US oil prices finished higher for the second time in three weeks after an OPEC production cut extension, the election of Donald Trump, production disruptions from a major hurricane in the Gulf, a Fed interest rate cut, and disappointment in Chinese economic stimulus measures….after falling 3.2% to $69.49 a barrel last week as fears of a broader war impacting oil supplies in the Middle East were diminished after Israel limited its attack on Tehran to military targets, the contract price for the benchmark US light sweet crude for December delivery climbed during early hours in overseas trading on Monday, following a decision by OPEC and its allies’ to delay their plan to pump more oil into the global markets beginning December, then rallied in New York Monday morning, on the announcement by OPEC+ to again push back their planned output hike, and settled $1.98 or almost 3% higher at $71.47 a barrel, as Iran outlined a possible response to Israel’s recent bombardment, and traders braced for jumpy trading ahead of the US election….oil prices declined slightly overseas on Tuesday, as markets awaited results from the U.S. presidential election, then traded higher in New York on a weaker U.S. dollar ahead of what was expected to be a close U.S. presidential election, and settled up 52 cents at $71.99 a barrel as producers in the Gulf of Mexico started evacuating workers from offshore platforms ahead of Tropical Storm Rafael, on track to strengthen into a Gulf hurricane later in the week…oil prices tumbled 2.5% in global trading early on Wednesday, weighed down by a stronger US dollar as early reports suggested that Republican candidate Donald Trump was edging closer to securing a second term in the White House, but partly rebounded after the EIA reported across the board inventory builds, and settled 30 cents lower at $71.69 a barrel as traders weighed a strong U.S. dollar against the potential that U.S. President-elect Donald Trump's foreign-policy plans could squeeze global oil supply….oil prices slipped on global markets on Thursday, as a strong dollar and lower crude imports in China outweighed supply risks from a Trump presidency and output cuts caused by Hurricane Rafael, but again traded higher in New York, as traders digested competing narratives on how Donald Trump’s presidency would affect the crude market, and settled 67 cents higher at $72.36 a barrel as the market continued to weigh the consequences of a Trump presidency and the Federal Reserve's latest decision to cut interest rates…oil prices were sharply lower in Asian markets on Friday as hopes faded over the possibility of further support packages for the Chinese economy amid concerns that the effects of Trump's policies would weaken the Chinese economy and deepen those concerns, then further retreated during Friday’s New York session as fears of damage to oil and gas infrastructure in the U.S. Gulf by Hurricane Rafael receded, and settled $1.98 lower at $70.38 a barrel, on concerns about the outlook for demand after data showed a drop in China's oil imports, and on disappointment over the size of China's fresh stimulus measures, but still ended 1.3% higher for the week…
meanwhile, natural gas prices also finished higher for the second time in three weeks, but just barely, on a drop in production and a hurricane threat in the Gulf….after falling every day last week to finish 13.9% lower at $2.663 per mmBTU on mild weather forecasts and on a larger than expected inventory build, the price of the benchmark contract for natural gas for December delivery opened 3.2 cents lower on Monday, but then moved higher, as traders shrugged off low demand and steady production and instead focused on the possibility of a tropical disturbance in the Gulf of Mexico, and then rallied to settle 11.8 cents higher at $2.781 per mmBTU on the return to service of Freeport LNG's export plant in Texas, and on forecasts for stronger demand than had been expected…however, natural gas prices pulled back early on Tuesday, as bearish sentiment proved too strong for waning production and potential demand disturbances in the Gulf of Mexico, and settled 11.1 cents lower at $2.670 per mmBTU, on forecasts for the mild weather to continue through late-November, keeping heating demand lower than usual for this time of year…natural gas prices opened 2.4 higher on Wednesday and trended upward, which some analysts attributed to the result of the Presidential election, and finished the session 7.7 cents higher at $2.747 per mmBTU on a drop in daily output so far this month due to pipeline issues, and on the evacuation of some oil and gas platforms in the Gulf of Mexico ahead of Hurricane Rafael….natural gas prices faltered through early afternoon trading on Thursday, held in check by benign weather and a seasonally stout storage increase, and settled 5.4 cents lower at $2.693 per mmBTU. as an exceptionally warm mid-November weather pattern was expected to keep national power demand much lighter than normal, with storage nearly full and exploration and production (E&P) companies signaling flexibility in ramping production….natural gas prices then see-sawed in a narrow band early Friday as traders weighed bearish weather patterns and robust supplies in storage against easing production levels and lingering hurricane uncertainties, and settled 2.4 cents lower at $2.669 per mmBTU, pulled down by Henry Hub spot prices sinking to the lowest average in 16 years, as the Freeport LNG facility might have encountered another operational snag, even as the December gas contract managed to finish 0.2% higher for the week…
The EIA’s natural gas storage report for the week ending November 1st indicated that the amount of working natural gas held in underground storage rose by 69 billion cubic feet to 3,932 billion cubic feet by the end of that week, which left our natural gas supplies 157 billion cubic feet, or 4.2% above the 3,775 billion cubic feet that were in storage on November 1st of last year, and 215 billion cubic feet, or 5.8% more than the five-year average of 3,717 billion cubic feet of natural gas that had typically been in working storage as of the 1st of November over the most recent five years….the 69 billion cubic foot injection into US natural gas storage for the cited week was a little more than the 66 billion cubic foot addition to storage that traders were expecting ahead of the report, and it was quite a bit more than the 19 billion cubic feet that were added to natural gas storage during the corresponding week in November of 2023, and also much more than the average 32 billion cubic foot injection into natural gas storage that had been typical for the same autumn 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 November 1st indicated that after an increase our oil imports and a big drop in our oil exports, we had surplus oil left to add our stored commercial crude supplies for the sixth time in nineteen weeks, and for the 22nd time in the past 48 weeks, despite a big increase in demand for oil that the EIA could not account for ...Our imports of crude oil rose by an average of 265,000 barrels per day to average 6,240,000 barrels per day, after falling by an average of 456,000 barrels per day over the prior week, while our exports of crude oil fell by an average of 1,411,000 barrels per day to 2,850,000 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 3,390,000 barrels of oil per day during the week ending November 1st, 1,676,000 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 supplies from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils averaged 418,000 barrels per day, while during the same week, production of crude from US wells was unchanged at a record high of 13,500,000 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 total of 17,308,000 barrels per day during the November 1st reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,334,000 barrels of crude per day during the week ending November 1st, an average of 281,000 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 506,000 barrels of oil per day were being added to the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA appear to indicate that our total working supply of oil from net imports, from transfers, and from oilfield production during the week ending November 1st averaged a rounded 468,000 barrels per day more than what was added to storage plus what our oil refineries reported they used during the week. To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a [-486,000 ] barrel per day figure onto line 16 of the weekly U.S. Petroleum Balance Sheet, in order to make the reported data for the supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus indicating there must have been an error or omission of that magnitude in the week’s oil supply & demand figures that we have just transcribed… Moreover, since 522,000 barrels per day of oil supplies could not be accounted for in the prior week’s EIA data, that means there was a 990,000 barrel per day difference between this week’s oil balance sheet error and the EIA’s crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week’s report are off by that much, making the week over week changes we have just cited nonsense….However, since most oil traders react to these weekly EIA reports as if they were accurate, and since these weekly figures therefore often drive oil pricing and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it’s published, and just as it’s watched & believed to be reasonably reliable by most everyone in the industry…(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil supply, see this EIA explainer….there is also an old twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had hoped to do about it)
This week’s net average 506,000 barrel per day increase in our overall crude oil inventories came as an average of 307,000 barrels per day were being added to our commercially available stocks of crude oil, while an average of 199,000 barrels per day were being added to our Strategic Petroleum Reserve, the forty-seventh SPR increase in the past fifty-four weeks, following nearly continuous SPR withdrawals over the 39 months prior to that… Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports inched up to 6,044,000 barrels per day last week, which was 2.4% less than the 6,193,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at a record high of 13,500,000 barrels per day because the EIA’s rounded estimate of the output from wells in the lower 48 states was unchanged at 13,100,000 barrels per day, while Alaska’s oil production was 7,000 barrels per day lower at 428,000 barrels per day, but still added the same 400,000 barrels per day to the EIA’s rounded national total as it did every week this year….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 3.1% higher than that of our pre-pandemic production peak, and was also 39.2% 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 16,334,000 barrels of crude per day during the week ending November 1st, up from from their 89.1% utilization rate of a week earlier, both fairly normal utilization rates for the middle of Autumn, when refineries typically schedule maintenance and seasonally change fuel blends…the 16,334,000 barrels of oil per day that were refined this week were 7.2% more than the 15,235,000 barrels of crude that were being processed daily during week ending November 3rd of 2023, and 3.6% more than the 15,761,000 barrels that were being refined during the prepandemic week ending November 1st, 2019, a week when our refinery utilization rate was at an unusually low 86.0% for mid-Autumn…
With the increase in the amount of oil being refined this week, gasoline output from our refineries was also higher, increasing by 13,000 barrels per day to 9,708,000 barrels per day during the week ending November 1st, after our refineries’ gasoline output had decreased by 259,000 barrels per day during the prior week.. This week’s gasoline production was still 5.1% less than the 10,228,000 barrels of gasoline that were being produced daily over week ending November 3rd of last year, and 3.3% less than the gasoline production of 10,036,000 barrels per day during the prepandemic week ending November 1st, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 233,000 barrels per day to 5,096,000 barrels per day, after our distillates output had decreased by 148,000 barrels per day during the prior week. After twenty-four production increases in the past thirty-six weeks, our distillates output was 8.4% more than the 4,700,000 barrels of distillates that were being produced daily during the week ending November 3rd of 2023, and 4.5% more than the 4,875,000 barrels of distillates that were being produced daily during the pre-pandemic week ending November 1st, 2019…
With this week’s modest increase in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the eighth time in nineteen weeks, increasing by 412,000 barrels to 211,280,000 barrels during the week ending November 1st, after our gasoline inventories had decreased by 2,707,000 barrels to a 102 week low during the prior week. Our gasoline supplies rose this week because the amount of gasoline supplied to US users fell by 331,000 barrels per day to 8,828,000 barrels per day, and rose even as our imports of gasoline fell by 266,000 barrels per day to an 83 month low of 229,000 barrels per day, while our exports of gasoline rose by 98,000 barrels per day to 884,000 barrels per day.…After twenty-four gasoline inventory withdrawals over the past forty weeks, our gasoline supplies were 2.7% below last November 3rd’s gasoline inventories of 217,210,000 barrels, and were 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 first time in seven weeks and by the most since July 5th, increasing by 2,947,000 barrels to 115,809,000 barrels over the week ending November 1st, after our distillates supplies had decreased by 977,000 barrels to a forty-seven week low during the prior week. Our distillates supplies rose this week because the amount of distillates supplied to US markets, an indicator of domestic demand, fell by 475,000 barrels per day to a 22 week low of 3,406,000 barrels per day, even as our exports of distillates rose by 152,000 barrels per day to 1,431,000 barrels per day, while our imports of distillates rose by 4,000 barrels per day to 162,000 barrels per day....Even after 24 inventory withdrawals over the past 41 weeks, our distillates supplies at the end of the week were 7.2% above the 108,001,000 barrels of distillates that we had in storage on November 3rd of 2023, while they are still about 6% below the five year average of our distillates inventories for this time of the year…
Finally, with the decrease in our oil exports and the increase in our oil imports, our commercial supplies of crude oil in storage rose for the 10th time in twenty-six weeks, and for the 24th time over the past year, increasing by 2,149,000 barrels over the week, from 425,509,000 barrels on October 25th to 427,658,000 barrels on November 1st, after our commercial crude supplies had decreased by 515,000 barrels over the prior week… Even with this week’s increase, our commercial crude oil inventories slipped to about 5% below the most recent five-year average of commercial oil supplies for this time of year, while remaining about 26% above the average of our available crude oil stocks as of the 1st of November 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 have somewhat leveled off since, and as of this November 1st were 1.9% less than the 435,762,000 barrels of oil left in commercial storage on November 3rd of 2023, and 3.0% less than the 440,755,000 barrels of oil that we had in storage on November 4th of 2022, and 1.5% less than the 434,102,000 barrels of oil we had left in commercial storage on October 29th of 2021…
This Week’s Rig Count
Since Baker Hughes has apparently reverted to their old table format, we are again including below a screenshot of the rig count summary from Baker Hughes…in the table below, the first column shows the active rig count as of November 8th, the second column shows the change in the number of working rigs between last week’s count (November 1st) and this week’s (November 8th) count, the third column shows last Friday’s (November 1st) active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting period a year ago, which in this week’s case was the 10th of November, 2023…
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EOG to ramp Ohio Utica activity by 50% next year | Oil & Gas Journal --EOG Resources Inc., Houston, guided to fourth-quarter crude production volumes in line with those of the 3 months ended Sept. 30, but said natural gas production should tick up about 5%. Looking ahead to 2025, executives plan to grow their drilling activity in the Ohio Utica basin by 50%.During third-quarter 2024, EOG Resources averaged crude oil and condensate production of 493,000 b/d, up from 490,700 in second-quarter 2024. Total volumes averaged about 1,076,000 boe/d, an increase of nearly 3% from the prior quarter. For fourth-quarter 2024, chief executive officer Ezra Yacob and the EOG Resources team are forecasting that the latter number will grow to 1,084,500-1,113,200 boe/d as natural gas output climbs to 2.03-2.12 billion cu ft equivalent per day (bcfed).EOG executives have lauded delineation and testing work in the Utica in recent months and indicated they will dedicate more resources to the play (OGJ Online, Sept. 5, 2024). Speaking on a conference call Nov. 8, chief operating officer Jeff Leitzell said the operator will be “up to two full rigs and one full frac fleet by year-end” as the next step to boosting activity.“The Utica provides an ideal operational environment to make significant gains quickly. We have decreased drilling days to drill three-mile laterals 29% year-over-year and have already achieved a record of drilling more than two miles in a single day,” Leitzell said. “We also have made significant gains on the completion side, achieving a nearly 13% increase in completed lateral feet per day compared to last year.”Despite guiding to slightly higher production, the company is sticking to a full-year capital spending budget of about $6.2 billion. Fourth-quarter spending is expected to be $1.23-1.43 billion compared with just under $1.5 billion last quarter.EOG generated a third-quarter net profit of $1.67 billion on revenues of nearly $6 billion. Those numbers were down from $2.03 billion and $6.2 billion in the same period of 2023, when the company’s average oil price was 9% higher.
Utica's Encino Boasts Four Pillars to Claim Top Appalachian Oil Producer After acquiring Chesapeake’s Utica assets in 2018, Encino Energy ascended to claim the titles of the largest oil producer in Appalachia, the most active driller in the region and the seventh largest private U.S. E&P company. Founded in 2017, rapidly growing Encino Energy made waves in the oil and gas industry through its four-pillar investment thesis built upon leveraging market inefficiencies, long-term capital deployment, technological advancements and world class operations. “[Back in 2016], companies were being forced to sell assets and it was difficult for us to see where the buyers for those were going to be, especially larger assets,” Encino Energy CTO Tim Parker told the audience at Hart Energy’s DUG Appalachia Conference & Expo on Nov. 7.“Our argument was that we were going to be able to find better quality assets if we bought larger assets. That meant that we had to have access to a lot of capital,” Parker said.The company’s ability to access large-scale capital enabled it to make strategic acquisitions when others could not, taking advantage of what Parker called a “major market inefficiency.” The second pillar to Encino’s strategy was to adopt a patient capital model, allowing for disciplined investment that paid dividends in the long run. This allowed the company to combine technical work with operational efficiency to reduce risk and enhance returns, Parker said. With the advent of new data technologies, the company was able to harness detailed geological and production data to refine its approach to drilling and production, outperforming expectations and competitors and unlock the Utica’s potential. However, the most defining aspect of the company’s success was its fourth and final pillar: a commitment to operational standards to improve drilling efficiency, reduce costs and maximize production output, Parker said.“The Utica looked to us to have all of the things that we were looking for and we thought it was grossly misunderstood,” Parker said. “The datasets that we had access to enabled us to see what needed to be done and to make us very confident that this was going to prove that it would deliver the kinds of returns that our investors expected.” When the company acquired the Utica assets, it inherited an asset base with more than 700 producing wells across nearly 900,000 acres. Since the acquisition, the company has grown its acreage to approximately 1.1 million acres and now produces from more than 1,000 wells. Oil production has nearly tripled and the company has unlocked some of the most productive oil locations in the region. The company also has made major strides with its oil takeaway capacity.“We are now routinely delivering wells with better than 1,500 bbl/d of initial production, and we’ve turned the play from being something that was uneconomic with zero inventory, into something where we have more than 10 years’ worth of inventory that we recognize today of high-quality oil locations,” Parker said. By drilling more efficiently—32% faster than other operators—Encino was able to outperform competitors in well completions and lateral footage drilled per day. The company has not only driven operational excellence but also established itself as a leader in sustainability. With 87% of water used in operations being recycled, zero routine flaring and no spills, the company has made major steps in reducing its methane intensity, setting new standards in environmental stewardship. “We have gotten distinctly better year after year after year, and that all translates into real economic returns,” Parker said.“I’m sure that there are other people who argue that their economics are maybe a little better, but we really don’t care. The unescapable conclusion here is that the economics that we’re producing in the Utica are world class and we’re very proud that we have been able to do that.”
Gulfport Spent $52M on Leases, Still Loves the Ohio Marcellus -Marcellus Drilling News --- Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), reported its third quarter 2024 numbers yesterday. 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 3Q24 averaged 1,057.2 MMcfe/d (1.06 Bcfe/d), up slightly from 3Q23’s average of 1,056.9 MMcfe/d. Production in 3Q consisted of 861.6 MMcfe/d in the Utica/Marcellus (81%) and 195.6 MMcfe/d in the SCOOP (19%). The production mix comprised approximately 91% natural gas, 6% natural gas liquids (NGLs), and 3% oil and condensate. The company has spent $52 million on maintenance leasehold and land investment so far this year, pointing out that leasing still happens.
MPLX to Build New Harmon Creek III Gas Processing in PA Marcellus --Marcellus Drilling News - In late 2015, MPLX (i.e., Marathon Petroleum) bought out and merged in the Utica Shale’s premier midstream company, MarkWest Energy, for $15 billion (seeMarkWest Energy Investors/Unitholders Approve Merger with Marathon). The “new” MarkWest, aka MPLX, plays on a much larger stage now, including ownership and operation of major assets in the Permian Basin and the Bakken Shale, in addition to the Marcellus/Utica. Yesterday, MPLX issued its third quarter 2024 update with some exciting news for the Marcellus: MPLX will add a 300 MMcf/d (million cubic feet per day) processing plant and 40,000 bpd (barrels per day) de-ethanizer to its Harmon Creek facility in southwestern Pennsylvania (Smith Township, Washington County).
Deep Well Services Company In Southwest PA To Be Bought By United Arab Emirates Company - A joint venture based in the United Arab Emirates will acquire one of the region's largest energy companies Deep Well Services for $223 million. Enersol — owned by ADNOC Drilling Co. and Alpha Dhabi Holding PJSC — signed an agreement to acquire a 95% equity stake in Zelienople-based Deep Well. The transaction is subject to regulatory approval. Deep Well is an oilfield services company that provides well drilling and completion services for many of the country’s biggest oil and natural gas producers around the United States and elsewhere in the world. Deep Well is the 11th-biggest energy company in southwestern Pennsylvania with about 600 employees, according to the Pittsburgh Business Times Book of Lists. The company was founded in 2008 and is privately held with Mark Marmo as its founder and president. “This partnership will allow our company to grow domestically and into new international markets, creating unmatched value for our employees, customers, and esteemed shareholders,” Deep Well Services said in a statement on LinkedIn. Enersol said in a statement Deep Well Services “will play a role in contributing to the development of the UAE’s conventional and unconventional energy resources” and work with ADNOC Drilling’s $1.7 billion contract to build 144 unconventional wells. Deep Well has long been an innovator in oilfield services and has worked with at least 70 natural gas and oil companies. Data released by Enersol said Deep Well had $205 million in revenue in 2023 and has free cash flow of more than 10%. “DWS’s attractive operational and financial profile is aligned with Enersol’s acquisition strategy to acquire, and invest in, multiple businesses and foster a scalable portfolio, enhancing market value and optimizing operational efficiencies,” Enersol said. Enersol has made four energy-related acquisitions already in 2023.
PA Re-Adds One Rig to 13; National Rig Count Even 2nd Week @ 585 -Marcellus Drilling News --Two weeks ago, Pennsylvania lost another rig, going from 13 rigs down to 12 rigs, the lowest that state has operated in the last 17 years (see PA Drops Another Rig to 17-Year Low; National Rig Count Even @ 585). Last week, PA picked up one rig, so the tally is back to 13. It’s still not great, but we suppose it’s progress. A little over two months ago (as of August 23), PA operated 21 rigs. We went through a period of rapid rig loss in the Keystone State. Last week, Ohio and West Virginia maintained their respective counts of 10 active rigs each.
2 Radical Groups Appeal CNX Gas & Water Pipeline Project in SWPA -Marcellus Drilling News -- CNX Resources filed a request with the Pennsylvania Dept. of Environmental Protection (DEP) in April 2023 to build two pipelines—two for natural gas—along a 13.9-mile route in Bell, Loyalhanna, and Salem Townships in Westmoreland County. An additional 4-mile pipeline would be built for water. Called the Slickville Trunkline Project, the DEP originally told CNX its application was “incomplete.” The DEP later told CNX (in March of this year) the agency considered the application “withdrawn” because it hadn’t received any more information (see Temporary Setback for CNX Gas & Water Pipeline Project in SWPA). Since then, CNX was able to provide the information the DEP wanted, and in early October, the DEP issued permits for the project, which has torqued off the antis.
66 Water Withdrawals Now Restricted In Susquehanna River Basin Due To Low-Flow Water Conditions, Most Shale Gas-related --On November 7, the Susquehanna River Basin Commission Hydrologic Conditions Monitor reported another increase in low stream flows that have triggered water withdrawal restrictions on water users, including multiple shale gas development water withdrawals.A total of 66 water withdrawals are operating under water use restrictions-- most are shale gas-related-- and five more have hydrologic conditions approaching restrictions.Shale gas development-related water withdrawals are often affected first by low stream flows because they take water from smaller streams. Contact the Susquehanna River Basin Commission to report suspected violations of these requirements.Visit SRBC’s Hydrologic Conditions Monitor webpage to learn more. Water withdrawals with restrictions found on the Hydrologic Conditions Monitor can be looked up on SRBC’s Search for Projects webpage.
CEO of PA Fracking Company Says Frackers Idle, Hitting Rock Bottom -Marcellus Drilling News -- Dan Doyle is president of Reliance Well Services, a hydraulic fracturing (oilfield services, or OFS) company established in 2008 and based in Pennsylvania. Reliance works throughout the Appalachian and Illinois Basins. In an article published by Doyle on the OilPrice.com website, he says low natural gas prices, high interest rates, and reallocation of capital have led to a slump in demand for oilfield services like those offered by his company. Doyle said, “Frac’ers never want to admit that they’re idle, but we’re idle.”It’s hard for OFS companies to make money on the thin margins at which they operate, and investors are staying away. Doyle says in the article below that there are “measly 17 frack fleets covering the Marcellus and the Utica.” He calls this an unthinkably low number, a “hope-to-God bottom.” He provides a frank assessment of the OFS space, saying it’s overbuilt. If you took an OFS company CEO to the local bar and chatted him up “off the record,” this is what he might say after a few beers... Frac’ers never want to admit that they’re idle, but we’re idle. We need producers to work and right now they’re not working very much. Blame that on low natural gas prices, high interest rates, capital reallocation, stock buybacks, outsized dividends, election year follies, declining lease quality, burdensome regulations, or whatever other reason you like, but producers just aren’t working much these days. Inflation hasn’t helped our cause either. $58 oil in 2018 is the equivalent of $72 oil today. As a counter, frac pricing has nudged up, but nothing close to what we’ve lost to inflation. Eating into our margins too is discounting. Every attempt is being made by services companies to get E&Ps to work. But to be sober about it, not much is working. Consider the VanEck Oil Services ETF (ticker: OIH) in which small and midcap oil field services companies (OFS’s) make up 80% of the fund. Oilfield services companies just aren’t garnering investor favor these days. A year ago, OIH was trading at $337. Today it’s at a lethargic $272. That’s a 19% decline against a 31% S&P gain. Note too the April high of $353, the same month in which oil also hit a 52-week high ($87/bbl). That’s a spoiler alert. OIH tracks WTI. Lying between the WTI and OIH trades is producer sentiment. Without a work-on bias for E&Ps, OFS’s suffer. All this talk of burgeoning LNG markets in Asia and Europe, and natural gas as a transition fuel, and yet the polestar of natural gas production, the Marcellus/Utica, has seen frac spreads drop from 40 to 30 a few years ago, to the current 17. That’s 17 frack spreads feeding transcontinental pipelines and the northeastern power generation machine. Maybe someday some movement, or some jury decision in an otherwise activist court, will reverse this anti-carbon bias, allowing demand and perennially low gas prices to rise and LNG terminals to flourish, but in the meantime, entire frac fleets sit by idly rusting into grown-over lots. That makes for OFS blood in the water, and the E&Ps know it. Adrift and bleeding out are the drillers and cementers, frackers and wire-liners, all of us stuck in each other’s miserable company, quietly speculating on who will go to the bottom first. Below bottom really, because one of us will always reach down further, right through the bottom of profitability into the muck of chasing market share—a euphemism for bankruptcy. Over the years I’ve seen this price capitulation play out uninterruptedly, usually coming from the same group that talks up horsepower over profitability, that sells jobs at prices that miss the costs of pumping, let alone maintenance programs, cap ex replacements, (replacements, not expansions) benefits, salaries, Christmas parties. It’s playing out now at one of our frac camps. An out-of-state group rolled in and took work below even our costs. And we have the logistical benefits of being locals. But that’s their right. Anyone can lose money any way they want. But surely, they must understand, right? That service companies that go to the bottom, perish on the bottom, especially with their self-assurances of “this time it’ll be different.” Our willingness to capitulate to price deflation, our bloodletting, will never stop. And just the same, E&Ps will never stop exploiting because when one OFS fails there has always been another in a conga line of “next, next, next.” But what to do with the measly 17 frack fleets covering the Marcellus and the Utica? That’s an unthinkably low number, a hope-to-God bottom. It’s worse than last call at a singles bar. Of course you’re going to do something stupid, especially if you’re a services company desperate for work. Our survivor’s instinct will overrule good sense. In a stair step of lows to lower lows, one of us will succumb to the neural onset of a death wish, so desperate is our need to please our E&P masters, and—of course—to work, even if it means losses. It’s the buckets bailing out the sinking ship moment, in which, predictably, the end result is always the same—one of us taking a Swaney off the precipice of measured patience, financial prudence, good common sense. Following will be the inevitable trip to Sherwin Williams, when the colors of the most aggressive price cutters is painted over by the survivors. BJ, C&J, Superior, and Producers, all gone but their equipment living on under fresh coats of new paint. click for larger version Look above at the frack spreads and the rig count and the obvious answer is we’ve overbuilt; too much money chasing too little work. Look too and see if you don’t see “consolidation” in the graph. Like the E&P’s recent M&A run, the OFS sector may have a few more deals to go as well. If there isn’t room at the table for everyone, simply remove a chair or two. There’s more for everyone that way, at least for a while. Eventually, the industry will turn back on, but with it will come new demands for newer equipment, modifications, and even better practices than the gains in efficiencies we’re logging these days. Frac spreads started out as Tier 2, progressed to cleaner burning Tier 4, then dual fuel and now electric. Bringing out older equipment won’t satisfy the E&Ps any longer. ESG may be falling out of favor, but climate accountability may stick and with it demands for expensive things like electric fleets. Just as we serve our masters, the E&Ps must serve theirs—climate minded bankers and investors—and the occasional states’ AG who’s higher-office aspirations are generally marked by a rallying call of “just stop oil.” In the meantime, service companies will continue to struggle but the best of us have been built to struggle. What other industry sees constantly recurring swings in revenue of twenty, thirty, forty percent? How many other industries are constantly forced without much warning into right-sizing their enterprise, hiring, laying off, insurance-on, insurance-off, pleading with bankers, ignoring bankers, seeking investors, ignoring investors, maneuvering and not maneuvering, in a tug of war, a Jekyll and Hyde state of schizophrenic paranoia. Had Freud lived through the shale revolution, the Great Depression, the OPEC market share fixation of 2015 and 2016, the pandemic, and 2024, he’d have come up with a name for us, a condition, something about overachieving to the point of sure demise, something about working and innovating ourselves right into the poor house. So far, I’m putting the blame on my OFS brethren. But that’s like blaming the chicken for the wolf that ate it. It’s really the E&Ps. They’re the masters. Me and my service- side brothers and sisters are just the dogs. We jump, sit and bark at their command so long as we have spare capacity. And then, when E&Ps are working and there isn’t a single piece of equipment left in the yard, we dutifully remain obedient and self- denigrating because we can’t help ourselves. If there was an OFS Anonymous, it would be the best attended meeting in Texas, bigger even than half-off wings night at Little Woodrow’s Bar and Grill in Midland. To be fair, I really don’t know how E&Ps do it, especially in the gassier shale plays, which with the rise in associated gas is becoming more of them. The margins are just so thin, even with natural gas prices up a tick, though still abysmally low, seemingly forever low. But sorry guys. For now, this pity party is for us service folk alone. Most times it’s about you, but not this time. This time it’s for us, your best friend; really, man’s best friend.*
Cecil Township Supervisors In Washington County Adopt 2,500 Foot Setback From Shale Gas Well Pads From Homes, Businesses, 5,000 Foot Setback From Hospitals, Schools - On November 4, the Cecil Township Board of Supervisors in Washington County adopted an ordinance establishing setbacks from shale gas well pads of 2,500 feet from homes and businesses as “protected structures” and 5,000 feet from schools and hospitals. The proposed 25-page ordinance also gives property owners the ability to waive the setback, however, all property owners within the 2,500 foot setback must agree to a waiver. The setbacks for schools and hospitals cannot be waived under the ordinance. Well pads must also be located not less than 1,000 feet from any residential lot line. The ordinance also includes provisions requiring an environmental impact analysis to “describe, identify and analyze all environmental aspects of the site and of neighboring properties that may be affected by the proposed operations or the ultimate use proposed to be conducted on the site.” The ordinance also sets requirements for other oil and gas development facilities “which employ the use of compressors, motors or engines as part of the operations and/or produce air-contaminant emissions or offensive odors, subsurface facilities, including horizontal drilling facilities, gathering system facilities and production facilities.” Many residents’ pleas to the Board of Supervisors for increased setback distances have been based on their negative experiences of living near well pads and or the growing list of peer-reviewed research linking poor health outcomes to people living in close proximity to fracking. That public engagement has been crucial. This is not a ban on drilling in Cecil Township. [MDN: That statement is not correct. It is a defacto ban on all new drilling.] There are five existing well pads that will be grandfathered in and that cover more than 60% of the township. In addition, land owners who want to waive the 2,500 foot setback and have drilling on their property can do so, as long as everyone within that buffer zone agrees. [MDN: A moot point as some will never agree.] The ordinance was as a follow-up to a series of four public hearings held by the Township on the issue of regulating shale gas well pads. A fifth hearing was held right before the Supervisors voted on November 4.*
3rd Circuit Sides with PA Antis’ Appeal of REAE Permits 2nd Time --Marcellus Drilling News - Williams’ Transco Regional Energy Access Expansion (REAE) project expands the mighty Transco pipeline in Pennsylvania and New Jersey to deliver an extra 829 MMcf/d of Marcellus gas to Pennsylvania, New Jersey, and Maryland. About 450,000 MMcf/d of the total capacity went online in late 2023 along Transco’s Leidy Line in Pennsylvania. Another 160 MMcf/d went online in PA and NJ in early July. On July 26, FERC granted Williams’s request to bring online the final 219 MMcf/d ahead of schedule (see FERC OKs Request to Place Balance of Transco REAE Online Early). Two PA-based anti-fossil groups are still trying to get permits for the project in PA invalidated. They won a minor victory in that regard with a federal court yesterday.
8 Mo. After NY Legislature Passed CO2 Frack Ban, Gov Has Not Signed -- Nearly eight months ago, the New York Senate passed a bill the Assembly had previously passed to ban the use of carbon dioxide in shale drilling (so-called “CO2 fracking”). Democrat Gov. Kathy Hochul, a reliable anti-fossil fueler, still has not signed the bill into law. What the heck is going on? Why is she missing in action? We've written about this a few times, beginning two months after the bill was passed (see our NY CO2 fracking stories here). No matter why she hasn't yet signed the bill, the longer it goes unsigned, the better chance we who live in NY have of trying to persuade Hochul not to sign it. We hesitate to offer any hope, but while there’s still time, there’s hope, however small it may
Marcellus Waiting to Exhale But Held Back by Regional, Economic Factors | Hart Energy --The U.S. natural gas market is in the midst of a sea change. Prices, adjusted for inflation, are as low as they’ve been in the last 30 years. Energy companies, however, continue to spend billions on new infrastructure in the hopes of a massive demand increase expected to hit before the end of the decade. Yet most of that development is happening on the Gulf Coast, via pipelines in Texas and LNG plants in Louisiana. The nation’s largest gas field on the eastern side of the U.S., the Marcellus Shale, has seen little of the transformations shaking the industry along the Gulf Coast. The Marcellus has steadily produced natural gas for more than a century and has plenty of reserves for a future of increased demand for exports and power generation. While producers continue to develop the region and extol the basin’s low-cost, high-quality virtues, low prices have led to flattened and—in some cases reduced—production. CEOs are often fighting political battles for permission to build infrastructure. An appeals court recently revoked a permit for a pipeline infrastructure project that was already operational, and the Mountain Valley Pipeline faced never-ending protests and court actions until the government intervened. “It’s never been more important for us to produce energy in this country—whether it’s increasing LNG exports to protect our allies, addressing the situation in Ukraine or powering the AI boom that’s taking place,” Toby Rice, president and CEO of EQT Corp., told Oil and Gas Investor (OGI). EQT bases its operations primarily in the Marcellus and the Upper Devonian in West Virginia. “It’s also never been more difficult to produce energy in this country. The last pipeline built in this country took an act of Congress. In order to provide the energy we need, we have to get back to building things.” The Middle Devonian Marcellus Shale stretches from the northeast in New York, to the mid-Atlantic in Pennsylvania, West Virginia and Maryland, and to the Midwest in Ohio. The formation is generally about a mile beneath the surface and about 1,000 feet above the Utica Shale. Due to the different depths, the two basins provide different products. The Utica is a major producer of oil and NGL. The Marcellus provides mostly dry gas, meaning it’s composed primarily of methane and requires little processing before being shipped to market. API describes it as the second-largest natural gas find on Earth. There are advantages and disadvantages to the Marcellus’ makeup. As of a result of its shallower depth, it’s cheaper to drill into the Marcellus than the Utica. Dry gas also costs less to commercialize because of lower processing fees. However, NGL can be a useful buffer for producers when natural gas prices dip. The NGL composite price held steady for much of the first half of the year at $6.91/MMbtu, while the cost of natural gas had fallen by about one-third, the Energy Information Administration said. The Marcellus does produce some NGL, but natural gas is the primary product by far. Pennsylvania led the basin in gas production, producing 85% of the region’s output in 2024, according to Rextag. “The United States has a vast natural gas resource in the Marcellus, but supplies are constrained due to lack of infrastructure. Costly pipeline project delays occur due to duplicative permitting processes, a lack of cooperation among regulatory agencies, and inadequate judicial review standards,” Larsen told OGI. “In fact, between 2013 and 2022, natural gas demand has grown by 43%, with only 25% growth in infrastructure to handle it. We can, and should, modernize the federal permitting process to benefit all energy sources, not just natural gas. Specifically, we are calling on Congress to restore the balance intended in the Natural Gas Act by removing the one-state veto power loophole in the current law.”
U.S. exports of ethane and ethane-based petrochemicals rose 135% from 2014 to 2023 - U.S. exports of ethane and ethane-based petrochemicals reached an all-time high of 21.6 MMt in 2023, up 135% since the U.S. began exporting ethane in 2014 and 17% more than in 2022, according to data from the U.S. Census Bureau. The rapid expansion of U.S. ethane and ethane-based petrochemical exports has been fueled by the growth in domestic ethane production, which has increased with the country’s natural gas production and the buildout of export and production infrastructure. Ethane is a natural gas liquid that’s primarily extracted from raw natural gas during processing. It’s mainly used as a feedstock for ethylene production, one of the most important building blocks in the petrochemical industry. Ethylene is a gas used to produce a wide range of products, including plastics, resins, and synthetic rubber. All elements of the ethane value chain, are produced in, consumed in, and exported from the United States, including ethane, ethylene, polyethylene, and other ethylene derivatives. We publish data on U.S. ethane production, exports, and product supplied (deliveries to domestic consumers); the U.S. Census Bureau publishes export data for ethane and ethane-derived products. U.S. ethane exports. The U.S. started exporting ethane in 2014 via pipeline to petrochemical plants in Canada. In 2016, the United States began exporting ethane to countries in Europe from marine export terminals. U.S. ethane export capacity has increased since 2016 with the completion of two new pipelines and three more marine export terminals—Marcus Hook, Pennsylvania; Morgan’s Point, Texas; and Nederland, Texas. In addition, the number of destination countries continued to grow along with the fleet of specialty built tankers. U.S. ethane exports increased to a record high of 3.0 MMmt in 2023, up 12% from 2022. In 2023, U.S. ethane was mostly exported to China, which accounted for 45% (1.4 MMmt) of U.S. ethane exports, followed by India (16%), Canada (14%), Norway (9%), and the United Kingdom (7%). U.S. ethane exports to China increased fastest between 2022 and 2023, rising 35% last year. China’s Satellite Petrochemical has begun ethylene production at two new ethane crackers since 2021, which has increased domestic ethane demand in China. Ethane exports to Norway rose the second fastest, rising 32% to 288,000 metric tons in 2023. Other importers of U.S. ethane include Belgium, Brazil, Canada, Mexico, and Sweden. Ethane’s high ethylene yields and cost advantages over naphtha in ethylene production have driven export volumes of ethane higher since 2014. Most petrochemical crackers have some flexibility in switching between ethane and naphtha as a feedstock, depending on the relative profitability of each feedstock. In the United States, cracking ethane to produce ethylene has historically generated higher profit margins compared with the margins from cracking naphtha, the most common feedstock in Western Europe and East Asia. Global petrochemical manufacturers looking to secure low-cost ethane feedstock to produce ethylene are developing new petrochemical crackers and associated infrastructure.After ethylene is processed by a polymerization reactor or another production unit, petrochemical manufacturers can develop intermediate products such as:
- Low-density polyethylene (LDPE): a thermoplastic used for more flexible plastic products such as dispensing bottles, plastic bags, and trays
- High-density polyethylene (HDPE): a thermoplastic used for more rigid plastic products such as piping, water gallon jugs, cutting boards, and motor oil jugs
- Ethylene alpha olefins: used for products such as flexible packaging, molding, and car applications
The United States exported ethylene derivatives to over 100 nations in 2023. Unlike ethane and ethylene, which require cryogenic cooling to turn them from a gas to a liquid, ethylene derivatives do not require special handling and can be exported or imported through any port or overland route capable of handling containerized traffic.Total U.S. ethylene-derivative exports grew 20% to 16.9 MMt from 2022 to 2023, led by a 69% increase (2.2 MMt) in exports to Asia. U.S. exports to Canada fell by 10% to 1.5 MMt; exports to Mexico grew 3% to 2.4 MMt in 2023. Until 2017, North American destinations, particularly Canada and Mexico, accounted for the largest share of U.S. polyethylene and other ethylene-derivative exports.Canada and Mexico do not impose tariffs on exports of U.S. ethane-derived chemicals because of reciprocal free-trade agreements. These countries also benefit from proximity and being able to import these products over land at lower cost compared with waterborne imports. However, exports to overseas destinations have also grown since 2017, with the exception of 2021 when the global pandemic led to lower demand.
US shale gas production has declined for the first time in a quarter century - Natural gas production from shale rocks in the United States decreased by 1% in the first nine months of 2024, reaching 2,270 million cubic meters per day, according to the Energy Information Administration (EIA). If this trend continues through the end of the year, the US shale gas production decline will be recorded for the first time at least since 2000. The key reason was reduction of gas production at the Haynesville shale formation located in the states of Arkansas, Louisiana and Texas: according to the results of the first nine months of 2024, production there decreased by 12%, and in absolute terms – by 50 million cubic meters per day. Production from the Utica formation in Pennsylvania, New York, Ohio and West Virginia decreased by 10% (by more than 15 million cubic meters per day) over the same period, while production from the Marcellus formation, an Appalachian basin part, remained virtually unchanged. As a result, despite an increase in gas production in the Permian basin (by 45 million cubic meters per day), total shale gas production declined for the first time in a quarter century. The dynamics of gas production is strongly influenced by falling gas prices. For example, in September 2024, the average gas price at Henry Hub was 15% lower than in September 2023 and 71% lower than in September 2024 ($81 vs $95 vs $278 per thousand cubic meters). The lower prices forced the companies to curtail production in the least profitable wells. According to Baker Hughes, in September 2023, the average daily number of active drilling rigs at the Haynesville formation decreased by 53% compared to January 2023, the latest high. In turn, the Utica Formation’s active rig count halved over the same period, and the Marcellus Formation’s rig count decreased by 36%. Geologic differences also play an important role. On the Haynesville formation, dry gas is produced, and on the Utica and Marcellus formations, it is dry gas together with gas condensate, while in the Permian basin, gas is produced together with oil. This explains the difference in production dynamics. In the Permian basin, gas production is growing together with oil production, including under the impact of relatively high prices: in the first nine months of 2024, the average price of WTI oil was 3% higher than between January and September 2023 ($77.7 vs $75.1 per barrel). Overall, shale rocks accounted for 79% of US gas production. Production from conventional reserves increased by 6% (to almost 620 million cubic meters per day) in the first nine months of 2024. As a result, the US total gas production remained at the same level as last year.
With Trump presidency looming, Biden plans to publish draft gas export study this year --The Biden administration plans to publish a draft study by the end of this year that could have implications for the future of new gas exports. The administration said earlier this year that it would work to more fully assess the impacts of exporting U.S.-produced natural gas on climate change, national security and economics. Since that time, the Energy Department has worked on studying those impacts. An energy official told The Hill on Thursday the department planned to have a draft analysis out before the end of this year. Publication will be followed by a 60-day comment period. Bloomberg reported Thursday that the administration planned to finish the study this month. It’s not clear whether the final version of the study will be completed before President-elect Trump takes office. But if it does, the study’s findings could put information on the record that conflicts with an anticipated effort from the Trump administration to rapidly approve more gas export facilities.The Biden administration announced the assessment in conjunction with its since-halted pauseon approving new gas export terminals. It said at the time that it was taking on the study because current analyses may not “adequately account” for factors such as climate change.
Consumers Energy completes Mid-Michigan (U.S.) natural gas pipeline - Consumers Energy completes Mid-Michigan (U.S.) natural gas pipeline Consumers Energy completes Mid-Michigan (U.S.) natural gas pipeline 11/8/2024 Consumers Energy has completed its Mid-Michigan Pipeline, replacing and upgrading 55 mi of natural gas transmission pipeline in Clinton, Shiawassee, Ingham, Livingston and Washtenaw counties. Mid-Michigan is the last in a series of major projects representing a nearly $1.5-B investment to modernize the company’s natural gas system, ensuring the major arteries that keep natural gas flowing to homes and businesses are as safe and reliable as possible. Consumers Energy finished work on the Mid-Michigan Pipeline in time for this winter heating season. The project replaced 20-in. pipeline dating to the 1940s with 36-in. pipeline that will carry large volumes of natural gas more safely and reliably. “Our friends and neighbors count on us to safely and affordably heat their homes and businesses, and we take that responsibility seriously,” said David Hicks, the Consumers Energy vice president who oversaw the project. “The Mid-Michigan Pipeline and our other pipeline projects play a central role in Consumers Energy’s Natural Gas Delivery Plan to ensure we meet Michigan’s needs for decades to come.” The pipeline also illustrated Consumers Energy’s commitment to protecting the planet. This spring, officials released two dozen young turtles rescued from potential harm during the project’s construction. Consumers Energy planted wildflower seeds along the pipeline’s route to attract birds, bees and other pollinators. The Mid-Michigan Pipeline’s first phase, from Williamston to Ovid, was completed last year. This year, crews worked through Sleepy Hollow State Park to bring the project to completion, working carefully to protect natural resources and reduce the environmental footprint. This decade, Consumers Energy also has completed the four-county Saginaw Trail Pipeline in 2020 and the South Oakland Macomb Network, which finished in 2022. Consumers Energy is Michigan’s largest energy provider, providing natural gas and/or electricity to 6.8 MM of the state’s 10 MM residents in all 68 Lower Peninsula counties.
Enbridge 'Ideally Situated' for Rising North American Natural Gas Power Demand, CEO Says --Lifted by a huge expansion of its U.S. natural gas utility network and myriad projects across North America in the onshore and offshore, Calgary-based Enbridge Inc. is gearing up for expanded power generation growth in the years ahead. Bar chart showing Enbridge's estimated natural gas growth across North America. Enbridge, which reports in Canadian dollars (C$1.00/US72 cents), issued its third quarter results in late October. CEO Greg Ebel was joined by his executive team to deliver the results and provide guidance.Since the second quarter, the midstream giant’s backlog is up by C$3 billion, reaching C$27 billion at the end of September, Ebel told investors. The backlog extends from Western Canada to the deepwater Gulf of Mexico (GOM), tying service to LNG terminals, natural gas utilities, oil infrastructure and increasingly, renewables.
LNG producer Cheniere tops 3Q profit estimates, raises annual forecast - Top U.S. LNG exporter Cheniere Energy on Thursday raised its annual core profit forecast after higher demand for liquefied natural gas (LNG) helped it top 3Q estimates. Results benefited from higher Asian spot LNG prices, which rose to their highest level in more than eight months in August, and an increase in exports. Cheniere exported 158 LNG cargoes in the quarter, up about 4% from the year-ago period. Its shares rose nearly 5% to $190.42 in midday trading. The company raised its full-year adjusted core profit outlook to between $6 B and $6.3 B, from its previous range of $5.7 B to $6.1 B. Cheniere's Corpus Christi Stage 3 project, an export facility in South Texas, is expected to soon start introducing natural gas into one unit, which will produce the first LNG before the end of the year, Cheniere CEO Jack Fusco said. Cheniere expects three trains of the 10-metric MMtpy expansion to produce LNG next year, which will add 3 MM tonnes of the superchilled gas to the spot market, he said. Sales of those cargoes will help provide funding for the capital requirements of the Stage 3 project's capital expenditures, said finance chief Zach Davis. On the proposed 20 MMtpy expansion at its Sabine Pass, Louisiana, facility, Cheniere said it is making "good progress" in discussions with potential buyers. Chief Commercial Officer Anatol Feygin said Cheniere expects continued growth in LNG demand from Asia, while Europe would remain stable in its gas consumption through the middle of the next decade.
Energy Transfer Readies FID on Permian Warrior in ‘Weeks,’ with Lake Charles LNG Accelerated on Trump Win --Energy Transfer LP is inching closer toward final investment decisions (FID) on two of its largest natural gas projects, management said Wednesday. Map showing Energy Transfer's Warrior Pipeline and other gas takeaway projects in South Texas. Expand Co-CEO Marshall McCrea during the second quarter earnings call in August had promised an FID for the Warrior natural gas pipeline would be announced during the 3Q2024 results, that did not come to fruition. However, “We are very likely within weeks of getting to FID. We're not there yet, but we've made a lot of strides.” Steel for the 42-inch diameter pipeline’s construction has already been purchased. The company also has begun examining ways to further expand the proposed system’s initial 1.5-2 Bcf/d capacity by another 700-800 MMcf/d.
Plaquemines Clears Another Regulatory Hurdle as Startup Nears — Venture Global LNG Inc. has received authorization from federal regulators to introduce hazardous fluid, or feed gas, to the high pressure and low pressure fuel gas systems and the warm flare system at its Plaquemines LNG project in Louisiana. “This is another step closer to initial liquefaction, as it helps move the entire pretreatment system closer to startup,” Criterion Research LLC said. The company has been working to bring the 20 million tons/year (Mt/y) Plaquemines facility online. It had been expected to bring up to six of the 36 smaller modular trains online by the end of the year, but analysts have pushed the timeline back as it awaits regulatory approvals.
Glenfarne Looks to Push Texas LNG Project to FID with Kiewit EPC Contract --Despite regulatory challenges, Glenfarne Energy Transition LLC is pushing forward to finalize the design of its 4 million ton/year (Mt/y) capacity Texas LNG project with the selection of its engineering, procurement and construction (EPC) partner. The LNG project developer disclosed it signed a lump-sum turnkey EPC contract with subsidiaries of Kiewit Corp. for its export project proposed in Brownsville, TX. But, before reaching a final investment decision (FID) on the terminal, Glenfarne CEO Brendan Duval said Texas LNG would be working with Kiewit to finalize engineering requirements. “Texas LNG received immense interest from world-class contractors that wanted to be involved in the project,” Duval said. “Kiewit’s proposal, capability and partnership vision for Texas LNG, as well as their significant execution and implementation expertise on the U.S. Gulf Coast, made a substantial impression on our project team.”
Sapphire Gas Looks to Boost ‘Constrained’ U.S. LNG Industry with International Container Exports -Small-scale LNG player Sapphire Gas Solutions is leaning on its experience with containerized transport to supply U.S. natural gas volumes to logistically challenged international markets. The U.S. Department of Energy (DOE) granted authorization for Sapphire to export 51.75 Bcf to free trade agreement (FTA) and non-FTA (NFTA) countries until the end of 2050. While long-term NFTA authorizations for large-scale LNG facilities have been impacted by a permit pause since the beginning of the year, DOE officials have said small-scale projects would be unaffected. Using transport units certified by the International Organization for Standardization (ISO), referred to as ISO containers, Sapphire CEO Sam Thigpen said the firm is looking to fill a growing gap in the international market for easily deployable and reliable volumes of natural gas.
Sempra Focuses on Port Arthur LNG Phase 2 Progress as Regulatory Risk Shrinks -With interest from long-term offtakers increasing and an end to regulatory issues in sight, Sempra Infrastructure management said the second phase of Port Arthur LNG in Texas is taking center stage. The LNG and Mexico infrastructure arm of San Diego-based Sempra is currently in the early phases of construction on the 13 million tons/year (Mt/y) Port Arthur LNG project and began commercializing its second phase. The two-train expansion at the facility southeast of Houston would increase export capacity to 26 Mt/y. In June, Saudi Arabian Oil Co., aka Saudi Aramco, became an anchor partner in the project, signing a heads of agreement for 5 Mt/y of offtake and a 25% stake. A non-free trade agreement (FTA) export permit for Port Arthur Phase 2 was delayed earlier in the year due to the Biden administration’s regulatory pause.
Commonwealth LNG Seeks Certification to Provide ‘Wellhead-to-Water’ Net-Zero Cargoes --Commonwealth LNG and its exploration and production affiliate Kimmeridge Texas Gas LLC (KTG) announced Friday that their operations would be certified by MiQ to better meet international demand for low-emissions natural gas supplies. The certification process for the 9.5 million tons/year Commonwealth facility being developed in Louisiana is expected to start within one month of reaching full commercial operations. Eagle Ford Shale-focused KTG, which produces 400 MMcfe/d, is expected to complete its certification in 2025. Kimmeridge Energy Management Co. acquired a 90% interest in Commonwealth in June. The company is targeting a final investment decision for the terminal next year. Management has said it expects its first cargo to be loaded in 2029.
NextDecade Advances FID Talks for Rio Grande Train 4 -NextDecade Corp. provided updates on the Phase 1 construction currently underway of Rio Grande LNG. The project received the necessary authorizations for construction from the Federal Energy Regulatory Commission and Department of Energy, NextDecade said in a Nov. 7 press release. Phase 1 development includes liquefaction Trains 1, 2 and 3, with a total capacity of 17.61 million tonnes per annum (mtpa). For the facility’s Trains 4 and 5, the company is awaiting a positive final investment decision (FID), which is still subject to maintaining government approvals and finalizing and entering into engineering, procurement and construction (EPC) contracts, among other things, NextDecade said. NextDecade said its advancing commercial discussions with potential counterparties “to finalize commercial arrangements for Train 4 in the coming months to support an FID on Train 4.” On May 20, the company signed an LNG sales and purchase agreement (SPA) with ADNOC for 1.9 mtpa of LNG from Train 4. Additionally, Aramco entered June 13 into a heads of agreement for the sale of 1.2 mtpa of LNG from Train 4, but a finalized binding sale and purchase agreement is in the works. The company also anticipates TotalEnergies will exercise its option to purchase 1.5 mtpa of LNG from Train 4. NextDecade expects to begin the EPC contracting process for Train 5 after a positive FID on Train 4. As of September 2024, construction of Trains 1, 2 and 3 is on schedule, NextDecade reported. For Train 1, foundation pours continued throughout the third-quarter, including work on compressor foundations. Train 2 completed its first concrete pour while equipment relocation for deep soil mixing is in process for Train 3, NextDecade said. Phase 1 development also involves the construction of two LNG storage tanks, each with a capacity of 180,000 cubic meters (cu. m). Plans for the facility's marine infrastructure include two jetty structures designed to accommodate LNG carriers with capacities of up to 216,000 cu. m.
U.S. LNG exports to increase at slowest pace since 2016 - U.S. liquefied natural gas exports this year will increase about 2%, analysts estimate, the smallest annual increase since 2016 when the first big U.S. LNG export plant opened, launching a boom that drove the country's producers to the top of world gas exporters. Slower gains reflect delays and production outages and the absence of a new facility since March 2022 when Venture Global LNG's started up its Calcasieu Pass, Louisiana, project. This year's 2% increase in export volumes, to 12.1 Bft3d, is down from 12% last year and the average growth rate of 43% between 2018 and 2022, according to data from the U.S. Energy Information Administration (EIA). The dollar value of U.S. exports reached a peak of $47.33 B in 2022, when prices skyrocketed after Russia's invasion of Ukraine. Prices eased and last year's U.S. exports were valued at $34.27 B, according to U.S. government data. Faster growth should resume next year when new projects start. Gains could rise around 14% to an estimated 13.8 Bft3d in 2025, according to an EIA outlook. U.S. LNG capacity could more than double over the next four years, rising to around 17.8 Bft3d next year, 20.6 Bft3d in 2026, and reach 24.5 Bft3d in 2028, analysts estimate. The seven big LNG export plants are capable of turning around 13.8 Bft3d of natural gas into LNG for export. Since 2023 the U.S. has been the world's largest exporter of the superchilled gas. The 2024 forecast includes some output from two projects scheduled to start operation by year-end: Cheniere Energy's Sabine Pass, Texas expansion, and Venture Global's Plaquemines, Louisiana facility. A contractor's bankruptcy has delayed the third project that was due to open this year, the QatarEnergy and ExxonMobil Golden Pass joint venture. The partners say they expect to deliver first LNG in the second half of next year, but others see the delay stretching into 2026. "That sort of thing is very disruptive and so getting back up to speed when something like that is happening is a challenge," said Jason Feer, Poten and Partners Global head of business intelligence. This year's growth was constrained by maintenance and other outages at the second-largest U.S. export facility, Freeport LNG's 2.1-Bft3d plant in Texas. Its output was cut by more than half for almost four months from mid-January, according to the company and data from financial firm LSEG.
US natgas prices jump 4% on Freeport LNG return, Gulf of Mexico hurricane (Reuters) -U.S. natural gas futures jumped about 4% on Monday with another hurricane expected to enter the Gulf of Mexico this week, the return to service of Freeport LNG's export plant in Texas and forecasts for stronger demand than expected. The U.S. National Hurricane Center forecast Tropical Depression 18 would strengthen into a hurricane as it moves northwest from the Caribbean Sea toward Cuba and the Gulf of Mexico, and then to weaken into a tropical storm before possibly hitting the U.S. Gulf Coast near Louisiana over the weekend. Hurricanes can boost gas prices by cutting output, although only about 2% of the nation's gas comes from the federal offshore Gulf of Mexico. But hurricanes can also reduce prices by destroying demand for gas through power outages and knocking liquefied natural gas (LNG) export plants out of service. Some storms do some of both. Front-month gas futures for December delivery on the New York Mercantile Exchange (NYMEX) rose 11.8 cents, or 4.4%, to settle at $2.781 per million British thermal units (mmBtu). Open interest in NYMEX futures, meanwhile, rose to a record high for a third day in a row, reaching 1.767 million contracts on Nov. 1. Financial firm LSEG said average gas output in the Lower 48 U.S. states held at 101.3 billion cubic feet per day (bcfd) so far in November, the same as in October. That compared with a record 105.3 bcfd in December 2023. With so many firms still curtailing drilling activities, analysts projected average output in calendar 2024 will decline for the first time since 2020 when the COVID pandemic cut demand for the fuel. Analysts, however,projected producers would boost output later this year and in 2025 to meet rising liquefied natural gas (LNG) export demand with two new export plants - Venture Global LNG's Plaquemines in Louisiana and Cheniere Energy's Corpus Christi stage 3 expansion in Texas - expected to start producing LNG later this year. Meteorologists projected the weather in the Lower 48 states would remain warmer than normal through at least Nov. 19. But even if mid-November is warmer than normal, it will be cooler than early November. With seasonally cooler weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 101.0bcfd this week to 102.6bcfd next week. The forecasts for this week were higher than LSEG's outlook on Friday, while the forecast for next week was lower. The amount of gas flowing to the seven big U.S. LNG export plants fell to an average of 12.0bcfd so far in November from 13.1bcfd in October. That compares with a monthly record high of 14.7 bcfd in December 2023. The feedgas decline so far this month was mostly due to a shutdown at Freeport's 2.1-bcfd plant on Friday due to a power feed interruption at the pretreatement facility, according to a company report to Texas environmental regulators. Gas flows to Freeport were on track to rise to a preliminary 1.8 bcfd on Monday, according to LSEG data, up from 0.3 bcfd on Nov. 1 and near zero on Nov. 2. That compares with an average of 1.9 bcfd during the prior week.
US natural gas prices drop 4% on mild forecasts (Reuters) - U.S. natural gas futures fell about 4% on Tuesday on forecasts for mild weather to continue through late-November, keeping heating demand lower than usual for this time of year and allowing utilities to add more gas into storage for at least a couple more weeks. Analysts projected utilities injected more gas than normal intostorage last week for a thirdweek in a row for the first time since October 2023. EIA/GAS NGAS/POLL Prior to last week, injections had been smaller than usual for 14 weeks in a row because many producers so far this year have reduced drilling activities after average spot monthly prices at the U.S. Henry Hubbenchmark in Louisiana fell to a 32-year low in March. Prices have remained relatively low since then. Front-month gas futures NGc1 for December delivery on the New York Mercantile Exchange fell 11.1 cents, or 4.0%, to settle at $2.670 per million British thermal units (mmBtu). That price dropoccurred even though a hurricane threatened to reduce oil and gas output in the Gulf of Mexico later this week. The U.S. National Hurricane Center forecast Tropical Storm Rafael would strengthen into a hurricane on Wednesday as it moves from the Caribbean Sea northwest towardCuba and the Gulf of Mexico before itweakens back into a tropical storm and hitsthe U.S. Gulf Coast around Louisiana over the weekend. Hurricanes can boost gas prices by cutting output, although only about 2% of the nation's gas comes from the federal offshore Gulf of Mexico area. But hurricanes can also reduce prices by destroying demand for gas through power outages and knocking liquefied natural gas (LNG) export plants out of service. Some storms do both. In the spot market, pipeline constraints caused next-day gas prices at the Waha hub NG-WAH-WTX-SNL in the Permian Shale in West Texas to remain in negative territory for a record 44th time this year. Analysts said the constraints were caused in part by reductions on Kinder Morgan's Permian Highway gas pipe in Texas that would likely continue through mid-November. Financial firm LSEG said average gas output in the Lower 48 U.S. states has slid to 100.9 billion cubic feet per day (bcfd) so far in November, down from 101.3 bcfd in October. That compared with a record 105.3 bcfd in December 2023. On a daily basis, output over the past three days wason track to drop by about 2.4 bcfd to a preliminary 26-week low of 99.2 bcfd on Tuesday. Part of that daily decline was caused by a force majeure on part of Kinder Morgan'sEl Paso pipeline after a leak on a line near a compressor in New Mexico. Meteorologists projected the weather in the Lower 48 states would remain warmer than normal through at least Nov. 20. LSEG forecast average gas demand in the Lower 48, including exports, would rise from 100.9 bcfd this week to 101.4 bcfd next week.
US natgas prices climb 3% on output decline, higher demand forecasts (Reuters) -U.S. natural gas futures climbed about 3% on Wednesday on a drop in daily output so far this month due to pipeline issues and the evacuation of some oil and gas platforms in the Gulf of Mexico ahead of Hurricane Rafael, and on forecasts for slightly cooler weather and higher heating demand next week than previously expected. Front-month gas futures for December delivery on the New York Mercantile Exchange rose 7.7 cents, or 2.9%, to settle at $2.747 per million British thermal units. Donald Trump was elected U.S. president, capping a remarkable comeback four years after he was voted out of the White House. "President Trump’s return to the White House will reverberate across the natural gas sector, with predominant impacts on the demand side via lifting the moratorium on new LNG export approvals, and a slower energy transition improving long-term power sector gas demand," analysts at energy consulting firm EBW Analytics said in a note. "The natural gas supply curve could also shift outward, with an eventual more gas-friendly FERC (U.S. Federal Energy Regulatory Commission) likely to speed gas infrastructure with lesser consideration of environmental impacts," EBW added. In its latest forecast, the U.S. National Hurricane Center said Rafael would crash across Cuba later Wednesday as it moves from the Caribbean Sea into the Gulf of Mexico. By Sunday, Rafaelis expected to weaken into a tropical storm in the western Gulf of Mexico. It is no longer certain whether the storm will reach land along the U.S. Gulf Coast. Earlier, the NHC expected Rafael to hit Texas or Louisiana early next week. Hurricanes can boost gas prices by cutting output, although only about 2% of the nation's gas comes from the federal offshore Gulf of Mexico area. But hurricanes can also reduce prices by destroying demand for gas through power outages and knocking liquefied natural gas export plants out of service. Some storms do both. About 7% of U.S. gas production from the Gulf of Mexico was shut in due to Rafael, according to the U.S.Bureau of Safety and Environmental Enforcement. Financial firm LSEG said average gas output in the Lower 48 U.S. states slid to 100.7 billion cubic feet per day (bcfd) so far in November, down from 101.3 bcfd in October. That compared with a record 105.3 bcfd in December 2023. On a daily basis, output over the past four days was on track to drop by around 2.7 bcfd to a preliminary nine-month low of 98.9 bcfd on Wednesday. Analysts noted that preliminary data is often revised later in the day. In addition to curtailments for Rafael in the Gulf of Mexico, the daily output decline was also related to a few force majeures and reductions on Kinder Morgan's El Paso pipe in New Mexico over the past couple of days, and maintenance on Kinder Morgan's Permian Highway pipe in Texas.
What a Trump Presidency Means for Oil and Gas Markets -- Energy markets are trying to digest what a Trump presidency means for oil and gas prices. While the bulk of Trump’s policies are expected to be bearish for prices, the key upside risk is how the future president deals with Iran. “We have more liquid gold than any country in the world,” Trump mentioned in his victory speech, which ties in with previous comments from the president-elect that the US will “drill baby, drill.” And while the incoming administration will hold a more favorable view towards the oil and gas industry, ultimately the potential for production growth is going to be largely dictated by price. There is additional upside to US oil production, but we do not think it will significantly move the needle. According to the quarterly Dallas Fed Energy Survey, oil producers need US$64/bbl to profitably drill a new well, and the Kansas Fed Energy Survey shows a similar number. This compares to 2025 and 2026 forward prices of around $70/bbl and $67/bbl respectively. The potential additional growth in US output is likely to come from federal lands with a reversal of some of President Joe Biden’s policies – although it may take a while until we see the impact of this. Onshore oil production on federal lands made up around 12% of total output in 2023; if you include offshore production, this share grows to around 26%. The Biden administration reduced lease sales on federal land and also increased royalty payments and bond requirements for production on federal land. If we compare the number of new leases issued during Trump’s first three years in office, it totaled more than 4,000. In Biden’s first three years, new lease issuances totaled a little over 1,400. However, lower issuances of leases are having little impact on output so far, with oil production on federal lands growing every year that Biden has been in office. Any upside in oil production would likely also provide an upside to natural gas output through associated production. A Trump presidency may also provide more certainty to the industry and provide comfort to them to invest in pipeline infrastructure, alleviating a persistent bottleneck for the US natural gas market, particularly in the Permian region. Investment in natural gas pipeline capacity also leaves the potential for stronger crude oil output. In addition, under Trump's presidency, we are likely to see a lifting of Biden’s pause on LNG export project approvals. While this does not change the short to medium-term outlook for the global LNG market, it will help remove some of the longer-term uncertainty around LNG supply. Trade uncertainty is another factor that could have a negative impact on energy prices, specifically when it comes to US energy prices. Our house view is that Trump is likely to focus on domestic issues initially, but his attention will turn to trade eventually. This could happen in late 2025/early 2026. The potential for growing trade friction will likely provide headwinds to energy prices, particularly if energy trade gets entangled in any of these tensions. US trade tariffs could see retaliatory action taken against the US on some exports, much like we saw from China during the 2018 trade war. Chinese oil buyers were reluctant to purchase US crude oil due to the risk and the eventual implementation of tariffs. This saw the WTI-Brent discount widen from around US$3/bbl to more than US$11/bbl in 2018. A ratcheting up in the trade war with retaliatory tariffs – or even the risk of tariffs – could see the WTI-Brent spread coming under pressure once again. However, we may not see as much pressure on the spread given that in early 2018, close to a quarter of US crude exports went to China, while this share has fallen to around 7% currently. For natural gas, the risk arises from LNG exports. In 2018, China imposed retaliatory tariffs of 10% on US LNG imports, which were then increased to 25% in June 2019. This saw US LNG exports to China fall to zero and they only started to recover when China issued tariff waivers as part of the trade deal. Since 2018, there have been large shifts in the global gas market, with a tight LNG market and Europe a significantly more important buyer of US LNG – which may provide some comfort to the US, if China were to target US LNG. But timing is important as there is a significant amount of LNG capacity set to start up towards the end of this decade, and this is likely to push the LNG market to a buyer’s market. A Smaller Portion of US Crude Oil Exports End Up in China For energy markets when it comes to foreign policy, how president-elect Trump will handle the Russia/Ukraine war and the Middle East conflict will be most important. Trump has said that he will bring an end to the Russia/Ukraine war, but it is unclear how he will go about doing so. However, managing to broker a peace deal would likely remove a large amount of geopolitical risk hanging over energy markets. It is unclear whether any peace deal would also involve the removal of certain sanctions against Russia. It is difficult to see a scenario where Europe agrees to increase its reliance once again on Russian fossil fuels. It would be in the interest of the US that Europe continues to shun Russian fossil fuels, given the US oil and gas industry has been one of the key beneficiaries of this move. The Middle East is the other geopolitical factor that continues to hang over energy markets. While Trump is supportive of Israel (which was evident during his previous term), he has said that he would look to bring peace to the region. This will be no easy task. It's possible that he aims to achieve this by taking an aggressive stance against Iran, which would also put pressure on Iran’s proxies. Any de-escalation would take a large risk premium out of both the oil and gas market. Iran sanction risk. The biggest potential impact of an incoming Trump presidency could come from his stance against Iran. It was Trump who re-imposed sanctions against Iran in 2018, which saw a significant fall in Iranian oil exports. And while President Biden did not lift these sanctions, they have not been strictly enforced. This has allowed Iran to increase exports significantly during President Biden’s term. The upside risk for the oil market is that Trump once again takes a hawkish view against Iran and strictly enforces these sanctions. This leaves the potential for a loss of more than 1m b/d of supply from the oil market. This would be enough to erase the surplus that we currently expect through 2025 and would require us to revise our current 2025 Brent forecast of US$72/bbl. Trump would likely try to counter any strength in oil prices as a result of this by pressuring OPEC+ to increase output. This was a fairly common occurrence during his previous term.
Covia Energy and Black Mountain Sand Combine to Create Iron Oak Energy Solutions, a Leading North American Proppant Supplier -- Covia Energy LLC ("Covia Energy") and Black Mountain Sand Holdings LLC ("Black Mountain Sand") today jointly announced the closing of a definitive agreement to merge in an all-stock transaction. The combined company, which now operates under the name Iron Oak Energy Solutions LLC ("Iron Oak Energy" or the "Company") is a leading diversified proppant supplier in North America with an active annual production capacity of approximately 30 million tons of sand. The Company's assets include strategically located in-basin sand mines in the Permian Basin and Eagle Ford Shale, as well as premium Northern White Sand facilities with an extensive logistics network. Iron Oak Energy will be headquartered in Houston, Texas and will maintain a corporate presence in Fort Worth, Texas. "This combination creates a leading proppant provider across the most active oil and gas shale basins in North America, and with a debt-free balance sheet, Iron Oak Energy is well positioned to pursue further mergers and acquisitions," said Mr. Segura. "The scale and reach of the combined company are unmatched and allow us to better serve our existing customers' needs across multiple basins and capture new opportunities. Further, our diversified network of production facilities and significant storage position in the Permian Basin provide the scale, reliability, and deliverability of volumes required to meet the increasing proppant demands of longer-lateral, higher intensity completions."
Sempra’s Dual-Coast LNG Plans Progress with Gasoducto Rosarito Pipeline Startup Looming --In Mexico, Sempra Infrastructure’s plans to create a corridor for U.S. natural gas to Asia is nearing a new milestone as it anticipates the start of commercial operations for a major pipeline extension. In August, Sempra Infrastructure disclosed that construction delays would push the launch of commercial operations for phase one of EnergÃa Costa Azul (ECA) into spring 2026. The 3 million tons/year (Mt/y) export project is now expected to produce first LNG volumes by the end of next year. ECA will be fed by U.S. natural gas exported into Mexico through the Gasoducto Rosarito pipeline project, a more than 180-mile pipeline connection bridging the facility to TC Energy Corp.’s North Baja system.
NFE Hunting for Buyers and Partners to Boost Value of Mexican LNG Export, South American Import Infrastructure - As it works to boost efficiency of its Fast LNG export project in Mexico, New Fortress Energy Inc. (NFE) is looking to streamline businesses and slim down debt with equity partnerships or asset sales. Map from Natural Gas Intelligence (NGI) showing the Sur-de-Texas-Tuxpan pipeline and associated gas infrastructure in Mexico. The New York-based company has been shifting its focus on a building spree of LNG import terminals in South America and the Caribbean, as well as export assets in North America, to boosting its financial position, management told analysts during a third quarter call Wednesday. President Andrew Dete, formerly managing director, said NFE is working to close the gap between the real-world value of its infrastructure assets and the perception of the current debt and equity levels.
Could Guyana, Suriname Compete With Rising Latin American LNG Exporters? - Latin America could become a major LNG player with two additional countries looking to enter the fold: Guyana and Suriname. Combined, the two nations at the northeastern edge of South America could provide 12 million tons/year (Mt/y) of “cost competitive” LNG in the 2030s, according to new research conducted by Wood Mackenzie. Several gas developments are already underway in both countries.
New gas pipeline in Argentina promises more domestic supply - Argentine officials celebrated the formal kick off of a major natural gas pipeline on Monday, a project that will provide supply from the country's booming shale development to both homes and businesses as well as eventually allowing for exports. The start of operations for the Northern Natural Gas Pipeline, originating in western Neuquen province, will put an end to imports from neighboring Bolivia while moving supply to population centers in northern provinces. Neuquen is home to the massive Vaca Muerta shale formation, Argentina's main hope for additional domestic oil and gas production that could end the need for costly foreign supplies. The newly-inaugurated project cost $710 MM, with $540 MM financed by the World Bank and the Development Bank of Latin America and the Caribbean. The government in a statement touted the possibility of future natural gas exports to buyers in Bolivia, Chile and Brazil, marking a reversal in longstanding Argentine energy flows. The project involved the reversal in the direction of gas moving on the Northern Natural Gas Pipeline, in addition to the construction of the La Carlota-Tio Pujio pipeline.
Industrial End-Users Look to Escape Natural Gas Price Volatility, ‘Structural Disadvantage’ in Europe --Natural gas price volatility and shifting demand trends are pushing major European chemical manufacturers to revamp their strategies or search for other investments outside the region. Bar chart showing 2024 versus 2023 global natural gas demand expectations. While most of 2024 has been marked by falling Title Transfer Facility prices and slightly reduced LNG imports on the continent, a growing number of large European manufacturers have indicated in 3Q2024 that high energy prices have taken their toll on the sector. Dow Inc. CEO Jim Fitterling said that “while energy costs are higher” the European power market has “moderated a bit” as LNG imports created a “relatively competitive floor” for TTF.
Facing tariff threat, Europe eyes options to appease Trump, including LNG - The European Union is considering options to appease Donald Trump on his return to the White House as it braces for a resumption of U.S. tariffs and other trade threats plus tough exchanges on how to treat China. Trump warned shortly before his U.S. presidential victory that the 27-nation bloc will have to "pay a big price" for not buying enough American exports. Brussels recognizes that threats of 10% tariffs on all U.S. imports and 60% on those from China are credible, not just campaign rhetoric, EU officials say. The European Commission has already begun modeling the impact on the bloc as a whole and on those nations likely to be hardest hit. They could include major car producer Germany and Italy, the second largest EU exporter to the United States. Though cagey in public, some governments expressed anxiety in the lead-up to the election, EU diplomats say. In addition to the direct hit to a sluggish EU economy from tariffs on its products, the EU could face a second blow as Chinese producers, effectively facing greater barriers to the U.S., may steer more exports to Europe. In response to Trump's 2018 tariffs on EU steel, the EU put in place safeguard measures to limit imports of steel tariff-free to its markets. But these measures are due to expire in June 2026, with no extension possible under EU or WTO rules. The EU will seek to contact the future Trump administration before his inauguration and is already mulling future areas of cooperation that could ease or even remove the tariff threat. One possible field is liquefied natural gas (LNG), which the EU could import more of from the U.S. to ease the trade deficit that preoccupies Trump. In 2018, Trump and then EU Executive Chief Jean-Claude Juncker agreed a deal that included an EU wish to import more U.S. LNG. It helped ward off fresh tariffs on EU goods beyond steel and aluminum. Brussels hopes Trump will prove a president it can do business with again. Investments in the EU to diversify energy supply, particularly after Russia's invasion of Ukraine, could lead to increased LNG flows from the U.S., EU officials believe. Some EU diplomats suggest China, on which U.S. policy is likely to toughen, could be another area of cooperation, although the EU wish to stick to global trade rules and "de-risk" but not de-couple from China will make discussions tough. A Trump presidency has other major implications for Europe, which faces the long-term challenge of how to finance welfare spending for an aging population during modest economic growth. If Trump reduces support for the NATO military alliance and the Ukraine war, Europe's governments would have to fund increased defense spending from budgets already stretched by national debt levels close to 90% of output. Trump's proposals, if enacted, will weigh on European growth and likely lower inflation, especially if manufacturers, already suffering through a lengthy industrial recession, start to curb workforces. Increased imports from China could also weaken prices, while more U.S. oil drilling and coal production could add to deflationary pressures. Trump's inflationary tariffs and higher budget deficit will likely strengthen the U.S. dollar, so the U.S. may export some of its own inflation, but that will not be enough to offset the other factors that weigh on prices. This could force the European Central Bank to cut interest rates below 2% next year, where it will once again stimulate growth after several years of restrictive policies.
Opinion: Trump-led oil and gas export boom may go bust in Europe trade spat -- Oil and gas producers in the U.S. expect to find it easier to ramp up production and exploration under the incoming second administration of Donald Trump. Finding local and lucrative markets for their wares may be the bigger challenge. Producers expect the new administration to streamline permit processes relating to fossil fuel extraction and distribution that should result in a climb in U.S. oil and natural gas output, which is already at record highs. That bodes well for firms that export liquefied natural gas (LNG), crude oil and refined fuels and will likely encourage further growth in U.S. export capacity of those products. However, energy exporters also run the risk of getting caught in trade-related crossfire should Trump's plan to impose steep tariffs on a slew of imported goods trigger retaliatory responses in consumer markets. European nations are particularly likely to be targeted with tariffs by the incoming administration as the long-standing U.S. trade deficit with Europe - around $240 B annually - is a major irritant for Trump allies. President-elect Trump said last month that Europe would "pay a big price" for not buying enough American exports and has threatened to impose blanket tariffs on European goods. However, Europe is also the single largest market for both U.S. LNG and crude oil exports, accounting for 49% of all U.S. LNG shipments and 47% of U.S. crude exports this year, according to ship-tracking data from Kpler. Since Russia's invasion of Ukraine in 2022, Europe has had to import record volumes of fuels and oil from other suppliers, and the U.S. has been the main beneficiary by shipping out record volumes of those commodities. In 2023, U.S. LNG export revenue was > $30 B and two-thirds of all U.S. LNG shipments went to Europe, according to the U.S. Energy Information Administration (EIA) and Kpler. The U.S. exported around $10 B of crude oil in 2023, with just under half sent to Europe, EIA data showed. Those U.S. LNG and oil shipments have resulted in a profit boom for U.S. exporters and valuable tax revenue for the U.S. Treasury which the next administration will want to protect. However, the high price tag of energy imports has also hurt European consumers and is accelerating Europe's energy transition away from fossil fuels. A slowdown in economic activity has also curbed industrial gas use and power consumption and has triggered a more than 20% drop in Europe's LNG imports over the first 10 months of 2024 from the same period of 2023. Europe's imports of U.S. crude oil have climbed to a record so far in 2024 but the continent's overall crude imports have contracted by around 1%, showed data from Kpler. This indicates that European energy product importers have scope to reduce purchases of U.S. LNG and crude as overall gas use remains stunted while crude supplies from alternative sellers are abundant. European policymakers are already planning responses to Trump's intended tariff impositions, wary of a potential deterioration in economic ties with a key trade partner while embroiled in a trade spat with China. Trade experts in Brussels - home to the European Union's policy arm - will want to avert any further souring in the region's economy and will likely seek to maintain strong ties with the U.S. during Trump's next term. However, they will not shy away from proposing tariff measures of their own during negotiations, if only to avert being steam-rolled by blanket tariff threats from the U.S. U.S. energy products are likely to be an attractive option for retaliatory tariffs as Europe can readily source LNG and oil from other keen sellers and thereby hurt U.S. suppliers without harming their own consumers. On paper, U.S. energy product exporters could redirect cargoes to other buyers if Europe somehow becomes shut off during a trade scuffle. But in reality, the loss of European buyers would be a heavy blow to U.S. firms, especially LNG exporters. All current U.S. LNG export terminals are located on either the East Coast or in the U.S. Gulf and so are better situated to service a Pan-Atlantic trade route than across the Pacific to buyers in Asia. The U.S. to Europe journey is also only a fraction of the distance and time to major buyers in Asia. The roughly 12-day trip from Cove Point LNG terminal in Maryland to Wilhelmshaven in Germany - a major European LNG import hub - is a third of the time of the trip to Guangdong in China, the world's largest LNG buyer. Longer journeys mean longer turnaround times for LNG sellers, who need speedy vessel turnover to maximize revenue. So while U.S. sellers could feasibly maintain total export volumes by redirecting cargoes if Europe became off limits, they would most likely incur sharply higher shipping costs and longer return times if they had to go to Asia instead.
Europe can replace gas coming via Ukraine using LNG terminals, Snam CEO says Europe can use several liquefied natural gas (LNG) terminals to replace Russian gas flowing through Ukraine when a transit deal expires at the end of December, the CEO of Europe's biggest gas grid operator Snam said on Thursday. Russia shipped about 15 Bm3 of gas via Ukraine in 2023 - only about 8% of peak Russian gas flows to Europe via various routes in 2018–2019 - supplying mainly Hungary, Slovakia and Austria. Ukraine has refused to renew the transit deal with Russia due to the ongoing military invasion. With the deal coming to an end this year, some concerns have arisen over energy security risks for these countries. "Europe has plenty of LNG facilities to offset this 15 Bm3 of Russian gas," Snam's Stefano Venier said, speaking at a post-result conference call. Venier mentioned an LNG terminal that started operations in Greece's northeastern port of Alexandroupolis in October, and a floating terminal that Snam will place offshore the Italian city of Ravenna early next year. The group has also finished works to boost its gas export capacity towards Austria to 9 Bm3 from a previous 6 Bm3. Snam on Thursday reported a 12% rise in nine-month core earnings to €2.09 B. Speaking after the results, Snam's Chief Financial Officer Luca Passa confirmed the group was in negotiations with Eni over the energy group's carbon capture and storage (CCS) division. "We are doing due diligence on the new Eni CCS unit spinoff to become a partner and eventually round up our stake... this would allow us to diversify our presence in this area of business," Passa said. Snam has completed the funding for this year and could start to do pre-funding activities for 2025 with future moves depending on the reaction of the financial markets to the U.S. elections, Passa said.
LNG Freight Rates Forecast to Stay Lower for Longer -- A lack of arbitrage opportunities, high storage inventories in Europe and Asia, an oversupply of vessels and export project delays have all combined to drag global LNG freight rates to the lowest levels in the last five years at this time of year. Natural Gas Intelligence's (NGI) West of Suez LNG vessel rate curve. The cost to hire an LNG vessel has dropped below $50,000/day. Spark Commodities assessed LNG freight rates at $19,750/day in the Atlantic on Tuesday, while they stood at $29,000/day in the Pacific, “bucking seasonal trends expected in the freight market as we head into winter,” Spark Commodities analyst Qasim Afghan told NGI. It is also the first time in the last five years that fourth quarter prices have dropped below $50,000/day in either the Atlantic or Pacific basins, according to Spark Commodities data.
Chevron CEO Says ‘Healthy’ Global LNG Inventory Unlikely to Tighten Up in 2025 - Global LNG demand may be growing, but Chevron Corp. CEO Mike Wirth said ample natural gas supply is stacking the cards against the market tightening in 2025. (chart: global natural gas demand outlook by region) Speaking with investors during the third quarter conference call, Wirth on Friday said all signals point to rising LNG consumption. “But it comes against a backdrop of very healthy inventories,” he said. The European inventory is “strong for this time of year. Inventories in the U.S. are very healthy for this time of the year. You see that reflected in Henry Hub prices. And so overall, we've got a market that currently has healthy inventories…”
Gazprom subsidiary files $880-MM claim against Linde - A subsidiary of Russia's gas major Gazprom has filed a claim for 85.7 B roubles ($879 MM) against global industrial gases and engineering company Linde and its subsidiaries, court documents showed on Wednesday. The Gazprom subsidiary, in charge of the Amur Gas Processing Plant, filed the claim on Oct. 29 in the Arbitration Court of the Amur Region, in Russia's east. Linde left Russia and the plant, which facilitates Russian gas exports to China via the Power of Siberia pipeline, following Russia's invasion of Ukraine in February 2022. The plant's first technological line started operation in June 2021. The plant is expected to reach full annual capacity of 42 Bm3 of natural gas processing next year. Linde, the world's largest industrial gases company, said in 2022 it was suspending all business development activities in Russia, ceasing supply to certain customers, and divesting industrial assets to reduce its footprint in the country. Gazprom and Linde did not immediately reply to emailed requests for comment. There have been a number of claims against Linde in Russia following its departure from the country. In one of the cases, a Russian court ordered that assets worth around $1.15 B of a British subsidiary of Linde be frozen in a dispute over a gas processing plant in August.
Exxon targets first LNG from $30-B Mozambique Project by 2030 --ExxonMobil is expecting the first liquefied natural gas (LNG) output from its project in Mozambique in 2030, a company executive said on Thursday.Exxon, along with partners including Eni and China's CNPC are developing an LNG project in northern Mozambique, with the U.S. energy giant leading the construction and operation of the onshore liquefaction and related facilities."We will most likely next year start some early works in (the) Afungi (site) to get things going, keep it on track and allowing us to get first LNG (production) in 2030," Frank Kretschmer, general manager at the company's Mozambique unit, told delegates at an energy conference in Cape Town.The company said on Wednesday that it now expected a final investment decision for its Rovuma LNG project in Mozambique in early 2026. The cost of the project is estimated at about $30 B.
Adnoc Signs First Long-Term SPA for Ruwais LNG as Project Advances to 2028 Startup --Abu Dhabi National Oil Co. (Adnoc) has signed its first long-term agreement to supply LNG from its Ruwais export project, which was sanctioned earlier this year. The company said it would supply an affiliate of Germany’s Securing Energy for Europe GmbH (Sefe) with 1 million tons/year (Mt/y) of the super-chilled fuel for 15 years. Deliveries are expected to start in 2028 when the terminal is scheduled to enter service. “This partnership with Adnoc supports our efforts to responsibly diversify our energy sources, enhance security of energy supply for Germany and Europe and to support our customers on their decarbonization journey,” said Sefe CEO Egbert Laege. “Furthermore, it is an important step for Sefe’s ambition to drive the energy transition and become a European energy major in the low-carbon economy.”
QatarEnergy Inaugurates Four LNG Carriers - QatarEnergy said Thursday it had held naming ceremonies to inaugurate four of the dozens of conventional-size liquefied natural gas (LNG) vessels it had ordered from South Korean builders. Three of the newly inaugurated ships, named “Lebrethah”, “Nuaijah” and “Umm Swayyah”, mark the first deliveries by Hanwha Ocean Co. Ltd. under QatarEnergy’s LNG fleet expansion program, state-owned QatarEnergy said in a statement. “This is a historic moment as these three LNG vessels prepare to set sail on their missions across the globe, providing a cleaner and more economic source of energy, and are equipped with state-of-the-art technologies to achieve optimal fuel efficiency and reduce emissions”, Saad Sherida Al-Kaabi, president and chief executive of QatarEnergy and energy minister of Qatar, told one of the two separate ceremonies in Geoje, according to the online statement. The other ship, named “Id’asah”, will also be the first delivery by Samsung Heavy Industries Co. Ltd. under the program, QatarEnergy said. Both the Hanwha Ocean Shipyard and the Samsung Heavy Industries Shipyard are in the city of Geoje on the country’s southern coast. South Korean government representatives attended the ceremonies, QatarEnergy said. It gave no date when the ships would be deployed. Two months ago QatarEnergy inaugurated two of the 12 conventional-size LNG tankers it ordered from China State Shipbuilding Corp. CSSC. The two, one named after former Exxon Mobil Corp. chief executive Rex Tillerson, will be deployed by QatarEnergy Trading under long-term charters, QatarEnergy said in a press release September 10. On September 9 it announced it had contracted the Chinese state-owned shipbuilder for six more LNG ships, bringing the number of LNG vessels ordered by QatarEnergy under its fleet expansion program to 128. The new orders consist of QC-Max tankers, each with a capacity of 271,000 cubic meters (9.6 million cubic feet). The new orders, which QatarEnergy said are the biggest LNG carriers and will incorporate sustainable innovation, are scheduled for delivery between 2028 and 2031. The new orders increased the number of QC-Max ships in its fleet expansion program to 24, with all build contracts awarded to CSSC for a total contract value of about $8 billion. CSSC is building the carriers at the Hudong-Zhonghua Shipyard. Of the 18 earlier ordered, eight are set to be delivered between 2028 and 2029, the rest between 2030 and 2031, according to a QatarEnergy statement April 29.
Booming Iranian Oil Trade in the Spotlight after Trump Win | Rigzone --Donald Trump’s impending return to the White House has brought Iran’s booming oil flows back into focus — as well as the possibility that the president-elect will once again try to crush them. Back in 2019, Trump led the US in a so-called maximum pressure campaign designed to choke off the Islamic Republic’s exports and, with it, Tehran’s access to petrodollars. Under Joe Biden’s leadership, however, flows have boomed again with an emphasis on policies that cause friction to Iran’s shipments but don’t curtail them. Trump’s return to the Oval Office from January — along with rhetoric during his campaign that he would be tough on Iran — raises the question of whether he’ll target those flows again. To circumvent the US measures, Iran has increasingly relied on a fleet of tankers and trading practices that are outside of the West’s oversight. “I think this will have a material impact on Iranian oil exports,” Ben Cahill, energy markets and policy director at the University of Texas, said of Trump’s return. “It’s hard to put the genie back in the bottle entirely after the black market has developed for years and sanctions evasion and obfuscation has advanced. But I suspect Trump will lean on China.” Cahill estimates that Iran’s flows could be curtailed by between 750,000 barrels a day and 1 million barrels a day. If that were to prove accurate, it would take them back down to around the 1 million-a-day mark last seen during the early stages of Covid. Iran’s oil exports averaged 1.7 million barrels a day in the third quarter of this year, almost two-and-a-half times as high as they were in second half of 2019, according to data from TankerTrackers.com Inc., which has been monitoring the nation’s secretive shipments using satellite data for years. With widespread expectations that oil and diesel markets will be in surplus next year, the incoming president could also have room for maneuver. Bob McNally, president of Rapidan Energy Group, says Trump will target ports that take Iran’s oil, and make the Middle East country a priority in his talks with top buyer China. A hard line sanctions policy has the potential to disrupt as much as 1.3 million barrels a day of Iranian crude flows, Rapidan estimates. A shift in global dynamics since Trump’s last term may also require the next president to recalibrate his approach to relations with Saudi Arabia, said McNally. The de facto leader of OPEC struck an agreement in 2023 to normalize relations with Tehran for the first time in seven years, and ties have become less tense in recent years. “Iran policy is the most important consequence of the election,” McNally said Wednesday in Abu Dhabi. “The vote between Harris and Trump was literally up or down on Iranian supply. Trump is going to crack down on Iran from day one as one of his biggest priorities.”
China Oil Imports Sink Again - Oil imports into China sank again last month, highlighting soft consumption in the largest buyer just as traders weighed the implications of Donald Trump capturing the White House and potential supply rises from OPEC+. Imports contracted to 44.7 million tons in October, according to customs data on Thursday. That’s about 2 percent lower than September, and almost 9 percent below the same period last year, according to Bloomberg calculations. Year-to-date shipments are now running more than 3 percent behind last year’s pace. Crude prices are lower year-to-date despite tensions in the Middle East, with US output running at a record rate, and OPEC+ planning to ease supply curbs. China’s consumption has been a weak spot for the market, and last month’s decline in inflows came as local refiners cut throughput amid weaker margins. Trump’s victory has prompted speculation it’s negative for prices. State-owned refineries in the Asian nation cut their run rates at the end of October to the lowest since December, according to data from Mysteel OilChem. More than half of 60 state-owned plants surveyed by the industry consultant were seen to have curtailed operations in the period. The roots of the slowdown in oil imports lie in the wider economy’s sluggish performance, with policymakers grappling with a drawn-out property crisis despite several round of stimulus. In addition, more of the nation’s trucking fleet has been switching away from diesel to liquefied natural gas.
Taiwan races to remove oil from grounded Chinese ship -- Taiwan on Friday raced to remove 284 tonnes of oil from a Chinese carrier that ran aground off the island after losing power in rough seas as Typhoon Kong-rey neared. The Chinese-flagged Yu Zhou Qi Hang was transporting three cranes from Keelung, in northeast Taiwan, to China on Tuesday when it stalled in wild weather, Taiwanese authorities said. A Taiwan coast guard vessel was deployed to rescue the 17 crew and the Chinese ship drifted to the shore of Yehliu Geopark, northeast of Taipei, where it ran aground. Sponsored The Yu Zhou Qi Hang was carrying 247 tonnes of heavy fuel oil and 37 tonnes of light diesel oil, the coast guard said. An AFP photographer on Friday saw red cranes above the water, one leaning heavily and touching the rocky shore, while the Yu Zhou Qi Hang was submerged. Tracking website vesselfinder.com said the ship was a 143-metre long heavy load carrier built in 2012. Authorities hoped to start recovering the oil on Friday afternoon, an official in the Maritime and Port Bureau told AFP. The Ocean Affairs Council estimated it would take two to three days to finish, with its minister, Kuan Bi-ling, saying no oil had been detected leaking from the ship.
Global Oil Demand to Hit 120.1mn Barrels per Day by 2050-OPEC - Kenyan Wall Street - The Organisation of Petroleum Exporting Countries (OPEC) projects that global oil demand will reach 120.1 million barrels per day by 2050 from about 103mn barrels per day today, concurrent with a 24% rise in energy demand. Refinery runs are set to start slowing down in Canada, Europe, the US, and parts of Asia-Pacific from 2030 onwards, slowing down growth as transition policies take effect. But regions seeking a just transition energy policy are expected to fill the gap, with almost 90% of new refining capacity set to be located in Africa, the Middle East, and the Asia-Pacific. Most of Africa’s oil exports are expected to end up in Europe and Asia Pacific for the next 35 years, although the proportions for exports to the former will progressively slow towards 2050. “Demand will be fueled by a world economy that is expected to more than double in size to more than $360 trillion by 2050. Driving this economic growth is the rapidly expanding world population, expected to reach 9.7 billion from the current 8 billion,” Haitham Al Ghais, OPEC Secretary General, said in a keynote speech at the African Energy Week. While exports to the US & Canada are projected to increase in the next five years, OPEC estimates that they will slow down and ultimately plateau as exports from the Middle East dominate until 1940, and then Latin America’s exports grow in the decade after.
Oil Futures Advance as OPEC-Plus Postpones Large Output Hike -- Oil futures closest to expiration rallied Monday morning, following an announcement by OPEC+ to again push back a planned output hike.OPEC+ producers who shouldered an additional 2.2 million barrels per day (bpd) in production cuts postponed their plans to return production once more. Initially planned to end in October, the group on Sunday decided to extend these voluntary cuts into December. Weak demand among main OPEC crude oil consumers, particularly in East Asia, has been weighing on oil prices since the spring and dimmed global demand growth outlooks.OPEC had banked on Chinese oil demand growth this year, which all but failed to materialize in any meaningful way. Official government data show less crude oil processing and lower imports than last year as the country's industrial sector experienced little growth, domestic consumption stayed behind expectations and regional demand for refined products softened. China's official manufacturing PMI in October broke the 50-mark for the first time since April, at 50.1, finding itself barely in expansion territory. The Caixin manufacturing PMI in October at 50.3 also suggested slight growth, up from 49.3 in September. Caixin's index, which in the first half of the year pointed to solid growth, has been hovering around the 50-mark for the past four months. The Chinese government has until recently been reluctant to embrace meaningful stimulus measures, so far mostly opting for small cuts to interest rates. The Standing Committee of the National People's Congress, however, which is meeting all week, is now expected to draft new and additional stimulus measures.Barring a Middle Eastern war disrupting oil production and exports, the return of Libyan production and ever-growing non-OPEC oil output may leave the producer group in no better spot to hike output next month -- with or without Chinese stimulus. Near 8:15 a.m. EST, WTI for December delivery was trading near $71.43 barrel (bbl), up $1.94, and Brent for January delivery was up $1.88 near $74.98 bbl. December RBOB rose $0.0564 gal to $2.0229, and December ULSD gained $0.0478 gal to $2.2820.
Oil Rallies on OPEC+ Decision and US Election Jitters | Rigzone -Oil climbed after OPEC+ agreed to push back its December production increase and Iran outlined a possible response to Israel’s recent bombardment. Traders also braced for jumpy trading ahead of the US election. West Texas Intermediate rose 2.8% to settle near $71.50 a barrel, the biggest gain since early October, while Brent advanced 2.7% to settle above $75. Saudi Arabia and its allies delayed a series of monthly output hikes until early next year, a move anticipated by many traders amid an impending glut. Looking ahead, Macquarie analysts said the delay “casts doubt” on 2025 supply hikes, quelling speculation of a potential price war. If prices don’t get a boost from surprisingly strong China demand or weaker-than-expected non-OPEC production, “we can look forward to OPEC continuing to push back unwinding, in dribs and drabs,” said Stewart Glickman, an analyst at CFRA Research. Meanwhile, Iran escalated its rhetoric, with supreme leader Ayatollah Ali Khamenei warning Saturday of a “crushing response” to Israel’s recent strike. The Wall Street Journal reported that Tehran told allies an attack would come after Tuesday’s US presidential vote, but before January’s inauguration, and it wouldn’t be limited to missiles and drones as two previous strikes were. Israel has kept up its campaign against Iranian proxies, striking Hezbollah intelligence sites in Damascus. The US election tomorrow is also contributing to heightened market volatility. The dollar weakened — offering another support to crude prices — after new polling suggested traders were underestimating the prospect of a win for Democrat Kamala Harris, leading investors to unwind their so-called “Trump Trade” bets. “The challenge for oil markets is that they’re getting caught up in the election uncertainty,” said Rob Haworth, senior investment strategist at US Bank. The event “isn’t necessarily driving prices, but it is driving investor sentiment.” With the OPEC+ decision helping to crystallize near-term supply outlook, traders will be honing in on a looming Fed rate decision and stockpile data this week to get a better sense of US demand, Haworth said. In the Americas, Tropical Storm Rafael threatens to menace offshore oil and natural gas production areas in the western Gulf of Mexico, and Shell said it would evacuate some non-essential personnel in the area. Oil prices have become increasingly volatile, with concerns of an oversupply next year and lackluster demand in top importer China vying against unrest in the Middle East, which supplies about a third of the world’s crude. The oil market has a number of other key events on the horizon this week, such as a meeting of China’s top legislative body. Saudi Aramco is scheduled to release its official prices for December, with the producer expected to lower its rates for Asia, according to a Bloomberg survey. WTI for December delivery climbed 2.8% to settle at $71.47 a barrel in New York. Brent for January settlement rose 2.7% to settle at $75.08 a barrel.
Oil jumps nearly 3% after OPEC+ delays output hike, US election in focus (Reuters) - Oil prices climbed nearly 3% on Monday on OPEC+'s decision for a month's delay in plans to increase output, while investors also focused on the U.S. presidential election.Brent futures were up $1.98, or 2.7%, at $75.08 a barrel. U.S. West Texas Intermediate (WTI) crude rose $1.98, or 2.85%, to $71.47. Last week, Brent declined about 4%, while WTI fell around 3%.On Sunday, OPEC+ said it would extend its output cut of 2.2 million barrels per day (bpd) for another month in December, with an increase already delayed from October because of falling prices and weak demand.OPEC+, the Organization of the Petroleum Exporting Countries plus Russia and other allies, had been due to increase monthly output by 180,000 bpd from December.The extension through the entire fourth quarter of 2024 "casts doubt on the group's commitment (or wherewithal) to return supply at all" in 2025, said Walt Chancellor, an energy strategist at Macquarie, adding that the announcement may allay some fears of a renewed OPEC+ "price war."OPEC remains very positive on demand for oil in both the short and long term, Secretary General Haitham Al Ghais said on Monday.French oil major TotalEnergies forecast global oil demand will peak after 2030 in its two most likely energy transition scenarios in its annual energy outlook report.Meanwhile, the CEO of Italian energy company Eni said that OPEC+ oil supply cuts and recent efforts to unwind them had increased volatility in energy markets and hampered investment in new production. OPEC oil output rebounded in October as Libya resolved a political crisis, a Reuters survey found. In the previous month output was at its lowest this year. A further Iraqi effort to meet its cuts pledged to the wider OPEC+ alliance limited the gain.Iran has approved a plan to increase oil production by 250,000 barrels per day, the oil ministry's news website Shana reported on Monday. Libya's oil production is nearing 1.5 million bpd, the country's National Oil Corporation (NOC) said.U.S. Democratic presidential nominee Kamala Harris and Republican Donald Trump remain virtually tied in opinion polls ahead of Tuesday's Election Day, and the winner might not be known for days after voting ends.Investors also watched for any escalation in Middle East tensions.On Thursday, U.S. news website Axios said Israeli intelligence suggested Iran was preparing to attack Israel from Iraq within days, citing two unidentified Israeli sources. "Middle East tensions are once again on the forefront as traders await the Iranian response attack," Analysts expect draws this week in gasoline and distillate inventories, while crude stocks are estimated to rise. U.S. gasoline stocks fell to their lowest in two years in the week to Oct 25. Markets were also watching a new tropical storm that was forecast to form on Monday in the Caribbean and threaten offshore oil production along the Gulf of Mexico. Shell said it was moving non-essential personnel from six platforms, adding it currently expects no other impacts on its production across the Gulf of Mexico. Investor focus this week will be on the U.S. Federal Reserve as economists expect interest rates to be cut by 25 basis points on Thursday, and on China, where the Standing Committee of the National People's Congress meets and is expected to approve additional stimulus to boost the slowing economy.
Oil prices decline before US election, attempts to negotiate ceasefire in Gaza =On Tuesday, oil prices experienced a slight decline, reflecting ongoing uncertainty in the market as the US presidential election looms and reports indicate continued attempts to negotiate a cease-fire in Gaza. The international oil benchmark, brent crude, fell by 0.2 percent, settling at USD75.04 per barrel around 10:52 am local time (0752 GMT), compared to the previous session's closing price of USD75.19. Similarly, the US benchmark West Texas Intermediate (WTI) also saw a 0.2 percent drop, trading at USD71.25 per barrel, down from USD71.42 at the last close.As millions of Americans prepared to cast their votes for the presidency, Congress, state governors, and local officials, analysts noted that investor sentiment was cautious, with many avoiding high-risk positions ahead of the election. The uncertainty surrounding the electoral outcome has led market participants to be particularly attentive to potential shifts in US economic policy, which could have significant implications for oil demand. In addition to the electoral concerns, the market is also bracing for an important announcement from the US Federal Reserve regarding interest rates, set to be revealed on Thursday. This decision is anticipated to provide insight into the Fed's perspective on economic growth, further influencing market dynamics. Investors are particularly aware that the economic landscape will likely evolve based on the election results, impacting the outlook for oil consumption in the United States, the world's largest consumer of oil.Overall, the interplay between the upcoming election, geopolitical tensions, and monetary policy decisions continues to shape the oil market, leading to fluctuations in prices as traders assess the potential outcomes and their implications for future demand.
The Oil Market Traded Higher Ahead of the U.S. Presidential Election - The oil market continued to trade higher on Tuesday on a weaker U.S. dollar ahead of what was expected to be a close U.S. presidential election. The market continued to trend higher in follow through strength seen on Monday following the OPEC+ decision to delay plans to increase output in December. It was further supported by a weak U.S. dollar, which fell to a three-week low as traders squared their positions ahead of the U.S. presidential election results. The market was also supported by forecasts of Tropical Storm Rafael strengthening into the next hurricane of the season and moving into the Gulf of Mexico. Energy companies have started to evacuate non-essential workers from their Gulf operations. The crude market posted the day’s trading range by mid-day as it posted a low of $71.29 in overnight trading before it rallied to a high of $72.67. It retraced more than 50% of its move from a high of $77.70 to a low of $66.72. The market later gave up some of its gains and traded in a sideways trading range ahead of the close. The December WTI contract settled up 52 cents at $71.99 and the January Brent contract settled up 45 cents at $75.53. The product markets ended the session in positive territory, with the heating oil market settling up 2.01 cents at $2.3042 and the RB market settling up 2.54 cents at $2.0446. Major energy companies said they are evacuating some oil production workers and securing offshore platforms as they prepare for the approach of Tropical Storm Rafael to the Gulf of Mexico. BP said it has secured offshore facilities and removed some non-essential personnel from its Argos, Atlantis, Mad Dog, Na Kika and Thunder Horse facilities. Chevron, which operates six platforms in the Gulf, including Anchor, Blind Faith, Jack/St. Malo, Tahiti, Petronius and Big Foot, said it moved non-essential personnel, though production remains unaffected. Equinor said it has shut down production, with full evacuations expected by the day’s end. Shell said it began relocating personnel from its Appomattox, Vito and other assets in anticipation of the storm’s potential impact. The port of Freeport in south Texas closed to inbound vessel traffic due to offshore conditions ahead of tropical storm Rafael.Investors increased their oil futures and options trading in October to record levels in a bid to hedge increasing uncertainty as war continues in the Middle East and a bearish 2025 supply and demand outlook looms, triggering big swings in crude prices. According to data from the Intercontinental Exchange, about 68.44 million barrels of oil in futures and options were traded in October, surpassing the monthly record hit in March 2020 when Brent futures fell about $30/barrel as the COVID-19 pandemic cut global oil demand. Investors traded more than 8.38 million barrels in Brent options in October on the ICE, surpassing the April 2024 record of 6.02 million barrels. Meanwhile, the CME Group reported a single day volume record for weekly crude oil options on October 18th, with 58,132 contracts traded.Trade sources said trading firms will deliver about 5 million barrels of Middle East crude oil to the Shanghai International Energy Exchange this month, an unusually large volume, after domestic prices increased against global benchmark Brent. The volume of oil to be delivered into the November contract was likely the biggest for the year, as trade was mostly muted through 2024.
Oil prices edge up on Gulf of Mexico storm ahead of US election results (Reuters) - Oil prices edged up about 1% on Tuesday with a storm expected to cut U.S. output in the Gulf of Mexico and as the U.S. dollar weakened on Election Day with polls showing America's presidential race exceptionally close.Brent crude oil futures rose 45 cents, or 0.6%, to settle at $75.53 a barrel. U.S. West Texas Intermediate (WTI) crude rose 52 cents, or 0.7%, to settle at $71.99."Crude oil is bid (up) on bullish supply/demand dynamics, geopolitics, and election fever, with a little weather thrown in for good measure," The U.S. presidential contest between Republican former President Donald Trump and Democratic Vice President Kamala Harris hurtled toward an uncertain finish as Americans headed to the polls."The (election) result might not be known for days, if not weeks, and it will most plausibly be challenged and contested," said Tamas Varga, an analyst at PVM, a brokerage and consulting firm that is part of TP ICAP.The U.S. dollar slid to a three-week low versus a basket of other currencies as traders squared positions ahead of election results.A weaker greenback makes oil less expensive in other countries.The U.S. services sector accelerated to a more than two-year high in October as employment rebounded strongly, suggesting last month's near stall in job growth was an aberration. The U.S. trade deficit surged to nearly a 2-1/2-year high in September. Elsewhere in the U.S., energy firms in the Gulf of Mexico started evacuating workers from offshore platforms ahead of Tropical Storm Rafael, on track to strengthen into a hurricane this week. Analysts say the storm could reduce oil production by about 4 million barrels. On Sunday, the Organization of the Petroleum Exporting Countries and their allies in OPEC+ said they would push back a production hike by a month from December as weak demand and rising non-OPEC supply depress markets. Top oil exporter Saudi Arabia lowered the price for the flagship Arab light crude it sells to Asia in December.Still, risk-taking remains limited with a busy week - including the U.S. election, the U.S. Federal Reserve's policy meeting and a meeting of China's National People's Congress keeping many traders on the sidelines, said Yeap Jun Rong, market strategist at IG International, a financial firm."Eyes are also on China's NPC meeting for any clarity on fiscal stimulus to uplift the country's demand outlook, but we are unlikely to see any strong commitment before the U.S. presidential results, and that will continue to keep oil prices in a near-term waiting game," Yeap said.The chairman and co-founder of Gunvor, one of the world's largest oil traders, said there is little growth in oil demand and the industry is probably over-investing somewhat.
Crude oil prices plummet 2.5% on strong US dollar; Brent slips below $74 -Crude oil prices slid 2.5% on Wednesday, November 6, snapping a five-day winning streak, weighed down by a stronger US dollar as early reports suggested that Republican candidate Donald Trump is edging closer to securing a second term in the White House. The stronger dollar exerts pressure on oil and other commodities, making them more expensive for buyers using other currencies. Brent crude oil futures fell to $73.64 per barrel, marking a 2.5% drop from the previous close of $75.53. Similarly, WTI crude futures declined to around $70.22, down 2.45% from the prior close of $71.99. Crude prices have experienced notable fluctuations in recent sessions, influenced by OPEC+'s decision to delay December production plans for the second time, escalating tensions in the Middle East, the upcoming U.S. Federal Reserve policy meeting decision, and signs of economic improvement in China, the world’s largest crude importer. Rahul Kalantri, VP Commodities, Mehta Equities, said, "Crude oil prices experienced significant volatility last week, rebounding from earlier lows due to a decline in U.S. oil stocks and heightened geopolitical tensions. U.S. crude oil inventories fell by 0.5 million barrels, contrary to expectations of a 1.5-million-barrel increase, and well below the previous week’s stock level of 5.5 million barrels.""The recovery in crude prices was further supported by geopolitical unrest in the Middle East and the potential postponement of production increases by OPEC+ nations. However, gains were tempered by the strength of the US dollar and weak economic data from Europe," he added.Looking ahead, Rahul Kalantri anticipates crude oil prices to remain volatile this week, influenced by fluctuations in the dollar index and ongoing geopolitical tensions. The US Dollar Index, which measures the greenback’s strength against a basket of six major currencies, surged by 1.9% to 105.30, reaching its highest level in nearly four months amid rising odds of a Trump victory in the US presidential election.In the past few sessions, the Dollar Index was under pressure after polls showed rising support for the Democratic presidential nominee and Vice President Kamala Harris in key swing states, prompting investors to unwind some of their positions betting on Trump’s victory.However, the actual trends showed that Trump is gaining ground over Harris in several critical swing states, leading to a sharp rebound in the dollar index. According to the Associated Press, Donald Trump won key Pennsylvania, putting him just three electoral votes shy of defeating Kamala Harris to win the White House. Trump has 267 of the 270 electoral votes needed to win the White House. A win in Alaska or any of the outstanding battleground states — Michigan, Wisconsin, Arizona, or Nevada—would send the Republican former president back to the Oval Office, the report said. Pennsylvania, a part of the once-reliable Democratic stronghold known as the “blue wall” with Michigan and Wisconsin, was carried by Trump when he first won the White House in 2016 and then flipped back to Democrats in 2020. Trump also flipped Georgia, which had voted for Democrats four years ago, and retained the closely contested state of North Carolina, the report added.Analysts generally assume Trump's plans for restricted immigration, tax cuts, and sweeping tariffs, if enacted, would put more upward pressure on inflation and bond yields than Harris' center-left policies. Trump's proposals are also likely to push up the dollar and potentially limit how far U.S. interest rates might ultimately be lowered.
WTI Holds Rebound Gains After Across-The-Board Inventory Builds -Oil prices are bouncing back from weakness overnight (strong dollar and Trump 'drill, baby, drill' win).“Overnight trading saw widespread losses across the commodities sector,” Markets believe a Trump presidency “is expected to bring about the promised tariffs on imported goods, particularly targeting China, potentially triggering a new wave of trade tensions and economic disruptions.”The dollar has been lifted on expectations Trump's fiscal plans and tariff proposals would stoke inflationary pressures, curtailing the scope for Fed rate cuts.The strengthening dollar "leaves oil market participants grappling with election-related uncertainties that can only be answered in the coming months," Mukesh Sahdev, global head of commodities at Rystad Energy, said in a note.But for now, let's focus on the immediate fundamentals. API
- Crude +3.13mm (0.00mm exp)
- Cushing +1.72mm
- Gasoline -928k (-900k exp)
- Distillates -852k (-300k exp)
DOE
- Crude +2.15mm (0.00mm exp)
- Cushing +552k
- Gasoline +412k (-900k exp)
- Distillates +2.95mm (-300k exp)
A Green sweep of inventory builds across crude and all products last week with Distillates stocks soaring by the most since July.
The Largest One-Day Increase of the U.S. Dollar Since March 2020 - The oil market traded lower on Wednesday as the U.S. dollar rallied following Donald Trump’s re-election as president. Traders expect a Trump presidency to support the dollar as interest rates may need to remain high to lower inflation resulting from any new tariffs and polices that may further pressure China’s economy. The crude market traded lower in overnight trading and continued to sell off early in the morning as the U.S. dollar was set for its largest one-day increase since March 2020. The crude market extended its losses to $2.25 and retraced almost 50% of its move from a low of $66.72 to a high of $72.67 as it posted a low of $69.74. However, the oil market bounced off its low and retraced its losses as the market focused on the possibility that the president elect could renew sanctions on Iran and Venezuela, which could remove barrels from the market, and the fact that the war in the Middle East continues. The market, which largely ignored the EIA weekly inventory report showing a build of over 2 million barrels in crude stocks, traded to a high of $72.63 by mid-day and later traded in a sideways trading range during the remainder of the session. The December WTI contract settled down 30 cents at $71.69 and the January Brent contract settled down 61 cents at $74.92. The product market ended the session in negative territory, with the heating oil market settling down 3.42 cents at $2.27 and the RB market settling down 92 points at $2.0354. The EIA said U.S. exports of petroleum products increased to a record high of 7.62 million bpd in the week ending November 1st. Total petroleum product exports increased by 1.3 million bpd on the week, the largest increase since the week ending June 7th. The previous record for total petroleum exports was also in the week ending June 7th at 7.5 million bpd. The EIA reported that U.S. Midwest gasoline stocks fell by 100,000 barrels to 44.3 million barrels, the lowest level since November 2023 and U.S. Midwest distillate fuel stocks fell by 100,000 barrels to 26.3 million barrels, also the lowest level since November 2023.Analysts said that president elect Donald Trump’s return to the White House could mean tougher enforcement of U.S. oil sanctions against Iran, potentially cutting global supplies, but they added that his administration could struggle to get China, Iran’s top crude customer, to cooperate. Enforcing sanctions on Iran would support global oil prices, but the effect could also be offset by the president elect’s other policies, from measures to expand domestic drilling, the imposition of tariffs on China that could cut economic activity or an easing of relations with Russia that could increase its sanctioned crude shipments. Jesse Jones, head of North American upstream at Energy Aspects said a Trump administration return to a maximum-pressure campaign on Iran could lead to a 1 million bpd decrease in Iranian crude exports.The Iranian Student News Agency reported that Iran’s Revolutionary Guards’ deputy chief Ali Fadavi said Iran is ready for confrontation with Israel and does not rule out a pre-emptive strike by the U.S. and Israel, after Donald Trump claimed victory in the U.S. presidential election.The U.S. Bureau of Safety and Environmental Enforcement said about 17% or 304,418 bpd of crude oil production and 7% or 131 million cubic feet of natural gas output in the U.S. Gulf of Mexico was shut in response to Hurricane Rafael.
Trump's victory may pressure oil prices through 2025, Citi says (Reuters) - Citi forecasted on Wednesday that U.S. President-elect Donald Trump's second term could exert downward pressure on oil through 2025, with Brent crude forecasted to average at $60 per barrel, primarily due to potential trade tariffs and increased oil supply. The bank notes that Trump's influence on OPEC+, which is made up of the Organization of the Petroleum Exporting Countries and allies led by Russia, might prompt the producer group to taper production cuts faster, while potentially reducing geopolitical tensions and releasing some oil on water back into the market. Trump's policy could favor the industry through potential tax incentives for capital investment in exploration and production and could reverse the Biden era's increases in royalties, costs for minimum bids, and lease rates on Federal lands, Citi noted. Citi further notes that Trump's policies could have mixed global economic growth implications, particularly negative for Europe and China, which remain exposed to the risk of trade tariffs. This could further dent into global oil demand growth, posing downside risks to Citi's current global oil demand growth expectations of 0.9 million barrels per day for next year. "Still, despite the more supportive oil and gas agenda, its immediate impact on physical oil markets is likely to be limited," Citi said. After Republican Trump recaptured the White House with a sweeping victory on Wednesday, Brent crude oil futures settled down 61 cents, or 0.8%, at $74.92 per barrel, while U.S. West Texas Intermediate crude (WTI) fell 30 cents, or 0.4%, to $71.69. Trump's reelection triggered a large sell-off that pushed oil prices down by more than $2 per barrel during early trade as the U.S. dollar rallied, currently at its highest level since September 2022.
Oil slips as investors digest US election fallout - Oil slipped on Thursday, extending a sell-off triggered by the U.S. presidential election, as a strong dollar and lower crude imports in China outweighed supply risks from a Trump presidency and output cuts caused by Hurricane Rafael. Donald Trump’s election win initially triggered a sell-off that pushed oil down more than $2 as the dollar rallied. But crude prices later pared losses to settle at a less than 1% decline by the end of Wednesday’s session. Brent crude oil futures fell 63 cents, or 0.8%, to $74.29 a barrel by 1253 GMT on Thursday. U.S. West Texas Intermediate (WTI) crude lost 73 cents, or 1%, to $70.96. Downside factors include a strong dollar and sluggish demand, while upside pressures come from potentially increased sanctions on Iran and Venezuela under Trump, as well as conflict in the Middle East, said Saxo Bank analyst Ole Hansen. “Some of these potential drivers will have no impact in the foreseeable future, but they all add up to the current narrative leading to rangebound trading,” he said. “Absent any major geopolitical escalation, the short-term outlook leans toward downside risk in my opinion.” The dollar held near four-month highs on Thursday as investors prepared for several central bank decisions, including from the U.S. Federal Reserve. A strong dollar makes oil more expensive for other currency holders and tends to weigh on prices. “Historically, Trump’s policies have been pro-business, which likely supports overall economic growth and increases demand for fuel,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. “However, any interference in the Fed’s easing policies could lead to further challenges for the oil market.” Further downward pressure came from data showing that crude oil imports in China fell 9% in October - the sixth consecutive month showing a year-on-year decline - as well as from a rise in U.S. crude inventories. Trump is expected to reimpose his “maximum pressure policy” of sanctions on Iranian oil exports. That could cut supply by as much as 1 million barrels per day (bpd), according to Energy Aspects estimates. In his first term, Trump also put in place harsher sanctions on Venezuelan oil. Those measures were briefly rolled back by the Biden administration but later reinstated. Actual, rather than feared, supply cuts also lent support. In the U.S. Gulf of Mexico, about 17% of crude output or 304,418 bpd has been shut because of Hurricane Rafael, the U.S. Bureau of Safety and Environmental Enforcement said.
Federal Reserve's Interest Rate Decision - The oil market ended the session higher after it was well supported early in the afternoon ahead of the Federal Reserve’s interest rate decision. Early in Thursday’s session, the crude market remained steady following a volatile trading session on Wednesday. The market seemed ready to post an inside trading day as it traded to $72.29 in overnight trading and sold off to a low of $70.66 early in the morning. The market was pressured by news of China’s crude oil imports falling by 6% in October, the sixth consecutive month showing a year-on-year decline. The market later bounced off that low and breached its previous highs as it rallied to a high of $72.88 ahead of the Fed decision. The market’s reaction to the expected 25 basis point interest rate cut was muted as the market remained range bound following the Federal Reserve announcement. The December WTI contract settled up 67 cents at $72.36 and the January Brent contract settled up 71 cents at $75.63. The product markets ended the session higher, with the heating oil market settling up 1.64 cents at $228.64 and the RB market settling up 1.82 cents at $2.0536. Russell Hardy, CEO of Vitol, said global oil prices are expected to stay in the $70 to $80/barrel range in 2025, similar to 2024, while geopolitical risks create uncertainty around supply. He said there’s still a lot of geopolitical tensions, unknowns around the Middle East, around Iranian exports and Venezuelan exports under the new U.S. Trump presidency. He said China’s oil demand is expected to grow by 700,000 bpd in 2025.According to the General Administration of Customs data, China’s crude oil imports in October fell 9% on the year to 44.7 million metric tons or about 10.53 million bpd. That was down from 11.07 million bpd in September and 11.53 million bpd in October 2023. China’s January-October crude oil imports were down 3.4% at 457 million metric tons or 10.76 million bpd.The U.S. Bureau of Safety and Environmental Enforcement said that over 22% or 391,214 bpd of crude oil production and 9% or 181 mcf of natural gas output in the U.S. Gulf of Mexico was shut in response to Hurricane Rafael.The Federal Reserve cut interest rates by a quarter of a percentage point on Thursday, lowering the overnight interest rate to the 4.50%-4.75% range, as widely expected as policymakers took note of a job market that has “generally eased” while inflation continues to move towards the U.S. central bank’s 2% target. The central bank’s rate-setting Federal Open Market Committee said “Economic activity has continued to expand at a solid pace.”U.S. Federal Reserve Chair Jerome Powell said some of the downside risks to the economy have diminished amid stronger economic data, including retail sales and revisions to the National Income and Product Accounts data. He said that no decision has been made on what sort of policy action the Fed will take in December. He said “we are prepared to adjust our assessment of the appropriate pace and destination” for monetary policy amid uncertainty.
Oil Resumes Drop As China Economy Disappoints Amid Trump Return Fears - Crude oil is back in sharp decline today with more than 1.5% losses for both brent and WTI.The renewed decline in oil prices comes as hopes fade over the possibility of providing more support packages for the Chinese economy, which reinforces concerns about the future of demand for crude from its largest importers. The declines also come amid concerns about the effects of Trump's policies that could weaken the Chinese Economy and deepen those concerns. The Standing Committee of the Chinese Legislative Council, after its meeting that lasted throughout the working days this week, approved a package equivalent to $1.4 trillion as part of a debt swap program. However, the disappointment comes with the lack of disclosure of financial measures to support the economy directly, and the debt swap measures will only push the maturity dates of the debts forward, according to what was reported by the Wall Street Journal, citing economists.Adding to these disappointments, concerns about China's economic recovery could intensify if Donald Trump returns to the White House next year. He has signaled a willingness to reintroduce protectionist policies, potentially imposing tariffs as high as 60% on Chinese imports. Such measures would likely hurt China's export sector-a critical driver of its growth recovery-and heighten worries about future crude demand, which explains today's steep losses.On the other hand, any of the policies that Trump previously spoke about may not actually be implemented, but rather will be a tool to negotiate new terms of trade and do not mean a rupture between the two economies, according to John Paulson, who is considered to take over the Treasury Department in the new administration.This is not the only thing that the oil market may fear, as Trump's intention to support the production and extraction of fossil fuels and ease regulatory restrictions will put downward pressure on crude prices with the increase in supply.I also believe that uncertainty may cloud the oil market regarding the likely path of inflation and interest rates in the United States, as Trump's protectionist policies may fuel inflation, which may encourage the Federal Reserve to slow down the pace of rate cuts.While this was reflected in Jerome Powell's cautious tone after the central bank announced its decision to cut rates by 25 basis points. Trump's victory also weakened the possibility of cutting interest rates in January of the new year, to remain below 30% after exceeding 60% a month ago, according to CME FedWatch Tool figures.As for the geopolitical side, we do not find any certainty regarding the possible steps that Trump may take towards the Middle East front. The escalation of the conflict between Iran and Israel may lead to the disruption of oil supplies from the region, which may lead to a rise in inflation again, which is what Trump may not want. This is because reducing fuel prices is a major part of Trump's plan to reduce inflation.On the other hand, Trump's intention, at least the declared one, to de-escalate the situation in the region may clash with the desires of Israeli Prime Minister Benjamin Netanyahu and behind him the far-right coalition who call for expanding the war and are counting on the Republican administration to give them a free hand in the region. While these conflicting interests may keep the uncertainty high in the markets.
Oil Prices Decline As Hurricane Risk Fades, China Demand Weakens -Oil prices retreated in Friday’s session as fears of damage on oil and gas infrastructure in the U.S. Gulf by Hurricane Rafael receded. Concerns about weakening demand in China have also contributed to the oil price decline, after data showing crude imports in China fell 9% in October. That marked the sixth consecutive month that imports by the world's largest oil importer declined on a year-over-year basis. Brent crude for January delivery was down 2.7% to trade at $73.76 a barrel at 11.40 am ET while WTI crude for December delivery fell 2.9% to trade at $70.28 per barrel. "The weakening of oil imports in China is due to weaker demand for oil as a result of the sluggish economic development and rapid advance of e-mobility," Commerzbank analyst Carsten Fritsch told Reuters. Oil markets witnessed choppy trading in Wednesday’s session, with oil prices declining in the intraday session before jumping after Donald Trump defeated Kamala Harris to clinch leadership of the White House.The mixed reactions by oil markets are not hard to decipher. On one hand, U.S. oil producers are looking forward to fewer regulations on crude production under a Trump presidency, meaning higher oil supply and consequently lower prices. On the other hand, a Trump win also means more sanctions on Iranian and Venezuelan barrels, potentially boosting prices.. Whereas the ongoing hurricane season has contributed to large oil price rallies in recent months, the extreme weather is proving very costly for energy companies. On Thursday, North Carolina giant electric utility, Duke Energy Corp has provided estimates that the total cost to restore facilities damaged by Hurricanes Debby, Milton and Helene could fall in the range of $2.4 billion to $2.9 billion. According to CEO Lynn Good, tens of thousands of the company’s customers were left without power after Helene ripped away transmission lines and power poles, but the company managed to restore 5.5 million outages during the "historic storm season".
Oil settles down 2% on receding hurricane risk, lackluster China stimulus (Reuters) - Oil prices settled more than 2% lower on Friday as traders grew less fearful of prolonged supply disruptions from a hurricane in the U.S. Gulf of Mexico, while China's latest economic-stimulus packages failed to impress some oil traders. U.S. West Texas Intermediate futures led the decline and settled at 70.35 per barrel, down by 2.7%, or $1.98. Global benchmark Brent crude futures fell by 2.3%, or $1.76, to$73.87 per barrel.Energy producers shut in more than 23% of oil output in the U.S. Gulf of Mexico by Friday to brace against Hurricane Rafael. However, the latest forecasts on trajectory and intensity reduced the risks Rafael poses to oil production."Threats of supply outages due to Hurricane Rafael are subsiding as the storms shifts to circling in the center of the Gulf of Mexico for the next five days or so," Alex Hodes, analyst at brokerage firm StoneX told clients in a note.The storm, which left a trail of destruction in Cuba this week, had weakened to a Category 2 hurricane on Friday, according to the U.S. National Hurricane Center's latest advisory. Meanwhile, top oil importer China's latest round of fiscal support disappointed oil investors. Chinese authorities announced a package easing debt-repayment strains for local governments, but those measures do little to directly target demand, UBS analyst Giovanni Staunovo said."I guess some market participants were hoping for more stimulus measures coming from China," he said. "Hence, the disappointment weighing on prices earlier today."Deflationary pressures on the Chinese economy have been a heavy drag on oil prices this year, with customs data showing a sixth consecutive month of year-over-year declines in the country's crude oil imports for October.Despite Friday's losses, oil prices gained more than 1% week-over-week, drawing support from expectations of tighter sanctions on Iran and Venezuela by U.S. President-elect Donald Trump, which could cut oil supply to global markets.The U.S. Federal Reserve's decision to cut interest rates by a quarter percentage point on Thursday could also helped lift oil prices by more than 1% in the previous session.
Salvors Begin Oil Removal from Greek Tanker Damaged in Houthi Attacks -- Salvors have begun the operation to transfer the crude oil remaining in the cargo tanks of the damaged Greek tanker Sounion nearly three months after the ship was first targeted by Yemen's Iran-backed Houthi rebels. Sounion is now at an anchorage just south of the Suez Canal in Egypt. Participating in the offloading operation are the tug Aigaion Pelagos and the tanker Delta Blue, where the removed oil will be transferred. Delta Blue had also been the target of four separate attacks by the Houthis within a 24-hour period in early August.Approximately 150,000 tonnes of crude oil are believed to still be in Sounion's cargo tanks. Egyptian shipping ministry officials expect the removal effort to take between three and four weeks due to the volume of oil involved. Sounion had been targeted by repeated attacks by the Houthis while transiting the Red Sea in late August. One attack involved the use of an explosives-laden unmanned boat, which was promptly intercepted and destroyed by a French Navy warship that had arrived in the area to render assistance to the tanker.A number of fires ignited on board, but the ship remained afloat long enough to permit it to be towed to a safe location.Salvage experts had initially advised against the towing of the damaged tanker, saying that prevailing conditions will make the endeavour more challenging, while the US State Department had earlier remarked that the Houthis’ continued attacks on the tanker threatened to spill a million barrels of oil into the Red Sea, an amount four times the size of the Exxon Valdez disaster.
Iran Says It Won't Be Deterred by US Bomber Deployment to Middle East - On Monday, Iranian Foreign Ministry spokesman Esmaeil Baghaei said the new US B-52 bomber deployment to the Middle East wouldn’t deter Iran as Iranian officials are vowing there will be a response to Israel’s October 26 attack on Iranian territory.The US heavy bombers arrived in the region on Saturday as part of a deployment meant as a threat to Iran. The Pentagon said the bombers and other US military assets were being sent to the region to “defend” Israel.When asked about the US deployment, Baghaei said, “We have always believed that the presence of America in the region is a destabilizing presence” and added that it “will not deter [Iran’s] resolve to defend itself.” According to media reports, Iran is planning a major attack on Israel that may be launched from Iraqi territory. Publicly, Iranian officials are saying a response is inevitable, and Baghaei said it will be “definite and decisive.”Iranian President Masoud Pezeshkian suggested on Sunday that Iran would soften its attack on Israel if a ceasefire were reached in Gaza and Lebanon, but there’s no sign the Israelis are thinking about ending the slaughter. Israel has also ramped up attacks on Syria in recent days.On top of the US bombers being sent to the Middle East, the Pentagon said Secretary of Defense Lloyd Austin also ordered the deployment of additional US Navy destroyers, a fighter squadron, and tanker aircraft. The US also has a THAAD missile defense system and about 100 troops in Israel. If Iran decides to launch a major attack on Israel, it could also target US assets since the US is vowing to defend Israel.Israel launched airstrikes against military targets in Iran on October 26 in retaliation for the October 1 Iranian missile barrage that was fired into Israel in response to a string of Israeli escalations and assassinations in the region. The Israeli attack killed four Iranian soldiers and one civilian and did some damage to Iranian air defenses, but the extent is unclear.
US F-15 Fighter Jets Arrive in Middle East as Part of Buildup Aimed at Iran - The US military said Thursday that additional F-15 fighter jets arrived in the Middle East as part of a buildup meant as a threat to Iran as Tehran is vowing it will respond to Israel’s October 26 airstrikes on Iranian territory.“Today, US Air Force F-15E Strike Eagles from the 492nd Fighter Squadron, RAF Lakenheath, England, arrive in the US Central Command area of responsibility,” US Central Command wrote on X.The Pentagon announced last week that it was sending additional military assets to the region for the “defense” of Israel. CENTCOM said that B-52 bombers arrived in the region on November 2. According to flight and satellite data, six US B-52 bombers are at al-Udeid Air Base in Qatar. Haaretz reported that the US F-15 fighter jets were being sent to Jordan. The Pentagon said it would also be deploying additional US Navy destroyers and tanker aircraft to the region.Before the latest US deployments, the Pentagon sent a THAAD missile defense system and about 100 troops to Israel. The US assets in Israel and elsewhere in the region could become potential targets of Iranian missiles since the US is vowing to defend Israel.Recent media reports have said Iran is planning to launch a major attack on Israel from Iraqi territory. Baghdad has denied the rumors, sayingthey’re “false pretexts” to justify aggression against Iraq.
Iraq Denies Reports That Iran Is Planning to Attack Israel From Its Territory - The Iraqi government on Wednesday denied reports that Iran is planning to launch a major attack against Israel from Iraqi territory, saying the rumors were “false pretexts” meant to justify aggression against Iraq.“Iraq’s national interests demand distancing its land and airspace from the hostilities fueled by Israel’s expansionist and aggressive policies toward nations and peoples in the region,” Iraq’s Council for National Security said, according to The Cradle.Iraqi Shia militias have launched drone attacks on Israel, but the reports coming from US media say Iran has been planning something much more significant. Axios reported on Wednesday that US and Israeli officials claimed Iran’s Islamic Revolutionary Guard Corps (IRGC) has been moving drones and ballistic missiles to Shia militias in Iraq in preparation for a joint attack.The US has reportedly warned Iraqi Prime Minister Mohammed Shia al-Sudani that if Iran launched an attack from Iraqi territory, the US wouldn’t stop Israel from striking Iraq.Iranian officials have vowed they will respond to Israel’s October 26 airstrikes, an attack that killed four Iranian soldiers and one civilian. Israel’s strikes came after Iran fired a barrage of nearly 200 ballistic missiles at Israeli territory on October 1, which came in response to a series of Israeli escalations in the region.The US is vowing to defend Israel from any potential Iranian attack and deployed additional military assets, including B-52 bombers, as a threat to Iran. The US pledge to back Israel could make US troops and military assets in the region potential targets of Iranian missiles.
Report: Israel Considers Attacking Iranian Nuclear Sites During US Transition - Israel is considering hitting Iran’s civilian nuclear facilities during the US presidential transition period, Bloomberg reported on Wednesday.The report cited an Israeli official familiar with the thinking inside the Israeli security cabinet who said the handover period might provide Israel with a window to attack Iran’s nuclear program. Realistically, Israel would likely need US support if it wanted to do significant damage to Iranian nuclear facilities that are buried deep underground. A US official speaking to Bloomberg ruled out the idea of President Biden ordering an attack on Iranian nuclear sites in cooperation with Israel, but the US is vowing to defend Israel if Iran responds to recent Israeli airstrikes that hit Iranian territory.The fact that Israeli officials are discussing the idea of hitting Iran’s nuclear sites signals that they are looking for another escalation with Iran before President-elect Donald Trump is inaugurated. During the last transition period in 2020, Israel carried out a covert attack inside Iran that killed Mohsen Fakhrizadeh, a nuclear scientist.The Israeli official speaking to Bloomberg said Israeli Prime Minister Benjamin Netanyahu considered Iran’s nuclear program an “existential threat,” although there’s no evidence that Iranian Supreme Leader Ayatollah Ali Khamenei has decided to build a nuclear weapon, something that’s recently been affirmed by the CIA. However, Israel’s aggression in the region has prompted calls inside Iran to reconsider the nuclear doctrine. Khamenei issued a fatwa in 2003 prohibiting the development of nuclear weapons and other weapons of mass destruction.Iran is currently enriching some uranium at 60%, which is the highest level it has achieved but still lower than the 90% needed for weapons-grade uranium. Israeli aggression led to Iran increasing uranium enrichment to 60% as it took the step in response to a sabotage attackon its Natanz nuclear facility in April 2021. Before that, Iran took the step to increase uranium enrichment to 20% in response to the Israeli assassination of Fakhrizadeh.
Israel Confirms July Ground Raid on Southern Syria - There have been reports circulating for some time about Israeli commandos conducting ground operations inside southern Syria. Today, Israel confirmed one of those operations just a few months ago, in which commandos captured a Syrian citizen. The raid took place in July, and the man captured was identified as Ali Soleiman al-Assi, who was from the southern village of Saida in the Daraa governate. He was captured in the nearby Quneitra Governate.With news of the raid being made public, Assi’s reported identity has been substantially changed. He was initially reported as a man who drove a milk delivery truck in Damascus. Now he’s being accused of watching Israeli military positions in the occupied Golan Heights, and doing so on behalf of Iran.Even that claim seems to be further embellished by Israeli media outlets, who are presenting him as an Iranian spy. Israeli media also claimed that he was personally under surveillance by them for months before the raid.Pro-government Syrian radio Sham FM also reported on the incident today, describing it as a kidnapping operation. Assi’s fate isn’t entirely clear, though Israel reported that he was initially taken for interrogation. Israel has been conducting air strikes against Syria for years, and the number of such strikes has been on the rise in recent weeks alongside the escalation everywhere else. This is the first official confirmation of a ground operation in Syria though, and that may be substantial if these sorts of incidents continue in the future.
Israel Imposed Evacuation in Much of East Lebanon, But Many Attacks Outside Those Zones - Last week, Israel imposed massive evacuation orders including a lot of heavily populated parts of eastern Lebanon, including an evacuation of the entire ancient city of Baalbek. People started fleeing, and within hours, the missiles started hitting the city and surrounding areas.But where do the people go? With airstrikes having already damaged the border crossings into Syria, most people are having to go to towns and villages outside the evacuation zones. But are they any safer there?Not so far they aren’t, as of the Israeli airstrikes into eastern Lebanon,more are hitting areas outside the evacuation zones than the zones themselves. On Friday, 14 airstrikes were reported in eastern Lebanon, and fully 10 of them were outside of the designated zones.That’s a big problem, because again, the zones included a lot of the most densely populated areas. The small towns and villages people are fleeing into are having enough problems trying to absorb all these people without also coming under attack themselves.This isn’t an issue just in eastern Lebanon, of course. Yesterday, Israel carried out another attack on the town of Haret Saida, in the country’s southwest. It was the third time they’d attacked the town this week though it too is outside the evacuation zone. Haret Saida reportedly had taken in some 17,000 people from the surrounding area because it was conspicuously outside the zones for cities in the coastal area.Over 3,000 people have been killed across Lebanon in the ongoing Israeli invasion, and at least 1.2 million people have been displaced by the evacuation orders, which cover more than a quarter of Lebanon’s population.Inside and outside the zones, the attacks seem to be killing more civilians than combatants, and there is growing international criticism of Israel’s air war. In eastern Lebanon too, despite Israel emphasizing that they are targeting Hezbollah strongholds, the casualties are heavily civilian, and included a number of children. Reports out of Baalbek suggest that about a third of the city’s 100,000 people stayed behind, most because they had nowhere to go. Since the areas outside the city don’t seem safer, those broad evacuation orders may be viewed skeptically by many in the future.
Israel Killed Over 50 Children in Jabalia in 48 Hours: UN - Israeli strikes in Jabalia, northern Gaza, killed over 50 children in just 48 hours, the UN’s child relief agency, UNICEF, said in a statement on Saturday.“This has already been a deadly weekend of attacks in North Gaza. In the past 48 hours alone, over 50 children have reportedly been killed in Jabalia, where strikes leveled two residential buildings sheltering hundreds of people,” said UNICEF Executive Director Catherine Russell.Jabalia has been the focus of an Israeli ethnic cleansing campaign in northern Gaza that began in early October. The campaign has involved a starvation blockade and massive strikes on civilians, and Israeli troopsare preventing the approximately 50,000 Palestinians who have been forced out of Jabalia from returning.Russell said Israeli strikes included an attack on UNICEF staff working on a polio vaccination campaign for children and an attack on a vaccination center. The World Health Organization said at least six people, including four children, were wounded in the Israeli strike on the vaccination center.“The attacks on Jabalia, the vaccination clinic, and the UNICEF staff member are yet further examples of the grave consequences of the indiscriminate strikes on civilians in the Gaza strip,” Russell said. “Taken alongside the horrific level of child deaths in North Gaza from other attacks, these most recent events combine to write yet another dark chapter in one of the darkest periods of this terrible war.”Israeli strikes continued to pound northern, central, and southern Gaza on Sunday. Medical sources told Al Jazeera that at least 35 Palestinians were killed, including 16 in the north. An Israeli attack on a residential building in the southern city of Khan Younis killed seven members of the same family, including four children.Gaza’s Health Ministry said in its death toll update on Sunday that at least 27 Palestinians were killed and 86 were injured in the previous 24-hour period. The latest violence brought the ministry’s death toll since October 2023 to 43,341 and the number of wounded to 102,105.The Health Ministry’s numbers are considered an undercount since they don’t account for Palestinians missing and presumed dead under the rubble or indirect deaths caused by the Israeli siege. A group of American healthcare workers who volunteered in Gaza have estimated the US-backed Israeli bombing campaign and siege has killed at least 118,908 Palestinians, including over 60,000 who have starved to death. The genocidal slaughter would not be possible without US military aid, as Israeli officials have acknowledged they couldn’t sustain operations in Gaza for more than a few months without US support. The Israeli news site Calcalist has estimated the US has funded about 70% of Israel’s military operations over the past year.
Israel Informs UN of Its Plan To End Relationship With Palestinian Relief Agency - Israel formally notified the United Nations on Monday of its decision to end its relationship with the UN’s Palestinian relief agency, UNRWA, which millions of Palestinians rely on to survive.Israel said it was ending a 1967 agreement that regulated its relations with UNRWA. The move came a week after the Israeli Knesset passed legislation to ban UNRWA activities inside Israel and effectively end its operations in the West Bank and Gaza as well.The legislation, which is set to fully take effect within 90 days of the bills being passed, prohibits any contact between UNRWA and Israeli authorities, making UNRWA aid deliveries into Gaza impossible. The US warned Israel against implementing the legislation, acknowledging it would mean cutting off food supplies to starving women and children, but that hasn’t stopped Israel from moving ahead with the plan.UNRWA is responsible for the most significant humanitarian relief operations in Gaza, and the Israeli legislation did not include a plan to replace the agency’s efforts. The UN’s World Food Program said Monday that it was not in a position to replace UNRWA, pointing to its services, including “the administration of emergency shelters, schools, and health centers.”Israel has waged war against UNWRA over the past year, killing over 200 of its staff members in Gaza. Israel has claimed a significant number of UNWRA’s staff are members of Hamas but has offered no evidence for the allegations, which have been strongly rejected by the UN agency. The Israeli Knesset passed the bills to ban UNRWA as the number of aid deliveries into Gaza was at its lowest point yet. In early October, Israel imposed a starvation blockade on northern Gaza as part of its efforts to carry out an ethnic cleansing campaign known as the “general’s plan.”
Israel withdraws from 1967 agreement with UNRWA - Israel notified the United Nations on Monday that it was withdrawing from the 1967 agreement with UNRWA, the main aid agency for Palestinian refugees, following passage of two laws in the country’s parliament, the Knesset, severely limiting the U.N. agency’s operations in Israel, the West Bank and the Gaza Strip. The notification was delivered in a letter to U.N. General Assembly President Philémon Yang and Secretary-General António Guterres. The letter said Israel stands ready to work with international partners, including other U.N. agencies, to ensure delivery of humanitarian assistance to Palestinians in the Gaza Strip. Israel Foreign Minister Israel Katz criticized the U.N. as failing to address allegations that UNRWA staff in the Gaza Strip participated in Hamas’s Oct. 7 attack on Israel, and said other international aid agencies are sufficient to substitute UNRWA’s work. “There are other international aid agencies that are not tainted by terrorist activity,” Katz wrote in Hebrew on the social platform X. Israel’s law limiting UNRWA’s activity in Israel is expected to come into effect early next year. The U.N. in August completed an investigation into Israeli allegations of terrorist activity among 19 UNRWA staff, saying evidence on at least nine employees indicated participation in the attacks but evidence in nine other cases was insufficient, and no evidence was available in one case. UNRWA has further said it raised protest with Hamas when it discovered that munitions have been stored in its facilities and that it has taken steps to dismantle tunnels discovered in or near its facilities, publicizes this information and raises protest with Hamas. Israel calls these steps insufficient. The U.S. halted its funding for UNRWA in the wake of Israel’s allegations that staff with the organization had participated in the Oct. 7 attack. “UNRWA, of course, plays a critical role in providing services to Palestinians in Gaza, the West Bank, and throughout the broader — the wider region. And particularly in Gaza, they play a role right now that, at least today, cannot be filled by anyone else,” State Department spokesperson Matthew Miller said last week. “They are a key partner in delivering food, water, and other humanitarian assistance to civilians in Gaza that wouldn’t have anyone else to get it from if UNRWA were to go away.” Miller further said there could be consequences with U.S. law; the Biden administration has warned Israel that the hindering of delivery of humanitarian assistance could impact the delivery of U.S. military assistance to the country. “They certainly have a legal obligation to allow humanitarian assistance in and not to erect roadblocks to humanitarian assistance to people in Gaza,” Miller said. “And we have made that clear since the outset of this conflict, and a great number of our engagements with the government of Israel have been around ensuring that they do let humanitarian assistance in, and that they do ensure that humanitarian assistance gets to the people that need it. And that is precisely one of our major concerns about this legislation.”
UNICEF head warns everyone in Northern Gaza “is at imminent risk of dying” - Every man, woman and child who remains in northern Gaza “is at imminent risk of dying,” warned Catherine Russell, the director of the United Nations Children’s Fund, in a statement Saturday. Nearly one month ago, Israel began an assault on Northern Gaza to implement the so-called “generals’ plan” to ethnically cleanse the entirety of Northern Gaza. Virtually no food, water, or medical supplies have been allowed into the northern section of the Gaza Strip, forcing hundreds of thousands of people to flee. Those who remain, estimated at approximately 100,000 people, are cut off from all necessities of life and are being systematically starved or killed by Israeli bombardment. Israel’s “generals’ plan” is being carried out with the endorsement and support of the United States, which continues to fund and arm the Israeli genocide in Gaza. The US is also sending troops to the Middle East to aid Israel’s escalating war against the populations of Gaza, Lebanon, Syria and Iran. As a result of this starvation and killing campaign, “the entire Palestinian population in North Gaza, especially children, is at imminent risk of dying from disease, famine, and the ongoing bombardments,” Russell said. “This has already been a deadly weekend of attacks in North Gaza,” Russell added, noting that “In the past 48 hours alone, over 50 children have reportedly been killed in Jabalia, where strikes leveled two residential buildings sheltering hundreds of people.” She continued, “Taken alongside the horrific level of child deaths in North Gaza from other attacks, these most recent events combine to write yet another dark chapter in one of the darkest periods of this terrible war.” Russell said international law prohibits the targeting of civilians and humanitarian workers. “Yet these principles are being flouted over and over again, leaving tens of thousands of children killed, injured, and deprived of essential services needed for survival.” These statements were echoed by Rachel Cummings, a spokesperson for Save the Children, who told Al Jazeera: We are seeing the apocalypse now unfolding in the north of Gaza. People are being constantly bombarded with aerial attacks, and, of course, we know that the food and water are not sufficient. The convoys of food and water are being denied into the north... It is absolutely catastrophic. She added that 20,000 children are either missing or unaccompanied, and another 14,000 children have been confirmed killed. “[Children are] having to take on roles within family settings that are not for children. They take on caregiver roles. They have to take on fetching water, trying to find food,” she said. “They have seen things that no child should ever see.” The mass killing continued Sunday, with Israeli strikes killing 31 people in the Gaza Strip that day, Reuters reported. The killings took place in separate attacks on houses in Beit Lahiya town and Jabalia. Israeli forces attacked Kamal Adwan Hospital near Beit Lahiya, severely wounding a child and damaging the facility’s nursery. Dr. Hussam Abu Safia, director of the Kamal Adwan Hospital in northern Gaza, described to Al Jazeera the horrifying conditions that medical staff are working under. “As Israeli forces stormed the hospital and detained the entire medical staff, I, together with my assistant physician, we were left alone between a rock and a hard place, either to give up or start doing what we can to save lives,” Abu Safiya told Al Jazeera. “We’ve been flooded with victims suffering all kinds of injuries.” He concluded, “We have been abandoned by the whole world and left to work under unimaginably harsh and horrifying conditions.” In a statement, the Euro-Mediterranean Human Rights Monitor wrote: Since the beginning of August 2024, the Israeli army has targeted schools, hospitals, clinics, and shelter halls 65 times, including 39 times in the current month of October, killing 672 Palestinians and injuring over 1,000 more, according to the Euro-Med Monitor field team.
Israeli Forces Kill 33 More Palestinians in Gaza Within 24 Hours - Gaza’s Health Ministry said Monday that Israeli forces killed at least 33 Palestinians and wounded another 156 in the previous 24-hour period. The Health Ministry also reported Israeli shelling of the Kamal Adwan Hospital in Beit Lahia, northern Gaza, which has come under repeated Israeli attacks, and said there were many injuries.“The occupation forces continue to bomb and destroy Kamal Adwan Hospital violently, affecting all the hospital facilities. There are many injuries among the medical staff and patients,” the ministry wrote on Telegram. “It seems that a decision has been made to execute all the staff who refused to evacuate the hospital.”The hospital’s director, Dr. Hussam Abu Safia, said the situation was “catastrophic” and he hadn’t received any notice before the attacks began. “Several of our staff have been injured, and we are unable to leave the hospital,” he said, according to Al Jazeera. “We do not understand the purpose behind this bombing that is targeting the hospital.”Due to the repeated Israeli attacks, Kamal Adwan has not been able to treat patients. Al Jazeera reporter Hani Mahmoud said northern Gaza has been left without a properly functioning healthcare facility. “The entire northern part of the strip is left without any proper healthcare facility, the whole healthcare system is gone, is completely collapsing,” he said.
Report Details Israel's Ethnic Cleansing Campaign in Beit Lahia, Northern Gaza -A report from the Israeli newspaper Haaretz published on Wednesdaydetailed the situation in Beit Lahia, a city in northern Gaza near the Israeli border where Israeli forces are implementing an ethnic cleansing campaign.At the beginning of October, Israel ordered hundreds of thousands of Palestinians living in northern Gaza to head south. Many ignored the order since there was nowhere safe to go, and the Israeli military focused its renewed assault on the north on Beith Lahia and neighboring Beit Hanoun and Jabalia, where it imposed a full siege to starve out civilians.The Israeli military has said it forcibly expelled 55,000 Palestinians from the Jabalia refugee camp, and it has no intention of allowing them back. According to Haaretz, only a few thousand civilians remain in Beit Lahia and Beit Hanoun.“There is no intention of allowing the residents of the northern Gaza Strip to return to their homes,” IDF spokesman Brig Gen Itzik Cohentold reporters on Tuesday. Google Maps screenshot that shows the cities of Beit Lahia, Beit Hanoun, and JabaliaThe Haaretz reporters traveled to Beit Lahia and al-Atatra, a neighborhood northwest of the city, and described the destruction they saw. “In [al-Atatra] and Beit Lahia, there isn’t a single house that people can return to and live in. The area looks like it was hit by a natural disaster. There are no civilians to be seen among the ruins,” the report says.As an attempt to remove any remaining civilians, the Israeli military fires artillery into Beit Lahia at night. “Those who want to return can’t do so, because the army prevents it. The bottom line is that it makes no difference what the IDF calls its actions. The army has begun the stage of cleansing the northern Strip while it prepares to hold onto the area for a long time to come,” the report reads.Israeli media has reported that the Israeli military is carrying out a version of the “general’s plan,” an outline for ethnic cleansing drawn up by retired IDF generals. The plan calls for the complete evacuation of all Palestinian civilians from northern Gaza to below the Netzarim Corridor, a strip of land controlled by the Israeli military. Under the plan, if civilians don’t leave, they are to be treated as combatants and killed either by military action or starvation.While the Israeli military claims its cleansing campaign is about removing Hamas, the IDF commander in charge of Beit Lahia, Col. Yaniv Barot, acknowledged they found no significant militant infrastructure in the area. “Barot says his mission is to continue to locate and eliminate terror infrastructure and Hamas activists. But he says that in the course of the most recent operation, no underground infrastructure, heavy war materiel or weapons production sites were found,” the report says.The Haaretz report said the activity on the ground proves that the Israeli military is bisecting northern Gaza, potentially to pave the way for the construction of Jewish settlements, an idea strongly supported by many Israeli ministers and members of the Knesset.The Biden administration has claimed it opposes any implementation of the “general’s plan” and the advancement of settlements but has continued to provide military aid for the ethnic cleansing campaign
Netanyahu Fires Defense Minister Gallant - On Tuesday, Israeli Prime Minister Benjamin Netanyahu announced that he fired Defense Minister Yoav Gallant, who was recently calling for Israel to make “painful concessions” to reach a hostage deal with Hamas.“Unfortunately, over the past months, the trust between me and the minister of defense has been broken. There were significant gaps regarding the management of the [military] campaign, and these gaps were accompanied by statements and actions that contradicted the decisions of the government and of the Cabinet,” Netanyahu’s office said in a statement.Gallant is set to be replaced by Israeli Foreign Minister Israel Katz. Gideon Sa’ar, a former Netanyahu rival who joined the government after Israel’s dramatic escalations in Lebanon in September, will replace Katz as foreign minister.Netanyahu’s decision to fire Gallant was slammed by the Hostages and Missing Families Forum, which represents relatives of Israeli hostages in Gaza. According to Haaretz, the group said the firing was part of Netanyahu’s “efforts” to torpedo any chances of a hostage deal with Hamas.The firing was praised by Israeli Minister of National Security Itamar Ben Gvir, who has called for the ethnic cleansing of Palestinians from Gaza and wants the establishment of Jewish settlements in the Strip. “I congratulate the prime minister on the decision to dismiss Gallant. With Gallant, who is still deeply trapped in his own conception, it is impossible to achieve a complete victory,” Ben Gvir said.Israeli opposition parties called for protests against Netanyahu over the firing, and thousands of demonstrators took to the streets in Tel Aviv to block traffic and light fires.Netanyahu and Gallant have been at odds over much of the past year. In August, Gallant called Netanyahu’s goal of “total victory” in Gaza “nonsense.” Gallant has repeatedly called for a deal with Hamas but made clear he only wanted a temporary deal and didn’t want to end the genocidal war.Comments from Gallant in October 2023 are often cited as evidence of Israel’s genocidal intent in Gaza. On October 9, 2023, Gallant said he ordered a “complete siege” on Gaza and said Israel was fighting “human animals.”Katz, Gallant’s replacement, also called for a total siege at the time. “Humanitarian aid to Gaza? No electrical switch will be turned on, no water hydrant will be opened, and no fuel truck will enter until the Israeli abductees are returned home. Humanitarianism for humanitarianism. And no one will preach us morality,” he said.
Gallant Says There's 'Nothing Left' for Israeli Troops to Do in Gaza - Israeli media reported Thursday that former Israeli Defense Minister Yoav Gallant told family members of Israeli hostages that there’s “nothing left” for Israeli troops to do in Gaza and that Prime Minister Benjamin Netanyahu was only keeping them in the Strip “out of a desire to stay there.” Netanyahu fired Gallant on Tuesday, and according to The Times of Israel, Gallant’s conversation with the hostage families came just hours before his firing went into effect and former Foreign Minister Israel Katz officially replaced him.According to Israel’s Channel 12, Gallant told the families that “conditions were ripe” for a hostage deal with Hamas back in July and that he tried to convince Netanyahu to reach an agreement. “The head of the Shin Bet, the chief of staff, and I think the head of the Mossad also agreed with me,” he said.During negotiations in the summer, Netanyahu began demanding that Israel maintain control of the Gaza-Egypt border, known as the Philadelphi Corridor. At the time, Israeli media reports and comments from officials made it clear that Netanyahu inserted the demand as a way to sabotage the chances of a deal.“I can tell you what there was not, security considerations. The IDF chief and I said there was no security reason for remaining in the Philadelphi Corridor,” Gallant told the hostage families. “Netanyahu said that it was a diplomatic consideration, I’m telling you there was no diplomatic consideration.”Gallant said Israel had no reason to keep soldiers in Gaza. “There’s nothing left in Gaza to do. The major achievements have been achieved,” he said. “I fear we are staying there just because there is a desire to stay there.”
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