US oil prices rose for the fourth time in five weeks and ended at a 5 month high on stronger than expected US economic data and expectations that OPEC would leave its production cuts in place….after rising less than 0.1% to $80.63 a barrel as week as an early rally on bullish Chinese data following attacks on Russian refineries was reversed by the threat of a ceasefire in Gaza, the contract price for the benchmark US light sweet crude for May delivery moved higher in Asian trading early Monday, as oil routes remained under threat amid ongoing attacks on Russian oil refineries, then traded higher in New York following a 14-0 vote by the United Nations Security Council passing a resolution calling for a ceasefire in Gaza, and settled $1.32 higher at $81.95 a barrel after the Russian government ordered oil producers to cut their output…oil prices traded in a narrow range Tuesday, as traders weighed the bearish effect of the decline in Russian refinery demand against the bullish effect from the cut in Russia’s oil exports, and settled 33 cents lower at $81.62 a barrel as traders assessed the impact of the wars in Eastern Europe and the Middle East on the supply picture…oil prices extended those losses in overnight trading after the American Petroleum Institute reported a surprise and significantly large crude build and a notable increase in stocks at the Cushing Hub, then continued to trade lower on Wednesday amid signs that OPEC+ appeared unlikely to change its output policy at its meeting next week, and settled 27 cents lower at $81.35 a barrel, as the US dollar strengthened and EIA data showed a surprise jump in both crude and gasoline stocks….oil prices rose by more than $1 a barrel in Asian trading early Thursday, as traders anticipated tighter supplies as OPEC+ producer cartel was widely expected to continue its current production cuts, then added another one percent gain to that rally in New York trading to settle $1.82 higher at a 5 month high of $83.17 a barrel after the US Bureau of Economic Analysis said that the U.S. economy grew 0.2% faster than previously estimated, on upward revisions to 4th quarter consumer spending and nonresidential fixed investment, leaving oil prices 3.2% higher on the week, 6.3% higher for the month, and 16.1% higher over the first quarter of 2024..
meanwhile, natural gas price quotes finished higher this week on a switch to the higher priced May contract, even as both contracts that were traded as the front month ended lower…after inching up 0.2% to $1.659 per mmBTU last week on a bit of chilly weather, despite the first addition to natural gas inventories of the year, the contract price for natural gas for April delivery opened four cents lower on Monday morning, on ample storage levels and forecasts for weak heating demand, then hovered near the $1.640 level for much of the day before settling 4.4 cents lower at a three-week low of $1.615 per mmBTU, on lowered demand forecasts for this week, a glut of gas in storage, and expectations that gas flows to LNG export plants would remain low…after volatile trading between $1.461 and $1.647 on its last day of trading Tuesday, the April gas contract finished 4.0 cents, or 2.5% lower at a three and a half year low of $1.575 per mmBTU on mild forecasts, while the more actively traded May contract for natural gas traded sideways near $1.785 throughout the day and settled a tenth of a cent lower at $1.788 per mmBTU as May gas traders positioned ahead of the storage report on Thursday…with markets now quoting the contract price of natural gas for May delivery, that contract opened 4 cents lower on Wednesday and retreated to trade near $1.720 for most of the day, as weak fundamentals and a drop in weekly LNG export volume provided bearish pressure, before settling 7.0 cents lower at $1.718 per mmBTU amid a plethora of bearish fundamentals, most notably abundant supply met by a shortage of demand…natural gas prices opened two cents higher ahead of the storage report on Thursday, but to slipped back to an intraday low of $1.718 minutes after the report, before staging a steady advance to settle 4.5 cents higher at $1.763 per mmBTU, as traders considered the implications of the larger-than-anticipated storage withdrawal… while natural gas price quotes ended 6.3% higher on the week, the contract price of May gas, which had ended the prior week at $1.812 per mmBTU, finished 2.7% lower..
The EIA's natural gas storage report for the week ending March 22nd indicated that the amount of working natural gas held in underground storage fell by 36 billion cubic feet to 2,296 billion cubic feet by the end of the week, which left our natural gas supplies 430 billion cubic feet, or 23.0% above the 1866 billion cubic feet that were in storage on March 22nd of last year, and 669 billion cubic feet, or 41.1% more than the five-year average of 1,627 billion cubic feet of natural gas that were typically in working storage as of the 22nd of March over the most recent five years…the 36 billion cubic foot withdrawal from US natural gas working storage for the cited week was more than the 31 billion cubic foot withdrawal that was the consensus estimate from S&P Global Commodity Insights' weekly gas storage survey, while it was quite a bit less than the 55 billion cubic feet that were pulled from natural gas storage during the corresponding third week of March 2023, but was more than the average 27 billion cubic feet withdrawal from natural gas storage that has been typical for the same last 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 22nd indicated that after an increase in our oil imports and a drop in our oil exports, we had surplus oil to add to our stored commercial crude supplies for 7th time in nine weeks and for the 15th time in the past 23 weeks, despite a decrease in oil supplies that the EIA could not account for….Our imports of crude oil rose by an average of 424,000 barrels per day to an average of 6,702,000 barrels per day, after rising by an average of 787,000 barrels per day over the prior week, while our exports of crude oil fell by 700,000 barrels per day to average 4,181,000 barrels per day, which when used to offset our imports, meant that the net of our trade in oil worked out to a net import average of 2,521,000 barrels of oil per day during the week ending March 22nd, 1,124,000 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 382,000 barrels per day, while during the same week, production of crude from US wells was unchanged at 13,100,000 barrels per day. Hence our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a rounded total of 16,003,000 barrels per day during the March 22nd reporting week…
Meanwhile, US oil refineries reported they were processing an average of 15,932,000 barrels of crude per day during the week ending March 22nd, an average of 127,000 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 558,000 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 22nd appear to indicate that our total working supply of oil from net imports, from transfers, and from oilfield production was 488,000 barrels per day less than what 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 +488,000] 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 magnitude in the week’s oil supply & demand figures that we have just transcribed... Despite that, since most oil traders react to these weekly EIA reports as if they were accurate, and since these weekly figures therefore often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably reliable by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….(note there is also an aging twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had hoped to do about it)
This week's average 558,000 barrel per day increase in our overall crude oil inventories came as an average of 452,000 barrels per day were being added to our commercially available stocks of crude oil, while an average of 106,000 barrels per day were being added to our Strategic Petroleum Reserve, the sixteenth SPR increase in twenty-three 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 6,419,000 barrels per day last week, which was 1.1% more than the 6,350,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at 13,100,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 12,700,000 barrels per day, while Alaska’s oil production was 9,000 barrels per day lower at 432,000 barrels per day, but still added the same 400,000 barrels per day to the EIA's rounded national total as it did last week...US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure matches that of our pre-pandemic production peak, and is also 35.1% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.
US oil refineries were operating at 88.7% of their capacity while processing those 15,932,000 barrels of crude per day during the week ending March 22nd, up from their 87.8% utilization rate of a week earlier, and finally approaching a normal operating rate for mid March, after recovering from damage caused by the arctic cold that penetrated to the Gulf Coast in mid January... the 15,932,000 barrels of oil per day that were refined this week were 0.8% more than the 15,813,000 barrels of crude that were being processed daily during week ending March 24th of 2023, and 0.6% more than the 15,831,000 barrels that were being refined during the prepandemic week ending March 22nd, 2019, when our refinery utilization rate was at a below normal 86.6%..
Even with the increase in the amount of oil being refined this week, gasoline output from our refineries was somewhat lower, decreasing by 435,000 barrels per day to 9,213,000 barrels per day during the week ending March 22nd, after our refineries' gasoline output had decreased by 263,000 barrels per day during the prior week. This week’s gasoline production was 8.2% less than the 10,038,000 barrels of gasoline that were being produced daily over week ending March 24th of last year, and 4.6% less than the gasoline production of 9,657,000 barrels per day during the prepandemic week ending March 22nd, 2019....on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 124,000 barrels per day to 4,814,000 barrels per day, after our distillates output had increased by 128,000 barrels per day during the prior week. After six straight solid production increases, our distillates output was 3.9% more than the 4,633,000 barrels of distillates that were being produced daily during the week ending March 24th of 2023, but it was still 2.3% less than the 4,925,000 barrels of distillates that were being produced daily during the week ending March 22nd, 2019…
Even with this week's decrease in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the first time in eight weeks, following five prior increases, increasing by 1,299,000 barrels to 232,072,000 barrels during the week ending March 22nd, after our gasoline inventories had decreased by 3,310,000 barrels during the prior week. Our gasoline supplies rose this week because the amount of gasoline supplied to US users fell by 94,000 barrels per day to 8,715,000 barrels per day, and because our exports of gasoline fell by 247,000 barrels per day to 786,000 barrels per day, and because our imports of gasoline rose by 26,000 barrels per day to 522,000 barrels per day.…After thirty-two gasoline inventory withdrawals over the past fifty-two weeks, our gasoline supplies were still 2.4% above last March 24th's gasoline inventories of 226,694,000 barrels, but about 1% 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 7th time in nine weeks, following eight consecutive prior increases, decreasing by 1,185,000 barrels to 117,337,000 barrels over the week ending March 15th, after our distillates supplies had increased by 624,000 barrels during the prior week. Our distillates supplies fell this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 242,000 barrels per day to 4,028,000 barrels per day, and because our exports of distillates rose by 135,000 barrels per day to 1,120,000 barrels per day, while our imports of distillates fell by 5,000 barrels per day to 165,000 barrels per day...Even with 30 inventory decreases over the past fifty-two weeks, our distillates supplies at the end of the week were 0.6% above the 116,683,000 barrels of distillates that we had in storage on March 24th of 2023, but about 6% below the five year average of our distillates inventories for this time of the year...
Finally, after this week’s increase in our oil imports and decrease in our oil exports, our commercial supplies of crude oil in storage rose for the 16th time in twenty-six weeks and for the 23rd time in the past year, increasing by 3,165,000 barrels over the week, from 445,042,000 barrels on March 15th to 448,207,000 barrels on March 22nd, after our commercial crude supplies had decreased by 1,952,000 barrels over the prior week... With this week’s increase, our commercial crude oil inventories rose to about 2% below the most recent five-year average of commercial oil supplies for this time of year, but were still about 32% above the average of our available crude oil stocks as of the fourth 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 22nd were still 5.4% less than the 473,691,000 barrels of oil left in commercial storage on March 24th of 2023, but 5.4% more than the 409,950,000 barrels of oil that we still had in storage on March 25th of 2022, while still 10.7% less than the 501,835,000 barrels of oil we had in commercial storage on March 26th of 2021, after refinery damage from winter storm Uri left even more crude 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...note that this week's rig count was released a day early, ahead of the Good Friday holiday, and hence only covers 6 days...in the table below, the first column shows the active rig count as of March 28th, the second column shows the change in the number of working rigs between last week’s count (March 22nd) and this week’s (March 28th) count, the third column shows last week’s March 22nd 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 31st of March, 2023...
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Environmental groups appeal court order on drilling under Ohio park and wildlife areas - Four environmental groups filed an appeal Friday challenging an Ohio judge’s order declining to review state regulators’ decisions to allow oil and gas drilling under state park and wildlife areas. The Notice of Appeal filed with Franklin County Court of Common Pleas takes issue with Judge Jaiza Page’s Feb. 23order, which said the groups had no right to challenge rulings by the Ohio Oil & Gas Land Management Commission last November to allow drilling and fracking under Salt Fork State Park, Zepernick Wildlife Area and Valley Run Wildlife Area. “Our appeal continues the fight for legal accountability and oversight of the commission’s decisions,” said Earthjustice attorney Megan Hunter, who is one of the lawyers representing groups in the appeal. Those groups include Save Ohio Parks, the Buckeye Environmental Network, Backcountry Hunters & Anglers and the Ohio Environmental Council.The move to drill and frack under state-owned lands was jump-started last year when Gov. Mike DeWine signed HB 507 into law. The statute would have required state agencies to lease lands unless the commission adopted rules and lease terms under a 2011 law. The leasing process under that law had languished after a widespread backlash a decade ago.Once the commission adopted the rules and lease terms last spring, HB 507 no longer imposed any mandatory dutyto allow drilling on state-owned lands. Instead, Ohio law requires the commission to consider nine factors. They include environmental impacts, effects on visitors or users of state-owned lands, economic benefits, public comments, and more.In this case, the environmental groups claimed the commission didn’t consider all nine factors before reaching its decisions. They also objected to the commission’s failure to hold a hearing and accept public testimony for the proposed parcels at each park and wildlife area. Comments on the proposals detailed worries about possible contamination from accidents, anticipated interference with people’s ability to enjoy state parks and wildlife areas, and other objections.Judge Page’s ruling rejected the environmental groups’ argument that the commission’s rulings could be appealed under a general statutory provision for “adjudication orders.” Instead, she noted there was no specific statutory language dealing with appeals from the Ohio Oil & Gas Land Management Commission. She also found the groups did not have standing to raise their claims.Days after Judge Page’s ruling, the commission accepted a bid from Infinity Natural Resources, based in West Virginia, to drill under Salt Fork State Park. The commission also accepted Texas-based Encino Energy’s bids to drill under Zepernick Wildlife Area and Valley Run Wildlife area. Unless blocked, drilling is likely to start this spring.Without judicial review of the commission’s actions, it’s unclear what checks, if any, exist over the commission’s decisions on drilling beneath park and wildlife areas.“The Commission handed over Valley Run Wildlife Area, Zepernick Wildlife Area and Ohio’s largest state park — Salt Fork State Park — to drillers without considering the environmental and geologic impacts of oil and gas development,” Hunter said. “Thousands of state residents and users of these protected public lands demand accountability for this enormous failing.” A separate lawsuit challenging the constitutionality of HB 507 remains pending. Meanwhile, new filings this month ask the commission to allow drilling and fracking underEgypt Valley Wildlife Area and Keen Wildlife Area.
Guest column/ODNR should protect Ohio's public lands - Randi Pokladnik - On February 26, Ohio proved once again that nothing in the state is sacred when it comes to making money from fracking. In addition to some Department of Transportation parcels, the 5-member Oil and Gas Land Management Commission (OGLMC) approved bids to frack Salt Fork State Park in Guernsey County, Valley Run in Carroll County, and Zepernick Wildlife area in Columbiana County. In some cases, the accepted bids were considerably “below market value” as noted by commissioner Warnock who voted against a bid of $500 per acre by EOG Resources Inc. for a DOT parcel. This would approximately be one-tenth the average going rate of $5,000 per acre. Recently, additional state lands have been opened by the Ohio Department of Natural Resources (ODNR) for oil and gas extraction bids. These include the 366-acre Egypt Valley Wildlife area in Belmont County and the 85-acre Keen Wildlife area in Harrison County. Both areas are used for hunting, fishing, and recreational activities by local residents. Against the wishes of Ohio’s citizens, Ohio’s public lands have become a cash cow for Ohio’s politicians seeking to increase the state’s coffers. The OGLMC has ignored thousands of citizens comments, hundreds of scientific studies, and expert witness testimonies warning them of the health and environmental dangers of fracking. Those of us who live in fracked regions of the state are aware of the impacts our state lands and the surrounding communities will experience as fracking ramps up around these rural recreational sites. Ohio citizens need to demand protections for their state lands from well pads, compressor stations, pipelines, water withdraws, and injection wells. According to Ohio Revised Code 1521.16, any facility withdrawing over 100,000 gallons per day of surface water or groundwater must register with the Ohio Department of Natural Resources. Currently there are over 400 fracking facilities registered with the state. Typically, Marcellus and Utica wells require an average of 5 million gallons of water to frack a well. A recent study from Ohio Northern University shows that water withdraws from small streams negatively affect aquatic habitats. It was noted by one of the study’s authors, Dr. Christopher Spiese, how “difficult it was to find water source locations for well pad permits.” How will water withdraws affect lakes and streams in places like Salt Fork State Park? Along with monitoring water usage, ODNR needs to create, enforce, and make publicly available a system for water quantity and quality monitoring. Since fracking has been excluded from the Safe Drinking Water Act as per the passage of the Haliburton Loophole in 2005, states are responsible for regulating the over 1,100 chemicals used in fracking. The only entity in Ohio that oversees oil and gas extraction is the ODNR. Ohio’s regulations fail to protect human health and the environment. In 2022, several community groups in southeast Ohio petitioned the EPA to revoke ODNR primacy over Class II radioactive organic and inorganic waste injection wells “due to the longstanding and systemic failures.”The current water quality parameters used by the Oil and Gas Division of ODNR to test rural water wells, and the criteria used by the Ohio EPA to test inland lakes, do not address any of the hundreds of aromatic and aliphatic organic chemicals used in the fracking process, including the toxic forever compounds (PFAS). Adequate testing of the many organic compounds used will require a minimum of Tier 3 testing conducted by certified labs.“Methane contamination of drinking water wells has been a common complaint among people living in gas drilling areas across the country.” In some cases, methane from fracking operations migrates and causes explosions like the one experienced in Bainbridge Township in Geauga, Ohio in 2007. According to a report from ODNR, inadequate cementing of the production casing can allow natural gas to migrate along the annulus of the well pipe into aquifers. In addition to explosions, methane is water soluble and has been found as a contaminant in drinking water wells. “In aquifers overlying the Marcellus and Utica shale formations of northeastern Pennsylvania and upstate New York, systematic evidence for methane contamination of drinking water associated with shale-gas extraction has been documented.”Additionally, well pads, utility roads, pipelines, machinery, and especially the clear cutting of forests can physically break up the habitat that wildlife needs for survival. There are acres of forest land being clear-cut to make room for drilling sites. Since 2005, fracking has affected over 360,000 acres of land with over 80,000 fracking wells in 17 states. Once a well pad is constructed, that acreage remains an industrial site as wells can have a lifetime of 20 to 40 years. These fracking sites will mar the natural beauty of our parks for decades. If the ODNR and Ohio’s politicians insist on forcing this destructive and dangerous process into our rural wildlife areas and parks, they should at the very least spend some of those millions of dollars to create a monitoring program for air and water emissions. It is the ODNR’s responsibility to ensure that our streams, lakes, and land are not permanently damaged and rendered useless after the rush to frack diminishes.
BLM Floats Draft Assessment for Drilling in OH’s Wayne Nat’l Forest -Marcellus Drilling News - Like a phoenix rising from the ashes, the seemingly moribund effort to drill shale wells on land located in Ohio’s Wayne National Forest (WNF) is active once again. WNF is a patchwork of public and private mineral rights that covers over a quarter million acres of Appalachian foothills of southeastern Ohio. For years, the Bureau of Land Management (BLM) blocked new permits and drilling in WNF. During the Trump administration, the BLM began to auction off federal leases and permits (see our stories about BLM auction in WNF here). However, a federal judge blocked drilling in WNF in 2021 after Biden seized control of the White House (see Federal Judge Blocks Permits to Drill in OH’s Wayne Natl Forest).
Landowners forced into fracking agreements - Dr. Randi Pokladnik - Ohio private property rights have been stolen by Ohio laws that force land owners into fracking their land regardless of their wishes. Many homeowners around the Tappan Lake region are now being targeted by a forced pooling or mandatory unitization action. “Ohio Revised Code 1509.27 provides a mechanism to unitize private property in order to benefit oil and gas profits over private property rights.Forced or mandatory pooling is defined as when a “person who has obtained the consent of the owners of at least 65% of the land area overlying a pool or a part of a pool submits an application for the operation as a unit of the entire pool or part of the pool to the chief of the division of oil and gas resources management.” If approved, the application will force the remaining 35% of landowners to become part of the unit.There are only three criteria to satisfy in order for the chief of the division of oil and gas at the Ohio Department of Natural Resources to approve a mandatory pooling application. They are protecting correlative rights (those who have leased), providing for effective development and use, and promoting conservation of oil and gas. Any concerns over environmental harms or health effects are not considered.There have been many amendments to the original laws written in 1965; however, these amendments do not address one of the most critical aspects of the laws, the risk-penalty provision. Landowners subject to the order only have the choice between the following: “relent and become a participant in the drilling unit or become a nonparticipating owner and pay a penalty of up to 200% of the reasonable costs and expenses of production.”This penalty is a way to encourage nonconsenting owners to ultimately lease and helps the well operators from undergoing additional application fees and paperwork.Refusing to sign a lease relinquishes the ability to write legal protections for your land. A lease agreement can allow a landowner to limit surface access, pipeline construction, the use of hydrocarbon storage tanks on the land and the drilling of injection wells to inject waste fluids. Basically, if you want to protect your property, you have no real options aside from writing a protective lease agreement.In June 2022 the Muskingum Watershed Conservancy District leased 7,300 acres around Tappan Lake to Encino Energy. A quick examination of the recent unitization hearings found on the ODNR unitization library site shows several proposed fracking laterals located across the Tappan Lake region, and all contain significant portions of MWCD land. We believe this has led to the mandatory pooling of our land as we live beside the lake. Our land is now part of Encino’s Akers HN FRA East Unit. Property-owning citizens have no ability to stop this heinous process that pollutes the air, land and water and affects health and the environment. Ohio is not a democracy but rather an oligarchy run by fossil fuel companies.
Mid-Ohio Valley Climate Corner: More fracked gas is a dead end - -Eric Engle - It’s clearer than ever that, for residents of Ohio and greater Appalachia, the fracking “boom” has turned out to be a bust. The Appalachian Hydrogen Hub will only be another dead end for our region but it’s not too late to turn back.More than a decade ago, the shale gas industry held all the right cards. Decision-makers were lavishing fracking developers with tax cuts and publicly funded subsidies. Gas production in the early 2010s was soaring, outpacing even the most optimistic pre-boom estimates. Between 2008, when gas development first began in earnest in the Marcellus and Utica shales, and 2019, before the onset of the COVID-19 pandemic, the largest fracking counties in Ohio, Pennsylvania, and West Virginia saw their economic output swell by nearly 90%, a rate more than four times the national average. Business was booming. Elected officials and industry boosters promised the fracking industry’s success meant prosperity for Appalachia, that our region would soon see hundreds of thousands of new jobs and a bona fide economic renaissance. But those promises of prosperity never came true. During the same period of soaring output, families closest to the booming gas economy were actually having a harder time finding jobs. Many residents left the region entirely, due in no small part to the human toll of fracking operations. A litany of epidemiological studies began to demonstrate the connections between shale gas development and serious health impacts for nearby residents, including respiratory problems, heart-related complications, mental health issues, birth defects, and an outsized risk of rare cancers. Data show that those same fracking counties collectively lost more than 10,000 net jobs and almost 47,000 residents by 2021. Fracking for methane gas hasn’t worked for our communities. In fact, for most people, it’s done nothing but harm. That’s why we can’t afford to keep continuing down the same gas-lined path.But the industry is pulling all the stops to continue our region’s reliance on fossil fuels. Their latest ploy? The Appalachian Hydrogen Hub, or ARCH2, a gas-powered network of industrial facilities, power stations, and pipelines geared to create “blue” hydrogen, which uses costly, experimental carbon capture technology to reduce some smokestack emissions.ARCH2 claims that blue hydrogen is “clean” energy, that their sprawling complex of heavy industry, fossil-fired power generation, and expanded fracking operations will somehow reduce the region’s net greenhouse gas emission output. That claim is far from the truth. Recent peer-reviewed research on lifecycle emissions shows that, in fact, blue hydrogen has a 20% greater greenhouse gas footprint than burning natural gas or coal directly for heat and some 60% greater than burning diesel oil for heat. And because blue hydrogen uses fracked gas as a feedstock, greenlighting ARCH2 would mean more expanding fracking operations, generating even more pollution and climate-warming emissions.
Ohio AG Sues Austin Master Services for Unsafe Storage of Wastewater-- Marcellus Drilling News - Ohio Attorney General Dave Yost took legal action Monday, seeking to force Austin Master Services in Martins Ferry (Belmont County), OH, to correct “egregious violations of Ohio law” regarding storage of oil and gas waste that he says threatens the Ohio River (500 feet away) and Martins Ferry’s drinking water supply (1,000 feet away). Austin Master Services serves the Marcellus/Utica industry (and other industries) with radiological waste management solutions, including remediation, decontamination & decommissioning (D&D), and transportation. The company was bought by and is now a subsidiary of PA-based American Environmental Partners, Inc. (see American Energy Buys Radioactive Waste Co. Austin Master Services).
Martins Ferry Mayor Gives Update on Closed Frack Wastewater Facility -- Marcellus Drilling News - Yesterday, MDN reported that Ohio Attorney General Dave Yost took legal action on Monday, seeking to force Austin Master Services (AMS) in Martins Ferry (Belmont County), OH, to correct “egregious violations of Ohio law” regarding the storage of oil and gas waste that he says threatens the Ohio River and Martins Ferry’s drinking water supply (see Ohio AG Sues Austin Master Services for Unsafe Storage of Wastewater). Last night, Martins Ferry Mayor John Davies addressed the ongoing situation of the now-shuttered AMS facility at the biweekly City Council meeting. We learned some interesting things in reading his comments.
Public Employees Retirement System of Ohio Has $2.14 Million Stock Position in DT Midstream, Inc -- Public Employees Retirement System of Ohio reduced its holdings in DT Midstream, Inc. (NYSE:DTM – Free Report) by 9.5% during the 3rd quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 40,449 shares of the company’s stock after selling 4,267 shares during the period. Public Employees Retirement System of Ohio’s holdings in DT Midstream were worth $2,141,000 as of its most recent SEC filing. Several other institutional investors also recently added to or reduced their stakes in DTM. Teachers Retirement System of The State of Kentucky grew its holdings in shares of DT Midstream by 93.7% during the 3rd quarter. Teachers Retirement System of The State of Kentucky now owns 33,110 shares of the company’s stock worth $1,752,000 after purchasing an additional 16,015 shares in the last quarter. American Century Companies Inc. grew its holdings in shares of DT Midstream by 2.5% during the 3rd quarter. American Century Companies Inc. now owns 117,310 shares of the company’s stock worth $6,208,000 after purchasing an additional 2,876 shares in the last quarter. Deutsche Bank AG grew its holdings in shares of DT Midstream by 1,176.7% during the 3rd quarter. Deutsche Bank AG now owns 867,145 shares of the company’s stock worth $45,889,000 after purchasing an additional 799,224 shares in the last quarter. Comerica Bank grew its holdings in shares of DT Midstream by 11,073.2% during the 3rd quarter. Comerica Bank now owns 86,257 shares of the company’s stock worth $4,565,000 after purchasing an additional 85,485 shares in the last quarter. Finally, Creative Planning grew its holdings in shares of DT Midstream by 1.6% during the 3rd quarter. Creative Planning now owns 32,540 shares of the company’s stock worth $1,722,000 after purchasing an additional 511 shares in the last quarter. 79.82% of the stock is owned by institutional investors.
Summit Midstream Partners, LP Announces Sale of Utica Position for $625 Million - Summit Midstream Partners, LP announced today the sale of Summit Midstream Utica, LLC, which includes its approximately 36% interest in Ohio Gathering Company, LLC ("OGC"), approximately 38% interest in Ohio Condensate Company, LLC and wholly owned Utica assets to a subsidiary of MPLX LP for $625 million in cash (the "Utica Divestiture"). This transaction is the culmination of the comprehensive strategic review process undertaken by the Summit Board of Directors (the "Board"), in consultation with external advisors, that was publicly announced on October 3, 2023. As part of this process, the Board considered a wide range of opportunities to maximize value for unitholders, including an outright sale of Summit and other divestiture and partnership-level transactions. The Utica Divestiture and conclusion of the strategic review were unanimously approved by the Board. The Board and management team have completed their active process, but will remain open to all potential value-enhancing transactions. In connection with the Company's strategic review, the Board also evaluated various corporate structures to determine how to drive the greatest long-term value for unitholders. The Board believes converting to a C-Corp positions the Company to maximize value by enhancing trading liquidity, greatly expanding the universe of potential investors and optimizing the long-term tax consequences to unitholders. The Board and management plan to seek approval from Summit unitholders to convert the Partnership to a C-Corp at a Special Meeting later this year. Summit expects to file a proxy statement to provide unitholders with additional information about the rationale and benefits of the C-Corp conversion in advance of the Special Meeting. Transaction Highlights:
- Delivers significant value and dramatically improves credit profile and financial flexibility
- Reduces Summit's current net leverage by 1.5x to sub-4.0x, furthering progress toward achieving 3.5x net leverage target
- Increases liquidity with undrawn $400 million credit facility and more than $325 million of unrestricted cash
- Shifts Summit's portfolio to approximately 55% crude oil-oriented basins
- Accelerates timing of potential preferred equity and common equity distributions
- Positions Summit to continue to fund and execute on organic growth projects including further commercialization of Double E and potential synergistic bolt-on acquisitions, primarily in its Rockies segment
- Enables Summit to further reduce cost of capital in elevated interest rate environment
- Revised pro forma 2024 Adjusted EBITDA guidance of $185 million to $220 million1
MPLX Acquires Utica Shale Assets From Summit Midstream Partners - MPLX has agreed to purchase the Utica shale assets from Summit Midstream Partners for $625 million in cash. The strategic acquisition includes nearly 36% of Summit Midstream Utica's stake in Ohio Gathering (“OGC”), around 38% in Ohio Condensate (“OCC”) and Summit Midstream Partners’ wholly-owned assets in the Utica Shale.Located in southeastern Ohio, particularly across Belmont and Monroe counties, the Summit Utica natural gas gathering system is a key component of this deal. It plays a crucial role in supporting producers targeting the dry-gas reserves of the Utica and Point Pleasant shale formations. The Summit Utica system specializes in the gathering and delivery of natural gas, primarily under long-term, fee-based gathering agreements that include acreage dedications.The transaction also encompasses OGC and OCC, collectively known as Ohio Gathering, which features a natural gas gathering system and a condensate stabilization plant in the Utica Shale. This system is crucial for a range of producers operating across the condensate, liquids-rich and dry-gas windows of the Utica Shale in counties like Belmont, Guernsey, Monroe, Noble and Harrison.Highlighting the significance of this acquisition, Summit Midstream Partners noted that the sale culminates a strategic review process initiated by its board in October of 2023. This sale is not just a business transaction but a strategic pivot, enabling Summit Midstream Partners to focus more on crude oil-oriented basins, with a transition in its portfolio to nearly 55% in these sectors.From a financial perspective, Summit Midstream Partners anticipates the sale to substantially reduce its debt, boost liquidity and dramatically improve its credit profile. The expected financial uplift includes adding a $400-million credit facility and more than $325 million of unrestricted cash, with a revised EBITDA guidance for 2024 being set at $220 million, up from $185 million. MPLX, which has been a joint venture partner and operator of the OGC and OCC assets since Summit's entry into the Utica Shale in 2014, stands to further solidify its presence in the region with this acquisition. The deal underscores MPLX's commitment to enhancing its portfolio in the Utica Shale, an area that has proven to be of significant interest to the energy sector, particularly for natural gas production.
Phillips 66 explores sale of pipeline stake worth over $1 billion, sources say - (Reuters) -U.S. oil refiner Phillips 66 is exploring a sale of its 25% stake in the Rockies Express Pipeline that it hopes could be worth more than $1 billion, including debt, people familiar with the matter said on Tuesday. The Rockies Express Pipeline (REX) is a 1,700-mile (2730-km)interstate natural gas pipeline, stretching from Wyoming and Colorado in the U.S. West to Eastern Ohio. Phillips 66 is working with its advisers on talks with potential buyers, which include private equity firms and infrastructure funds, the sources said, requesting anonymity as the discussions are confidential. The Houston-based company is hoping to command a premium to the stake's current book value of $451 million, the sources said, adding bidders would also need to assume debt obligations worth more than $500 million associated with the stake. A spokesperson for Phillips 66 declined to comment. Phillips 66, which has a market value of $67 billion, is aiming to raise about $3 billion from asset sales this year. In an interview earlier on Tuesday, Chief Executive Mark Lashier said the company was in discussions with potential buyers for asset sales, but it was not in a rush to complete divestments. He declined to name the assets referenced in those discussions. The company has come under pressure in recent months from Elliott Management, which disclosed a stake in November and pushed for Phillips 66 to improve its refining operations and revamp its board of directors. The activist investor and Phillips 66 agreed last month to add a new board member approved by the investment firm, and to work together to identify a second director appointment. The remainder of the REX pipeline is controlled by privately owned Tallgrass Energy. Stakes in pipelines, such as REX, are attractive to financial investors as they like businesses with steady cash flow, the sources said, adding stakes in interstate pipelines are not marketed to buyers often.
Federal Court Tosses Challenge to WV’s 2022 Forced Pooling Law - Marcellus Drilling News - Hopefully, we’re now at the conclusion of an effort to overturn a bill passed in early 2022 by the West Virginia legislature, Senate Bill (SB) 694, which finally brought forced pooling for shale wells to the Mountain State after eight years of trying (see WV House Passes Forced Pooling Bill, Done Deal When Gov Signs). A lawsuit brought by two West Virginia landowners seeking to overturn the state’s forced pooling (i.e., unitization) law was put on pause by a federal judge in December 2022 (see WV Landowner Lawsuit to Block Forced Pooling Law Dealt Another Blow). The federal judge said the lawsuit belongs in state court and that he did not have jurisdiction over the case. West Virginia officials disagreed and appealed the ruling to the next rung up the federal court ladder (see WV Appeals Lawsuit re Forced Pooling Law to Higher Fed Court).
Northern District of West Virginia Rules on Mineral Owners' Stand - The National Law Review -A federal court has dismissed a challenge to the validity of a West Virginia law authorizing pooling and unitization of oil and gas formations associated with Marcellus and Utica shale wells. The court concluded that the mineral owners who filed the suit lacked standing to bring their claims because they failed to allege an actual injury from the challenged law.As reported in an Alert published on February 1, 2024, the Fourth Circuit Court of Appeals directed the lower court, Judge John Preston Bailey of the District Court for the Northern District of West Virginia, to resolve a pending lawsuit challenging the law, known as Senate Bill 694, enacted by the West Virginia Legislature in 2022. This includes a determination of whether the mineral owners established legal standing to challenge the law. The District Court had previously abstained from addressing the merits of the claims or the legal standing of the mineral owners. Judge Bailey ruled that the mineral owners lacked legal standing for at least two reasons. First, the Court observed that the mineral owners did not allege that their mineral interests had been adversely affected by the challenged law, that they were subject to unitization under the law, or that their royalties were diminished in any way by the law. Second, the Court found no causal connection between the mineral owners’ alleged injury and the enactment of the law. The Court noted that the mineral owners did not explain how the agency they sued, the West Virginia Oil and Gas Conservation Commission, was affecting their mineral interest “in any way” or that future enforcement of the law against them was “imminent.”
Mountain Valley Pipeline fined $34,000 for 29 environmental violations -- The Virginia Department of Environmental Quality has issued fines to the Mountain Valley Pipeline for environmental violations. The fines total $34,000 for 29 different violations along the pipeline construction route through Virginia.From September to November last year, inspectors discovered inadequate erosion control, impacts to wetlands and say MVP broke rules outlined in a 2019 consent decree with DEQ.Most of the violations are for technical mistakes, like improper installation of a timber mat, and multiple cases of no secondary containments, which are used to contain sediment runoff and water from construction sites.David Sligh, conservation director with the group Wild Virginia, said these violations add up to a pattern of instances where mud and sediment likely ended up in water that should have been protected. He said he doesn’t think the fines are an adequate response to the pollution MVP has done to rivers, streams and wetlands.“There’s no reason to think that a minimal fine is going to affect their behavior going forward,” said Sligh. The pipeline is projected to cost $7.6 billion, and Sligh, who previously was an employee with DEQ, said $34,000 isn’t a very stiff fine for a company of that size.
U.S. NatGas Production Grew by 4% in 2023; M-U Grew 3% – 1.2 Bcf/d -Marcellus Drilling News - According to the data geeks at the U.S. Energy Information Administration (EIA), U.S. natural gas production grew by 4% in 2023, which was similar to the growth in 2022. U.S. gas production in 2023 averaged a whopping 125.0 Bcf/d (billion cubic feet per day). In 2023, more natural gas was produced in the Appalachia (Marcellus/Utica) region of the Northeast than in any other U.S. region, accounting for 29%, or 37.7 Bcf/d, of gross natural gas production. However, production growth in Appalachia slowed because our region doesn’t have enough pipeline takeaway capacity to transport more natural gas out of the region to the markets that would buy it.
EQT Eyeing Data Center 'Gold Rush' for Natural Gas-Fired Power, Unleashing More LNG - EQT Corp., the No. 1 natural gas producer in the United States, isn’t resting on its laurels. The gas giant is continuing to eye a potential East Coast LNG project, but it’s venturing into the artificial intelligence (AI) market, to gain a slice of the data center power market. Executive Vice President Rob Wingo, who oversees Corporate Ventures, sat down with NGI in Houston for a wide ranging discussion during CERAWeek by S&P Global. Wingo leads the Pittsburgh-based company’s efforts to identify and enter new businesses. He’s got a lot on his plate. EQT already contracts to move gas to the Gulf Coast for LNG exports. And it continues, as it has for two years, to advance a potential liquefied natural gas facility on the East Coast or offshore on the coast as a floating LNG facility
U.S. energy secretary tells skeptical executives natural gas export pause will be short-lived— The Biden administration this week sought to reassure skeptical oil and gas executives that a pause on liquified natural gas exports from new projects would be short-lived and would not alter the industry's meteoric growth.In less than a decade, the U.S. has become the world's largest LNG exporter as production of the commodity and construction of export terminals has boomed. LNG is natural gas cooled into liquid form to make it easier to transport.U.S. exports have provided European allies with energy security as they seek to end their dependence on Russian gas in the wake of Moscow's invasion of Ukraine. Industry executives argue LNG will play a key role in the energy transition by displacing coal for electricity generation.The Department of Energy announced a pause on exports from new projects in January to evaluate the impact the LNG surge has had on the climate, energy security and domestic prices."This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time," President Joe Biden said after the January announcement.Secretary of Energy Jennifer Granholm indicated in Houston on Monday that the pause would be relatively short-lived."I predict that as we sit here next year ... this will be well in the rearview mirror," Granholm told the CERAWeek by S&P Global energy conference in reference to the LNG export pause.The energy secretary reiterated the pause has no impact on the 48 billion cubic feet per day that is currently authorized for export. This includes 14 billion cubic feet per day that is currently exported, another 12 Bcf/d under construction and 22 Bcf/d that is authorized but has not received final investment decisions.The 48 Bcf/d of currently authorized LNG is three times the current export capacity of the U.S., according to the Department of Energy.
Work progresses on NextDecade's Rio Grande LNG export plant in Texas - US LNG firm NextDecade is moving forward with construction work on the first phase of its Rio Grande LNG export terminal in Texas.In July last year, NextDecade took the final investment decision on the first three trains of its Rio Grande LNG project on the north embankment of the Brownsville Ship Channel in Cameron County, and completed $18.4 billion project financing.The firm also closed a joint venture agreement for the first phase which included about $5.9 billion of financial commitments from Global Infrastructure Partners (GIP), GIC, Mubadala, and TotalEnergies.NextDecade also expects to take a final investment decision to build the fourth liquefaction train in the second half of 2024.Phase 1, with nameplate liquefaction capacity of 17.6 mtpa, has 16.2 mtpa of long-term binding LNG sale and purchase agreements.These include deals with TotalEnergies, Shell, ENN, Engie, ExxonMobil, Guangdong Energy Group, China Gas Hongda Energy Trading, Galp, and Itochu. NextDecade awarded the $12 billion EPC contract to compatriot Bechtel and it officially kicked of work on the plant in October last year.
Freeport LNG says to boost capacity to about 16.5 mtpa - Freeport LNG, the operator of the three-train 15 mtpa liquefaction plant in Texas, will soon be able to produce a bit over 16.5 mtpa of LNG due to a debottlenecking project.“For roughly over a year and a half, Freeport LNG has been working on a debottlenecking project that will result in the installation of additional compressor capacity across the facility’s three liquefaction unit trains,” a Freeport LNG spokeswoman told LNG Prime on Wednesday.The recent liquefaction train unit outages that the company has experienced, have allowed Freeport LNG to accelerate the debottlenecking work of installing the additional compressor capacity across its three trains.“When complete, the debottlenecking project will increase Freeport LNG’s production capacity from an excess of 15 mtpa to just over 16.5 mtpa by roughly the June timeframe,” she said.Additionally, Freeport LNG’s train 4, which has received all regulatory approvals, will add an additional 25 percent LNG production capacity, when that train becomes operational, the spokeswoman said.Of the 15 mtpa of Freeport LNG’s export capacity, 13.4 mtpa has been sold to Osaka Gas, Jera, BP, TotalEnergies, and SK E&S.The spokeswoman said that Freeport LNG’s third train is currently online and producing LNG.“It was during the January freeze that damage occurred in one of the train 3 motors. Once we understood the cause of the damage, we knew it would be prudent to take proactive steps to inspect our other two trains,” she said.“So our train 2 liquefaction unit is now offline and our train 1 liquefaction unit will be taken down imminently,” she said.“We anticipate that our inspections on trains 1 and 2, and any subsequent, necessary repairs resulting from those inspections, will be completed on both trains by sometime in May,” the spokeswoman added
Exxon ahead of LNG expansion targets - US oil and gas company Exxon Mobil is ahead of schedule with its plan to double the size of its LNG portfolio to 40mtpa by 2030 and will focus on producing its own gas rather than trading the gas of third parties. There has been a strong focus on the production of LNG since 2022, and Exxon is looking to revamp its LNG trading strategy. Total Energies and Shell are the bigger players in LNG trading, overpowering Exxon; Shell made $2.4bn (£1.9bn) from trading LNG in the fourth quarter of 2023. Peter Clarke, Exxon senior vice-president for global LNG, said that Exxon’s approach to LNG trading differs to that of Total and Shell as Exxon mainly trades LNG that it produces itself. “Our portfolio is never going to look like Shell's, it's not going to look like Total's, we are targeting different aspects of the value chain. We are well on track to achieve the objective we set ourselves back in 2020 – and we are slightly ahead of that,” he told Reuters in an interview. In 2020, Exxon said it planned to double its LNG portfolio to 40mtpa by 2030, from 20mtpa. Clarke claimed it is now producing around 30mtpa. Clarke added that profits it can make on its own natural gas are larger than those made by purchasing and marketing LNG from third parties. “The big component in LNG is obviously the commercialisation of the LNG itself. We want to have the leading LNG portfolio in the world in terms of its financial robustness and financial returns. I would say we are well on the way to doing it,” he said. Examples of Exxon’s own production projects include the Golden Pass LNG project, in which it holds a 30% stake with QatarEnergies as a partner. The project will produce its first LNG in 2025 and will have an export capacity of around 18mtpa.
DC Circuit Backs FERC Time Extension for Natural Gas Pipelines - Bloomberg Law News
- Cheniere, National Fuel projects can proceed
- FERC’s ‘good cause’ decisions justified
US energy regulators acted reasonably when they granted time extensions to two natural gas developers to complete pipeline projects that were delayed by litigation and the Covid-19 pandemic, a federal appeals court ruled Friday.The Federal Energy Regulatory Commission properly found the developers demonstrated “good cause” in their requests to extend construction deadlines for projects in New York and the Gulf Coast, the US Court of Appeals for the District of Columbia Circuit decided. The Natural Gas Act’s “good cause” provision allows the commission to give more time to developers who can demonstrate their diligence and cite factors beyond their ...
US natgas prices fall 3% to 3-1/2-year low on mild weather (Reuters) -U.S. natural gas futures fell about 3% to a 3-1/2-year low on Tuesday on forecasts for milder weather and less heating demand over the next two weeks than previously expected and ample amounts of gas in storage. Also weighing on prices was the expiration of the April futures contract and the low amounts of gas flowing to liquefied natural gas (LNG) export plants due to work expected to continue through May at Freeport LNG's export plant in Texas. "Weather-driven demand for natural gas is set to drop ... over the next two weeks. With LNG feedgas demand wavering ... the low-demand shoulder season may prolong recent price weakness for natural gas," On its last day as the front-month, gas futures NGc1 for April delivery on the New York Mercantile Exchange fell 4.0 cents, or 2.5%, to settle at $1.575 per million British thermal units (mmBtu), their lowest close since June 2020. Despite the drop in the April contract, futures for May NGK24, which will soon be the front-month, were little changed at around $1.79per mmBtu. This is not the first time gas futures have collapsed to a 3-1/2-year low this year. In February, gas prices also fell to their lowest since June 2020 as near-record output, mostly mild weather and low winter heating demand allowed utilities to leave significantly more gas in storage than usual for this time of year. Analysts estimated current gas stockpiles were around 41% above normal levels. Those low prices will boost U.S. gas use to a record high in 2024, but cut production for the first time since 2020 when the COVID-19 pandemic destroyed demand for the fuel, according to the U.S. Energy Information Administration's latest outlook. Output was already down by around 3% over the past month as several energy firms, including EQT and Chesapeake Energy, delayed well completions and cut back on other drilling activities. EQT is currently the biggest U.S. gas producer and Chesapeake will soon become the biggest producer after its merger with Southwestern Energy SWN.N. Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 100.2 billion cubic feet per day (bcfd) so far in March, down from 104.1 bcfd in February. That compares with a monthly record high of 105.5 bcfd in December 2023. Meteorologists projected weather across the Lower 48 would remain mostly colder than normal through April 10. But with seasonally warmer weather coming, LSEG forecast gas demand in the Lower 48, including exports, would fall from 112.3 bcfd this week to 107.1 bcfd next week. Those forecasts were lower than LSEG's outlook on Monday. Gas flows to the seven big U.S. LNG export plants fell to an average of 13.2 bcfd so far in March, down from 13.7 bcfd in February. That compares with a monthly record of 14.7 bcfd in December. Analysts do not expect U.S. LNG feedgas to return to record levels until all three liquefaction trains at Freeport LNG's export plant in Texas return to service. Freeport has said it expects Trains 1 and 2 to remain shut until May for inspections and repairs, while Train 3 was operating. Each Freeport train can turn about 0.7 bcfd of gas into LNG.
March cold front helps narrow US gas storage surplus as NYMEX shrugs | S&P Global Commodity Insights -The US natural gas sector posted a larger-than-normal 36 Bcf drawdown in storage stocks for the week ended March 22, the US Energy Information Administration said March 28, snapping a seven-week streak of bearish reports for the oversupplied US gas market. The US supply overhang remains massive despite the relatively bullish withdrawal. The latest estimate from the EIA narrowed US inventory levels to 2.296 Tcf for the week ended March 22, which is still 669 Bcf, or 41%, above the five-year average of 1.627 Tcf and 430 Bcf, or 23%, above the year-ago level of 1.866 Tcf. Analysts say any meaningful reduction in the storage surplus over the coming months may depend on steeper declines in US production or prolonged stretches of unusual weather. The NYMEX gas futures market largely shrugged off the EIA's latest report, already facing a string of bearish factors in 2024 including mild winter weather, unusually weak heating demand and storage levels that remain high compared to historical benchmarks. The NYMEX gas futures market largely shrugged off the EIA's latest report, already facing a string of bearish factors in 2024 including mild winter weather, unusually weak heating demand and storage levels that remain high compared to historical benchmarks.The newly prompt NYMEX Henry Hub May contract fell 2-3 cents mid-morning trading following release EIA report before retracing those losses by early afternoon to trade around $1.75/MMBtu , data from CME Group showed.After a rare mid-March storage build, the pivot back to withdrawals for the week ended March 22 was driven by market fundamentals tightening over the week as colder weather arrived in the Lower 48 states. The consensus estimate from S&P Global Commodity Insights' weekly gas storage survey had predicted a 31 Bcf withdrawal, which also would have amounted to an above-average pull.Total US demand in the week to March 22 increased about 8 Bcf/d, driven by residential-commercial demand jumping by about 6.1 Bcf/d for a week-over-week increase of about 26%, S&P Global data showed. Gas-fired power demand increased by nearly 1 Bcf/d over the same period, attributed in part by market analysts to a drop-off in wind-power generation, while industrial demand picked up by about 600 MMcf/d. On the supply side, dry gas production declined by nearly 100 MMcf/d, although that was offset a 320 MMcf/d increase in imports from Canada. On balance, the US gas market tightened by about 7.8 Bcf/d, S&P Global data showed. Late-season heating demand in parts country could help whittle down the country's surplus before injection season begins in earnest, with periods of cooler-than-usual weather forecast to continue in Texas and parts of the central, southeastern and western US into early April, according to the latest short-term outlooks from the National Weather Service. S&P Global's natural gas supply-demand and storage models are already predicting another relatively bullish storage report from EIA for the week to March 29. Both models foresee net withdrawals for the week ranging from 29 Bcf to 40 Bcf, compared with a five-year average withdrawal of 1 Bcf and a year-ago pull of 29 Bcf reported for the corresponding week. A withdrawal in the predicted range for the week would chip away further at the US storage surplus to the five-year average.
What's Causing Negative Gas Prices in the Permian and How Long Will They Last? -- Natural gas prices at the Waha Hub in West Texas have been below zero for going on two weeks — that’s outright negative cash prices, not basis, which means Permian producers are literally paying to have their gas taken away. Ample supply along with weak demand have prompted an early start to the injection season this year and are putting downward pressure on U.S. gas prices more broadly. But why all the craziness now? One of the best ways to get a handle on the Permian gas-market meshugah is to examine gas pipeline flows within the basin and without, which, as it turns out, is the focus of our upcoming School of Energy Master Class. Today's RBN blog is a blatant advertorial for that event where we’ll be discussing gas-flow analysis, pipeline modeling and how they help explain why Waha gas prices have gone sub-zero. At first glance, nothing extraordinary jumps out about what’s happening in the Permian to depress Waha prices. Permian supply is in line with or lower than where it has been all winter, except for during the mid-January freeze-offs. Is it pipeline maintenance? Weirdly low demand? We’ve dug into it and determined that no single driving factor or event is to blame for the recent run of negative prices. Instead, it’s a combination of low demand (both within the basin and without), as well as pipeline work along several key routes, including El Paso Natural Gas (EPNG) and some of the newer greenfield pipelines headed east out of the basin. And it looks like these overall dynamics will keep downward pressure on Waha prices throughout the spring, meaning we likely haven’t seen the last — or lowest — of negative prices in the basin this year. Yikes!Negative gas prices for weeks or even months in a market as massive and important as Waha is a big deal, so it’s worth taking a look under the hood and getting our hands dirty to see what’s going on. For now, let’s focus on just a couple of the key factors at play: namely, gas flows within the Permian and from there to the U.S. West Coast. By using pipeline flow analysis — which you can learn to do on your own at our April 10 Master Class — we can unpack the impact of the ongoing EPNG system maintenance on both the West Texas and California markets to reveal part of the puzzle of why Waha prices are negative now and how long this price pressure might persist.Maintenance on EPNG (light-green lines in Figure 1 below) has been intermittently disrupting flows from the Permian to the California border for some time now, and who feels the pain depends on what else is happening in both regions. Last fall, these flow disruptions were a bigger deal for California than they were for the Permian, but currently it’s the Permian that’s feeling the heat.
When Natural Gas Prices Cool, Flares Burn in the Permian Basin - – Sharon Wilson trained her bulky, black camera on a thin, steel tower next to a natural gas compression station.The screen of her Optical Gas Imaging camera lit up with warm colors, indicating that methane was pouring out of the tower. Wilson, of the non-profit Oilfield Witness, was recording the Oklahoma-based company ONEOK’s Coyanosa station in its WesTex pipeline network. The station maintains pipeline pressure of natural gas during transportation. Wilson documented widespread flaring, venting and other methane releases during a week in the Texas Permian Basin this month. Natural gas prices in the Permian Basin fell below zero during March. When natural gas prices are low, companies are more likely to vent or flare methane. Pipeline capacity to transport the gas out of the Permian Basin is currently limited, which can also result in more flaring.That’s bad news for efforts to fight climate change. Natural gas is mostly made up of methane and the Permian Basin is the single-largest source of methane emissions in the U.S. oil and gas industry. As a greenhouse gas, methane is about 80 times more potent at warming the atmosphere than carbon dioxide over a 20-year period. Flaring also releases a variety of hazardous air pollutants, including volatile organic compounds like benzene, a carcinogen, and contributes to ground-level ozone, a pollutant that causes respiratory illness and heart disease. The Permian Basin produces more crude oil than any other in North America and is now the second-most productive gas basin in the country. Drilling for oil yields the biggest profits for energy companies, but oil drilling also produces large volumes of natural gas. Companies flare natural gas if they aren’t able to sell or transport it, a practice known as routine flaring.“They have to get rid of the gas because it’s going to cost them money to get it in a pipeline,” Wilson said.At the Waha Hub, where natural gas produced in the Permian Basin is funneled into pipelines to reach demand centers, the price for gas dipped below zero on March 13 and was still negative as of March 21. Analysts warn that the capacity for pipelines to transport gas away from the Permian Basin is limited. The ONEOK compression station where Wilson documented methane emissions connects gas producing wells in the Permian Basin to the Waha Hub. An ONEOK spokesperson said during the time period Wilson documented emissions at the compression station, “no unpermitted emissions occurred.” However, a spokesperson for the Texas Commission on Environmental Quality said the emissions were not reported to their agency, as required by law, and they would be looking into the incident. The Permian Basin sprawls across the arid landscape of West Texas and southeastern New Mexico. The quantity of this gas in the Permian has nearly tripled since 2018, according to the Energy Information Administration. At drilling sites, the Railroad Commission of Texas enforces State Rule 32, which prohibits flaring natural gas. However, the Commission grants thousands of exceptions a year. Companies can request an exemption to flare when there is not enough pipeline capacity. During January 2024 in Texas, 2.65 percent of the natural gas produced at oil wells, known as casinghead gas, was flared, according to information provided by the Railroad Commission. More recent data was not available. “In the rush to develop the oil in the area, [companies] don’t plan for how to manage the gas that’s produced at the well,” explained Elizabeth Lieberknecht, a regulatory and legislative manager at the Environmental Defense Fund.The Environmental Protection Agency issued its final rule to reduce methane emissions under the Clean Air Act in December. The new rules, as written, will eventually prohibit routine flaring, which is currently allowed in Texas. However, the attorneys general of Texas and another two dozen stateshave challenged the federal rule. The legal challenges may delay implementation. Extensive pipeline construction has facilitated moving natural gas out of the Permian. But East Daley Analytics, which provides energy market analysis, and Validere, an emissions data company, projected in a May 2023 report that, starting in 2024, production growth in the Permian Basin once again could exceed gas “takeaway” capacity. The authors expected the problem to peak in mid-2024. When there is not enough pipeline capacity, companies can either limit drilling or increase flaring.
Why Colorado’s oil and gas industry filed a ballot proposal to ban oil and gas drilling -Over the last few months, Colorado’s oil and gas industry has mounted an all-out opposition campaign against a suite of legislative proposals backed by climate and air quality advocates. It has blanketed the airwaves with ads calling on lawmakers to kill the bills and held press conferences claiming the plans would wreck the state’s economy. But the latest move from industry-aligned lawyers stumped many political observers. On March 22, attorneys filed eight ballot proposals, including one draft initiative that would ask voters to approve the most controversial policy backed by environmentalists: a plan to phase out new drilling permits by 2030. Two other ballot proposals are copy-paste versions of the very air quality legislation the industry is trying to defeat. So why would the industry take the first step to ask voters to approve the exact policies it vocally opposes? It’s a question some of their top opponents are struggling to figure out. "We have no insight into what the oil and gas industry is doing with these measures,” said Jessica Goad, the vice president of Conservation Colorado, one of the state’s leading environmental groups. “They're either trying to game the system or have recognized the fact that we need to do more to reduce air pollution from oil and gas drilling." Mark Truax, the president and CEO of Pac/West Strategies, is leading ballot campaigns for Protect Colorado, a political action committee funded by Chevron Energy, Occidental Petroleum, and other major fossil fuel operators. He confirmed the latest ballot proposals are meant to force Colorado election officials to consider whether the language violates the state’s single-subject rule. The constitutional provision requires every proposed statute or constitutional initiative to limit itself to a single purpose clearly described in its title. “Besides threatening Colorado’s economy, we believe SB24-159, SB24-165, and HB24-1330 as introduced violate the single-subject requirement,” Truax told CPR News in an email. The rule applies to both legislative and ballot proposals, but it’s not enforced the same way. Every proposed ballot initiative is reviewed by the Colorado Title Board, which is comprised of the secretary of state, the attorney general, and the director of the Colorado Office of Legislative Legal Services, the non-partisan in-house council for the legislature. Each member usually appoints a delegate to sit on the board and vote on whether ballot initiatives meet the single-subject rule. The legislature, in contrast, doesn’t use the rule to gatekeep proposals. While nonpartisan staff members might advise lawmakers on whether a proposal follows the constitutional provision, elected officials can run bills and determine their titles. If a bill passes both chambers, the governor might issue a veto if they feel it violates the single-subject rule. If it’s signed into law, it can be challenged by a lawsuit and a court might then determine it is unconstitutional. By copying the language of the proposed legislation it’s trying to defeat as a ballot measure, Colorado’s oil and gas industry may have found a potential shortcut. If the Title Board determines that the proposal's language doesn’t follow the single-subject rule, the governor may be less inclined to sign it, and a court might also be more inclined to invalidate the policy. “They must be fairly confident they’ll win this argument in front of the Title Board,” said Curtis Hubbard, a political consultant with experience running ballot measures as the owner of OnSight Public Affairs. “In my way of thinking, it’s a sign that deep pockets don’t have limits around where they’ll go to fight legislation they oppose.”
Federal Court Rules Major Wyoming Oil and Gas Lease Sale Illegal for Ignoring Climate Impacts --The U.S. Bureau of Land Management will have to reevaluate the wildlife and public health impacts of a major 2022 oil and gas lease sale in Wyoming after a federal judge ruled Friday that the agency had overlooked "what is widely regarded as the most pressing environmental threat facing the world today" when it moved forward with leasing 120,000 of federal land.U.S. District Judge Christopher Cooper ruled in Washington, D.C. that the BLM did not halt the lease sale even after it acknowledged that oil and gas drilling on the federal lands could result in the same negative environmental and social impacts as the addition of hundreds of thousands of cars to U.S. roads each year.Moving forward with one of the Biden administration's largest lease sales despite its likely environmental harm, said Cooper, was illegal under the National Environmental Policy Act and other laws.Representing The Wilderness Society and Friends of the Earth (FOE), environmental legal group Earthjustice sued BLM over its leasing plans' potential impact on the greater sage grouse, an endangered bird species, and other wildlife, as well as groundwater impacts.The judge found BLM did not complete a sufficiently detailed review of drilling impacts on the greater sage grouse, and relied too heavily on outdated and overly broad analyses of oil and gas drilling in Wyoming.While the agency has been attempting to "stop the bleeding" of the greater sage grouse, whose population has declined nearly 40% since 2002, the BLM still refused to postpone leasing in a critical habitat for the bird.The Biden administration also did not adequately explain its analysis of potential groundwater harms, said the ruling.Despite some conservation strides by the Biden administration, The Wilderness Society's Ben Tettlebaum said the court's decision "affirms that much work remains" to be done. The BLM, he added, "must fully account for the serious impacts of its oil and gas program on groundwater, wildlife, and the climate."
Chevron will pay record fines for oil spills in California - Oil giant Chevron has agreed to pay a record-setting $13 million to two California agencies for past oil spills, but some of the company’s spills are ongoing.The fines, announced Wednesday, come more than three years after an investigation by The Desert Sun and ProPublica found that oil companies are profiting from illegal spills and that oversight of the industry by California’s oil and gas division was lax.At least one of Chevron’s spills is still running 21 years after it began in a Kern County oilfield, although a state spokesperson said it has been reduced by 98% “from its peak.” The amount spilled from the site, dubbed GS-5, is larger than the Exxon Valdez disaster.The crude collected from GS-5 generated an estimated $11.6 million in just three years, The Desert Sun and ProPublica found. In fact, rather than stopping potentially deadly inland spills, known as surface expressions, oil companies have routinely tried to contain them with netting or pieces of metal and used more than 100 of them as unpermitted oil production sites in Kern and Santa Barbara counties.This week’s announcement stopped short of saying GS-5 and other ongoing spills must be stopped, as required under state law. Instead, officials said the settlement “creates a framework for managing the spills with State oversight,” and “Chevron agrees to continue monitoring the site with Department of Conservation oversight.” No specific sites were named.In follow-up emails and a phone call, spokespeople for the state said the fines cover the first phase of the Cymric spill, in which a river of thick crude flowed down a natural watershed. Chevron for several years denied it posed a risk to health and the environment, and the company fought a $1.6 million fine imposed by state regulators. The penalties also cover dozens of smaller spills that killed or damaged wildlife and habitat.The new fines, which will be paid to the Department of Conservation and the Department of Fish and Wildlife, are unprecedented for the agencies but are minuscule for Chevron, a multinational that reported $2.3 billion in earnings in the fourth quarter of 2023.Spills in Chevron’s Cymric oil field had gushed more than 6 million gallons of wastewater and crude as of last June, but the settlement covers only 2 million gallons spilled from unidentified Kern County Chevron operations.A spokesperson for the Department of Fish and Wildlife said in an email that the fines covered the first phase of the Cymric incident that the agency’s oil spill response teams worked on from June 2019 through April 2020, totaling 1.2 million gallons, about 70% wastewater and 30% oil.As for the decadeslong GS-5 spill, Department of Conservation spokesperson Jacob Roper said: “As mitigation continues, less oil finds its way to the surface. Mitigation measures include injecting water underground to improve ground stability, sealing subsurface leak paths and removing fluids in shallow areas before they can reach the surface.” (The injected fluid gradually cools hot steam so as to not create more boiling spills.)At the spill’s peak in 2019, Roper noted, about 2,500 barrels of oil and water came to the surface each day. At the start of 2024, that had fallen to 80, and it has since dropped to 68.
California governor, celebrities and activists launch campaign to protect law limiting oil wells (AP) — Arnold Schwarzenegger and Jane Fonda joined California Gov. Gavin Newsom and environmental advocates in Los Angeles on Friday to launch a campaign to keep a 2022 law banning new oil and gas wells near homes, schools and hospitals.The law bans new wells within 3,200 feet (975 meters) of certain community sites, and proponents say it will protect residents from the health impacts of pollution. It hasn’t taken effect after the oil industry qualified a referendum to ask voters to overturn it in November.At a Los Angeles park with an oil pump jack in the background behind him, Newsom said keeping the law is a key part of advancing the state’s climate goals.“Big Oil is the polluting heart of this climate crisis,” Newsom said. “Thank you for being here today, tomorrow, and thank you for being there on Election Day, when we send a powerful message — not just here in the state of California, but heard all across the United States.”Newsom is backing a lawsuit claiming oil and gas companies deceived the public about the risks of fossil fuels. It’s part of his efforts to fortify California’s status as a climate leader as the state transitions away from fossil-fuel powered cars, trucks and trains.The California Independent Petroleum Association, which is pushing for voters to overturn the law, is concerned about how it will impact the oil and gas industry, which generates large amounts of state and local tax revenue.Newsom signed a law last year that was inspired in part by oil industry tactics, which have come under scrutiny, to collect enough signatures to get the referendum on the ballot. The law requires top funders pushing a referendum proposal to overturn a law to be listed on voter information guides released by the state. It also requires a referendum on the ballot to ask voters to “keep the law” or “overturn the law,” a departure from asking them to vote “yes” to keep the law or “no” to block it.Lawmakers introduced a bill last year that would have made oil companies pay up to $1 million to people with cancer or other health problems associated with a well, but it was blocked by the Senate Appropriations Committee.
Coast Guard updates clean-up efforts for tank 11 diesel spill at the Randolph Harley Power Plant in St. Thomas, U.S. Virgin Islands > United States Coast Guard News > Press Releases— Coast Guard oversight efforts continue, Thursday, for ongoing Virgin Islands and Water and Power Authority (VIWAPA) clean-up operations at the Randolph Harley Power Plant in St. Thomas, U.S. Virgin Islands, following the tank 11 diesel discharge that occurred at the facility, Oct. 25, 2023. Since the day of the incident, the original estimates of 33,600 gallons of No. 2 diesel discharged outside tank 11’s secondary containment have been updated and calculated to be over 50,000 gallons. The Coast Guard has been communicating and consulting with local government agencies, stakeholders, and partner members from the Caribbean Regional Response Team, including local Department of Natural Resources, the Environmental Protection Agency, the National Oceanic Atmospheric Administration, U.S. Fish and Wildlife Service, the U.S. Corps of Engineers and the Department of Transportation Pipeline and Hazardous Materials Safety Administration, among others, which are collaborating with the Federal On-Scene Coordinator during this response. “This is a long-term and complex response which includes several phases and matters that are being resolved with VIWAPA to ensure the most diligent and effective clean-up of the site,” said Capt. Jose E. DÃaz, Coast Guard’s Federal On-Scene Coordinator for the VIWAPA Tank 11 diesel spill. “As good stewards of the environment, removing this pollution threat is our top priority and should be carried out with the diligence and expedience it requires to ensure the safety of our citizens and the proper remediation of the affected environment.” Current clean-up operations remain actively focused on the recovery of the subsurface diesel material along the hillsides leading to Lindbergh Bay and Krum Bay, as well as the affected coastal area of Lindbergh Bay. Presently, clean-up crews continue irrigation tactics utilizing a high-volume low-pressure flow of water to help move the subsurface diesel through seven natural land veins to established collection points from where the diesel is being recovered. VIWAPA contractors are conducting weekly sampling for the response and management of an established collection system on the Krum Bay side of the site. Furthermore, Coast Guard Atlantic Strike Team personnel provide continuous technical and regulatory compliance consultation to the Federal On-Scene Coordinator and VIWAPA, contractor oversight of collection and recovery activities of diesel free product and contaminated soils on-scene, and monitoring of VIWAPA’s site safety plan, which includes managing air monitoring activities for clean-up crews at the site. Clean-up operations in the next 30 days include GeoSyntec consultants utilizing Light Detection and Ranging (LiDAR) technology to conduct a sub-surface site assessment and plume modeling of the affected terrain to help identify areas of free diesel product and provide recommendations for response recovery strategies. Once the site assessment is completed, VIWAPA will use the data to execute a drilling strategy to reach and recover the subsurface diesel. VIWAPA is also working with Coast Guard and other government agencies to finalize a comprehensive Waste Management Plan for the storage, transportation, and disposal of hazardous waste and contaminated materials from the site. The plan will include the proper management of all oily water waste, contaminated vegetation, and response materials that have been utilized to recover the diesel.
Hanwha Ocean bags $1.84 billion Qatari LNG carrier order - South Korean shipbuilder Hanwha Ocean, previously known as DSME, has secured an LNG carrier order worth about $1.84 billion as part of QatarEnergy’s massive shipbuilding program.The shipbuilder said on Monday it will build eight LNG carriers for an owner in Oceania and deliver them by January 2028.Hanwha Ocean did not reveal the name of the company but QatarEnergy announced on Sunday that it has signed time charter agreements for 25 LNG carriers with Nakilat as part of the second phase of the shipbuilding program, saying that eight of these 174,000 cbm vessels will be built by Hanwha Ocean.Prior to this, Hanwha Ocean signed a memorandum of understanding for 12 LNG carrieers tied to the shipbuilding program.The price of about $230 million per LNG carrier is also in line with the previous orders under the second part of the program. It is also much less then the current price of about $265-270 million for 174,000 cbm LNG carriers in South Korea.Last year, QatarEnergy signed a deal for 17 LNG carriers worth about $3.9 billion with HD Hyundai Heavy, kicking off the second phase of the shipbuilding program.In addtion, Samsung Heavy also secured a large order to build 15 LNG carriers for about $3.45 billion and this order is also tied to the program.
Exxon warns Australia faces sharp drop in gas supply, calls for policy stability (Reuters) - Exxon Mobil Corp (XOM.N), opens new tab on Tuesday gave a dire warning about the outlook of Australia's domestic gas supply, joining other gas producers in calling for policy stability and more investment in the sector. There is an urgent need for new investment in domestic gas supply and infrastructure to provide energy security and affordability for households and businesses, ExxonMobil Australia's Commercial Director David Berman said in a speech to the Australian Domestic Gas Outlook (ADGO) conference in Sydney. "Without investment, ExxonMobil Australia estimates by 2030 domestic gas supply available to southern states will decrease by 44%," Berman said. Exxon operates the Gippsland Basin joint venture, the biggest single gas supplier into the country's southern region, which includes New South Wales, Victoria, Tasmania, the Australian Capital Territory and South Australia. Berman said it takes just months to apply for and receive an onshore and offshore drilling permits in the U.S. but in Australia it can take up to two years. "Chasing sizably lower domestic gas prices requires significantly shorter regulatory timelines because one third of the gas that will be required by consumers on the east coast between 2025 and 2030 is not in production," he added. The Gippsland Basin has the resources to be able to help plug the gap, but final investment decisions to develop that gas have yet to be made, Berman said. Gas producer Senex Energy's Chief Executive Ian Davies said Australia's environmental approval process was killing investment as it takes almost three years for new projects to secure a green light. Davies said the Labor government's planned changes to its environmental protection law had to ensure the nation's resources industry remained competitive. Labor has proposed reforming the Environment Protection and Biodiversity Conservation Act (EPBC) with new legislation and the establishment of an agency to oversee development decisions. The government has argued the changes should reduce red tape and streamline the project assessment process. "The 1,009 days it takes on average to approve a resources project under the EPBC act is killing investment in Australia," Davies told the conference. Minister for the Environment and Water Tanya Plibersek did not immediately reply to a request for comment. Senex, owned by South Korea's Posco International Corp (047050.KS), opens new tab and Hancock Energy, is a Queensland-based gas producer. It had been due to spend A$1 billion ($653 million) on expanding its Atlas project in Queensland's Surat Basin. The expansion was put on hold in December 2022 after the government set a price cap on gas sales by east coast producers to reduce soaring power bills for households and businesses.
Pakistan to seek US waiver over Iran gas pipeline - Pakistan Observer - Minister for Petroleum Musadik Malik has said that Pakistan would approach the United States to waive the sanctions over the Iran-Pakistan Gas Pipeline project. Speaking to media representatives, the petroleum minister said that Pakistan cannot afford the project to be halted, adding that the United States government would be asked to waive off the sanctions from the project. “We have prepared an exemption petition draft against the US sanctions,” Musadik Malik added. He said that Pakistan will fully present its case on the matter. The petroleum minister said that Pakistan would use every available political and technological means to avert the sanctions. Musadik Malik said that Pakistan will start construction on its part of Iran gas pipeline project soon. The caretaker government had approved the 80-kilometre Iran-Pakistan gas pipeline project within the country’s territory. Earlier on March 21, Pakistan reaffirmed its commitment to Iran Pakistan gas pipeline project as Foreign Office Spokesperson Mumtaz Zahra Baloch said that it is the sovereign decision of the Pakistani government to move forward on the project. During her weekly news briefing, Mumtaz Zahra Baloch responded to the queries of the media persons regarding US congressional hearing. She made it clear that at this point there is no room for any discussion or waiver from any third party for the construction of the pipeline inside Pakistan’s territory. She said Pakistan has also conveyed to the US authorities the importance of this project for its energy security.
Russia supplies oil to North Korea as UN sanctions regime nears ‘collapse’ - Russia has started supplying oil directly to North Korea in defiance of UN sanctions, further cementing ties between the two authoritarian regimes and dealing a new blow to international efforts to contain Pyongyang. At least five North Korean tankers travelled this month to collect oil products from Vostochny Port in Russia’s Far East, according to satellite images shared with the Financial Times by the Royal United Services Institute, a UK think-tank. The shipments, which began on March 7, are the first documented direct seaborne deliveries from Russia since the UN Security Council — with Moscow’s approval — imposed a strict cap on oil transfers in 2017 in response to Pyongyang’s nuclear weapons tests. “These oil deliveries constitute a full-frontal assault against the sanctions regime, which is now on the brink of collapse,” said Hugh Griffiths, a former co-ordinator of the UN panel that monitors sanctions on North Korea. The vessels, which are North Korean-flagged and classified as oil products tankers, all visited the same berth operated by a Russian oil company at Vostochny Port, where they appeared to load. Satellite imagery confirmed that two of the ships then travelled from Vostochny Port to the North Korean port of Chongjin, where they appeared to unload. “The vessels we’ve seen at Russian terminals are some of the largest-capacity vessels in North Korea’s fleet, and the vessels are continually sailing in and out of the port,” said Joseph Byrne, a research fellow at Rusi. “Several of these vessels are also UN-designated, meaning they shouldn’t even be allowed entry into foreign ports, let alone involved in oil deliveries.” The deliveries come after North Korea last August began supplying thousands of containers of munitions to Russia, which military experts argue have made a significant contribution to Moscow’s war effort in Ukraine. According to Rusi, Vostochny Port has also been used as a hub for Russian ships allegedly involved in arms trade between the countries. “What we can see now is a clear arms-for-oil bartering arrangement in open contravention of sanctions that [Russian President] Vladimir Putin signed off on personally, illustrating Russia’s trajectory in recent years from international spoiler to outlaw state,” said Griffiths. All five of the North Korean ships made the journeys to Vostochny Port with their transponders switched off. One of those vessels, the Paek Yang San 1, was identified by the UN as having been involved in illicit ship-to-ship oil transfers designed to circumvent the import cap, which restricts North Korea to just 500,000 barrels a year each for oil and petroleum products. Deliveries can also only be deemed compliant if they are reported to a UN sanctions committee. Rusi researchers calculated that the oil deliveries documented from Vostochny Port could amount to 125,000 barrels of oil products — a quarter of the permitted annual quota — in a matter of weeks. Kremlin spokesperson Dmitry Peskov declined to comment. The operators of the North Korean ships could not be reached for comment. The revelation of the apparent oil-for-arms trade comes as western diplomats are rushing to preserve the UN panel that monitors compliance with sanctions on North Korea, amid fears that Russia could veto a renewal of the body’s mandate, according to three people familiar with discussions at the UN in New York. Western officials postponed a vote on renewing the expert panel last week after Russia and China made proposals to water down its mandate, the people said. The deliberations over the UN sanctions panel, which were first reported by Seoul-based news service NK News, have raised questions about how long the UN body — and the sanctions regime itself — can survive. “While there is a debate about the effectiveness of sanctions, what we are now seeing is what would start to happen if the sanctions were removed,” said Byrne. “This is giving North Korea a very significant lift.”
Indian refiners buy more US crude as Russia sanctions tighten - (Reuters) - More than 250,000 barrels per day of U.S. crude is set to arrive in India next month, the highest in more than a year, ship tracking data showed, amid tighter enforcement of sanctions on Russian crude. India, the world's third-biggest oil importer and consumer, is looking to diversify its oil supplies as fresh U.S. sanctions on Moscow threaten to dent Russian oil sales to India, the biggest buyer of Russian seaborne crude. About 7.6 million barrels of oil, or 256,000 barrels per day (bpd), were headed to India on three very large crude carriers and three Suezmax vessels, according to ship tracking firm Kpler. The ships, which were largely headed to India's west coast, were chartered by Reliance Industries, opens new tab, Vitol, Equinor, opens new tab and Sinokor, among others, according to data from financial firm LSEG. India was the top buyer of Russian oil last year after other groups retreated from purchases following Western sanctions on Moscow for its invasion on Ukraine in February 2022. Last month, the U.S. tightened efforts to reduce Russia's oil trade adding sanctions on state-owned shipping firm Sovcomflot and 14 crude oil tankers involved in Russian oil transportation. India's Reliance, operator of the world's biggest refining complex, will not buy Russian oil loaded on tankers operated by Sovcomflot after recent U.S. sanctions, sources told Reuters last week. More Indian refiners plan to shun Sovcomflot vessels, which may weigh on imports of Russian oil and leave Russia with fewer outlets for its flagship product, sources said.
India Suspends Venezuela Oil Purchases Fearing U.S. Sanctions Return, Stops Accepting Russian Oil Tankers - On Tuesday, Indian state and private refiners suspended purchases of crude from Venezuela as the U.S. sanctions waiver on Venezuela’s oil exports expires on April 18 and could lead to complications if not renewed, Bloomberg reported citing sources familiar.As OilPrice adds, private refiner Reliance Industries, which is India’s largest buyer of Venezuelan crude grade Merey, looks to avoid complications with cargoes if the U.S. were to re-impose the sanctions that were temporarily lifted for six months in the middle of October 2023. As the deadline for the waiver expiry nears, state refiner Indian Oil Corporation has also halted buying Venezuelan crude.At the end of last year, the U.S. introduced a temporary sanctions relief from October 2023 to April 2024, which now allows the production, lifting, sale, and exportation of oil or gas from Venezuela, and the provision of related goods and services, as well as payment of invoices for goods or services related to oil or gas sector operations in Venezuela.As a result, the top international oil trading houses are back in the business of trading with oil from Venezuela, and refiners in India returned at the end of last year to the market of purchasing Venezuela’s crude. In December, India resumed imports of crude oil from Venezuela for the first purchases since 2020 after the U.S. lifted most of the sanctions on Venezuela’s oil industry in October. For India, the world’s third-largest crude oil importer, Venezuelan oil is welcome as some refineries are designed to process the South American country’s heavy crude. The biggest refiners, including Reliance Industries, Indian Oil Corporation, and HPCL-Mittal Energy started securing crude cargoes from Venezuela as soon as the sanctions were lifted temporarily in October. Most refiners have resumed the purchases via intermediaries, sources familiar with the development told Reuters at the time. Reliance is also looking to discuss direct sales with Venezuela’s state-owned oil firm PDVSA, according to Reuters’ sources. It's not just Venezuela, however: last week Bloomberg also reported that all of India's oil refineries have stopped accepting Russian crude oil delivered by tankers operated by Sovcomflot, Russia’s largest commercial shipping company that has been sanctioned by the US, potentially dealing a blow to Moscow’s economy as India is one of the largest importers of its fossil fuels since the start of the Ukraine war. According to the report, private and state-run processors including the biggest - Indian Oil - have stopped taking cargoes if they’re on Sovcomflot tankers, as refiners scrutinize the ownership of each ship to make sure they’re not affiliated with the company, or other sanctioned groups.
Up to Rs10/litre: Significant hike in petrol prices under consideration - The federal government is contemplating a significant raise in petrol prices by up to Rs10 per litre, effective from April 1, 2024, further worsening the financial burden on the general public. The recent surge in petrol prices is attributed to an increase in premium from $12.15 per barrel to $13.507 per barrel, marking a $1.45 per barrel increment. In case the government passes on full impact on general masses ahead of Eid-ul-Fitr, the price of petrol would surpass high-speed diesel (HSD) price. It would rise from Rs279.75 to Rs289.75 per litre. Additionally, the Inland Freight Equalization Margin (IFEM) on petrol is expected at Rs5.01 per litre. There may be a slight decrease of Rs1.30 per litre in the price of HSD, as the premium on HSD stands at $6.50 per barrel as in the last two reviews of petroleum products. IFEM is expected at Rs3.76 per litre on HSD. The prices of kerosene oil (KERO) and light diesel oil (LDO) are expected to remain unchanged at Rs188.66 per litre and Rs168.18 per litre, respectively. The Oil and Gas Regulatory Authority (OGRA) will send its recommendation of petroleum prices on March 31, 2024, and the federal government will announce the price in light of the OGRA’s recommendations. This rise in petroleum product prices is anticipated to occur without the proposed imposition of 18 percent general sales tax (GST). However, if the GST be levied, prices could surge by an additional Rs50 per litre on petrol. Currently, the government imposes a petroleum levy (PL) of Rs60 per litre, amounting to 21.4 percent of the current petrol price of Rs279.75 per litre. Again, if the government chooses to impose an 18 percent GST on HSD, the price could increase by Rs53 per litre from the current Rs285.70 per litre. Since February 2022, the federal government has maintained a zero GST rate on petroleum products. The International Monetary Fund (IMF) has been asking the government to remove sales tax exemptions on all items, including petroleum products. An official from the Federal Board of Revenue (FBR) noted that there are currently no proposals under consideration to impose sales tax on petroleum products. Nevertheless, the estimated revenue from an 18 percent sales tax on petroleum products could range between Rs21 billion to 25 billion per month, based on current consumption levels.
Exclusive: Russia increases gasoline imports from Belarus as domestic supplies shrink (Reuters) - Russia has increased gasoline imports from neighbouring Belarus in March to tackle the risk of shortages in its domestic market because of unscheduled repairs at Russian refineries after drone attacks, four industry and trade sources said on Wednesday. Usually Russia is a net exporter of fuel and a supplier to international markets, but the disruption of Russian refining has forced oil companies to import. Already Russia banned gasoline exports from March 1 to try to secure enough fuel for its domestic market after repeated Ukrainian drone attacks on Russian refineries since the start of the year. Russia normally imports very little fuel from Belarus, although it turned to it last August-to-October, when it faced fuel shortages that led to a rapid rise in gasoline prices and prompted another oil product export ban. This year, Russia has again increased gasoline imports from Belarus, and in the first half of March they reached almost 3,000 metric tons, Reuters sources familiar with the statistics said. In February, Russia imported 590 tons, while in January, there were no shipments from Belarus. Two industry sources, who requested anonymity because they were not authorised to speak publicly, said discussions on further imports were taking place between governments and oil companies. One of them said the talks were difficult as Belarus prioritises exports of its fuel to international markets. How much will be required by Russia will depend on the timing of refinery repairs, another of the sources said. Russian oil companies can increase oil supplies to Belarusian refineries in return for extra petroleum products for supply to Russia, the industry sources said. Belarus generally exports its oil products via Russian Baltic ports to international markets under long-term transit agreements between the states. Belarus has two oil refineries - the Naftan oil refinery in Novopolotsk and the Mozyr oil refinery. Each has a capacity of 12 million tons per year (some 240,000 barrels per day), but they typically run at lower capacity, each refining about 9 million tons per year (some 180,000 barrels per day). It is unclear how much Belarus can increase production and industry sources have said there are technical bottlenecks. Russia's Energy ministry and Belarus's state oil company Belneftekhim, which operates both of the republic's refineries, did not answer requests for comment. Neither did Russia's Rosneft, Lukoil, Tatneft and Gazpromneft, all major oil suppliers to Belarus and operators of gas stations in the republic. The refineries in Belarus use mostly Russian oil as a feedstock, while Russian oil companies, which have Belarusian subsidiaries, also buy gasoline from the refineries to supply their Belarusian fuel stations.
Over 20% Of The World's Oil Refining Capacity Is At Risk Of Closure - More than 20% of the total global refining capacity is at some risk of closure as refining margins are set to weaken alongside demand, while carbon taxes could also burden many refiners, Wood Mackenzie has said in a recent report.Overall, based on expected net cash margins in 2030, Wood Mackenzie has identified 121 out of 465 screened refining sites “at some risk of closure”. This represents a cumulative 20.2 million bpd of refining capacity, or 21.6% of the global capacity last year, WoodMac’s analysis showed.The energy consultancy sees refiners in Europe and China at higher risk of shutting down because of worsened economics. European refineries will see their net cash margins decline from 2030 due to the unwinding of free allowances for carbon emissions, while transport fuel demand in developed countries is expected to begin to decline from next year onwards, according to WoodMac’s analysis.“China will see liquid demand peak by 2027 and start to fall as the country actively electrifies their road transport. Non-OECD countries will enjoy continued demand growth beyond 2030, but their refiners will not be immune as global demand for transport fuels falls,” researchers and analysts and Wood Mackenzie wrote.Europe could also see its long-standing fuel export trade volumes with Nigeria tumble after the start-up of the Dangote Refinery, Africa’s biggest, earlier this year.The trade, estimated to be worth $17 billion each year, could be threatened by soaring output at the Dangote refinery, traders and analysts told Reuters earlier this month.The Dangote refinery, with a processing capacity of 650,000 barrels per day (bpd), is expected to meet 100% of Nigeria’s demand for all refined petroleum products, and will also have a surplus of each of the products for export. Meanwhile, oil majors have recently announced upcoming closures of European oil refineries that would be converted into biofuels-making facilities. The latest include Eni’s refinery in Livorno, Italy, and Shell’s oil refinery at the Wesseling site in Germany which will be converted into a production unit for base oils.
Oil slicks in waters off Tuas Port likely to have originated inland, authorities investigating pollution source - — The periodic oil slicks found in the waters off Tuas Port are likely to have originated from inland Singapore, said the Maritime and Port Authority of Singapore (MPA) on Monday (March 25). Responding to media queries in a statement, MPA said that it is investigating reports of oil slicks in the area together with the National Environment Agency (NEA) and JTC Corporation (JTC). No evidence indicating a single source of the oil pollution has been found, said MPA, adding that the oil slicks have not significantly impacted port operations or navigation. Laboratory tests on oil samples by PSA — formerly known as the Port of Singapore Authority — found that the source is likely to have originated from "further inland", said MPA. Investigations by the NEA are also ongoing to identify probable upstream sources of the oil pollution, which may have flowed through drain networks to the sea. JTC has installed oil booms and closed-circuit television cameras along an open seaward section of a drain to monitor oil gathered at the booms. Surveillance of the area has also been stepped up though night patrols along Tuas South Avenue 16 and Tuas South Way, said MPA. The authority added it is deploying regular patrols to monitor the waters off Tuas Port, with oil spill response craft ready to be activated at short notice to deal with any oil slicks. NEA has also issued guidance and reminders to various premises in the vicinity of the area on how to properly manage waste oil.
Shell seeks millions in costs from law firm over failed oil spill claim - Legal Futures - Listed law firm Rosenblatt is facing the prospect of having to pay out millions of pounds after the High Court allowed proceedings for costs orders against it to proceed. Mrs Justice O’Farrell ordered the firm to show cause why a wasted costs order should not be made over whether it had authority to act for the claimants in a huge failed group action. She further ordered Rosenblatt to disclose funding agreements and other information that would help Shell understand the level of control it exerted on the claim brought against the oil giant with a view to applying for a non-party costs order. Shell argues that the firm went beyond acting as solicitors and became a funder of the litigation. Rosenblatt acted for 27,380 claimants and 479 communities taking action against Shell over an oil spill off the coast of Nigeria in two related actions (called Jalla 1 and Jalla 2), which last year the Supreme Court held were statute-barred for limitation. Initially, between 2015 and 2020, the claimants were represented by London law firm Johnson & Steller, with Rosenblatt latterly providing legal assistance and funding under a collaboration agreement. Rosenblatt took over the case in August 2020 and signed up the two lead claimants, who were stated to have authority to act on the individual claimants’ behalf, and the claimant steering committee to a damages-based agreement (DBA). A question throughout was whether, as a matter of Nigerian law, Rosenblatt had authority to act for the claimants. O’Farrell J ruled last year that it did where individual claimants had given their consent – but only five had – and where the claims were community claims in respect of community land rights (of which there were four). At a hearing last October, for which O’Farrell J has only just given judgment, the defendants sought its costs from the claimants and a wasted costs order against Rosenblatt for acting in breach of warranty of authority, as well as the disclosure order. She held that the claimants should pay the defendants 90% of their costs of the authority issue – said to be approaching £1.2m – and ordered an interim payment on account of £577,000. The defendants sought these costs from Rosenblatt on the ground that it was the real party to that issue or alternatively a wasted costs order.
OPEC rules out oil production policy change - The Organisation of Petroleum Exporting Countries (OPEC) and the broader OPEC+ group do not see any need to propose a change to the oil production policy when the Joint Ministerial Monitoring Committee (JMMC) meets next week, according to delegates, commodity analyst Giovanni Staunovo yesterday. OPEC+ members have decided to cut 2.2 million barrels per day (bpd) from the group’s production this quarter, although much of that was production cuts that were already in effect, including Saudi Arabia’s 1 million bpd voluntary cut. Early this month, the members of the OPEC+ alliance that had pledged the Q1 cuts announced they would roll over the supply reductions until the end of the second quarter. Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, Oman, and Russia are now cutting their respective crude oil production and exports in the first half of 2024 with extra voluntary reductions, on top of the voluntary cuts OPEC+ previously announced in April 2023 and later extended until the end of 2024. When the OPEC+ members announced on March 3 their intentions to extend the cuts into the second quarter, Russia changed its production/export cut plan and said that in the second quarter it would reduce supply by 471,000 bpd in the form of cuts to oil production and exports. In April, Russia will reduce production by 350,000 bpd and exports by 121,000 bpd. In May, the 471,000 bpd reduction would be in the form of a 400,000-bpd cut to production and 71,000 bpd cut to exports, and in June the Russian supply cut would be 471,000 bpd entirely from production reductions. The production estimates for February have shown that some of OPEC+ members – especially Iraq and Kazakhstan – continued to overproduce above their respective quotas. OPEC’s second-largest producer, Iraq, is committed to its voluntary cut in the OPEC+ agreement and will produce no more than 4 million bpd of crude oil, Iraq’s Oil Minister Hayan Abdel-Ghani said in February. Non-OPEC oil producer Kazakhstan, for its part, vowed to compensate over the coming months for a lack of compliance with the cuts in January.
Saudi Aramco CEO says energy transition is failing - — Saudi Aramco CEO Amin Nasser said Monday that the energy transition is failing and policymakers should abandon the "fantasy" of phasing out oil and gas, as demand for fossil fuels is expected to continue to grow in the coming years. "In the real world, the current transition strategy is visibly failing on most fronts as it collides with five hard realities," Nasser said during a panel interview at the CERAWeek by S&P Global energy conference in Houston, Texas. "A transition strategy reset is urgently needed and my proposal is this: We should abandon the fantasy of phasing out oil and gas and instead invest in them adequately reflecting realistic demand assumptions," the CEO said to applause from the audience. The Paris-based International Energy Agency forecast last year that peak oil, gas and coal demand would come in 2030. Nasser said demand is unlikely to peak anytime soon, let alone by that year. Nasser suggested that the IEA is focusing on demand in the U.S. and Europe and needs to focus on the developing world as well. Nasser said alternative energy sources have been unable to displace hydrocarbons at scale, despite the world investing more than $9.5 trillion over the past two decades. Wind and solar currently supply less than 4% of the world's energy, while total electric vehicle penetration is less than 3%, he said. Meanwhile, the share of hydrocarbons in the global energy mix has barely fallen in the 21st century from 83% to 80%, Nasser said. Global demand has increased by 100 million barrels of oil equivalent per day during the same period and will reach an all-time high this year, the CEO said. Gas has grown 70% since the start of the century, Nasser said. The transition from coal to gas is responsible for two-thirds of the reductions in carbon emissions in the U.S., he said. "This is hardly the future picture some have been painting," Nasser said. "Even they are starting to acknowledge the importance of oil and gas security." Developing nations in the global south, meanwhile, will drive oil and gas demand as prosperity rises in those nations, which represent more than 85% of the world's population, the CEO said. These nations receive less than 5% of the investment targeting renewable energy, he said. Nasser said the world should focus more on reducing emissions from oil and gas in addition to renewables. The CEO said efficiency improvements alone over the past 15 years have reduced global energy demand by almost 90 million barrels per day oil equivalent. Wind and solar, meanwhile, have substituted only 15 million barrels over the same period, he said. "We should phase in new energy sources and technologies when they are genuinely ready, economically competitive and with the right infrastructure," Nasser said.
Peak Oil is Officially Here! World oil production peaked November of 2018 | Peak Everything, Overshoot, & Collapse -- When I first published this post in February of 2022, I said that peak world oil production might have arrived, but it takes 5 years in the rear-view mirror to call it. Now peak “crude oil including lease condensate oil” is officially here! Production was less in November 2023 than the peak of global oil production in November 2018. See for yourself at the U.S. Energy Information Administration site here. You can ignore all the other liquids, they do not make diesel fuel for heavy-duty trucks, locomotives, and ships that do the actual work of civilization. Mainly the other categories are good for plastics, which we have more than enough of. Or ethanol for gasoline, but you’d destroy a diesel engine if you added this to extend diesel fuel. I suspect these categories were added to keep people from panicking like they did in the oil crises of 1973 and 1979. Why would they panic? There is a very tight correlation between fossil production, GDP, and population.Unconventional shale oil was responsible for over 90% of the increased production above the 2008 plateau with a little help from Canadian tar sands.Seven of the eight U.S. shale basins are past peak, with only the Permian producing the majority of fracked oil. And it may peak in 2024 (Geiger 2022). Or not, some scientists think the USA shale oil production could be on a plateau until 2040. But at any rate, when shale oil and gas decline, will be a hell of a rollercoaster ride down, since shale oil declines 80% over 3 years. And already 81% of all the other oil production is declining at 8.5% a year, offset by 4.5% enhanced oil recovery.As the energy crisis in Europe deepens, there could be a sudden mad rush of capital to explore, drill, and produce more oil which would keep the plateau going a bit longer.But wars, natural disasters, the export land model (the few oil producing nations left keep the oil for their own population and factories), plus other factors and black swans could also throw a monkeywrench in the works and cause oil production to fall rapidly. Above all, it is the FLOW rate that matters. Half the oil may still be underground, but it will take longer and more expensive to get, and require more energy to extract, subtracting what can be delivered to society for other uses. Delannoy et al (2021) estimate that by 2050, half of the gross energy output will be engulfed in its own production. Whoa — if the EROI of civilization needs to be at least 10 to 14, that’s the end of civilization (Lambert et al 2014)! Also important is that the actual problem is Peak Diesel since this is the portion of an oil barrel that really matters, as I showed in When Trucks Stop Running: Energy and the Future of Transportation. Diesel is what powers tractors, harvesters, mining, long haul, construction, and myriad other trucks that do the actual work of civilization. Diesel production may have peaked in 2015 (Turiel 2021) and Russia’s invasion of Ukraine has led to shortages of diesel (Slav 2022). In addition, supply chain issues for goods are likely to increase since trucks make everything you own or can imagine possible, and energy decline will lead to a financial depression, business failures, and a lack of key spare parts for trucks of all kinds (as well as locomotives and ships, which carry 90% of all internationally traded goods, including oil). And there may be a lot less oil than the EIA, IEA, BP Statistical review, and other estimates of world reserves have estimated. Laherrere et al (2022) explain the various methods used to calculate world fossil reserves, and why their method is probably most accurate — which is what Laherrere has written about for the past 60 years. Many geologists who’ve modeled likely fossil fuel decline within the IPCC climate model predicted that the most likely outcomes were RCP 2.6 to 4.5 (see the last chapter in “Life After Fossil Fuels”). If 2018 was the world peak oil production year, perhaps the lower RCP 2.6 is most likely. Laherrere et al (2022) estimates RCP 3.0 since the global CO2 emissions for the period 2020–2100 are approximately 1000 GtCO2 for coal, 750 GtCO2 for oil and 650 GtCO2 for natural gas, giving a grand total of 2400 GtCO2, with a further ~850 GtCO2 being emitted beyond 2100. Clearly such emissions are incompatible with the 580 GtCO2 limit to CO2 emissions to 2100 assumed by Welsby et al 2021 to meet 1.5 °C goal in the 2022 IPCC report. If the 1750 GtCO2 emitted so far has led to a 1.1 C increase, 3250 GtCO2 would add another 2 C for a total of 3 C above pre-industrial levels. I think a great deal of oil will be left in the ground. Geology isn’t the whole issue. Oil makes all other resources possible, including food, so its decline is likely to lead to social unrest, depressions, war and civil wars, supply chain failures, natural disasters like hurricanes taking out offshore oil platforms, floods and earthquakes damaging refineries, and other catastrophes that disrupt oil production. And don’t forget that the FLOW RATES will be lower. Maybe the last oil will take 1,000 years to get out — if we can maintain the level of technology we have now when things are falling apart. Nor are unconventional tar sands (Canada) or heavy oil (Venezuela) likely to produce much oil since their energy return on invested is very low. So that leaves their estimate of remaining conventional oil of 1100 Gb (Table 1) to carbon of ~470 GtCO2, well under the 580 GtCO2 limit to CO2 emissions and if the above parameters occur, less coal and natural gas as well.
Global energy demand will outpace population growth through 2050, Kuwait oil CEO says — Global energy demand will increase faster than the rate of population growth through 2050, contradicting projections that demand will peak this decade, according to the CEO of Kuwait Petroleum Corporation. "The world population is going to increase by about 25% between now and 2050, but energy demand will increase faster than that," Shaikh Nawaf al-Sabah told the CERAWeek by S&P Global energy conference in response to a question about whether demand will peak by 2030. "That means that we're going to require more energy intensity for the population in the world," al-Sabah said. Three-quarters of a billion people in the developing world have no electricity and nearly 2.5 billion people have no clean cooking solutions, according to the CEO. Oil Prices, Energy News and Analysis Follow today's coverage of oil prices and the latest news on crude oil Red Sea crisis could lead to global tanker shortage, Kuwait Petroleum CEO says U.S. energy secretary tells skeptical executives natural gas export pause will be short-lived Global energy demand will outpace population growth through 2050, Kuwait oil CEO says Exxon is not trying to acquire Hess in dispute with Chevron, CEO says Saudi Aramco CEO says energy transition is failing Solar CEOs bet that red state investments will protect them from threat of Trump repealing IRA "That is going to have to change," Al-Sabah said. "The global south will be a large component of energy demand in the future. And it's only fair to have countries that have – to use a term – energy poverty, be able to exploit natural resources in a clean and efficient manner." The Paris-based International Energy Agency forecast in October that demand for oil, coal and natural gas would peak before the end of this decade as clean energy technologies play a bigger role in the global energy mix. The IEA's projection has been a point of contention during discussions at the CERAWeek conference this week. Saudi Aramco CEO Amin Nasser said Monday at CERAWeek that projections of peak oil demand this decade are focused on Western nations. More than 85% of the world's population, however, lives in developing countries, he said. Demand growth potential in developing nations is significant with oil consumption ranging between 1 to just below 2 barrels per person per year, Nasser said. That compares to 9 barrels per person in the European Union and 22 barrels per person in the U.S., he said. The energy transition will be largely determined by developing nations, which receive just 5% of investments that target renewables, Nasser said. The current energy transition strategy is failing and needs a reset, Nasser said. Many alternative energy sources are currently unaffordable for a majority of people around the world, he added. The world needs to abandon the "fantasy" of phasing out oil and gas, said Nasser, calling for investments that reflect realistic assumptions for hydrocarbons. The Kuwait Petroleum Corporation plans to increase its production capacity to 4 million barrels per day by 2035 from 3 million bpd currently, Al-Sabah said. "The reason we want to get to 4 million a barrels a day during that period, is because we see demand increasing throughout this energy transition," Al-Sabah said. Crude demand will remain a central part of the energy mix in the coming decades, according to the CEO.
Oil prices up as geopolitical tensions fuel supply concerns Oil prices increased on Monday amid global supply concerns supported by heightened geopolitical risks. International benchmark Brent crude traded at $85.21 per barrel at 10.29 a.m. local time (0729 GMT), a 0.45% rise from the closing price of $84.83 per barrel in the previous trading session. The American benchmark West Texas Intermediate (WTI) traded at $81.01 per barrel at the same time, a 0.47% increase from the previous session that closed at $80.63 per barrel. Since major oil routes are still under threat from ongoing attacks on oil refineries and as the conflict between Russia and Ukraine intensifies, geopolitical risks continue to impact oil prices. Last week, the Russian governor of the Rostov region, Vasily Golubev, stated on Telegram that attacks by Ukrainian drones had shut down the largest oil refinery in the southern part of the country. The official said drones fell on the territory of the Novoshakhtinks refinery, which has an annual oil processing capacity of 7.5 million tons. Furthermore, hopes of a cease-fire in the Middle East subsided after the UN failed to pass a cease-fire resolution on Gaza on Friday. The UN Security Council was set to vote on a US draft resolution calling for an immediate cease-fire in Gaza linked to the release of all hostages. On Friday, Russia and China, two of the five permanent Security Council members, vetoed the US-proposed resolution. Meanwhile, the rise of the US dollar against other currencies is expected to reduce demand and slow the rise in oil prices. The US dollar index increased by 0.33% to 104.35 at 10.22 a.m. local time (0722 GMT) on Monday.
The Crude Market on Monday Traded Higher as the Russian Government Ordered Producers to Cut Output - The crude market on Monday traded higher as the Russian government ordered producers to cut output. The oil market, which posted an inside trading day on Friday, posted a low of $80.59 on the opening and continued to retrace some of its previous losses. The market was well supported by the news that Russia ordered companies to cut their oil output in the second quarter to meet a production quota of 9 million bpd by the end of June. The recent attacks on Russian energy facilities and Ukrainian energy infrastructure and fading hopes of a ceasefire in Gaza have also helped support the market. The market rallied to a high of $82.48 by mid-morning. However, the market erased some of its gains and traded in a sideways trading range during the remainder of the session. The May WTI contract settled up $1.32 at $81.95 and the May Brent contract settled up $1.32 at $86.75. The product markets ended the session in positive territory, with the heating oil market settling up 2.52 cents at $2.6786 and the RB market settling up 86 points at $2.7484. Goldman Sachs said “Brent prices modestly overshot fundamentals and are likely to consolidate for now at the top end of $70-$90 range.” The White House said it was very disappointed that Prime Minister Benjamin Netanyahu had canceled a high level Israeli delegation’s planned visit to Washington after the U.S. abstained from a U.N. vote demanding an immediate ceasefire in Gaza. White House spokesperson, John Kirby, said senior U.S. officials would still meet for separate talks with Israeli Defense Minister Yoav Gallant on issues including hostages, humanitarian aid and protecting civilians in the southern Gaza town of RafahA Houthi spokesperson said Houthis have threatened to target Saudi Arabia’s oil installations should the country allow a U.S.-led coalition to use its airspace to counter the group’s attacks. The U.S. formed a coalition with Australia, Bahrain, Canada, Denmark, the Netherlands and New Zealand to counter Houthi attacks in the region and safeguard commercial shipping routes. Saudi Arabia has not made a commitment to joining the coalition and has so far avoided making any statements that could provoke the Houthis.Three industry sources said Russia's government has ordered companies to reduce oil output in the second quarter to ensure they meet a production target of 9 million bpd by the end of June in line with its pledges to OPEC+.IIR Energy reported U.S. oil refiners are expected to shut in about 809,000 bpd of capacity in the week ending March 29th, marking an increase in available refining capacity of 8,000 bpd. Offline capacity is expected to increase to 882,000 bpd in the week ending April 5th.
Oil prices slip as traders assess Ukraine drone strikes, Red Sea impact -- Crude oil futures slipped Tuesday as traders assessed the impact of the wars in Eastern Europe and the Middle East on the supply picture. The West Texas Intermediate contract for May fell 33 cents, or 0.4%, to settle at $81.62 a barrel. The Brent contract for May lost 50 cents, or 0.58%, to settle at $86.25 a barrel. Solar CEOs bet that red state investments will protect them from threat of Trump repealing IRA Ukraine has escalated its drone strikes against Russian oil refineries, knocking an estimated 900,000 barrels per day of capacity offline, according to Goldman Sachs. The outages could take weeks to repair and, in some cases, there may be a permanent loss of capacity, the investment bank said. The disruptions' effect on crude prices will likely be mixed, with a decline in refinery demand bearish and a potential reduction in Russian oil exports bullish, Goldman noted. The Red Sea crisis, meanwhile, has led to a build of 100 million barrels of oil on international waters as shipping companies redirect trade flows to avoid attacks by Houthi militants, according to the bank. The Red Sea disruptions combined with Russian shipping frictions have given crude prices up to a $4 boost per barrel due to larger-than-expected draws from commercial stocks, according to Goldman.
Oil Futures Down Amid Consumer Pessimism, Weak Manufacturing -- Oil futures closest to expiration settled lower Tuesday, with product losses outpacing the decline in crude as returning refinery activity is seen leading to increased supply availability for oil products while lifting refiner demand for crude. Tuesday morning, The Conference Board released their U.S. Consumer Confidence Index which ticked lower in March to 104.7, well below expectations for a 106.7 reading, with U.S. consumers turning pessimistic about the future. "Consumers remained concerned with elevated price levels," said Dana M. Peterson, chief economist at The Conference Board. "March's write-in responses showed an uptick in concerns about food and gas prices." Peterson said confidence deteriorated for consumers under 55, and consumers in the $50,000 to $99,999 annual income range. Historically, driving activity correlates with the confidence level of consumers, so heightened pessimism bodes poorly for gasoline demand. Cumulatively in 2024 through March 15, Energy Information Administration shows gasoline supplied to the U.S. market a modest 0.2% below the comparable year-ago period. NYMEX April RBOB futures settled down $0.0478 to $2.7006 gallon Tuesday afternoon, with the backwardation in the prompt spread narrowing to $0.0153 ahead of the April contract's expiration Thursday afternoon. Demand for diesel fuel has been undermined by overall weak manufacturing, with the Federal Reserve Bank of Richmond survey of manufacturing activity for March released Tuesday the latest regional indicator showing a slowdown. On Monday, the Dallas Federal Reserve Bank reported a negative downturn in Texas manufacturing activity in March. "A business is only as good as its customers' business and is completely dependent upon its customers' demand -- and demand is weak. It's a far stronger, deeper recession than publicized," a fabricated metal product manufacturer told the Dallas Fed. Distillate fuel supplied to the U.S. market was down 72,000 bpd or 1.9% at 3.693 million bpd against a year ago during the four weeks ended March 15, EIA data shows, although an improvement from the first 12 weeks of 2024 which was down 102,000 bpd or 2.7% year-on-year. Freezing wintry weather in January and February slowed manufacturing activity. NYMEX April ULSD futures ended Tuesday's session $0.0568 lower at $2.6218 gallon, with the May contract settling at a narrowing $0.0059 discount to April delivery. NYMEX May West Texas Intermediate futures settled $0.33 lower at $81.62 bbl. ICE May Brent futures settled down $0.50 at $86.25 bbl ahead of expiration Thursday afternoon, with the June contract ending the session at a $0.62 discount.
WTI Extends Losses After API Reports Large Crude Build -- Oil prices dipped lower today, consolidating just off five-month highs."WTI crude oil and Brent crude oil front month futures trade steady after both climbing 1.6% on Monday as Ukrainian drones hit another Russian oil refinery, adding to the list of casualties of Russian refining infrastructure, which according to (Goldman Sachs) has knocked out an estimated 900,000 barrels per day of refining capacity," Saxo Bank noted.Expectations were for a third weekly crude draw in a row and an eighth weekly decline in gasoline stocks... API
- Crude +9.34mm (-1.2mm exp) - biggest build in six weeks
- Cushing +2.39mm
- Gasoline -4.437mm (-1.7mm exp) - 8th straight weekly draw
- Distillates +531k (+100k exp)
Against expectations of a small draw, API reported a surprise significantly large crude build and stocks at the Cushing Hub rose notably. Gasoline stocks fell for the 8th week in a row..WTI was hovering around $81.50 ahead of the API print and legged lower on the surprise crude build...And finally, as gasoline stocks decline, wholesale gasoline prices imply pump prices are going much higher...
WTI Rises After Smaller Crude Build - Oil prices are lower overnight following API's report of a large crude inventory build. DOE
- Crude +3.17mm (-1.2mm exp)
- Cushing +2.1mm - biggest build since Jan 2023
- Gasoline +1.3mm (-1.7mm exp)
- Distillates -1.185mm (+100k exp)
Unlike API's report, the official data showed gasoline stocks building last week (first build in 8 weeks) and stocks at the crucial Cushing hub surged by the most since Jan 2023...
Signs That OPEC+ is Unlikely to Change its Output Policy at its Meeting Next Week The oil market continued to trade lower on Wednesday amid signs that OPEC+ is unlikely to change its output policy at its meeting next week and the unexpected builds reported in crude stocks. The market remained pressured in overnight trading as traders took profits on the OPEC news. The crude market, which posted a low of $80.55, also fell after the API on Tuesday afternoon reported an unexpected build in crude inventories of 9.3 million barrels. The market bounced off its low and retraced some of its previous losses as it posted a high of $81.60 in late morning trading. This was despite the EIA showing a build of 3.2 million barrels in crude stocks compared with the market expectations of a decline of 1.3 million barrels. The crude market later traded mostly sideways ahead of the close, with the May WTI contract settling down 27 cents at $81.35. The market later posted a new high of $81.66 in the post-settlement period. The May Brent contract settled down 16 cents at $86.09. The product markets ended the session lower, with the heating oil market settling down 2.32 cents at $2.5986 and the RB market settling down 1.59 cents at $2.6847. The U.S. Energy Department said the Biden administration has awarded contracts worth $225.6 million to buy 2.8 million barrels of oil for the Strategic Petroleum Reserve to Atlantic Trading & Marketing, Macquarie Commodities, and Sunoco Partners Marketing & Terminals. IIR Energy reported that U.S. oil refiners are expected to shut in about 1.1 million bpd of capacity in the week ending March 29th, increasing available refining capacity by 33,000 bpd. Offline capacity is expected to fall to 956,000 bpd in the week ending April 5th. Six biofuels and agricultural industry groups this week called on the US EPA to quickly issue a waiver allowing the sale of E15 ethanol gasoline in the Midwest this summer, in order to allow consumers access to “lower cost” gasoline this summer. The EPA last month announced it would allow the higher ethanol blends to be sold nationwide and year round beginning in 2025. The EPA did issue temporary emergency waivers in 2022 and 2023 to help combat rapidly rising gasoline prices at the time. Colonial Pipeline is rationing space on a small line to Baltimore in an unusual move that signals demand is exceeding capacity after the Francis Scott Key Bridge collapsed on Tuesday when it was struck by a container ship. Much of the Baltimore area gets its fuel via pipeline rather than barges, meaning extra supplies will likely have to flow through the Colonial Pipeline. Colonial issued an allocation notice for Line 32, which delivers gasoline, diesel and jet fuel between Maryland’s Dorsey Junction to Baltimore neighborhood Curtis Bay. The notice is for cycle 17, which spans from April 9th-16th. The company also froze nominations, which means shippers cannot send more barrels than initially indicated, for the previous two cycles.
Oil prices fall on stronger dollar, weak US gasoline demand (Reuters) - Oil prices fell for the second consecutive session on Wednesday as the dollar strengthened and government data showed a surprise jump in U.S. crude and gasoline stocks. Brent crude futures for May shed 16 cents, or 0.2%, to settle at $86.09 a barrel while the more actively traded June contract was down 22 cents to $85.41. The May contract expires on Thursday. U.S. West Texas Intermediate (WTI) crude futures for May delivery dropped 27 cents, or 0.3%, to $81.35 a barrel. Both Brent and WTI futures have been under selling pressure since hitting more than four-month highs last week. A stronger U.S. dollar weighed on oil, with the U.S. dollar index gaining for a second consecutive session. A rising U.S. currency makes dollar-denominated oil more expensive for holders of other currencies, dampening demand. A surprise jump in U.S. crude and gasoline stockpiles also added to the pressure on oil prices, analysts said. U.S. crude oil stocks rose by 3.2 million barrels while gasoline stocks rose by 1.3 million barrels in the week ended March 22, according to data from the Energy Information Administration (EIA). Analysts polled by Reuters expected crude stocks to decline by 1.3 million barrels and gasoline stocks to drop by 1.7 million barrels. Gasoline demand fell for a second straight week to 8.7 million barrels per day (bpd), down from 8.8 million bpd in the prior week, EIA data showed. "Considering the fact that we're only making crude oil to make gasoline basically, that is a bearish development," said Robert Yawger, director of energy futures at Mizuho. The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+, are unlikely to change oil output policy until a full ministerial gathering in June, three OPEC+ sources told Reuters ahead of next week's meeting to review the market and members' implementation of output cuts. OPEC+ this month agreed to extend output cuts of about 2.2 million bpd to the end of June, although Russia and Iraq have had to go to extra lengths to tackle over-production. Those struggles have called into question the group's ability to comply with the agreed cuts, with OPEC having exceeded its targets by 190,000 bpd in February, a Reuters survey showed. "The OPEC+ production cuts have sparked debate over volumes, particularly concerning Iraq's overproduction over the past two months," said Alex Hodes, energy analyst at StoneX. "Another pivotal point is Russia's potential volume reduction," Hodes said. "Monitoring Russian oil flows in the upcoming quarter will be crucial for market observers," he added.
Oil jumps on tighter supply outlook - Oil prices rose by more than $1 a barrel on Thursday, after falling for two consecutive sessions, on the prospect of supplies given the Opec+ producer alliance is widely expected to stay the course on its current production cuts. Brent crude futures for May were up $1.30, or 1.5pc, at $87.39 a barrel at 1:28pm EDT (1728 GMT). The more actively traded June contract rose $1.22, or 1.4pc, to $86.43 at 1:28pm The May contract expires on Thursday. US West Texas Intermediate (WTI) crude futures for May delivery were up $1.43, or 1.8pc, at $82.78 a barrel. Both benchmarks were up more than 2pc on the week and were on track to finish higher for a third consecutive month. In the prior session, oil prices had come under pressure from last week’s unexpected rise in US crude oil and gasoline inventories, driven by an increase in crude imports and sluggish gasoline demand, according to Energy Information Administration data. However, the crude stock increase was smaller than the build projected by the American Petroleum Institute, and analysts noted the increase was lower than expected for the time of year. “We... expect US inventories to rise less than normal in reflection of a global oil market in a slight deficit,” “This will likely hand support to the Brent crude oil price going forward.” US refinery utilisation rates, which rose 0.9 percentage point last week, also supported prices. The US economy, meanwhile, grew faster than previously estimated in the fourth quarter. Gross domestic product increased at a 3.4pc annualised rate from the previously reported 3.2pc pace, the Commerce Department’s Bureau of Economic Analysis said. “The strength in the stock market suggests strong forward earnings that are, in turn, hinting at a surprisingly strong US economy conducive toward better than expected energy product demand,”
Oil Futures Close Out Q1 With Rally on Strong Economy -- Oil futures on the New York Mercantile Exchange (NYMEX) and Brent crude on the Intercontinental Exchange rallied during the final session of the first quarter with bullish macroeconomic data accelerating an advance after contracts reversed off technical support points midweek. In its final estimate for fourth-quarter 2023 U.S. gross domestic product, the Bureau of Economic Analysis (BEA) said Thursday morning that the U.S. economy grew at a 3.4% annualized rate, adjusting the expansion rate 0.2% higher from the month prior. The greater-than-expected economic expansion was primarily fueled by upward revisions to consumer spending and nonresidential fixed investment, according to the BEA. The resilience of the U.S. economy despite the Federal Reserve's monetary tightening cycle has repeatedly caught markets off guard, belying expectations at the start of the central bank's rate hiking cycle for recession. U.S. GDP growth did slow from a 4.9% growth rate for the third quarter 2023 while the Federal Reserve Bank of Atlanta's GDPNow forecast calls for a 2.1% expansion for the first quarter. The University of Michigan released its Index of Consumer Sentiment a day earlier because of Good Friday with its consumer survey showing sentiment improved 3.3% in March. "Critically, consumers exhibited confidence that inflation will continue to soften. Assessments and expectations of personal finances improved modestly from last month, as the perceived negative effects of high prices and expenses on living standards eased," said Joanne Hsu, who directed the survey. Strong economic growth spurred in large part by consumer spending and easing inflation concerns, even if only slightly, could push off an expected start to a rate-cutting cycle by the Federal Open Market Committee (FOMC) if inflation remains sticky. FOMC will make its next decision on the federal funds rate, currently in a 5.25% by 5.5% target range, on May 1. Expectations were limited FOMC would cut the rate on May 1, although the probability of maintaining the current target range increased from 90.4% on Wednesday to 95.8% Thursday, up from 81.3% at the end of February, according to CME's FedWatch Tool. The market still expects FOMC to trim the federal funds rate 25 basis points at its June 12 meeting, although today's economic data boosted those expecting no rate hike by 6.5% to a 36.4% probability. The U.S. dollar index rallied 0.2% to a 104.269 six-week high in index trading Thursday, which failed to slow the advance by West Texas Intermediate (WTI) futures, which surged $1.82 to $83.17 per barrel (bbl). WTI futures gained $11.52 bbl or 16.1% in the first quarter, with $4.91 of the increase occurring in March. The U.S. dollar strengthened by 3.2% during the first three months of 2024. ICE May Brent futures expired Thursday $1.39 higher at $87.48 bbl, with the June contract settling at a $0.48 discount. The advance by Brent crude in the first quarter came at a slower pace than WTI, climbing $10.44 or 13.6%, including $3.86 in March. Both WTI and Brent futures tested Fibonacci retracement support this week before Thursday's rally. NYMEX April RBOB futures rallied to a $2.7749-gallon seven-month high on the spot continuous chart, testing resistance at the $2.7795 trendline for the uptrend for the December 2022 low before expiring $0.0764 higher at $2.7611 gallon. The gasoline contract is in a seasonal uptrend amplified by a protracted refinery turnaround season dotted by unplanned outages, with commercial inventory drawn down 22.204 million bbl or 8.7% from late January to mid-March, according to data from the Energy Information Administration. During the first quarter, RBOB futures rallied $0.6585 gallon or 31.3%, with $0.4577 or 19.9% of the advance occurring in March. NYMEX April ULSD futures expired $0.0170 higher at $2.6156 gallon, bolstered after testing support at the $2.5895 trendline for the downtrend from the April 2022 high. The ULSD contract gained $0.0625 or 2.4% in the first quarter after a $0.0682 gallon decline in March. ULSD's market structure moved out of backwardation for the first time since June 2023 this week.
Houthis demand oil exports to Europe and Washington be cut by half – Middle East Monitor - The Houthis in Yemen demanded yesterday that oil exports to the US and Europe should be reduced by half. The movement said that this step would “prompt an end” to the ongoing Israeli war against the Palestinians in Gaza. The comment was made by a member of the Houthis’ Supreme Political Council, Mohammad Ali Al-Houthi, during a televised interview on Al-Masirah. “The Arabs have many cards in their hands [to stop the Israeli offensive], said Al-Houthi. “If they wanted to play them, they would do so, and this would have major consequences.” He called on the Arab and Islamic regimes to reduce the export of petroleum derivatives to the US and Europe by 50 per cent. “This will have repercussions [leading to ending the war].” A draft resolution was submitted to the UN Security Council by Algeria on 21 February. It called for an “immediate” ceasefire in Gaza for humanitarian reasons and received the support of 13 out of 15 members. The US used its veto against the resolution, while the UK abstained from voting. That was the third time that the US had used its veto in the UN Security Council for the benefit of the occupation state since the start of the Israeli offensive in October. Acting in “solidarity with Gaza,” the Houthis have been targeting Israel-linked merchant ships in the Red Sea for months using missiles and drones.
Red Sea crisis could lead to global tanker shortage, Kuwait Petroleum CEO says - — The crisis in the Red Sea could lead to a shortage in the global tanker fleet if disruptions persist for another six months, the CEO of Kuwait Petroleum Corporation told CNBC. Houthi militants have been striking commercial shipping in the Red Sea since November in support of Palestinians as Israel wages war in Gaza. The attacks have forced many container shipping and tanker companies to divert traffic around the Cape of Good Hope in southern Africa, adding time and cost. "One of the things I think we may be concerned about is if this continues for another six months, that we will not have perhaps the tanker fleet available to continue to go around," Shaikh Nawaf al-Sabah said of the global fleet during an interview at the CERAWeek by S&P Global energy conference. KPC has diverted a substantial amount of production around the Cape during the crisis, al-Sabah said, declining to provide specific numbers. The company is continuing to ship through the Red Sea and is making decisions on which route ships should take on a daily basis, he said. "We maintain a strategic tanker tanker fleet for these types of reasons," al-Sabah said. "We're comfortable that we can supply our customers in the quantities that are required on time without issue, but I don't know how many other producers have that strategic vision." Al-Sabah does not see a risk of Middle East tensions leading to a conflict that could disrupt crude supplies in the wider region. The Persian Gulf has faced numerous wars but the only time Kuwait has been unable to ship was during Iraq dictator Saddam Hussein's invasion of the country in 1990, he said. "I don't see a supply fear," the CEO said. "I am confident that the industry and the system is well equipped to handle potential supply crises that might happen." Chevron CEO Michael Wirth, however, said the security situation in the Middle East is "tenuous" and "could pivot on a dime." Wirth told CNBC that Chevron is "not moving ships to the Red Sea." "Today the conflict in Israel and Gaza goes on, a resolution does not seem to be at hand and the regional risks continue to be high," Wirth told CNBC's Brian Sullivan at CERAWeek Crude oil futures have risen this year, but have struggled to break out amid uncertainty over the health of China's economy and the strength of U.S. crude production. Last year, fears that demand was slowing in China as U.S. production hit a record 13.3 million barrels per day weighed on prices. Al-Sabah said he is not worried about crude demand in the world's second-largest economy. "I visit our partners in China frequently and the feedback I have from them has always been if you have additional supplies, we are willing to take it," Al-Sabah said. "The demand has increased steadily in China and it's been solid." CEO Ryan Lance said in remarks at CERAWeek that U.S. crude production growth will slow to 300,000 to 400,000 barrels per day this year, from 1 million barrels last year. Total U.S. production will eventually exceed 14 million barrels per day at some point this decade and then plateau, Lance said.
Failed Israeli Drone Assassination Attempt Kills Civilian in Lebanon - On Sunday, an Israeli drone strike against a vehicle near Sewairi killed the driver. Discussion among Lebanese security sources reveal they believe this was an assassination attempt against an unnamed Hamas officialwho was traveling on the same road.The discussion gave no indication of how close the Hamas official was to the drone attack, only commenting he “escaped.” The driver who was killed was a Syrian civilian, who was described as delivering groceries in a car belonging to a store owner.Though Israel has attacked the Bekaa Valley several times this year, the drone attack was the first time the Sewairi area in particular was targeted during the current six months of tit-for-tat strikes across Lebanon.Though the failed assassination was reported in the Israeli press, Israel has not issued a statement on the drone attack since revealing a civilian was killed. Other strikes in Baalbek targeted what they described as a weapons workshop but which was actually a long-abandoned building.The building may have been empty, but surrounding homes were not, and damage done to the surrounding area wounded four people, including civilians. Hezbollah confirmed two of its members were slain.Today, both Israel and Hezbollah returned to attacking the border area, focusing on one another’s military targets. Hezbollah fired some 15 rockets at military sites, although reportedly without doing any damage.Israel reported attacking Hezbollah sites in southern Lebanon, again not specifying what sort of sites these were, beyond linking them to Hezbollah. Recently many of the targeted sites have turned out to be houses. Two Hezbollah members were reportedly targeted directly in Mays al-Jabal, their fate unknown.
Hezbollah Struck Two Iron Dome Launchers in Northern Israel With Suicide Drones - Israel and Hezbollah continued strikes against one another across the border over the weekend, with Israel reporting that some rockets were intercepted by Iron Dome missile defense systems. Hezbollah has been appearing to test Iron Dome defenses to find ways to allow it to hit Israeli targets.Saturday, efforts to circumvent Iron Dome took on a new form, as a pair of suicide drones near Kfar Blum were used to attack Iron Dome launchers outright, and scored what were described as “precise hits.”Israel appeared to downplay, if not completely deny, this. The official Israeli response reported two crashed drones near Kfar Blum with no casualties inflicted. There was no comment on any damage done.Elsewhere in northern Israel, Hezbollah fire went after Shebaa Farms, the occupied Golan Heights, and Upper Galilee. Hezbollah added it also shelled the Ramim barracks in northern Israel with artillery.Israel attacked several sites in southern Lebanon describing, as usual, that these were Hezbollah-used sites. IDF also attacked at least two observation posts, both on Saturday and Sunday.Daily attacks by both sides have become the new normal in southern Lebanon and northern Israel. There is considerable fear among locals, many of them displaced, that it will be a long time before they can safely return home.The international community has made several proposals to try to forestall any further escalations along the border areas. The United States has tried to incentivize the deal involved in replacing Hezbollah in the border areas with the Lebanese military by offering to fund the deployment.
Suspected Israeli Airstrikes in Syria Kill Iranian Adviser, WHO Official - Suspected Israeli airstrikes hit targets across eastern Syria’s Deir Ezzor province early Tuesday, killing a member of Iran’s Islamic Revolutionary Guard Corps (IRGC) and an official working for the World Health Organization (WHO). Syrian media said the strikes hit a number of residential areas and military sites. Damascus has blamed the attacks on the US, but a US official denied involvement, and Israeli sources told Ynet and Haaretz that the Israeli military was responsible.Iranian media has confirmed the death of Behrouz Vahedi, an IRGC advisor who was based in Syria. Israeli airstrikes in Syria have killed several members of the IRGC since October, risking Iranian retaliation and a major regional war.The WHO said one of its engineers, Emad Shehab, was killed in strikes on his building. The organization said he was the WHO official involved in water, sanitation, and hygiene in the province since 2022.Syrian media said a total of eight people were killed in the strikes, including seven members of the military and one civilian. The report said 19 soldiers and 13 civilians were wounded in the attack it blamed on “US occupation forces.” The US has occupied eastern Syria for years and backs the Kurdish-led SDF in the region, allowing the US to control a significant chunk of Syrian territory, an area where many oil fields are located.The UK-based Syrian Observatory for Human Rights (SOHR) said a total of 15 people were killed, including the IRGC advisor and two of his bodyguards, nine Iraqi militia members, two Syrians working with the Iranians, and one Syrian engineer, but the numbers aren’t confirmed. Besides risking war with Iran, the Israeli strikes risk the Iraqi Shia militias who operate in the region restarting their attacks on US bases, which have stopped due to pressure from Iran and the Iraqi government.The Iraqi groups view Israel’s military and the US as one and the same since the US provides so much support for Israel.
Israel Unleashes Major Airstrikes On Syria & Deep Inside Lebanon -The Israel Defense Forces (IDF) confirmed on Tuesday another rare strike conducted deep into Lebanese territory. The strikes targeted "a military compound used by Hezbollah’s aerial unit" in the Baalbek District which is in the northeast of the country.This marks the deepest Israeli strike inside Lebanon since the war began in the wake of the Oct.7 Hamas terror attack, at more than 110km from Israel's border.The extent of casualties or damage remains unclear, but it follows a similar February strike on the Bekaa Valley some 100km from the Israeli border, which killed at least two people. There are growing fears that if such strikes become more regular, it will signify a bigger regional war could be opening up.Hezbollah has lobbed several missiles against northern Israeli communities as well as the IDF base atop Mount Meron over the past days. The Mount Meron surveillance base is about 8km from the Lebanese border and has come under repeat attack over several months. In the overnight and early morning hours there were also large-scale strikes against areas of eastern Syria. While Israel frequently attacks Syria, some Syrian government-affiliated sources laid blame on the United States. According to regional outlet The Cradle: Airstrikes targeted a number of areas in Syria’s eastern city of Deir Ezzor and its countryside on 26 March, resulting in numerous deaths and injuries. "At 1:49 AM, American aircraft carried out several simultaneous air strikes targeting a number of areas in the governorate and its countryside," Syria’s government-affiliated National Defense Forces (NDF) said, according to Sputnik.The strikes targeted the Salhiya area in Al-Bukamal near the Iraqi border and residential areas in the Al-Mayadin and Al-Qusour areas in Deir Ezzor. But Israeli media has identified the IDF air force as behind the eastern Syria attack, reportedly targeting 'pro-Iran' assets. According to details in The Times of Israel:The Israeli Air Force carried out airstrikes in the predawn hours of Tuesday morning in eastern Syria, targeting Iranian assets and operatives involved in a recent plot to smuggle advanced arms to West Bank terrorists, The Times of Israel has learned.More than 15 people were reportedly killed in the strikes in the Deir Ezzor and al-Bukamal areas, close to Syria’s border with Iraq.The strikes targeted assets belonging to Iran’s Unit 4000, the Special Operations Division of the Islamic Revolutionary Guards Corps’ Intelligence Organization, and the special operations unit of the IRGC’s Quds Force in Syria, known as Unit 18840, according to Israeli defense sources. Various international reports have cited different casualty figures, but what is clear is that there were a series of large airstrikes. Iranian media said a Revolutionary Guard member was killed in Syria overnight.
Israel Attacks Lebanon Paramedic Center, Killing Seven - In one of the deadliest strikes in the current round of fighting at the Lebanon border, Israel attacked a site in Hebbariye, southern Lebanon, killing at least seven paramedics. The strike destroyed the building in Hebbariye that housed the Islamic Emergency and Relief Corps.The official Israel narrative was, of course, starkly different, reporting that they’d attacked a “military building” and killed a “significant terrorist” and several other operatives associated with the Jamaa al-Islamiya.Locals mocked the story, saying that it was plainly a lie, and that this building, used by Islamic Emergency and Relief Corps paramedics, was a simple civilian target that Israel chose to attack. The locals said they believe this is part of a concerted Israeli effort to depopulate the southern part of Lebanon along the Israeli border. Nearly 100,000 Lebanese residents have fled the south because of the ongoing attacks. While most Hebbariye residents haven’t done so yet, this overnight attack on the paramedics raises the concern that their locality is now in the line of fire.Hezbollah responded to the attack by firing around 30 rockets against the city of Kiryat Shmona and a nearby army base in northern Israel. Many of the rockets were intercepted, though at least three hit their targets.One struck an industrial building in the city, killing a 25-year-old Druze from a nearby village and wounding at least one other. Hezbollah officials emphasized they intend to retaliate against the Israelis for the paramedic attack.
Israel Kills Nine More in South Lebanon, Including More Paramedics - Fears of a major escalation on the Lebanon border with Israel continued to grow this afternoon, as Israel carried out a new round of deadly attacks against border communities, killing at least nine more people.The first strikes were against the border village of Tair Harfa, killing five. The identities of those killed aren’t certain, although Hezbollah said two of its paramedics were killed in Tair Harfa. The attack that killed the Hezbollah paramedics was reportedly against a vehicle for the Islamic Health Organization.That wasn’t the end to attacks on paramedics, as Israel followed up with attacks on the border town of Naqoura, hitting a group of paramedics near a cafeteria, and killing at least four and wounding six others. Between these and the overnight strike in Hebbariye which killed seven paramedics, the death toll simply for medical rescue workers is in excess of a dozen.The Israeli attacks were presented as retaliation for a rocket attack by Hezbollah earlier in the day, which killed one Israeli-Druze and wounded two others. Those rockets were themselves retaliation for the Hebbariye strike on the civilian paramedics.Israel still hasn’t discussed the killing of paramedics in either case, presenting the first strike as the killing of a “significant terrorist” and his associates in a “military building.” Locals confirmed the building in question was host to paramedics, a civilian target. Throughout the past six months of tit-for-tat strikes between Lebanon and Israel, paramedics and other medical workers have often found themselves a target, and today’s actions suggests that it is only getting worse..
Death Sentence for Thousands': Israel Bars UNRWA Food Aid to Northern Gaza -- Israel will no longer permit the United Nations Relief and Works Agency for Palestine Refugees in the Near East to drive convoys bearing food aid into northern Gaza, even as the area is on the brink of famine. Israeli officials informed the U.N. of the new restrictions on Sunday, prompting outrage and dire warnings from U.N. officials and other human rights advocates. "By preventing UNRWA to fulfill its mandate in Gaza, the clock will tick faster toward famine and many more will die of hunger, dehydration, and lack of shelter," UNRWA Commissioner-General Philippe Lazzarini posted on social media. "This cannot happen, it would only stain our collective humanity.""I have urged Israel to lift all impediments on aid to Gaza. Now this—MORE impediments."In his response, Lazzarini said that UNRWA was the largest organization operating in Gaza with the greatest capability to distribute aid."This is outrageous and makes it intentional to obstruct lifesaving assistance during a man-made famine," Lazzarini said. "These restrictions must be lifted."The news comes as medical workers and international aid organizations have sounded the alarm about famine in Gaza. At least 23 children in northern Gaza have already died from starvation or dehydration, and one-third of children under two years old suffer from acute malnutrition, according to the United Nations' International Children's Emergency Fund. A new Integrated Food Security Phase Classification report published on March 18 found that famine was "imminent" in Gaza's northern governorates and likely to begin "anytime" between the report's publication and May. In the northern governorates, where around 300,000 live, almost two-thirds of households endured at least 10 days and nights when they did not eat at all in the last 30 days."Blocking UNRWA from delivering food is in fact denying starving people the ability to survive," World Health Organization Director-General Tedros Adhanom Ghebreyesus said on social media. "This decision must be urgently reversed. The levels of hunger are acute. All efforts to deliver food should not only be permitted but there should be an immediate acceleration of food deliveries."U.N. Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator Martin Griffiths also called for Israel's decision to be "revoked.""I have urged Israel to lift all impediments on aid to Gaza. Now this—MORE impediments," Griffiths posted on social media, calling UNRWA the "beating heart of the humanitarian response in Gaza." UNRWA Communications Director Juliette Touma toldBBC World on Monday that a quarter of a million people in the north rely on UNRWA food aid, yet the agency has not been able to deliver to them in two months. An attempt on February 5 had to turn back after the Israeli Navy fired on an aid convoy even as it traveled along a pre-approved route.Touma told BBC World that more than 1 million people in Gaza now live in UNRWA shelters."They lost everything, and they need everything," Touma said.Touma added that the most important commodity people in Gaza need is food, but they also need "safety, and they need protection, above all, and a cease-fire, which is very, very much overdue."
'Beyond Comprehension': Medical Team Reports Starvation, Infections at Gaza Hospital -Members of an emergency medical team that has treated patients at a hospital in southern Gaza in recent weeks said Monday that the horrors they've witnessed there are "unimaginable," from worsening malnutrition to deadly infections stemming from lack of healthcare equipment.The team formed by Medical Aid for Palestinians (MAP), the International Rescue Committee (IRC), and the Palestine Children's Relief Fund (PCRF) has been working at the European Hospital near Khan Younis, a city decimated by Israeli bombing. At least two hospitals in the city are currently under siege by Israeli forces, which have killed more than 32,000 Gazans and injured tens of thousands more in less than six months."The situation we're facing is beyond comprehension," said Arvind Das, IRC's Gaza team lead. "Continuous Israeli military operations near hospitals are making an already tense situation even worse for those seeking shelter or medical help, pushing the healthcare system to the brink of collapse.""Despite the relentless efforts of our medical teams, the infrastructure necessary to deliver optimal medical care has been severely compromised by bombing, stringent restrictions on the entry of aid including medical supplies, and the overwhelming surge in needs," Das added. "We're doing everything we can, navigating through critical shortages and working with very limited resources, to save lives amidst this dire situation."Not a single hospital in the Gaza Strip is fully functional after months of Israeli attacks, and the dozen that are partially operating are well beyond capacity, with patients and displaced people filling the hallways and outskirts of the facilities. The United Nations' special rapporteur on the right to health has accused Israel's military of waging an "unrelenting war" on Gaza's medical system. Dr. Konstantina Ilia Karydi, an anesthetist with the emergency medical team, said Monday that the European Hospital "had an original capacity of just 200 beds, and at the moment it has expanded to 1,000 beds.""There are around 22,000 people that have been displaced from other parts of Gaza sheltering in the corridors and in tents inside the hospital, because people feel that it's safer to be here than anywhere else," said Karydi."We worked around the challenges we faced and managed in a different way, but the staff here are overwhelmed."MAP said in a statement that the medical team's surgeons "completed successful complex vascular and orthopedic surgeries on patients" at the hospital, but some "later died due to infections in the hospitals and the inability to provide post-operative care.""This is due to the intense security situation that forced healthcare workers to evacuate hospitals and hindered their access," said MAP. "Moreover, significant damage to hospital infrastructure and facilities, coupled with a complete shortage of equipment and medicine—largely due to Israel's restrictions on medical aid entry into Gaza—severely impacted the ability to provide necessary care." Dr. Husam Basheer, an orthopedic surgeon with the emergency medical team, stressed that healthcare workers in the territory are "managing with the bare minimum of resources," lacking even basic supplies such as gauze. "We worked around the challenges we faced and managed in a different way," said Basheer, "but the staff here are overwhelmed." The medical team's report added to the abundance of harrowing accounts from healthcare personnel on the devastating conditions inside Gaza's hospitals, many of which have been shelled and raided—in some cases repeatedly—by Israeli forces. Al Jazeerareported Monday that the Israeli military has "surrounded the al-Amal and Nasser hospitals in southern Gaza, while pressing on with their siege of Gaza City's al-Shifa Hospital, the largest medical complex in the strip." "Military vehicles, tanks, and attack drones are encircling these two facilities," Al Jazeera's Hani Mahmoud reported. "They're also blocking the entrance with piles of sand, preventing medical staff, patients, and injured people inside from leaving safely and constantly failing to provide a safe corridor for people and evacuees trapped inside the hospital."
Draft UN Report Finds Israel Has Met Threshold for Genocide --The United Nations Human Rights Council on Monday published a draft report that found "reasonable grounds to believe" that Israel is committing genocide in Gaza, a move that came on the same day as the U.N. Security Council passed a resolution demanding an immediate cease-fire in the ongoing war. The advance unedited version of the report—entitled Anatomy of a Genocide—concludes that Israel's far-right government and military "have intentionally distorted jus in bello principles, subverting their protective functions, in an attempt to legitimize genocidal violence against the Palestinian people.""The overwhelming nature and scale of Israel's assault on Gaza and the destructive conditions of life it has inflicted reveal an intent to physically destroy Palestinians as a group," the draft report states, enumerating Israeli actions that violate Article II of the Convention on the Prevention and Punishment of the Crime of Genocide: "Killing members of the group; causing serious bodily or mental harm to group members; and deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part.""Israel has de facto treated an entire protected group and its life-sustaining infrastructure as 'terrorist' or 'terrorist-supporting,' thus transforming everything and everyone into either a target or collateral damage, hence killable or destroyable," the paper continues. "In this way, no Palestinian in Gaza is safe by definition. This has had devastating, intentional effects, costing the lives of tens of thousands of Palestinians, destroying the fabric of life in Gaza, and causing irreparable harm to its entire population."Israel rejected the report as "an obscene inversion of reality."According to Palestinian and international humanitarian officials, Israel's 171-day Gaza onslaught has killed at least 32,333 Palestinians, most of them women and children, while wounding nearly 75,000 others and displacing around 90% of Gaza's 2.3 million people. Thousands more Palestinians are missing and believed to be dead and buried beneath the rubble of bombed buildings. Disease and deadlystarvation caused and exacerbated by Israel's siege and blockade of Gaza are spreading rapidly."Israel's genocide on the Palestinians in Gaza is an escalatory stage of a long-standing settler-colonial process of erasure," the draft report asserts. "For over seven decades this process has suffocated the Palestinian people as a group—demographically, culturally, economically, and politically—seeking to displace it and expropriate and control its land and resources."Referring to the flight and ethnic cleansing of more than 750,000 Arabs from Palestine during the foundation of the modern state of Israel in 1948, the paper contends that "the ongoing Nakba must be stopped and remedied once and for all. This is an imperative owed to the victims of this highly preventable tragedy, and to future generations in that land.""The ongoing Nakba must be stopped and remedied once and for all."The draft report urges U.N. member states to "enforce the prohibition of genocide in accordance with their... obligations" under international law. In January, the U.N.'s International Court of Justice (ICJ) found that Israel was "plausibly" perpetrating genocide in Gaza and ordered the country's government to "take all measures within its power" to prevent genocidal acts. Human rights defenders say Israel has ignored the order."Israel and those states that have been complicit in what can be reasonably concluded to constitute genocide must be held accountable and deliver reparations commensurate with the destruction, death, and harm inflicted on the Palestinian people," the publication argues.The draft report recommends measures including:
- Immediate implementation of an arms embargo on Israel, as it appears to have failed to comply with the binding measures ordered by the ICJ;
- Immediate referral of the situation in Palestine to the International Criminal Court in support of its ongoing investigation;
- Ensuring that Israel, as well as states who have been complicit in the Gaza genocide, acknowledge the colossal harm done, commit to nonrepetition, with measures for prevention and full reparations, including the full cost of the reconstruction of Gaza;
- Deploying an international protective presence to constrain the violence routinely used against Palestinians in the occupied territories; and
- Ensuring that the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) is properly funded to enable it to meet the increased needs of Palestinians in Gaza.
Israel on Monday informed the U.N. that it will no longer allow UNRWA convoys carrying food aid into northern Gaza, even as the Palestinians are starving to death, a move that one humanitarian campaigner calleda "death sentence."
US Claims Israel Is Following International Law, Not Blocking Aid - The State Department claimed on Monday that Israel is using US weapons without violating international or US law despite the massive civilian casualties in Gaza and the starvation blockade imposed on the Strip.Under a new national security memorandum, the US requires countries armed with US weapons to provide assurances that they won’t violate international law or block humanitarian assistance. Israeli Defense Minister Yoav Gallant gave the assurances in a letter he issued earlier this month.The State Department is also claiming Israel is not violating international law by imposing restrictions on aid entering Gaza, which has caused severe levels of acute food insecurity for 100% of the Strip’s population.“We’ve had ongoing assessments of Israel’s compliance with international humanitarian law. We have not found them to be in violation, either when it comes to the conduct of the war or the provision of humanitarian assistance. We view those assurances through that ongoing work we have done,” said State Department spokesman Matt Miller. The State Department has until May 8 to submit a report to Congress on Israel’s compliance with international law.By backing the Israeli assurances, the Biden administration can continue to arm Israel to support the slaughter in Gaza, which has killed over 32,000 Palestinians, including over 13,000 children. The certification from the US came after a video was released of an Israeli drone killing four unarmed Palestinian men in a series of strikes. The last man was killed while trying to crawl away from the scene of the initial drone strike.Dozens of congressional Democrats have urged President Biden to suspend military assistance to Israel by invoking foreign assistance laws that prohibit aid to countries that block humanitarian assistance. But so far, the pressure hasn’t worked, as the $1.2 trillion funding bill President Biden signed over the weekend included $3.8 billion in annual military aid for Israel.
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