US oil prices ended lower for the first time in three weeks on an unexpected build of US crude inventories and on indications from Fed officials that interest rates would remain high for longer than was widely assumed…..after rising 2.3% to $80.06 a barrel last week on an across the board draw from US oil and fuel supplies, and on stronger than expected data from China and the US, the contract price for the benchmark US light sweet crude for June delivery edged higher in overseas trading early Monday, amid uncertainty among major producers after Iran's president was feared dead in a helicopter crash and the Saudi crown prince cancelled a Japan trip, citing health issues with the king, but edged back down in New York after a handful of Federal Reserve officials said recent data showing inflation slowed in April was not enough to begin reducing interest rates and settled 26 cents lower at $79.80 a barrel on worries about US inflation and interest rates…oil prices extended their decline in overseas markets early Tuesday, falling over one percent on concerns that US inflation would keep interest rates higher for longer and dampen consumer demand, and continued to trade lower ahead of the June contract’s expiration at the day's end before expiring 54 cents lower at $79.26 a barrel on sticky US inflation, and a dampened geopolitical risk premium, while the more actively traded benchmark US light sweet crude for July delivery settled 64 cents lower at $78.66 a barrel….with markets now quoting that contract price for the US benchmark crude for July, oil prices extended their losses in overnight trading after the American Petroleum Institute reported an unexpected increase in crude inventories, then continued on its downward path for the third consecutive session on Wednesday on expectations that the Federal Reserve would not be in a hurry to cut interest rates, due to sustained inflation, and settled $1.09 lower at $77.57 a barrel, further depressed after the EIA reported U.S. commercial crude oil stockpiles had increased by 1.8 million barrels last week, vs. analysts expectations of a 2.5 million barrel drop….oil prices rose early on Thursday after Russia said it would present a plan to compensate for exceeding its OPEC+ oil production quota in April, but continued lower later for the fourth consecutive day, pressured after the minutes of the Fed’s last policy meeting showed they would maintain their policy rate for now, but also reflected talk of possible further rate increases, and settled 70 cents lower at $76.87 a barrel as manufacturers reported a surge in prices for a range of inputs, suggesting a pickup in goods inflation was in the cards in the months ahead…US and international oil prices extended their losses to 13- and 15-week lows early Friday ahead of the long Memorial Day weekend, as the market adjusted to the likelihood interest rates would remain higher for longer as inflation pressure prevailed, but rallied late in the session to settle 85 cents higher at $77.72 a barrel as traders hedged their bets ahead of the three-day holiday weekend and turned their attention to the OPEC+ meeting next week…oil prices still finished 2.9% lower over the week, while the July US oil contract, which had finished the prior week priced at $79.58, finished 2.3% lower…
meanwhile, natural gas prices finished lower for the first time in four weeks, on signs that the recent price rally had prompted producers who had cut their output due to lower prices to restart operations…..after rising 16.6% to a four month high of $2.626 per mmBTU last week as the return of Freeport LNG added 2% to daily demand and inventories increased less than had been forecast, the contract price for natural gas for June delivery opened four cents higher on Monday, supported by unseasonably high cooling demand and weak production, and rallied to close 12.5 cents higher at $2.751 per MMBTU, soaring to a new four month high as optimism over summer demand prospects continued…however, natural gas prices pulled back to open 7 cents lower on Tuesday, after analysts voiced concerns that the contract had drifted into overbought territory on short-term technical factors and on short covering in the last few sessions, then settled 8.0 cents lower at $2.671 per mmBTU, as a mid day rally stalled as news of a bankruptcy filing by a lead contractor for a major LNG project spooked the market and as output signs turned slightly bearish…natural gas prices started Wednesday 2 cents lower, as the bankruptcy of the lead contractor on the Golden Pass LNG export project put a damper on LNG exports projections, but rallied from there as traders focused on short term cooling demand to settle 17.1 cents, or more than 6% higher at $2.842 per mmBTU, as gas flows to Freeport LNG’s plant in Texas rose to an 11-month high….natural gas prices opened two cents higher and rose to an intraday high of $2.924 by 9:45AM on Thursday, as traders believed the day’s storage report would show shrinking surpluses, but then turned lower just ahead of the report and continued falling even as the print was a bullish miss against expectations and historical averages and settled 18.5 lower at $2.657 per mmBTU on signs that natgas frackers were starting to produce more gas…natural gas prices continued lower Friday as traders took profits ahead of the long holiday weekend, and settled 13.7 cents lower at $2.520 per mmBTU, on forecasts for lower demand in two weeks, on an ongoing oversupply of gas in storage and on signs that recent high prices had prompted drillers to stop cutting output and start pulling more gas out of their wells, and thus ended 4.0% lower for the week...
The EIA’s natural gas storage report for the week ending May 17th indicated that the amount of working natural gas held in underground storage rose by 78 billion cubic feet to 2,711 billion cubic feet by the end of the week, which left our natural gas supplies 402 billion cubic feet, or 17.4% above the 2,309 billion cubic feet that were in storage on May 17th of last year, and 606 billion cubic feet, or 28.8% more than the five-year average of 2,105 billion cubic feet of natural gas that had typically been in working storage as of the 17th of May over the most recent five years…the 78 billion cubic foot addition to US natural gas working storage for the cited week was less than the 83 billion cubic foot addition to storage that the market was expecting ahead of the report, and less than the 97 billion cubic feet that were added to natural gas storage during the corresponding 3rd week of May 2023, and also less than the average 92 billion cubic foot injection into natural gas storage that has been typical for the same spring 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 May 17th indicated that despite a jump in our oil exports and an increase in our refinery throughput, we managed to also add oil to our stored commercial crude supplies for the twelfth time in seventeen weeks and for the 20th time in the past 31 weeks, largely due to a jump in oil supplies that the EIA could not account for….Our imports of crude oil fell by an average of 81,000 barrels per day to an average of 6,663,000 barrels per day, after falling by an average of 226,000 barrels per day over the prior week, while our exports of crude oil rose by 595,000 barrels per day to 4,730,000 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 1,933,000 barrels of oil per day during the week ending May 17th, 676,000 fewer barrels per day than the net of our imports minus our exports during the prior week. At the same time, transfers to our oil supply from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils averaged 475,000 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 15,508,000 barrels per day during the May 17th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,482,000 barrels of crude per day during the week ending May 17th, an average of 227,000 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 an average of 403,000 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 May 17th appear to indicate that our total working supply of oil from net imports, from transfers, and from oilfield production was 1,376,000 barrels per day less than what what was added to storage plus what our oil refineries reported they used during the week…To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a [+1,376,000] 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 indicating there must have been an error or omission of that magnitude in the week’s oil supply & demand figures that we have just transcribed...Moreover, since 201,000 barrels of demand for oil per day could not be accounted for in the prior week’s EIA data, that means there was a 1,577,000 barrel per day difference between this week's oil balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, and therefore nonsense... However, since most oil traders react to these weekly EIA reports as if they were accurate, and since these weekly figures therefore often drive oil pricing (as is obvious to anyone who watches oil prices), and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably reliable by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer….and 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 403,000 barrel per day increase in our overall crude oil inventories came as an average of 261,000 barrels per day were being added to our commercially available stocks of crude oil, while an average of 142,000 barrels per day were being added to our Strategic Petroleum Reserve, the twenty-fourth SPR increase in thirty-one weeks, following nearly continuous withdrawals from the SPR 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 6,787,000 barrels per day last week, which was 10.1% more than the 6,165,000 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 1,000 barrels per day lower at 416,000 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 just matches that of our pre-pandemic production peak, while it's 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 91.7% of their capacity while processing those 16,482,000 barrels of crude per day during the week ending May 17th, up from their 90.4% utilization rate of a week earlier, and finally a normal operating rate for mid-May, after US refineries have lagged normal operating rates since arctic cold penetrated to the Gulf Coast in mid January and froze off some operations… the 16,482,000 barrels of oil per day that were refined this week were 2.6% more than the 15,990,000 barrels of crude that were being processed daily during week ending May 19th of 2023, but 0.6% less than the 16,578,000 barrels that were being refined during the prepandemic week ending May 17th, 2019, when our refinery utilization rate was at a slightly below normal 89.9%...
With the increase in the amount of oil being refined this week, gasoline output from our refineries was also higher, increasing by 351,000 barrels per day to 10,049,000 barrels per day during the week ending May 17th, after our refineries’ gasoline output had increased by 203,000 barrels per day during the prior week. This week’s gasoline production was still 2.6% less than the 10,315,000 barrels of gasoline that were being produced daily over week ending May 19th of last year, but 1.7% more than the gasoline production of 9,883,000 barrels per day during the prepandemic week ending May 17th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 260,000 barrels per day to 5,064,000 barrels per day, after our distillates output had increased by 22,000 barrels per day during the prior week. After ten production increases in the past fourteen weeks, our distillates output was 3.9% more than the 4,875,000 barrels of distillates that were being produced daily during the week ending May 19th of 2023, but 2.7% less than the 5,206,000 barrels of distillates that were being produced daily during the week ending May 17th, 2019…
Even with this week’s increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the twelfth time in sixteen weeks, decreasing by 945,000 barrels to 226,822,000 barrels during the week ending May 17th, after our gasoline inventories had decreased by 238,000 barrels during the prior week. Our gasoline supplies fell by more this week because the amount of gasoline supplied to US users rose by 440,000 barrels per day to a six month high of 9,315,000 barrels per day, and even though our exports of gasoline fell by 127,000 barrels per day to 770,000 barrels per day while our imports of gasoline rose by 47,000 barrels per day to 773,000 barrels per day.…But even after thirty-six gasoline inventory withdrawals over the past fifty-seven weeks, our gasoline supplies were still 4.9% above last May 19th’s gasoline inventories of 216,277,000 barrels, even while about 2% below the five year average of our gasoline supplies for this time of the year…
With this week’s increase in our distillates production, our supplies of distillate fuels rose for the sixth time in eighteen weeks, increasing by 379,000 barrels to 116,744,000 barrels over the week ending May 17th, after our distillates supplies had decreased by 45,000 barrels during the prior week. Our distillates supplies increased this week even as the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 52,000 barrels per day to 3,883,000 barrels per day, and even as our exports of distillates rose by 155,000 barrels per day to 1,224,000 barrels per day, while our imports of distillates rose by 9,000 barrels per day to 98,000 barrels per day.…Even with 31 inventory decreases over the past fifty-six weeks, our distillates supplies at the end of the week were 10.5% above the 105,672,000 barrels of distillates that we had in storage on May 19th of 2023, but were still about 7% below the five year average of our distillates inventories for this time of the year…
Finally, after the increase in our oil supplies that the EIA could not account for, our commercial supplies of crude oil in storage rose for the 15th time in twenty-six weeks, and for the 26th time in the past year, increasing by 1,825,000 barrels over the week, from 457,020,000 barrels on May 10th to 458,845,000 barrels on May 17th, after our commercial crude supplies had decreased by 2,508,000 barrels over the prior week… With this week’s increase, our commercial crude oil inventories were about 3% below the most recent five-year average of commercial oil supplies for this time of year, while they were still about 29% above the average of our available crude oil stocks as of the third weekend of May 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 due to higher exports relating to the onset of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze offs, our commercial crude supplies as of this May 17th were 0.8% more than the 455,168,000 barrels of oil left in commercial storage on May 19th of 2023, and were 9.3% more than the 419,801,000 barrels of oil that we had in storage on May 20th of 2022, but were still 5.3% less than the 484,349,000 barrels of oil we had in commercial storage on May 21st of 2021, after refinery damage from winter storm Uri left even more crude oil remaining after 2020’s pandemic precautions had left a glut of oil unused…
This Week’s Rig Count
In lieu of a detailed report on the rig count, we are again just including a screenshot of the rig count summary from Baker Hughes…in the table below, the first column shows the active rig count as of May 24th, the second column shows the change in the number of working rigs between last week’s count (May 17th) and this week’s (May 24th) count, the third column shows last Friday’s May 17th 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 26th of May, 2023…
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Ohio approves two more bids to drill on state-owned lands, advances five other proposals - An Ohio commission approved two bids by out-of-state companies to drill for oil and gas under state-owned lands (Monday. Colorado-based Antero Resources was the sole bidder to drill under a Department of Transportation property in Noble County. SWN Production LLC of Texas won its bid to drill the DOT land in Monroe County along the Ohio River.The Oil and Gas Land Management Commission also advanced five other nominations to drill under state-owned properties to the bidding process. One approved nomination is to drill under the 84-acre Keen Wildlife Area in Harrison County. Citizens opposed to selling state lands for drilling yelled, “Listen to the people!” during the meeting as the four commission members voted. The state received numerous public comments against the nomination.The commission also disapproved five drilling nominations at the meeting, including four under DOT properties and one under the Egypt Valley Wildlife Area, which covers 14,300 acres in Belmont and Guernsey counties. “Much of the land in Egypt Valley is encumbered by federal funding, and so there is a federal process that would have to be gone through and ultimately federal approval obtained,” explained Commission Chair Ryan Richardson before the vote. “And there’s a question really about who bears the responsibility for paying for that.” But she recommended that the commission deny the drilling nomination at Egypt Valley for a different reason: the economics of the proposal. “A provision in this nomination that essentially would significantly reduce the bonus that would be supplied [to the state] if a particular time frame it’s not satisfied,” Richardson said. In total, the commission has advanced 14 drilling nominationson Ohio state-owned lands, since it began this process last fall. Once approved, the nominations are put up for public bid. The process is confidential until a bid is approved. Keen is the third wildlife area where a drilling bid has been approved so far.
Two companies selected by Ohio commission to lease parts of Noble and Monroe counties for fracking - The “highest and best bidders” were selected to lease parts of Noble and Monroe counties for fracking during Monday’s Ohio Oil and Gas Land Management Commission meeting. Colorado-based company Antero Resources Corporation was the sole bidder to lease eight parcels for drilling in Noble County for $4,713.60, according to the Ohio Department of Natural Resources. Antero has previously leased land in Noble County and other Eastern Ohio counties including Harrison, Guernsey, Belmont, Monroe and Washington. Texas-based company Southwestern Energy was the only bidder for eight parcels of land in Monroe County for $3,378, according to ODNR.Each lease agreement includes a 12.5% royalty paid to the state for production. The commission posted the nominated leasing parcels to bid on March 4 and May 4 was the deadline to submit bids.Fracking is the process of injecting liquid into the ground at a high pressure to extract oil or gas and it has been documented in over 30 states, according to the Center for Biological Diversity. Anti-fracking advocates tried to raise their concerns to the commissioners throughout the meeting. “I’d like to say that we have people who are very concerned about the water in that area. The water is not tested. We don’t know what it’s going to be like,” one advocate said. She tried bringing up a basket of water samples during the meeting, but a Ohio State Highway patrol officer stopped her from approaching the commissioners and intercepted the basket. Another advocate held up a sign during the meeting that said “commissioners or gas and oil puppets?”There were more than 1,400 fracking incidents associated with oil and gas wells in Ohio between 2018 and September 2023, according toFracTracker Alliance — a nonprofit that collects data on fracking pipelines. About 10% of those incidents were reported as fires or explosions.Of those, there were 71 total incidents in Noble County and 59 total incidents in Monroe County during that time period, according to FracTracker.Nominations for land in Egypt Valley Wildlife Area in Belmont County, Guernsey and Noble counties were not approved during Monday’s meeting and won’t move forward to the bidding process at this time. The Guernsey and Noble county nominations were denied because “ODOT indicated it lacks the ability to enter into a lease at this time,” according to ODNR.The Egypt Valley Wildlife Area nomination was denied “due to a condition in the nomination that could render the economic benefits too low to warrant approval pursuant to Ohio Revised Code,” according to ODNR.“ODOT submitted a comment indicating that due to their stewardship and oversight agreement with the Federal Highway Administration, they are not legally authorized to enter into mineral basis for these parcels without express pre-approval from the FHWA,” Richardson said about the nomination for land in Wills Township in Guernsey County. Lorraine McCosker, steering committee member of Save Ohio Parks, said this shows the importance of federal laws with the FHWA. “ODNR needs to address certain things that they rejected,” she said. “They disapproved Egypt Valley so I think that that’s really important.”
Current and former Ohio politicians from both parties bow at the alter of fossil fuels by Randi Pokladnik -- Ohio’s Republican politicians will do anything to promote fracking in Ohio. They’ve passed legislation that outlaws protests against oil and gas infrastructure (SB 33); forces Ohio landowners into fracking leases (Ohio Revised Code § 1509.27); restricts solar arrays and wind turbine projects (HB52); eviscerates the state’s renewable energy and energy efficiency standards (HB6); and sacrifices Ohio State Parks (HB 507). Now former Ohio Democratic politicians Tim Ryan and John Bocierri appear to have become shills for the fossil fuel industry. Both Ryan and Bocierri have cherry picked data that is misleading and scientifically inaccurate. The real threat to national security is climate change, not pausing LNG exports. Defense Secretary Lloyd Austin said, “There is little about what the Department does to defend the American people that is not affected by climate change, it is a national security issue, and we must treat it as such.”Peer-reviewed studies show that increased fracking has led to increased emissions of methane; a potent greenhouse gas.Tim Ryan said when he passed the plastics-making Shell Cracker in Monaca, Pennsylvania: “ I looked on with hope and pride: Our region was creating well-paying union jobs in an industry that was fighting climate change”. Plastics contribute to climate change and escalating plastics production will make it impossible to keep global temperature increases below 1.5 degrees Celsius. Our planet is drowning in plastics that are toxic and pervasive in our bodies. The Shell cracker has been fined over $10 million for air pollution violations, and recently the “Pennsylvania Office of Attorney General’s Environmental Crimes Section filed 13 misdemeanor charges against Shell Falcon Pipeline LP for violating the state’s Clean Streams Law during the construction phase.” John Bocierri relies on pro-fossil fuel organizations for his employment data. For example, he references a PricewaterhouseCoopers report, commissioned by the American Petroleum Institute as well as theConsumer Energy Alliance, the organization responsible for submittingfraudulent comments to the Ohio Oil and Gas Land Management Commission to advocate for fracking Ohio State Parks. Research reveals that the industry’s jobs claims are inaccurate. “The Bureau of Labor Statistics shows that the industry employs far fewer workers than it claims: about 541,000 nationwide, or less than 0.4 percent of all jobs.” Mike Chadsey, spokesperson for the Ohio Oil and Gas Association admitted that “crews move from one well pad to the next” following the rigs and pipelines. Ryan touts using new technologies like carbon capture sequestration (CCS)to get us out of this climate disaster. CCS will be funded with taxpayer dollars in the Inflation Reduction Act (IRA). It has not been proven to work at scale; must be heavily subsidized; props up fossil fuels; takes dollars away from real solutions; and does not address the increasing methane emissions from fracking. Additionally, it will negatively affect frontline communities that are already being sacrificed at the altar of fossil fuels. The 9th Compendium of Scientific, Medical, and Media Findings Demonstrating Risks and Harms of Fracking, a compilation of years of scientific research on fracking said, “Our examination uncovered no evidence that fracking can be practiced in a manner that does not threaten human health directly or without imperiling climate stability upon which human health depends”.We can meet the climate challenge by building grid resilience, adopting renewable energy, and investing in energy efficiency. The Big Wires Actpromotes more interregional transmission from areas with available energy to areas that need energy. The Big Wires Act ensures “utilities and other transmission developers would be responsible for upgrading the grid.” Technological improvements have now made renewable green energy cheaper than fossil fuels. Energy efficiency tax credits in the IRA support projects which will help citizens and the planet. Ryan speaks about “shrill and impractical voices”; those voices are Ohio citizens crying out for environmental justice. They are not misinformed; they understand exactly what is happening to the planet and their communities.
Ohio Landowners Seek Class Action Against Rice/EQT re Royalties - Marcellus Drilling News -- A group of landowners in Belmont County, OH, filed a lawsuit against Rice Drilling (now EQT Corporation) in July 2021, alleging the company had shorted them on royalty payments by (a) selling the gas extracted to an affiliated (instead of unaffiliated) third party, and (b) deducting post-production costs specifically disallowed under the signed contract. Several landowners who are part of what was originally known as the Smith-Goshen Landowners Group have requested a federal court in Ohio to elevate the lawsuit to class-action status.
Ohio Utica Shale Drilling Dispute Remanded to Lower Court - Bloomberg Law News - An Ohio oil drilling contract was ambiguous about whether the Utica Shale formation includes the Point Pleasant formation below Utica’s base, the state’s high court ruled Thursday, sending the dispute back to a lower court. “We are not persuaded that the lease language clearly established that the Point Pleasant was or was not to be considered part of the Utica Shale,” the Ohio Supreme Court held in a 4-3 ruling. It’s up to a fact-finder to resolve the ambiguity in the contract, the opinion said.
OH Supreme Court Reverses “Drilled Too Deep” Decision TERA v Rice --Marcellus Drilling News -- Back in the summer of 2020, MDN told you about a lawsuit brought by an Ohio rights owner called TERA, an organization that owns the royalty rights for a number of leases with wells in Belmont County, OH, drilled by different producers, suing the producers for drilling into the Point Pleasant shale layer when the lease only mentions the Utica layer (see OH Landowners Sue Rice, Ascent, XTO, Gulfport for Drilling Too Deep). We have an important update on that lawsuit which potentially affects all Ohio landowners and drillers.Yesterday, the Ohio Supreme Court issued a ruling that overturns a Seventh District Court of Appeals decision upholding a lower court’s ruling in favor of the rights owner. The Ohio Supremes reversed the judgment of the Seventh District and remanded the case back to the trial court for further proceedings.
Tera, L.L.C. v. Rice Drilling D, L.L.C. - Supreme Court of Ohio - 22 page document [ Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Tera, L.L.C. v. Rice Drilling D, L.L.C. , Slip Opinion No. 202 4 - Ohio - 1945 .] NOTICE: This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215 , of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.
Ohio O&G Commission Blames Unplugged Well for Injection Well Leak - Two weeks ago, MDN told you about an odd situation in Ohio. DeepRock Disposal, an injection well company owned by a former member of the Ohio Oil & Gas Commission and current State Senator, Brian Chavez, leaked injected wastewater beyond its permitted boundary of a half mile into a non-functioning conventional well “miles away” (in Noble County) where the water came to the surface (see Plain Dealer Alleges Political Strings at ODNR re Injection Wells). The Ohio Dept. of Natural Resources (ODNR) had to plug the non-functioning conventional well (owned by a different company, Genesis) in an emergency action. ODNR then sent a bill for $1.3 million for the cleanup to Genesis, the victim of DeepRock’s water migration!
ODNR Selects Contractor to Conduct Well Water Testing in Athens - Marcellus Drilling News --One month ago, the Ohio Oil and Gas Commission upheld a regulatory order from the Ohio Dept. of Natural Resources (ODNR) suspending the operation of three wastewater injection wells located in Torch (Athens County), OH, owned by K&H Partners, a subsidiary of Tallgrass Energy (see Ohio O&G Commission Votes to Shut Down 3 Athens Injection Wells). ODNR has hired an outside third party to conduct well water testing in the area to gauge whether or not the injection wells have leaked into and contaminated local water supplies.
Austin Master Services Responds to AG Lawsuit; Court Hearing Today -- Marcellus Drilling News -- American Environmental Partners (AEP) and its owner, Brad Domitrovitsch, are due in court today in Belmont County, OH, to address a motion by Ohio’s Attorney General, David Yost, to hold the company and Domitrovitsch in contempt for not complying with an order to clean up the Austin Master Services (AMS) facility owned by AEP. AMS is a radiological waste management solutions company in Martins Ferry ( in Belmont County) close to the Ohio River. Media accounts report that AMS has stored at least 10,000 tons of fracking waste (drill cuttings with low radioactivity) at the facility. The facility is rated and permitted to hold 600 tons. In March, Ohio Attorney General Dave Yost asked the Belmont County Common Pleas Court to block AMS from receiving more waste and order it to clean up and comply with its rating. The court granted both requests with a deadline of April 17 to comply. The deadline came and went without compliance.
Austin Master Services Court Hearing Day One: Single Witness --Marcellus Drilling News --American Environmental Partners (AEP) and its owner, Brad Domitrovitsch, had their first day in court yesterday in Belmont County, OH, to address a motion by Ohio’s Attorney General, David Yost, to hold the company and Domitrovitsch in contempt for not complying with an order to clean up the Austin Master Services (AMS) facility owned by AEP. Although the hearing was scheduled to begin at 10 am, it didn’t actually start until 11:10 am. The judge gave the attorneys for the parties involved time to talk in an effort to arrive at a resolution. Which obviously didn’t happen as the hearing went forward. There was just one witness for the day yesterday.
AMS Court Hearing Day Two: Comply by July 22 or Jail Time for CEO -Marcellus Drilling News --Yesterday was the second and final day of a hearing begun on Monday in Belmont County, OH, Common Pleas Court to determine whether or not Austin Master Services (AMS) and its parent company American Environmental Partners (AEP), along with the owner of both companies, Brad Domitrovitsch, has failed to comply with an order from the Ohio Dept. of Natural Resources (ODNR) to clean up and clear out a facility in Martins Ferry that currently holds too much frack waste. The hearing concluded with the judge’s finding that AMS, AEP, and Domitrovitsch are in “contempt” of a previous court directive to get the facility cleaned by April 17. Beginning yesterday, AMS will be fined $200 per day. If the facility is not cleaned up and in compliance by July 22, the judge has ordered Domitrovitsch (who does not live in Ohio) to report to Belmont County jail to serve a 30-day sentence.
16 New Shale Well Permits Issued for PA-OH-WV May 13 – 19 | Marcellus Drilling News Permits issued in the Marcellus/Utica continue to bounce up and down. One month ago, there were 26 new permits in the M-U for a one-week period. Three weeks ago, 16 new permits were issued. Two weeks ago, just ten new permits were issued. And last week, May 13-19, the number increased to 16, but only because of Pennsylvania. Range Resources scored seven new permits in PA last week, all in Washington County. EQT (and its subsidiary Rice Drilling) received six new permits last week, mostly in Fayette County, PA (with one in Washington County, PA). Southwestern Energy received three permits to drill in Brooke County, WV. Ohio issued no new permits last week. Brooke County | EQT Corp | Fayette County | | Range Resources Corp | Southwestern Energy | Washington County
Smart Sand Reports Strong Q1 Results Amid Rising Demand - — Smart Sand, Inc. has announced its financial results for the first quarter of 2024, highlighting a significant increase in sales and revenue driven by rising demand in major basins.The company sold approximately 1.3 million tons of sand during the quarter. This led to a revenue of $83.1 million. Despite these gains, Smart Sand reported a modest net loss of $0.2 million, while adjusted EBITDA—a measure of operational performance—reached $9.3 million. Charles Young, Smart Sand’s CEO, pointed out the robust performance compared to the previous quarter. “Sales volumes increased by over 30%, contribution margin doubled, and Adjusted EBITDA increased by almost $9 million,” stated Young.A key factor in this growth was the heightened demand for Smart Sand’s product across various basins, coupled with increased utilization of the company’s SmartSystems fleet. The company also invested in new terminals in northeast Ohio, now operational and serving the Utica shale formation, which contributed to the improved sales volumes. However, the company faced challenges with free cash flow, which was negatively impacted due to an increase in working capital needed to support higher sales levels. Young expects this issue to stabilize starting in the second quarter, projecting positive free cash flow for the rest of 2024. “We are focused on being more efficient in our operations and in the utilization of our combined assets to improve our cost structure,” he added. Smart Sand’s liquidity remains stable, with primary sources including cash on hand, cash flow from operations, and available borrowings under its ABL Credit Facility. As of March 31, 2024, the company had $4.6 million in cash and $6.0 million in undrawn availability on the credit facility. This strong performance in the first quarter reflects Smart Sand’s ability to adapt to market demands and effectively manage its operational assets. The increased sales volumes and improved margins suggest a positive trajectory for the company, particularly in addressing the growing needs of the energy sector.
Haynesville Activity ‘Soft’ as Permian Associated Natural Gas Supply Competes, Says Patterson-UTI CEO - Mergers by exploration customers and low natural gas prices continue to be a headwind in the Lower 48 for the oilfield services sector, but impacts may begin to ease later this year, according to completions expert Patterson-UTI Energy Inc. U.S. land activity “continues to be cautious and reflects slightly lower activity than we saw to start the year,” CEO Andy Hendricks said during the recent first quarter conference call. “So far, activity in natural gas basins has held up better than we had anticipated, particularly in the Northeast. But we are seeing more natural gas activity reductions continuing in the second quarter.”
U.S. Southeast Manufacturing, Industrial Growth Driving Billions in New Natural Gas Infrastructure - While data centers and artificial intelligence (AI) may dominate the news, investments by large load industrial and manufacturing sectors, particularly in the U.S. Southeast, are driving a significant portion of an expected rise in natural gas consumption. Southeast utility Santee Cooper is looking to add more than 1,000 MW of natural gas-fired electric generation to help meet expected industrial growth and continued economic development across the state. The state-owned utility currently serves 27 large customers whose operations involve industrial, manufacturing and other energy-intensive economic activities. Its industrial customers represent about 17% of the utility’s total energy sales. The Moncks Corner, SC-based utility provides gas and electric services to about 2 million people in South Carolina
How Much Natural Gas Could Data Centers Consume? – Listen Now to NGI’s Hub & Flow - Natural Gas Intelligence --Click here to listen to the latest episode of NGI’s Hub and Flow, as Enverus senior energy transition analyst Carson Kearl joins NGI’s Carolyn Davis, managing editor of News, to break through the hype about power generation needs as more hyperscale data centers come online. A race is underway by big and small operators as the world is transformed by the use of artificial intelligence (AI). The data centers to store and process AI run 24-7. They are likely to pull generation from a variety of sources, including alternative resources and from natural gas. And power generation consumption also could evolve as evolving technology improves efficiencies.
US to close Northeast gasoline reserve with 1 million-barrel sale (Reuters) - President Joe Biden's administration will sell nearly 1 million barrels of gasoline in the U.S.-managed stockpile in northeastern states as required by law, the Department of Energy said on Tuesday, effectively closing the near decade-old reserve.The department created the Northeast Gasoline Supply Reserve in 2014 after Superstorm Sandy left motorists scrambling for fuel. But storing refined fuel is costlier than storing crude oil, so closing the reserve was included in U.S funding legislation signed in March by Biden, a Democrat. Bids are due on May 28 and the Treasury Department's general funds gets proceeds from the sale, the department said. The volumes will be allocated in quantities of 100,000 barrels with each barrel containing 42 gallons, the department said. The gasoline should flow into local retailers ahead of the Fourth of July holiday, it said. While the sale was mandated by bipartisan legislation, both the Biden administration and Republican presidential candidate Donald Trump tried to score points from it. Energy Secretary Jennifer Granholm said the Department of Energy had timed the sale to coincide with the runup to peak summer driving demand. “By strategically releasing this reserve in between Memorial Day and July 4th, we are ensuring sufficient supply flows to the ... northeast at a time hardworking Americans need it the most,” Granholm said in a release. U.S. gasoline prices have fallen for four weeks in a row to $3.58 a gallon amid plentiful supplies but remain about a nickel above year-ago levels, according to the Energy Information Administration. Trump said Biden was using the reserve to push down retail gasoline prices for political reasons. "And so he's trying to stop that because high gasoline prices are not good for elections," Trump said outside the New York courtroom where his hush-money trial is taking place. U.S. gasoline prices are about 30% cheaper now than in June 2022 when they hit a record above $5.00 a gallon. Prices have fallen as U.S. crude oil output has hit a record under Biden.
Biden Drains Entire Northeast Gasoline Reserve In Bid To Lower Gas Prices As He Trails Trump By Double Digits - Back in March, when reading the mammoth, 1050-page bill that was meant to avert government shutdown, but was yet another pork filled free-for-all bonanza authorizing $1.7 trillion in in discretionary spending, we stumbled upon something that was truly shocking: after Biden singlehandedly drained half of the US strategic petroleum reserve to avoid obliteration for Democrats in the 2022 midterm elections, Congress has snuck in a provision that would sell off and shutter the Northeast Gasoline Supply Reserve, a move that while perhaps keeps gas prices lower for a day or two, would also leave the entire continental northeast defenseless to any true environmental catastrophe or shock. We were so dismayed by the inclusion of this particular text, we wondered if it hadn't been put there solely for the benefit of America's enemies... The entire US 1 million barrel Northeast Gasoline Supply Reserve will be required to be sold and closed in fiscal 2024, according to bill text of government funding legislation unveiled Sunday https://t.co/d8qLXZ5Gi6pic.twitter.com/8B2flG0CZw ... because surely nobody in their right mind, not even the illegitimate senile occupant of the White House, would ever pursue such short-term gains at the expense of potentially disastrous long-term consequences to the entire nation. We were wrong: earlier today, just two months after the bill was signed by Biden into law, the panicking administration announced that it would sell the nearly 1 million barrels of gasoline in the US managed stockpile in northeastern states, the Department of Energy said, effectively closing the reserve. The department created the Northeast Gasoline Supply Reserve (NGSR) in 2014 after Superstorm Sandy left motorists scrambling for fuel. But, according to some megabrains hoping to justify the dumping of gas so its price drops for a few weeks ahead of the summer and avoid even more anger aimed at the president, storing refined fuel is costlier than storing crude oil, so closing the reserve was included in U.S funding legislation signed by President Joe Biden in March. Bids to buy the gasoline located at the two NGSR storage sites in Port Reading, NJ (900,000 bbl) and South Portland, ME (98,824 bbl), are due on May 28 and the Treasury Department's general funds gets proceeds from the sale. Incidentally, the proceeds from the reserve liquidation - which will amount to roughly $125 million gross (and far less net) - is roughly how much the government spends every 15 minutes! So is it better to have a gasoline reserve for unexpected events, or to fund a quarter hour of US government's spending? Don't answer that. Of course, the answer is neither - the whole point of selling the gasoline is to depress prices at the pump if only for a few days to help Americans forget about the great inflationary nightmare they have been in for the past 3 years. The volumes will be allocated in quantities of 100,000 barrels with each barrel containing 42 gallons, the department said and said it would require that fuel is transferred or delivered no later than June 30. That will ensure the gasoline can flow into local retailers ahead of the Fourth of July holiday and that it will be sold at competitive prices. Translation: Biden just drained the Northeast strategic gasoline reserve to push gas lower by a few cents on July 4. “By strategically releasing this reserve in between Memorial Day and July 4th, we are ensuring sufficient supply flows to the ... northeast at a time hardworking Americans need it the most,” Energy Secretary Jennifer Granholm said in a release. White House Press Secretary Karine Jean-Pierre said release of gas from the Northeast reserve builds on actions by President Joe Biden, a Democrat, “to lower gas and energy costs — including historic releases from the Strategic Petroleum Reserve and the largest-ever investment in clean energy.″ Biden significantly drained the Strategic Petroleum Reserve in 2022 following Russia’s invasion of Ukraine, dropping the stockpile to its lowest level since the 1980s after selling about 280 million barrels to keep prices low. The election year move helped stabilize gasoline prices that had been rising in the wake of the war in Europe but drew complaints from Republicans, and frankly anyone with half a brain, that the Democratic president was playing politics with a reserve meant for national emergencies. The Biden administration has since very theatrically begun refilling the oil reserve, which had more than 364 million barrels of crude oil as of last month, by purchasing a couple million barrels every other month or so, setting it on pace for refilling some time in the 2100s. “While congressional Republicans fight to preserve tax breaks for Big Oil at the expense of hardworking families, President Biden is advancing a more secure, affordable, and clean energy future to lower utility bills while record American energy production helps meet our immediate needs,” Jean-Pierre said.
US LNG exports climb to 28 shipments - LNG Prime US liquefied natural gas exports rose in the week ending May 15 compared to the week before, with the Freeport LNG terminal shipping four cargoes during the period, according to the Energy Information Administration.The agency said in its weekly report that 28 LNG carriers departed the US plants between May 9 and May 15, six shipments more compared to the week before. This is also the highest weekly number of cargoes since January this year, the data shows.Citing shipping data provided by Bloomberg Finance, the EIA said the total capacity of these 28 LNG vessels is 102 Bcf. Average natural gas deliveries to US LNG export terminals increased by 3.5 percent (0.4 Bcf/d) week over week, averaging 12.7 Bcf/d, according to data from S&P Global Commodity Insights.Natural gas deliveries to terminals in South Louisiana decreased by 4.7 percent (0.4 Bcf/d) to 7.4 Bcf/d, while natural gas deliveries to terminals in South Texas increased 23.5 percent (0.8 Bcf/d) to 4.1 Bcf/d.The agency said that scheduled volumes of natural gas at the Stratton Ridge delivery location for Freeport LNG in South Texas on the Gulf South Pipeline increased 48.7 percent this report week from an average of 0.9 Bcf/d last week to 1.3 Bcf/d this week.Natural gas deliveries to terminals outside the Gulf Coast were essentially unchanged at 1.2 Bcf/d.Cheniere’s Sabine Pass plant shipped ten cargoes and the company’s Corpus Christi facility sent three shipments during the week under review.Venture Global LNG’s Calcasieu Pass facility and the Freeport LNG terminal each shipped four cargoes while Sempra Infrastructure’s Cameron LNG terminal shipped three cargoes during the period.Also, the Elba Island and the Cove Point facility each sent two cargoes during the week under review.Freeport LNG, the operator of the 15 mtpa liquefaction plant in Texas, told LNG Prime on Wednesday it has resumed operations at all of its three liquefaction trains.The LNG terminal operator said on March 20 that only the third liquefaction train was operating.Since then, the plant has been shipping about one LNG cargo per week, and increased its shipments in the week ending May 8 to three. This report week, the Henry Hub spot price rose 14 cents from $2.01 per million British thermal units (MMBtu) last Wednesday to $2.15/MMBtu this Wednesday.The agency said the price of the June 2024 NYMEX contract increased 22.9 cents, from $2.187/MMBtu last Wednesday to $2.416/MMBtu this Wednesday.According to the agency, the price of the 12-month strip averaging June 2024 through May 2025 futures contracts climbed 8.2 cents to $3.049/MMBtu.The agency said that international natural gas futures were mixed this report week.Bloomberg Finance reported that weekly average front-month futures prices for LNG cargoes in East Asia were the same week over week at a weekly average of $10.46/MMBtu.Natural gas futures for delivery at the Dutch TTF decreased 27 cents to a weekly average of $9.50/MMBtu.In the same week last year (week ending May 17, 2023), the prices were $10.44/MMBtu at TTF and $10.62/MMBtu in East Asia, the agency said.
Golden Pass LNG EPC Firm Exiting Project, Files Bankruptcy - Zachry Group, one of the construction firms working on the Golden Pass LNG terminal, disclosed it will eventually exit the project and has filed for bankruptcy amid reported financial and labor issues. The San Antonio-based engineering, procurement and construction (EPC) firm is the lead contractor in charge of staffing construction activities for the 18 million metric tons/year (mmty) Golden Pass liquefied natural gas export project. Earlier in the month, a Golden Pass LNG spokesperson told NGI that the EPC joint venture partners, which include Chiyoda Corp. and McDermott, were in “ongoing discussions regarding the role of Zachry” after reported furloughs of workers from the site southeast of Houston.
Golden Pass LNG contractor Zachry files for bankruptcy - US construction company Zachry said on Tuesday it has filed for bankruptcy, initiating a structured exit from the Golden Pass LNG export project in Texas due to “financial challenges” related to the construction of the facility owned by QatarEnergy and ExxonMobil.ZHI and certain of its subsidiaries have filed to start the Chapter 11 process in the US Bankruptcy Court for the Southern District of Texas that “provides them with time and flexibility to resolve issues related to the Golden Pass LNG (GPX) export terminal project in Sabine Pass,” the firm said on Tuesday.This restructuring is intended to strengthen the company’s overall financial position, while work at all remaining jobsites is continuing without interruption, it said.The company expects that its cash on hand, along with cash generated from operations, will provide “sufficient liquidity for the company to meet its ongoing business obligations during the court-supervised process.” A joint venture of Chiyoda, McDermott, and Zachry named CCZJV is building the three Golden Pass LNG trains worth more than $10 billion next to the existing LNG import terminal.State-owned QatarEnergy owns a 70 percent stake in the Golden Pass project with a capacity of more than 18 mtpa and will offtake 70 percent of the capacity, while US energy firm ExxonMobil has a 30 percent share.ExxonMobil said earlier this year that the partners were expecting to start LNG production at their Golden Pass LNG export terminal in the first half of 2025.LNG Prime invited Golden Pass LNG to provide a comment on the matter.John B. Zachry, chairman and CEO of ZHI said in the statement that, “as the project’s lead contractor, we have navigated significant challenges and disruptions stemming first from the Covid-19 pandemic and, more recently, international geopolitical issues.”He said these “unforeseen disruptions have resulted in significant financial strain while meeting targets and keeping the project appropriately staffed.”“We have been transparent with GPX and its shareholders as we have attempted to reach a mutually agreeable resolution to these issues. Because we have been unable to find a path forward, we have been forced to take action to protect our business,” he said.“The process we are starting today provides us mechanisms to initiate a structured exit from the GPX project. It also enables us to take certain actions that will improve our performance and better position our business for the future,” Zachry said.According to a court filling, estimated assets are between $1 billion and $10 billion, and estimated liabilities are between $1 billion and $10 billion.The company said it has filed a number of customary motions seeking court authorization to continue to support its ongoing operations during the court-supervised process.Subject to approval of these motions, the company does not expect this process to impact employee wages, health and welfare benefits plans, or qualified retirement savings plans.The company expects to receive court approval for these requests. ZHI also intends to “pay vendors and suppliers in full under normal terms for goods and services provided during the bankruptcy case,” it said.
Lawsuit slams DOE’s LNG pause as unconstitutional - A Louisiana think tank and a nonprofit law firm have sued the Department of Energy over its pause on liquefied natural gas export approvals, saying the move is unconstitutional and hurts the economy.The Pelican Institute for Public Policy and the Liberty Justice Center filed suit Thursday — more than three months after the Biden administration announced DOE’s freeze. The pause has been met with cheers from some environmental groups and widespread disapproval from the U.S. oil and gas industry.In their filing, the Pelican Institute and the Liberty Justice Center asked the court to set aside DOE’s proclamation pausing U.S. LNG export approvals as unlawful.“Nothing in the Natural Gas Act grants any federal officer, even the President, the authority to halt the approval process, and yet the Biden Administration has tried just that,” Loren Seehase, senior counsel at the Liberty Justice Center, said in a news release last week.
FERC Chairman Attributes CP2 LNG Delays to Project’s Potential Emissions - FERC Chairman Willie Phillips recently told lawmakers that an extended analysis of the proposed CP2 LNG facility’s air emissions was prolonging the regulatory review of the project. Phillips said Venture Global LNG Inc.’s Calcasieu Pass terminal, which entered service in 2022, is releasing more emissions than previously expected, which would add to the nearby CP2 project’s cumulative impact. Last week, the Federal Energy Regulatory Commission sent a request asking the company for updated cumulative impact analysis using revised emission rates, to which Phillips told lawmakers the company has responded.
Adnoc Lands 1.9 MMty Offtake Agreement, Equity in Rio Grande LNG - Abu Dhabi National Oil Co. (Adnoc) has invested in the first phase of Rio Grande LNG and secured offtake from a future expansion as it looks to boost its international natural gas portfolio. Adnoc disclosed Monday it has acquired an 11.7% stake in the first three trains of NextDecade Corp.’s 17.6 million metric tons/year (mmty) export terminal currently under construction in South Texas. It also signed a 20-year liquefied natural gas supply agreement for 1.9 mmty from the proposed Train 4 project on a free-on-board basis indexed to Henry Hub. “As global energy demand continues to increase, Adnoc is growing our diversified energy portfolio to ensure a secure, reliable and responsible supply of energy to our customers while driving innovation and greater value,”
Adnoc buys stake in NextDecade’s Rio Grande LNG project -- UAE’s Adnoc has purchased an 11.7 percent stake in the first phase of NextDecade’s Rio Grande LNG export terminal in Texas from Global Infrastructure Partners. Adnoc and NextDecade also entered into a 20-year LNG offtake agreement for the fourth Rio Grande LNG train.According to a joint statement issued on Monday, the Phase 1 RGLNG equity stake has been acquired through an investment vehicle of GIP.State-owned Adnoc acquired a portion of GIP’s existing equity interest in Phase 1 while NextDecade retains its previously announced expected economic interest in Phase 1 as well as its interests in the train 4 and train 5 expansion capacity.Also, Adnoc’s acquisition of the equity stake secures the option from GIP for equity participation in the future trains 4 and 5 of the project.The acquisition marks Adnoc’s first strategic investment in the US as it continues to deliver on its international growth strategy and complements its efforts to expand its lower-carbon LNG portfolio to meet growing gas demand, the statement said.Adnoc owns a 70 percent stake in Adnoc LNG, that currently produces about 6 mtpa of LNG from its facilities on Das Island. The firm also plans to take a final investment decision on its Ruwais LNG export projectthis year. The 20-year LNG offtake agreement between Adnoc and NextDecade is for 1.9 million tons per annum (mtpa) from RGLNG train 4, on a free on board (FOB) basis at a price indexed to Henry Hub. The deal remains subject to a final investment decision (FID). NextDecade is currently targeting FID on the fourth train at the Rio Grande LNG facility in the second half of 2024. This remains subject to, among other things, finalizing and entering into an engineering, procurement and construction (EPC) contract, entering into commercial arrangements, and obtaining adequate financing to construct the train 4 and related infrastructure, it said. NextDecade’s partner TotalEnergies has LNG purchase options of 1.5 mtpa for each of train 4 and train 5.
Pilot LNG, Seapath Seek Approval for Galveston LNG Bunkering Project - Pilot LNG LLC and maritime infrastructure firm Seapath are seeking approval to build their proposed liquefied natural gas bunkering project near Galveston, TX, to meet expected rising demand for low-carbon marine fuel on the Gulf Coast. Galveston LNG Bunker Port LLC, a joint venture formed last year between Pilot LNG and Seapath, has filed an application with the U.S. Army Corps of Engineers to build a 600,000 gallon/day LNG fueling terminal. It also has filed applications with the Railroad Commission of Texas and U.S. Coast Guard. “We are confident that we will meet the rigorous requirements of state and local permitting authorities to ensure that the project is delivered on time and will meet the ever-growing demand for clean fuel supply in the Galveston Bay and Gulf Coast...
APA Selling Bundle of Natural Gas-Weighted Properties in Upper Eagle Ford, Permian - Houston-based APA Corp. has clinched agreements to sell some natural gas-weighted assets across Texas for more than $700 million. Subsidiary Apache Corp., which oversees exploration and production activity, is divesting properties in the Upper Eagle Ford Shale, which is generally in East Texas. It also is selling properties in West Texas within the Permian Basin’s Midland formation. Combined, average production was 13,000 boe/d during the first quarter. “Slightly more” than 33% of the overall output mix was petroleum-weighted, Apache noted.
Phillips 66 Pursues $550M Acquisition to Expand Natural Gas Operations in Permian Midland - Phillips 66 agreed to acquire Pinnacle Midland Parent LLC in an all-cash deal that would expand its natural gas gathering and processing operations in West Texas. The Houston-based company agreed to pay $550 million to acquire Pinnacle from private equity firm Energy Spectrum Capital in a deal expected to close around mid-year. The acquisition would expand Phillips 66’s footprint in the Permian Basin’s prolific Midland sub-basin ahead of an anticipated surge in natural gas demand from export facilities along the Gulf Coast. Five LNG projects are under construction along the Gulf Coast to increase U.S. export capacity from 14 Bcf/d to nearly 25 Bcf/d by the end of the decade.
US natgas prices jump 5% to 4-month high on lower output and rising LNG feedgas (Reuters) -U.S. natural gas futures jumped about 5% to a four-month highon Monday on a decline in output and a rise in the amount of feedgas flowing to liquefied natural gas (LNG) export plants. Energy traders said prices would be even higher but for bearish forecasts for less demand over the next two weeks than previously expected and the tremendous amount of surplus gas still in storage. Analysts projected there was currently about 29% more gas in storage than usual for this time of year. EIA/GAS NGAS/POLL Front-month gas futures NGc1 for June delivery on the New York Mercantile Exchange rose 12.5 cents, or 4.8%, to settle at $2.751 per million British thermal units (mmBtu), their highest price since Jan. 17. Looking ahead, the premium of futures for November over October NGV24-X24, which traders use to bet on winter weather and future demand, fell to 29cents per mmBtu, its lowest level since December 2022 for a second day in a row. With gas prices up about 62% over the past three weeks, speculators last week boosted their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges to their highest since November 2023, In other news, more than 223,000 homes and businesses in Texas were still without power on Monday after severe storms battered the region last week and over the weekend. Those outages and forecasts for less heat than previously expected have reduced power use in Texas. The state's power grid operator, the Electric Reliability Council of Texas (ERCOT), now projects power use will break records for the month of May on Friday and Saturday as homes and businesses crank up air conditioners to escape rising heat. Last week, ERCOT forecast demand would break the May record on Monday. Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.2 billion cubic feet per day (bcfd) so far in May, down from 98.2 bcfd in April. That compares with a monthly record high of 105.5 bcfd in December 2023. On a daily basis, output was on track to drop by around 1.3 bcfd over the past three days to a preliminary one-week low of 96.5 bcfd on Monday. Meteorologists projected weather across the Lower 48 states would remain warmer than normal through May 29 before turning mostly near normal from May 30-June 4. LSEG forecast gas demand in the Lower 48, including exports, would rise from 91.6 bcfd this week to 92.2 bcfd over the next two weeks. Those forecasts were lower than LSEG's outlook on Friday. Gas flows to the seven big U.S. LNG export plants rose from an average of 11.9 bcfd in April to 12.7 bcfd so far in May with the return of Freeport LNG's 2.1-bcfd plant in Texas. That compares with a monthly record high of 14.7 bcfd in December. On a daily basis, however, LNG feedgas was on track to slide to 12.5 bcfd on Monday from 13.5 bcfd on Friday due mostly to a reduction in flows to Cheniere Energy's 2.4-bcfd Corpus Christi plant in Texas to 1.7 bcfd on Monday from 2.3 bcfd on Friday.
US natgas prices slide 3% on signs of rising output, Golden Pass LNG worries (Reuters) -U.S. natural gas futures slid about 3% on Tuesday on signs producers were no longer cutting output and worries the bankruptcy of a contractor working on Exxon Mobil/QatarEnergies' Golden Pass LNG export plant in Texas could delay the project and reduce expected demand for gas next year. Zachry Holdings, one of the companies building Golden Pass, filed for bankruptcy citing challenges at the project. Even before the bankruptcy some analysts had alreadyshifted their expected startup of the project from the first half of 2025 to the second half of 2025. In addition, traders said gas futures were down as speculators cash in their long bets after prices soared about 63% over the prior three weeks to a four-month high in the prior session. Front-month gas futures NGc1 for June delivery on the New York Mercantile Exchange fell 8.0 cents, or 2.9%, to settle at $2.671 per million British thermal units (mmBtu).On Monday, the contract closed at its highest since Jan. 17. Despite the small price decline, the front-month remained in technically overbought territory for a 13th day in a row for the first time since April 2022. In other news, more than 146,000 homes and businesses in Texas were still without power on Tuesday after severe storms battered the region last week and over the weekend. Power demand in the Electric Reliability Council of Texas (ERCOT) region, meanwhile, hit a preliminary record high for the month of May on Monday and will likely keep breaking that high over the next week as homes and businesses keep their air conditioners cranked up to escape a spring heat wave. In Massachusetts, utility regulators last week approved a deal between U.S. energy company Constellation Energy CEG.O and some New England gas utilities that will keep the Everett LNG import plant in service through 2030 to help keep the regional gas system reliable and meet growing demand, especially during the peak winter heating seasons. In the spot market, next-day gas prices at the Henry Hub benchmark in Louisiana rose to their highest since January due to rising air conditioning use. That left prices at the PG&E Citygate in Northern California this week less expensive than the Henry Hub for the first time since March 2022. Energy traders said that was because demand for gas was low in California, while melting snow in the West was resulting in lots of cheap hydropower. Meteorologists projected weather across the Lower 48 states would be warmer than normal from May 21-27 and then again from June 2-5 with a near normal stretch in the middle from May 28-June 1. LSEG forecast gas demand in the Lower 48, including exports, would rise from 91.5 bcfd this week to 92.3 next week.
U.S. natgas prices jump 6% to 4-month high as rising LNG feedgas boosts demand (Reuters)—U.S. natural gas futures jumped about 6% to a four-month high on Wednesday on lifted forecasts for weekly demand and as more gas was flowing to liquefied natural gas (LNG) export plants with flows to Freeport LNG’s plant in Texas up to an 11-month high. Prices were also supported by analyst forecasts that utilities injected a smaller-than-usual amount of gas into storage for a fourth week in a row. Analysts estimated there was about 29% more gas in storage than usual for this time of year. Front-month gasd futures for June delivery on the New York Mercantile Exchange rose 17.1 cents, or 6.4%, to settle at $2.842/MMBtu, their highest close since Jan. 17. That kept the front-month in technically overbought territory for a 14th day in a row for the first time since June 2016. In other news, U.S. gas pipeline venture Mountain Valley Pipeline pushed back the target in-service date of its long-delayed pipe from West Virginia to Virginia to early June from the prior target of "prior to June 1." Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.3 Bft3d so far in May, down from 98.2 Bft3d in April. That compares with a monthly record of 105.5 Bft3d in December 2023. On a daily basis, output was up about 0.7 Bft3d since hitting a 15-week low of 96.2 Bft3d on May 1. Energy traders said that increase was a sign the 63% gain in futures prices over the past three weeks likely prompted some drillers to start producing more gas. U.S. gas production was still down by around 9% so far in 2024 after several energy firms, including EQT and Chesapeake Energy, delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in February and March. Meteorologists projected weather across the Lower 48 states would be warmer than normal from May 22–27 and then again from June 2–6 with a near normal stretch in the middle from May 28–June 1. LSEG forecast gas demand in the Lower 48, including exports, would ease from 92.6 Bft3d this week to 91.8 Bft3d next week. The forecast for this week was higher than LSEG forecast on Tuesday, while its forecast for next week was lower. Gas flows to the seven big U.S. LNG export plants rose from an average of 11.9 Bft3d in April to 12.7 Bft3d so far in May with the return of Freeport LNG’s 2.1- Bft3d plant in Texas. That compares with a monthly record of 14.7 Bft3d in December. With no new plants expected to enter service until later in 2024, average LNG feedgas was 13.1 Bft3d so far this year, the same as in 2023. On a daily basis, flows to Freeport were on track to reach an 11-month high of 2.2 Bft3d on Wednesday, up from 2.1 Bft3d on Tuesday, while flows to U.S. energy company Kinder Morgan's Elba Island in Georgia were on track to slide to a four-month low of 0.3 Bft3d on Wednesday from a four-month high of 0.4 Bft3d on Tuesday.
US natgas prices fall 5% to one-week low on rising output (Reuters) -U.S. natural gas futures dropped about 5% on Friday to a one-week low on forecasts for lower demand in two weeks, an ongoing oversupply of gas in storage and signs that recent high prices have prompted drillers to stop cutting output and start pulling more gas out of the ground. Prices dropped despite forecasts for more demand next week than previously expected and a demand-boosting heat wave expected to blanket Texas over the long Memorial Day weekend. Analysts forecast gas stockpiles were about 27% above normal levels for this time of year. Front-month gas futures NGc1 for June delivery on the New York Mercantile Exchange fell 13.7 cents, or 5.2%, to settle at $2.520 per million British thermal units, their lowest close since May 16. For the week, the front-month fell about 4% after it soared about 63% over the prior three weeks. In the spot market, power prices in Texas soared for Friday with electric demand expected to break the record for the month of May for a second time this week ahead of the long weekend as homes and businesses crank up air conditioners to escape a heat wave. Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.5 billion cubic feet per day (bcfd) so far in May, down from 98.2 bcfd in April. That compares with a monthly record of 105.5 bcfd in December 2023. On a daily basis, however, output was up about 1.5 bcfd since hitting a 15-week low of 96.2 bcfd on May 1. Energy traders said that increase was a sign that the 63% gain in futures prices over the past three weeks prompted some drillers to start producing more gas. Overall, U.S. gas production was still down around 8% so far in 2024 after several energy firms, including EQT EQT.N and Chesapeake Energy CHK.O, delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in February and March. U.S. energy firms this week actually cut the number of gas rigs operating to just 99, the lowest since October 2021, according to data from U.S. energy services company Baker Hughes. Meteorologists projected weather across the Lower 48 states would be warmer than normal from May 24-28 and then again from June 3-8 with a near normal stretch in the middle from May 29-June 2. LSEG forecast gas demand in the Lower 48, including exports, would hold near 92.7 bcfd this week and next before easing to 92.2 bcfd in two weeks. The forecast for next week was higher than LSEG forecast on Thursday. Gas flows to the seven big U.S. LNG export plants rose from an average of 11.9 bcfd in April to 12.7 bcfd so far in May with the return of Freeport LNG's 2.1-bcfd plant in Texas. That LNG feedgas, however, was still down from the monthly record of 14.7 bcfd in December due to ongoing spring maintenance at Kinder Morgan's KMI.N Elba Island in Georgia and several plants in Louisiana, including Cameron LNG, Cheniere Energy's LNG.N Sabine Pass and Venture Global's Calcasieu Pass.
Exxon Joliet, Illinois refinery reports fire on May 18 (Reuters) -Exxon Mobil reported a fire at the 250,000-barrel-per-day Joliet refinery in Illinois on Saturday, as per a regulatory filing. According to the filing from the Illinois Emergency Management Agency (IEMA), the in-house fire brigade was contacted and there were no evacuations following the incident. Last week, a company spokesperson confirmed that the refinery completed planned maintenance and was in the process of restarting operations. The Joliet refinery mainly processes Canadian crude oil.
US Coast Guard says Texas barge collision may have spilled up to 2,000 gallons of oil - - Early estimates indicate up to 2,000 gallons of oil may have spilled into surrounding waters when a barge carrying fuel broke free from a tugboat and slammed into a bridge near Galveston, Texas, the U.S. Coast Guard said Thursday. The barge crashed into a pillar supporting the Pelican Island Causeway span on Wednesday. The impact caused the bridge to partially collapse and cut off the only road connecting Galveston to Pelican Island, the Coast Guard said. Video shows splotches of oil had spilled from the barge into Galveston Bay. Jeff Davis of the Texas General Land Office said during a news conference Thursday that early cleanup efforts have not identified any impacted wildlife. The barge has the capacity to hold 30,000 barrels, but was holding 23,000 barrels — approximately 966,000 gallons — when it struck the bridge, Rick Freed, the vice president of barge operator Martin Marine, said at the news conference. Freed said the only tank that was compromised in the crash was holding approximately 160,000 gallons, which is the “complete risk.” “We’re pretty confident there was much less oil introduced to the water than we initially estimated,” Coast Guard Capt. Keith Donohue said. “We’ve recovered over 605 gallons of oily water mixture from the environment, as well as an additional 5,640 gallons of oil product from the top of the barge that did not go into the water,” Donohue said.. The Coast Guard said earlier that it had deployed a boom, or barrier, to contain the spill, which forced the closure of about 6.5 miles (10.5 kilometers) of the waterway. A tugboat lost control of the 321-foot barge “due to a break in the coupling” that had connected the two vessels, the Coast Guard said.
Texas bridge damaged by barge reopens after giant oil spill -- A Texas bridge damaged when it was struck by a massive oil barge has reopened to vehicle traffic.The Pelican Island Causeway, the only connection between Pelican Island and the city of Galveston, was hit by the vessel last Wednesday.Due to concerns about the bridge’s stability, it was closed to all vehicles for several days. It reopened Saturday night with new weight limits for vehicles. “The Galveston County Navigation District, which owns the bridge, signed off on its opening,” the city of Galveston said in a Facebook post.A tugboat was towing the oil barge through the lightly used Galveston Channel between Pelican Island and Galveston Island when a coupling broke loose and the barge was carried by the current toward the bridge. The 321-foot barge, loaded with tens of thousands of gallons of oil, struck a support pillar and caused a chunk of the bridge to fall. The barge began spilling oil into the waterway. Officials initially estimated 2,000 gallons spilled, but the Coast Guard on Sunday updated that figure to 20,000 gallons. At least three birds — two brown pelicans and a laughing gull — were killed by the oil spill, and the Coast Guard spotted at least nine other birds clearly suffering from the spill. Officials placed “acoustic cannons” to scare off other birds.Texas A&M University shut down its Galveston campus, which sits on Pelican Island, following the crash. The campus resumed normal operations on Monday. The Pelican Island Causeway was already 64 years old, and construction on a new span was scheduled to start in 2025.
Endangered listing for lizard could slow oil, gas drilling in New Mexico, West Texas - Federal wildlife officials declared a rare lizard in southeastern New Mexico and West Texas an endangered species Friday, citing future energy development, sand mining and climate change as the biggest threats to its survival in one of the world’s most lucrative oil and natural gas basins.“We have determined that the dunes sagebrush lizard is in danger of extinction throughout all of its range,” the U.S. Fish and Wildlife Service said. It concluded that the lizard already is “functionally extinct” across 47% of its range.Much of the the 2.5-inch-long (6.5-centimeter), spiny, light brown lizard’s remaining habitat has been fragmented, preventing the species from finding mates beyond those already living close by, according to biologists.“Even if there were no further expansion of the oil and gas or sand mining industry, the existing footprint of these operations will continue to negatively affect the dunes sagebrush lizard into the future,” the service said in its final determination, published in the Federal Register.The decision caps two decades of legal and regulatory skirmishes between the U.S. government, conservationists and the oil and gas industry. Environmentalists cheered the move, while industry leaders condemned it as a threat to future production of the fossil fuels.
Ship in the Delta is leaking fuel, oil — A ship sinking in the Delta leaked fuel and oil Wednesday after a hole caused it to take on water.The San Joaquin County Sheriff's Office says the ship, called the Aurora, is docked near Empire Tract and Eight Mile Road outside Stockton. It's in the waters of the Little Potato Slough. The California Department of Fish and Wildlife, the California Office of Emergency Services and the US Coast Guard were a few of the agencies that responded to the scene in a rural part of San Joaquin County."It's under investigation as far as who owns the ship. We do believe it's a private owner," said Sheriff's Office spokesperson Heather Brent. "Right now, the biggest thing is containing that gasoline leak."The gasoline leak is not as large as first responders once feared, an officer with the U.S. Coast Guard said, but the majority of Wednesday for law enforcement was spent placing floating barriers to slow the spread of any oil."There is minimal petroleum remaining on board on the aurora, so it shouldn't take too long to remove the pollution," said Petty Officer Stephen McConnell. "There's white absorbent boom already out there, which is meant to absorb any sheen that's in the water but we're putting in that hard boom."First responders and state agencies got to work quickly, partly because Wednesday's ship sinking marked the second in recent months in the same area. In September, a tugboat called the Mazapeta sunk beside the Aurora carrying 1,600 gallons of diesel and engine oil at the time. The cleanup took months and cost millions of dollars. It's unclear how much Wednesday's cleanup will cost and who will pay for it.
Youth climate-change lawsuit targets Alaska LNG project (Reuters)—Eight young Alaska residents sued the state on Wednesday seeking to block a major natural gas project, the latest in a string of climate-change related lawsuits by youths arguing that government policies promoting fossil fuels violate their rights. The Anchorage state court lawsuit, brought by a group of plaintiffs ranging in age from 11 to 22, alleges that an Alaska law mandating the project's development infringes on their due process rights and other constitutional protections by causing the release of greenhouse gases that harm their health and livelihood. Several other youth climate-change lawsuits have recently been dismissed, including two lawsuits against the federal government and two previous cases in Alaska. A similar case involving young Hawaiian plaintiffs is expected to head to trial next month, and the plaintiffs have amended one of the dismissed federal cases as well. The Alaska Supreme Court said in the most recent case before it, which was dismissed in 2022, that courts cannot mandate broad policy changes. The latest lawsuit is narrower than the earlier Alaska cases, which challenged broad state policies that support fossil fuels. By focusing on a specific project, the plaintiffs said the newest suit complies with the earlier court decisions. "Alaska's youth are on the front lines of the climate crisis, and their futures depend on a swift transition away from fossil fuels," Andrew Welle, an attorney at the non-profit law firm Our Children's Trust, which represents the plaintiffs, said in a statement. Alaska Attorney General Treg Taylor called the lawsuit "misguided" in an email, and said liquefied natural gas development in the state "is subject to the most stringent environmental standards in the world." Taylor said he is confident the courts will uphold the law. The corporation's Alaska LNG project includes an over 800-mi pipeline that will bisect the state, carrying up to 3.3 Bft3d of gas from the state's petroleum rich North Slope to Alaska communities and an export terminal south of Juneau. The development agency has said the roughly $39-B project is expected to be operational by 2030. The young plaintiffs said in the lawsuit that climate change is already causing them breathing problems due to wildfire smoke and is diminishing their ability to hunt and fish for subsistence, among other alleged harms. They said the Alaska LNG project will make climate change worse. The lawsuit asks the court to block the Alaska LNG project from proceeding, and to declare that a law mandating its development is unconstitutional. They also asked the court for a declaration that the Alaska constitution includes a right to a life-sustaining climate system.
Canadian Fires Present Wildcard for Natural Gas Production, Imports to Western U.S. and Prices - Following a record-setting outbreak in 2023, a fast start to the wildfire season is already threatening interruptions to Canada’s largest crude oil production region. Blazes in the western reaches of the country, if not contained, could also hamper natural gas output in a potential replay of last summer. Impacts to either would present possible implications for supply and prices in Canada and the United States. Nearly 20,000 acres were burning and out of control as of late last week near Canada’s oilsands epicenter in Alberta (AB). The fires forced the evacuation of several thousand people from Fort McMurray, AB, and thousands more were told to prepare to leave at any moment. Rainy conditions over the weekend temporarily slowed the outbreaks and allowed residents to return...
Canadian Natural Gas E&Ps, Midstreamers Focus on Demand Catalysts - -Natural gas exploration and production (E&P) firms and midstream companies in Canada expect to continue driving and delivering strong volumes of output. Their high expectations for demand growth outshined weak prices to begin 2024. Such was a prevailing theme of companies active in Western Canada’s natural gas complex during first quarter earnings season. The demand outlook – bolstered by LNG expansions and rising data center demand driven by artificial intelligence (AI) – largely mirrors the collective view of E&Ps in the United States. But, unlike the Lower 48, Canadian production remained on track for a record year in 2024 coming out of the first quarter. E&Ps are holding steady at elevated levels as the Shell plc-led liquefied natural gas export project in British Columbia...
Mexico Planning Natural Gas Infrastructure Amid Rising Nearshoring, Power Demand – Spotlight - North American natural gas futures have been on a hot streak these past two weeks as warmer temperatures and tighter supplies provided market bulls with some optimism. Bucking the trend on Thursday, the New York Mercantile Exchange June contract settled at $2.657/MMBtu, down 18.5 cents day/day. Mexico imports of U.S. gas have, meanwhile, continued to be strong, averaging 7.28 Bcf/d over the past 10 days, according to NGI calculations. So far in May, Mexico has imported 7.27 Bcf/d via pipeline, a full 1 Bcf/d higher than during the month of May 2023. “The hot weather in Mexico is pushing the Mexico electrical grid to the limit, which runs mostly on natural gas power plants, which without the increased demand from cooling systems throughout the country, already runs under..
Developers Ask DOE to Approve 4 MMty Gato Negro LNG Project in Mexico - Mexican developers backed by Big River Energy LLC are seeking approval from the Department of Energy (DOE) for a 4 million metric ton/year (mmty) LNG export project in Manzanillo that would be fed by U.S. natural gas. Gato Negro Permitium Uno SAPI de CV filed a request with the DOE to import up to 0.647 Bcf/d of natural gas from the Waha hub in West Texas that would be delivered to the terminal for up to 20 years. It also requested approval to re-export up to 0.556 Bcf/d of liquified natural gas to free trade agreement (FTA) countries for 20 years, starting in 2027. “Applicant plans on exporting natural gas to FTA countries through the duration of the 20-year term of the authorization requested herein, by negotiating and entering into one or more supply agreements of various...
Mexico Natural Gas Potential Said ‘Massive’ with Right Policy Changes - Mexico’s recent widespread blackouts serve as a warning in failed policies for the current and incoming governments, but solutions are available, experts said Thursday. Speaking in San Antonio, TX, at the 10th Mexico Gas Summit organized by Industry Exchange, Grupo Alfa’s Rodolfo Gamboa, vice president for Energy said, “The impending energy crisis that we are only seeing the beginnings of…is coming if real problems are not solved.” Gamboa stressed that the frailties exposed by recent power outages were solvable.
Southeastern Mexico Lacks Natural Gas Access Despite Producing Most of it, Says Report - -Mexico’s next government must improve access to natural gas in the country’s south-southeastern region, according to the Instituto Mexicano para la Competitividad (IMCO) think tank. Although the region accounts for most of Mexico’s domestic gas production, homes and businesses there lack access to the fuel, leading to higher electricity costs and fewer development opportunities than in the industrialized north, researchers said in a new report. “The inequalities that permeate south-southeastern Mexico will not be resolved if the energy poverty in the region is not addressed first,” the IMCO team said. “Natural gas has the potential to reduce it by two routes: from less polluting and more accessible electricity, to its incorporation as a fuel for domestic use in the region...
Trinidad and Tobago to claim compensation for February oil spill - Trinidad and Tobago may soon get international compensation for its oil-spill response after the February 7 oil spill incident off Tobago. Energy Minister Stuart Young met with representatives of the International Oil Pollution Compensation (IOPC) Fund on May 20 to discuss the next steps in the claims process for compensation for the oil spill.The meeting took place at the Ministry of Energy and Energy Industries, Port of Spain. At the meeting were representatives of the Coast Guard, the Ministry of Works and Transport and the Institute of Marine Affairs.Fifteen kilometres of Tobago's coast was polluted after the overturned barge Gulfstream was found leaking an oily substance near Cove.In a response to questions in Parliament about the spill, the Prime Minister said 50,000 barrels of oil were subsequently removed.A media release from the Energy Ministry quoted the IOPC as saying the next step would be evaluating the claims for economic losses due to the spill. This would include a thorough and transparent process to ensure all claims are validated and considered for compensation. Both parties reportedly committed to maintaining communication and co-operation to ensure the claims process is seamless.At the meeting, Young said the government intends to take legal action against the owners of the vessels involved in the accident: the barge, Gulfstream, and the tug, Solo Creed. Though the owners have not yet been identified, he told the IOPC TT continues to aggressively pursue leads to identify them using all available resources.In April, Young led a high-level delegation to London to champion Trinidad and Tobago’s case for compensation for its oil-spill response to the IOPC. After Young’s presentation, the IOPC agreed to pay compensation for claims arising from the incident.
Spot LNG shipping rates nearly flat, European prices drop - Spot charter rates for the global liquefied natural gas (LNG) carrier fleet remained steady this week, while European prices dropped compared to the previous week.Last week, charter rates were also almost flat compared to the last week.“Freight rates in the Atlantic and Pacific basins stayed steady this week, with the Spark30S Atlantic spot rate increasing by $750 per day to $42,750 per day, and the Spark25S Pacific rate stayed unchanged at $45,750 per day,” Qasim Afghan, Spark’s commercial analyst told LNG Prime on Friday.“Freight rates have remained within an extremely tight range over the last few weeks, staying within a $2,000 per day spread since the beginning of April for both Atlantic and Pacific basins,” he said.In Europe, the SparkNWE DES LNG front month dropped compared to the last week.“The SparkNWE DES LNG front month price for June delivery is assessed at $9.451/MMBtu and at a $0.185/MMBtu discount to the TTF,” Afghan said.He said this is a $0.097/MMBtu decrease in DES LNG price, and a $0.015/MMBtu narrowing of the discount to the Dutch TTF.“The discount has narrowed 35c in the last 3 months as demand for European regasification, which this spread is driven by, has waned as US cargos are pulled to Asia on higher Northeast Asian prices,” Afghan said.
European Natural Gas Prices at Five-Month Highs – Three Things to Know About the LNG Market - European natural gas prices continued to climb on Thursday, hitting a five-month high after Austria’s OMV AG warned earlier in the week of potential disruptions to Russian gas supplies. The company, one of the few in Europe still importing Russian volumes, said an undisclosed company won a favorable court ruling that could potentially impact its payments to an affiliate of Gazprom PJSC. The development could eventually halt supplies from Russia if the foreign court ruling is enforced in Austria – and if OMV is forced to pay the undisclosed company instead of Gazprom. Despite ample storage stocks and steady injections, the market remains on edge about supply disruptions. The Title Transfer Facility contract on Wednesday climbed above $11/MMBtu for the first time since...
Asian Spot Buying Increases Amid Hot Weather, Supply Disruptions – LNG Recap - Hot weather, maintenance at power generation facilities and LNG production outages have combined to push Asian natural gas prices higher. The July Japan-Korea Marker futures contract was trading above $11/MMBtu after climbing 7% last week. One of three trains at Chevron Corp.’s Gorgon liquefied natural gas export facility in Western Australia, which mainly serves Asia, remains offline and is expected to be out of service until early next month.
EU Adopts Regulations to Help Limit Russian LNG Imports - The European Union (EU) this week adopted new market rules for natural gas and hydrogen that allow member countries to essentially ban the import of Russian LNG. The EU Council adopted the package of regulations to aid decarbonization efforts by helping the bloc shift to renewable and low-carbon gasses in the energy system. It sets out rules for the organization of the natural gas market and establishes a framework for the development of a future hydrogen market with regulations for the transport, supply and storage of the fuels. Under the rules, which would become effective in about six months, member states could temporarily limit bidding for import capacity at any pipeline entry point or liquefied natural gas terminal for delivery from Russia and its ally Belarus.
Deltamarin, EcoLog develop LNG-fueled LCO2 carrier - LNG Prime -Finland-based Deltamarin, a unit of China Merchants Group, and Greece-based EcoLog have developed a new LNG-powered LCO2 carrier design.According to a statement by Deltamarin, the partners have collaborated to design an intra-EU, short-range, low-pressure, shallow-draft LCO2 carrier for the “purpose of tendering at shipyards worldwide”.During the initial design, various solutions have been studied in order to optimize the vessel for LCO2 transportation.This includes different configurations of the cargo containment and handling system, considering the effect of the wide variety of CO2 compositions, Deltamarin said.Also, the design features LNG dual-fuel propulsion, shore power (AMP), and wind assistance to minimize the environmental footprint, it said.EcoLog, a sister company of Peter Livanos-led LNG shipper GasLog, plans to build and own a fleet of LCO2 carriers to serve the emerging carbon capture, utilization and sequestration (CCUS) sector.The company’s strategy revolves around connecting hard-to-abate emitters with sequestration sites and re-use facilities, utilizing its midstream infrastructure, including ships and terminals.
India boosts LNG imports in April - India’s liquefied natural gas (LNG) imports rose in April this year compared to the same month last year, according to the preliminary data from the oil ministry’s Petroleum Planning and Analysis Cell.The country imported about 2.60 billion cubic meters, or about 1.9 million tonnes of LNG, in April via long-term contracts and spot purchases, a rise of 3.7 percent compared to the same month in 2023, PPAC said.In March this year, LNG imports dropped slightly following a year-on-year rise in January and February, PPAC’s data previously showed.During the April 2023-March 2024 financial year, India took some 23.3 million tonnes, up by 17.5 percent.India paid $1.1 billion for April LNG imports, the same as in April last year, and $13.3 billion in the April-March period, down from $17.1 billion in the year before, PPAC said.As per India’s natural gas production, it reached 2.95 bcm in April, up by 7.8 percent compared to the corresponding month of the previous year.At the moment, India imports LNG via seven facilities with a combined capacity of about 47.7 million tonnes.These include Petronet LNG’s Dahej and Kochi terminals, Shell’s Hazira terminal, and the Dabhol LNG, Ennore LNG, Mundra LNG, and Dhamra LNG terminal.The Chhara LNG import terminal in Gujarat should also received its commissioning cargo later this year after it recently failed to unload the cargo from the 2015-built 159,800-cbm, Maran Gas Mystras.India’s Hindustan Petroleum, a unit of state-owned ONGC, aims to launch its delayed Chhara LNG import terminal by October this year, according to its management.During April 2023-March 2024, the 17.5 mtpa Dahej terminal operated at 95.1 percent capacity, while the 5.2 mtpa Hazira terminal operated at 30.3 percent capacity, PPAC said.The 5 mtpa Dhamra LNG terminal operated at 27.4 percent capacity, the 5 mtpa Dabhol LNG terminal operated at 42.7 percent capacity, the 5 mtpa Kochi LNG terminal operated at 20.6 percent capacity, and the 5 mtpa Ennore LNG terminal operated at 18.3 percent capacity, it said.
Asian spot LNG prices at five-month high on firm demand, geopolitical risks - Asian spot liquefied natural gas (LNG) prices surged to a five-month high, marking the fourth consecutive week of gains. This increase, fueled by robust demand and mirroring European gas market trends, underscores concerns over potential disruptions to Russian gas supply. Strong demand, unexpected outages, and geopolitical tensions continue to buoy prices.Asian buyers, including China and Thailand, are capitalizing on comparatively lower prices this year, driving record import levels. Hot weather in key Asian markets boosts power demand, further stimulating LNG purchasing. Meanwhile, in Europe, maintenance outages and apprehensions over Russian pipeline supply tighten discounts to the Asian market. Geopolitical uncertainties, such as potential disruptions to Russian exports, prompt market scrutiny. In the US, LNG production remains steady, while Atlantic freight rates witness a notable uptick, contrasting with a slight decline in Pacific rates.
Nagapattinam oil spill: NGT orders CPCL to pay penalty of Rs 5 crore, Chennai: The National Green Tribunal (NGT) on Wednesday penalised CPCL over an oil spill in Tamil Nadu's Nagapattinam last year, and levied a penalty of Rs five crore on the IOCL group company. "Whether the damage is man-made or natural, the hazards of it are known in crude oil transportation and such incidents underscore the justification for imposing no-fault liability," the NGT's Southern Zone Bench of Justice Pushpa Sathyanarayana, Judicial Member Dr Satyagopal Korlapati, an expert member, said. The bench had taken up the matter on its own, based a media report."The leak was from a 9km-long 20-inch diameter pipeline from the Chennai Petroleum Corporation Limited (CPCL) Cauvery Basin Refinery (CBR) crude storage tanks at Nagapattinam to Karaikal Port," it was reported.The NGT said that though it noted the stand of the Indian Coast Guard and the CPCL that there was not much damage to seawater due to the oil spillage, the bench felt it appropriate to direct an investigation to ascertain whether any remedial measures were required. Therefore, a joint committee comprising the Central Pollution Control Board, Tamil Nadu Pollution Control Board, District Magistrate of Nagapattinam, Indian National Centre for Ocean Information Services (INCOIS) and National Centre for Sustainable Coastal Management (NCSCM) was constituted. Based on the reports of the various experts, the committee noted that no crude oil spill was observed, the visual observation of the shoreline was clean and no fish deaths were reported due to the incident, the NGT bench said. The counsel appearing for TNPCB stated that as per the spill pattern, 10,000 litres of oil had leaked, whereas only 9,000 litres were removed or recovered. "The CPCL has not accounted for 1,200 litres which has either mixed with the seawater or sand. These kinds of incidents/accidents are prone to occur in future also.
Nigeria Seeks UAE Investment to Modernize Aging Oil Pipelines - Nigeria's government is seeking investment from the United Arab Emirates (UAE) to renew its aging network of oil pipelines, some of which are over 50 years old, Investorsking reported on Tuesday, May 21, 2024. The Minister of State for Petroleum Resources (Oil) Heineken Lokpobiri met with a delegation from the UAE, led by Ambassador Salem Al Shamsi, in Abuja this week. Discussions focused on opportunities for collaboration in Nigeria's energy sector, particularly oil exploration and infrastructure development.Lokpobiri stressed the importance of pipelines in transporting crude oil to export terminals, despite advancements in alternative methods. He noted that most of Nigeria's pipelines were built in the late 1950s, around the time the country first discovered oil.Acknowledging the significant investment needed, Lokpobiri proposed a model where investors could recoup their costs as crude oil is transported through the pipelines. This proposal aims to incentivize participation in the modernization efforts.Nigeria holds vast natural gas reserves, estimated at over 208 trillion cubic feet, solidifying its position as a major player in the global energy market. In an effort to woe investors, Lokpobiri highlighted the potential for further exploration and development in both the gas and oil sectors, underscoring Nigeria's commitment to maximizing its energy resources.The meeting also addressed the balance between oil exploration and climate concerns. Lokpobiri reaffirmed Nigeria's commitment to the Paris Agreement while advocating for a measured approach to energy production and transition. He emphasized the need for strategic partnerships to finance Nigeria's energy transition, highlighting the UAE's potential role.Ambassador Al Shamsi expressed the UAE's willingness to collaborate with Nigeria to address challenges in the oil and gas sector. He emphasized the long-standing relationship between the two countries and the UAE's commitment to supporting Nigeria's development goals.
EIA: Guyana becomes key contributor to global crude oil supply growth -- The EIA reports that Guyana, situated on South America's northern coast neighbouring Venezuela, Suriname, and Brazil, has emerged as a significant contributor to growth in the global supply of crude oil.Since starting production in 2019, Guyana has increased its crude oil production to 645 000 bpd as of early 2024, all from the Stabroek block.Guyana increased crude oil production by an annual average of 98 000 bpd from 2020 to 2023, making it the third-fastest growing non-OPEC producing country during this period. Crude oil production has been the largest contributor to Guyana’s economic growth in recent years. In 2022, Guyana’s GDP grew by 62.3%, the highest real GDP growth in the world that year, according to the International Monetary Fund (IMF).Guyana's most recent estimate of recoverable oil and natural gas resources is more than 11 billion oil-equivalent barrels, and developers are still exploring the country’s offshore waters. Guyana's discovered oil and natural gas resources are currently located offshore within the Guyana-Suriname Basin of the Atlantic Ocean.The first significant oil discovery in offshore Guyana was made by ExxonMobil in 2015 at what is now the Liza project in the Stabroek block. Since then, ExxonMobil and its partners, Hess and the China National Offshore Oil Corporation (CNOOC), have made more than 30 additional offshore oil and natural gas discoveries within the Stabroek block.Guyana's oil production comes from three floating production, storage, and offloading (FPSO) vessels: Liza Destiny, Liza Unity, and Prosperity. These vessels produce oil and natural gas from the Liza and Payara projects. All associated natural gas is reinjected into wells to support its production and used as on-site fuel. A proposed project would bring associated natural gas onshore to processing facilities via pipeline.Currently, the block’s partners plan for the combined production capacity to reach approximately 1.3 million bpd by the end of 2027, with plans to develop three additional projects: Yellowtail, Uaru, and Whiptail. If realised, the increased production would make Guyana the second-largest crude oil producer in Central America and South America behind Brazil.The future of the corporate partnership at the Stabroek block is uncertain. Chevron's acquisition of Hess, which holds a 30% stake in the Stabroek block, may face delays due to arbitration filings by existing block partners ExxonMobil and CNOOC, which claim preemption rights over Hess’s stake in the block. ExxonMobil holds a 45% interest in the Stabroek block, and CNOOC holds a 25% stake.Exploration operations in the Stabroek block and nearby offshore blocks may be affected by Venezuela’s claim of sovereignty over the Essequibo region, which accounts for more than two-thirds of Guyana’s land area. The International Court of Justice (ICJ) ruled in December that Venezuela should not take any action to interrupt the status quo while the ICJ hears the case.
Oil prices increase following Iranian president's tragic death -- Strong economic activity in China and growing expectations that Fed will decrease interest rates continue to influence prices Oil prices spiked on Monday after Tehran confirmed the deaths of Iranian President Ebrahim Raisi, Foreign Minister Hossein Amir-Abdollahian, and other officials in a helicopter crash in the country's northwestern province. International benchmark Brent crude traded at $84.24 per barrel at 10.44 a.m. local time (0744 GMT), a rise of 0.31% from the closing price of $83.98 per barrel in the previous trading session. American benchmark West Texas Intermediate (WTI) traded at $79.81 per barrel at the same time, a 0.29% increase from the previous session that closed at $79.58 per barrel. The helicopter carrying the Iranian president, the country's foreign minister, and their entourage crashed in the East Azerbaijan region of northwest Iran on Sunday afternoon. After a night-long search operation hampered by bad weather, Iranian Deputy President for Executive Affairs Mohsen Mansouri said in a statement on X that all onboard, including the president, foreign minister, accompanying delegation, and helicopter crew, had died. Supply fears in favor of higher oil prices were stoked by worries about the political fallout in the oil-producing country and how it might affect decisions to be made at the June 1 meeting of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+. According to the latest OPEC report, over 3 million barrels of oil are produced daily in Iran. Meanwhile, hope of the US Federal Reserve's (Fed) starting interest rate cuts this year continues to influence oil prices. With a current 65% probability rating for a Fed interest rate decrease in September, financial markets are beginning to reflect this forecast in pricing, while bolstering trade and prices as a weak US dollar rate makes oil trade cheaper for other currency holders. Furthermore, robust economic data from China, signaling high oil demand, is supporting price increases. The world's second-largest oil consumer and largest importer announced plans to start issuing subsidized bonds worth 1 trillion yuan last week.
Oil Searches for Direction, RBOB Slides on Inflation Worry -- New York Mercantile Exchange West Texas Intermediate futures edged lower Monday, ULSD firmed while the RBOB contract slumped, as inflationary pressure is seen blunting demand for gasoline despite the unofficial kickoff to the summer U.S. driving season this weekend. A handful of Federal Reserve officials speaking Monday suggested recent data showing inflation slowed in April was not enough to sway their opinion to begin reducing interest rates at their June meeting. Atlanta Federal Reserve Bank President Raphael Bostic continues to believe the central bank might cut the federal funds rate only once in 2024, with the market currently eyeing two 25-basis point reductions in the policy rate this year. April's Consumer Price Index for April released last week by the Bureau of Labor Statistics unexpectedly ticked down to a 3.4% annual increase, with BLS also reporting separately that real average hourly earnings declined. The Census Bureau said retail sales in April showed no growth, which followed weakening consumer sentiment and confidence in early May. The Federal Open Market Committee is still expected to reduce the federal funds rate 25-basis points in September from a 5.25% to 5.5% target range and by another 25-basis points in December, according to CME's FedWatch Tool. A second cut in December on Monday had a probability of 54%, down from 57.3% on Friday, according to the tool. After pushing up to a $2.5830 two-week high overnight, June RBOB futures settled $0.0343 lower at $2.5399 gallon, as consumer pessimism and a pullback in discretionary spending is deleterious for driving demand with no help soon in the form of easing interest rates. The falloff in the gasoline contract is realized despite AAA projecting a record 38.4 million Americans will travel by road over this weekend's Memorial Day holiday, up 4% from a year ago. Gasoline inventory in the United States on May 10 was 9.437 million bbl or 4.3% above year ago, data from the Energy Information Administration shows. June ULSD futures notched its fourth straight advance, albeit settling Monday's session a fractional eight points higher at $2.4871 gallon, after holding above key trendline technical support last week. It was the first settlement above the 20-day moving average since April 10. The weekend deaths of Iranian President Ebrahim Raisi and Foreign Minister Hossein Amirabdollahian had a negligible impact on the crude contracts on Monday, with both the international and U.S. benchmarks down $0.26 and $0.27 bbl, respectively. July Brent settled at $83.71 bbl, and June WTI futures at $79.80 bbl ahead of expiration Tuesday afternoon. July WTI settled at a $0.50 bbl discount to the expiring contract.
Oil eases on worries about US inflation, interest rates (Reuters) - Oil prices eased less than 1% on Monday as U.S. Federal Reserve officials said they were awaiting more signs that inflation was declining before the central bank starts cutting interest rates. Two top Fed officials said they're not yet ready to say inflation trends are again moving sustainably back to the central bank's 2% target, weighing in after data last week showed a welcome easing in consumer price pressures in April. Lower interest rates would reduce borrowing costs for consumers and businesses, which could boost economic growth and demand for oil. Brent futures fell 27 cents, or 0.3%, to settle at $83.71 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 26 cents, or 0.3%, to settle at $79.80. That kept the premium of Brent over WTI near its lowest level since March for a third day in a row. A narrower premium makes it less profitable for energy companies to send vessels to the U.S. to pick up crude cargoes for export. That leaves more oil in the U.S. that must be consumed or stored. The premium of the Brent front-month over the second month, known in the industry as backwardation, fell to its lowest since January. When a market is in backwardation, energy firms are more likely to pull oil out of storage and use it now rather than wait for prices to decline in the future. If the market switches to contango, with future contracts worth more than the front-month, energy firms could start storing oil for the future, which could depress prices. The market, however, appeared unfazed by political uncertainty in two major oil-producing countries after Iran's president died in a helicopter crash and Saudi Arabia's crown prince deferred a trip to Japan because of the health of his father, the king. Iranian oil policy should be unaffected by the president's sudden death because Supreme Leader Ayatollah Ali Khamenei holds ultimate power with the final say on all state matters. In Saudi Arabia, the market is already accustomed to Crown Prince Mohammed Bin Salman's leadership in the energy sector, said Saul Kavonic, an energy analyst at MST Marquee. "Continuity in Saudi strategy is expected regardless of this health issue," he said. The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, are scheduled to meet on June 1. Data showed that Saudi Arabia's crude oil exports rose for a second consecutive month in March, reaching their highest in nine months. Russia remained China's top oil supplier in April for a 12th month, with volumes rising 30% from a year earlier as refiners continued to cash in discounted shipments, while supplies from Saudi Arabia fell a quarter on higher prices. Russian President Vladimir Putin said gas output rose by 8% in the first four months of the year but oil output declined by 1.8%, a dip largely due to production cuts under OPEC+ agreements. Even though the Slavyansk oil refinery in the Krasnodar region of Russia was damaged by a drone attack over the weekend, Russia said it suspended a ban on gasoline exports until June 30. The country, however, said it would put the ban back in place July 1 to Aug. 31.
Oil prices drop over $1 after US inflation, Fed outlook hurts consumer demand; Brent at $82/bbl - International crude oil prices declined by more than one per cent on Tuesday, May 21, with lingering US inflation poised to keep interest rates higher for longer, potentially dampening consumer demand. Higher borrowing costs tie up funds in a blow to the economic growth and demand for crude oil and pressures consumer demand at the pump.Brent crude futures fell by $1.21, or 1.45 per cent, to $82.50 per barrel. US West Texas Intermediate crude (WTI) futures for June, slipped by $1.26, or 1.58 per cent, to $78.54. The more active July contract lost $1.09, or 1.37 per cent, to $78.21. The structure of the Brent contract is weakening in an indication of a softer market and strong supply.The front-month Brent contract's premium to the second-month contract narrowed to 10 cents, its weakest since January 2024, according to news agency Reuters. On the domestic front, crude oil futures last traded 0.02 per cent higher at ₹6,569 per barrel on the multi-commodity exchange (MCX). -Analysts said that the market is very focused on gasoline demand in the US because there are signs that consumers are cutting back due to inflation. Unless that turns around, the market suggests things could be a little bleak.-Despite the run up to this weekend's Memorial Day holiday, which kicks off the US peak summer driving season, the retail gasoline prices fell for the fourth consecutive week to $3.58 per gallon on Monday, the Energy Information Administration (EIA) said in its gasoline and diesel fuel update.-However, in a bid to ensure sufficient supply flows to the northeast, the US will sell the nearly one million barrels of gasoline in a reserve in northeastern states, with bids due on May 28, the Department of Energy said on Tuesday.-Investors are awaiting minutes from the US Federal Reserve's last policy meeting due on Wednesday, as well as weekly US oil inventory data. Analysts say nothing in the market right now that is pushing prices higher. -Meanwhile, Fed officials' comments pointed to interest rates staying higher for longer than markets previously expected. Two Federal Reserve policymakers said it was prudent for the US central bank to wait several more months to ensure that inflation is back on a path to the two per cent target before commencing interest rate cuts.-"In the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy," said Fed Governor Christopher Waller.-On the supply side, a fading geopolitical risk premium from the ongoing war in Gaza failed to provide much support. The market also appeared largely unaffected by the death of Iranian President Ebrahim Raisi, a hardliner and potential successor to Supreme Leader Ayatollah Ali Khamenei, in a helicopter crash on Sunday.-The market has taken away some of the risk premium because it seems even though Israel is continuing in Rafah, this is not impacting supply or demand. Crude prices may not change majorly over Iranian oil policy after the president’s death.-Investors are focusing on supply from the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+). They are scheduled to meet on June 1 to set output policy, including whether to extend some members' voluntary supply cuts of 2.2 million barrels per day. OPEC could extend some voluntary cuts if demand fails to pick up. Analysts said that WTI crude oil futures came under pressure as investors weighed weak demand prospects against a lack of supply disruptions. Hawkish comments from Fed officials improved the conviction that rates might stay higher for longer and the quantum of cuts might be less than market anticipations, which might weigh on the oil demand going forward.At the same time, recent events such as Ukraine's attacks on Russian refineries and a Houthi missile strike in the Red Sea continued to pose risks to global supply. Fed officials' comments led to profit-taking from higher levels and a rebound in the dollar index.
The Oil Market Traded Lower on Tuesday Ahead of the June Contract's Expiration at the Close -- The oil market traded lower on Tuesday ahead of the June contract’s expiration at the close. The market continued to trade below its downward trending resistance line as the market remained concerned that U.S. interest rates could remain higher for longer. Fed officials remain reluctant to declare victory over inflation following the recent easing of inflation, signaling a need for restrictive policy to continue for some time. The market was focused on the economic news ahead of the release of the Fed minutes on Wednesday afternoon. The crude market posted a high of $79.72 in overnight trading before it sold off to a low of $78.08 early in the morning. The market later retraced some of its losses and traded between $78.50 and $79.50 in afternoon trading. The June WTI contract went off the board down 54 cents at $79.26, while the July WTI contract settled down 64 cents at $78.66 and the July Brent contract settled down 83 cents at $82.88. The product market also ended the session lower, with the heating oil market settling down 2.48 cents at $2.4623 and the RB market settling down 2.99 cents at $2.51. The Department of Energy said the U.S. will sell the nearly 1 million barrels of gasoline in a reserve in northeastern states with bids due on May 28th. The volumes will be allocated in quantities of 100,000 barrels with each barrel containing 42 gallons. That will ensure the gasoline can flow into local retailers ahead of the Fourth of July holiday and that it will be sold at competitive prices. The companies buying the gasoline, likely retailers and fuel terminals, will have the fuel transferred or delivered no later than June 30th. Some 900,000 barrels will be sold from the reserve's Port Reading, New Jersey site and nearly 99,000 barrels from the South Portland, Maine site. Saudi Arabia's Crown Prince Mohammed bin Salman made reassuring comments about King Salman's health during a cabinet meeting on Tuesday after the royal court said on Sunday the monarch will undergo treatment for a lung inflammation. Japan’s Foreign Ministry said Saudi Arabia’s Crown Prince Mohammed bin Salman promised stable oil supplies to Japan in a video conference with Prime Minister Fumio Kishida on Tuesday. Ship tracking data showed that crude oil tanker Dubai Angel moored at the Westridge Marine Terminal in Vancouver, preparing to load the first cargo of crude oil from the recently expanded Trans Mountain pipeline. Chartered by Canadian oil producer Suncor Energy, the Marshall Islands-flagged vessel was expected to load about 550,000 barrels of Access Western Blend for delivery to China. The expanded Trans Mountain pipeline, which will ship an additional 590,000 bpd to Canada's Pacific coast from Alberta, began commercial operations this month after years of regulatory delays and construction setbacks. The structure of the benchmark Brent crude oil futures market fell on Tuesday to its weakest level since February, another indication that concern about tight supply for prompt delivery is easing.
WTI Extends Losses After API Reports Unexpected Crude Build - Oil (and gasoline) prices were lower today (WTI sliding back near two-month lows) as the Biden administration said Tuesday it is releasing 1 million barrels of gasoline from a Northeast reserve established after Superstorm Sandy in a bid to lower prices at the pump this summer.However, the main driver for oil prices right now is "worry about the economy, and the potential that [interest] rates will remain elevated," Michael Lynch, president at Strategic Energy & Economic Research (SEER), told MarketWatch. Additionally, the market appears to have quickly shrugged off the death of Iranian President Ebrahim Raisi.Will a third weekly crude draw in a row be enough to re-energize prices ahead of OPEC+'s meetings, where members will "almost certainly roll over" its current quotas when it meets on June 1, "keeping a floor on prices for now," according to SEER's Lynch.
- Crude +2.49mm (-3.1mm exp)
- Cushing +1.77mm
- Gasoline +2.09mm
- Distillates -320k
Crude and Gasoline stock piles grew last week (more than expected) along with inventories at the Cushing hub while Distillates saw a small draw...WTI was trading around $78.60 ahead of the API print and slipped lower after...
WTI Rallies After Crude Inventory Build, Another Large SPR Addition - Oil prices edges lower again this morning (for the third straight day) after API reported crude and gasoline builds overnight in the US, and on the other side of the Atlantic, Genscape data showed expanded inventories in Europe’s oil trading hub.Additionally, Bloomberg reports that signs of physical market weakness have been signaled by multiple market gauges.Brent’s prompt spread remains close to flipping into a bearish contango structure for the first time since January - an indication of plentiful supply relative to demand.Meanwhile the Brent DFL - a measure of Dated Brent relative to futures - also recently turned negative. Will the official data provide any support for crude prices?
- Crude +1.825mm (-3.1mm exp)
- Cushing +1.325mm
- Gasoline -945k
- Distillates +379k
The official data confirmed a crude inventory build (vs an expected draw) and stocks at the Cushing Hub also rose. Gasoline and Distillates inventories were mixed... While the Biden administration drained its gasoline reserve, it added to the SPR once again last week (+993k barrels - the most since Dec 2023)... US Crude production continued to chug along near record highs at 13.1mm b/d...WTI was trading around $77.60 ahead of the official data and rallied up to $78 shortly after...OPEC and its allies, led by Russia, will hold a crucial meeting to review production policy next weekend. A coalition of nations in the broader OPEC+ grouping are cutting 2.2 million barrels per day, which has supported oil prices this year. The group is likely to extend those production cuts as prices soften, according to analysts.
Oil slides for third straight session on high US Fed rate outlook, weaker demand; Brent sticks to $82/bbl -- Crude oil prices declined nearly one per cent on Wednesday, May 22, retreating for a third straight day on expectations that US interest rate cuts might be delayed due to sustained inflation, a move that could weaken the oil demand. Brent crude futures were down 78 cents, or 0.94 per cent, at $82.10 a barrel, while US West Texas Intermediate crude (WTI) was down 74 cents, or 0.94 per cent, to $78.92. Both benchmarks settled about one per cent lower on Tuesday. On the domestic front, crude oil futures declined 1.28 per cent to₹6,484 per barrel on the multi-commodity exchange (MCX).
- -US Fed policymakers said on Tuesday the US central bank should wait several more months to ensure that inflation is back on track toward its two per cent target before cutting rates. Investors are awaiting minutes from the Fed's last policy meeting later on Wednesday.
- -The Federal Open Market Committee (FOMC) minutes will be scrutinized for the Fed's assessment of the high Q1 inflation and clues on the timing and extent of potential interest rate cuts in 2024. Lower interest rates reduce borrowing costs, freeing up funds that could boost economic growth and the demand for oil.
- -The US Energy Information Administration on Wednesday said that US crude stocks rose by 1.8 million barrels during the week ended May 17. However, gasoline stocks, which fell more than expected, signaled strong implied demand and pared back some losses earlier in the day.
- -Analysts said that crude markets have been pressured by weakening fundamentals, with the Organisation of Petroleum Exporting Countries (OPEC) likely extending production cuts at their June meeting to support prices
- -Physical crude markets have been weakening. In another sign that concern of tight prompt supply is easing, the premium of Brent's first-month contract over the second, known as backwardation, is close to its lowest since January.
Pranav Mer said that oil prices failed to sustain above $80 per barrel earlier in the week. In the session ahead, focus will be on the beginning of pick summer driving season in US next week. ‘’Technically, trend remains down till below 6,600/ 6,700, downside prices may test 6,420-6,350,'' said Mer.Analysts said that the premium on prompt Brent contracts has narrowed to a marginal 10 cents per barrels. ‘’The loosening of the physical markets might encourage the OPEC+ to extend the 2 mbpd of supply cuts into 2H 2024, when they meet on 1st June,'' ‘’The risk premium associated with Middle East tensions has also decreased, as oil supplies have remained undisrupted. All eyes are now focused on the upcoming OPEC+ meeting on June 1, where key oil producers are expected to extend output curbs to avoid a worldwide glut and boost prices,''
Oil slips for a third straight day on prospect of US rates staying high | (Reuters) - Oil prices fell more than 1% on Wednesday, retreating for a third straight day, as Fed officials rekindled worries about oil demand when they indicated interest rate cuts might be deferred due to sustained inflation.Brent crude futures settled 98 cents lower, or 1.18%, at $81.90 a barrel. U.S. West Texas Intermediate crude (WTI) was down $1.09, or 1.39%, to $77.57. Both benchmarks settled about 1% lower on Tuesday.Federal Reserve officials at their last policy meeting indicated inflation could take longer to ease than previously thought, minutes of the Federal Reserve's May policy setting meeting, released on Wednesday, showed.Lower interest rates reduce borrowing costs, freeing up funds that could boost economic growth and demand for oil."I wouldn't expect rate cuts to come before one of the fall meetings," Also in the U.S., Energy Information Administration said crude stocks rose by 1.8 million barrels during the week ended May 17. That compares with a 2.5-million-barrel draw analysts forecast in a Reuters poll and a 2.48-million-barrel rise shown in the data from the American Petroleum Institute (API), an industry group. ,"There was strong demand from refiners for crude oil and the gasoline demand was one of the highest we've seen in quite some time," Part of that demand increase was due to pre-Memorial Day weekend stockpiling by suppliers, he noted.Crude markets have been pressured by weakening fundamentals, such as falling spot Brent over futures and softer refinery margins. This will likely force OPEC+ to extend production cuts at its June meeting to support prices, according to Ole Hansen, Saxo Bank's head of commodity strategy.Physical crude markets have been weakening. In another sign that concern of tight prompt supply is easing, the premium of Brent's first-month contract over the second , known as backwardation, is close to its lowest since January.
Oil Prices Rebound After Three Days of Losses | OilPrice.com Oil prices rose early on Thursday, recouping some losses of the previous three days, after Russia said it would present a plan to compensate for exceeding its OPEC+ oil production quota in April. Following three consecutive trading days of losses, Brent Crude prices were rising by 0.88% at $82.62 as of 9:00 a.m. EDT on Thursday, and the U.S. benchmark, WTI Crude, was trading 0.93% higher at $78.29. Oil prices still look rangebound in the low $80s, at least until next week’s OPEC+ meeting on June 1, which is expected to decide how to proceed with the current cuts of around 2.2 million barrels per day (bpd) in the second half of the year. The recent move lower in prices prompted analysts to bet that the OPEC+ group would fully roll over the current cuts. Oil has been capped by concerns about demand and the fact that the Fed is still unconvinced that the fight against inflation is over, while a Russian pledge to compensate for overproduction supported prices early on Thursday. On Wednesday, Russia’s Energy Ministry said “In April, as part of voluntary cuts, Russian oil production was slightly above target levels.” “Overproduction was due to the technical features of reducing production by a significant amount. Russia is fully committed to the OPEC+ agreements, plans to compensate for shortfalls in production plans and will soon submit to the OPEC Secretariat its plan to cover small deviations from voluntary production levels,” the ministry added. While lower production from Russia could support prices, the market has been fretting about oil demand this week, amid signs of weakening physical crude prices across the board. In addition, the Fed’s minutes from its meeting early this month, released on Wednesday, showed that officials have become more concerned about inflation. “Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate,” the Fed said.
Oil falls for fourth straight session on US inflation jitters - Oil prices fell for a fourth consecutive session on Thursday and settled at multi-month lows as the prospect of higher-for-longer U.S. interest rates raised worries around demand growth in the world's biggest oil market.Brent crude futures settled lower by 54 cents, or 0.7 per cent, at $81.36 a barrel, the lowest since January. U.S. West Texas Intermediate (WTI) crude futures fell 70 cents, or 0.9 per cent, to $76.87 a barrel, a three-month low.S&P Global data showed accelerating U.S. business activity this month, but manufacturers also reported a surge in prices for a range of inputs, suggesting a pickup in goods inflation in the months ahead.On Wednesday, minutes from the U.S. Federal Reserve's latest policy meeting showed policymakers remain doubtful if current interest rates are high enough to tame stubborn inflation.High interest rates increase the cost of borrowing, which can slow down economic activity and dampen demand for oil. Also weighing on the market, U.S. crude stocks rose by 1.8 million barrels last week, according to the Energy Information Administration, compared with an estimated draw of 2.5 million barrels.However, the EIA reported U.S. gasoline demand at its highest since November, providing some support for energy markets ahead of the Memorial Day holiday weekend, which is considered the start of the U.S. summer driving season. U.S. gasoline consumption makes up around 9 per cent of global oil demand."It was a pretty good report for gasoline, everything pretty much hit the positive side of the ledger,". "However, one report does not make a trend, so everyone will be watching if it can continue to perform going forward."Investors are also looking ahead to the June 1 meeting of the Organization of Petroleum Exporting Countries and its allies, together called OPEC+, where the group will decide its output policy.Russia said it exceeded its OPEC+ production quota in April for "technical reasons" and will soon present to the OPEC Secretariat its plan to compensate for the error, the Russian Energy Ministry said late on Wednesday.Recent weakness in crude oil prices raises the likelihood that OPEC+ will maintain its existing production curbs at least through the end of September
Oil Futures Continue Lower as Inflation Pressure Persists -- Oil futures on the New York Mercantile Exchange and Brent on the Intercontinental Exchange extended losses early Friday in front of the Memorial Day weekend, with West Texas Intermediate and Brent down for a fifth consecutive session, falling to 13- and 15-week lows, respectively. The market is adjusting to the likelihood interest rates will remain higher for longer as inflation pressure prevails, with central bank officials expressing patience before easing monetary policy through a reduction in the federal funds rate. The federal funds rate is now in a 5.25% by 5.5% target range. Charlie Bilello with Creative Planning noted the continued fight against inflation, quoting a recent comment from Federal Reserve Chairman Jerome Powell, who said, "we'll need to be patient and let restrictive policy do its work. I do think it's really a question of keeping policy rates at the current rate for longer than had been thought." "This is a big shift from his dovish rhetoric late last year. And as a result, we've seen a huge shift in markets," said Bilello. Data from the Bureau of Labor Statistics shows the year-on-year change in the U.S. Consumer Price Index has been above 3% for 37 consecutive months through April, with CPI in April up 3.4% annually. The Fed's inflation target is 2%. While down from the 40-year highs experienced in June 2022, inflation is stubbornly holding at a more than 30-year high. Minutes released Wednesday for the Federal Open Market Committee's April 30-May 1 meeting noted progress in lowering inflation slowed in the first quarter, and the recent increases in inflation pressure were broad based. Fed officials also highlighted the "harm" high inflation has caused to households by reducing their purchasing power. Market expectations for multiple rate cuts this year have vanished. Based on CME's FedWatch Tool, the market expects one 25-basis point cut in the federal funds rate this year, with confidence in that rate reduction low. Coming into 2024, the high end of expectations suggested as many as six 25-basis point cuts in the key overnight bank borrowing rate. The combination of high interest rates and persistent inflation will slow economic growth, which has been apparent in U.S. manufacturing activity, which remains in contraction. Pressure on consumer purchasing power also weighs on economic growth, as well as driving demand. The market will get the latest read on consumer psychology at 10 AM ET, when the University of Michigan releases their closely watched Consumer Sentiment Index for May. The preliminary reading for May was at a 67.4 six-month low. Weakness in consumer sentiment is not seen deterring Americans from hitting the highways this weekend, with today marking the second day for the Memorial Day holiday weekend. AAA expects a record number of people to travel more than 50 miles over the holiday weekend, projecting 38.4 million holiday travelers, up 4% from year ago and 1.9% above the pre-COVID Memorial Day weekend in 2019. Near 8 AM ET, July WTI futures were down $0.22 at $76.65 barrel (bbl), trimming an overnight decline to $76.15 bbl -- the lowest print on the spot continuation chart since late February. July Brent futures were $0.26 lower at $81.10 bbl, edging off an overnight print at $80.65 -- the lowest trade since early February. Oil product futures are trading near one-week lows, with the June RBOB contract down $0.0154 at $2.4540 gallon, and June ULSD futures $0.0047 lower at $2.4071 gallon.
Oil prices end higher, but fall more than 2% for the week -- Oil futures finished higher on Friday, but notched losses for the week as traders noted concerns that the Federal Reserve may keep interest rates elevated for longer than previously anticipated, posing a threat to demand if that causes a sharp economic slowdown. West Texas Intermediate crude CL00 for July delivery CL.1 CLN24 climbed by 85 cents, or 1.1%, to settle at $77.72 a barrel on the New York Mercantile Exchange, for a 2.3% weekly fall, according to Dow Jones Market Data. July Brent crude, the global benchmark, tacked on 76 cents, or 0.9%, to $82.12 a barrel on ICE Futures Europe, for a 2.2% decline on the week.June gasoline RBM24 rose 0.6% to $2.48 a gallon, ending 3.5% lower for the week, while June heating oil HOM24 added nearly 0.1% to $2.41 a gallon, for a loss weekly loss of 2.9%.Natural gas for June delivery NGM24 settled at $2.52 per million British thermal units, down 5.2% for the session to lift its loss to 4%. It settled at its lowest since May 16.Losses for oil this week seem to be "coming from a lack of conviction among traders based on a lack of clear signals," Colin Cieszynski, chief market strategist at SIA Wealth Management, told MarketWatch.With traders headed into the three-day holiday weekend in the U.S., it seems like "neither bulls nor bears want to make any kind of a commitment at this point, leaving the market adrift," he said."Some of the political risk premium may still be coming out [of prices], but that could flare up again at any time," said Cieszynski.WTI ended at its lowest since Feb. 23 on Thursday, while Brent saw its lowest finish since Feb. 7 as uncertainty over the outlook for monetary policy and jitters over the global demand picture kept pressure on crude."The North Sea market is currently awash with light, sweet barrels, which has led the entire complex lower. We see a potential path for the light grades to clean up by midsummer coming out of refinery turnarounds in Europe," Brian Leisen, analyst at RBC Capital Markets, said in a note. "Until then, we find it hard to get more constructive until we see evidence that cargoes are starting to clear."Attention is turning to the Organization of the Petroleum Exporting Countries and its allies - known as OPEC+. The group said Thursday that it will hold a ministerial meeting via videoconference on Sunday, June 2.Traders are waiting to see if the group will move to extend a full suite of production cuts due to end at the end of June.After the OPEC+ meeting, the market is likely to renew its focus on demand, Barbara Lambrecht, commodity analyst at Commerzbank, said in a note.While U.S. gasoline demand had shown some uncharacteristic weakness, it rebounded last week, according to government data, just ahead of the kickoff of summer driving season on Memorial Day weekend in the U.S. "If this trend continues in the world's leading oil consumer country, it should support the medium-term recovery in oil prices that we expect," Lambrecht wrote. 'Until sentiment and price action changes in crude, it is hard to get bulled up quite yet. In a Friday newsletter, the Kansas City energy team at StoneX, led by Alex Hodes, said a lot of managed money has left WTI, which is a common theme before the summer. With PMI's [purchasing managers' index data] improving and record-level equities, "there is an expectation that a turn up in economic activity is expected," they said. However, "until sentiment and price action changes in crude, it is hard to get bulled up quite yet."
Houthis Say They Downed 4th US MQ-9 Reaper Drone - The Houthis said Friday that Yemeni forces downed another US MQ-9 Reaper drone over Yemen and published footage of air defenses hitting the US aircraft.The US military hasn’t confirmed that it lost an MQ-9 over Yemen and did not respond to a request to comment about the Houthi claim when asked by AP. But video emerged of what appears to be the wreckage of a US MQ-9 in Yemen, and the Houthis have successfully targeted the drones before.The incident would mark the fourth time the Houthis shot down a US MQ-9 since November 2023. Each MQ-9 is estimated to be worth about $30 million, bringing the total costs for the US military in lost MQ-9 drones to about $120 million.The US has also spent over $1 billion in munitions used to bomb Yemen and other operations in the Middle East that started due to Israel’s slaughter of Palestinians in Gaza.The US bombing campaign against the Houthis, officially known as Ansar Allah, has done nothing to deter the group. US Central Command said that a Houthi missile hit a Greek-owned tanker early Saturday morning, although the Yemeni group hasn’t taken credit for the attack.The US was bombing Yemen on a near-daily basis from January 12 until about mid-March, when US and British strikes on the country declined. According to the Yemen Data Project, April marked the least intense month of bombings since they started in January.The Houthis have been clear that they would only stop attacks on Israel-linked shipping if there were a ceasefire in Gaza. Tim Lenderking, President Biden’s Yemen envoy, has acknowledged that he thinks the Houthis would be true to their word, but the US refuses to pressure Israel to agree to end its onslaught in Gaza.
ISIS Claims Friday Attack on Tourists in Central Afghanistan - On Sunday, ISIS issued a statement taking credit for Friday’s attack on a group that included foreign tourists in the central Afghan province of Bamyan. The attacks killed at least six people and wounded eight others.ISIS said the fighters “shot at Christian tourists and their Shi’ite companions” when they were visiting a marketplace in Bamyan. This is the first example of foreign tourists being killed since the Taliban returned to power in 2021.ISIS explained the attacks by saying they went after a “bus of tourists who are citizens of coalition countries.” They cited orders from ISIS leadership in Iraq and Syria to go after coalition citizens when possible.Bamyan Province is a popular tourist area, the site of two ancient Buddhist statues destroyed by the Taliban in 2001. Tourism was seen as more or less safe in the area, though the local ISIS affiliate often carries out attacks of opportunity on Shi’ites as well as on Christians.The three foreign tourists who were killed were from Spain. Among the eight wounded were citizens from Spain, Norway, Australia, and conflicting reports that a fourth was either from Latvia or Lithuania.Seven suspects had been arrested on suspicion of being involved in the attacks, according to the Taliban’s Interior Ministry. The wounded were said to be in relatively good condition, and at least one underwent a successful surgery.
Gantz Threatens To Quit Israeli Government If Netanyahu Doesn't Approve Long-Term Gaza Plan - Israeli War Cabinet Minister Benny Gantz has threatened that his party will leave the government if Prime Minister Benjamin Netanyahu doesn’t approve a long-term plan for Gaza.In a speech on Saturday, Gantz made a list of demands that he wants Netanyahu to approve, including the establishment of a US-European-Arab-Palestinian administration to manage civilian affairs in the Strip alongside Israeli security control.Gantz said if his conditions aren’t met by June 8, his National Unity party will leave the government. If they quit, Netanyahu’s coalition will still have a majority of seats in the Knesset (64 out of 120), so it wouldn’t force elections.“Prime Minister Netanyahu, I look you in the eye tonight and tell you: The choice is in your hands. The Netanyahu of a decade ago would have done the right thing. Are you willing to do the right and patriotic thing today?” Gantz said in his speech.“The people of Israel are watching you. You must choose between Zionism and cynicism, between unity and factionalism, between responsibility and lawlessness – and between victory and disaster,” he added. According to The Times of Israel, Gantz’s full list of demands includes:
- “Bring the hostages home.”
- “Topple Hamas rule, demilitarize the Gaza Strip and gain Israeli security control [over Gaza].”
- Alongside that Israeli security control, “create an international civilian governance mechanism for Gaza, including American, European, Arab and Palestinian elements — which will also serve as a basis for a future alternative that is not Hamas and is not [Palestinian Authority President] Abbas.”
- “Return residents of the north [who were evacuated due to Hezbollah attacks] to their homes by September 1, and rehabilitate the western Negev [adjacent to Gaza, targeted by Hamas on October 7].”
- “Advance normalization with Saudi Arabia as part of a comprehensive process to create an alliance with the free world and the West against Iran and its allies.”
- “Adopt a framework for [military/national] service under which all Israelis will serve the state and contribute to the national effort.”
Realistically, Netanyahu couldn’t agree to Gantz’s demands since they would go against the vision of the far-right and ultra-Orthodox members of his coalition, who could force elections if they quit. In response to Gantz’s demands, Netanyahu’s office rejected the conditions. “The conditions set by Benny Gantz are laundered words whose meaning is clear: the end of the war and a defeat for Israel, the abandonment of most of the hostages, leaving Hamas-rule intact and the establishment of a Palestinian state. Our soldiers did not fall in vain and certainly not for the sake of replacing Hamastan with Fatahstan,” the office said.
Smotrich Calls for Israel To Take Over Southern Lebanon If Hezbollah Doesn't Withdraw from Border - On Sunday, Israeli Finance Minister Bezalel Smotrich called for the Israeli military to invade and take over southern Lebanon if Hezbollah does not withdraw from the border. Smotrich called for Prime Minister Benjamin Netanyahu to issue an ultimatum to Hezbollah. “A public ultimatum must be issued to Hezbollah that they completely stop firing and withdraw all forces to beyond the Litani River,” he said at a faction meeting of his Religious Zionism party.“If the ultimatum is not fully met, the IDF will launch an assault deep in Lebanese territory to defend the northern communities, including ground entry and Israeli military takeover of the southern Lebanese area,” Smotrich added.He said the only way to return Israelis to northern areas that have been evacuated is “through a military decision with a devastating assault on Hezbollah, its infrastructure, and the destruction of its power.”Israel and Hezbollah have exchanged near-daily strikes across the border since October 7. Over 300 people have been killed on the Lebanon side of the border, and dozens have been killed in southern Israel. Tensions show no sign of easing, and Israeli officials have frequently threatened a full-scale invasion, although such an operation would stretch Israel’s military thin amid its onslaught in Gaza.Concerning Gaza, Smotrich said permanent Israeli military control was needed and that military outposts should be built “in the north, center and south of the Gaza Strip, to prevent a situation in which Hamas rebuilds its military infrastructure and [reasserts] civilian control.” He has repeatedly called for the expulsion of Palestinians from Gaza and the re-establishment of Jewish settlements.Smotrich is a settler himself and holds a minister position in the Defense Ministry that gives him the power to expand settlements in the West Bank. He has also signaled support for Israeli expansion beyond the occupied Palestinian territories.Last year, Smotrich spoke at a conference that displayed a map of “Greater Israel,” which showed Jordan as part of Israeli territory. In the speech, Smotrich said the Palestinian people were “an invention.”
ICC seeks arrest warrants for Israel Prime Minister Benjamin Netanyahu, Hamas leaders Yahya Sinwar, Ismail Haniyeh - The International Criminal Court (ICC) on Monday issued arrest warrants for the Hamas leaders Yahya Sinwar and Ismail Haniyeh along with Israeli Prime Minister Benjamin Netanyahu and his defense minister as the court’s prosecutor said he found evidence of war crimes committed in the ongoing war between the militant group and the state of Israel. ICC Prosecutor Karim Khan said in a statement that Sinwar, the head of the Hamas movement in Gaza, Haniyeh, the top political leader for Hamas, and Mohammed Diab Ibrahim Al-Masri, the commander of the Hamas military wing, “bear criminal responsibility” for war crimes committed against Israel, including the taking of hostages, sexual violence, extermination and torture. “We submit that the crimes against humanity charged were part of a widespread and systematic attack against the civilian population of Israel by Hamas and other armed groups pursuant to organisational policies,” Khan wrote. Khan also said Netanyahu and Israeli Defense Minister Yoav Gallant bear criminal responsibility for starvation as a method of war, the intentional targeting of civilians, extermination and persecution, among other war crimes. The arrest warrants had been expected after they were leaked in the press last month, drawing backlash from Israel and from GOP congressional leaders in the U.S. who are strong Israeli supporters. The Republican lawmakers warned the ICC against the move and reportedly drafted legislation to sanction the court if it went ahead with the warrants. The ICC, founded in 2002, is seated in The Hague, Netherlands, and tries individuals for specific crimes. The court previously issued an arrest warrant for Russian President Vladimir Putin for his alleged crimes in abducting children from Ukraine. The ICC is independent from the United Nations, unlike the International Court of Justice, which hears disputes between nations and is hearing a case filed by South Africa accusing Israel of genocide over its war in Gaza. The U.S. and Israel have never ratified the Rome Statute that established the ICC and thus are not parties to the court. Still, if Netanyahu or Gallant were to travel to a country that is a party to it, officials there would be obligated to arrest them. Khan’s official move Wednesday likely will draw immediate backlash from Israeli officials, who charge that they are defending the nation against a legitimate threat after Hamas invaded southern Israel on Oct. 7, killing more than 1,100 people and taking around 250 hostages. In Gaza, around 130 hostages are still being held, but it’s not clear how many of them are alive.
EU Members Will Have To Arrest Netanyahu After ICC Warrant: Borrell -- Will Israel eventually come up with its own Hague Invasion Act? EU foreign policy chief Josep Borrell on Tuesday commented on the International Criminal Court (ICC) issuing arrest warrants for top Israeli officials over alleged war crimes in Gaza. He stressed in the statement that all European Union member countries will be legally required to oblige.He explained that if Israeli Prime Minister Benjamin Netanyahu or Defense Minister Yoav Gallant travel to a European country, they would face arrest. He said the same for those Hamas leaders listed alongside Netanyahu: "I take note of the decision of the ICC Prosecutor to apply for warrants of arrest before Pre-Trial Chamber I of the International Criminal Court (ICC) against Yahya Sinwar, Mohammed Deif, Ismail Haniyeh, Benjamin Netanyahu and Yoav Gallant," Borrell sated."The mandate of the ICC, as an independent international institution, is to prosecute the most serious crimes under international law," Borrell wrote on X. He emphasized "All States that have ratified the ICC statutes are bound to execute the Court’s decisions." He said the EU has taken "note" of the world court's action.With the exception of Ukraine and Turkey, all of Europe is a signatory to the Rome Statue, requiring them to apprehend those individuals 'wanted' by the ICC.The ICC has described:The ICC can prosecute crimes against humanity, which are serious violations committed as part of a large-scale attack against any civilian population. The 15 forms of crimes against humanity listed in the Rome Statute include offences such as murder, rape, imprisonment, enforced disappearances, enslavement – particularly of women and children, sexual slavery, torture, apartheid and deportation.This could impact Israeli leaders' travel to certain places in the world. It most certainly creates diplomatic pressure to not do so in the case of destination countries which are required to make an arrest under the Rome Statute.
Outraged Israel Recalls Ambassadors From Spain, Norway, & Ireland Over Recognition Of Palestinian State -- The decades-long cause to push toward establishing a state of Palestine has just gotten a big boost out of Europe, as the countries of Norway, Ireland, and Spain announced Wednesday that they would recognize a Palestinian state.They are the latest to join some 140 countries globally, which constitute more than two-thirds of the United Nations, who recognize a Palestinian state. The formal recognition will take place May 28, and comes as the official Palestinian death toll put out by Gaza's Health Ministry approaches 36,000 since Oct.7.This is also yet another blow to Israel's reputation on the world stage coming the very same week the International Criminal Court (ICC) in The Hague issued an arrest warrant for Prime Minister Netanyahu and his defense chief.Norway led the announcement among the three countries, with Norwegian Prime Minister Jonas Gahr Støre saying, "In the midst of a war, with tens of thousands killed and injured, we must keep alive the only alternative that offers a political solution for Israelis and Palestinians alike." He declared this means "Two states, living side by side, in peace and security." Shortly following this Irish Prime Minister Simon Harris said from Dublin that this move will "offer hope and encouragement to the people of Palestine at one of their darkest hours."And Spanish Prime Minister Pedro Sánchez in an address to parliament sought to emphasize that "This recognition is not against anyone, it is not against the Israeli people." He characterized that it is "an act in favor of peace, justice and moral consistency."Israel's reaction has been fierce and swift, with Foreign Minister Israel Katz confirming he immediately recalled Israel's ambassadors to Oslo, Dublin and Madrid while ordering a "severe Démarche" all of their envoys in Israel."History will remember that Spain, Norway, and Ireland decided to award a gold medal to Hamas murderers and rapists," Katz said.
Israeli Hostage Families Release Shocking Clip Of Female Troops' Abduction "The world must look at this cruel atrocity. Those who care about women’s rights must speak out. All those who believe in freedom must speak out, and do everything possible to bring all of the hostages home now," Israeli President Isaac Herzog has said in a statement, reacting to the Wednesday release of footage showing the abduction of five female IDF soldiers by Hamas terrorists on October 7. The women are still being held captive somewhere in the Gaza Strip.The families of the hostages agreed to release the raw, shocking clip with an aim to revive efforts to free them. It also comes as the European nations of Spain, Norway, and Ireland earlier the same day declared they are formally recognizing a Palestinian state. Watch the video published by Israeli sources below:The Hostages and Missing Families Forum has released footage obtained by the IDF, showing the abduction of five female soldiers from the Nahal Oz base on October 7 by Hamas terrorists.The clip shows Liri Albag, Karina Ariev, Agam Berger, Daniella Gilboa and Naama Levy. It has… pic.twitter.com/xcls0UGq3FPrime Minister Benjamin Netanyahu called the move by the three nations a "prize for terrorism" and that any future Palestinian state "would try to carry out the October 7 massacre again and again – and that, we shall not agree to.""We will continue to do everything to bring them home. The brutality of the Hamas terrorists only strengthens my determination to fight with all my might until Hamas is eliminated and to ensure that what we saw tonight will never happen again." In the newly released footage, some of the girls are clearly battered and blood-soaked, and look terrified as they plead with their armed captors in English. They have been identified as Daniella Gilboa, Karina Ariev, Naama Levy, Agam Berger and Liri Albag."Take their pictures," one of the militants is heard saying. "I want you quiet! Quiet! Sit down," another shouts at one point. "We will shoot you all." One girl tries to reason with one of the men by saying that she has friends in Gaza."These are the Zionists. You are so beautiful," one terrorist is also heard saying.And in another moment, one says according to an Israeli media translation: "Our brothers died because of you, we will kill you." Then the video shows the captors sitting next to girls with machine guns on their chests, while others are on the floor praying. One of the terrorists says, "Here are the girls," using a term in Arabic that implies they can be impregnated [many Arabic speakers have since disputed the accuracy of the translations coming from Israeli official sources, however]... Parts of the video which featured dead bodies and other of the more shocking scenes were edited for public release. A father of one of the kidnap victims said: "What else can we do to wake the nation up?" Israel's military has said the number of hostages held in Gaza is 128, but dozens are believed to possibly be deceased.
Israel Allows Settlers To Return to West Bank Settlements That Were Evacuated in 2005 'Disengagement' - Israeli Defense Minister Yoav Gallant announced on Wednesday the broadening of a law that will allow Israelis to return to three settlements in the occupied West Bank that were dismantled in 2005.In 2005, four settlements were dismantled in the West Bank and 21 in Gaza, a move known as the “disengagement.” Last year, the Israeli Knesset passed an amendment to the disengagement law allowing the return to one West Bank settlement, and Gallant’s moves allow settlers to return to the entire area, which is located in the northern West Bank between the Palestinian cities of Nablus and Jenin.Announcing the move, Gallant vowed to do what he could to continue expanding West Bank settlements. “Just as I have done in every position I’ve held in government, I will continue to foster the settlement of Judea and Samaria,” he said, using the biblical name for the West Bank.Gallant’s announcement came on the same day Spain, Norway, and Ireland said they would recognize Palestine as a state. The over 500,000 Israeli settlers living in the West Bank and the expansion of settlements are some of the main impediments to a two-state solution.When the current Israeli government coalition was formed in December 2022, it released a statement vowing to prioritize the expansion of West Bank settlements with the ultimate goal of annexing the territory. Settlers have very influential positions in the government, including Finance Minister Bezalel Smotrich, who also has a position as a minister in the Defense Ministry that gives him power to expand settlements.
World Court Orders Israel To Halt Military Operations in Rafah - The International Court of Justice (ICJ) ruled that Israel must halt military operations in Rafah. The court made the ruling after South Africa appealed to the court to take action as Israeli military operation in the southern region of Gaza has displaced nearly a million people and prevented aid deliveries. Tel Aviv said the court’s decision will not stop Israeli forces from achieving their objectives in Gaza.On Friday, ICJ President Nawaf Salam announced the court had ruled 13-2 that Israel must halt military operations in Rafah, open border crossings to aid deliveries, and allow investigators into Gaza. The ruling came after oral argument from South Africa, who requested the ICJ order Tel Aviv to halt the offensive, and Israel.Late last year, Pretoria initially filed accusations of genocide against Israel at the World Court. In January, the ICJ issued a preliminary ruling that it was plausible that Israel was committing a genocide against the people of Gaza but stopped short of ordering Israel to halt military operations in the Strip.After Israel launched an assault on Rafah earlier this month, South Africa asked the court to issue an explicit ruling ordering Israel to halt the offensive. Prior to the court issuing the ruling, Israeli officials said they would not comply with any demand to halt the offensive.The ICJ is the court for the UN. All members of the UN, including the US and Israel, are subject to its rulings. However, a government spokesperson told Reuters that “no power on earth” can stop the Israeli onslaught.American officials also targeted the ICJ for its ruling. “As far as I’m concerned, the ICJ can go to hell. The ICJ’s ruling that Israel should stop operations that are necessary to destroy four battalions of Hamas killers and terrorists – who use Palestinians as human shields – is ridiculous. Senator Lindsey Graham posted on X. “This will and should be ignored by Israel.”
