US oil prices rose for the first time in five weeks on increasing violence in the Middle East, and on the sixth straight weekly drawdown of US oil inventories….after falling 4.7% to six month weekly closing low of $73.52 a barrel last week due to weak economic data from the US and China, the contract price for the benchmark US light sweet crude for September delivery moved lower on global markets on Monday driven by fears of an impending recession in the United States, then tumbled to as low as $71.69 during the New York session, its lowest price of this year, before partly recovering to settle down 58 cents at a new 6 month low of $72.94 a barrel, as a global stock market selloff offset rising Middle East tensions…however, oil prices rose more than $1 in early Asian trade on Tuesday, as concerns that an escalating Middle East conflict could hit supplies outweighed fears of a possible U.S. recession, then erased its gains and traded mostly sideways in New York before settling 26 cents higher at $73.20 a barrel, as traders turned their attention to supply tightness and as financial markets recovered from Monday’s selloff….oil prices slumped to a low of $72.58 in overnight trading after the American Petroleum Institute reported unexpected builds in crude and gasoline supplies, but bounced off that low and retraced the previous losses after the EIA reported a larger than expected draw from crude supplies, then rallied to settle $2.03 higher at $75.23 per barred on rising demand for oil and a strengthening U.S. dollar, after Citi Research said oil prices could rise to the low-to-mid-$80's….oil prices were mixed in early overseas trading Thursday, with growing supply risks in the Middle East offsetting the demand concerns that had pushed prices to their lowest since early tis year at the start of the week, but rallied during the New York trading session to settle up 96 cents, or 1.28%, at $76.19 a barrel after U.S. jobless claims data eased economic concerns, and war in the Middle East helped prices recover…oil prices were flat in Asian trading Friday, after data showed Chinese consumer price inflation grew more than expected in July, while a decline in producer price inflation was slightly less than expected, but moved up again in New York to settle 65 cents higher at $76.84 a barrel as positive economic data and signals from Fed policymakers that they could cut interest rates as early as September eased demand concerns, while fears of a widening Middle East conflict continue to raise supply risks, and thus finished 4.5% higher for the week…
meanwhile, natural gas prices rose for the first time in the past four weeks on lower production from shut-in gas wells and on another bullish storage report….after falling 4.1% to a four month low of $1.967 per mmBTU last week as the glut of natural gas in storage offset record heat and increased LNG demand, the price of the contract for natural gas for September delivery opened six cents lower on Monday, as forecasts turned bearish and Hurricane Debby was expected to dampen cooling demand, but partly recovered to settle 2.5 cents lower at $1.942 per mmBTU, after the U.S. Energy Information Administration projected the national benchmark’s natural gas spot price would average at about $2.60 per mmBTU for the final five months of the year…natural gas prices opened up three cents on Tuesday and moved higher, as analysts pointed to technical trading and changing forecasts related to the former Hurricane Debby for the morning’s volatility, then stabilized to settle 6.8 cents higher at $2.010 per mmBTU, as lighter production readings and mild impacts from remnants of former Hurricane Debby provided the catalyst for a relief rally…natural gas prices opened nine cents higher on Wednesday, as traders judged prices had drifted into oversold territory, and settled 10.2 cents higher at $2.112 per mmBTU, supported by a production slowdown and expectations of a light summer storage print on Thursday….however, natural gas prices opened lower Thursday and traded as low as $2.028 ahead of the weekly storage report, before rallying on the report's bullish-leaning storage injection and on a reduction in production due to maintenance to settle 1.5 cents higher at $2.127 per mmBTU, as the relatively lean storage data signaled that production levels might be running lower than had been expected…natural gas futures forged ahead through midday on Friday, but pulled back to near even by early afternoon as weakness in West Texas pressured spot prices lower, before settling 1.6 cents higher at $2.143 per mmBTU as maintenance projects curbed production, reversing its jump to a five-month high in the previous week, and left September contract prices with a 8.9% gain for the week
The EIA’s natural gas storage report for the week ending August 2nd indicated that the amount of working natural gas held in underground storage rose by 21 billion cubic feet to 3,270 billion cubic feet by the end of the week, which left our natural gas supplies 248 billion cubic feet, or 8.2% above the 3,022 billion cubic feet that were in storage on August 2nd of last year, and 424 billion cubic feet, or 14.9% more than the five-year average of 2,846 billion cubic feet of natural gas that had typically been in working storage as of the 2nd of August over the most recent five years…the 21 billion cubic foot addition to US natural gas working storage for the cited week was below the 30 billion cubic foot average addition to storage that the market was expecting, and also less than the 25 billion cubic feet that were added to natural gas storage during the corresponding week in August 2023, and much less than the average 38 billion cubic foot injection into natural gas storage that had 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 August 2nd indicated that even after a big drop in our oil exports, we still had to pull oil out of our stored commercial crude supplies for the sixth week in a row, and for the 19th time in the past 34 weeks, essentially due to an increase in demand for oil that the EIA could not account for....Our imports of crude oil fell by an average of 729,000 barrels per day to 2,586,000 barrels per day, after rising by an average of 62,000 barrels per day over the prior week, while our exports of crude oil fell by 1,281,000 barrels per day to 3,638,000 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 2,586,000 barrels of oil per day during the week ending August 2nd, 552,000 more barrels per day than the net of our imports minus our exports during the prior week. At the same time, transfers to our oil supply from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils averaged 517,000 barrels per day, while during the same week, production of crude from US wells was 100,000 barrels per day higher at a record 13,400,000 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 16,503,000 barrels per day during the August 2nd reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,402,000 barrels of crude per day during the week ending August 2nd, an average of 252,000 more barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that a net average of 427,000 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 August 2nd averaged a rounded 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… But 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” demand, 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 427,000 barrel per day decrease in our overall crude oil inventories came as an average of 533,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while an average of 105,000 barrels per day were being added to our Strategic Petroleum Reserve, the thirty-fifth SPR increase in the past forty-two 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 fell to 6,772,000 barrels per day last week, which was 0.7% more than the 6,723,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day higher at a record 13,400,000 barrels per day because the EIA’s rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 13,000,000 barrels per day, while Alaska’s oil production was 19,000 barrels per day higher at 415,000 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 2.3% higher than that of our pre-pandemic production peak, and it’s also 38.1% 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 90.5% of their capacity while processing those 16,402,000 barrels of crude per day during the week ending August 2nd, up from their 90.1% utilization rate of a week earlier, but still well below normal utilization for mid-summer… the 16,402,000 barrels of oil per day that were refined this week were 1.1% less than the 16,579,000 barrels of crude that were being processed daily during week ending August 4th of 2023, and 7.7% less than the 17,777,000 barrels that were being refined during the prepandemic week ending July 26th, 2019, when our refinery utilization rate was at a prepandemic normal 96.4% for August…
With the increase in the amount of oil being refined this week, gasoline output from our refineries was also higher, increasing by 32,000 barrels per day to 10,040,000 barrels per day during the week ending August 2nd, after our refineries’ gasoline output had decreased by 205,000 barrels per day during the prior week.. This week’s gasoline production was 1.2% more than the 9,921,000 barrels of gasoline that were being produced daily over week ending August 4th of last year, but was 3.7% less than the gasoline production of 10,421,000 barrels per day during the prepandemic week ending August 2nd, 2019…. at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 56,000 barrels per day to 4,980,000 barrels per day, after our distillates output had increased by 34,000 barrels per day during the prior week. After sixteen production increases in the past twenty-three weeks, our distillates output was 2.5% more than the 4,911,000 barrels of distillates that were being produced daily during the week ending July 28th of 2023, but was still 4.7% less than the 5,286,000 barrels of distillates that were being produced daily during the week ending August 2nd, 2019…
With this week’s increase in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the 10th time in twenty-seven weeks, increasing by 1,340,000 barrels to 225,097,000 barrels during the week ending August 2nd, after our gasoline inventories had decreased by 3,665,000 barrels to an eight month low during the prior week. Our gasoline supplies rose this week because the amount of gasoline supplied to US users fell by 283,000 barrels per day to 8,967,000 barrels per day, and because our exports of gasoline fell by 108,000 barrels per day to 899,000 barrels per day, and even while our imports of gasoline fell by 287,000 barrels per day to 630,000 barrels per day.…Even after seventeen gasoline inventory withdrawals over the past twenty-seven weeks, our gasoline supplies are still 4.0% above last August 4th’s gasoline inventories of 216,420,000 barrels, but are now about 2% below the five year average of our gasoline supplies for this time of the year…
With this week’s increase in our distillates production, our supplies of distillate fuels rose for the 12th time in twenty-eight weeks, increasing by 1,534,000 barrels to 126,847,000 barrels over the week ending August 2nd, after our distillates supplies had increased by 1,534,000 barrels during the prior week. Our distillates supplies increased by less this week because our exports of distillates rose by 371,000 barrels per day to 1,546,000 barrels per day, while our imports of distillates fell by 25,000 barrels per day to 140,000 barrels per day, and even as the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 256,000 barrels per day to 3,469,000 barrels per day....Even with 16 inventory withdrawals over the past 29 weeks, our distillates supplies at the end of the week were 10.7% above the 115,447,000 barrels of distillates that we had in storage on August 4th of 2023, but are still about 6% below the five year average of our distillates inventories for this time of the year…
Finally, even after this week’s big decrease in our oil exports, our commercial supplies of crude oil in storage fell for the 16th time in twenty-six weeks, and for the 29th time in the past year, decreasing by 3,728,000 barrels over the week, from 433,049,000 barrels on July 26th to a 26 week low of 429,321,000 barrels on August 2nd , after our commercial crude supplies had decreased by 3,436,000 barrels over the prior week… With this week’s decrease, our commercial crude oil inventories were about 6% below the most recent five-year average of commercial oil supplies for this time of year, while they were still about 27% above the average of our available crude oil stocks as of the first weekend of August 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 August 2nd were 3.7% less than the 445,622,000 barrels of oil left in commercial storage on August 4th of 2023, and 0.6% less than the 432,010,000 barrels of oil that we had in storage on August 5th of 2022, and 2.2% less than the 438,777,000 barrels of oil we had left in commercial storage on August 6th 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 August 9th, the second column shows the change in the number of working rigs between last week’s count (August 2nd) and this week’s (August 9th) count, the third column shows last Friday’s August 2nd active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting period a year ago, which in this week’s case was the 11th of August, 2023…
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Commission to consider fracking more public land on August 12 -- Ohio's Oil and Gas Land Management Commission, under the Ohio Department of Natural Resources, will hold its next meeting on Monday, August 12, 2024, at 1 p.m.During this meeting, the commission will discuss:
- Nominations to frack Egypt Valley Wildlife Area and Salt Fork State Park, as well as two parcels managed by the Ohio Department of Transportation
- Pending bids to frack Keen Wildlife Area, as well as four parcels managed by the Ohio Department of Transportation
See the full commission meeting agenda here. Ohio citizens pay for and use these public lands, and we need to turn out to this meeting to let the commissioners know that we do not want them to be fracked. Please register here if you can attend. We encourage you to bring children and youth to witness this proceeding and make their stake in the future of our Ohio parks and wildlife areas known. You are welcome to make signs and posters, but we will also have some you can hold.Carpools: We have a carpool board where you can post your car or sign up for someone else's car, or for a waiting list: https://www.groupcarpool.com/t/g89axqThanks so much for considering this trip to Columbus for the commission meeting. We get only one week's notice for these meetings, and wanted to let you know as soon as we could.
Tragedy of the commons: Fracking in Ohio - Op-ed by Randi Pokladnik - No doubt that most people are feeling the effects of this summer’s relentless heat (12 days above 90 degrees in the Ohio River Valley so far) and drought conditions. Farmers are worried about crops and homeowners watch as their lawns turn brown. Our family spends lots of time hauling water from our rain barrels and cisterns to water our garden and flowers beds. Rain events have become sporadic, lake levels are down and woodland streams are barely a trickle. Water is a precious common resource. Sadly, in Southeastern Ohio, we are witnessing a tragedy of commons being perpetrated on our region by out-of-state oil and gas companies. Every day we see countless water and brine trucks traveling back and forth on U.S. Route 250 near our home. No doubt they are hauling in water for fracking and hauling out toxic brine wastes. At one point, an enormous swimming-pool-like structure was erected just off Route 250 on the west side of Tappan Lake. There were several sites where water was being pumped from local streams and placed into this huge tank. Hoses took the water from the tank uphill toward a well pad. This practice is not unusual in our area as fracking gobbles 1.5 to 9.7 million gallons of water per well according to the United States Geological Survey. That amount of water being withdrawn from small streams is alarming. A 2023 study by Ohio Northern University “shows that these water withdraws are having an impact on small streams in the area.” Researchers found that withdraws “could have lasting negative impacts on the stream biota and have the potential to affect downstream users, including regionally-endangered species.The stream ecosystem might be severely impacted.” Given that Harrison County alone has 537 active wells, the amount of water used for fracking is staggering.This fresh water is mixed with sand and toxic chemicals, possibly including PFAS. It is then injected into fracking wells to fracture the bedrock below and release oil and methane gas. Some of that mixture returns to the surface and it referred to as produced water. “For every barrel (42 gallons) of oil produced, four to seven barrels of produced water may be generated.” The produced water contains salty brine as well as radioactive nuclides that become dissolved in the fracking mixture. Out-of-state companies use Ohio’s bedrock like a commons to store this toxic mixture in Class II injection wells permitted by the Ohio Department of Natural Resources. The ODNR reported about 22 million barrels (924 million gallons) of produced water from Ohio along with 12 million barrels from other states was injected into Class II wells in 2022. No one can say for sure where these liquids migrate from the original injection site, and in fact these wastes have been known to move. “The Division of Oil and Gas Resources Management found that waste fluid injected into the three K&H wells had spread at least 1.5 miles underground and was rising to the surface through oil and gas production wells in Athens and Washington counties.”Rural Ohio residents’ sources of drinking water are being threatened by this process. Last year, Ohio state parks became the latest victim of this tragedy of the commons. HB 507, a bill passed during a lame-duck session and without public comments in December 2022, opened up state lands to fracking. No public land is safe from the environmental destruction and health effects of fracking.Ohioans must watch precious public areas like the wildlife area in Carroll County near Leesville Lake be leased away. The Ohio Oil and Gas Land Management Commission, a five-member commission responsible for granting the leases, continues to ignore the science-based evidence of the dangers and instead considers only the economic gains.Ohio’s Republican politicians have led us to this tragedy as they welcomed this industry with open arms under the Kasich administration. They did not do their homework like some states. They did not consider the risks to rural residents or the land. They saw dollar signs. They still see only dollar signs and believe that Southeastern Ohio can drill its way into prosperity. That is not the case as a 2022 report from the Appalachian Regional Commission shows many of the same counties being heavily fracked remain“stressed economically”.As another election cycle gears up, we hear the chant,“Drill baby drill.” Appalachia Ohio has been logged, mined and now drilled to death. A look at a map of Ohio drilling sites in Southeast Ohio shows the ridiculous amounts of wells already drilled in our region. We certainly export a lot of methane gas, making the United States the largest exporter of liquid natural gas in the world. But, unlike manufacturing industries, rural Ohio’s frack pads don’t make value-added products. Instead, corporations exploit and export another resource from our region in return for a meager amount of money to the local communities.Exporting resources is not a recipe for economic prosperity. Appalachia historically has been treated as a mineral colony for outside interests and our commons — our water, our land, our air and even our bodies — are receptacles for fossil fuel wastes. At a time when we should be pivoting toward renewable energy, Ohio continues to put all its eggs in one energy basket.
3 Conv. Drillers Sue Multiple OH Injection Wells for Contamination -- Marcellus Drilling News -- In April, the Ohio Oil and Gas Commission upheld a regulatory order from the Ohio Dept. of Natural Resources (ODNR) suspending operations of three wastewater injection wells located in Torch (Athens County), OH, owned by K&H Partners, a subsidiary of Tallgrass Energy (see Ohio O&G Commission Votes to Shut Down 3 Athens Injection Wells). K&H subsequently applied to plug and abandon the wells (see Owner of 3 Athens, OH Injection Wells Applies to Permanently Plug). It appears that the situation has resulted in a flood of lawsuits by conventional drillers in the region, not only against K&H but also against a number of other injection wells and their owners.
6th Circuit Rules Sabre Energy Can’t Get Royalties from Deeper Wells -- Here’s a court case that flew under the radar until now. It’s a case that has the potential to affect some drillers and some royalty owners in Ohio. Sabre Energy Corporation (the plaintiff) sued Gulfport Energy Corporation and Antero Resources Corporation (the defendants) for breach of contract. Sabre Energy owns Overriding Royalty Interests (ORRIs), or fractional shares, in defendants’ shares of royalties from their oil and gas leases. Sabre Energy contends that these ORRIs attach to defendants’ recently drilled deep horizontal wells, and so the defendants owe it royalties.
Oil Company Denied Royalty Interests in Midwest Shale Oil Wells - Bloomberg Law - Company only has interest in vertical wells, not horizontal. Interest in drillers’ untap acreage is depth limited. An energy company doesn’t have royalty interests in two oil and gas drillers since its ownership of mineral rights only covers shallow vertical wells, not deep horizontal ones, a split federal appeals panel ruled Thursday. Sabre Energy Corp. was denied overriding royalty interests in the Gulfport Energy Corporation and Antero Resources Corporation horizontal wells in the Ohio portion of the Utica Shale/Point Pleasant formation, a majority of the US Court of Appeals for the Sixth Circuit said. Sabre’s royalty interests in the disputed mineral leases also didn’t apply to undrilled acreage, which preempts the now-drilled land they seek royalties from. ...
EOG Testing 700-ft Spacing in Ohio's Utica Oil Window, Sees Success | Hart Energy --EOG Resources has dropped a new five-well pad in its Ohio Utica oil play, showing 700-ft spacing will make IPs as strong as 1,000-ft-spaced pads.Its new pad, called Shadow, is in Carroll County at the northern end of its 140-mile-long north-south leasehold, which it grew by 10,000 net acres this spring to total 445,000 acres, the company told investors on Aug. 2.Shadow’s 30-day IP averaged 2,125 boe/d per well, 50% oil and 80% liquids.It is near EOG’s four-well Timberwolf pad, which was D&C’ed last summer at 1,000-ft spacing. It IP’ed a 30-day average of 2,150 boe/d per well, 55% oil and 85% liquids.Through first-quarter-end, it made 780,068 bbl, averaging 886 bbl/d per well in the first 220 days, according to Ohio Department of Natural Resources (DNR) data. First-37-day production averaged 1,214 bbl/d per well.At how many months into Shadow’s production will the spacing test’s success be clear?In addition to the Timberwolf pad, EOG made the three-well Xavier last fall in the middle of its north-south leasehold with 1,000-ft spacing and the four-well White Rhino this spring at the southern end with 800-ft spacing.In Harrison County, Xavier’s three wells produced 667,366 bbl in its first 179 days online, averaging 1,243 bbl/d each, according to Ohio DNR data. First-88-day production was 1,536 bbl/d each. It had IP’ed a 30-day average of 3,250 boe/d per well, 55% oil and 75% liquids.In Noble County, White Rhino made 30,800 bbl in its first eight days, averaging 963 bbl/d per well. It had a 30-day IP of 1,700 boe/d per well, 70% oil and 85% liquids.The Xavier wells were placed at 800-ft spacing; Timberwolf and White Rhino, 1,000-ft. All of the wells' results are normalized to 3-mile laterals. The Utica reservoir is thinner at the southern end, thus smaller IPs, EOG reported. But it has 100% mineral rights there, it noted, thus 100% net revenue interest. EOG’s 445,000 net acres in the play include 220,000 acres in the Utica’s black oil window along the western side of the volatile-oil fairway. Leitzell said the operator’s focus will remain on the volatile-oil window for now “where we have a more comprehensive geologic dataset.”EOG reported earlier this year that it is acquiring seismic and other data on the window before testing it. It expects to complete 20 net wells in the volatile-oil play this year and has one rig drilling it full time, while it is using a frac spread half-time.
Gulfport Energy 2Q: Completely in Love with Ohio Marcellus - Marcellus Drilling News - Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), reported its second quarter 2024 numbers earlier this week. The company drills Utica and Marcellus wells in Ohio. It also has an active drilling program in the Oklahoma SCOOP shale play. Gulfport’s net daily production for 2Q24 averaged 1,050.1 MMcfe/d, up from 2Q23’s average of 1,039.3 MMcfe/d. Production in 2Q consisted of 836.9 MMcfe/d in the Utica/Marcellus (80%) and 213.2 MMcfe/d in the SCOOP (20%). The production mix was comprised of approximately 92% natural gas, 6% natural gas liquids (NGLs), and 2% oil and condensate. Gulfport brass talked up the Marcellus during a conference call with analysts.
Ascent Resources 2Q – Pivots to Drill More Oil & NGLs -- Ascent Resources, founded as American Energy Partners by gas legend Aubrey McClendon, is a privately held company focusing 100% on the Ohio Utica Shale. Ascent, headquartered in Oklahoma City, OK, is Ohio’s largest natural gas producer and the 8th largest natural gas producer in the U.S. The company issued its second quarter 2024 update on Wednesday. The company posted a 5% increase in net production to 2,190 MMcfe/d (2.19 Bcfe/d) compared to a year ago. Ascent is pivoting to produce more liquids, including oil and NGLs — although the emphasis is on producing more NGLs.
Ascent Resources moves toward more oil production to fight natural gas price volatility - The volatility in natural gas prices forced Oklahoma City’s Ascent Resources to include more oil production, but the company still reported a net loss of $98 million along with adjusted net income of $96 million. The firm indicated it had adjusted EBITDAX of $333 million and cash flows from operations of $211 million and adjusted free cash flow of $76 million. It also had a 5% increase in net production of 2,190 mmcfe a day compared to a year ago. Liquids production show up 60% over a year ago with an average of 50 mbbls a day from its operations in the Utica shale of southern Ohio. Ascent’s chairman and Chief Executive Officer Jeff Fisher gave a hint of what’s to come. “I am pleased to say that we built on our success from the first quarter by continuing to balance our development program to more prominently feature liquids in the production mix. By doing so, we have improved price realizations and maximized returns during a volatile quarter for natural gas prices. Second quarter 2024 net production averaged 2,190 mmcfe per day, consisting of 1,910 mmcf per day of natural gas, 12,209 bbls per day of oil and 34,571 bbls per day of natural gas liquids (“NGL”). For the six months ended June 30, 2024, Ascent reported a Net Loss of $12 million, Adjusted Net Income of $314 million and Adjusted EBITDAX of $788 million, along with Cash Flow from Operations of $579 million and Adjusted Free Cash Flow of $275 million. Ascent incurred a total of $425 million of capital expenditures during the six months ended June 30, 2024 consisting of $337 million of D&C costs, $72 million of land and leasehold costs, and $16 million of capitalized interest. As of June 30, 2024, Ascent had total debt of approximately $2.4 billion, with $655 million of borrowings and $169 million of letters of credit issued under the credit facility. Liquidity as of June 30, 2024 was approximately $1.2 billion, comprised of $1.2 billion of available borrowing capacity under the credit facility and $6 million of cash on hand. During the second quarter of 2024, Ascent spud 19 operated wells, hydraulically fractured 18 wells, and turned-in-line 17 wells with an average lateral length of 13,761 feet. As of June 30, 2024, Ascent had 888 gross operated producing Utica wells. The company confirmed again its use of “significant hedges” in place in order to reduce exposure to the volatility in commodity prices, as well as to protect expected operating cash flow. As of June 30, 2024, Ascent had hedged 1,483,000 mmbtu per day of natural gas production for the remainder of 2024 at an average downside price of $3.49 per mmbtu, and 1,450,000 mmbtu per day in 2025 at an average downside price of $3.80 per mmbtu. Additionally, Ascent has hedged 10,000 bbls per day of crude oil production at an average price of $75.39 per bbl for the remainder of 2024, and 6,000 bbls per day in 2025 at an average price of $71.13. We also have a significant portion of our natural gas basis position hedged in 2024 and 2025 along with additional natural gas hedges in place through 2027.
The Story of Utica Oil Part 5: Utica is “the Last Oil Frontier” - Marcellus Drilling News - Writing for Hart Energy’s Oil and Gas Investor magazine, author Nissa Darbonne penned a fabulous overview of the Utica, bringing us the history of oil drilling in Ohio (in the 1800s) all the way up to the present day and Encino Energy’s dominance in oil drilling in the Utica. The article includes details about Encino and other companies, including Infinity Natural Resources and EOG Resources. Yesterday, we brought you the story of oil giant EOG joining the Utica party (see The Story of Utica Oil Part 4: EOG Resources Joins the Party). Today, in the final installment, we learn more about what makes the Ohio Utica special.
DT Midstream, Inc. (NYSE:DTM) Shares Sold by Public Employees Retirement System of Ohio - Public Employees Retirement System of Ohio reduced its position in DT Midstream, Inc. by 8.3% during the 1st quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The institutional investor owned 38,183 shares of the company’s stock after selling 3,470 shares during the period. Public Employees Retirement System of Ohio’s holdings in DT Midstream were worth $2,333,000 as of its most recent SEC filing.
20 New Shale Well Permits Issued for PA-OH-WV Jul 29 – Aug 4 -- For the week of July 29 – August 4, a total of 20 permits were issued to drill new shale wells in Marcellus/Utica, with the vast majority issued in Ohio. The Buckeye State had 13 new permits, with seven going to EOG Resources split between Noble and Carroll counties. Four permits went to Encino Energy in Harrison County. Two permits were issued to INR (Infinity Natural Resources) in Guernsey County. Pennsylvania issued six new permits last week, with four going to Range Resources in Washington County and two to Snyder Brothers in Armstrong County. West Virginia had just one new permit issued to Southwestern Energy in Marshall County. ARMSTRONG COUNTY | CARROLL COUNTY | ENCINO ENERGY | EOG RESOURCES | GUERNSEY COUNTY | HARRISON COUNTY | INR |MARSHALL COUNTY | NOBLE COUNTY | RANGE RESOURCES CORP | SNYDER BROTHERS | SOUTHWESTERN ENERGY |WASHINGTON COUNTY
Shale Drilling Becomes Leaner & Meaner, Lowering Costs | Marcellus Drilling News -We have often marveled at the innovation in the oil and gas industry that happens each year. When we first began to write about shale drilling in 2009, a long horizontal lateral was perhaps a mile. Today, there are wells that go over four miles underground! In 2009, it might take two months for a rig to drill a new well. Today, it’s done in a few weeks. The rigs operating today are doing the work of three to four times the same number just a few years ago. It’s astonishing. The end result is that shale drilling has gotten “leaner and meaner” and has resulted in lowered costs.
Harris once wanted to ban fracking. Trump wants voters in energy-rich Pennsylvania to remember (AP) — Facing the need to win battleground Pennsylvania, Vice President Kamala Harris is swearing off any prior assertion that she opposed fracking, but that hasn't stopped Republican Donald Trump from wielding her now-abandoned position to win over voters in a state where the natural gas industry means jobs. Last week, in his first appearance in Pennsylvania since Harris became the Democrats' presumptive nominee, Trump repeatedly warned that Harris would ban fracking — a position she held as apresidential primary candidate in 2019 — and devastate the economy in the nation's No. 2 natural gas state. “She's against fracking, she's against oil drilling, she wants everybody to have one electric car and share it with the neighbors," Trump told rallygoers at a Harrisburg rally on Wednesday, which was also his first appearance in the state since he was wounded in a July 13 assassination attempt in Butler County. “Harris has stated repeatedly that she supports, quote, banning fracking. I'll ban fracking, I'll ban it on my first day.” Harris’ campaign, in a statement, insisted she would not ban fracking, and called Trump’s claims an “attempt to distract from his own plans to enrich oil and gas executives at the expense of the middle class.”Still, Trump criticized Harris' support as a senator and candidate in 2020's presidential primary for a Democratic resolution to create a “Green New Deal,” a sweeping progressive effort to shift the country toward renewable energy. Trump called the platform — never fully translated into policy proposals — a “$100 trillion green new scam designed to abolish the oil, coal and natural gas industry entirely.”While Harris considers choosing popular Pennsylvania Gov. Josh Shapiro as a finalist to be her running mate on the Democratic ticket, Trump has made it clear that he won't concede the swing state, part of the decisive “blue wall” along with Michigan and Wisconsin. Trump repeatedly has said his administration would “drill baby drill” and dismissed Harris' change of position with these words of caution: "Remember, a politician always goes back to what their original thought was.”Republicans routinely attack Democrats over fracking to drive a wedge into the party's fragile alliance between its left wing, which is hostile to fossil fuels, and its bedrock building trade union base, whose workers are building an expanding network of gas pipelines, power plants and processing facilities in Pennsylvania.Republicans have used similar attacks in the past two election cycles, both unsuccessfully, against Joe Biden in 2020's presidential race and against Sen. John Fetterman in 2022.
Multi-Year Study Tries to Understand Support for Fracking in PA -- This is fascinating. A leftist researcher rented an apartment and lived in Williamsport for eight months in 2013. He interviewed over 100 residents of Greater Williamsport (Lycoming County), PA, to learn their views on fracking. He followed up with the participants and made return visits to the region for the next eight years until 2021. The researcher was looking for any wedge issues that he (and the left) could use to convince PA’s salt-of-the-earth, very conservative landowners/voters to turn against the shale industry. Did he find anything he could use? The results of his research were published yesterday as a study in the journal Nature Climate Action.
Natural gas pipeline expansion project in Pennsylvania, four other states on hold - A United States appeals court decision issued July 30 blocks the federally approved construction of a nearly $1 billion natural gas pipeline expansion project that aims to serve three million customers in Pennsylvania and four other mid-Atlantic states. “The court’s decision sets a dangerous precedent by dismissing the reliability needs of local distribution companies to satisfy the demand for energy during critical periods, such as life-threatening winter events,” said Matthew Agen, chief regulatory counsel for energy at the American Gas Association (AGA). The U.S. Court of Appeals for the District of Columbia Circuit on Tuesday vacated the approval given in 2023 by the Federal Energy Regulatory Commission (FERC) to Transcontinental Gas Pipeline Co. (Transco) to construct its Regional Energy Access expansion project and remanded the case to the commission for a more careful review. Transco, a unit of Tulsa, Okla.-based Williams Companies Inc., wants to expand its existing natural gas transmission system to provide year-round transportation capacity from the Marcellus Shale production area in northeastern Pennsylvania to multiple delivery points and to provide greater access to cleaner, cost-effective energy that would serve the Northeast region by this winter heating season. In Pennsylvania, the proposed project would extend through seven counties, including Luzern, Monroe, Northampton, Bucks, Chester, Delaware, and York counties, and would consist of about 36.1 total miles of pipeline in the state. This would include building a 22.3-mile, 30-inch pipe lateral in Luzerne County, and a 13.8-mile, 42-inch pipe loop in Monroe County, according to Williams.Additionally, modifications would be made to several existing compressor facilities, including those in the commonwealth’s Luzerne, York, and Chester counties, while other construction for the project would occur at locations in New Jersey, Delaware, Maryland, and New York.Williams told Reuters that the court erred, but the company plans to address its concerns. The company also said the decision will not delay full implementation of the project. AGA, which filed an amicus brief with the court in support of Transco, emphasized that the pipeline would provide vital increased supply and added reliability to the Northeast region. AGA also cited a lack of available natural gas created by Winter Storm Elliott in 2022, when low pressures impacted delivery from pipelines across the greater New York metropolitan area. While detailed contingency planning and excellent implementation allowed local natural gas utilities to avoid the worst, if pressures in the area had continued to decline, there could have been a loss of service requiring weeks or months of recovery while leaving untold customers in life-threatening cold without access to natural gas, the AGA said on Wednesday. The additional capacity offered by the Transco pipeline also would play a critical role in rectifying and preventing such critical shortages during future extreme weather events, said AGA, noting that pipeline capacity to transport natural gas from Pennsylvania, the Appalachia, and the rest of the United States to the Northeast is already severely constrained. “We know for a fact that the project will improve overall reliability and diversification of energy infrastructure in the Northeast, ease pipeline constraints, and help address current challenges, including increased natural gas prices during the winter months for consumers,” Agen said. The court called FERC’s decision “arbitrary and capricious,” saying the agency failed to sufficiently review the natural gas pipeline’s potential greenhouse gas (GHG) emissions. The court also held that while 73 percent of the pipeline’s capacity is pledged to natural gas local distribution companies and the pipeline was 100-percent subscribed under long-term contracts, there was insufficient evidence that the pipeline was required.
Natural Gas Expansion Goose Cooked By Mid-Atlantic Clean Hydrogen Hub --A proposal to bring more natural gas into New Jersey hit a brick wall last month, after regulators failed to prove that New Jersey needs more gas. The court-ordered halt sets up another round of legal action. However, it’s going to be a tough row to hoe. Natural gas is up against competition from two newly hatched local clean energy industries in New Jersey, in the form of offshore wind farms and the forthcoming Mid-Atlantic Clean Hydrogen Hub.The developers of the Mid-Atlantic Clean Hydrogen Hub plan to re-purpose existing gas pipelines with the aim of supporting a locally produced clean hydrogen industry.The details are still under negotiation, but the general idea is to deploy renewable energy and/or nuclear energy to run electrolysis systems, which separate hydrogen from water with the help of a catalyst. Sustainably speaking, that’s a big step up from the usual way to produce hydrogen, by extracting it from natural gas.In terms of producing one’s own energy locally, that’s also a 180-degree turn in a new direction. New Jersey doesn’t produce natural gas. Its gas utilities and other industries depend on gas imported from other states.The nuclear energy issue aside, what New Jersey does have is a new offshore wind industry. Presumably that would play a key role in the new hydrogen hub. Electrolyzers can run at night, when residential and commercial electricity demand drops and wind speeds are more optimal (see more offshore wind background here).The Mid-Atlantic hub includes parts of Pennsylvania, Delaware, and southern New Jersey. It is one of a network of seven new H2 hubs across the US in the new $7 billion Regional Clean Hydrogen Hub program, funded by the 2021 Bipartisan Infrastructure Law.The program is administered by the US Department of Energy. As stipulated by the law, the Energy Department is required to include extraction from natural gas in the program. However, gas is not required to be present in each hub. The Mid-Atlantic hub is among those to exclude it in favor of alternative sources.As for that proposed natural gas expansion, it’s back to the drawing board for the Regional Energy Access Expansion (REAE) project. The project comes under the umbrella of the century-old Oklahoma-based energy firm Williams. The business suffered some ups and downs back in the 20th century, but it has ridden the fracking boom of the early 21st century to a more robust portfolio. “Today, the company is one of the largest gatherers and processors of natural gas in the Marcellus and Utica shale-gas supply regions,” Williams says of itself.Williams also notes that it has “continued to invest in expanding its Transco interstate natural gas pipeline system – the nation’s largest, and fastest-growing – to create access to the ‘best markets’ to the north and south of the Marcellus and Utica supply areas.”
Williams Advances Projects On and Offshore as Natural Gas Demand Seen Exceeding Expectations - Williams is plowing ahead to bring a large Southeast project online amid the “unprecedented pace” in natural gas demand growth. It is also turning attention to other burgeoning opportunities, including offshore in the Gulf of Mexico (GOM), executives said. Map showing Williams' pipeline expansion projects. “The good news is that a meaningful increase in natural gas demand continues to exceed our expectations,” CEO Alan Armstrong said during the second quarter earnings call. The supply side is poised to return over 1 Bcf/d of volume to Williams’ gathering systems from completed but delayed wells and those temporarily shut-in, he said. Armstrong said the optimistic view came regardless of the macro environment, as its businesses, specifically transmission and storage and gathering and processing, “held up very well despite challenging natural gas prices.”
EIA Says Natural Gas Supply and Demand Coming Into Balance - As we’ve discussed many times before, the price for natural gas (especially the NYMEX futures price) is primarily determined by supply and demand — Economics 101. When there is too much supply with the same or less demand, prices go down. And boy, have they gone down! The problem we’ve struggled with all this year is too much supply. A number of drillers (many in the Marcellus/Utica) have pulled back on production to take some of the supply off the table. A good measure of supply is the inventory or storage number. Natural gas is stored during the “summer” season for use later during the “winter” season. As we began the injection “summer” season earlier this year, natgas inventories were 39% above the five-year average. The U.S. Energy Information Administration (EIA) predicts inventories will have dropped to 6% above the five-year average by the end of October.
Gulfport Pivoting to Liquids-Rich Production in Lower 48, but ‘Significant Upside’ for Natural Gas --Multi-basin independent Gulfport Energy Corp., whose Lower 48 portfolio is 92% weighted to natural gas, is holding production flat to wait for stronger prices into 2025. Chart showing Gulfport's production and estimates. CEO John Reinhart discussed second quarter performance and expectations for the year during a conference call. He was joined by CFO Michael Hodges. The Oklahoma City-based producer works in the Marcellus and Utica shales of Appalachia. It also develops oil and gas in the South Central Oklahoma Oil Province, aka the SCOOP. The company today is navigating “a volatile and ever-changing commodity price environment,” Reinhart said. To that end, the key is to retain “flexibility” until commodity prices improve. Related Tags
Eagle LNG Asks FERC to Push Florida Export Project’s Deadline to 2029 -- To evaluate the impacts of cost inflation, Eagle LNG Partners LLC has asked FERC to extend the in-service deadline for a small-scale natural gas export project planned for Jacksonville, FL. The Federal Energy Regulatory Commission granted Houston-based Eagle approval in 2019 to build the roughly 1 million metric ton/year (mmty) capacity liquefied natural gas facility. The deadline to complete the facility was mid-September. However, the company told FERC staff that it needed an additional five years to complete the greenfield project. The extension is necessary because of lingering impacts from the Covid-19 pandemic, as well as turbulent commodity markets and storms.
ExxonMobil CEO says Golden Pass plant to deliver first LNG in H2 2025 - Energy giants QatarEnergy and ExxonMobil are now expecting to start LNG production at their Golden Pass LNG export terminal on the US Gulf Coast near Sabine Pass, Texas in the second half of 2025, according to ExxonMobil's CEO Darren Woods.
Cheniere on Track for First LNG This Year at Corpus Christi Expansion — Cheniere Energy Inc. expects to produce first LNG at its Corpus Christi LNG (CCL) expansion project in South Texas by the end of this year. The company also is planning to introduce natural gas to Train 1 in two months, management said Thursday. Management said the company has energized the Train 1 liquefaction and utility substations and started regulatory filings in preparation for commissioning. The CCL Stage 3 expansion project would add seven trains and 10 million metric tons/year (mmty) of capacity to the existing 15 mmty facility. All seven trains are expected to be online by 2026. Plans for two more trains that would add another 3 mmty at the site received a positive environmental assessment from federal regulators in June. Cheniere expects to sanction the Midscale Trains 8 & 9 project next year.
Cheniere seals long-term LNG supply deal with Galp - US LNG exporting giant Cheniere has signed a long-term deal to supply liquefied natural gas to Portuguese energy firm and LNG player Galp.Under the 20-year sales and purchase deal, Galp will buy from Cheniere 0.5 mtpa of LNG contingent to FID of the second train of the Sabine Pass liquefaction expansion project, currently under development, according to a statement by Galp released on Monday.Also, the deal includes access to a limited number of “early” LNG cargoes, from 2027 and up to the start of the second train, it said.Galp’s volumes will be purchased on a FOB basis and priced indexed to Henry Hub plus a fixed liquefaction fee.“This agreement further enhances Galp’s LNG sourcing basket with access to competitive US volumes, adding flexibility and diversity to its portfolio,” it said.Galp already has a 20-year LNG supply deal with US LNG exporter Venture Global, but the latter has not yet declared commercial operations at the Calcasieu Pass facility since shipping the first commissioning cargo on March 1, 2022.The SPA signed back in 2018 includes the supply of one mtpa from the Calcasieu Pass plant to Galp. Cheniere, the largest LNG exporter in the US, said in a separate statement later on Monday LNG deliveries are expected under the SPA with Galp are expected to start in the early 2030s.The supplies are subject to, among other things, a positive final investment decision with respect to the second train (train eight) of the Sabine Pass liquefaction expansion project.The company’s Sabine Pass facility in Louisiana currently has a capacity of about 30 mtpa following the launch of the sixth train in February 2022.Cheniere aims to build two new liquefaction trains as part of the Sabine Pass Stage 5 expansion project to add up to 20 mtpa of capacity to the giant facility, including debottlenecking opportunities.In February 2024, Cheniere’s units submitted an application to the US FERC for authorization to site, construct, and operate the SPL expansion project, as well as an application to the DOE requesting authorization to export LNG to FTA and non-FTA countries.Besides the Sabine Pass plant, Cheniere’s three-train Corpus Christi plant in Texas can produce about 15 mtpa of LNG and is undergoing expansion to add more than 10 mtpa of capacity.The Stage 3 expansion project at Cheniere’s Corpus Christi LNG export plant in Texas is 62.4 percent complete, according to the June construction report filed with the US FERC.The US LNG exporting giant is expecting to start production at the first train later this year.On top of this expansion, Cheniere plans to build two more liquefaction trains as part of the third expansion phase at the Corpus Christi plant.
Court Nixes Rio Grande, Texas LNG Approvals, Creating More Obstacles for Gulf Coast Buildout --The Rio Grande and Texas LNG projects are potentially facing lengthy delays after a federal appeals court on Tuesday vacated their FERC authorizations, effectively leaving them without a key approval to move ahead with construction and operation. The U.S. Court of Appeals for the District of Columbia Circuit again sent the authorizations back to the Federal Energy Regulatory Commission for further consideration of the projects’ environmental impacts. Environmental groups challenged the projects, arguing that FERC did not adequately consider their environmental justice impacts and emissions. The court upheld most of the petitioners’ arguments. FERC must now issue a new draft supplemental environmental impact statement and start a new public comment period, both lengthy processes.
U.S. court overturns FERC's authorization for NextDecade's Rio Grande project -- A U.S. court has overturned the Federal Energy Regulatory Commission's (FERC) authorization for NextDecade's Rio Grande LNG project for not issuing a supplemental environmental impact statement, the company said on Tuesday. The facility has been in development for several years, suffering repeated delays, and phase 1 is now expected to reach completion by early 2029 at an expected cost of about $18 B. NextDecade said it was "disappointed in the court's decision and disagrees with its conclusions." "At this time, construction continues on the first three liquefaction trains and related infrastructure (Phase 1)" the company said, adding it "is evaluating the impact of the court's decision on the timing of a positive final investment decision (FID) on Train 4". Earlier this year, Abu Dhabi National Oil Company (ADNOC) acquired an 11.7% stake in phase 1 of the project and NextDecade signed a non-binding agreement with Saudi Aramco to supply 1.2 MMtpy of LNG for 20 years. NextDecade was planning to start the construction of the fourth liquefaction train in the second half of 2024 after the FID.
EIA Raises Natural Gas Price Forecast Amid Curtailed Output, Strong Power Demand - Continued production curtailments and rising electric power sector demand are expected to drive Henry Hub natural gas prices higher through the end of 2024 and lead to production growth in 2025, according to updated federal forecasts. In the August release of its Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) projected the national benchmark’s natural gas spot price average at about $2.60/MMBtu for the final five months of the year. That would be up 53.0 cents from the July average, but below the average of $2.69 during the same period in 2023.Record low Henry Hub natural gas spot prices in the first half of the year led producers to curtail production. With prices still foundering, EQT Corp., the largest natural gas producer in the United States, said recently it would continue curtailing production by about 0.5 Bcf/d through the second half of the year.
US natgas rises over 4% to near one-week high on hot-weather forecasts (Reuters) -U.S. natural gas futures rose more than 4% to a near one-week high on Wednesday, boosted by forecasts for hotter weather over the next two weeks that should boost air conditioning demand. Front-month gas futures for September delivery on the New York Mercantile Exchange were up 5.8 cents, or about 3%, to $2.07 per million British thermal units at 9:37 a.m. EDT (1337 GMT). "The southern tier of the country has seen temperatures rise again, with Texas seeing triple-digit heat and calm winds leading to strong power-sector gas demands, and weather for later in the month has heat continuing, which is giving some support, as the storage surplus is expected to continue to erode," Financial firm LSEG estimated 220 cooling degree days (CDDs) over the next two weeks, slightly lower from 221 CDDs estimated on Tuesday. The normal for this time of year is 190 CDDs. Cooling degree days, used to estimate demand to cool homes and businesses, measure the number of degrees a day's average temperature is above 65 degrees Fahrenheit (18 degrees Celsius). LSEG said gas output in the Lower 48 states had risen to an average of 103.6 billion cubic feet per day (bcfd) so far in August, up from 103.4 bcfd in July. That compares with a monthly record high of 105.5 bcfd in December 2023. LSEG forecast average gas demand in the Lower 48 states, including exports, to rise to 109.7 bcfd this week from 105.8 bcfd last week, before declining to 104.5 bcfd next week. U.S. natural gas output will average around 103.3 billion cubic feet per day (bcfd) this year, the U.S. Energy Information Administration (EIA) said in its August edition of the short-term energy outlook report on Tuesday. That compares with 103.8 bcfd produced last year, and is a slight downgrade from a forecast of 103.5 bcfd in the July edition of the report. Major U.S. natural gas producers are preparing to further curtail production in the second half of 2024, after prices sank nearly 40% over the past two months. "Long-term markets could see some selling after the D.C. Circuit Court ruling yesterday, which vacated the FERC approvals for both Texas LNG and the Rio Grande expansion," The U.S. court overturned the Federal Energy Regulatory Commission's authorization for NextDecade's Rio Grande LNG project for not issuing a supplemental environmental impact statement, the company said on Tuesday. Meanwhile, Dutch and British wholesale gas prices edged lower on Wednesday, as ample supply offset the impact of forecasts that hot weather next week will increase power sector demand and concerns about possible disruption as tensions flare in the Middle East. NG/EU
Once Again, Utilities in South Central Withdraw Natural Gas from Storage in Heart of Summer -- For the fourth consecutive week, underground supplies of natural gas in storage in the South Central dwindled, bucking seasonal norms as every other region injected excess fuel into underground stocks. NGI's weekly Henry Hub, Waha natural gas price vs South Central storage chart. Utilities in the region pulled 5 Bcf of gas from storage during the week ended Aug. 2, driven by a decrease in salt facilities, the U.S. Energy Information Administration (EIA) reported Thursday. It followed a 10 Bcf pull the prior week. Both draws played outsized roles in consecutive overall lean storage prints relative to expectations and historical averages. The latest result “sparked some bullish momentum,” analysts at Gelber & Associates noted, with front month Nymex natural futures rallying several cents after the report crossed the wires. It ultimately settled at $2.127/MMBtu for the day, up 1.5 cents.
Bayou Lafourche oil spill contained and clean-up expected to finish next week - The oil spill from the Crescent Midstream pumping station in Bayou Lafourche on Saturday has been successfully contained. The spill was traced to a leaking fuel tank and valve failure, prompting immediate response efforts to minimize environmental damage. The containment was achieved through the coordinated efforts of local, state, and federal agencies, along with specialized clean-up crews. Lafourche Parish President Archie Chaisson… “We’re moving into that kind of flushing operation where they’re spraying water from the bayou into the vegetation to try to flush out that oil that’s against the bank.” Booms and skimmers were deployed to prevent the spread of the more than 34-thousand gallons of oil, and vacuum trucks have been used to remove oil that contaminated the water. Environmental monitoring teams have been dispatched to assess the impact on local wildlife and vegetation. Chaisson says preliminary reports suggest minimal long-term damage. ” I think were gonna be ok long term, but again were gonna continue to do some monitoring I think in the coming months.” The rapid response and efficient coordination among various agencies have been praised for preventing a potentially more severe environmental disaster. “Overall we’re doing pretty well and we’re gonna move into I think more of a maintenance phase as we get into next week.” There have been no issues with drinking water or air quality, but both are continually being checked.
Markey and Grijalva urge pause on deepwater oil terminal approvals - Sen. Ed Markey (D-Mass.) and Rep. Raul Grijalva (D-Az.) on Friday called on the Biden administration to pause approvals for deepwater oil export terminals. In a letter to the U.S. Department of Transportation Maritime Administration (MARAD), Markey and Grijalva called for the approval criteria for deepwater terminals to be expanded to factor in criteria like public health, environmental justice and impact on climate change. The criteria currently requires MARAD to determine whether such ports “will be in the national interest and consistent with national security and other national policy goals and objectives, including energy sufficiency and environmental quality.” In its most recent approval, MARAD cleared the Sea Port Oil Terminal (SPOT) off the coast of Texas in November 2022, although applications are still pending for three further terminals. Only one further terminal is currently online. If the SPOT facility were to come online, it would have the capacity to move 2 million barrels daily, the largest U.S. expert terminal, for an estimated 232 million metric tons of carbon dioxide in total, according to MARAD. Grijalva and Markey noted that MARAD has never denied an export facility approval and took issue with the determination that allowing such facilities to come online is in keeping with the national interest. They further pointed to an executive order President Biden issued in 2021 that requires federal agencies to suspend operations that do not comport with the administration’s public health and environmental goals. “Broadening MARAD’s interpretation of national interest — which already requires an assessment of the impact on energy sufficiency and environmental quality — to more fully include environmental justice, climate, and public health considerations would be consistent with President Biden’s directive. Such a step would also recognize that the anticipated emissions from these oil export facility projects would counteract the benefits of the historic climate investments in the Inflation Reduction Act (IRA).” The Hill has reached out to the Transportation Department for comment.
Summit Sees Drop-off in Gas Traffic Following Utica Midstream Sale | Hart Energy -- Summit Midstream’s transformation into a crude-focused midstream company resulted in a major drop in natural gas traffic for the second quarter, as throughput declined 46%, to 716 MMcf/d, from first-quarter 2024.In March, Summit announced a $625 million deal to sell its assets in the Utica Shaleto an MPLX subsidiary. Company leadership said the focus would be on oil-rich basins in the Permian Basin and Rockies. Summit no longer owns any Northeast U.S. assets.Summit made the deal after beginning a strategic review process in 2023 to increase shareholder value. Besides moving away from its natural gas assets in the Northeast, the company also reorganized from an MLP to a C-Corporation.Summit closed on a refinancing of its capital structure, including a new asset-based lending facility worth $500 million and a $575 million senior notes issue. Both mature in 2029."Summit has made considerable progress towards executing its long-term strategy over the last four months,” said Heath Deneke, Summit CEO, chairman and president. “With this maturity extension and improved liquidity profile, Summit is well positioned with a strong balance sheet and additional financial flexibility to support execution of the base business plan, continue to pursue opportunistic, bolt-on acquisitions and continue to utilize our strong free cash flow generating platform.”During the second quarter, the company’s liquids volumes increased 1.4% to 75 MMbbl/d relative to the first three months of the year. Summit recorded a net loss of $23.8 million for the quarter with adjusted EBITDA of $43.1 million.
MPLX Expects Delaware Basin Gas Processing to Reach 1.4 Bcf/d - --MPLX LP expects its processing capacity in the Permian’s Delaware Basin to reach 1.4 Bcf/d due to the near-term rise in throughput volumes at its Preakness ll processing plant coupled with the start of operations at its Secretariat processing plant.In the Delaware, the 200 MMcf/d Preakness ll processing plant began operations in July, MPLX said during its Aug. 6 second-quarter earnings release. The plant is expected to boost throughput volumes over the next 12 months.Secretariat, MPLX's seventh processing plant in the Delaware, is expected to come online in the second half 2025, the company said.In the gathering and processing space, MPLX—a diversified MLP that owns and operates midstream energy infrastructure and logistics assets and provides fuels distribution services—remains focused on the Permian and the Marcellus Shale in response to producer demand, the company said.In the Utica Shale, MPLX’s gathering and processing volumes continue to rise, inclusive of assets acquired in March 2024.Summit Midstream agreed to divest its assets in the Utica Shale to an MPLX subsidiary for $625 million in cash. The March 2024 deal included Summit's 36% interest in the Ohio Gathering Co. and 38% interest in the Ohio Condensate Co., along with other Utica assets.MPLX was formed by Marathon Petroleum in 2012 as a limited partnership to focus on midstream and logistic infrastructure in key U.S. natural gas basins.
ExxonMobil Overcomes ‘Softer’ Commodity Prices and Permian Outperforms, Lifted by Pioneer Merger --Integrated energy major ExxonMobil is seeing bottom-line gains by simplifying and standardizing operations, a strategy that should continue to benefit the global natural gas and oil operations, CEO Darren Woods said Friday. NGI's Henry Hub natural gas price chart. “Overall, market conditions were softer in the second quarter,” he said during the second quarter conference call. Natural gas prices continued to slump but “oil prices remained firm.” Natural gas traded at Waha averaged negative 53.7 cents/MMBtu during 2Q2024, down from $1.502 in the year-ago period, according to NGI’s Daily Historical Data. Prices at the benchmark for the Permian Basin, where ExxonMobil saw production jump year/year from its merger with Pioneer Natural Resources Co., have remained suppressed at negative 14.0 cents as of Monday (Aug. 5).
Oil and gas jobs decline amid record-breaking production - The United States is pumping out more oil and gas than any country in history. But even as production soars, oil field employment keeps shrinking. The decade long decline isn’t driven by climate policy or the rise in clean energy. Instead, it’s the result of boom-and-bust cycles — and the fossil fuel industry’s relentless push for efficiency. “You just need fewer workers to produce more oil,” said Greg Upton, executive director of Louisiana State University’s Center for Energy Studies. “When you need less workers, that’s a sign of growth. On the other hand, these are real people losing their jobs.” Oil production is up 5 percent since 2019, the last peak before the pandemic. The industry set a new record for crude production last week, according to data released Wednesday by the U.S. Energy Information Administration, pumping an average of 13.4 million barrels a day. But employment among the people who find that oil and pull it out of the ground is down nearly 20 percent from prepandemic levels. Oil and gas production still supports hundreds of thousands of jobs in the United States, from the rig floor to office suites in Houston skyscrapers. Even at the low end, many pay enough to offer middle-class incomes to people without college degrees. And many of the jobs supported by oil and gas drilling are also far from the oil field — such as the union pipefitters who work in refineries and the workers at nearby restaurants. The Marcellus Shale Coalition trade group says in Pennsylvania the industry supports 10 times the jobs that drilling wells create directly. But declining oil field employment shows that the transition away from fossil fuel jobs is already happening without drilling bans or comprehensive federal climate regulation.
Ranchers reported abandoned oil wells spewing wastewater. A new study blames fracking. | The Texas Tribune -Fracking wastewater, injected underground for permanent disposal, traveled 12 miles through geological faults before bursting to the surface through a previously plugged West Texas oil well in 2022, according to a new study from Southern Methodist University.It’s the first study to draw specific links between wastewater injection and recent blowouts in the Permian Basin, the nation’s top producing oil field, where old oil wells have lately begun to spray salty water.It raises concerns about the possibility of widespread groundwater contamination in West Texas and increases the urgency for oil producers to find alternative outlets for the millions of gallons of toxic wastewater that come from Permian Basin oil wells every day.“We established a significant link between wastewater injection and oil well blowouts in the Permian Basin,” wrote the authors of the study, funded in part by NASA and published last month in the journal Geophysical Research Letters. The finding suggests "a potential for more blowouts in the near future,” it said.For years, the Texas agency that regulates the oil and gas extraction industry has refrained from putting forth an explanation for the blowout phenomenon, even as achorus of local landowners alleged that wastewater injections were driving the flows of gassy brine onto the surface of their properties since about 2022.Injection disposal is currently the primary outlet for the tremendous amount of oilfield wastewater, also known as produced water, that flows from fracked oil wells in West Texas. Thousands of injection wells dot the Permian Basin, each reviewed and permitted by Texas’ oilfield regulator, the Texas Railroad Commission.Oil producers are exploring alternatives — a small portion of produced water isreused in fracking, and Texas is in the process of permitting facilities that will treat produced water and release it into rivers and streams. Still, underground injection remains the cheapest and most popular method by far.A scientific connection has solidified between the practice of injection disposal and the increasing strength and frequency of earthquakes nearby. In the Permian Basin, a steady crescendo of tremors peaked last November with magnitude 5.4 earthquake, the state’s strongest in 30 years, triggering heightened restrictions on injections in the area.The link between injections and surface blowouts, however, has remained unconfirmed, despite widespread suspicions. The latest study marks a big step forward in scientific documentation.“It just validates what we’ve been saying,” Sarah Stogner, an oil and gas attorney who ran an unsuccessful campaign for a seat on the Railroad Commission in 2022, said about the latest study.For the last three years, Stogner has represented the Antina Cattle Ranch, where dozens of abandoned oil wells have been spraying back to life. Stogner persistently alleged that nearby wastewater injection was responsible. But she couldn’t prove it.Now a scientific consensus is beginning to fall in behind her.“Our work independently comes to this same conclusion in different areas [of the Permian Basin],” said Katie Smye, a geologist with the Center for Injection and Seismicity Research at the University of Texas at Austin, citing several upcoming papers she and her colleagues will release at major geoscience conferences in the coming year. “There is a link between injection and surface flows in some cases.”
A Legal Fight Over Legacy Oil Industry Pollution Heats Up in West Texas - —A dozen people huddle around a 10-foot deep hole in the parched West Texas soil. The group falls silent in anticipation as well-control specialist Hawk Dunlap, in a red jumpsuit, scrapes at the soil with a shovel. A lawyer in a hardhat peers down and trains his iPhone camera on the excavation.Dunlap unearths what was buried decades ago. Not a cadaver, but a plugged oil well. Or at least it was supposed to be plugged. Decades underground had corroded the metal casing and cement that sealed the half-mile deep well. Leaking crude oil had stained the casing black. Gas hissed from the rusted, stained well head. Contractors got to work, collecting soil samples and measuring compounds in the gas. The well was clearly leaking.“Things shouldn’t be left out here like that,” Dunlap observed drolly. “Not by an international oil company.” Chevron holds the lease for this old well—and dozens of others—at Antina Ranch in Crane County, Texas. Ashley Watt, who inherited the ranch from her parents, filed a lawsuit in the 109th District Court in Crane County against Chevron and other oil companies in December 2022. She alleges that the multinational and smaller companies failed to properly plug and abandon wells on the property. She argues that old wells are now leaking, contaminating the groundwater and surface of her ranch. The common wisdom is that once an oil or gas well is plugged, the chapter is closed. Regulators don’t require operators to go back and check the plugs. Most everyone assumes that crude oil, produced water and gases like methane won’t leak from a plugged well. But Watt and her team are documenting how decades-old plugs can fail, with disastrous consequences. She wants Chevron to re-plug and remediate wells on her land. The ambitious lawsuit, still in the discovery phase, could upend assumptions about plugging oil and gas wells. “This is a colossal liability that’s going to have to be borne by somebody,” Watt said. “Whether it’s the companies—or, if they pass the buck—the taxpayers of the state of Texas.”The first sign that something was wrong at Antina Ranch came in June 2021, when the Estes 24 well began spewing toxic water to the surface. In the three years since the original well blowout, Watt and Stogner say they have excavated about 90 of the roughly 330 wells on the ranch and found widespread integrity problems. As the scale of their endeavor became clear, they brought on Daniel Charest, an experienced Dallas trial attorney with Burns Charest LLP.“This problem went from being, ‘Oh, there’s a leaky well or two,’ to, ‘There are hundreds,’” Watt said. In December 2022, Watt filed suit against Chevron and Walsh and Watts Inc., Pitts Energy Co. and Williams Oil Company, smaller oil companies that took over low-producing wells on the ranch. The lawsuit aims to get the wells replugged and for Watt to be made whole for the damages to the property. Watt wants the court to find Chevron and the other companies liable for contamination, require cleanup and restoration of the property and require Chevron to pay monetary damages.
Oklahoma’s Oil Industry Touts a Voluntary Fund to Clean Up Oil Wells. Major Drillers Want Their Contributions Refunded. -Oklahoma’s oil and gas industry touts its altruism and environmental stewardship by pointing to a voluntary levy that companies pay on their production, which is then used to clean up orphan wells that have been left to the state.But some of Oklahoma’s biggest oil companies have opted out of the fund, forcing the state to return millions of dollars that would have otherwise gone to restoring land scarred by discarded drilling infrastructure and contaminated by leaks and spills, according to a ProPublica and Capital & Main analysis.The list of companies that received such refunds includes some of the Oklahoma oil industry’s household names, such as Ovintiv and Chesapeake Energy Corp. It also includes the two richest people in the state: Harold Hamm, a pioneer in fracking technology and the founder of the multibillion-dollar Continental Resources, and George Kaiser, whose success as head of his family’s oil company helped him buy the Bank of Oklahoma.All told, dozens of oil companies received refunds worth about $11 million over the past seven years, ProPublica and Capital & Main found. Put another way, for every $100 the state brought in via this funding mechanism, it sent $8.58 back to oil companies.The Oklahoma Energy Resources Board, created by the Legislature in 1993, collects a 0.1% assessment on oil and gas production that functions like a tax on the state’s largest industry. The roughly $163 million collected — after refunds — since the levy’s inception has funded the restoration of more than 20,000 sites.If the board had not had to issue the millions of dollars in refunds, it could have restored an additional 1,500 orphan well sites, according to the board’s average cleanup bill. Until they are plugged, these wells can leak a litany of pollutants, from toxic gasses to salty wastewater, presenting an environmental crisis across Oklahoma.ProPublica and Capital & Main reached out to all 76 companies that requested refunds in the past seven years as well as to the main in-state trade groups, the Oklahoma Energy Producers Alliance and the Petroleum Alliance of Oklahoma. The Petroleum Alliance of Oklahoma, Hamm’s Continental Resources, Kaiser’s Kaiser-Francis Oil Co., Chesapeake Energy and Ovintiv did not respond to requests for comment.Only two oil producers answered questions: one said she requested refunds to cut down on contact with regulators, while the other dismissed concerns about the refunds, stating that “it’s not that much money.”
BLM’s Bakken oil lease sale brings in $24M -The Bureau of Land Management netted roughly $24 million from an oil and gas sale on public lands in North Dakota and Montana on Tuesday, over the protests of climate organizations.The oil lease auction was the most lucrative the Biden administration has held in the region this year, but it still fell short of what some drillers wanted to see on the table. It was opposed by several prominent environmental groups who have called on President Joe Biden to end oil sales on public lands because of fossil fuels’ contribution to climate change.The auction included more than 5,000 acres, with most parcels clustered in the prolific Bakken oil region. A handful of parcels were also offered for auction in northern and southern Montana.Earlier this year, a BLM oil auction of similar size in Montana and North Dakota brought in $663,524.
Tourmaline Sees California Natural Gas Market Tightening on Data Center, Mexico LNG Demand --Canada’s largest natural gas producer, Tourmaline Oil Corp., expects the already tight California natural gas market to become more lucrative amid rising demand and limited transport capacity. NGI's NOVA/AECO C forward basis chart. “We obviously really like the California market, and we’ve been building our volumes to access that market for almost 10 years now,” CEO Mike Rose said during a call to discuss the Calgary-based company’s second quarter earnings. As a result, “we’re up to almost .5 Bcf/d accessing that market and it’s one of the premium priced markets in all of North America – at times it trades almost at LNG pricing.” NGI’s Malin forward basis price for winter 2024/2025 delivery averaged $1.696/MMBtu on Monday, while the corresponding PG&E Citygate forward basis price was $2.305.
Looming LNG Demand Surge Poised to Sop Up Excess Canadian Natural Gas Supply, Impact Prices -- Production soared to record levels in Canada and intersected with a relatively mild winter earlier this year. This left the country with robust supply and weak natural gas prices. It also resulted in elevated levels of exports to the Lower 48, where buyers capitalized on relatively low-cost gas. NGI's Canadian border price tracker. However, the pending ramp up of LNG Canada could soon begin soaking up excess natural gas and impact prices on both sides of the border, according to analysts and producers. The Shell plc-led liquefied natural gas export project in British Columbia has been testing its terminal and is targeting final commissioning this year. Commercial operations are slated to follow in 2025, when LNG Canada could process up to 2 Bcf/d – or more than 10% of Canadian output at its record level. The country recorded all-time high production around 19 Bcf/d in 2023 and again early this year.
Ksi Lisims LNG Project Partners Launch Western Canadian Pipeline Construction with Bechtel --The Nisga’a Nation and Western LNG are working to amend the route of their Prince Rupert Gas Transmission (PRGT) project in British Columbia (BC) as early site work begins this month. NGI's map of BC gas facilities. The Nisg̱a’a Lisims Government and Houston-based Western LNG recently disclosed that the partnership had selected Bechtel Group to manage construction of the pipeline connecting Montney Shale gas supply to its proposed Ksi Lisims LNG export project. “We are keenly aware of our responsibility to establish a new and improved approach to linear infrastructure development in Canada and partnering with industry-leading experts will help us make PRGT the best project it can be,” Western LNG CEO Davis Thames said.
Sempra’s Mexico LNG Project Startup Pushed Back to Spring 2026 -- Construction of Sempra Infrastructure’s EnergÃa Costa Azul (ECA) LNG Phase 1 in Mexico has hit a snag due to what the San Diego, CA-based company called labor and productivity challenges. The 3 million metric tons/year (mmty) export project, which would source U.S. natural gas, would now see the start of commercial operations pushed back from next year to the spring of 2026, management said during a second quarter earnings call on Tuesday. The company said work would be finished next year, when the plant is now expected to produce first liquefied natural gas. Construction at the project in Ensenada in Mexico’s Baja California is approximately 85% complete. “However, our contractor has experienced labor retention and productivity issues in recent months,” CFO Karen Sedgwick said.
Rio Negro, Near Unconventional Natural Gas Fields, Tapped for Agentina LNG Exports --Argentina’s 51% state-owned oil and gas company YPF SA, in partnership with Malaysian national oil company Petronas, has settled on the northern edge of Patagonia for their planned LNG export project. Graph showing Argentina LNG imports. “After an extensive technical and economic evaluation process undertaken by the YPF and Petronas teams we came to the conclusion that the most advantageous place for the project is Sierra Grande in the province of RÃo Negro,” executives said in a joint statement. RÃo Negro, considered to be in northern Patagonia, borders Neuquén, home to the vast majority of the natural gas-rich Vaca Muerta shale formation. The companies said the proximity to the unconventional gas fields, and the shorter pipelines, would be needed to transport the feed gas to the facilities.
SEA-LNG: Methane slip being eliminated as LNG uptake accelerates -- Significant progress is being made to eradicate methane slip as uptake of the LNG pathway accelerates, and this is worth underlining. With continued collaborative efforts across the value chain, methane slip will be eliminated for all engine technologies within the decade. Today, two-stroke diesel cycle engines account for approximately 75% of the LNG-fuelled vessel order book. These engines have effectively eliminated slip already. For low-pressure engine technologies where methane slip remains a challenge, manufacturers have already cut the levels of slip from low-pressure four-stroke engines by more than 85% over the past 25 years. It is worth noting that methane slip has been eradicated for the similar LNG dual-fuel engine technologies used in the heavy-duty vehicle sector. The science is clear, the technologies exist, and ongoing engineering will soon solve the problem. Peter Keller, Chairman of SEA-LNG, said: “We congratulate the efforts and initiatives such as the Methane Abatement in Maritime Innovation Initiative (MAMII) and the GREEN RAY project. As LNG continues to gain widespread recognition as the current practical and realistic alternative fuel pathway, it is reassuring to see growing evidence that the challenge of methane slip will be eliminated within this decade.” There is a growing momentum for LNG as a marine fuel. Clarksons’ data shows that 109 LNG dual fuel vessels have been ordered in 2024 up to June. There are now more than 550 LNG-fuelled vessels in operation, a number expected to double by 2027. Keller concluded: “There is universal agreement that the science is understood, and we have the necessary tools and technology to abate methane emissions, it is the final elements of the engineering that are being worked on. This, in combination with the option to transition to net zero emissions through bio-methane and e-methane, provides ship owners and operators with the confidence that vessels ordered today are future-proofed for the next 25 – 30 years. This cannot be said for any other alternative fuel right now.”
ADNOC Inks Agreement to Deliver Ruwais LNG to Osaka Gas --Abu Dhabi National Oil Co. (ADNOC) has signed a long-term heads of agreement with Japan's Osaka Gas for the delivery of up to 0.8 million metric tons per annum (mtpa) of liquefied natural gas (LNG). The LNG will primarily be sourced from ADNOC’s low-carbon Ruwais LNG project, which is currently under development in Al Ruwais Industrial City, Abu Dhabi, and is expected to start commercial operations in 2028, the company said in a news release. Under the agreement, LNG cargoes will be shipped to the destination ports of Osaka Gas and its Singapore-based subsidiary, Osaka Gas Energy Supply and Trading Pte. Ltd. (OGEST). The agreement with Osaka Gas is one of several long-term LNG sales commitments that ADNOC has signed with international partners for Ruwais LNG, the company noted, adding that the existing long-term sales commitments now make up 70 percent of the project’s total production capacity. The two companies will work together to conclude a detailed sale and purchase agreement in the coming months based on the terms of the LNG agreement, according to the release. Rashid Khalfan Al Mazrouei, ADNOC Senior Vice President for Marketing, said, “This landmark LNG agreement, our first long-term LNG deal with Osaka Gas, underscores the strong, long-standing energy partnership between the UAE and Japan. This agreement further enhances ADNOC’s position as a reliable and responsible global energy provider and reflects our commitment to help meet Japan’s energy needs with secure and sustainable energy solutions. The Ruwais LNG project supports our broader strategy to expand our global LNG footprint to enable the energy transition”. Keiji Takemori, Osaka Gas Executive Vice President, said, “Osaka Gas is delighted to secure LNG from ADNOC, a reliable and responsible global energy supplier. This agreement will significantly enhance the stability of Osaka Gas’ LNG procurement. It will also strengthen the foundation of our stable energy supply to customers, transition to lower carbon energy, and acceleration towards our net zero target. We will continue working on the stable procurement, development and supply of natural gas as a key transition fuel”. The Ruwais LNG project will consist of two 4.8-mtpa LNG liquefaction trains with a total capacity of 9.6 mtpa, more than doubling ADNOC’s existing UAE LNG production capacity to around 15 mtpa. The Ruwais LNG plant is set to be the first LNG export facility in the Middle East and Africa region to run on clean power, making it one of the lowest-carbon intensity LNG plants in the world, ADNOC said. Further, the facility will leverage artificial intelligence and the latest technologies to enhance safety, minimize emissions and drive efficiency.
China's STL building fleet of world's largest ethane carriers - China's Satellite Chemical (STL) will charter a fleet of up to ten of the world's largest ethane carriers to ship US ethane to China. This new type of vessel can be retrofitted to ship LNG and will be built by China's Jiangnan and South Korea's HD Hyundai Heavy, according to shipbuilding sources.
Asia spot LNG prices remain at 7-month high amid Russian supply concerns | Gas Processing & LNG -Asian spot liquefied natural gas (LNG) prices remained at their highest level in over seven months, tracking European gains amid concerns over supply disruption. The average LNG price for September delivery into north-east Asia was at $12.90 per million British thermal units (MMBtu), industry sources estimated. This is the highest level since mid-December and up from $12.80/MMBtu last week. "Asian prices rise this week has largely been underpinned by the European gains, with north-east Asian LNG demand remaining tepid despite hot weather in much of the region, particularly South Korea which is also facing a few unplanned nuclear outages," said Samuel Good, head of LNG pricing at commodity pricing agency Argus. Above-average temperatures are forecast in South Korea, Japan, as well as China’s Beijing and Shanghai in the coming week, which could support strong cooling demand. However, southeast China—where much of gas-fired generation capacity is situated—could return to normal temperatures in the coming weeks, leaving little scope for a late summer jump in power demand, Good said. Gas demand remains high enough in Asia to attract cargoes, said Klaas Dozeman, market analyst at Brainchild Commodity Intelligence, adding that current price levels might withhold price sensitive buyers from the spot market. Dozeman said that the latest La Nina weather pattern forecast has weakened, which might help to decrease next winter's gas demand in Asia and North America compared to earlier forecasts. In Europe, gas prices have risen this week on heightened geopolitical risk in the Middle East and after Ukraine mounted a surprise incursion into Russia's Kursk region, where Russian natural gas flows into Ukraine. The benchmark front-month contract at the Dutch TFF hub traded at €40.25 earlier on Friday, its highest level since Dec. 8. "While deliveries through the point have been little changed, traders remain concerned that the near 40 MMm3d of gas that passes through Sudzha could be affected, leaving an incentive for some to adjust their trading positions in a bid to avoid being short of gas were prices to spike," Argus' Good said. S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in September on an ex-ship (DES) basis at $12.676/MMBtu on Aug. 8, a $0.15/MMBtu discount to the September gas price at the Dutch TTF hub. Spark Commodities assessed the price at $12.717/MMBtu, while Argus assessed it at $12.700/MMBtu. Atlantic LNG freight rates rose for the first time in a month to $75,250/day on Friday, while the Pacific rates rose for the seventh week running to $86,750/day, said Spark Commodities analyst Qasim Afghan.
Perspective: What happens if Russian gas transit via Ukraine stops? -*-Heavy fighting near the Russian town of Sudzha, where Russian gas flows into Ukraine, has raised concerns over a sudden stop to transit flows via Ukraine before a five-year deal with Russia's Gazprom expires. The Ukraine gas transit route enables Russia to export gas to Europe via Ukraine. The transit deal is set to expire at the end of the year. Kyiv has previously said it has no plans to renew or extend it. According to Ukraine’s gas pipelines operator, Russian gas transit via Ukraine to Europe fell by 28.5% to 14.65 Bm3 last year in from 20.5 Bm3 in 2022. Why could transit stop early? Russia said it was fighting intense battles against Ukrainian forces that had penetrated its southern border near a major natural gas transmission hub of Sudzha. Two Russian military blogs said, without providing evidence, that Ukrainian forces had captured a gas measuring facility at Sudzha, through which Russian natural gas passes. The latter increases the risk for a more sudden stop in Russian pipeline flows via Ukraine, analysts at ING said. For now, Gazprom said it will continue to ship gas through Ukraine on Thursday and Ukraine's gas transit operator also said operations continue as normal. But there is a risk that Gazprom uses the fighting as an excuse to cut flows, said James Waddell, head of European gas and LNG at consultancy Energy Aspects. Ukraine's gas system operator declared force majeure through the other entry point of the transit route, Sokhranivka, and halted flows in 2022, citing "the interference of the occupying forces in technical processes." Most EU nations have lessened their dependence on Russian gas due to the Ukraine invasion. Former main recipients of gas via Ukraine include Austria, Slovakia, Italy, Hungary, Croatia, Slovenia and Moldova. Austria still receives most of its gas via Ukraine, while others have diversified their sources and taken steps to reduce demand. Moldova, one of Europe's poorest countries, last year sourced all its gas from European markets, leaving available gas from Gazprom for its breakaway eastern region, Transdniestria. Croatia's imports are now minimal and Slovenia's have dropped to near zero after its main gas supplier Geoplin's contract with Gazprom ended last year, a study by the Center on Global Energy Policy at Columbia University said. Austria can import from Italy and Germany, and its utilities have said they have taken precautionary measures if Russian gas supply stops. Hungary has been relying on Russian gas from an alternative route: the TurkStream pipeline, and Slovenia gets its gas from Algeria and other sources. Italy receives most of its gas through a route which facilitates Azeri gas imports and from Algeria. Slovak gas supplier SPP said a consortium of European gas buyers could take over the gas on the Russia-Ukraine border when the transit contract expires, but it is unclear how this might work. Another option is for Gazprom to supply some of the gas via another route, for example via TurkStream, Bulgaria, Serbia or Hungary. However, capacity via these routes is limited, SPP told Reuters. The EU and Ukraine have also asked Azerbaijan to facilitate discussions with Russia regarding the gas transit deal, an Azeri presidential advisor told Reuters, who declined to give further details. The EU has been trying to diversify its imports of gas and signed a deal to double imports of Azeri gas to at least 20 Bm3y by 2027 but the advisor said the infrastructure and financing were still not in place to facilitate this expansion. However, with Azeri domestic consumption set to rise, analysts at Energy Aspects said they see only around 1.7 Bm3 available for incremental exports, and there is also little spare capacity to get the gas into Europe.
Ukraine's Lukoil Sanctions Unlikely to Cause Hungary Shortage: Mol CEO --Hungary won’t suffer any oil shortages because of Ukraine’s decision to block the transit of Lukoil PJSC’s crude, the chief executive officer of refiner Mol Nyrt. said. “Let’s not cause panic,” Zsolt Hernadi, chairman and CEO, told a conference in a recording shared by the Budapest-based company Monday. “I don’t think this will lead to an actual shortage.” That contradicts assertions by Prime Minister Viktor Orban’s government and Slovakia, which called on the European Union to help resolve the situation. The EU rebuffed those concerns, saying Ukraine’s hardening of sanctions against the Russian producer won’t affect transit operations by trading companies using the Druzhba pipeline. Hungary has 90 days of strategic reserves and can also buy Russian crude via Croatia, Hernadi said at the conference Friday. The nation is better off having more options for importing crude, he said. Hungary has been reluctant to diversify its oil supplies, claiming without evidence that costs would be significantly higher to import from alternatives such as Croatia. Hungary and Slovakia, both landlocked nations that obtained exemptions from EU energy sanctions on Russia, each get at least a third of their crude supplies from Lukoil.
India’s Crude Oil Imports from Russia Surge 1000% - India now sources 40% of its crude oil imports from Russia, with year-to-date volumes averaging 1.6 million barrels per day (mbpd), according to BIMCO. This marks a staggering 1000% increase compared to 2021, prior to Russia’s invasion of Ukraine. Indian buyers began ramping up their Russian oil imports in 2022 following sanctions by the EU and the US, which previously purchased about 65% of Russia’s seaborne crude oil exports, according to BIMCO. However, sanctions have forced Russia to turn to new buyers, with India emerging as a key market for its discounted Urals crude oil. These cargoes are supposed to adhere to the G7 coalition’s price cap of $60 per barrel or less. As a result, Russian crude oil’s share in India’s seaborne imports have increased, making India the largest buyer in mid-2023, consistently accounting for 35-40% of Russia’s seaborne crude oil exports, according to BIMCO. At the same time, India’s seaborne crude oil imports from Persian Gulf countries have decreased from nearly 70% to 45% as the region redirects its exports to North Europe and the Mediterranean. BIMCO notes that the increase in Russian oil imports to India has led to a 10% rise in the average sailing distance for crude oil tankers and an 8% increase in total tonne miles, despite a 2% drop in volumes. The average sailing distance has increased by 25% compared to 2021. India’s shift in crude oil buying patterns has led to increased use of Aframax and Suezmax tankers, now accounting for 55% of imports, while the use of VLCCs has decreased. The change has also resulted in an older age profile of ships discharging in India, with the average age increasing by four years and the share of ships older than 20 years rising from 2% to 13%. BIMCO points out that Russia-India trade will likely continue at current levels under existing sanctions, but the International Energy Agency predicts that India’s rising oil demand may outpace Russia’s production, leading India to seek alternative suppliers.
Lost income due to oil spill now P78.69M --FISHERFOLKS affected by the oil spill caused by the sinking of a tanker off Limay, Bataan two weeks ago have lost at least P78.69 million in income, according to the latest data from the Department of Agriculture’s (DA) Disaster Risk Reduction and Management Operations Center. The DA attached agency said as of 9 a.m. yesterday, some 28,373 fisherfolks and 5,810 boats have been affected by the oil spill. The agency also reiterated that fishing bans have been declared in Las Piñas, Parañaque; Abucay, Balanga City, Limay, Mariveles and Samal in Bataan; and in Bacoor City, Cavite City, Kawit, Maragondon, Naic, Noveleta, Rosario, Tanza and Ternate in Cavite. In a separate bulletin, the Bureau of Fisheries and Aquatic Resources (BFAR) said it has been conducting on-ground monitoring and assessment of fishing areas and communities potentially affected by three consecutive maritime incidents in the waters of Bataan. Aside from the tanker MTKR Terranova that sank near the coast of Lamao Point in Limay last July 25, the MTKR Jayson Bradley also sank in the shallow waters of Mariveles last July 27 while MV Mirola 1 ran aground in the waters of Mariveles last July 31. BFAR has deployed personnel in catch landing sites and local markets in affected and nearby areas to ensure that oil spill-contaminated seafood does not reach the consumers and evaluate market dynamics to maintain the price stability of fish. The agency said its floating assets have also been mobilized to assist partner agencies in monitoring and surveillance, clean-up operations and fabrication and deployment of oil spill booms using used nets and coco fiber. BFAR assured it is also in close coordination with the Provincial Local Government Units and the Regional Disaster Risk Reduction Management Council to expedite the early recovery program. It is also set to release fuel subsidies and additional food packs and relief packages to mitigate the impact of the oil spill on the livelihood of displaced fisherfolks while validating alternative areas for capture fishing. “As a safety measure, the Bureau advises against consuming fish caught in areas where oil slicks have been observed. This is to avoid incidents of food poisoning as a result of ingesting contaminated seafood,” BFAR said in its advisory.
Philippine Coast Guard Brings Tanker Spill Under Control - The Philippine Coast Guard and its salvage response partners have been making progress on preventing pollution from the sunken tanker Terra Nova, which went down in rough weather from Typhoon Gaemi on July 25. Terra Nova has an estimated 370,000 gallons of petroleum on board, and has leaked an unknown but substantial amount of its oil into the bay. However, the PCG says that the leakage is now largely under control. As of August 1, all of the valves and high-level alarm pipes to the ship's cargo tanks have been capped, and a work barge and a receiving tanker have been positioned at the wreck site in preparation for siphoning off the remaining cargo. Only a thin sheen is present at the site, the PCG said, and there are control measures to keep it contained, including booms, dispersants and skimmers. Satellite tracking provided by the University of the Philippines Marine Science Institute shows that the size of the spill area coverage has been shrinking significantly. Over the next two weeks, the PCG and its commercial salvage partners will improve on the containment measures currently in place, before siphoning begins. PCG Commandant Admiral Ronnie Gil Gavan said that the capping bags that salvage divers used initially to prevent oil from getting out of the tank vents will be replaced by new metal caps. It will take about seven days to fabricate the caps, and another seven days to install them. In the meantime, divers will replace all the capping bags with a new set in order to reduce the risk that any might get punctured and leak. "With the above developments, the siphoning will be moved to not later than two weeks from now. This due diligence measure will however afford us with better control to reduce to barest minimum the possibility of disastrous oil spill during the conduct of siphoning activity," Gavan said. Once the team has siphoned off enough oil, they plan to refloat the vessel and move it to shallower water. That process should take another week, the PCG told local media. The United States Coast Guard and the National Oceanic and Atmospheric Administration (NOAA) are providing technical assistance for the response, including a seven-person advisory team, according to the PCG.
Philippines delays recovery of sunken tanker's oil - Khaleej Times - The Philippines postponed on Sunday the removal of fuel from a tanker that sank in Manila Bay, with fears of an environmental catastrophe growing as leaking oil reached shore for the first time. The siphoning of the 1.4 million litres of industrial fuel oil from the vessel's hold was pushed back to Tuesday at the earliest so divers could seal nine leaking valves first, Philippine Coast Guard spokesman Rear Admiral Armando Balilo told reporters. The tanker sank in bad weather off Manila early Thursday, killing one crew member and leaving the country facing the possibility of its worst oil spill ever. "An order was given to seal the valves first before the start of the siphoning operations in order to prevent further leakages," Balilo said on Sunday. "The weather remains bad out there but they have a target to finish this (sealing the valves) by tomorrow." Balilo said leaking oil had now reached a patch of shoreline in Hagonoy municipality, around 40 kilometres northwest of Manila. Coast guard cleanup teams were dispatched to the area on Sunday to spray oil dispersants, he said. Balilo had no estimates as to how much beach was affected or what kind of damage the oil had done. The coast guard has warned that if the entire cargo were to leak, it would be an "environmental catastrophe". It has also called for a suspension of fishing in Manila Bay to prevent people "eating contaminated fish". The Philippines has struggled to contain serious oil spills in the past. It took months to clean up after a tanker carrying 800,000 litres of industrial fuel oil sank off the central island of Mindoro last year, contaminating its waters and beaches 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. Meanwhile, another coast guard team was dispatched to the mouth of Manila Bay on Saturday to join the search for an unspecified number of crew members who were aboard a second tanker that sank nearby, Balilo said on Sunday. The wreck of the MTKR Jason Bradley has been located and a salvage will follow, a coast guard statement said, adding it had no cargo on board. The sinkings occurred as heavy rains fuelled by Typhoon Gaemi and the seasonal monsoon lashed Manila and surrounding regions in recent days.
Metal caps for sunken tanker being fabricated -- PHILIPPINE Coast Guard (PCG) Commandant Admiral Ronnie Gil Gavan yesterday said the fabrication of metal caps for the storage tanks of the sunken tanker in Limay, Bataan is underway. In a television interview, Gavan said two of the metal caps have been completed and are already undergoing testing by the salvage firm hired by the owner of the ill-fated MTKR Terranova. “The manufacturing or the fabrication of steel caps to replace the existing canvass-type of capping bags in place is underway,” Gavan said. “Two have been completed as of yesterday (Sunday) and the salvor is testing these prototypes,” added Gavan. Last week, the PCG said the canvass-type capping bags that were earlier installed on the valves of the storage tanks would have to be replaced with metal caps before the ship’s cargo of 1.4 million liters of industrial fuel oil could be siphoned off. Officials said the siphoning process with the canvass-type capping bags in place may cause oil to further spill from the storage tanks. MTKR Terranova, which has eight storage tanks with three valves each, sank last July 25 off Limay town at a depth of 34 kilometers after it was battered by huge waves, causing the oil spill. “The oil sheen has been contained. Since day five we have been clear of the oil sheen. Oil spill booms are well in place,” Gavan said. PCG spokesman Rear Admiral Armand Balilo said they are expecting the fabrication of the metal caps to be completed this week. After the metal caps are installed, siphoning can start. “This is pursuant to the wisdom of marine engineers and marine architects that we need to stabilize the vessel before the siphoning,” said Balilo. “If you proceed with the siphoning (without the metal caps) and the integrity of the vessel is compromised or the vessel moves, the temporary caps may break down. We will have a larger problem (if this happens).” Two other vessels, the MTKR Jason Bradley and the MV Mirola Uno, also figured in mishaps last July 23 in Mariveles, Bataan. MTKR Jason Bradley was not carrying any fuel cargo when it sank also due to bad weather. It was loaded with 5,500 liters of diesel to power its engine. Some of the diesel has spilled but the PCG said the threat is not serious because diesel dissipates when exposed to sunlight and waves. The spill has been also contained. “As to MTKR Jason Bradley, the plan is to refloat the vessel. We are coordinating with the salvage company and they will be the ones to declare when they will refloat the vessel,” said Balilo, adding the diesel would be siphoned off once the vessel is refloated.
Aramco CEO Says Oil Demand Is Strong, Recent Selloff an Overreaction - The selloff in global oil markets on perceived bad economic news was overdone because demand remains strong, according to top crude exporter Saudi Aramco. Brent crude dropped to almost $75 a barrel on Monday, alongside a rout in global stock markets, after a weaker-than-expected US jobs report sparked fears of a recession. Prices stabilized on Tuesday but remained near the lowest level since January. “The market to my view is overreacting and the fundamentals do not support the drop in prices that we are witnessing today,” Aramco Chief Executive Officer Amin Nasser said on an earnings conference call with journalists. “The market is reading too much into the short term responses and the news coming from the US with regard to the number of jobs for the month.” Despite Aramco’s profit falling in the second quarter due to OPEC+ constraints on the company’s output, Nasser painted a picture of healthy and growing demand. Oil use is set to rise by 1.6 million to 2 million barrels a day this year. That will continue into 2025 when Nasser sees global oil consumption “north of 106 million barrels a day.” Those figures are roughly in line with forecasts from the Organization of Petroleum Exporting Countries. OPEC, of which Saudi Arabia is the de facto leader, and partners like Russia are continuing a regime of production cuts into 2025, though the group will begin unwinding some of the reductions later this year. Refinery run rates in the US and growing demand for jet fuel, gasoline and chemicals in China will continue to drive the market, Nasser said. Aramco is continuing to invest in oil production, natural gas, refining and chemicals, he said. The state-run Saudi producer is in talks for a number of deals in China, particularly for plants that process crude into fuels and further into high yields of chemicals. The company is also looking to boost trading in liquefied natural gas by tapping into supply deals globally and buying more stakes in export terminals outside Saudi Arabia, he said. So far this year, Aramco has bought shares in Chinese refiners, fuel retailers and signed up to LNG supply deals.
Oil Prices Continue to Tumble as U.S. Recession Fears Mount -- Oil prices continued to fall on Monday morning, with both Brent and WTI dropping to their lowest levels since January. The collapse in oil prices, which started on Friday, was driven by fresh U.S. recession fears due to a weak July payrolls report. Demand concerns from China have been weighing on oil prices for quite some time, and fears of a recession in the U.S. will only add to the downward pressure on oil prices. Concerns over the U.S. economy reverberated around the world, with Asian stocks tumbling and the Nikkei posting its largest-ever decline, eclipsing the crash in October 1987 following Black Monday in New York. While demand concerns are driving oil market sentiment, geopolitical risks remain very real. Israel is currently preparing for a potential retaliatory attack from Iran, with the U.S. sending defensive reinforcements to the region. The U.S. embassy in Lebanon has urged citizens to leave the country as soon as possible, further highlighting the risk of escalation in the region.At the time of writing, WTI had fallen by over 2.38% to $71.77 and Brent had dropped by 2.08% to $75.21. Oil markets look set for yet another week of high volatility as demand concerns clash with rising geopolitics risk.
Sharp Sell-off in Equities Market Causes Oil Market Prices to Drop - The oil market sold off sharply on Monday in follow through selling seen in the equities market amid fears of a U.S. recession. Its losses were however limited by Libyan supply losses and concerns that an escalating conflict in the Middle East could further impact crude supply. The market posted a high of $74.46 in overnight trading amid the news that Libya’s Sharara oil field cut its output by 60,000 bpd after protesters had partially shut down the site. However, the market gave up its gains and sold off to a low of $71.67 early in the morning amid a sell off in the equities market across Asia, with Japanese stocks exceeding their 1987 “Black Monday” loss as fears of a U.S. recession sent investors fleeing from risk. The market later bounced off its low and traded in a sideways trading pattern during the remainder of the session. The September WTI contract settled down 58 cents at $72.94 and the October Brent contract settled down 51 cents at $76.30. The product markets ended the session in mixed territory, with the heating oil market settling down 1.99 cents at $2.2986 and the RB market settling up 1.6 cents at $2.3336. Oil production at Libya’s Sharara field has been reduced by 60,000 bpd or about 20% of its capacity due to ongoing protests in the area. Earlier, Reuters reported that local protesters partially shut down the field, which the Libyan government described as “political blackmail”.Palestinian officials said an Israeli airstrike hit two schools in Gaza City on Sunday, killing at least 30 people, while the Israeli military said it struck a Hamas military compound embedded in the schools. An Israeli airstrike hit a tent camp inside a hospital in central Gaza earlier in the day. Gaza health officials said a total of at least 44 Palestinians were killed on Sunday, the day after a round of talks in Cairo ended without result. Israel is bracing for a serious escalation following the assassination of Hamas’ leader Ismail Haniyeh in Tehran on Wednesday, a day after an Israeli strike in Beirut killed Fuad Shukr, a top military commander from Lebanese armed group Hezbollah. Israeli Prime Minister Benjamin Netanyahu was due to convene special security discussions late on Sunday following threats of retaliation from Iran and Hezbollah. Defense Minister, Yoav Gallant, said he was reviewing plans “that would exact a price in the case of attempts by Iran and its proxies to attack Israel.”Israel remains on high alert for a major retaliation by its adversaries after senior Hamas and Hezbollah officials were killed last week. The Washington Post reported that the Biden Administration informed U.S. lawmakers that Iran’s retaliatory strikes may happen as early as Monday or Tuesday. Earlier, Iran’s Foreign Ministry spokesperson, Nasser Kanaani, said Iran is not looking to escalate regional tensions but believes it needs to punish Israel to prevent further instability following the killing of Hamas leader Ismail Haniyeh in Tehran last week.Data from the General Administration of Customs showed that China’s crude oil imports in June fell 11% from a high base a year earlier, as independent refiners continued to cut production due to weak profit margins and as fuel demand remained tepid. June arrivals totaled 46.45 million metric tons or about 11.3 million bpd.
The Market’s Losses Were Limited by Concerns that Iran May Retaliate Against Israel and the U.S. -- The oil market traded mostly sideways on Tuesday after it retraced some of Monday’s sharp losses in overnight trading. The market breached its previous high of $74.46 and posted a high of $74.56. However, the market erased its gains and traded lower on a weak demand outlook following a global sell off on Monday. The crude market posted a low of $72.20 early in the morning and later retraced some of its losses and traded in a sideways trading pattern during the remainder of the session. The market’s losses were limited by concerns that Iran may retaliate against Israel and the U.S. following the assignation of a Hamas leader and an Israeli attack that killed a Hezbollah leader in Lebanon as well as a fall in Libya’s oil production at its Sharara oil field due to protests. The September WTI contract settled up 26 cents at $73.20 and the October Brent contract settled up 18 cents at $76.48. The product markets ended the session in negative territory, with the heating oil market settling down 28 points at $2.2958 and the RB market settling down 74 points at $2.3262. The U.S. Energy Department said it is offering to buy up to 3.5 million barrels of oil to help replenish the SPR in January 2025.The EIA forecast in its Short Term Energy Outlook that global consumption of liquid fuels will increase by 1.1 million bpd in 2024 and 1.6 million bpd in 2025, down from a previous forecast of 1.8 million bpd. Total world oil demand in 2024 is forecast to increase to 102.94 million bpd and to 104.55 million bpd in 2025. Total world oil output in 2024 is forecast to increase by 570,000 bpd to 102.36 million bpd and by 2.08 million bpd to 104.44 million bpd in 2025. OPEC’s oil output is forecast to fall 220,000 bpd to 26.67 million bpd in 2024 but increase by 480,000 bpd to 27.15 million bpd in 2025. U.S. oil output is estimated to increase by 300,000 bpd to 13.23 million bpd in 2024 and by 460,000 bpd to 13.69 million bpd in 2025. Meanwhile, U.S. petroleum demand is expected to increase by 200,000 bpd to 20.45 million bpd in 2024 and by 180,000 bpd to 20.63 million bpd in 2025. Gasoline demand is forecast to remain unchanged in 2024 at 8.94 million bpd but fall by 50,000 bpd to 8.89 million bpd in 2025. Distillate demand is expected to fall by 60,000 bpd to 3.87 million bpd in 2024 and increase by 110,000 bpd to 3.98 million bpd in 2025. The EIA lowered its 2024 WTI price forecast to $80.21/barrel from a previous forecast of $82.03/barrel. It also lowered its 2025 forecast to $81.21/barrel, down from $83.88/barrel. It lowered its 2024 Brent price forecast to $84.44/barrel from $86.37/barrel and also lowered its 2025 forecast to $85.71/barrel from $88.38/barrel.Bloomberg is reporting that oil production at Libya’s biggest oil field was halted on Monday following production declines over the weekend. The 300,000 b/d Sharara oil field was producing 270,000 b/d on Saturday. Platts is reporting the shutdown of the field came after the son of eastern warlord Khalifa Haftar ordered the shutdown in response to a European arrest being issued. The Libyan government called the curtailment of production as “new attempts at political blackmail”. Libyan oil production in recent months had been averaging 1.2 million b/d.
Oil prices settle higher; signs of tighter supply end 3-day swoon (Reuters) - Oil prices settled higher on Tuesday, bouncing off multi-month lows hit in the previous session, as investor attention turned to supply tightness and financial markets recovered from their recent slump. Brent crude futures rose by 18 cents, or 0.2% to settle at $76.48 a barrel. U.S. West Texas Intermediate futures gained 26 cents, or 0.4%, to close at $73.20 per barrel. Both benchmarks broke a three-session declining streak.Iran's vow of retaliation against Israel and the U.S. following the killing of two militant leaders has raised concerns that a wider war is brewing in the Middle East, which could have a direct impact on supplies from the region.Lower production at Libya's 300,000 barrel-per-day (bpd) Sharara oilfield is also adding to concerns of supply shortages. Libya's National Oil Corp said on Tuesday it would start to gradually decrease production at the field due to protests.Recent declines in crude oil and fuel inventories at major trading hubs are also supporting oil prices."Oil fundamentals are still suggesting an undersupplied oil market, with oil inventories still falling," Gasoline demand in the U.S. was likely at over 9 million barrels per day last week, feeding confidence in the economy.Global oil inventories decreased by around 400,000 bpd in the first half this year, according to U.S. Energy Information Administration (EIA) estimates published on Tuesday. It expects stockpiles to decline by around 800,000 bpd in the second half of the year.The agency lowered its average oil price forecasts for this year and next year, citing recent declines precipitated by economic concerns. It still expects higher prices in coming months. Brent spot prices will range between $85 and $90 per barrel by the end of the year, the EIA said.On Monday, Brent futures slumped to their lowest since early January and WTI futures had touched their lowest since February, as a global stock market rout deepened on growing concerns of a potential recession in the U.S., the world's largest petroleum consumer. Still, Goldman Sachs said its economists see recession risk as limited and believe oil prices will find support in coming weeks from strong demand in the West and India.
Oil Edges Lower on Surprise Build in US Crude, Gasoline Stocks --Oil prices slipped in early Asian trading on Wednesday following a brief rebound in the previous session after industry data showed an unexpected build in US crude oil and gasoline inventories, offsetting global oil supply concerns. Brent crude futures fell 21 cents, or 0.27%, to $76.27 a barrel by 0020 GMT. US West Texas Intermediate crude slipped 25 cents, or 0.34%, to $72.95 per barrel. US crude oil, gasoline and distillate inventories rose last week, according to market sources citing American Petroleum Institute figures on Tuesday, Reuters reported. Benchmarks slipped accordingly. Both WTI and Brent had bounced off multi-month lows to settle higher in the previous session. The API figures showed crude stocks were up by 176,000 barrels in the week ended Aug. 2, the sources said, speaking on condition of anonymity. Analysts polled by Reuters had expected crude stocks to fall by 700,000 barrels. Gasoline inventories rose by 3.313 million barrels against analysts' expectations for a 1 million bbl draw, while distillate stocks rose by 1.217 million barrels, a bigger build than anticipated. The US Energy Information Administration is due to release weekly inventory data at 10:30 a.m. (1430 GMT) on Wednesday. On Monday, Brent futures slumped to their lowest since early January and WTI futures had touched their lowest since February, as a global stock market rout deepened on growing concerns of a potential recession in the US, the world's largest petroleum consumer. However, both benchmarks broke a three-session declining streak on Tuesday as tensions in the Middle East stoked supply concerns, supporting prices. Iran's vow of retaliation against Israel and the US following the killing of two militant leaders has raised concerns that a wider war is brewing in the Middle East. "Any escalation of the conflict in the Middle East could see a greater risk of disruptions to supplies from the region," ANZ analyst Daniel Hynes said. Lower production at Libya's 300,000 barrel-per-day (bpd) Sharara oilfield is also adding to concerns of supply shortages. Global oil inventories decreased by around 400,000 bpd in the first half this year, according to US Energy Information Administration (EIA) estimates published on Tuesday. It expects stockpiles to decline by around 800,000 bpd in the second half of the year.
Oil Prices Rise as Dollar Strengthens: September Crude Oil Reaches $75.23 per Barrel - Oil prices experienced a significant increase on Wednesday, with benchmark U.S. crude oil for September delivery rising by $2.03 to reach $75.23 per barrel. Similarly, Brent crude for October delivery rose by $1.85 to $78.33 per barrel. This surge in oil prices can be attributed to several factors, including the rising demand for oil and the strengthening of the U.S. dollar. One of the primary drivers behind the increase in oil prices is the growing demand for oil. As economies around the world continue to recover from the impact of the COVID-19 pandemic, there has been a notable uptick in economic activity. This has resulted in an increased need for oil to fuel industries and transportation. The rise in demand has put upward pressure on oil prices, as suppliers struggle to meet the growing needs of the market. Additionally, the strengthening of the U.S. dollar has also played a role in the rise of oil prices. The dollar rose to 146.84 Japanese yen from 145.04 yen, while the euro fell to $1.0922 from $1.0928. A stronger dollar makes oil more expensive for buyers using other currencies, which can lead to an increase in oil prices. This is because oil is traded in U.S. dollars, and a stronger dollar means that buyers need to exchange more of their currency to purchase the same amount of oil. In addition to oil, other commodities also experienced fluctuations in their prices. Wholesale gasoline for September delivery rose by 3 cents to $2.36 a gallon, while September heating oil rose by 6 cents to $2.36 a gallon. September natural gas saw a significant increase of 10 cents, reaching $2.11 per 1,000 cubic feet. On the other hand, precious metals saw mixed results. Gold for December delivery rose by a modest 80 cents to $2,432.40 per ounce. However, silver for September delivery fell by 28 cents to $26.94 per ounce, and September copper fell by 8 cents to $3.95 per pound. In conclusion, the recent increase in oil prices can be attributed to the rising demand for oil and the strengthening of the U.S. dollar. As economies continue to recover and demand for oil grows, prices are likely to remain elevated. Additionally, fluctuations in other commodities, such as gasoline and natural gas, further contribute to the overall volatility of the market. It is important for investors and consumers to closely monitor these trends and adjust their strategies accordingly.
Oil settles 2% higher on falling US crude stockpiles, rebounds from multi-month lows (Reuters) -Oil prices gained more than 2% on Wednesday, bouncing back from multi-month lows, after data showed a bigger-than-expected draw in U.S. crude stockpiles, even as worries about weak oil demand in China persisted. Brent crude futures settled up $1.85, or 2.42%, at $78.33 a barrel. U.S. West Texas Intermediate crude gained $2.03, or 2.77%, to $75.23. U.S. crude stocks fell for a sixth week in a row, dropping by 3.7 million barrels to 429.3 million barrels last week, government data showed, more than analysts' expectations in a Reuters poll for a 700,000-barrel draw. "The story here really is that demand is stronger than people thought and overall supplies are tighter," "Crude supply is below average for this time of year." Industry data from the American Petroleum Institute on Tuesday had shown an unexpected build in crude and gasoline inventories. On Monday, Brent slumped to its lowest since early January and WTI touched its lowest since February, as a global stock market rout deepened on concerns about a potential recession in the U.S. after weak jobs data. Both oil benchmarks broke a three-session declining streak on Tuesday. "The recovery we have gotten from the large downturn on Monday shows it was a very short-lived temper tantrum and not a market crash," Lower production at Libya's 300,000 barrel-per-day (bpd) Sharara oilfield is also adding to concerns about supply shortages. Libya's National Oil Corp declared force majeure in its Sharara oilfield from Aug. 7, the company said on Wednesday. NOC had said on Tuesday it would start to gradually decrease production at the field due to protests. Tensions in the Middle East continued to stoke supply concerns. The Middle East is bracing for a possible new wave of attacks by Iran and its allies following last week's killing of senior members of militant groups Hamas and Hezbollah, with concern rising that the conflict in Gaza is turning into a wider Middle East war. Iran-aligned Houthi militants on Wednesday targeted a container ship in the Red Sea and two U.S. destroyers in the adjacent Gulf of Aden. Attacks on vessels passing through the region have forced tankers to choose longer alternate routes. "Any escalation of the conflict in the Middle East could see a greater risk of disruptions to supplies from the region," Supporting the bearish demand view, Chinese trade data showed that July daily crude oil imports fell to the lowest level since September 2022. China is the world's largest crude importer.
Escalating Tensions in the Middle East Offset Demand Concerns That Had Pushed the Market to its Lowest Levels - The crude market on Thursday continued to retrace its recent losses as increasing concerns over escalating tensions in the Middle East offset demand concerns that had pushed the market to its lowest levels since early this year at the start of the week. It also remained supported following the larger than expected draw in crude stocks of 3.7 million barrels reported by the EIA on Wednesday. The crude market traded sideways and posted a low of $74.60 early in the morning. However, the market bounced off that level and continued to recover from its sharp decline on Monday. It retraced more than 38% of its move from a high of $83.58 to a low of $71.67 as it rallied to a high of $76.52 ahead of the close. The market was further supported after U.S. jobs data eased demand concerns as initial unemployment benefit claims fell more than expected. The September WTI contract settled up 96 cents at $76.19 and the October Brent contract settled up 83 cents at $79.16. The product markets ended the session higher, with the heating oil market settling up 22 points at $2.3578 and the RB market settling up 4.19 cents at $2.3992. ExxonMobil said it continues to work on getting its 251,800 b/d Joliet refinery back up and running. Operators noted they have “safely restarted selected units at our refinery and are carefully ramping up production. We’re continuing to assess our equipment and working hard to resume full operations as safely and quickly as possible.” Last week, the U.S. Environmental Protection Agency issued an emergency waiver to help alleviate fuel shortages in states where the supply of gasoline has been impacted by the shutdown of the Joliet refinery.Phillips 66 reported emissions from a coker flare at its 265,000 bpd Sweeny, Texas refinery.U.S. crude oil refiners are cutting third-quarter production plans as summer fuel demand falls and profit margins remain weak. Operators say they are budgeting more maintenance downtime into forecasts after running at an industry average 95% of capacity earlier this year. Marathon Petroleum said it would operate its 13 refineries at 90% of their combined crude intake capacity of 3 million bpd, down from 97% of capacity last quarter. Valero Energy plans to reduce its processing rate due to plant maintenance and soft margins. The midpoint of its processing target is about 2.86 million bpd, down from 3 million bpd last quarter. Phillips 66 is planning to run its plants in the low-90% of capacity range. HF Sinclair expects planned plant overhauls will reduce its combined run rate by about 7.8% at the midpoint of a range of between 570,000 bpd and 600,000 bpd. Its network ran at a rate of 635,000 bpd last quarter.The United Kingdom Maritime Trade Operations agency said that it had received a report of an incident 45 nautical miles south of Yemen’s Mokha.A fall in the number of Americans applying for unemployment benefits last week relieved markets that had been in a near panic about prospects for a recession and how aggressive the Federal Reserve would have to be in easing policy. The Labor Department said initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 233,000 in the week ending August 3rd, the largest drop in about 11 months.
Oil settles up for third straight day on US job data and Mideast tensions - (Reuters) - Oil prices settled higher on Thursday for the third consecutive session, after U.S. jobs data eased demand concerns and war in the Middle East helped prices recover from an eight-month low on Monday. Brent crude futures settled up 83 cents or 1.06% to $79.16 a barrel. U.S. West Texas Intermediate crude settled up 96 cents, or 1.28%, to $76.19. Prices were buoyed after data showed the number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting fears the labour market is unravelling were overblown. "The latest U.S. data on jobless claims indicates still a growing U.S. economy, reducing some of the oil demand concerns," Investors were also digesting a 3.7 million barrel drop in U.S. crude inventories last week, reported by the Energy Information Administration on Wednesday, a drop which far exceeded analysts' expectations and marked a sixth straight weekly decline to six-month lows. Elsewhere, the killing of senior members of militant groups Hamas and Hezbollah last week had raised the possibility of retaliatory strikes by Iran against Israel, stoking concerns over oil supply from the world's largest producing region. "It will spike the price of crude oil if there is an Iranian retaliation on a large scale and I think that is what everyone is most worried about,” Meanwhile, the United Kingdom Maritime Trade Operations (UKMTO) agency said on Thursday it had received a report of an incident 45 nautical miles south of Yemen's Mokha. Iran-aligned Houthi militants have launched attacks on international shipping near Yemen since last November in solidarity with Palestinians in the war between Israel and Hamas. Israeli forces stepped up airstrikes across the Gaza Strip on Thursday, killing at least 40 people, Palestinian medics said, in further battle with Hamas-led militants as Israel braced for potential wider war in the region. Also lending some support, Libya's National Oil Corp. declared force majeure at its Sharara oilfield from Tuesday, a statement said, adding that the company had gradually reduced the field's production because of protests. Analysts at Citi said there was a possibility of a bounce in prices to the low-to-mid $80s for Brent. "Upside risks in the market remain, from still-tight balances through August, heightened geopolitical risks across North Africa and the Middle East, the possibility of weather-related disruptions through hurricane season, and light managed money positioning," Citi said.
Oil prices settle higher to snap four-week losing streak -- Oil prices settled higher Friday, snapping a four-week losing streak as easing fears of a global economic slowdown helped improve sentiment on demand. At 14:30 ET (18:30 GMT), Brent oil futures rose 0.6% to $79.66 a barrel, while West Texas Intermediate crude futures climbed 0.9% to $76.84 a barrel. The number of oil rigs rose by 3 to 485 from a week ago, Baker Hughes reported Friday.The uptick in rig counts pointing to increased drilling activity comes even as the US Department of Energy cut its forecast on domestic crude oil production to 300,000 barrels for 2024 from a prior estimate of 320,000 bpd this year.Better-than-expected U.S. jobless claims data on Thursday boosted sentiment, raising hope the world's largest economy could avoid a recession.Data earlier Friday showed that Chinese consumer price indexinflation grew more than expected in July, while a decline in producer price index inflation was slightly less than expected.The data highlighted some improving trends in the world’s biggest oil importer, especially after Beijing enacted a slew of interest rate cuts through July.But inflation still remained largely languid, with a sustained decline in factory prices suggesting that a deflationary trend was still in play.China’s oil imports also shrank in July, data showed earlier this week. Fears of slowing demand in the country have been a major pain point for oil markets.Initial gains in crude were fueled largely by bargain buying, after a rout on Monday put prices at seven-month lows.But signs of sustained draws in U.S. inventories spurred hopes that demand in the country remained underpinned by the travel-heavy summer season, even as the pace of draws appeared to be slowing.Traders were also seen attaching a greater risk premium to oil prices, after Ukraine mounted one of its biggest attacks on Russia since the war began in early-2022.Sustained tensions in the Middle East, amid fears of retaliation by Iran and Hamas against Israel, also kept some risk elements in oil.The killing last week of senior members of militant groups Hamas and Hezbollah had raised the possibility of retaliatory strikes by Iran against Israel, stoking concerns over oil supply from the world's largest producing region.Yet, despite this week's gains, global oil demand growth needs to accelerate in coming months or the market will struggle to absorb an increase in oil supply that OPEC+ is planning to make from October.
Oil posts 3% weekly gains on positive economic data, rate cut hopes (Reuters) - Oil prices settled higher on Friday and notched over 3.5% in weekly gains as positive economic data and signals from Fed policymakers that they could cut interest rates as early as September eased demand concerns, while fears of a widening Middle East conflict continue to raise supply risks. Brent crude futures settled 50 cents up, or 0.6%, at $79.66 a barrel, while U.S. West Texas Intermediate crude futures rose 65 cents, or 0.9%, to $76.84. both benchmarks.Brent gained more than 3.5% in the week, while WTI rose more than 4%."Crude is in a recovery mode ... as geopolitical tensions still seem to be a positive factor, and on-again off-again recession fears have calmed a bit, at least for now," A trio of Federal Reserve policymakers indicated on Thursday that they were more confident that inflation is cooling enough to cut rates. A bigger-than-expected fall in U.S. jobless claims data also helped to underpin the recovery.The number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting that fears the labor market is unraveling were overblown and that the gradual softening in the labor market remains intact.Also offering support was China's consumer price index, which rose last month at a slightly faster than expected rate, statistics bureau data showed."Positive momentum was further reinforced by Chinese inflation numbers that exceeded expectations. In this context, it wouldn't be surprising to see the price per barrel testing the $80 level," "The price per barrel has benefited from rising geopolitical tensions in the Middle East, which have fuelled fears of a potential conflict that could disrupt the region's output and reduce the global supply of crude," Veyret added.Israeli forces stepped up airstrikes across the Gaza Strip on Thursday, killing at least 40 people, Palestinian medics said, in further battles with Hamas-led militants.The killing last week of senior members of militant groups Hamas and Hezbollah had raised the possibility of retaliatory strikes by Iran against Israel, stoking concerns over oil supply from the world's largest producing region.Iran-aligned Houthi militants have also continued attacks on international shipping near Yemen in solidarity with Palestinians in the war between Israel and Hamas.Leaders of the United States, Egypt and Qatar on Thursday called on Israel and Hamas to meet for negotiations on Aug. 15 in order to finalize a Gaza ceasefire and hostage release deal.The Russia-Ukraine conflict also continued as Moscow moved extra tanks, artillery and rocket systems to its southern Kursk region on Friday as it battled for the fourth straight day to end a shock incursion by Ukrainian forces.Meanwhile, the dollar index , which measures the currency against six others, was down 0.136% at 103.14 following three days of gains. A weaker greenback helps demand as oil becomes cheaper for foreign buyers.Lending further support to prices, Libya's National Oil Corp declared force majeure at its Sharara oilfield from Wednesday, adding that it had gradually reduced the field's output because of protests.However, U.S. oil rigs, an indicator of future production, rose by three to 485 this week.Money managers cut their net long U.S. crude futures and options positions in the week to August 6, the U.S. Commodity Futures Trading Commission (CFTC) said.
Iran Expected to Retaliate Against Israel by Tomorrow -- In its latest Maritime Security Threat Advisory (MSTA), which was released on August 5, Dryad Global warned that, “Iran is expected to retaliate against Israel within the next 48 hours, assuming no new developments”. “The last two weeks have seen an unprecedented string of escalating events, with the potential to spark a major regional conflict,” Dryad said in the advisory. “The growing situation is expected to spark retaliatory attacks on Israeli territory and assets, affecting commercial shipping,” Dryad added. “Increased Houthi airstrikes on merchant ships in the Red Sea, Gulf of Aden, and Arabian Sea, as well as IRGCN seizures of merchant vessels in the Persian Gulf and Gulf of Oman, are expected,” it continued, noting that severe GPS jamming off the coast of Israel is also anticipated. A potential war between Iran and Israel could disrupt maritime shipping, increasing costs and delays, particularly on key oil and gas transportation routes, the MSTA stated. “The warring parties may target vessels and conduct cyberattacks, disrupting navigation systems and communication networks,” the MSTA noted. “Conflict could also disrupt port operations, limiting their ability to handle cargo and resulting in delays and increased costs. Iran’s retaliation against Israel could have long-term consequences for the global economy, as well as increased Middle Eastern geopolitical instability,” it added. A war between Iran and Israel would have a significant impact on countries such as Egypt, Jordan, Saudi Arabia, Kuwait, and the UAE, according to the MSTA, which stated that there is the potential of disruption of operations within the Strait of Hormuz along with the Northern Indian Ocean, Red Sea, Gulf of Aden, and the far Eastern Mediterranean Sea. “In line with this heightened risk, Dryad Global advises against all transit of Israeli-linked vessels within the Red Sea, Gulf of Aden, Gulf of Oman, and the Persian Gulf until further notice,” the MSTA said. “Perceived affiliation with Israel may include past or partial ownership or management of a vessel, past or expected transit via Israeli ports. Vessels linked with NATO countries are also assessed to be at a heightened risk when transiting these waters until further notice,” it added. In a recent exclusive interview, Caleb Jasso, an analyst at the Institute for Energy Research (IER), told Rigzone that “widespread regional conflict in the Middle East is certainly more likely than it was a few years ago”. “The recent retaliatory Israeli strikes in Beirut and Tehran, and the promise of a response from Iran, have opened the door to the possibility of an expanded regional conflict,” he added. “With the Israel-Hamas War now entering its tenth month, continued exchanges between both Israel and Hezbollah, and now Israel and Iran, puts the region on a precarious path toward significant conflict,” he warned. If widespread regional conflict happens, and directly involves Iran and Israel combating each other, the impact on oil prices could be severe, especially compared to how nominally oil prices have been impacted by the Israel-Hamas War when compared to historical regional conflicts, Jasso told Rigzone. “One of the more impactful actions on oil prices has been the Houthi attacks in the Red Sea, which began as a result of the Houthis’ support for Hamas and has caused considerable damage to the flow of trade through the Suez Canal,” he said. “If a broader conflict ensues, and the Houthis not only continue their attacks but are emboldened further, and Iran decides to harass shipping in the Strait of Hormuz, then oil prices, especially in East Asia, could be negatively affected,” he added.
Moscow Rushes Air Defenses To Iran In Payback For America Arming Ukraine - Russia has significantly stepped up its military cooperation with Iran amid the Islamic Republic's showdown with Israel. Many days have passed since Israel's assassination of Hamas leader Ismail Haniyeh in Tehran, with the region still on edge awaiting a likely major Iranian response.The NY Times and others confirmed this week that Russia has begun delivering radars and air defense equipment, possibly including S-400 anti-air missile components, to the Iranians. This can be seen as Moscow's 'payback' for America arming Ukraine. Now, Russia is arming America's (and Israel's) chief enemy in the Middle East.
Report: Putin Asks Iran To Avoid Civilian Casualties in Reprisal Attack on Israel - Russian President Vladimir Putin has asked Iranian Supreme leader Ayatollah Ali Khamenei to avoid civilian casualties in Iran’s expected reprisal attack on Israel for the killing of Hamas’s political chief in Tehran,Reuters reported on Tuesday, citing two unnamed Iranian sources.The sources said the message was delivered by Sergey Shoigu, head of the Russian Security Council and former defense minister. Shoigu was in Tehran on Monday and met with Iranian President Masoud Pezeshkian.The New York Times reported that Iran had requested air defenses from Russia in the meeting as it prepares for a potential war with Israel and the US and that Moscow had already begun delivering radars and air defense equipment.Russia and Iran have increased military ties in recent years as a result of both countries facing heavy US sanctions, but so far, neither country has confirmed that Russia is delivering new equipment.Brig. Gen. Alireza Elhami, the deputy commander of Iran’s air defense forces, said that the Iranian military was in the process of upgrading its air defense systems but added that Tehran is not relying on any foreign country.“We are 100% self-sufficient and we are not dependent on foreign equipment, and the security of our air borders is not dependent on foreign countries,” Elhami said, according to Iran’s Mehr news agency.
Israel Considering 'Preemptive Strike' Against Iran - Israel is considering launching a “preemptive strike” on Iran as it’s awaiting a reprisal attack for the assassination of Hamas’s political chief in Iran.According to Israeli media reports, Israel could launch an attack on Iran if it finds an Iranian strike is imminent. The idea was discussed on Sunday night in a meeting between Israeli Prime Minister Benjamin Netanyahu and his top military and intelligence officials.Iranian officials have made clear they will respond to the killing of Ismail Haniyeh on Iranian soil, and any Israeli preemptive strike would just escalate the situation even more.US and Israeli officials believe an Iranian attack could happen any day, and it’s expected that Hezbollah will be involved in the operation as the Lebanese group vowed a response to an Israeli strike that killed one of its top commanders in Beirut. Iran’s allies in Iraq and the Houthis in Yemen could also join the attack on Israel.The US has deployed additional warships and warplanes to the Middle Eastfor the purpose of “defending Israel,” making US military assets potential targets in a reprisal attack.
Nasrallah Vows 'Strong' Response to Israeli Killing of Hezbollah Commander Is Coming - Hezbollah Secretary-General Hassan Nasrallah vowed in a televised speech on Tuesday that the Lebanese group would have a “strong” response to the Israeli killing of a high-level Hezbollah commander. Nasrallah delivered the speech during a ceremony that marked one week after the Hezbollah commander, Fuah Shukr, was killed by an Israeli airstrike in the Beirut neighborhood of Dahieh, along with two women and two children.Moments before Nasrallah began his speech, Israeli jets broke the sound barrier over Beirut, letting out sonic booms over the city, which has a population of about 2.4 million. Nasrallah denounced the move as a “petty” provocation.“We have not sought escalations until now, we have been fighting in support of Gaza but keeping in mind the Lebanese national interest,” Nasrallah said. “But an assassination of a top leader in the Dahieh must be treated differently … Our response is coming, God willing, from us and the axis of resistance — and it will be strong.”The “axis of resistance” refers to Hezbollah and Iran’s allies in the region, including Shia militias based in Iraq and the Houthis, officially known as Ansar Allah, who govern the most populous areas of Yemen.Iran is preparing to respond to the Israeli killing of Hamas’s political chief, Ismail Haniyeh, in Tehran. The US and Israel are expecting Iran’s reprisal to be a major attack that will be coordinated with Hezbollah and its other allies.The US has vowed to defend Israel from any attack, which Nasrallah mentioned in his speech. “When Iran and Hezbollah spoke of retaliating against Israel for its atrocities, the US affirmed its commitment to defend the Zionist entity,” Nasrallah said, “The occupation relies on the United States and Western countries for protection as it is unable to defend itself.”
Hezbollah-Aligned Newspaper Urges Rockets On Tel Aviv - Israel has informed Washington that if Hezbollah harms more civilians in a retaliation campaign for the assassination of its top military commander Fuad Shukr last week, Israel's military will have no choice but to launch a disproportionate response."In the internal discussions with the U.S., Israel stressed that the cost of another Hezbollah mishap would be heavy and that Hezbollah would pay a disproportionate price if it harmed civilians as part of its retaliation," a senior Israeli official told Axios.The report continues, "Two Israeli officials said that in recent days Israel told the U.S. via several military channels that it is concerned Hezbollah could hit civilian population centers if it tries to target military bases in central Israel."Last month 12 children were killed in the occupied Golan Heights town of Majdal Shams during a Hezbollah rocket attack. Israeli officials believe the rocket was intended to hit a nearby IDF military base, while Hezbollah leadership has claimed an errant Israeli anti-air missile struck the soccer field where civilians died.Meanwhile, Hezbollah has since the killing of Shukr in Beirut declared that its strikes will hit targets deeper inside Israel.On Tuesday, the Lebanese newspaper Al-Akhbar - widely seen as sympathetic to Hezbollah - wrote that Hezbollah could decide to hit Tel Aviv, which would mark a new major escalation, likely leading to all-out war."If Hezbollah can choose targets, it is possible that it will target Tel Aviv and civilians might be harmed on the margins. The effective thing will be to hit a significant center of the organization that made the decision about the assassination and took part in it," the Al-Akhbar op-ed said. This too has been seen as a severe warning conveyed indirectly via Lebanese media.
Delta suspends August flights to Tel Aviv from JFK --Delta will suspend all flights from New York City to Tel Aviv for the remainder of August, the airline announced Monday, amid growing fears of a regional conflict between Israel and Iran.The announcement extends a previous suspension that began last week. Sales of all flights between New York’s John F. Kennedy International Airport and Tel Aviv this month have halted, the airline said.Any customers with tickets on affected flights will be issued a travel waiver. Flights on partner airlines Air France and EL AL Israel Airlines are still available, Delta said. “Delta is continuously monitoring the evolving security environment and assessing our operations based on security guidance and intelligence reports and will communicate any updates as needed,” the company said in a statement. United Airlines similarly paused flights to Tel Aviv “until further notice” last week, citing “security reasons.”The cancellations come after Israel killed two top Hamas leaders in strikes on Tehran and Beirut, ratcheting up concerns that Israel could escalate to all-out war in Lebanon, where Hezbollah militants are located. The Iranian government has also promised retaliation for the strikes, leading the U.S. military to deploy significant assets in the region.
Houthi Leader Vows Yemen Will Join 'Axis of Resistance' in Attack on Israel -On Thursday, Houthi leader Abdul-Malik al-Houthi vowed the Yemeni group will coordinate with the “Axis of Resistance” in an attack on Israel in response to Israeli escalations in the region.The axis includes Iran, Hezbollah, Shia militias that operate in Iraq and Syria, and the Houthis, who are officially known as Ansar Allah. Iran is vowing revenge for the Israeli killing of Hamas political chief Ismail Haniyeh in Tehran, and Hezbollah is warning it will escalate in response to the Israeli airstrike that killed one of its top military commanders in Beirut.Al-Houthi said Ansar Allah would respond to the July 20 Israeli bombing of Yemen’s Red Sea port of Hodeidah, which killed six people and caused about $20 million in damage. Israel launched the strikes after a Houthi drone hit Tel Aviv and killed one person.“The inevitable response to the Israeli aggression that targeted the fuel tanks in Hodeidah port is a must, and it is coming, God willing,” al-Houthi said, according to Al Mayadeen. Al-Houthi said the delay in the response from the axis to the Israeli escalations was a tactical decision. “The decision to respond is a collective decision across the entire axis, and within each front independently,” he said.The Houthi leader said there was a diplomatic push by the US, Europe, and some Arab countries to contain the response, but said Iran was undeterred, saying, “the matter touches upon the honor of the Islamic Republic by the killing of its guest in its capital.”Al-Houthi also touted recent Houthi attacks on US assets in the region, including the downing of a US MQ-9 Reaper drone. The US continues to bomb Yemen and intercept Houthi missiles and drones on a near-daily basis.The latest US strikes on Yemen targeted the Hodeidah province on Thursday. US Central Command claimed on Wednesday that it launched strikes in Yemen that destroyed two Houthi drones, a ground control station, and three anti-ship cruise missiles. The US bombing campaign has done nothing to stop Houthi attacks on shipping in the region and has only escalated the situation.The US has acknowledged that the Houthis would stop their attacks if there were a ceasefire in Gaza. But the Biden administration has refused to put real pressure on Israel to agree to a ceasefire and continues to provide military aid and political support, emboldening Israeli escalations in the region.The US-backed Saudi/UAE war against the Houthis from 2015-2022 involved heavy airstrikes and a blockade, and the Houthis only became a more capable fighting force during that time.
Israel Sends Truck Full of Dead Palestinians Into Gaza - On Monday, over 80 bodies of unidentified Palestinians were buried in a mass grave in Khan Younis after they were sent into Gaza on a truck by Israel.Yamen Abu Suleiman, the director of the Palestinian Civil Emergency Service in Khan Younis, told Reuters that it was unclear if the dead Palestinians were exhumed by Israeli forces from graveyards in Gaza or if they were tortured and killed in Israeli detention facilities.“The occupation provided us with no information about the names, or ages, or anything. This is a war crime, a crime against humanity,” Abu Suleiman said.Israeli forces have dug up cemeteries across Gaza, claiming the purpose was to look for the remains of Israeli hostages. Gaza’s Government Media Office has said Israel has taken 2,000 bodies out of Gaza.The Israeli human rights organization B’Tselem published a report on Monday that said 60 Palestinians have died in Israeli detention facilities since October 7. The report said the facilities have become torture camps under the direction of National Security Minister Itamar Ben Gvir.Also on Monday, Israeli airstrikes continued to pound the Gaza Strip. Gaza’s Health Ministry said at least 40 Palestinians were killed, bringing the death toll since October 7 up to 39,623, a total that doesn’t include thousands of Palestinians who are missing under the rubble and presumed dead.
Netanyahu Appoints New Spokesman Who Wants Ethnic Cleansing of Gaza - Israeli Prime Minister Benjamin Netanyahu has appointed a new spokesman who is a proponent of establishing Jewish settlements in Gaza and expelling Palestinians from the territory, Haaretz has reported.Omer Dostri, who is a regular guest on Israel’s Channel 14, was appointed to the new role on Sunday. He is aligned with the Israeli right and has a history of calling for policies that would result in the ethnic cleansing of Palestinians from Gaza.“There is no victory over Hamas without three basic conditions: military occupation of the entire Gaza Strip, military and civilian control of the area, and encouragement of voluntary migration of Gazans out of the strip,” Dostri said in January.While framing the idea of expelling Palestinians as “voluntary migration,” the Israeli military campaign is making Gaza uninhabitable and could give Palestinians no choice but to leave if they have the option. Dostri has suggested Egypt should be offered economic or military aid to agree to the transfer of “Gaza refugees to Sinai, even if only temporarily.”Dostri has also called for Israel to establish settlements in the areas of Gaza that it currently occupies. “Israel must order the rapid establishment of Israeli settlements in many of the areas it occupies, especially those close to the current border,” Dostri wrote in Makor Rishon.The Israeli military controls about 26% of Gaza’s territory, including a “buffer zone” that was established along the entire Israel-Gaza border. In these areas, the Israeli Defense Forces (IDF) has demolished most structures and has established some military bases. Israeli Prime Minister Benjamin Netanyahu has claimed he does not plan on establishing settlements in Gaza, but members of his coalition government and Likud party openly support the idea. Appointing a spokesman who favors settlements in Gaza also signals that the prime minister is aligned with that viewpoint.
Smotrich: It May Be 'Moral and Justified' for Israel To Starve 2 Million Palestinians to Death in Gaza - Israeli Finance Minister Bezalel Smotrich said Monday that it might be “moral and justified” for Israel to starve to death two million Palestinians in the Gaza Strip but said it couldn’t due to international pressure.“We are bringing in aid because there is no choice,” Smotrich said at a conference hosted by Israel Hayom, according to The Times of Israel. “We can’t, in the current global reality, manage a war. Nobody will let us cause 2 million civilians to die of hunger even though it might be justified and moral until our hostages are returned.”Smotrich continued, “Humanitarianism in exchange for humanitarianism is morally justified — but what can we do? We live today in a certain reality, we need international legitimacy for this war.”Smotrich is often portrayed as a fringe extremist in Israeli politics, but he has significant power as the finance minister and also holds a position in the Defense Ministry that puts him in charge of West Bank settlements. His threats to quit the government if a hostage deal is reached with Hamas is one reason why the onslaught in Gaza has continued.Genocidal rhetoric from Israeli officials has been used as evidence in South Africa’s genocide case against Israel at the International Court of Justice (ICJ). When Israel first imposed a full siege on Gaza following October 7, Defense Minister Yoav Gallant said the Israeli military was fighting “human animals.”While Israel has allowed some aid to enter Gaza, it has only been a trickle, and the majority of Palestinians are facing severe food shortages. Diseases are also rapidly spreading as the civilian infrastructure has been shattered by the Israeli bombardment.
Israel Airstrike Kills Hamas Leader in South Lebanon Port City of Sidon - Israel carried out an airstrike against a car in the southern Lebanese port city of Sidon on Friday evening, killing Hamas leader Samer Mahmoud al-Haj. A bodyguard, who has not been identified, was critically wounded.Haj worked in a nearby Palestinian refugee camp called Ayn al-Hilweh. The Israeli military and Shin Bet issued a joint statement claiming he was responsible for directing attacks against Israel and was “training terrorists” at the refugee camp.Sidon is located deep in southern Lebanon, almost 38 miles over the border. Israel has been carrying out strikes against Sidon this year, although most have been against Hezbollah, not Hamas.Israeli strikes against Hamas targets inside Lebanese territory are relatively rare, but often target high profile Hamas members, as in Januarywhen Saleh al-Arouri was killed. Arouri had been in charge of the critical hostage negotiations with Israel throughout the Gaza War. He was struck down in an attack in Beirut, the Lebanese capital city.Last week, Israel killed Hamas leader Ismail Haniyeh in an attack in the Iranian capital of Tehran. The Israelis have emphasized they will target Hamas members anywhere in the world they choose.
Israel Attacks Airbase In Central Syria Known To House Russian Troops -Following late night explosions being reported in the central Syrian region of Homs, state media SANA has subsequently confirmed that an Israeli airstrike has wounded at least four soldiers and caused "material losses" at the Shayrat Airbase.The Israeli attack came from the direction of northern Lebanon. It has become common for Israeli jets to use undefended Lebanese airspace from which to attack targets inside Syria. Images showing a series of large explosions have circulated on social media.Shayrat Airbase has long been well-known also as a base of Russian troop operations over several years. It remains unknown if Russians were present at the base when it was struck late Thursday night. Some Israeli sources have said ammo storage depots were hit, or else 'Iranian assets' were targeted - as is the usual refrain after such operations.
Ukraine Orders Evacuations From Donetsk Towns as Russian Forces Advance - On Sunday, Ukrainian officials ordered evacuations from some areas of the eastern Donetsk Oblast as Russian forces are making gains.Vadym Filashkin, the Ukrainian governor of Donetsk, said he ordered the mandatory evacuation of children and their parents from several villages. “The enemy is bombing the towns and villages of these communities every day, so it was decided to evacuate children with their parents or other legal representatives,” he said, according to AFP.Earlier in the day, the Russian Defense Ministry announced the capture of the Donetsk village of Novoselovka Pervaya as part of a push toward the city of Pokrovsk, which is used as a major supply hub for Ukrainian forces in the region.The Russian Defense Ministry claimed on Sunday that Ukraine lost 365 soldiers in fighting around Novoselovka Pervaya in the previous 24-hour period.As the fighting rages in Donetsk, Ukrainian President Volodymyr Zelenskyconfirmed Ukraine had received its first shipment of US-made F-16 fighter jets. But the planes and other military aid from NATO are not expected to turn the tide on the battlefield.Zelensky recently began floating the idea of holding peace talks with Russia, marking a shift in his position as he previously ruled out the idea altogether. But there’s been no sign that the US would support negotiations as any deal that cedes territory to Russia would hurt the election chances of Vice President Kamala Harris, who’s expected to be the Democratic nominee after President Biden dropped out of the race.
Ukraine Launches Incursion Into Russia's Kursk Oblast -Russia said Wednesday that its forces were fighting off a Ukrainian ground incursion into Russia’s Kursk Oblast, an attack President Vladimir Putin called a “large-scale provocation.”So far, Ukrainian officials have been quiet about the cross-border attack, which was launched from Ukraine’s Sumy Oblast.According to RT, the Russian military estimates up to 1,000 Ukrainian soldiers with dozens of armored vehicles entered Kursk. Drone attacks were also reported, and Kursk Acting Governor Alexey Smirnov said one hit an ambulance, killing two paramedics.In a meeting with his top officials, Putin said Ukrainian forces attacking Kursk were “firing indiscriminately from different types of weapons, including rockets, at civilian buildings, residential houses, ambulances.” The Russian Defense Ministry said Wednesday that the fighting in Kursk was ongoing and said it thwarted a breakthrough. The ministry said five residents of Kursk had been killed in the Ukrainian attack and claimed that it inflicted 260 casualties on the invading Ukrainian force.Ukraine has supported cross-border raids into Russia launched by militias, including the neo-Nazi Russian Volunteer Corps, but the fighting in Kursk appears to be its biggest ground attack into Russian territory of the war.Meanwhile, fighting continues across the frontlines, and Russian forces continue to make gains in Ukraine’s Donetsk Oblast. The Kursk attack could be an attempt to stretch Russia’s lines, but Ukraine has also been struggling with manpower issues and could end up losing more territory as a result.
German army declares itself rooted in the “traditions” of Hitler’s Wehrmacht - Last month, the German army published a document asserting that it bases itself on the tradition of the Wehrmacht, the army of the Nazi regime that massacred and starved tens of millions of civilians during World War II. Almost unnoticed by the public, on July 12 the Bundeswehr (Armed Forces) issued “Supplementary information on the guidelines for understanding and maintaining traditions in the Bundeswehr.” The document was signed by Lieutenant General Kai Rohrschneider, head of the Department for Operational Readiness and Support of the Armed Forces in the Defence Ministry. It explicitly names top officers of the Nazi Wehrmacht as “tradition-forming” and “identity-creating” for the Bundeswehr, today’s German army. This not only exposes the character of the political forces the major NATO powers are setting into motion as they wage war on Russia in Ukraine. It also exposes the arguments of German officials now charged with complicity in genocide over their support for the Israeli war on Gaza. Their bald denials that the German government could have any genocidal intent have no credibility when the government simultaneously rehabilitates the Wehrmacht, the army that played a central role in the Holocaust. Indeed, the “Supplementary Notes” is unabashed in its glorification of the political criminals in the officer corps of the Nazi regime. Despite the unspeakable crimes top Nazi officers committed during the Second World War, it hails them as “role models” and “heroes,” as the German ruling class once again prepares to wage war against Russia. Its purpose in so doing, the text states, is to “name examples that create tradition, strengthen identification and, as a result, increase the operational value of units and formations of the respective organisational area.” It continues: The turning point triggered by Russia’s war of aggression against Ukraine, which violates international law, has increased the importance of the war readiness of the armed forces, which is largely derived from a high operational value and high combat effectiveness, also for the cultivation of traditions. This turns reality on its head. In reality, it was the NATO powers who deliberately provoked Putin’s reactionary invasion of Ukraine in order to massively rearm Germany and realise long-held war plans. German imperialism, which had already attempted to annex Ukraine and defeat Russia militarily during the First and Second World Wars, is playing a leading role in the war offensive against Russia. The “Supplementary Notes” makes explicit that the German military believes the promotion of Nazi officers is essential to waging war on Russia today. That is, the promotion of the crimes of German imperialism in the 20th century flows from the crimes it is committing in the 21st. Indeed, the notes declare that “the cultivation of traditions should, among other things, strengthen operational readiness and the will to fight when the mission requires.” In one remarkable passage, the document explicitly argues that the need for military effectiveness requires valuing military skill over character and ability to function in society. It states that “greater attention must also be paid to military excellence (ability and skill) over other examples of tradition-building such as classic soldierly virtues (character) or achievements for the integration of the armed forces into society.” What flows from this? If the promotion in the army of Nazi officers who committed genocide and war crimes, including the mass murder of civilians, encourages similarly criminal and antisocial behavior, according to this argument, this is to be accepted as a necessary part of building a ruthless, victorious army.
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