natural gas price at 12 week low; ​commercial oil supplies at a 24 week low; highest gasoline demand in July since 2021

natural gas price at a 12 week low; ​commercial oil supplies at a 24 week low; gasoline supplies fell by most in 19 weeks as gasoline demand, at a 36 week high, was highest in July since 2021

US oil prices fell for the third straight week, as concerns over sluggish demand from China and ceasefire talks in the Middle East continued to discourage ​oil traders….after falling 2.5% to $80.13 a barrel last week as Chinese demand cratered and Middle East peace talks appeared to be making progress, the contract price for the benchmark US light sweet crude for August delivery opened higher in Asian trading early Monday after China reduced its lending rate in an effort to boost their economy, then traded lower in New York ahead of the August ​oil contract’s expiration at the close, shrugging off the news that Biden had decided on Sunday to end his reelection bid​, as well as news of ​a conflict escalation ​in Israel, as the August oil contract went off the board down 35 cents at $79.78 a barrel, while the more actively traded September oil contract settled 24 cents lower at $78.40 a barrel, as traders looked past President Biden's decision to end his reelection bid and focused instead on rising stockpiles and signs of weak demand…with markets now quoting the contract price for the benchmark US light sweet crude for September delivery, oil prices continued to trend lower on Tuesday, as expectations of a ceasefire in Gaza seemed to outweigh the likelihood of September interest rate cuts in​ both the U.S. and in Europe and supply threats from Canadian wildfires, and settled $1.44 or 2% lower at a six week low of $76.96 a barrel, with renewed cease-fire negotiations in the Israel-Hamas war and demand worries weighing on the market…however, oil prices rebounded early Wednesday after data from the American Petroleum Institute showed U.S. crude oil inventories shrank by five times what was expected, as ​demand likely picked up with the travel-heavy summer season. then added to its gains after the EIA reported across-the-board draws from crude and fuel inventories, and settled 63 cents higher at $77.59 a barrel, in light of the supportive oil inventory reports and the highest gasoline demand for this time of the year since 2021…but the market gave back Wednesday’s gains In overnight trading following th​ose bullish U.S. crude oil and products inventory reports, and was down nearly 2% in pre-market trading early on Thursday, as traders tried to digest the impact of lagging Chinese consumption on other positive U.S. inventory reports against the backdrop of another interest rate cut by Beijing, but rallied after the Commerce Department reported the U.S. economy grew ​much faster than expected in the second quarter while inflation eased, boosting expectations the Fed would lower interest rates in September, and settled 69 cents higher at $78.28 a barrel….oil prices rose in Asian trading on Friday, driven by stronger-than-expected US economic growth​ and optimism over a likely interest rate cut, but slumped in New York as disappointing crude oil demand data from China triggered a rash of calls for an oil supply surplus for the end of this year and next, and settled $1.12 lower at $77.16 a barrel on declining Chinese demand and hopes for a Gaza ceasefire agreement that could ease Middle East tensions and accompanying supply concerns….oil prices thus ended 3.7% lower for the week, while the price of the September oil contract, which had ended the prior week priced at $78.64 a barrel, finished 1.9% lower….

meanwhile, natural gas prices fell for the sixth time in the past seven weeks and ended at a 12 week low as natural gas supplies in storage remained 16.4% above normal for late July​, despite smaller than normal weekly additions since April…after falling 8.6% to $2.128 per mmBTU last week on forecasts for less heat and closer to normal demand in the weeks ahead, the contract price of natural gas for August delivery opened more than ten cents higher on Monday, supported by the continued recovery of a key Texas LNG terminal damaged by Hurricane Beryl, and held onto those gains to settle 12.3 cents higher at $2.251 per mmBTU on the increase in the amount of gas flowing to LNG export plants ​, as Freeport LNG in Texas started exporting cargoes again, after shutting for Hurricane Beryl in early July…however, natural gas prices opened 5 cents lower on Tuesday, rebounded briefly, then pulled back to trade at the $2.220 level as market fundamentals remained largely unchanged​, before settling 6.4 cents lower at $2.187 per mmBTU, on rising output from producing wells and on an ongoing oversupply of gas in storage…subdued by steady production and storage levels well above historic averages, the August natural gas contract then opened at $2.124 on Wednesday, and settled the trading session 7.0 cents lower at $2.117 per mmBTU after top US producer EQT expressed concern about elevated supplies, adding to market worries about hefty storage levels​, and overshadowing forecasts for strong cooling demand in the weeks ahead…natural gas prices opened slightly lower on Thursday and trended lower throughout the session as the storage​ report leaned bearish and overall storage levels remain healthy​, and finished the session 7.6 cents lower at $2.041 per mmBTU, on a bigger-than-expected storage build, rising output​, and forecasts for less demand next week than previously projected…natural gas prices fell further in early trading Friday as the market continued to mull a larger-than-expected inventory build and signs of returning production volumes, and settled 3.5 cents lower at $2.006 per mmBTU on rising output and a tremendous oversupply of gas in storage​, even ​a​fter injections ha​d been smaller than usual in 10 of the past 11 weeks, which thus left natural gas prices down 5.7% for the week…

The EIA’s natural gas storage report for the week ending July 19th indicated that the amount of working natural gas held in underground storage rose by 22 billion cubic feet to 3,231 billion cubic feet by the end of the week, which left our natural gas supplies 249 billion cubic feet, or 8.4% above the 2,982 billion cubic feet that were in storage on July 19th of last year, and 456 billion cubic feet, or 16.4% more than the five-year average of 2,775 billion cubic feet of natural gas that had typically been in working storage as of the 19th of July over the most recent five years…the 22 billion cubic foot addition to US natural gas working storage for the cited week was more than the 16 billion cubic foot average addition to storage that was forecast by analysts in a Reuters poll, but was close to the 23 billion cubic feet that were added to natural gas storage during the corresponding week inJuly 2023, and less than the average 31 billion cubic foot injection into natural gas storage that has been typical for the same midsummer 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 July 19th indicated that even after a big decrease in refinery demand, we had to pull oil out of our stored commercial crude supplies for the fourth week in a row and for the 17th time in the past 32 weeks, again largely due to demand for oil that the EIA could not account for….Our imports of crude oil fell by an average of 166,000 barrels per day to 6,871,000 barrels per day, after rising by an average of 277,000 barrels per day over the prior week, while our exports of crude oil increased by 222,000 barrels per day to 4,186,000 barrels per day, which when used to offset our imports, meant that the net of our trade of oil worked out to a net import average of 2,685,000 barrels of oil per day during the week ending July 19th, 388,000 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 514,000 barrels per day, while during the same week, production of crude from US wells was unchanged at a record 13,300,000 barrels per day. Hence our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a rounded total of 16,499,000 barrels per day during the July 19th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,407,000 barrels of crude per day during the week ending July 19th, an average of 521,000 fewer barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that a net average of 436,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production during the week ending July 19th averaged 528,000 barrels per day more than 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 [ –528,000 ] 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… 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​ 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….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 436,000 barrel per day decrease in our overall crude oil inventories came as an average of 534,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while an average of 99,000 barrels per day were being added to our Strategic Petroleum Reserve, the thirty-third SPR increase in​ the past forty weeks, following nearly continuous SPR withdrawals over the prior 39 months… Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to 6,804,000 barrels per day last week, which was 2.9% more than the 6,615,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at a record 13,300,000 barrels per day because the EIA’s rounded estimate of the output from wells in the lower 48 states was unchanged at 12,900,000 barrels per day, while Alaska’s oil production was 38,000 barrels per day higher at 422,000 barrels per day, but still added the same 400,000 barrels per day to the EIA’s rounded national total as it did last week….US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 1.5% higher than that of our pre-pandemic production peak, and it’s also 37.1% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.

US oil refineries were operating at 91.6% of their capacity while processing those 16,407,000 barrels of crude per day during the week ending July 19th, down from their 93.7% utilization rate of a week earlier, and a bit below ​a normal refinery operating rate for mid-summer… the 16,407,000 barrels of oil per day that were refined this week were 0.4% less than the 16,478,000 barrels of crude that were being processed daily during week ending July 21st of 2023, and 5.4% less than the 17,337,000 barrels that were being refined during the prepandemic week ending July 19th, 2019, when our refinery utilization rate was at a near normal 63.1% for mid-summer…

Even with the decrease in the amount of oil being refined this week, gasoline output from our refineries was much higher, increasing by 664,000 barrels per day to 10,213,000 barrels per day during the week ending July 19th, after our refineries’ gasoline output had decreased by 751,000 barrels per day during the prior week.. This week’s gasoline production was 7.6% more than the 9,488,000 barrels of gasoline that were being produced daily over week ending July 21st of last year, and was 1.2% more than the gasoline production of 10,089,000 barrels per day during the prepandemic week ending July 19th, 2019…. on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 292,000 barrels per day to 4,937,000 barrels per day, after our distillates output had increased by 101,000 barrels per day during the prior week. After fifteen production increases in the past twenty-two weeks, our distillates output was 3.3% more than the 4,781,000 barrels of distillates that were being produced daily during the week ending July 21st of 2023, but was still 5.4% less than the 5,219,000 barrels of distillates that were being produced daily during the week ending July 19th, 2019…

Even with this week’s big jump in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 16th time in twenty-five weeks, decreasing by 5,572,000 barrels to 227,422,000 barrels during the week ending July 12th, the biggest gasoline supply draw since March 8th, after our gasoline inventories had increased by 3,328,000 barrels during the prior week. Our gasoline supplies fell this week because the amount of gasoline supplied to US users rose by 673,000 barrels per day to a 36 week high of 9,456,000 barrels per day, and because our exports of gasoline rose by 64,000 barrels per day to 915,000 barrels per day, while our imports of gasoline rose by 50,000 barrels per day to 778,000 barrels per day .…Even after sixteen gasoline inventory withdrawals over the past twenty-four weeks, our gasoline supplies are still 4.5% above last July 21st’s gasoline inventories of 217,600,000 barrels, but are about 2% below the five year average of our gasoline supplies for this time of the year…

With this week’s big drop in our distillates production, our supplies of distillate fuels fell for the 16th time in twenty-seven weeks, decreasing by 2,753,000 barrels to 125,313,000 barrels over the week ending July 19th, after our distillates supplies had increased by 3,454,000 barrels during the prior week. Our distillates supplies also decreased this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 276,000 barrels per day to 3,861,000 barrels per day, and because our exports of distillates rose by 322,000 barrels per day to 1,581,000 barrels per day, while our imports of distillates rose by 4,000 barrels per day to 112,000 barrels per day....Even with 16 inventory ​w​ithdrawals over the past 27 weeks, our distillates supplies at the end of the week were 6.2% above the 117,949,000 barrels of distillates that we had in storage on July 21st of 2023, but are now about 9% below the five year average of our distillates inventories for this time of the year…

Finally, because of a demand for oil that the EIA could not account for, our commercial supplies of crude oil in storage fell for the 14th time in twenty-six weeks, and for the 28th time in the past year, decreasing by 3,741,000 barrels over the week, from 440,226,000 barrels on July 12th to a 24 week low of 436,485,000 barrels on July 19th, after our commercial crude supplies had decreased by 4,870,000 barrels over the prior week… With this week’s decrease, our commercial crude oil inventories were about 5% below the most recent five-year average of commercial oil supplies for this time of year, while they were still 29.5% above the average of our available crude oil stocks as of the third week of July 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 in the Spring of 2020, then jumped again after February 2021’s winter storm Uri froze off US Gulf Coast refining, but then fell ​sharply 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 July 19th were 4.5% less than the 456,820,000 barrels of oil left in commercial storage on July 21st of 2023, while 2.3% more than the 426,609,000 barrels of oil that we had in storage on July 22nd of 2022, and 0.2% more than the 435,598,000 barrels of oil we had left in commercial storage on July 23rd of 2021…

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 July 26th, the second column shows the change in the number of working rigs between last week’s count (July 19th) and this week’s (July 26th) count, the third column shows last Friday’s July 19th 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 28th of July, 2023…

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CNX Touts Deep Utica Wells Results as Deferrals Hit Production | Hart Energy CNX Resources leaders are “pretty excited” about early results from two deep Utica gas wells brought online last quarter. CNX turned in line two of three deep Utica Shale wells the company drilled in Westmoreland County, Pennsylvania, during the second quarter, the Canonsburg, Pennsylvania-based E&P reported July 25. The two Utica wells were drilled with average lateral lengths of 13,800 ft (~2.6 miles), according to CNX regulatory filings. Alan Shepard, CFO at CNX, said the two deep Utica gas wells are “absolutely meeting expectations” both on drilling costs and on well performance. CNX expects to bring the third deep Utica well in central Pennsylvania online during the third quarter. The bulk of CNX’s core drilling program has focused on Marcellus Shale wells in southwestern Pennsylvania. CNX reported drilling eight Marcellus wells with average lateral lengths of approximately 14,100 ft (~2.67 miles) during the second quarter; Two wells featured average lateral lengths of 19,800 ft (3.75 miles). As of year-end 2023, CNX held the rights on 527,000 net Marcellus acres and 607,000 net Utica acres, per regulatory filings. Overall, CNX’s quarterly production declined to 134 Bcf equivalent due to deferred completions in response to low natural gas prices. U.S. natural gas prices have been historically low amid a run of overproduction, elevated storage inventories and weaker-than-expected demand during a mild winter season. Henry Hub gas prices averaged $1.49/MMBtu in March, the lowest average monthly inflation-adjusted price since at least 1997, the U.S. Energy Information Administration (EIA) has reported. And prices from February through April 2024 were the lowest ever recorded for those months, per EIA data. CNX said it deferred 11 well completions in response to the challenging macro gas pricing environment. Several other large Appalachia gas producers also slashed drilling and completion activity, including EQT, Chesapeake Energy, Range Resources and Gulfport Energy. However, CNX’s gas production is expected to climb as the company brings the remainder of its planned 2024 wells online during the back half of the year.

Companies Chip In to Help Encino Energy Raise $100K for Local Charities –- Encino Energy has capitalized on the Utica Shale natural gas and oil play to become one of Ohio’s leading natural gas producers and the state’s No. 1 oil producer. “We started in Houston and we could have operated anywhere in the country, but we really looked across the whole country and found the best opportunity was right here in the Ohio Utica, so that’s why we are here,” said Hardy Murchison, founder, president, CEO and director of Encino Energy. “We’re dedicated to Ohio. We really are. We can’t find anything that can compete per capital with what we’re doing in Ohio.” But Encino Energy did not do it alone, partnering with many companies here in the Mahoning Valley for mutual success. On Wednesday, they partnered again to hold the Encino Vendor Charity Classic at the Avalon Lakes and Squaw Creek golf courses, where 300 golfers raised $100,000 for charities in the region. One of the companies Encino partners with is Vallourec Star, which produces the seamless steel pipes that are connected and placed into the ground to produce oil and gas. “In the [Mahoning] Valley, people don’t necessarily associate a steel plant with energy or even an energy producing company,” said Gary Hauck, president of Vallourec Star, which currently employs 1,600 in the Youngstown area. “And what is great about our partnership with Encino, it allows us to showcase the products that our people so proudly make … that they’re being used in Ohio. And we’re here to support the energy independence of the nation, and our people are proud to do that and they’re excited to be part of that.” Vallourec is only one of the many companies in the region that teams up with Encino Energy to produce what they need. Guy Coviello, president and CEO of the Youngstown/Warren Regional Chamber, said Encino and the natural gas and oil industry has created several thousand jobs here, including at other companies like Brilex Industries Inc., Dearing Compressor and Pump and Warren Fabricating. Additionally, the golf outing attracted Encino vendors and partnering organizations from elsewhere, another plus according to Coviello. “You’ve got companies from all over the country, so I can’t thank Encino enough for giving us the opportunity to show off the Valley to all these companies coast to coast,” Coviello said. “And also to draw attention to the fact that we are a major player in the oil and gas industry, and the world is becoming more and more dependent on the Mahoning Valley for energy.” Murchison said those participating included not only Encino employees but equipment and service providers from across the country. The current natural gas and oil play is not showing any signs of slowing down, either. Murchison said the company just added another quarter-billion dollar investment, its fourth drilling rig in the area. With that fourth rig and two completion crews, Encino Energy is the largest active oil and gas operator in Appalachia, he said. And he believes the future is in natural gas energy, although the oil play found in Columbiana County has been a “huge bonus for the state of Ohio and Encino.” “I think there’s huge potential for Ohio to expand electric generation from natural gas, although we do have to have some help from the regulatory bodies, particularly the federal ones,” Murchison said. “I think as artificial intelligence expands and becomes a bigger part of American life, we’re going to have to use more electricity, and the best source of electricity is natural gas.” The Encino Vendor Charity Classic was an opportunity to give back to Ohio, especially the region that has been so much a part of the Utica Shale play. According to Jackie Stewart, vice president of external affairs with Encino Energy, the five charities receiving donations will be the Brightside Project in Columbiana, the Youngstown/Warren Regional Chamber Foundation, the Foundation for Appalachian Ohio, the Cambridge-Guernsey County Community Improvement Corporation’s manufacturing workforce initiative and the Muskingum Watershed Conservancy Foundation. Coviello said the money for the Regional Chamber Foundation will go a long way toward implementing strategies to grow the workforce, including the marginalized population, and toward strategies to increase housing stock for the Valley. “We are seeing a lot of economic growth thanks to Encino and others, and so we need to grow population so we can fill the jobs that are being created,” Coviello said. “And in order to grow the population, we have to increase the housing stock so we can have places for people to live.” Coviello said he was happy to see the corporate citizenship effort that companies like Encino and its partners showed through the event Wednesday. “Vallourec has a long history here in the community in the Mahoning Valley,” Hauck said. “We’re excited to partner with a great partner of ours, Encino Energy, and give back to the community that is so important to our business and, more importantly, to our employees. We’re excited to just be a small part of this event and to give to the great charities that have been identified. And we can’t wait to see the great work that this money will do.”

Ohio Gets Another $57M from Biden Dept. Interior to Plug Old Wells -Marcellus Drilling News - In the fall of 2021, President Biden signed into law the so-called Infrastructure Bill, some $1.2 trillion in pork barrel spending, passed with the help of turncoat Republicans (see Biden So-Called $1.2T Infrastructure Bill Passes Thanks to RINOs). Only about 9% of the $1.2 trillion is being used for actual infrastructure projects like roads and bridges. One of the line items in the bill (so small it’s a rounding error) is money to plug orphaned and abandoned oil and gas wells. The money is dribbed and drabbed out as the Bidenistas have time (and need). Ohio is about to get another drib.

Austin Master Services Misses Deadline, ODNR Steps in To Clean Site - Marcellus Drilling News - Austin Master Services (AMS) is a radiological waste management solutions company in Martins Ferry (Belmont County), Ohio. The Ohio Attorney General lodged charges against AMS in March, accusing the company of storing 16+ times more drill cuttings at the facility than it’s rated for (see Ohio AG Sues Austin Master Services for Unsafe Storage of Wastewater). A county judge ordered AMS to clean out the site and bring it back into compliance by July 22, or else AMS would be fined $200 per day, and the owner and CEO, Brad Domitrovitsch, would need to report to jail for a 30-day stint. Yesterday’s deadline came and went without compliance, so the Ohio Dept. of Natural Resources (ODNR) is stepping in to do the cleanup work.

Austin Master Serv. CEO Asks Court to Block Jail Time, $1.2M Bond - Marcellus Drilling News - As we have been reporting, Austin Master Services, a radiological waste management solutions company in Martins Ferry (Belmont County), Ohio, that handles fracking waste (trucks it for disposal), ran into trouble when it ran out of money. The facility where waste is temporarily stored went from a permitted maximum of 600 tons of stored waste to over 10,000 tons, in violation of its permit. The Ohio Attorney General’s office filed a lawsuit against the company to force compliance. As is always the case, there are two sides to every story. The side of AMS and its owner, Brad Domitrovitsch, is not getting much media coverage. We have an update on Brad’s side of the story…

Flurry of Activity at Austin Master Services Site in Martins Ferry - Marcellus Drilling News Yesterday, the Ohio Dept. of Natural Resources (ODNR) opened up the shuttered Austin Master Services (AMS) radiological waste management solutions company in Martins Ferry (Belmont County), Ohio, to begin cleanup work at the facility. One contractor began working at the site, while a bunch of others did a “pre-bid walkthrough” to look at what is there to make bids for cleaning it. AMS is permitted by the ODNR to temporarily store up to 600 tons of fracking waste, like drill cuttings and wastewater. ODNR estimates there are some 10,000 tons of fracking waste at the site. AMS ran out of money, and vendors quit accepting the waste. After failing to meet a court-ordered July 22 deadline, ODNR stepped in to handle the cleanup.

‘Roadspreading’ returns: How Pennsylvania’s oil industry quietly dumped waste across the state -- Siri Lawson and her husband live on a stamp of wooded, hilly land in Warren County, Pennsylvania, nestled in the state’s rural northwest corner. During the summer heat, cars traveling on the county’s dirt roads cast plumes of dust in their wake. Winter’s chill can cause a hazardous film of ice to spawn on paved roads. To protect motorists from both slippery ice and vision-impairing dust, communities across Pennsylvania coat these roads with large, cheap volumes of de-icing and dust-suppressing fluids. In Lawson’s case, her township had been using oil and gas wastewater as a dust suppressant, believing the material was effective. But researchers have found it is no better at controlling dust than rainwater. It can also contain toxic chemicals and have radioactive concentrations several hundred times the acceptable federal limit in drinking water. Given the risks it poses to human health and the environment, Pennsylvania lawmakers and the state’s environmental agency disallowed this practice more than seven years ago. But oil and gas companies have continued to spread their wastewater practically unchecked across the state, thanks to a loophole in state regulations. A Grist review of records from 2019 to 2023 found that oil and gas producers submitted more than 3,000 reports of wastewater dumping to the state Department of Environmental Protection, or DEP. In total, they reported spraying nearly 2.4 million gallons of wastewater on Pennsylvania roads. This number is likely a vast undercount: About 86 percent of Pennsylvania’s smaller oil and gas drillersdid not report how they disposed of their waste in 2023. Wastewater dumping is an open secret on Pennsylvania roads. At a legislative hearing this spring, state senators Katie Muth and Carolyn Comitta, both Democrats, said they witnessed companies spreading wastewater last fall during a tour of new fracking wells. Lawson, who has become a public face of opposition to wastewater dumping, experiences sinus pains and believes her symptoms are connected to living near roads coated with wastewater. Sometimes the pain has been so intense she’s had to leave her home “to get different air.” She’s submitted multiple complaints to DEP over the years, but she says it has done little to drag the agency off the sidelines. “I am told [by DEP] to catch the truck,” Lawson said. “I’m told to be my own cop.” Neil Shader, a spokesperson for DEP, told Grist that the department “is committed to responding to all brine/roadspreading complaints that are received from the general public” and that it investigates all complaints. “If/when a responsible party is identified, appropriate enforcement action is taken,” he said. Lawmakers first banned the use of wastewater from fracking wells as a dust suppressant in 2016. Two years later, the DEP issued a moratorium on the use of wastewater from traditional drilling methods as well. But conventional oil and gas companies have found a loophole that allows them to skirt these rules with impunity. The DEP requires permits for wastewater disposal, but the agency grants an exception if the wastewater can be reused for a “beneficial” purpose. Any waste that is no more injurious to the environment and human health than a commercial alternative may be classified as a “coproduct,” a designation that receives less DEP oversight. Under Pennsylvania law, companies can grant their wastewater coproduct status by conducting in-house analyses to determine whether their waste is harmful to human health or the environment. These tests do not have to include a radiation analysis, even though studies have shown radium from oil and gas wastewater — which often contains 300 to 560 times the acceptable levels of radioactive substances in drinking water — has made its way into roadside vegetation, fresh water, and up the food chain. A company is only required to submit its justification for using the coproduct status if asked by the DEP to do so. The agency rarely asks. In 2021, the DEP requested justification for claiming coproduct status from 16 companies. Only 10 responded. The DEP told them that the materials they submitted were “inadequate.”Any conventional driller who is audited and “roadspreads” in the absence of an approved coproduct determination from the DEP — and without updating or submitting a new coproduct determination — is technically violating the agency’s moratorium, putting them in murky legal territory. But without agency enforcement, these companies face no consequences.“As far as I am aware, there have been zero notices of violations, compliance orders, fines, and penalties for anything dealing with rogue dumping of wastewater,” said David Hess, a former DEP secretary. “No one is enforcing the moratorium.”

14 New Shale Well Permits Issued for PA-OH-WV Jul 15 – 21 -Marcellus Drilling News -- For the week of July 15 – 21, a total of 14 permits were issued to drill new shale wells in Marcellus/Utica. Pennsylvania issued six new permits, split two each for INR, Chesapeake Energy, and Olympus Energy. Ohio issued eight new permits, all of them to Encino Energy split between two counties. West Virginia issued no new permits last week.

EQT Moving to Knock Down Appalachian Storage Volumes by Shuttering More Natural Gas - EQT Corp., the largest natural gas producer in the United States, will continue to curtail Appalachian volumes through the second half of the year in light of surplus storage levels, executives said Wednesday. Chart showing natural gas storage and EQT estimates on prices. During the second quarter conference call, CEO Toby Rice and CFO Jeremy Knop said the longer-term outlook for the Appalachian pure play is solid. For now, though, the executive team is focused on reducing Appalachian gas storage levels, which have failed to moderate on flat prices and industry curtailments. EQT began curtailing about 1 Bcf/d in late February, or around 180 Bcfe, Knop reminded analysts. Through the second half of this year, EQT expects to hold back an average of 90 Bcfe, or around 500 MMcf/d.

U.S. E&Ps Shifting Upstream Capex Lower on ‘Weak’ Natural Gas Prices, M&A Wave --North American upstream activity remained sluggish through the first half of the year, with little optimism things would change before 2025, according to an industry survey. NGI's Henry Hub Forward Fixed price chart Expand Evercore ISI conducts two global spending surveys each year to check the temperature of the natural gas and oil market. An increasing focus on energy security and reliability drove global upstream spending through June. However, U.S. and Canadian exploration and production (E&P) companies have reduced capital expenditures (capex) more than was forecast last December.

Mountain Valley pipeline sold to largest US gas producer - The original lead developer of the Mountain Valley gas pipeline is again its owner, after EQT closed its acquisition of Equitrans Midstream on Monday.EQT proposed the pipeline in 2014, before handing it over to Equitrans in a corporate spinoff in late 2018. In acquiring Equitrans, EQT has estimated that it could realize more than $425 million in savings, partly by integrating the two companies’ pipeline assets. The deal was contingent on federal approval to start moving gas through the 303-mile pipeline, which came on June 11. But the business deal came together more quickly than expected. At the time the deal was announced in March, EQT said it would close in the last three months of this year.

TVA leadership’s ‘fossil fuel agenda’ questioned as utility advances another gas project --The Tennessee Valley Authority released details about one of its latest gas plant proposals in a public document last week. TVA is planning to build a half-gigawatt methane gas plant in central Mississippi. Last week, the federal utility released a draft environmental review for the project, in which TVA considered no alternatives to a gas plant. “The climate emergency is so in our face right now, and TVA is continuing to ignore that reality to build gas plant after gas plant,” said Gaby Sarri-Tobar, climate justice campaigner for the Center for Biological Diversity. “We need the TVA Board to take a good hard look at this, nix the plan and lead the way on renewables instead.” The TVA Board is the main regulator for the federally-owned utility, with members appointed by U.S. presidents. The board has not made any public decisions in recent years to limit or end TVA’s fossil fuel buildout and has even given more decision-making power to TVA CEO Jeff Lyash. Lyash, along with TVA’s other top executives, have collectively banked millions of dollars for decisions to expand gas infrastructure. “They have a very clear responsibility as TVA Board members, and it’s very concerning that they’re relinquishing that to someone with a fossil fuel agenda,” Sarri-Tobar said. Since 2020, TVA has proposed eight gas plants across its seven-state region, equivalent to 20% of the utility’s operating capacity, and 160 miles of pipelines. The proposed Mississippi project is located on the Kinder Morgan pipeline system that supplies many of TVA’s other gas plants. The project will not require any new pipelines, but it will financially benefit the pipeline operator and gas producers. Kinder Morgan has pipelines that run through Tennessee between the largest gas-producing region in the nation and the Gulf of Mexico.Every time TVA builds a new gas plant, a pipeline operator gets more money annually selling gas on its lines. In this case, the operator will be Kinder Morgan, which transports about 40% of the gas consumed in the United States and sold $15 billion of gas services on its pipeline systems last year. The electricity sector is the largest consumer of gas in the U.S. The electric-gas system has a lot of layers, and gas producers, pipeline operators and utilities set up contracts to ensure both sufficient fuel needs and profits forcompanies and investors. These contracts are often hidden from the public, even by public utilities like TVA. In the case of the Cumberland and Kingston projects, for example, TVA set up “precedent agreements” with pipeline giants Kinder Morgan and Enbridge years before the projects were formally reviewed — the Southern Environmental Law Center has been in litigation with TVA for not disclosing these documents for the past two years.

‘This used to be a beautiful place’: how the US became the world’s biggest fossil fuel state -- To witness how the United States has become the world’s unchallenged oil and gas behemoth is to contemplate the scene from John Allaire’s home, situated on a small spit of coastal land on the fraying, pancake-flat western flank of Louisiana.Allaire’s looming neighbor, barely a mile east across a ship channel that has been pushed into the Gulf of Mexico, is a hulking liquified natural gas (or LNG) plant, served by leviathan ships shuttling its chilled cargo overseas. Another such terminal lies a few miles to the west, yet another to the north. The theme continues even in Allaire’s seaward vista – alongside a boneyard of old oil rigs, a new floating offshore LNG platform is in the works.“I’m pretty much surrounded,” said Allaire, a retired oil industry engineer who has a trailer, a couple of friendly dogs, and a patch of marshland and beach in Cameron parish. Yet another gas export plant is planned just a few hundred yards from Allaire’s property, while his existing imposing neighbor, which Allaire compares to Las Vegas due to its incandescent flaring of gas into the night’s sky, is on track to expand to become one of the largest such facilities in the world.“We don’t really have a Gulf coast in the US,” said Allaire. “We have the east coast, the west coast and the carbon coast. This is simply a sacrifice zone for the oil and gas industry.” Venture Global’s CP1 plant sits near the Calcasieu Pass marina, where many shrimpers and fishers work from.The rise of the US as the world’s oil and gas powerhouse has come at an astonishing pace. Within just the last decade, Congress lifted a ban on exporting crude oil and the US became one of the world’s leading oil exporters, elbowing aside classic petrostates like the UAE and Kuwait. In that timeframe, US exports of gas, frozen to liquid form and shipped, also started in earnest and last year America became the world’s leader. “To go from zero to billions of barrels is just stunning,” said David Dismukes, an energy expert at Louisiana State University. “It can be hard to comprehend.” Domestic oil and gas production, turbocharged by the advance of hydraulic fracturing, or fracking, has rocketed. No country in history has extracted as much oil as the US has in each of the past six years, with a fifth of all oil drilled in 2023 being American flavored. US gas production also tops the global charts, having surged 50% in the past decade. Every hour of every day, on average, around 1m barrels of oil and 2m tons of gas are sucked up from oil and gas fields from Texas to Appalachia to Alaska.Domestic oil and gas production, turbocharged by the advance of hydraulic fracturing, or fracking, has rocketed. No country in history has extracted as much oil as the US has in each of the past six years, with a fifth of all oil drilled in 2023 being American flavored. US gas production also tops the global charts, having surged 50% in the past decade. Every hour of every day, on average, around 1m barrels of oil and 2m tons of gas are sucked up from oil and gas fields from Texas to Appalachia to Alaska.The US’s hydrocarbon dominance, coming as experts have warned there can be no new fossil fuel projects if the world is to avoid climate breakdown, challenges conventional assumptions about what makes a “petrostate”. While the vast, diverse US economy doesn’t hinge upon oil and gas like Libya’s and Kuwait’s economies do, some regions have become hooked on industry incomes, research shows.“The US has become a petrostate and is still, even under President Biden, permitting new drilling,” said John Sterman, a climate policy expert at MIT.

US weekly LNG exports drop to 20 shipments - US liquefied natural gas (LNG) exports reached 20 shipments in the week ending July 17, and pipeline deliveries to US terminals decreased compared to the week before, according to the Energy Information Administration.The agency said in its weekly report, citing shipping data provided by Bloomberg Finance, the total capacity of these 20 LNG vessels is 75 Bcf.This compares to 23 shipments and 85 Bcf in the week ending July 10.Based on EIA’s previous weekly reports, this is also the lowest number of weekly shipments since January this year.Average natural gas deliveries to US LNG export terminals decreased 0.8 Bcf/d from last week to 11.1 Bcf/d, according to data from S&P Global Commodity Insights.Natural gas deliveries to terminals in South Louisiana increased by 1.3 percent (0.1 Bcf/d) to 7.8 Bcf/d, while natural gas deliveries to terminals in South Texas decreased 27.9 percent (0.9 Bcf/d) to 2.2 Bcf/d.Also, natural gas deliveries to terminals outside the Gulf Coast decreased slightly (less than 0.1 Bcf/d) to 1.1 Bcf/d, the agency said.The agency said that Freeport LNG, south of Houston, resumed operations this week by restarting the first train.Feedgas deliveries to the facility have averaged under 0.2 Bcf/d since July 16, according to Gulf South Pipeline Company.The facility had been offline since July 7, a day before Hurricane Beryl made landfall 40 miles southwest of the terminal.Freeport LNG, the operator of the three-train 15 mtpa liquefaction plant in Texas, told LNG Prime on July 15 it expects to restart the first train this week after the terminal’s fin fan air coolers were damaged during Hurricane Beryl.Freeport LNG plans to restart the remaining two trains “shortly thereafter”.Moreover, the LNG terminal operator said production levels after restart would be at “reduced rates for a period of time” as Freeport LNG continues repairs while operating the facility.During the week under review, Cheniere’s Sabine Pass plant shipped seven cargoes and the company’s Corpus Christi facility sent four shipments.Sempra Infrastructure’s Cameron LNG terminal and Venture Global LNG’s Calcasieu Pass facility each shipped three cargoes.Also, the Cove Point terminal sent two cargoes and the Elba Island facility sent one cargo during the week under review. This report week, the Henry Hub spot price fell 39 cents from $2.37 per million British thermal units (MMBtu) last Wednesday to $1.98/MMBtu this Wednesday.The last time the Henry Hub price was below $2.00/MMBtu in July was in 2020 during the Covid-19 pandemic, according to the EIA.The agency said the price of the August 2024 NYMEX contract decreased 29.4 cents, from $2.329/MMBtu last Wednesday to $2.035/MMBtu this Wednesday.The price of the 12-month strip averaging August 2024 through July 2025 futures contracts declined 17.5 cents to $2.827/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 decreased 12 cents to a weekly average of $12.28/MMBtu.Natural gas futures for delivery at the Dutch TTF increased 4 cents to a weekly average of $10.16/MMBtu.In the same week last year (week ending July 19, 2023), the prices were $11.22/MMBtu in East Asia and $8.67/MMBtu at TTF, the agency said.

DOE Authorizes Plaquemines LNG to Export Foreign Cargoes Needed for Start-Up Operations --The Plaquemines LNG terminal under construction in Louisiana is a step closer to bringing its terminal into service after federal regulators authorized it to re-export cargoes it would need to import to cool down its facilities. The U.S. Department of Energy (DOE) said the liquefied natural gas facility’s developer Venture Global LNG Inc. could export up to 6 Bcf of foreign-sourced LNG to both U.S. Free Trade Agreement (FTA) countries and non-FTA countries between July 11, 2024 and July 10, 2026. Earlier this year, Venture Global filed an application with the DOE saying it would need to import at least three cargoes so facilities at Plaquemines could be cooled down for cryogenic operations. The company said it “has determined that the optimal method for this part of the start-up of its terminal facilities is to import foreign-sourced LNG by vessel.”

Golden Pass, Zachry Near Settlement to Restart LNG Terminal Construction -Golden Pass LNG Terminal LLC and its primary contractors, including Zachry Industrial Inc., have agreed to a settlement that could jumpstart construction again at the Texas LNG facility. In a filing Monday, San Antonio, TX-based Zachry requested that the U.S. Bankruptcy Court for the Southern District of Texas accept the proposed agreement at a hearing scheduled for Wednesday. Along with structuring the release of around $213 million in contested costs, Zachry agreed to exit the liquefied natural gas export project and turn over equipment and work to engineering, procurement and construction (EPC) partners Chiyoda Corp. and McDermott

Golden Pass Ready to Ramp Construction with Zachry Settlement — Golden Pass LNG Terminal LLC is looking to ramp up construction at the 18 million metric tons/year (mmty) capacity project after a bankruptcy court approved a deal between the project partners and Zachry Holdings Inc. At an interim hearing Wednesday, the U.S. Bankruptcy Court for the Southern District of Texas gave the greenlight for a settlement that allows Golden Pass and its construction contractors to pay vendors and progresses Zachry’s bankruptcy proceedings. In exchange, San Antonio-based Zachry will exit the project. “This allows Golden Pass and our construction contractors McDermott and Chiyoda Corp. to ramp up site construction activities and progress our” liquefied natural gas terminal, a Golden Pass representative said. “Going forward, we are focused on getting people back to work, including local workers and vendors, and progressing this critical energy project.”

Tellurian LNG Agrees to Sell Company, Driftwood LNG to Australia's Woodside --Tellurian Inc. has agreed to sell the company and its developing 27.6 million metric ton/year (mmty) Driftwood LNG project to an Australian oil and natural gas giant, Woodside Energy Group Ltd. The Houston-based company has agreed to be acquired by Woodside in a deal valued at $900 million. The deal is expected to be closed by the end of the year, according to Tellurian. After more than a decade of development for Driftwood, the first phase of the five-train Louisiana export project could also be a step closer to advancing. In its disclosure of the deal, Woodside targeted a final investment decision (FID) on the first phase of Driftwood, which could consist of 11 mmty of capacity, by March of next year.

Australia's Woodside to buy Tellurian - Australian LNG player Woodside has entered into a definitive deal to buy Tellurian, the developer of the Driftwood LNG export project in Louisiana.Woodisde said in a statement the consideration for the transaction is an all-cash payment of about $900 million, or $1.00 per share of outstanding Tellurian common stock, while the implied enterprise value is about $1.2 billion.This represents an “attractive entry into an opportunity” with more than $1 billion of expenditure incurred to date, Woodside said.Tellurian said in a separate statement the acquisition price represents a 75 percent premium to Tellurian’s closing price on July 19, 2024, and also a 48 percent premium to Tellurian’s 30-day volume weighted average price.The US LNG firm this reflects Driftwood LNG’s “premier site, fully permitted status, advanced stage of pre-FID development and strong relationships with Bechtel, Baker Hughes, and Chart.”Tellurian issued a limited notice to proceed to compatriot engineering and construction giant Bechtel in March 2022.The company claims it has invested more than $1 billion in the Driftwood project up to date.The transaction, which was unanimously approved by both boards of directors, is expected to close in the fourth quarter of 2024, subject to customary closing conditions, including approval from Tellurian and Woodside shareholders and the receipt of regulatory approvals.

Freeport Volumes Return to Market; Global Natural Gas Trade Picks Up as Prices Moderate — Global natural gas benchmarks relaxed once again as cargoes from Freeport LNG Development LP returned to the market and the pace of worldwide imports of the super-chilled fuel heated up along with the temperatures.NGI's LNG tracker. Feed gas flows to the South Texas liquefied natural gas facility have ticked up since July 17 after the 2.1 Bcf/d capacity facility was shut down in response to Hurricane Beryl’s impact on the Gulf Coast. Since then, flows to Freeport LNG have increased to around 13% of capacity, according to Wood Mackenzie pipeline data, indicating that at least one train may be online.A ship controlled by Glencore plc departed from Freeport over the weekend, while another cargo left Monday for Japan, according to Kpler ship tracking data.

Freeport LNG Natural Gas Pipeline Nominations Point to Another Possible Outage — Feed gas nominations to the Freeport LNG Development LP facility were revised down Wednesday and Gulf South Pipeline Co. LLC issued a failure to take notice, indicating the facility may have experienced another operational issue, according to Wood Mackenzie pipeline data. Feed gas flows to the liquefied natural gas export facility had previously topped 50% of pipeline capacity, near the highest point since former Hurricane Beryl passed through the Texas coast. The third vessel in less than a week was loading at one of Freeport’s berths Wednesday, according to Kpler data. New Fortress Energy Inc. updated its target for the first shipment of LNG from its Fast LNG (FLNG) terminal offshore Altamira to August. A vessel, thought to be carrying Mexico’s first LNG export cargo after anchoring near the FLNG unit for about a week, is likely empty, according to Kpler ship tracking data. The Energos Princess, passing south of Cuba on Wednesday, was reported as being in ballast and open for orders. Eni SpA is preparing to send a floating production and storage unit and a floating storage unit to the Baleine field, located offshore Côte d'Ivoire. It has targeted a startup of a second phase of development at the field by December, boosting oil output to 60,000 b/d and increasing associated gas to 70 MMcf/d.

EQT Finalizes Agreement to Provide Half of Texas LNG's Export Capacity - Back on January 11 of this year, EQT announced that they entered into an informal tolling agreement to provide 65 MMcf/d in feedgas to the proposed Texas LNG facility in Brownsville. That amount was quadrupled to 260 MMcf/d with a subsequent agreement announced in April. These earlier Heads of Agreement (HOAs) have now been executed, and EQT is committed to supplying 260 MMcf/d to the facility for 20 years if it becomes operational. This amounts to half of Texas LNG’s overall liquefaction capacity.Texas LNG also has HOAs with two other suppliers. It will seek to convert these to executed agreements and reach a Final Investment Decision (FID). The project has benefited from the permitting pause, as its permit from the Department of Energy to export to non-Free Trade Agreement countries has already been approved. If FID is reached it will further EQT’s desire to gain more exposure to international prices. EQT, a leading Appalachian pure-play natural gas producer, has contracted pipeline capacity in what the company calls its "firm transportation portfolio" to deliver 1.2 Bcf/d, or 20%, of its production to the U.S. Gulf Coast for LNG exports from its operations in the Marcellus and Utica shale plays.EQT also has signed an informal 15-year HOA with Commonwealth LNG in Cameron, Louisiana for 133 MMcf/d, and negotiations toward a definitive tolling agreement are ongoing. Commonwealth expects to make a final investment decision (FID) on the project in the first half of 2025 in order to start up in 2028.

An Awful Thing to Waste – The Push to Consume More Natural Gas Close to Where It’s Produced | RBN Energy - There are two primary drivers for consuming more natural gas close to where it emerges from production wells. One is to eliminate routine gas flaring, which is wasteful and environmentally detrimental, and the other — especially true in takeaway-constrained plays like the Permian — is to add value to gas that otherwise would be sold downstream at steeply discounted prices. In today’s RBN blog, we discuss some innovative approaches to maximizing gas value by consuming it “in-basin” — and the potential for a lot more gas to be used in West Texas and southeastern New Mexico. We first blogged about gas flaring a dozen years ago, in the RBN blogosphere’s Stone Age, noting that one-third — yes, one-third! — of the associated gas then being produced in the booming Bakken was being flared. The main culprit was a dire lack of gas gathering systems, gas processing plants and long-haul gas pipelines, whose development was far outpaced by the increases in crude oil and associated gas production. Gas flaring wasn’t a new thing, of course. In fact, crude-oil-focused E&Ps have been flaring gas in the U.S. since the first oil was produced in western Pennsylvania more than 160 years ago, both for safety reasons and — then as now — for lack of infrastructure. As we’ve discussed often (see It Don’t Come Easy and Cover Me), there’s a big push in the U.S. — and globally — to reduce greenhouse gas (GHG) emissions, with a special focus on both carbon dioxide (because of the gargantuan volumes involved) and methane (because of its heat-trapping potency). And that’s spurred broad efforts to eliminate all “routine” (non-emergency/non-safety-related) flaring of natural gas by 2030 (if not sooner). The U.S. and more than 30 other countries have agreed to work toward that target, as have more than 50 large oil and gas companies.

US natgas prices jump 6% on rising feedgas to Freeport LNG in Texas (Reuters) -U.S. natural gas futures jumped about 6% to a one-week high on Monday with an increase in the amount of gas flowing to U.S. liquefied natural gas (LNG) export plants as Freeport LNG in Texas started exporting cargoes again after shutting for Hurricane Beryl in early July. Traders also noted that the hottest weather of the summer is forecast to cover much of the U.S. Lower 48 states in early August. That heat could boost the amount of gas power generators burn to produce electricity for air conditioning to a fresh record high, topping the current all-time high set on July 9. Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange rose 12.3 cents, or 5.8%, to settle at $2.251 per million British thermal units (mmBtu), their highest close since July 12. That also put the contract up for a third day in a row for the first time since early June. In other news, Australian energy firm Woodside Energy Group agreed to buy U.S. LNG developer Tellurian for about $1.2 billion in a deal that could increase the chances that Tellurian's Driftwood LNG export plant in Louisiana will be built. Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 102.1 bcfd so far in July, up from an average of 100.2 bcfd in June and a 17-month low of 99.4 bcfd in May. U.S. output hit a monthly record high of 105.5 bcfd in December 2023. Meteorologists projected weather across the Lower 48 states would remain mostly near normal through July 28 before turning hotter than normal through at least Aug. 6. With hotter weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 104.7 bcfd this week to 105.9 bcfd next week. The forecast for this week was higher than LSEG's outlook on Friday, while its forecast for next week was lower. Gas flows to the seven big U.S. LNG export plants fell to 11.5 bcfd so far in July after Freeport shut before Hurricane Beryl hit the Texas Coast on July 8, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023. With Freeport starting to export LNG over the weekend for the first time since Beryl, gas flows to the 2.1 bcfd plant was on track to rise to around 1.0 bcfd on Monday, up from 0.8 bcfd on Sunday after the facility pulled in almost no gas from July 7-15.

US natgas prices slide 3% on rising output, oversupply in storage (Reuters) -U.S. natural gas futures slid about 3% on Tuesday on rising output and an ongoing oversupply of gas in storage. Analysts said there was still about 17% more gas in storage than normal for this time of year even though injections have been smaller than usual for nine of the past 10 weeks after several producers cut output earlier in the year when futures prices dropped to 3-1/2 year lows in February and March. EIA/GAS NGAS/POLL Higher prices in April and May, however, prompted some drillers, including EQT and Chesapeake Energy, to boost output so far in June and July. EQT is the nation's biggest gas producer and Chesapeake is on track to become the biggest after its planned merger with Southwestern Energy. EQT, meanwhile, completed its roughly $14 billion acquisition of Equitrans, the pipeline company EQT spun off in 2018. Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange fell 6.4 cents, or 2.8%, to settle at $2.187 per million British thermal units. That price increase came despite rising amounts of gas flowing to U.S. liquefied natural gas (LNG) export plants as Freeport LNG in Texas started exporting cargoes again after shutting for Hurricane Beryl in early July. Another factor that kept gas prices incheck was the latestforecast that the weather over much of the Lower 48 U.S. states would turn extremely hot in August. That should boost the amount of gas power generators burn to produce electricity to keep air conditioners humming. In addition to the heat, electricgenerators were also burning more gas because wind powerso far this week was much lower than usual. Wind farms were on track to produce an average of just 4% of power generation this week, down from 7% last week, 12% so far in 2024 and 10% in 2023. Gas-fired power plants were producing an average of 48% of generation this week, up from 46% last week, 40% so far in 2024 and 41% in 2023. Gas flows to the seven big U.S. LNG export plants fell to 11.6 bcfd so far in July after Freeport shut before Hurricane Beryl hit the Texas Coast on July 8, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023. On a daily basis, however, LNG feedgas was on track to reach a two-week high of 12.6 bcfd on Tuesday as the 2.1-bcfd Freeport slowly returns to service. Gas flows to Freeport, which started to exit a nine-day outage on July 16, held near 1.4 bcfd on Monday and Tuesday after the plant pulled in almost no gas from July 7-15.

US natgas prices slide 3% on forecasts for less demand, rising output (Reuters) -U.S. natural gas futures slid about 3% to a one-week low on Wednesday on forecasts for less demand next week than previously expected and expectations by EQT, the nation's biggest gas producer, that output will rise during the second half of the year. Another bearish factor keeping a lid on prices was the tremendous oversupply of gas still in storage. There was still about 16% more gas in storage than normal for this time of year even though injections have been smaller than usual for nine of the past 10 weeks after several producers cut output earlier in the year when futures prices dropped to 3-1/2 year lows in February and March. EQT said late Tuesday that it produced about 508 billion cubic feet of gas equivalent (bcfe) in the second quarter and projected output would rise to around 510-560 bcfe in the third quarter and 515-565 bcfe in the fourth quarter. Even though EQT kept its output forecast for all of 2024 flat at 2,100-2,200 bcfe, analysts noted the company's expectations that output would rise in the second half of the year came even though gas futures were down about 19% so far in July. Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange fell 7.0 cents, or 3.2%, to settle at $2.117 per million British thermal units, their lowest close since July 17. That price decline came despite the latest weather forecast calling for extreme heat to return in August, which should boost the amount of gas power generators burn to produce electricity to keep air conditioners humming. In addition to the heat, power generators were burning more gas this week after the amount of electricity produced by wind farms in the Lower 48 states fell to a 33-month low on Monday. With hotter weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 105.2 bcfd this week to 105.8 bcfd next week. The forecast for this week was higher than LSEG's outlook on Tuesday, while the forecast for next week was lower. Gas flows to the seven big U.S. LNG export plants fell to 11.6 bcfd so far in July after Freeport shut before Hurricane Beryl hit the Texas Coast on July 8, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023.

US natural gas prices fall 4% on bigger storage build - (Reuters) - U.S. natural gas futures fell about 4% to a one-week low on Thursday on a bigger-than-expected storage build, rising output and forecasts for less demand next week than previously projected. Despite the larger build, traders noted it was still smaller than usual for this time of year for the 10th time in 11 weeks. Recent storage builds have mostly been smaller than usual because several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March, traders said. Higher prices in April and May, however, prompted some drillers, including EQT and Chesapeake Energy, to boost output. The U.S. Energy Information Administration forecast utilities added 22 billion cubic feet (bcf) of gas into storage during the week ended July 19. Analysts in a Reuters poll had forecast a 16-bcf build. The EIA forecast compares with an increase of 23 bcf in the same week last year and a five-year (2019-2023) average rise of 31 bcf for this time of year. Front-month gas futures for August delivery on the New York Mercantile Exchange fell 7.6 cents, or 3.6%, to settle at $2.041 per million British thermal units (mmBtu), their lowest close since July 17 for a second day in a row. That puts the contract within a penny of the 11-week closing low of $2.035 per mmBtu on July 17. That price decline came despite the latest weather forecast calling for extreme heat to return in August, which should boost the amount of gas power generators burn to produce electricity to keep air conditioners humming. Meteorologists forecast temperatures across the Lower 48 states will average around 83 degrees Fahrenheit (28.3 Celsius) on Aug. 2, according to LSEG data. That would match the current record high average temperature set on July 20, 2022, when power demand peaked at an all-time high of 742,600 megawatts, according to LSEG and federal energy data. In addition to the heat, power generators were burning more gas this week after the amount of electricity produced by wind farms in the Lower 48 states fell to a preliminary 59-month low on Tuesday. That drop in wind power came even though energy firms have added about 53.3 gigawatts of wind over the past five years (2019-2023), bringing total wind capacity up to around 147.6 GW by the end of 2023, according to EIA data. That is an average capacity increase of about 9% a year over the past five years and makes wind power the nation's third largest source of power capacity behind gas at 490.8 GW and coal at 177.1 GW. Power companies get a lot more energy out of those gas and coal plants. Gas was producing about 49% of the country's power so far this week, with the rest coming from coal at 18%, nuclear at 18%, hydro and solar at 5% each, wind at 3% and other at 1%. Financial firm LSEG said gas output in the Lower 48 states rose to an average of 102.4 billion cubic feet per day so far in July, up from an average of 100.2 bcfd in June and a 17-month low of 99.4 bcfd in May. U.S. output hit a monthly record high of 105.5 bcfd in December 2023. With more wind power expected next week, LSEG forecast average gas demand in the Lower 48, including exports, will ease from 105.5 bcfd this week to 105.3 bcfd next week. The forecast for this week was higher than LSEG's outlook on Wednesday, while the forecast for next week was lower.

Court Reverses Biden EPA on Denial of Small-Refinery Exemptions in 2022 (DTN) -- A federal appeals court vacated Biden administration reversals of small-refinery exemptions to the Renewable Fuel Standard in a judgment handed down Friday. The U.S. Court of Appeals for the District of Columbia Circuit sealed its opinion in the case for seven days but issued a two-page judgment that appears to side with refining companies, so the number of exemptions affected is unclear. In April 2022, the EPA revoked 36 SREs granted by the Trump administration for the 2018 compliance year. In June 2022, the EPA announced the denial of 69 exemption requests. In April 2022, however, EPA offered most refineries an alternative way to comply with the RFS that wouldn't require the companies to make up for the 1.4 billion gallons of biofuels or compliance credits originally exempted. There were 32 cases filed against EPA on the Biden administration's decision and consolidated by the court in one group, while six other cases were consolidated in a second group. "Ordered and adjudged that, in accordance with the opinion of the court filed herein this date, the petitions of company A and company B be denied, but otherwise the petitions for review in (the first group) be granted," the court said in the judgment. Those cases were remanded back to EPA for "further proceedings," according to the judgment. In a joint statement following the court's ruling, the Renewable Fuels Association, Growth Energy and the American Coalition for Ethanol, all of whom intervened on EPA's behalf in the litigation, said they were disappointed in the ruling. "We are extremely disappointed in today's decision to vacate and remand EPA's denial of dozens of small refinery exemption petitions," the groups said. "EPA's decision in 2022 to deny the petitions was well-reasoned, based on sound economic analysis and consistent with both the Clean Air Act and the objectives of the Renewable Fuel Standard. We will evaluate our next steps, which may include seeking further review of today's decision. Our coalition remains resolute and committed to protecting and defending the proper implementation of the RFS." In the second group of cases, the court said in its judgment it dismissed petitions filed by Growth Energy and Wynnewood Refining Company and denied a petition filed by Sinclair Wyoming Refining Company LLC. The second group of lawsuits challenged the EPA's alternative compliance option given to the small refiners. The appeals court's action is the latest in a long drama that has played out across multiple administrations. In December 2021, the Biden EPA released a proposal to reject all pending exemption requests. The Trump administration approved more than 80 small-refinery exemption requests.

Three US states are rattled by a wave of earthquakes ranging from 3.0 to 5.0 magnitude... did YOU feel the shake? - Texas was hit by three earthquakes on Monday evening through Tuesday morning, with the largest felt 200 miles away from the epicenter. Reports of the quakes flooded out of Texas after the first shook people awake in Hermleigh at 10.38pm, which registered as a 4.9 magnitude - the eighth strongest in the state's history. At least 1.6 million people as far away as Austin, southern Oklahoma andNew Mexico experienced the event.A 4.4 magnitude aftershock occurred less than 10 minutes after the initial earthquake and residents experienced a 3.1 magnitude in the early hours of Tuesday morning.Northern Texas, where Hermleigh is located, doesn't sit on any major fault lines, but 250 minor ones extend outward 1,800 miles from the Dallas-Fort Worth area - which reaches the epicenter of Monday's quake.The earthquake started near the Scurry-Fisher County line which is located 54 miles west of Abilene and 10 miles northeast of Hermleigh.The Geological Survey (USGS) confirmed that the earthquake started just 4.8 miles beneath the earth's surface. At their deepest, quakes can begin as far as 400 miles underground. Earthquakes that reach 43 miles or less are considered shallow and will only result in mild to moderate damage.The seismology site Volcano Discovery reported that residents experienced notable shaking indoors which caused minor cracks in floors and ceilings and felt two aftershocks.Although much of the US experiences naturally occurring quakes, the USGS reported that 'in some regions, such as the south-central states, a significant majority of recent earthquakes are thought by many seismologists to have been human-induced.' These activities have included the water impoundment behind dams, injecting fluid into the earth's crust, extracting fluid or gas and removing rock during mining efforts.Because of this, residents rarely experience quakes or tremors, but scientists have speculated that the recent spate of earthquakes in Texas is largely due tohydraulic fracturing, also known as fracking.Texas is listed as the number one state for fracking, and as of February 2017, it was home to 279,615 oil and gas wells but by 2023, that number had increased to 373,133 active wells.This process involves miners drilling deep into the earth's surface and releasing high-pressure water that creates a small explosion to release natural gas and oil that can be used to create energy. The action brings groundwater to the surface and when it is injected back into the ground, it puts pressure on fault lines, resulting in more earthquakes.

Texas Hit By Multiple Earthquakes In Last 48 Hours, Scientists Believe THIS Is The Reason -Texas has reported five earthquakes in just 48 hours, with the latest being a 2.5 magnitude tremor. The series of quakes, centered around the town of Hermleigh in northern Texas, began with a 4.9 magnitude earthquake on Tuesday. This first earthquake, the seventh largest in the state's history, affected 1.6 million people and was felt as far away as Austin, southern Oklahoma, and New Mexico. A 4.4 magnitude event, a 3.1 magnitude tremor on Tuesday morning, and a subsequent 4.0 magnitude earthquake on Thursday evening were among the subsequent aftershocks. A 2.5 magnitude aftershock followed the 4.0 magnitude event. Scientists believe that the current seismic activity is related to hydraulic fracturing, or fracking, which is a method of extracting natural gas and oil from the earth by pumping wastewater underground. It is thought that this process puts extra strain on fault lines, which causes an increase in seismic activity. According to US Geological Survey (USGS) geophysicist Justin Rubinstein, there is a connection between these earthquakes and the exploitation of oil and gas. The number of operational oil and gas wells increased in Texas, the state that leads the nation in fracking, from 279,615 in 2017 to 373,133 in 2023. Since 2019, the Hermleigh region has seen a marked rise in seismic activity, which the USGS has linked to more intensive fracking activities. In other states, including Colorado, Oklahoma, Ohio, and Arkansas, fracking—which entails drilling deep into the ground and utilizing high-pressure water to liberate natural gas and oil—has been linked to induced seismicity. Since at least 1990, the US Environmental Protection Agency (EPA) has recognized a link between fracking and earthquakes. For instance, from 1967 to 2000, Oklahoma saw just 21 earthquakes larger than a 3.0 magnitude yearly; but, since the fracking boom began in 2010, the state has seen over 300 earthquakes annually. If the Railroad Commission of Texas (RRC), which oversees the state's oil and gas sector, determines that saltwater disposal is causing seismic activity, it can suspend or revoke permits related to the practice. After discovering that wastewater injection was causing fault lines to break and cause earthquakes, the RRC suspended 23 of these licenses in January. In the event of an earthquake in the region measuring 4.5 or higher, the commission has also put into effect a strategy that forbids operators from injecting wastewater for a period of two years. Research professor Dr. Peter Hennings of the Bureau of Economic Geology in Austin stressed the need of comprehending why faults rupture in certain regions but not in others. He proposed that the probability of generated seismicity may be reduced with improved wastewater injection management. In order to lessen the need for subterranean disposal, the RRC is also looking at alternate techniques for treating and repurposing wastewater for advantageous uses.

Texas earthquakes: How common are they? Why do they happen? — At 10:38 p.m. Monday, the ground began to rumble in West Texas. The real action was nearly five miles below the surface, where a 4.9-magnitude earthquake happened just west of the Scurry-Fisher county line. A few minutes later, and several miles to the northwest, another earthquake rumbled -- this time a 2.8-magnitude rattler. Three more earthquakes then followed in the same area, all within the same half-hour, according to data from U.S. Geological Survey.Rumblings -- most likely from the initial 4.9-magnitude earthquake, about 10 miles northwest of Hermleigh -- were felt across the West Texas region, and reportedly as far away as the Dallas-Fort Worth metroplex, about three hours to the east.The exact causes of the earthquakes won't be determined until researchers have the chance to look into them further. But they were all part of a recent cluster of earthquakes in the Hermleigh area this week, most of them in the smaller 1.0-2.0-magnitude range, according to USGS data.More broadly, they were part of a growing trend in Texas in the last five years: Earthquakes are becoming increasingly common in the Lone Star State, particularly in West Texas.In 2023, there were 2,493 earthquakes that registered a 2.0-magnitude or higher on the Richter scale in Texas, according to data compiled by the Bureau of Economic Geology at the University of Texas at Austin.These numbers were similar to those of 2022 when Texas saw 2,601 earthquakes of at least a 2.0-magnitude.But they are also more than double the amount in seen 2020, and eight times the amount in 2017 -- all according to the bureau, which tracks Texas earthquakes through the TexNet Earthquake Catalog.This increase in earthquakes has been attributed by researchers to the rise of a form of oil drilling known as hydraulic fracturing, or fracking. The process involves injecting liquid into a well to break up shale and rock to extract oil or gas reserves, as the USGS explains here.Often, the USGS says, it's not the fracking that causes the earthquakes but rather the disposing of the large amounts of wastewater it produces.The disposal of that wastewater -- which sees it injected deep back into the earth's surface -- is what researchers have identified as the "primary causal agent" of the increased number of Texas earthquakes, said Dr. Peter H. Hennings, the principal investigator for the Bureau of Economic Geology's Center for Injection and Seismicity Research.Hennings researches earthquakes and their causes and has authored numerous papers that detail the recent rise in earthquakes in Texas.Hennings said the 4.9-magnitude earthquake near Hermleigh this week was "certainly notable." For one, Hennings said a 4.9 reading is on the higher end of what Texas usually sees, although the state has in recent years seen recordings venture past the 5.0 magnitudes. He also notes that the Hermleigh earthquakes happened within a newer cluster of earthquakes recorded on the eastern shelf of the Midland Basin. It's just one of many clusters identified across the Midland Basin and Delaware Basin, and extending into New Mexico, according to research Hennings has compiled.In a 2023 paper published by the Geological Society of America, Hennings and co-author Michael H. Young presented data that showed the sharp increase in earthquakes in the last five years. While the North Texas area saw an increase in earthquakes about 10 years ago, most of the recent rise in earthquakes has been seen in the Delaware and Midland basins of West Texas, located along the Interstate 10 corridor between Odessa and El Paso.

Beyond Permian? Breaking Down E&Ps' Second Half M&A Prospects | Hart Energy Times are good for Permian Basin E&Ps—provided, of course, that they aren’t looking to buy something. So far, Permian companies that have braved deals outside of the vaunted center of the shale universe haven’t necessarily been treated kindly by investors or analysts.Exhibit 1 is the aftermath of SM Energy Co.’s recent $2 billion deal to buy Uinta Basin producer XCL Resources. The transaction set the company’s stock reeling in late June, with share prices gradually returning to pre-deal levels by July 18.Generally, Permian Basin deals, where multiples are seemingly irrelevant, have been gold for equity prices. Not so for entering basins. For SM Energy, negative investor sentiment may have centered on a foray into Utah’s less well-known Uinta.Next, Devon Energy, looking to fortify its portfolio in the Williston Basin, agreed to purchase Grayson Mill Energy in a $5 billion acquisition in early July. Devon’s deal caused a brief flutter in share prices but the chief fallout was criticism over relatively high multiples paid for Bakken inventory.But E&Ps’ well-documented Permian inventory scramble has led to increasingly slim M&A pickings in the basin that may be leading them to look elsewhere. The Permian’s scarce A&D options are clearly starting to show, “with the exception ofDouble Eagle IV in the Midland, and the bulk of likely acquirers still early in the integration of other deals,” Mark A. Lear, senior research analyst at Piper Sandler, said in a July 18 report.To be clear two deals do not make a trend, Lear said. But the fact that two established Permian operators—Devon and SM Energy—went shopping outside of the Permian has not gone unnoticed. “Both deals got a decent amount of pushback, with Grayson Mill (Bakken) trading at a premium multiple to CHRD [Chord Energy], while XCL Resources (Uinta) appears to be a difficult asset to grow and scale despite strong project returns,” Lear wrote in the report.Piper Sandler noted that Chord Energy’s $4 billion acquisition of Enerplus Corp., which closed May 31, didn’t get more attention despite trading at “a ~0.75-turn discount” to the Devon deal on estimated fiscal year 2025 EBITDA.That’s despite Enerplus bringing among the best remaining undeveloped inventory in shale, let alone the Bakken, Lear said.While Devon acknowledged the premium valuation paid for Grayson Mill, Lear said the deal was “accretive on our FY25E estimates [for Devon] and replenishes a big inventory hole for the company in the Bakken which has not seen a similar level of capital allocation as year’s past as a result.”And Devon has acknowledged that the company will continue to look for opportunities to replenish inventory in other parts of its legacy portfolio, Lear said.In advance of second-quarter earnings reports, here’s how analysts surmise dealmaking opportunities, plans and delays for E&Ps in their coverage.

California Halts Injection of Fracking Waste, Warning it May Be Contaminating Aquifers --California officials have ordered an emergency shut-down of 11 oil and gas waste injection sites and a review more than 100 others in the state's drought-wracked Central Valley out of fear that companies may have been pumping fracking fluids and other toxic waste into drinking water aquifers there.The state's Division of Oil and Gas and Geothermal Resources on July 7 issued cease and desist orders to seven energy companies warning that they may be injecting their waste into aquifers that could be a source of drinking water, and stating that their waste disposal "poses danger to life, health, property, and natural resources." The orders were first reported by the Bakersfield Californian, and the state has confirmed with ProPublica that its investigation is expanding to look at additional wells.The action comes as California's agriculture industry copes with a drought crisis that has emptied reservoirs and cost the state $2.2 billion this year alone. The lack of water has forced farmers across the state to supplement their water supply from underground aquifers, according to a study released this week by the University of California Davis.The problem is that at least 100 of the state's aquifers were presumed to be useless for drinking and farming because the water was either of poor quality, or too deep underground to easily access. Years ago, the state exempted them from environmental protection and allowed the oil and gas industry to intentionally pollute them. But not all aquifers are exempted, and the system amounts to a patchwork of protected and unprotected water resources deep underground. Now, according to the cease and desist orders issued by the state, it appears that at least seven injection wells are likely pumping waste into fresh water aquifers protected by the law, and not other aquifers sacrificed by the state long ago."The aquifers in question with respect to the orders that have been issued are not exempt," said Ed Wilson, a spokesperson for the California Department of Conservation in an email.A 2012 ProPublica investigation of more than 700,000 injection wells across the country found that wells were often poorly regulated and experienced high rates of failure, outcomes that were likely polluting underground water supplies that are supposed to be protected by federal law. That investigation also disclosed a little-known program overseen by the U.S. Environmental Protection Agency that exempted more than 1,000 other drinking water aquifers from any sort of pollution protection at all, many of them in California.Those are the aquifers at issue today. The exempted aquifers, according to documents the state filed with the U.S. EPA in 1981 and obtained by ProPublica, were poorly defined and ambiguously outlined. They were often identified by hand-drawn lines on a map, making it difficult to know today exactly which bodies of water were supposed to be protected, and by which aspects of the governing laws. Those exemptions and documents were signed by California Gov. Jerry Brown, who also was governor in 1981. State officials emphasized to ProPublica that they will now order water testing and monitoring at the injection well sites in question. To date, they said, they have not yet found any of the more regulated aquifers to have been contaminated. California officials have long been under fire for their injection well practices, a waste disposal program that the state runs according to federal law and under a sort of license — called "primacy" — given to it by the EPA. For one, experts say that aquifers the states and the EPA once thought would never be needed may soon become important sources of water as the climate changes and technology reduces the cost of pumping it from deep underground and treating it for consumption. Indeed, towns in Wyoming and Texas — two states also suffering long-term droughts — are pumping, treating, then delivering drinking water to taps from aquifers which would be considered unusable under California state regulations governing the oil and gas industry.The EPA's report, commissioned from outside consultants, also said that California regulators routinely failed to adequately examine the geology around an injection well to ensure that fluids pumped into it would not leak underground and contaminate drinking water aquifers. The report found that state inspectors often allowed injection at pressures that exceeded the capabilities of the wells and thus risked cracking the surrounding rock and spreading contaminants. Several accidents in recent years in California involved injected waste or injected steam leaking back out of abandoned wells, or blowing out of the ground and creating sinkholes, including one 2011 incident that killed an oil worker.The exemptions and other failings, said Damon Nagami, a senior attorney with the Natural Resources Defense Council in an email, are "especially disturbing" in a state that has been keenly aware of severe water constraints for more than a century and is now suffering from a crippling drought. "Our drinking water sources must be protected and preserved for the precious resources they are, not sacrificed as a garbage dump for the oil and gas industry."Still, three years after the EPA's report, California has not yet completed its review of its underground injection program, according to state officials. The scrutiny of the wells surrounding Bakersfield may be the start.

Canada Set To Delay Trans Mountain Pipeline Sale After 2025 Election --Canada’s federal government plans to postpone the sale of the state-owned Trans Mountain oil pipeline for after the 2025 general election amid politics, regulations, and slow progress in talks with indigenous groups, Bloomberg reported on Friday, quoting officials with knowledge of the discussions within the cabinet. The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the pipeline expansion have soared to nearly $23 billion (C$30.9 billion).It’s not certain that Canada’s government can recoup all the costs it had plowed in the pipeline and its expansion if an auction is held before the election. A possible change of government after the 2025 election and ongoing talks with Indigenous groups about them owning a stake in the pipeline could also be reasons to delay the sale of the Trans Mountain pipeline, according to Bloomberg’s sources.Regulatory hurdles have added years to the timeline for the pipeline completion, but TMX received the final permits in early May from the Canada Energy Regulator (CER). This allowed it to enter into service on May 1. The expanded pipeline is tripling the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.The rise in pipeline egress is set to boost the price of Western Canada Select (WCS), the benchmark for Canadian heavy crude sold at Hardisty in Alberta, as it will narrow the discount at which WCS has traded in recent years relative to the U.S. crude oil benchmark, West Texas Intermediate (WTI).With TMX now in service, producers see more options to get their crude to demand centers—the U.S. West Coast and the prized Asian crude oil market.

NFE Achieves First LNG at Mexico’s Floating Altamira Export Facility --New Fortress Energy Inc. (NFE) has reportedly achieved first LNG at its export terminal offshore of Altamira, indicating it could be close to loading Mexico’s first export cargo. NGI map showing offshore mexico projects. Market analysts have been honing in on Central Mexico’s east coast after an LNG tanker anchored Thursday near NFE’s storage vessel at the floating Altamira liquefied natural gas facility. The arrival of the Energos Princess, a tanker owned by NFE and Apollo Global Management’s shipping joint venture, coincided with the company’s guidance that it could begin loading cargoes in mid-July. On Friday, the company disclosed it had achieved its goal of achieving the fastest timeline from construction to first LNG for a large-scale export facility with the start of liquefaction at Altamira.

Market Left Guessing on Outlook for Mexico’s LNG Projects Amid U.S. Permit Pause, Rising Competition -- The clock is ticking on Mexico LNG projects as a glut of liquefied natural gas supply is set to hit the market and giant projects advance elsewhere. None Some 40 million metric tons (mmt) of LNG capacity is expected to come online annually between 2026 and 2028, moving the world’s liquefaction capabilities beyond 500 mmt/year (mmty), or some 25% higher than current levels. Mexico could add as much as 6 Bcf/d in proposed projects. But the Biden administration’s pause on new export permits could scale these back, according to experts.

Mexico May Need to Import Crude and Cease Exports After 2030 -- Crude oil producer and exporter Mexico could see itself in need of crude imports in 2030 as its field production is set to rapidly decline at the end of this decade while it expands its refining capacity, Reuters reported on Thursday, citing projections from the Mexican Energy Ministry.Currently, Mexico pumps around 1.8 million barrels per day (bpd) of crude and condensates and is betting on a major new refinery to process some of the crude into fuels and end its dependence on fuel imports.However, the new fields that have started up recently will not be enough to offset what is expected to be a rapid decline in output from mature fields from 2030 onwards.Per the energy ministry assumptions of three scenarios, Mexico could be able to raise its crude oil production to between 2.164 million bpd and 2.39 million bpd in 2028. However, all three scenarios, which also assume some new discoveries, project a rapid decline in output from 2030, per the estimates reported by Reuters.The recently launched Trion field production – expected to reach a peak of 100,000 bpd in 2028 – and the Zama field could temporarily raise Mexico’s crude oil output this decade. But major declines at other fields would likely force the country to turn to crude imports to keep its refineries operating at relatively high utilization rates.Earlier this week, industry regulator CNH said that Mexico’s crude oil production fell by 6.2% year-over-year to just 1.57 million bpd in June. Crude plus condensate output came in at 1.84 million bpd, also down by 6.2% on the year, per the data reported by Bnamericas.Meanwhile, Mexico’s newest refinery, the long-delayed Olmeca processing facility with a planned capacity of 340,000 bpd, is unlikely to be ready to produce commercial quantities of fuels by the end of this year, five sources familiar with the operations told Reuters last month.The Olmeca refinery, also known as Dos Bocas, is a flagship project of outgoing Mexican President Andrés Manuel López Obrador, who sought to reduce Mexico’s dependence on fuel imports from the United States.The refinery, however, has seen multiple delays and budget overruns and is now estimated to have needed double the initial budgeted investment. Initially budgeted at $8 billion, the refinery went into significant cost overruns, with the price tag to date standing at some $18 billion and the start date still unclear.

New Government Seen Cementing UK's Role as Market of Last Resort for LNG - The UK’s new Labour government won in a landslide election earlier this month and has promoted the island country as a “clean energy superpower,” moving away from the previous government’s emphasis on oil and natural gas. Although Prime Minister Keir Starmer has supported a green energy plan, he has ensured a “phased and responsible transition” away from drilling in the North Sea. The new government recognized the need for keeping existing natural gas-fired power stations running, but has planned to halt the construction of any new gas plants. EnergyAspects analyst James Waddell told NGI that policies under Labour may accelerate the energy transition, “thereby cutting UK gas demand faster than would have otherwise been the case.”

TotalEnergies Output Up, but Lower Euro LNG Demand and Natural Gas Prices Hit Bottom Line - Subdued natural gas prices and lower European demand between April and June dinged Paris-based TotalEnergies SE during the second quarter. Bar graph showing natural gas demand by region. The lack of momentum in natural gas prices, combined with reduced demand for LNG, led to a sharper decline in profits than anticipated. The integrated major was the first of its peer group to issue quarterly results. The company, one of the world’s top gas traders, said liquefied natural gas sales slipped in the second quarter by 20% year/year to 8.8 million tons (Mt). Sales from equity production and third-party LNG purchases declined by 24% to average 7.6 Mt.

European Natural Gas Demand Continued Decline Through June, Says Energy Watchdog -- Natural gas-fired power generation in Europe declined 16% year/year during the first half of 2024, driven partly by a sluggish recovery in industrial demand across the continent, according to the European Union (EU) energy watchdog. Henry Hub vs Prompt JPN/KOR and TTF futures. Gas-fired power generation also declined amid mild weather, stronger renewable output and household energy efficiency, according to the EU Agency for the Cooperation of Energy Regulators (Acer). Overall, natural gas demand has fallen since Russia invaded Ukraine in 2022, cut off exports to the continent and sent prices soaring. Supplies have steadily recovered and storage inventories are filling fast. Acer said in its latest quarterly market monitoring review that both LNG and pipeline supplies are stable.

Germany’s Future as LNG Importer Expands with First Onshore Terminal -- The first of three planned onshore LNG import projects in Germany has broken ground as the country continues its journey as one of the fastest growing destinations in Europe for the super-chilled fuel. After roughly two-and-half years since Germany imported its first volumes of liquefied natural gas, Europe’s largest consumer of the fuel has flipped from relying on Russian supplies to meet over 50% of the country’s demand to a combination of Norwegian pipeline and U.S. LNG imports. In response to Russia’s invasion of Ukraine in 2022, the German government has progressed and approved plans for up to a dozen offshore and onshore LNG import facilities.

Pacific LNG shipping rates continue to rise, European prices up - Pacific spot liquefied natural gas (LNG) freight rates continued to increase this week, while European prices also rose compared to the week before.Last week, spot charter rates rose in the Pacific with Atlantic rates decreasing after nine weeks of increases.“Spark30s Atlantic rates continued to decrease this week, falling by $9,000 to $79,250 per day – the largest week-on-week decrease since the end of January,” Qasim Afghan, Spark’s commercial analyst told LNG Prime on Friday.“In comparison, Spark25S Pacific rates experienced a $10,500 increase this week, rising to $67,250 per day – this is the largest week-on-week increase since October 2023, and the highest Spark25S rate since January,” he said.In Europe, the SparkNWE DES LNG front month was up compared to the prior week.“The SparkNWE DES LNG front month price for August delivery is assessed at $10.297/MMBtu and at a $0.155/MMBtu discount to the TTF,” Afghan said.“This is a $0.542/MMBtu week-on-week increase in SparkNWE DES LNG price,” he said.Data by Gas Infrastructure Europe (GIE) shows that volumes in gas storages in the EU continued to rise and were 81.83 percent full on July 17.Gas storages were 80.09 percent full on July 10, and 82.01 percent full on July 17 last year.In Asia, JKM, the price for LNG cargoes delivered to Northeast Asia, for August settled at $12.200/MMBtu on Thursday.Last week, JKM for August settled at 12.330/MMBtu on Friday.Front month JKM dropped this week to 12.321/MMBtu on Monday, 12.300/MMBtu on Tuesday, and 12.090/MMBtu on Wednesday.US LNG exports reached 20 shipments in the week ending July 17, and pipeline deliveries to US terminals decreased compared to the week before, according to the Energy Information Administration.Freeport LNG, the operator of the three-train 15 mtpa liquefaction plant in Texas, toldLNG Prime on July 15 it expects to restart the first train this week after the terminal’s fin fan air coolers were damaged during Hurricane Beryl.The LNG terminal operator ramped down production at its liquefaction end export facility on Sunday, July 7, ahead of Hurricane Beryl making landfall.A Freeport LNG spokeswoman said the company is “completing initial repairs on the damage sustained to our fin fan air coolers in the hurricane and anticipate restarting the first train this week”. Freeport LNG plans to restart the remaining two trains “shortly thereafter”.

Natural Gas Flowing at Jerun Field to Help Boost Utilization at Malaysia LNG -The Bintulu LNG complex in Malaysia is poised to boost liquefied natural gas output now that supplies are flowing from the Jerun field. Bar graph showing Malaysian LNG Exports. Malaysia-based SapuraOMV Upstream Inc., which operates the field about 100 miles off the coast of Malaysian state Sarawak, said it achieved first gas from Jerun in early July. SapuraOMV holds a 40% interest in the field. The offshore platform is designed to produce up to 550 MMcf/d of natural gas. It would be delivered via pipeline to a production hub onshore. From there, it would be delivered to customers in the coastal town of Bintulu, including Malaysia LNG, which operates the nearly 30 million metric tons/year (mmty) liquefaction complex.

Russia Cuts Crude Exports To China And India By 17% -Russia’s four-week average seaborne oil exports fell to 3.11 million barrels a day as of July 14, down by almost 600,000 barrels or 17% from their recent peak in April, Bloomberg has reported. The country’s seaborne crude shipments have now sunk to the lowest since January and are likely to remain that way at least to the end of August, thanks to a rebound of domestic refining rates to a six-month high. China and India are likely to feel the export cuts most keenly since they buy more than 80% Russian seaborne crude sales. However, the barrels that have been taken off the market represent a small fraction of their total crude purchases, meaning Chinese and Indian buyers could easily replace them with crude from other markets.“The sharp drop in July isn’t a one-off event,” Viktor Kurilov, senior oil markets analyst at consultant Rystad Energy A/S, has told Bloomberg.Rystad Energy has predicted that Russia’s seaborne crude flows will remain capped at around 2.7 million barrels a day in July and August but rebound slightly to 2.9 million barrels a day in September when Russian refineries are expected to begin their traditional autumn maintenance. That’s a considerable drop from exports of 3.6 million to 3.7 million barrels per day recorded in April and May as repeated Ukrainian drone attacks disrupted domestic refining.“The levels seen in April or May are not to be repeated in 2024, barring large-scale drone attacks that would debilitate even more refineries than the spring strikes,” Viktor Katona, lead crude analyst at intelligence firm Kpler, has told Bloomberg. Katona has predicted that Russia’s seaborne crude supplies will hover near 3 million barrels a day for the rest of the year. Meanwhile, Ukraine has cut oil supplies to Slovakia and Hungary by Russia’s oil and gas giant Lukoil. Lukoil supplies Russian oil to Europe via the Soviet-built Druzhba pipeline and stands as the last major functioning Russian oil supply route to the continent. The European countries are, however, still receiving oil from other Russian companies.

Russia Could Ban Diesel Exports Again -- Russia is considering banning the export of diesel if prices rise further, Russian daily Kommersant reported on Wednesday, citing several sources. The Russian government could ban diesel exports if prices spike in the near term, but no decision has been made yet, according to Kommersant’s sources. There are no conditions for a complete ban on diesel shipments abroad yet, a source at a local oil company told the Russian daily.The government is restoring a ban on gasoline exports from August 1.In the autumn of 2023, Russia banned exports of diesel and gasoline in an effort to stabilize domestic fuel prices in the face of soaring prices and shortages as crude oil rallied and the Russian ruble weakened.Prior to implementing the ban, Russia had raised mandatory supply volumes for motor gasoline and diesel fuel to deal with a supply crunch.These bans lasted only a few weeks. This year, Russia reinstated a ban on gasoline shipments from March 1 but lifted the restriction on May 20 as more refineries completed planned seasonal maintenance or emergency repairs after Ukrainian drone hits in the winter and early spring.

Equinor lets platform drilling services contract for work offshore Brazil | Oil & Gas Journal - Equinor has let a 2-year contract for platform drilling services to Archer Ltd. in Brazil.The contract will begin in November 2024 in direct continuation of Archer’s current contract for drilling operations and maintenance on Equinor’s Peregrino A and B platforms and includes an optional 2-year extension period. The estimated firm contract value is $40 million.In February, Equinor extended a contract with Wood to deliver maintenance and modification solutions to the Peregrino assets. According to Equinor, more than 220 million bbl have been produced at Peregrino since 2011. With production of 110,000 b/d of oil, Peregrino is the largest producing field operated by Equinor outside of Norway (OGJ Online, Feb. 1, 2024).Peregrino Phase 2 produced its first oil in 2022 and will extend the life of the field until 2040. It will also add 250-300 million bbl of oil to the asset, according to Equinor’s website. The field consists of an FPSO accompanied by three fixed platforms: Alfa, Bravo, and Charlie.

Spain Detains Cargo Ship Over Fuel Spill Near Ceuta -- Spanish authorities have detained a German-operated cargo ship for causing a spill during a refueling operation near the Spanish enclave of Ceuta, Spain's Merchant Fleet said on Monday.The Antigua & Barbuda-flagged Tony Stark ship cannot leave the port on Africa's north coast until the owners pay bail of 120,000 euros ($130,524), it added.The Tony Stark's German-based operator NautiCore Shipping did not immediately respond to a request for comment.Last week, trails of fuel oil were detected in front of Benitez beach, the breakwaters of the port and San Amaro beach in Ceuta, in the Alboran sea.In a separate statement, the Merchant Fleet estimated the size of the fuel spill was one metric ton.The Merchant Fleet said it opened a disciplinary procedure that will determine the final fine.In a separate incident, three beaches near the eastern city of Valencia were closed last week after fuel from a spill washed up on a 2-km (1.2-mile) line of sand. The cause was not immediately clear.

Philippine oil tanker sinks in Manila Bay, raising concerns about a possible major spill - A Philippine oil tanker sank in Manila Bay early Thursday after encountering huge waves, and the coast guard was working to determine whether the vessel was leaking oil — in what could be a major spill — after it rescued 16 of 17 crew members in a nighttime operation, officials said.The tanker Terra Nova left Bataan province en route to the central province of Iloilo with about 1.4 million liters (370,000 gallons) of industrial fuel oil stored in watertight tanks when it got buffeted by huge waves and took on water. The crew struggled to steer the tanker back to port but it eventually sank shortly after midnight, coast guard spokesperson Rear Admiral Armando Balilo said, citing statements from surviving crew members.The sinking followed days of monsoon rains, exacerbated by a passing offshore typhoon, that caused landslides and floodings across the archipelago, leaving at least 22 people dead and displacing more than half a million people.An aerial survey spotted an oil spill about 3.7 kilometers (2.3 miles) long near the rough seawaters where the tanker sank but that may have come from the fuel intended to power the tanker’s engine, not the much greater amount of fuel the Terra Nova was carrying as cargo, Balilo said.A coast guard ship, the BRP Melchora Aquino, was in the waters where the tanker sank, more than 6 kilometers (about 4 miles) from Bataan province’s coast, to search for the last missing crewman and to carry out an initial assessment of the tanker’s fuel oil cargo, Balilo told an online news conference.He added that the coast guard was bracing to contain a possible major oil spill.“There’s a big danger that Manila would be affected, its shorelines, if the fuel leaks because this happened within Manila Bay. It’s part of the contingency we’re preparing for,” Balilo said. “The effect on the marine environment would not be good.”Balilo later said the oil tanker sank at a relatively shallow depth of 34 meters (111 feet), based on an initial assessment, and raised the possibility that its fuel oil cargo could be siphoned off by special ships in a delicate operation that could take about a week.“Siphoning will not be very technical and can be done quickly to protect the vicinity waters of Bataan and Manila Bay against environmental, social, economic, financial and political impacts,” Balilo said.He did not say if the tanker has been located on the seafloor and did not specify the status of its fuel oil cargo.Balilo compared the magnitude of the possible oil spill to one caused by the sinking of another Philippine oil tanker, which was carrying much less fuel oil cargo, in February last year off Oriental Mindoro province north of Manila. That spill took about three months to contain, caused massive damage to coral reefs and mangroves in a region known for its rich biodiversity, and affected tens of thousands of fishermen and beach resorts in at least six provinces. Manila’s shoreline is a major tourism and business hub, where the main seaport, a historic public park, the U.S. Embassy and upscale hotels and restaurants are located. Land reclamation efforts are also underway in the bay to create space for entertainment and tourism complexes with casinos. The bay for years has been notorious for its pollution but famous for its picturesque sunsets.

Philippine coast guard says oil leaking from sunken tanker --Some of the 1.4 million liters of industrial fuel oil inside a sunken Philippine tanker has started to leak into Manila Bay, the coast guard said Saturday, as they raced to avoid an environmental catastrophe.The MT Terra Nova sank in bad weather off Manila early Thursday, killing one crew member and leaving the country potentially facing its worst oil spill disaster.The oil slick has more than tripled in size and is now estimated to stretch 12-14 kilometers (7.5-8.7 miles) across the bay, which thousands of fishermen and tourism operators rely on for their livelihoods.Divers inspected the hull of the vessel on Saturday and saw a "minimal leak" from the valves, coast guard spokesman Rear Admiral Armando Balilo said, adding it was "not alarming yet"."It's just a small volume flowing out," Balilo said, adding "the tanks are intact"."We're hoping that tomorrow we will be able to start siphoning the oil from the motor tanker," he said.The ship that will carry the recovered oil is on its way to the area, he said.The coast guard has warned that if the entire cargo leaked it would be an "environmental catastrophe".It has previously said the oil leaking from the tanker appeared to be the diesel fuel used to power the vessel, which is resting on the sea floor under 34 meters (116 feet) of water.The coast guard now thinks the slick is a mixture of diesel and industrial fuel oil.Oil containment booms have been deployed for what Balilo earlier described as "the worst case scenario" of the cargo leaking out.Three coast guard vessels were also spreading dispersants on the oil.Balilo called for a suspension of fishing in Manila Bay to prevent people "eating contaminated fish".The vessel sank nearly seven kilometers from its origin in the port of Limay west of Manila. It was attempting to return to port after running into bad weather.Sixteen of the 17 crew members were rescued from the tanker, which vessel tracking website vesselfinder.com said was 65-meters long and built in 2002.The incident occurred as heavy rains fueled by Typhoon Gaemi and the seasonal monsoon lashed Manila and surrounding regions in recent days.The state weather service said the monsoon had weakened by late Friday, giving the authorities a window of relative calm at sea to recover the cargo.The coast guard estimates the extraction would take at least seven days.It met with representatives of the MT Terra Nova's owner and a contracted salvage company on Friday to discuss the timeline.The Philippines has struggled to contain serious oil spills in the past.It took months to clean up after a tanker carrying 800,000 liters of industrial fuel oil sank off the central island of Mindoro last year, contaminating waters and beaches of the island and devastating the fishing and tourism industries.Another tanker sank off the central island of Guimaras in 2006, spilling tens of thousands of gallons of oil that destroyed a marine reserve, ruined local fishing grounds and covered stretches of coastline in black sludge.

Iranian Oil Exports Have Risen Sharply, Facilitated By Malaysia | OilPrice.com

• According to StanChart, the latest China customs import data shows crude oil imports from Malaysia clocked in at 1.456 million barrels per day, a lot more than the country produces.
• Previously, we reported that Iran’s oil exports have seen a strong rebound under the Biden administration.
• Whether or not the U.S. will allow Iran to continue pumping freely will depend on who sits in the Oval Office come 2025.

Back in February, three U.S. service members were killed in Jordan, while more than 40 other soldiers were injured following a drone attack on a U.S. military base near the Syrian border. Oil markets only issued a muted response to the attack, with many analysts predicting that the administration was unlikely to cut off Iran’s key lifeline: oil exports. Experts pointed out that Washington would allow Iranian oil to continue flowing due to the risk of squeezing supply and triggering a politically damaging spike in world oil prices. Two months later, Washington imposed a raft of new sanctions and export controls on Iran after it launched one of the largest missile and drone attacks against Israel. According to the White House, the sanctions targeted leaders and entities connected to the Islamic Revolutionary Guard Corps (IRGC), the Iranian government’s missile and drone program and Iran’s Defense Ministry. Again, the U.S. did not try to limit Iran’s oil exports. And now commodity analysts at Standard Chartered have reported that Iranian oil exports have spiked, with Malaysian waters becoming a conduit for ship-to-ship transfers of Iranian oil.According to StanChart, the latest China customs import data shows crude oil imports from Malaysia clocked in at 1.456 million barrels per day (mb/d) in June, the second-highest monthly average on record. The commodity experts have pointed out that Malaysia’s crude oil output is about 0.35 mb/d while exports usually average 0.2 mb/d, implying that the vast majority of the oil that China imports from Malaysia was not produced in the country.According to multiple media sources, the transfers involve a dark fleet consisting of a group of aging tankers that rarely have an identifiable insurer. These transfers can be hazardous, including the danger of spills and collisions, with so many low-quality tankers massed in a narrow trade route with their transponders off. For instance, two such vessels caught fire off Singapore after a collision on 19 July.Previously, we reported that Iran’s oil exports have seen a strong rebound under the Biden administration with the U.S. and its allies hoping to strike a new nuclear deal with Tehran after the Trump administration scuttled the Joint Comprehensive Plan of Action (JCPOA) deal of 2015. Under former President Donald Trump, Iranian oil production tumbled from 3.8 million barrels per day in early 2018 to less than 2 mb/d in late 2020; in contrast, production has surged under Biden to 3.2 mb/d.Whether or not the U.S. will allow Iran to continue pumping freely will depend on who sits in the Oval Office come 2025. A week ago, Trump promised in his 18 July Republican National Convention speech to reduce Iranian oil exports. He said he had previously achieved this objective by linking it to trade; “I told China and other countries, if you buy from Iran, we will not let you do any business in this country and we will put tariffs on every product you do send in of 100% or more.” According to StanChart, Iranian oil is likely to play a key role in Trump’s wider China trade policy agenda. However, Tehran is likely to hope for a Kamala Harris victory since another Democrat in the highest office is likely to continue advancing Biden’s agenda.

CNOOC Announces Offshore Oil and Gas Exploration Breakthrough - Chinese state-held oil and gas giant CNOOC said on Monday it had achieved an exploration breakthrough in medium-to-deep Mesozoic plays in the Bohai Bay offshore China. CNOOC, which specializes in offshore exploration and production in China and abroad, was exploring a discovery well in the Longkou 7-1 oilfield in eastern Bohai Bay. The well was drilled and completed at a depth of approximately 4,400 meters (14,436 ft), encountering a total of 76 meters (249 ft) of oil and gas pay zones. The well was tested to produce about 210 cubic meters of crude oil and nearly one million cubic meters of natural gas, a new record for gas tested productivity in Bohai Bay, according to the Chinese firm.The successful well shows CNOOC’s “understanding and technological capabilities in tapping resources in medium-to-deep plays. The expertise we gained will guide our exploration in similar plays offshore China,” Xu Changgui, CNOOC’s deputy chief exploration officer, said in a statement. CNOOC and other Chinese state-owned energy giants are boosting domestic oil and gas exploration and production to keep up with government guidance for increased production to enhance China’s domestic energy supply and energy security.At the end of last month, CNOOC launched crude oil production from a new development project in the South China Sea.CNOOC announced the start of the Enping 21-4 Oilfield Development Project in the eastern South China Sea. The project is expected to reach peak production of about 5,300 barrels of oil equivalent per day (boepd) of light crude oil in 2025.The company boosted its 2023 oil and gas production to a record-high of 678 million barrels of oil equivalent (boe), above the 650 million boe guidance, it said in March. CNOOC hiked in January its oil and gas production targets and capital expenditures to record-high levels as it looks to boost reserves and production. Since the beginning of this year, CNOOC has announced two major oil discoveries offshore China.

Crude oil up as China lowers lending rate - The Hindu BusinessLine -- Crude oil futures traded higher on Monday morning as China reduced its lending rate in an effort to boost the economy. At 9.56 am on Monday, September Brent oil futures were at $83.11, up by 0.58 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at $79.05, up by 0.52 per cent. August crude oil futures were trading at ₹6625 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹6612, up by 0.20 per cent, and September futures were trading at ₹6565 against the previous close of ₹6553, up by 0.18 per cent. The People’s Bank of China has reduced the one-year loan prime rate (LPR) by 10 basis points to 3.35 per cent. One-year LPR is the benchmark for most corporate and household loans. The five-year rate was reduced by 10 basis points to 3.85 per cent. This rate is a benchmark for property mortgages. Also read: Copper futures: Testing a crucial support The slowing economic growth in China has affected the demand for commodities such as crude oil in the world market. China is the second largest consumer of crude oil. China hopes to boost its economy with this reduction in LPR. Media reports on the peace talks between Israel and Hamas also supported the crude oil prices. Reports said that Israel and Hamas are likely to broker a ceasefire during the week. Any such development would help bring stability in West Asia region, reducing the risks associated with supply of the commodity. Meanwhile, the US President Joe Biden has decided not to seek re-election to the post of the President. He has endorsed his deputy Kamala Harris to fight against Donald Trump. Investors assessing the impact of this decision on the market. The former US President Donald Trump has promised to increase oil production if he wins the second term. August natural gas futures were trading at ₹185 on MCX during the initial hour of trading on Monday against the previous close of ₹181.50, up by 1.93 per cent. On the National Commodities and Derivatives Exchange (NCDEX), August turmeric (farmer polished) contracts were trading at ₹16050 in the initial hour of trading on Monday against the previous close of ₹15876, up by 1.10 per cent. August jeera futures were trading at ₹26790 on NCDEX in the initial hour of trading on Monday against the previous close of ₹26620, up by 0.64 per cent.

Oil Slips as Chinese Demand Woes Outweigh Supply Risks -- Oil futures closest to expiration on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange softened Monday morning after two back-to-back weeks of losses. Stunted economic growth in China last quarter and the lack of major policy responses overshadowed flaring tensions in the Middle East, wildfires in Alberta and firmed up chances of a U.S. rate cut in September. Even two interest rate cuts by China's central bank weren't enough to relieve concerns in the light of struggling domestic consumption and swelling debt-to-capital ratios. The People's Bank of China on Monday cut both 1- and 5-year loan prime rates by 10 basis points. While the first interest rate cut in 11 months was unexpected, it was also deemed too little to revive growth rates to levels seen at the beginning of the year. Chinese interest rate cuts have a muted effect on consumer spending compared to their international counterparts, and a separate stimulus program does not seem to be on the table for now. A slowdown in domestic growth and poor refining margins led to crude oil throughput trailing expectations. On the bright side, we can expect a seasonal pick-up in refining activity as operable capacity is set to increase with state refiners returning from maintenance and two new plants ramping up operations. And given the increased odds of U.S. rate cuts starting in September, the PBOC may follow suit. A measurable cooldown in U.S. inflation and diffident growth outlooks have over the past month reopened the door to lowering interest rates, with now more than 91% of investors expecting the first 25 basis point cut at the Federal Reserve's Sept. 18 meeting, compared to less than 60% four weeks ago, according to CME's FedWatch Tool. The Bureau of Economic Analysis' first projection for second quarter GDP growth out Thursday and the June PCE price index scheduled for Friday release will help gauge future interest rate policy. Near 9:45 a.m. EDT, WTI futures for August delivery were trading near $79.39 barrel (bbl), down $0.74, and Brent for September delivery hovered around $81.84 bbl, down $0.79. RBOB and ULSD for August delivery dropped to $2.4276 gallon and $2.4052 gallon, respectively.

Oil drops as investors look past Biden exit, focus on weak fundamentals (Reuters) - Oil prices fell for a second consecutive session on Monday to their lowest level in over a month, as investors looked past U.S. President Joe Biden's decision to end his reelection bid and focused on rising stockpiles and signs of weak demand. Brent crude futures fell 23 cents, or 0.3%, to settle at $82.40 per barrel, the lowest since June 11. U.S. West Texas Intermediate crude futures for August delivery expired on Monday after falling 35 cents to $79.78 a barrel, also a one-month low. Biden ended his campaign on Sunday and endorsed Vice President Kamala Harris as the Democrat who should face Republican Donald Trump in the November election. Traders took Biden's decision in stride while shrugging off escalating tensions in the Middle East, U.S. fuel distributor TACenergy's trading desk wrote on Monday. Market participants were focusing on a weak technical outlook, ample inventories and soft demand, they wrote. While the oil market is visibly tight, it is expected to reach a balance by the fourth quarter and a surplus by next year, dragging Brent prices down to the mid-to-high $70s range in 2025, according to analysts at Morgan Stanley. Global petroleum inventories rose last week, according to a StoneX analysis. Total oil and refined products stockpiles are trending higher in all major trading hubs except Europe, StoneX analyst Alex Hodes noted. Energy policy will likely be a core debating point between Harris and Trump, but Citi analysts believe neither will promote policies that have an extreme effect on oil and gas operations as core positions. In the Middle East, Israeli fighter jets struck Houthi military targets near Yemen's Hodeidah port on Saturday, killing at least six people. The Houthis on Sunday told media that they will continue to attack Israel and not abide by any rules of engagement. Israel also sent tanks back into the greater Khan Younis area of Gaza, and at least 70 Palestinians were reported killed by Israeli fire, Gaza medics said on Monday. Elsewhere, top oil importer China surprised markets by lowering a key short-term policy interest rate and benchmark lending rates to boost its economy, but the move failed to support oil prices. "The Chinese interest rate cut has been too small to lift overall sentiment for crude oil,". The U.S. Federal Reserve will hold a policy meeting on July 30-31, with investors expecting it to keep rates steady, though there have been signs of a possible cut in September. "If we get an indication of a [near-term] rate cut, the Fed could be positive for risk sensitive assets like oil,

Expectations of a Ceasefire in Gaza Seemed to Outweigh the News of a Potential September Interest Rate Cut -- The oil market continued to trend lower as expectations of a ceasefire in Gaza seemed to outweigh the news of a potential September interest rate cut in the U.S. as well as in Europe and supply threats from Canadian wildfires. The market traded mostly sideways as the news of possible interest rate cuts in September helped support the market. It posted a high of $78.73 before it sold off and breached its previous low of $77.55. The market retraced more than 62% of its move from a low of $72.23 to a high of $83.58 as it sold off to a low of $76.40 by midday amid efforts to reach a ceasefire deal between Israel and Hamas. President Biden is expected to meet Israeli Prime Minister, Benjamin Netanyahu at the White House on Thursday and are expected to discuss ways to reach a ceasefire. The market later retraced some of its losses and traded in a sideways trading range. The September contract, in its first day as the spot contract, settled down $1.44 at $76.96, while the September Brent contract settled down $1.39 at $81.01. The product markets ended the session lower, with the heating oil market settling down 2.49 cents at $2.4099 and the RB market settling down 5.65 cents at $2.4141. Israeli Prime Minister Benjamin Netanyahu told families of hostages held in Gaza that a deal that would secure their release could be near, as fighting continued in the battered Palestinian enclave. Prime Minister Netanyahu is currently in Washington and is expected to meet U.S. President Joe Biden later this week after making an address to Congress. An Israeli negotiation team was due on Thursday to resume talks that would include hostages being released in return for Palestinian prisoners held in Israeli jails. In a week-long truce in November, 105 hostages were freed in return for 240 Palestinian prisoners. Russia’s Deputy Prime Minister, Alexander Novak, said the country’s oil production is close to the quotas agreed within the OPEC+ group of leading oil producers. He did not detail production data. Last month, Russia conceded that its oil production in May had exceeded quotas set by the OPEC+ group of major oil producing countries, while pledging to meet its obligations. Separately, Russian Deputy Prime Minister Alexander Novak said that Russia will reinstate a ban on gasoline exports from August 1st and that it is considering extending the restriction into the autumn. Goldman Sachs said Canada’s oil production has remained largely stable, but the risk that wildfires pose to the industry is increasing. It said the worst of the wildfire season is likely yet to come, and a third of Alberta wildfires are burning out of control, threatening 400,000 bpd of oilsands production. Suncor has been curtailing production in its over 200,000 bpd Firebag field for over two weeks and other producers started to evacuate non-essential workers from the most affected fields, while keeping production stable so far. Exxon Mobil said Monday its 251,800 b/d Joliet refinery was still awaiting power restoration at the refinery to assess damages after severe storms and a nearby tornado hit the region back on July 15th. Colonial Pipeline Co is allocating space for Cycle 43 shipments on Line 20, which carries distillates from Atlanta, Georgia to Nashville, Tennessee.

Oil prices fall 2% to six-week low on ceasefire talks, demand concerns (Reuters) - Oil prices fell about 2% to a six-week low on Tuesday on rising expectations of a ceasefire in Gaza and growing concerns about demand in China. Brent futures fell $1.39, or 1.7%, to settle at $81.01 a barrel, while U.S. West Texas Intermediate crude (WTI) closed $1.44, or 1.8%, lower at $76.96. That was the lowest closes for Brent and WTI since June 7 and pushed both benchmarks into technically oversold territory for the first time since early June. U.S. diesel futures also settled at their lowest since June 7, while gasoline futures closed at their lowest since June 14. In the Middle East, efforts to reach a ceasefire deal between Israel and militant group Hamas under a plan outlined by U.S. President Joe Biden in May and mediated by Egypt and Qatar, have gained momentum over the past month. Israeli Prime Minister Benjamin Netanyahu told families of hostages held in Gaza that a deal to secure their release could be near even asfighting raged in the Palestinian enclave.Biden is expected to meet Netanyahu on Thursday at the White House.The war in Gaza has lent support to oil futures as investors priced in the risk of potential disruptions to global crude supply in the key producing regions of the Middle East.United Nations Special Envoy to Yemen Hans Grundberg warned of a real danger of a devastating regional escalation following new Iran-backed Houthi attacks on commercial shipping and the first Israeli air strikes on Yemen in retaliation for Houthi drone and missile attacks on Israel.Palestinian factions including rivals Hamas and Fatah, meanwhile, agreed to end their divisions and form an interim national unity government during negotiations in China. "Ceasefire negotiations in the Middle East and an uncertain macroeconomic outlook in China are exerting downward pressure on oil prices this week," Also weighing on prices, the U.S. dollar strengthened to a nine-day high against a basket of other currencies. A stronger greenback makes oil more expensive in other countries, which can reduce demand for the fuel. Growing bets on interest rate cuts in September, however, could provide a floor to oil prices, as lower borrowing costs tend to support oil demand. European Central Bank Vice-President Luis de Guindos hinted at a possible interest rate cut in September, while in the U.S., investors are betting the Federal Reserve will cut interest rates in September. The Fed hiked rates aggressively in 2022 and 2023 to tame a surge in inflation. Higher interest rates increase borrowing costs for consumers and businesses, which can reduce economic growth and demand for oil. China surprised markets by cutting major short and long-term interest rates on Monday, its first such broad move since last August, signalling intent to boost growth in the world's second-largest economy. The market is looking for direction from weekly U.S. oil storage data from the American Petroleum Institute (API) trade group later on Tuesday and the U.S. Energy Information Administration (EIA) on Wednesday. Analysts projected U.S. energy firms pulled about 1.6 million barrels of crude out of storage during the week ended July 19. If correct, that would be the first time U.S. crude stocks declined for four weeks in a row since September 2023 and compares with a decrease of 600,000 barrels in the same week last year and an average decline of 1.8 million barrels over the past five years (2019-2023).

Oil Prices Rebound As API Reports Inventory Draw - Oil prices rose on Wednesday, snapping three straight sessions of declines after industry data showed a draw in U.S. inventories for a fourth consecutive week.Growing supply risks from wildfires in Canada also offered some support while the upside was capped by a firmer dollar, lingering concerns over top importer China and chatter over an Israel-Hamas ceasefire.Benchmark Brent crude futures jumped 0.7 percent to $81.61 a barrel, while WTI crude futures were up 0.9 percent at $77.62.Data from the American Petroleum Institute (API) showed U.S. crude oil inventories shrank by 3.9 million barrels (mb) in the week to July 19, as oil demand likely picked up with the travel-heavy summer season.Analysts had predicted a 700,000-barrel build for the week. The API report also showed draws in gasoline and distillate inventories, indicating strong demand in the world's largest fuel consumer.Official oil inventory data from the Energy Information Administration is due later in the session. Elsewhere, wildfires in Canada have forced some producers to curtail production and were threatening a large amount of supply, analysts said.

WTI Extends Gains After Across-The-Board Inventory Draws - Oil prices continued to drift higher, after finding technical support yesterday the 200DMA and also buoyed by across-the-board draws reported by API. API :

• Crude: -3.9M
• Cushing: -1.6M
• Gasoline: -2.8M
• Distillates: -1.5M

DOE;

• Crude: -3.74mm
• Cushing: -1.71mm
• Gasoline: -5.57mm - biggest draw since March
• Distillates: -2.75mm

The official data confirmed API's across-the-board draws with crude stocks down for 4 straight weeks and a large gasoline draw too.... The Biden admin added another 690k barrels to the SPR last week... US Crude production remains at record highs despite the rig count continuing to decline...WTI is extending gains on the draws and yesterday supportive bounce from the 200DMA...Over the past five years, crude prices have averaged monthly declines from August through November, he said. Oil benchmarks have been "dragged lower by renewed concerns over Chinese demand, given the absence of further economic support out of Beijing," said Tan.

The Oil Market Broke its Three Day Losing Streak in Light of the Supportive Oil Inventory Reports --The oil market on Wednesday posted an inside trading day and broke its three day losing streak in light of the supportive oil inventory reports. The crude market posted the day’s trading range following the release of the EIA’s weekly inventory report. The market traded to a low of $76.98 despite the larger than expected draws in stocks reported across the board by the EIA. However, the market later bounced off its low and rallied to a high of $78.19 by mid-day. The market later settled in a sideways trading pattern during the remainder of the session. The September WTI contract ended the session up 63 cents at $77.59, while the September Brent contract settled up 70 cents at $81.71. The product markets ended the session higher, with the heating oil market settling up 4.25 cents at $2.4524 and the RB market settling up 3.74 cents at $2.4515.The EIA reported that U.S. crude oil stocks fell for the fourth consecutive week, the longest declining streak since September 2023. It reported that U.S. gasoline demand increased to 9.46 million bpd in the week ending July 19^th, the most for this time of the year since 2021’s record high of over 10 million bpd. Product supplied of gasoline increased by 673,000 bpd on the week, the biggest weekly increase since November 2023. S&P Global Commodities at Sea estimates loadings of diesel for export to Europe have surged to record highs in July to 517,000 b/d, up from 330,000 loaded in June. Growth in U.S. diesel exports to Europe has come at a time that western sanctions have disrupted Russian gasoil shipments to Europe but also Saudi exports to Europe have dropped off significantly in June and July.IIR Energy reported that U.S. oil refiners are expected to shut in about 671,000 bpd of capacity in the week ending July 26^th, cutting available refining capacity by 12,000 bpd. Offline capacity is expected to fall to 504,000 bpd in the week ending August 2^nd. Colonial Pipeline Co is allocating space for Cycle 44 shipments on Line 1, its main gasoline line from Houston, Texas to Greensboro, North Carolina. The current allocation is for the pipeline segment north of Collins, Mississippi.The OPEC Secretariat said it had received a plan from Iraq to make up for overproduction in the first half of the year and said it would offset it by September 2025. OPEC said Iraq’s overproduced volumes between January and June totaled about 1.184 million bpd.Russian crude oil production in June exceeded quotas set by the OPEC+ group. However, Russia’s Energy Ministry pledged on Wednesday to stick to the required output level in July. Russia’s cumulative oil overproduction in January-June this year stood at 480,000 bpd under the OPEC+ deal and the country has pledged to offset the majority of the excess output next year. According to OPEC, Russia would offset 40,000 bpd of oil overproduction in October-November 2024, while 440,000 bpd of excess output will be offset in March-September 2025.OPEC also reported that it received a plan from Kazakhstan to make up for the country’s overproduction in the first six months of the year. The country overproduced 620,000 bpd between January and June.

US crude oil prices retreat amid doubts about further stock draw: Kemp - U.S. crude oil inventories have depleted faster than normal over the last four weeks – squeezing hedge funds running short positions, keeping spot prices firm and the futures curve in a steep backwardation. But with most short positions now repurchased this source of support has melted away and both spot prices and calendar spreads have retreated in recent trading sessions. Commercial crude inventories across the United States depleted by 24 million barrels between June 21 and July 19, according to the Energy Information Administration (EIA). Crude inventories normally deplete at this time of year as refineries ramp up processing to meet demand for gasoline during the summer holiday driving season. But the drawdown in crude stocks this year has been more than twice as fast as the average over the previous ten years. As a result, crude inventories were 8 million barrels (-2% or -0.15 standard deviations) below the seasonal average on July 19. The draw more than eliminated a surplus of 6 million barrels (+1% or +0.12 standard deviations) four weeks earlier. Most of the stocks were taken from refineries and tank farms along the Gulf of Mexico (-17 million barrels) and around the delivery point for the NYMEX WTI futures contract at Cushing in Oklahoma (-3 million). The Gulf Coast and the Cushing hub are the parts of the U.S. petroleum refining system most closely integrated with international markets. The drawdown more than halved the seasonal surplus on the Gulf Coast to 11 million barrels (+5% or +0.34 standard deviations) from 25 million barrels (+10% or +0.79 standard deviations) four weeks earlier. And it slightly widened the deficit at Cushing to 11 million barrels (-26% or -0.69 standard deviations) from 10 million barrels (-22% or -0.66 standard deviations). The depletion of crude stocks has been accompanied by an influx of investment money into futures contracts based on U.S. crude prices anticipating a further increase in prices. Hedge funds and other money managers purchased the equivalent of 79 million barrels of futures and options in the NYMEX and ICE WTI contracts over the four weeks ending on July 16. Purchases were faster than for Brent, where fund managers bought the equivalent of 44 million barrels, according to records filed with regulators and exchanges. In consequence, fund managers had amassed a combined position of 239 million barrels (48th percentile for all weeks since 2013) in WTI compared with only 184 million (33rd percentile) in Brent. The number of hedge fund short positions betting on a fall in WTI prices had been squeezed down to just 21 million barrels on July 16 from 41 million four weeks earlier and as many as 96 million in early May. Inventory depletion and the associated short squeeze have forced the NYMEX WTI futures curve into a relatively steep backwardation. The three-month calendar spread has been in an average backwardation of almost $3 per barrel so far in July compared with less than $1.50 in May. Even so, the fund buying and backwardation have looked a little overdone given the relatively moderate stock depletion so far and the limited rise in spot prices. Cushing inventories 20% below the seasonal average have been associated with much narrower backwardations in the past making the market look a bit overheated. Similarly, backwardations of this scale would normally be associated with a rising spot price trend; instead prices have fallen slightly compared with three months ago. Perhaps traders anticipate a deliberate raid on deliverable inventories at Cushing in the next few weeks – reprising the drawdown between July and September 2023. The squeeze on Cushing inventories in the third quarter of 2023 sent spot prices surging to almost $94 per barrel and the backwardation flying to more than $6. Perhaps they also anticipate U.S. crude production will be disrupted by the forecast for an unusually large number of hurricanes of higher-than-normal intensity. Since the start of June, traders have been positioning themselves for a relatively large depletion of global petroleum inventories over the third quarter. But doubts about another physical and futures squeeze seem to have crept in, with spot prices and spreads falling to multi-week lows in recent trading sessions. Hedge fund short positions in NYMEX WTI have already been reduced close to the lowest level over the last decade so there is not much scope to squeeze them further. Short positions are just 6 million barrels above the lowest-ever level since 2013, removing one of the major supports for prices and spreads. U.S. oil prices are unlikely to rebound much in the next two months – unless there is another depletion of deliverable supplies at Cushing and a broader drawdown on the Gulf Coast.

Oil Prices Tank on Fears China’s Rate Cuts Herald Demand Weakness -- Oil prices were trading down nearly 2% in early-morning trading on Thursday, with markets attempting to digest the impact of lagging Chinese consumption on other positive U.S. inventory reports against the backdrop of another interest rate cut by Beijing. At 6:50 a.m. ET on Thursday, Brent crude was trading down 1.77% at $80.26, while the U.S. benchmark, West Texas Intermediate (WTI), was trading down 1.80% at $76.19. Though this week saw another big U.S. crude inventory draw reported by the Energy Information Administration (EIA), the market remains focused today on the global economic outlook and China demand. Refinery margins worldwide are also taking a hit, with big refiners lining up ahead of earnings reports to warn investors of a weak Q2 earnings season. Throughout the year, China has seen crude oil imports on a downward trend, with refinery runs also trending lower, year-on-year, suggesting sustained economic growth weakness. On Thursday, China’s central bank cut interest rates again, lending more concern to analyst fears that demand is shrinking. The People’s Bank of China slashed rates from 2.5% to 2.3% on Thursday in a surprise move that is being interpreted as a response to weak economic growth. Also potentially weighing on prices is Wednesday’s news that Russia, Kazakhstan, and Iraq have established clear plans to compensate for overproduction to raise compliance with OPEC+ output cuts.According to OPEC, the entire over-produced volumes will be fully compensated for over the next 15 months through September 2025, with Russia ‘paying back’ a cumulative 480 kb/d, Iraq 1,184 kb/d, and Kazakhstan 620 kb/d.Earlier this week, Exxon, Shell, and BP warned of flagging refining margins that will be reflected in Q2 earnings. On Thursday, European refiners French TotalEnergies and Neste also warned of sluggish demand and profit margin weakness. Earlier on Thursday, TotalEnergies reported a 34% drop in operating income for the quarter for its refining and chemicals arms.

Oil prices end higher on pause in risk-asset selloff - WTI and Brent oil move up after tapping lowest prices in over 6 weeks. Oil futures settled higher Thursday, with U.S. and global benchmark prices rebounding from their lowest prices in more than six weeks and supported by a similar rise in other risk assets after a recent slump. Oil prices had been pressured in early dealings after China's central bank delivered another cut to interest rates, underlining worries about demand from the world's second-largest crude consumer. West Texas Intermediate crude CL00 for September delivery CL.1 CLU24 tacked on 69 cents, or 0.9%, to settle at $78.28 a barrel on the New York Mercantile Exchange. Prices touched a low of $76.04, the lowest since June 10, FactSet data show.September Brent crude BRNU24, the global benchmark, climbed 66 cents, or 0.8%, at $82.37 a barrel on ICE Futures Europe. The more actively traded October contract BRN00 BRNV24 added 57 cents, or 0.7%, to $81.39 a barrel.August gasoline RBQ24 edged up 0.7% to $2.47 a gallon, while August heating oil HOQ24 climbed by 0.8% to $2.47 a gallon.Natural gas for August delivery NGQ24 settled at $2.04 per million British thermal units, down 3.6%."We never bought into the [early] decline today, and have been upping our positions," said Manish Raj, managing director at Velandera Energy Partners. "When oil markets diverge from fundamentals and blindly follow the broader markets instead, we chose the other way."Early Thursday, Raj had said oil's price decline was primarily "in sympathy with the broader market sentiment." When traders are "taking chips off the table, they avoid all risk assets, with oil and gold being no exceptions."On Wednesday, U.S. stocks saw their worst decline sine 2022, but they were moving higher in Thursday's trading.Meanwhile, the People's Bank of China surprised market participants Thursday by cutting the rate on its medium-term lending facility, or MLF, to 2.3% from 2.5%.When it comes to oil, "China remains a wildcard and its sentiment hard to tame," said Raj. "Chinese demand signals aren't weak, but there is a lot of noise on how to synthesize the demand story there."The central bank's move comes after it unexpectedly lowered its seven-day reverse-repo rate on Monday. Both moves appear to have stoked concerns about the underlying strength of China's economy."These announcements could be part of the plan agreed at the recent plenary session meeting of the 20th National Congress of the Communist Party of China, but the market is clearly worried whether these actions can successfully treat the housing-sector issues" that have plagued the country's economy, Brent and WTI bounced off of six-week lows in Wednesday's session, boosted by Energy Information Administration data that showed larger-than-expected declines in U.S. crude and gasoline inventories last week. Crude was also left technically oversold by its recent retreat.On Nymex, prices for natural gas continued to decline, settling with a nearly 4% loss, after the EIA reported Thursday an increase of 22 billion cubic feet in domestic supplies for the week ended July 19.Analysts had forecast an increase of 19 bcf, according to a survey conducted by the Wall Street Journal.

Oil edges higher on upbeat US economic data (Reuters) - Oil prices settled higher on Thursday after strong U.S. economic data stoked expectations for higher crude demand, but the gains were limited by concerns about lower oil imports from China. Brent crude futures for September settled up 66 cents, or 0.81%, to $82.37 a barrel. U.S. West Texas Intermediate crude for September gained 69 cents, or 0.89%, to $78.28. U.S. Commerce Department data on Thursday showed the U.S. economy grew faster than expected in the second quarter while inflation eased, boosting expectations the Federal Reserve would lower interest rates in September. Lower interest rates are expected to stir economic activity, which could increase oil consumption. "The U.S. GDP data implied the economy is humming along in a pretty nice rate," s "It's an indication that we're going to have a 'soft landing,'" he said, referring to a scenario in which inflation is tamed without triggering a painful recession or large rise in unemployment. In China, oil imports and refinery runs this year have trended lower than in 2023 on weaker fuel demand amid sluggish economic growth, government data showed. "While Chinese economic data remains disappointing, we are starting to see larger oil inventory draws, which suggests supply growth lags demand growth," Earlier on Thursday, China's central bank unexpectedly cut interest rates in a move to shore up its weakening economy. Both crude oil benchmarks fell by more than $1 per barrel earlier in the session. In Canada, hundreds of wildfires are burning in the western provinces of British Columbia and Alberta, including in the area of oil sands hub Fort McMurray. The area is forecast to receive some rain later this week, allaying supply worries. The hub produces 3.3 million barrels per day of crude. Elsewhere, efforts to reach a ceasefire deal to end the war in Gaza between Israel and militant group Hamas have gained momentum over the past month. A breakthrough could erode lingering threats to supply, sending prices lower. "With continued, and according to some sources, conciliatory developments in Gaza peace talks, oil prices are finding it increasingly hard to hang on to intermittent rallies," Israeli forces, however, advanced deeper into some towns on the eastern side of Khan Younis in southern Gaza on Thursday, hours after Israeli Prime Minister Benjamin Netanyahu told U.S. lawmakers he was actively engaged in bringing hostages home.

Oil prices rise on signs of increased US demand --Oil prices rose on Friday, driven by stronger-than-expected US economic growth, signalling greater oil demand, reported Anadolu. International benchmark Brent crude traded at US$82.49 per barrel at 09.32 am local time (0632 GMT), an increase of 0.15 per cent from the closing price of US$82.37 per barrel in the previous trading session. The American benchmark West Texas Intermediate (WTI) traded at US$78.39 per barrel at the same time, a 0.14 per cent rise from the previous session that closed at US$78.28 per barrel. The US economy expanded 2.8 per cent in the second quarter of 2024, according to the Commerce Department’s first advance reading released Thursday. The figure came much higher than market estimates of 2 per cent. The American economy expanded by 1.4 per cent in the first quarter of 2024. The current dollar GDP increased 5.2 per cent at an annual rate, or US$360 billion, in the second quarter to reach US$28.63 trillion, the Commerce Department said in a statement. In the first quarter, GDP rose 4.5 per cent, or US$312.2 billion, it added. The data also sparked increased optimism over a potential interest rate cut by the US Federal Reserve in September. However, gains were weak as prices continued to be depressed by slower-than-expected economic growth data in China. China’s gross domestic product (GDP) rose by 4.7 per cent in the second quarter of 2024, below market expectations, according to official data. The data prompted concerns about oil demand in the world’s largest crude oil importer. Demand worries were also supported by figures showing a softness in oil imports. Uncertainty over the country’s oil demand fuels market players’ fears that imp

Oil falls 1.5%, ends week lower on China demand fears (Reuters) - Oil futures fell about 1.5% on Friday, finishing the week lower on declining Chinese demand and hopes of a Gaza ceasefire agreement that could ease Middle East tensions and accompanying supply concerns. Brent crude settled down $1.24, or 1.5%, at $81.13 a barrel. West Texas Intermediate crude ended $1.12, or 1.4%, lower at $77.16 a barrel. For the week, Brent was trading down more than 1% while WTI fell beyond 3%. "Yesterday’s better-than-expected U.S. GDP growth figures initially supported the crude market," . "However, these gains were overshadowed by concerns about declining Chinese oil demand." Data released last week showing that China's total fuel oil imports, opens new tab dropped 11% in the first half of 2024 have raised concern about the wider demand outlook in China. "The Chinese demand situation is going down the tubes here and crude oil prices are going down with it," China's economy, opens new tab is threatening to enter a deflationary cycle, where prices will fall because of falling demand, Yawger said. "And that is about the worst possible scenario for a country that is the largest importer of crude oil on the planet," he said. Meanwhile, demand from the world's top oil consumer was also expected to ease as U.S. refiners are preparing to cut back production as the end of the summer driving season in early September nears. The nation's second largest refiner, Valero Energy, said on Thursday its 14 refineries would run at 92% of combined capacity in the third quarter. Valero's refineries ran at 94% in the second quarter. In the Middle East, hopes of a ceasefire in Gaza have been gaining momentum. A ceasefire has been the subject of negotiations for months, but U.S. officials believe the parties are closer than ever to an agreement for a six-week ceasefire in exchange for the release by Hamas of female, sick, elderly and wounded hostages. Baker Hughes' count of U.S. oil drilling rigs, an early indicator of future output, increased by five to 482 this week and by three in July, raising the number of rigs for the first month since March.

Oil prices in third weekly plunge as demand concerns bite - Oil prices settled lower Friday, suffering a third consecutive losing week as concerns over sluggish demand conditions in China dented sentiment. At 14:30 ET (18:30 GMT), Brent oil futures fell 2% to $80.70 barrel, and West Texas Intermediate crude futures dropped 1.4% to $77.16 a barrel.The third losing week for oil prices was driven by ongoing concerns over slowing growth and weaker demand from top importer China as data showed the country's apparent oil demand fell 8.1% to 13.66 million barrels per day in June.The persist growth concerns in China follow a weaker GDP print last week showing its economy grew less than expected in the second quarter.Beijing attempted to arrest worries about stumbling growth by unexpectedly cutting a swathe of lending rates this week, but that has done little to lift sentiment.Apart from China, uncertainty over Japan also grew following middling inflation data from Tokyo, while weak activity data in Europe also pointed to economic woes. Also weighing on the crude market have been increasing hopes of a ceasefire in Gaza.The leaders of Australia, New Zealand and Canada called for an immediate ceasefire in a joint statement on Friday, while U.S. Vice President Kamala Harris has pressed Israeli Prime Minister Benjamin Netanyahu to help efforts at reaching a deal, striking a tougher tone than President Joe Biden.A ceasefire has been talked about for months, but if it was to occur then some of the risk premium could be removed from the market.The downside in oil prices was limited somewhat by stronger data out of the U.S. showing better-than-expected Q2 growth and cooler inflation, stoking investor optimism on a soft landing and sooner rate cuts. According to data from the Bureau of Economic Analysis, the personal consumption expenditures (PCE) price index slipped to 2.5% in June, from 2.6% the prior month. .On the domestic demand front, meanwhile, data showing steady drawdowns in U.S. oil inventoriesalso offered some positive cues to oil markets, as fuel demand in the country remained robust amid the travel-heavy summer season. In sign of pick in drilling activity, oilfield services firm Baker Hughes on Friday reported its weekly U.S. rig count climbed to 482 from 477.

Yemen's Houthis Claim Deadly Tel Aviv Drone Attack - At least one person was killed and several others injured in a drone strike on Tel Aviv early Friday morning. Yemen’s ruling Houthi government claimed responsibility for the blast, saying a new weapon was used in the operation.A spokesman for the Houthis’ military wing, Yahya Saree, announced the attack in a televised statement later on Friday. Saree said the drone mission utilized a new unmanned weapon dubbed the “Yaffa” and “successfully achieved its goals.” The Houthis had previouslyacknowledged a “qualitative operation” targeting Tel Aviv.“A state of confusion prevailed among the enemy authorities following the attack,” Houthi-linked media reported, adding that Israel’s “Iron Dome systems were unable to detect the drone until after reports from settlers about an explosion in the middle of the capital of the enemy entity.”The exact type of drone used remains unclear, though Reuters cited an unnamed Israeli military official who described a “large UAV that can fly large distances.”The Israel Defense Forces (IDF) later claimed that an “Iranian drone, believed to have been launched from Yemen,” had crossed into Israeli territory and “hit a residential building downtown,” per Daniel Hagari, IDF spokesman. Hagari noted one fatality and at least “eight others” wounded.The Times of Israel clarified that four of those hospitalized were treated for “anxiety,” while four others sustained injuries.

Middle East Heating Up: Increased Hezbollah, Houthi Attacks on Israel after Israel Strike on Yemen Port, by Yves Smith - The intensification of Hezbollah’s and Yemen’s strikes against Israel feels like more than just a short-term uptick, but we’ll have to follow the pace over the upcoming week or more to be sure. But on the surface, it looks as if the Houthi and Hezbollah are ratcheting up their operations to a degree that this new campaign has good odds of being sustained. For quick confirmation, see these news updates from The Hindustan and Times of India, both reputable outlets:There appear to be additional Hezbollah strikes since the time of those videos: The proximate cause of the Hezbollah strikes, as the Hindustan Times confirms in its segment headline above, is retaliation for the Israeli response against a Houthi drone attack on Tel Aviv last Friday. That was clearly a significant escalation from Israel’s perspective. It destroyed a house and resulted in a fatality.The National, in Israel and Yemen braced for wider war after escalation of hostilities, recaps the Israel response of striking a Yemen port city, which among other things blew up fuel storage tanks. That port also receives humanitarian aid, and many reports singled out Israel as also intending to curb food supplies to Yemen, which has suffered from both food shortages and outbreaks of cholera during its war with the Saudis.From the National:Houthi-controlled areas were bracing for the prospect of regular missile, drone and aerial attacks on Sunday, after the first Israeli air strikes in Yemen since the war in Gaza started.Residents of Houthi-controlled Hodeidah woke up to palls of black smoke over their port city, while in Eilat, Israel, air-raid sirens sounded.Both Yemenis and Israelis are now facing a wider war between the two countries.A resident of Hodeidah told The National the entire city was engulfed in smoke, the density of which increased closer to the port hours after Israel’s counter-strike on Saturday. The attacks left fuel depots blazing, turning parts of the horizon fiery red and black.One might wonder why Ansar Allah decided to attack Tel Aviv when it did, which was pretty much guaranteed to elicit Israel lashing back. I don’t think one has to look further than, “Because it could.”The Houthis are set on punishing Israel and any sea carriers it reaches until Israel stops its genocide in Gaza, which Israel is absolutely determined to continue. The Houthis have been implementing new strategies with increasing success, such as low tech gambits like sending unmanned boats full of explosives into ships. But it has also been claiming to be upping its rocket game with new weapons. Whether they are indigenous or supplied by friends seems unimportant compared to the result, that the Houthis can and are inflicting more pain on Israel. We have the question of why Hezbollah decided to up the ante now, particularly with Netanyahu appearing before Congress this week. Hezbollah increasing its attacks would seem to play directly into Netanyahu demanding US assistance.But none other than the head of the Joint Chiefs, Charles Brown, has already told Israel that the US can do little to help. From the Jerusalem Times in late June: Joint Chiefs of Staff head Charles Q. Brown warned on Monday that the US may not be able to help defend Israel against an all-out war with Hezbollah in the same way that it stepped in during the Iran drone attack in April.That remark is even more fraught with meaning than it might appear.In the armed exchange Brown is describing, Israel first hit an Iranian embassy compound in Beirut, killing seven officials, including a top member of Iran’s Revolutionary Guard.Iran and the US then effectively negotiated what the US presumed would be a face-saving retaliation. Iran would target only specified military sites. In other words, Israel and the US had full notice of what to expect.The US further underscored its message to Israel that “There’s really not much we can do” by asking Israel to ship eight Patriot systems to Ukraine, and also by telling all Patriot users that Ukraine was getting top priority in new missile deliveries. Even if the US and Israel both knew those systems were mothballed, Israel might still want them as backups or for parts. And the message about not being in the front of the line for new Patriot missiles was hard to misconstrue.

Houthi Leader Says Yemen 'Pleased To Be in Direct Confrontation' With Israel - On Sunday, Houthi leader Abdul-Malik al-Houthi said Yemenis were “pleased to be in a direct confrontation” with Israel and vowed to hit back hard at the Israeli bombing of Yemen’s Red Sea port of Hodeidah.“Yemeni people are pleased to be in direct confrontation with the Israeli enemy, and they are steadfast and brave people,” al-Houthi said, according to Iran’s Press TV.Israel bombed fuel depots in Hodeidah on Saturday following the Houthi drone attack on Tel Aviv that killed one person. Yemeni health authorities said the Israeli strikes killed at least six people and wounded 83, many with severe burns, as the attack caused a massive fire.Al-Houthi said that Israel’s attack “was aimed at Yemen’s economy” since the port of Hodeidah is a vital entry point for fuel and humanitarian aid. Since 2015, Yemen has been under a US-backed Saudi blockade, which has been eased but not fully lifted.Al-Houthi noted that the US and British bombing campaign in Yemen had done nothing to deter Houthi attacks on Israel-linked and other commercial shipping in the Red Sea, the Gulf of Aden, and beyond. The Houthis, officially known as Ansar Allah, have made clear they would only end their attacks if Israel’s genocidal siege on Gaza came to an end.Also on Sunday, the Houthi military spokesman Yahya Sarea said Yemen’s “response to the Israeli aggression against our country is inevitably coming and will be huge.”Israeli officials said a missile fired from Yemen toward the Israeli port of Eilat had been intercepted. Over the past nine months, the Houthis have fired hundreds of drones and missiles toward Israel, but most were intercepted by US warships in the Red Sea. The attack on Tel Aviv was notable since it was a longer range than other attacks. Israeli officials said it traveled through Egypt and targeted Tel Aviv from the Mediterranean Sea.

Israel Launches New Assault on Khan Younis, Kills 70 Palestinians - On Monday, the Israeli military launched a new assault on the southern Gaza city of Khan Younis and ordered the evacuation of an area where 400,000 Palestinians were sheltering.According to the Palestinian news agency WAFA, a heavy assault began almost immediately after the evacuation order, giving Palestinians on the ground no time to prepare and forcing them to flee under fire.Gaza’s Health Ministry said the Israeli air and ground assault killed at least 70 Palestinians. “Due to the Israeli occupation’s attacks and massacres in Khan Younis governorate from the early hours of this morning until now, 70 people have been martyred and more than 200 wounded,” the ministry said, according to Al Jazeera.The ministry said the dead included women and children. “We are tired. We are tired in Gaza. Every day our children are martyred – every day, every moment,” Ahmed Sammour, who lost family members in the Israeli attack, told Reuters. “No one told us to evacuate. They brought four floors crashing down on civilians, … and the bodies they could reach, they brought to the refrigerator [morgue].” The IDF evacuation order covered some areas that were previously declared so-called “safe zones.” Such areas have been bombed by the IDF throughout the genocidal assault on Gaza, including the al-Mawasi camp, part of which was ordered to be evacuated on Monday.According to the UN, about 1.9 million Palestinians, or nine in 10 people, have been internally displaced in Gaza. Some Palestinians have been displaced up to 10 times due to Israeli attacks.Gaza’s Health Ministry also said on Monday that the death toll has crossed 39,000, a number that’s considered a low estimate since it doesn’t account for the estimated 10,000 people who are missing and presumed dead under the rubble. Others have died due to malnutrition, disease, and other health complications caused by the Israeli siege.

Israel Delays Sending a Delegation to Qatar for Hostage Talks - Israel has postponed the planned departure of a delegation to Qatar for negotiations on a potential ceasefire deal with Hamas, angering family members of Israeli hostages who remain in Gaza. The delegation was set to travel on Thursday but now won’t be sent until next week.An Israeli official told Haaretz that a delegation would not be sent until at least after Israeli Prime Minister Benjamin Netanyahu held a meeting with President Biden at the White House on Thursday.Einav Zangauker, the mother of hostage Matan Zangauker, slammed Netanyahu for the delay. “Instead of proclaiming before Congress that he accepts the deal on the table, Netanyahu is stopping the deal from going ahead for personal reasons,” she said.In his address to Congress, Netanyahu claimed he was working toward a hostage deal, but it’s been widely acknowledged by Israeli officials and media reports that he’s been the one standing in the way of an agreement. Zangauker said Netanyahu was afraid of National Security Minister Itamar Ben Gvir, who has threatened to quit the coalition government if a deal is reached with Hamas.“It is unimaginable that even today, nine months after the failure, the life of his coalition is more important than the lives of Matan and the other hostages abandoned by him,” she said.Once they do head to Qatar, the Israeli negotiators are expected to present a proposal that includes new demands from Netanyahu, which he has made public in recent weeks. After Hamas made a significant concession by agreeing to language Israel didn’t think would commit it to a permanent ceasefire, Netanyahu demanded Israel maintain control of the Gaza-Egypt border and screen Palestinians returning to north Gaza.