US oil prices fell for the third time in four weeks as weak demand and surplus supply offset OPEC’s decision to extend their production cuts to April…after falling 4.5% to $68.00 a barrel last week on a cease fire in the war between Israel and Lebanon, the contract price for the benchmark US light sweet crude for January delivery moved higher in early overseas trading on Monday on better than expected Chinese manufacturing data, then opened higher in New York as the civil war in Syria reignited when rebels took control of the country's second-largest city Aleppo, resulting in retalitory airstrikes from the Syrian government and from Russia, but steadied to settle just 10 cents higher at $68.10 a barrel amid uncertainty in the market ahead of the OPEC+ meeting planned for Thuirsday and an increasingly fragile ceasefire between Israel and Lebanon….oil prices rose on global commodities markets early Tuesday, driven by expectations of a U.S. Federal Reserve interest rate cut, optimism about an economic recovery in China, and escalating tensions in the Middle East, then climbed more than 2% in New York trading, as traders honed in on the outcome of the Thursday OPEC+ meeting, which sources said would extend their oil output cuts until the end of the first quarter, and settled $1.84 higher at $69.94 a barrel as Israel threatened to attack the Lebanese state if its truce with Hezbollah collapsed…oil prices rose slightly overseas on Wednesday, as traders expected OPEC+ to announce an extension to their supply cuts, while heightened geopolitical tensions continue to dominate market sentiment, and held those gains in early New York trading after the weekly EIA data showed a large surprise crude inventory draw last week, but then gave up those gains and settled down $1.40 at $68.54 a barrel in light of the larger than expected increaes in distillates and gasoline supplies reported by the API and EIA….oil prices dropped sharply overseas on Thursday morning, as weak demand projections from China and the United States sparked concerns in the global commodities markets, but began to inch back up after OPEC+ decided to delay planned output increase until April 2025, and extend the full unwind of its production cuts by a year until the end of 2026, and settled 24 cents lower at $68.30 a barrel, as concerns about a growing supply of crude persisted, offsetting the early gains following OPEC+'s decision to delay the restart of its oil production increases by three months…oil prices edged lower early Friday, as weak demand came into focus after the OPEC+ group postponed its planned supply increases and extended deep output cuts to the end of 2026, and fell by more than 1% in New York as analysts projected a supply surplus next year on weak demand, despite OPEC+’s decision to delay output hikes, and settled $1.10 lower at $67.20 a barrel as demand was still 'insufficient to meet free-market supply', leaving oil prices down 1.2% for the week…
meanwhile, natural gas prices ended lower for the first time in five weeks on a bearish shift in the weather forecasts and a smaller than expected withdrawal of gas from storage….after rising 2.3% to $3.363 per mmBTU last week on continued forecasts for colder than normal temperatures. the price of the benchmark contract for natural gas for January delivery opened 18.3 cents lower on Monday, weakened over the weekend by steady production and forecasts for a mid-month thaw, then rallied to an intraday high of $3.279 before fading to settle 15.0 cents lower at $3.213 per mmBTU, as mounting production and forecasts for mild mid-December weather overshadowed the near-term cold blasts….natural gas prices started Tuesday 8.8 cents lower and withdrew further throughout the day on a bearish shift in short-term weather forecasts and settled 17.1 cents lower at $3.042 per mmBTU, as futures for April gas traded higher than March for the first time, signaling that the market was already giving up on expectations of much higher prices this winter…natural gas opened 2 cents lower on Wednesday and slid to under $2.98 in morning trading amid mild weather forecasts and robust production, then rose to an intraday high of $3.082 by 12:55PM, before sliding sideways to close a tenth of a cent higher at $3.043 per mmBTU, narrowly averting a third straight decline under the shadow of ample supply and forecasts for waning Lower 48 weather related demand….natural gas opened 7 cent higher on Thursday, encouraged overnight by the addition of additional heating degree days to the forecast, but backed off the early peak to settle 3.6 cents higher at $3.079 per mmBTU following the first significant inventory decline of the season, amid near-term cold that supported the physical market…natural gas prices walked back some of their recent price surge early Friday amid weather forecasts showing the cold loosening its grip next week, and reached an intraday low of $3.004 as bearish weather and production metrics stabilized, before rebounding to flat territory by early afternoon and settling down three-tenths of cent to $3.076 mmBTU, as rising output and forecasts for warmer-than-expected weather over the next two weeks offset a 10-month high in the amount of gas flowing to LNG export plants, leaving natural gas prices down 8.5% for the week…
The EIA’s natural gas storage report for the week ending November 29th indicated that the amount of working natural gas held in underground storage fell by 30 billion cubic feet to 3,937 billion cubic feet by the end of the week, which left our natural gas supplies 185 billion cubic feet, or 4.9% above the 3,752 billion cubic feet of gas that were in storage on November 29th of last year, and 284 billion cubic feet, or 7.8% more than the five-year average of 3,653 billion cubic feet of natural gas that had typically been in working storage as of the 29th of November over the most recent five years, and at the highest November 29th level in 8 years….the 30 billion cubic foot withdrawal from US natural gas storage for the cited week was less than the 43 billion cubic foot withdraw from storage that was forecast by analysts ahead of the report, and much less than the 81 billion cubic feet that were pulled out of natural gas storage during the corresponding week in November of 2023, and also less than the average 47 billion cubic foot withdrawal from natural gas storage that had been typical for the same late November 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 29th indicated that even after a big jump in our oil imports, and a decrease in our oil exports, we needed to pull oil out of our stored commercial crude supplies for the 15th time in twenty-three weeks, and for the 28th time in the past year, mostly due to an increase in demand for oil that the EIA could not account for ...Our imports of crude oil rose by an average of 1,207,000 barrels per day to average 7,290,000 barrels per day, after falling by an average of 1,600,000 barrels per day over the prior week, while our exports of crude oil fell by an average of 428,000 barrels per day to 4,235,000 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 3,055,000 barrels of oil per day during the week ending November 29th, 1,635,000 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 559,000 barrels per day, while during the same week, production of crude from US wells was 20,000 barrels per day higher at a record 13,513,000 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 17,127,000 barrels per day during the November 29th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,910,000 barrels of crude per day during the week ending November 29th, an average of 615,000 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 518,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA appear to indicate that our total working supply of oil from net imports, from transfers, from oilfield production, and from storage during the week ending November 29th averaged a rounded 734,000 barrels per day more than what our oil refineries reported they used during the week. To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a [ -734,000 ] 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 729,000 barrels per day of oil supplies could not be accounted for in the prior week’s EIA data, that means there was a 1,463,000 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, rendering 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 once hoped to do about it)
This week’s net average 518,000 barrel per day decrease in our overall crude oil inventories came as an average of 725,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while an average of 206,000 barrels per day were being added to our Strategic Petroleum Reserve, the fifty-first SPR increase in the past fifty-eight 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 rose to 6,891,000 barrels per day last week, which was 5.0% more than the 6,651,000 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 20,000 barrels per day higher at a record 13,513,000 barrels per day because the EIA’s estimate of the output from wells in the lower 48 states was 16,000 barrels per day higher at 13,067,000 barrels per day, while Alaska’s oil production was 2,000 barrels per day higher at 446,000 barrels per day, all of which was included in the national total.….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 3.2% higher than that of our pre-pandemic production peak, and was also 39.3% 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 93.3% of their capacity while processing those 16,910,000 barrels of crude per day during the week ending November 29th, up from from their 90.5% utilization rate of a week earlier, with that jump probably reflecting an end of the annual Autumn slowdown, when refineries typically schedule maintenance and seasonally change to producing winter fuel blends…the 16,910,000 barrels of oil per day that were refined this week were 4.4% more than the 16,201,000 barrels of crude that were being processed daily during week ending December 1st o0f 2023, and 0.7% more than the 16,798,000 barrels that were being refined during the prepandemic week ending November 29th, 2019, when our refinery utilization rate was at a fairly normal 91.9% for the end of November…
Even with the increase in the amount of oil being refined this week, gasoline output from our refineries was lower, decreasing by 248,000 barrels per day to 9,496,000 barrels per day during the week ending November 29th, after our refineries’ gasoline output had increased by 457,000 barrels per day during the prior week.. This week’s gasoline production was 0.2% less than the 9,517,000 barrels of gasoline that were being produced daily over week ending December 1st of last year, and 4.4% less than the gasoline production of 9,941,000 barrels per day during the prepandemic week ending November 29th, 2019….on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 219,000 barrels per day to 5,315,000 barrels per day, after our distillates output had increased by 259,000 barrels per day during the prior week. After those sharp production increases, our distillates output was 4.8% more than the 5,070,000 barrels of distillates that were being produced daily during the week ending December 1st of 2023, and 1.0% more than the 5,263,000 barrels of distillates that were being produced daily during the pre-pandemic week ending November 29th, 2019…
Even after this week’s decrease in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the eleventh time in twenty-three weeks increasing by 2,362,000 barrels to 214,603,000 barrels during the week ending November 22nd, after our gasoline inventories had increased by 3,314,000 barrels during the prior week. Our gasoline supplies rose by less this week because the amount of gasoline supplied to US users rose by 232,000 barrels per day to 8,738,000 barrels per day, and because our imports of gasoline fell by 125,000 barrels per day to 511,000 barrels per day, and even as our exports of gasoline fell by 69,000 barrels per day to 994,000 barrels per day.…After twenty-five gasoline inventory withdrawals over the past forty-three weeks, our gasoline supplies were 4.0% below last December 1st’s gasoline inventories of 223,604,000 barrels, and also were about 4% 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 third time in eleven weeks and by the most since July 12th, increasing by 3,383,000 barrels to 118,100,000 barrels over the week ending November 29th, after our distillates supplies had increased by 416,000 barrels during the prior week. Our distillates supplies rose by more this week because the amount of distillates supplied to US markets, an indicator of domestic demand, fell by 320,000 barrels per day to a six month low of 3,398,000 barrels per day, and even as our exports of distillates rose by 87,000 barrels per day to 1,550,000 barrels per day, while our imports of distillates fell by 28,000 barrels per day to 116,000 barrels per day....After 26 inventory withdrawals over the past 45 weeks, our distillates supplies at the end of the week were 5.4% above the 112,045,000 barrels of distillates that we had in storage on December 1st of 2023, while they are still about 5% below the five year average of our distillates inventories for this time of the year…
Finally, even after the big increase in our oil imports, our commercial supplies of crude oil in storage fell for the 16th time in twenty-six weeks, and for the 28th time over the past year, decreasing by 5,073,000 barrels over the week, the most in three months, from 428,448,000 barrels on November 22nd to 423,375,000 barrels on November 29th, after our commercial crude supplies had decreased by 1,844,000 barrels over the prior week… With this week’s decrease, our commercial crude oil inventories were still about 5% below the most recent five-year average of commercial oil supplies for this time of year, but were about 25% above the average of our available crude oil stocks as of the end 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 29th were 4.9% less than the 445,031,000 barrels of oil left in commercial storage on December 1st of 2023, but were 2.3% more than the 413,898,000 barrels of oil that we had in storage on December 2nd of 2022, while 2.2% less than the 433,111,000 barrels of oil we had left in commercial storage on November 26th of 2021…
This Week’s Rig Count
Note that this week’s rig count as of December 6th covers nine days, since last week’s count was released on Wednesday, November 27th, ahead of the Thanksgiving holiday…however, the comparisons to year ago rig counts are for two weeks after Thanksgiving, and hence only cover a day period….given that, we are again including below a screenshot of the rig count summary pdf from Baker Hughes…in the table below, the first column shows the active rig count as of December 6th, the second column shows the change in the number of working rigs between last week’s count (November 29th) and this week’s (December 6th) count, the third column shows last week’s November 29th 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 8th of December, 2022…
Utica oil: America's modest middleweight contender – Enverus - (Dec. 4, 2024) — Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, has released a new analysis of recent well performance and economics in the Utica shale and how it compares to other U.S. oil plays.“A relatively small and consistent proven fairway for Utica oil achieves economics that rank below the Midland, Delaware and Denver-Julesburg (DJ) but above the Bakken and Eagle Ford,” said Mah Noor Imtiaz, an associate at EIR. “Recent Utica oil wells have production rates similar to those in the Delaware, though with longer laterals. While the longer laterals reduce per-foot costs, steep declines lead to lower per-foot oil recoveries than the Permian play,” Imtiaz said. Key takeaways from the report:
- Recent wells targeting the oil-rich portion of the Utica shale in Ohio generate breakevens competitive with those in the Bakken and Eagle Ford plays, though less economic than wells in the Midland, Delaware and DJ Basins.
- These Utica oil wells achieve production rates over their first six months comparable to the Delaware Basin in Texas and New Mexico, one of the most lucrative oil-producing areas in the U.S. However, this production is achieved with lateral lengths that are 55% longer than those in the Delaware.
- Utica operators are drilling step-out locations to the north, west and south of the main fairway to extend the economic potential of the Utica oil play. The competitive economics of wells to date support continued delineation.
EIR’s analysis pulls from a variety of Enverus products including Enverus Activity Analytics, Enverus Forecast Analytics,Enverus Foundations® and Enverus M&A. View Report Here
Utica Play Economics Are Middleweight, Enverus Says -The Utica shale in Ohio is not the best U.S. oil play and not the worst. It's right there in the middle, Enverus Intelligence Research said in a report.According to a new well performance analysis, the Utica’s economics demonstrate “competitiveness” with established oil plays in the Lower 48, Enverus reported."A relatively small and consistent proven fairway for Utica oil achieves economics that rank below the Midland, Delaware and Denver-Julesburg but above the Bakken and Eagle Ford,” said Mah Noor Imtiaz, an associate at Enverus. Recent wells in the Utica need longer laterals to achieve production rates in the first six months comparable to those in the Delaware Basin in Texas and New Mexico, Enverus said. Operators are drilling step-out wells around the main part of the Utica that may extend the play.
Austin Master Services Cleanup in Martins Ferry One-Third Complete ---Marcellus Drilling News -- - In July, the Ohio Dept. of Natural Resources (ODNR) opened up the shuttered Austin Master Services (AMS) radiological waste management solutions company in Martins Ferry (Belmont County), Ohio, to begin cleanup work at the facility (seeFlurry of Activity at Austin Master Services Site in Martins Ferry). AMS is permitted by the ODNR to temporarily store up to 600 tons of fracking waste, like shale drill cuttings and wastewater. ODNR estimates there were some 10,000 tons of fracking waste at the site. AMS ran out of money, and vendors quit accepting the waste. After failing to meet a court-ordered deadline, ODNR stepped in to handle the cleanup. A local TV station is reporting one-third of the cleanup job is now completed. The facility is supposed to be completely cleaned up by May 2025.
Little-Discussed Infinity Natural Res. Ohio Utica’s #3 Oil Producer - - --Marcellus Drilling News -- In early October, Infinity Natural Resources (INR), with 90,000 acres in the Marcellus/Utica, filed an IPO with the Securities and Exchange Commission (SEC), hoping to raise $100 million (see M-U Driller Infinity Natural Resources Files for $100 Million IPO). We haven’t written much about INR, a company founded in 2017 and headquartered in Morgantown, WV, simply because we haven’t seen a whole lot of mentions in the media. However, here’s a fascinating fact: INR is the third largest producer of oil in the Ohio Utica, behind Encino (#1) and Ascent Resources (#2).
CNX Resources Buys Apex Energy for $505M, Adds Pa. M-U Assets -- Marcellus Drilling News - December 6, 2024 - CNX Resources announced yesterday it had struck a deal to buy the assets of Apex Energy II, LLC, a portfolio company of funds managed by Carnelian Energy Capital Management, for $505 million. Apex owns wells, acreage, and pipelines in Westmoreland County, PA. The Apex assets are close to, in some cases adjacent to, CNX’s considerable assets in the region. The deal is expected to close in the first quarter of 2025.
CNX to buy Apex Energy for $505 million, expanding Westmoreland County presence -- Cecil-based CNX Resources Corp. struck a deal to add more wells and leases to its portfolio in Westmoreland County, where the natural gas driller is taking the lead in Utica Shale development. The company announced it will acquire Apex Energy II LLC for $505 million in a deal that will add 36,000 underground acres in western Westmoreland County, some with already operating wells and others yet undeveloped. Pine-based Apex was founded in 2013 with private equity firm Apollo Global Management, but its current majority investor is Carnelian Energy Capital. The company is selling all of its operations to CNX, a spokesman for CNX confirmed, which includes unspecified pipelines and midstream infrastructure. According to the Pennsylvania Department of Environmental Protection, Apex operates about 50 wells, all in Westmoreland County. Their production will boost CNX’s by about 12%. In announcing the deal, CNX’s CEO Nick DeIullis said it was a reflection of the company’s confidence in the opportunities that exist in this part of the state to draw gas from both the Marcellus Shale and the deeper Utica Shale The Utica is a reservoir that sits more than 2 miles below the surface in Westmoreland County. Its depth makes it more expensive to develop, but in its most recent call with investors CNX executives said given how much gas its Utica wells have been producing, they are now cost competitive with shallower Marcellus Shale wells.CNX said it expects the deal to close during the first quarter of next year.
CNX's $505MM Bolt-On Adds Marcellus, Deep Utica in Pennsylvania --CNX Resources will buy the upstream and midstream Appalachian Basin assets ofCarnelian Energy Capital Management-backed Apex Energy II for $505 million, the company said Dec. 5. CNX entered into a definitive agreement to acquire Apex’s assets, including 36,000 total net acres (94% held) in Westmoreland County, Pennsylvania. The deal includes 21,000 undeveloped acres—8,600 acres in the Utica Shale and 12,600 in the Marcellus Shale.CNX said the acquisition strategically expands its existing stacked Marcellus and Utica undeveloped leasehold in the region and provides an existing infrastructure footprint that can be leveraged for future development. The deal comes as natural gas prices continue to struggle but demand from LNG and data centers powergen is expected by analysts to recover in mid- to late-2025.Operational and other development synergies are expected to add incremental value to the core business in the coming years, the company said."This transaction represents a rare opportunity to acquire a highly complementary asset adjacent to our existing operations,” CNX President and CEO Nick Deluliis said. “It underscores our confidence in the stacked pay development opportunities that have been unlocked from pioneering the deep Utica in this region."CNX said the acquisition would be “immediately accretive” to its free cash flow per share.“The attractive acquisition price and free cash flow profile of the assets allows the company to maintain its strong balance sheet and preserve significant capital allocation flexibility moving forward,” the company said.The deal adds a fully integrated gathering midstream. CNX expects 2025 operating costs of approximately $0.16/Mcfe on the acquired assets. The existing infrastructure can be leveraged for future stacked pay development of the Marcellus and Utica, the company said.For 2025, CNX said it expects daily 2025 production to average 180 MMcfe/d to 190 MMcfe/d. At recent strip prices, it projected 2025 EBITDA of $150 million to $160 million.Apex is the second Carnelian Energy Capital Management-backed company to be sold this week following Crescent Energy’s agreement to acquire Eagle Ford assetsfrom Carnelian-backed Ridgemar Energy for $905 million.The Apex transaction will be funded through CNX’s secured credit facility. In May, CNX amended its secured credit facilities, extending the maturities to May 2029 and increasing the total elected commitment amounts to $2 billion. As of Sept. 30, CNX had approximately $1.8 billion of available borrowing capacity under the secured credit facilities.The deal, subject to certain adjustments, has an effective date of Oct. 1, 2024.The deal is expected to close in first-quarter 2025.
Antis Seek to Ban All Fracking in Allegheny County, PA - Marcellus Drilling News - They never, ever give up. And neither should we. The “they” we’re speaking of are irrational anti-fossil fuel zealots. The Allegheny County Board of Health, a nine-member governing board appointed by the County Chief Executive, held a meeting yesterday to discuss air permits. Attending the meeting were anti-fossil fuel zealots making a pitch to the board to support a ban on fracking new wells throughout the entire county. The zealots trotted out the same tired old lies—that fracking causes cancer.
28 New Shale Well Permits Issued for PA-OH-WV Nov 18 – 24 - --Marcellus Drilling News -- For the week of Nov 18 – 24, permits issued in the Marcellus/Utica continued to be strong, with 28 new permits issued, down just two from the 30 issued the prior week. The Keystone State (PA) issued 11 new permits, with five going to CNX Resources, all in Allegheny County. Two permits were issued to Southwestern Energy (now Expand Energy) in Lycoming County. The remaining four were single permits issued to EQT Corporation (Greene County), Infinity Natural Resources (Indiana County), Range Resources (Washington County), and Apex Energy (Westmoreland County). ALLEGHENY COUNTY | ANTERO RESOURCES | APEX ENERGY | ASCENT RESOURCES | CARROLL COUNTY | CNX RESOURCES | ENCINO ENERGY | EOG RESOURCES | EQT CORP | GREENE COUNTY (PA) | HARRISON COUNTY | INDIANA COUNTY | INR/INFINITY NATURAL RESOURCES |LYCOMING COUNTY | MARSHALL COUNTY | NOBLE COUNTY | OHIO COUNTY | RANGE RESOURCES CORP | SOUTHWESTERN ENERGY |TYLER COUNTY | WASHINGTON COUNTY | WESTMORELAND COUNTY
12 New Shale Well Permits Issued for PA-OH-WV Nov 25 – Dec 1 - Marcellus Drilling News - For the week of Nov 25 – Dec 1, permits issued in the Marcellus/Utica dropped dramatically. Only 12 new permits were issued last week, less than half the 28 issued the week before. The Keystone State (PA) issued just two new permits, one to EQT in Greene County and the other to Range Resources in Washington County. The Buckeye State (OH) issued six new permits last week. All six went to Encino Energy (EAP), with four in Carroll County and two in Columbiana County. The Mountain State (WV) issued four new permits, three of which went to Southwestern Energy (now Expand Energy) in Ohio County and one to Antero Resources in Tyler County. ANTERO RESOURCES | CARROLL COUNTY | COLUMBIANA COUNTY | ENCINO ENERGY | ENERGY COMPANIES | EQT CORP | GREENE COUNTY (PA) | OHIO COUNTY | RANGE RESOURCES CORP | SOUTHWESTERN ENERGY | TYLER COUNTY | WASHINGTON COUNTY
More Than $40 Million Remains Unclaimed in PA Well-Plugging Grants -- Marcellus Drilling News --Come and get it! Only ten companies have applied to plug 77 orphaned wells in Pennsylvania as part of $44.4 million allocated for PA’s Methane Emissions Reduction Program (MERP) grant program. By our calculations, more than $41 million remains in the pot unclaimed. However, the clock is ticking. There is a Dec. 16 deadline to meet if you want some of the money. Use it or lose it. What are you waiting for?
WV Supreme Court Rules Antero CAN’T Deduct Royalty Expenses -- Marcellus Drilling News - There is an important development for landowners AND drillers in a class action case that began some seven years ago. A civil suit was brought by Harrison County oil and gas owners against Antero Resources Corp., claiming the company had deducted post-production costs from royalties not allowed under the leases they had signed. In 2022, the U.S. District Court for the Northern District of West Virginia ruled mostly in favor of the landowners. The District Court sent two certified questions to the state Supreme Court. The Supremes ruled on both issues in November. The court ruled that energy companies cannot deduct post-production costs without explicit lease language, favoring royalty owners over drillers.
Mountain Valley Pipeline’s Final Cost Pegged at Nearly $10 Billion --Marcellus Drilling News -- When EQT first announced it intended to build the Mountain Valley Pipeline (MVP), stretching from Wetzel County, WV, to Pittsylvania County, VA, the project came with an estimated price tag of $3.5 billion and an estimated completion date of 2018 (see Mountain Valley Pipeline Files FERC Appl, Now Just Matter of Time). By the time it finally began operating earlier this year (10 years later!), the estimated cost had risen to $7.85 billion (see Confirmed: M-U Gas Now Flowing Through Mountain Valley Pipeline). Except, that number was not the true final cost either. According to a recent filing with the Federal Energy Regulatory Commission (FERC), the final cost to build MVP was $9.67 billion.
Golden Triangle Storage Launches 14 Bcf Expansion as LNG, Gulf Coast Demand Drives Salt Cavern Interest - A unit of Houston-based Caliche Development Partners LLC disclosed earlier in the month that the firm and its partners reached a final investment decision (FID) on the estimated $500 million Golden Triangle Storage expansion project. Sited southeast of Houston, near the developing Golden Pass LNG project, the expansion consists of two new salt caverns and related facilities connected to the existing Beaumont area storage installation that would add 14 Bcf in capacity. The expansion project is aimed to double Golden Triangle Storage capacity to 28 Bcf over the next three years, allowing for more market optionality between the seven major pipeline connections the facility serves. Cavern 3 is expected to enter service by the second quarter of 2026, followed by Cavern 4 in 2Q2027.
FERC Reviews CP2 LNG, Pipeline Project Authorizations Ahead of DC Circuit Challenge by Environmental Groups --FERC moved to conduct additional review of Venture Global LNG Inc.’s proposed CP2 LNG and CP Express Pipeline projects as the Commission looks to shore up its authorization order against heightened scrutiny from the U.S. Court of Appeals for the District of Columbia Circuit. In a stealth move over the Thanksgiving holiday weekend, the Federal Energy Regulatory Commission released a series of orders disclosing it planned to exercise its ability to modify an order challenged in an appeals court, as long as it has not yet been made an official part of the record (Nos. CP22-21-001, CP22-22-001). In the order, Commission staff wrote that the move would allow the agency to take a deeper look at cumulative air quality impacts ”for the purpose of conducting additional environmental review in light of an opinion issued” by the DC Circuit. It specifically mentioned a review of nitrogen dioxide (NO2) emissions in the order, a greenhouse gas that has been increasingly scrutinized in FERC authorization cases before the DC Circuit.
Inspector: Weak pipeline rules put ‘profit over safety’ - Steve Bromley spent years watching pipeline crews leave problem-plagued pipes in the ground. The former safety inspector, who quit in 2021, says oil and gas pipes were sometimes dented by rocks, with their protective coating peeling off and their walls rusted through. But when Bromley, a supporter of President-elect Donald Trump who calls himself “absolutely pro-pipeline,” eventually complained about it to federal regulators, they told him the companies weren’t violating any rules. Advertisement “Their paperwork was in order. That’s all they’ve got to look at,” Bromley said, later adding: “I know they’re in order, because I’m the one who puts them in order. It’s all swept under the rug.” Bromley’s experience illustrates the pitfalls of the way Congress directed the federal government to regulate pipelines, according to safety advocates. Under what is called “performance-based” regulation, companies draft their plans for meeting safety standards, which are approved by the federal Pipeline and Hazardous Materials Safety Administration. Private inspectors — who work for contractors paid by pipeline companies — then check to see if they are following the plan. “The reality is that operators are inspecting their own systems,” said Bill Caram, executive director of the Pipeline Safety Trust, the country’s main pipeline safety advocacy group. “And PHMSA is largely going through paperwork exercises to make sure that they documented those inspections to the appropriate level.” Inspectors like Bromley rarely speak publicly about their jobs. In recent years, at least three other inspectors have lodged formal whistleblower allegations that they were fired for reporting dangerous problems on pipelines, and several inspectors told POLITICO’s E&E News earlier this year that their safety warnings are often ignored. Bromley also filed a whistleblower complaint, but it was dismissed.As Bromley speaks out, the country looks ahead to a possible boom in pipeline construction.Federal data shows 6,000 miles of pipelines for gas, oil and other liquids are on the drawing board or under construction right now. As many as 65,000 miles of carbon dioxide pipelines will be needed for the country to reach net-zero greenhouse gas emissions by 2050, according to experts. And thousands of miles of pipeline could be needed if, as currently anticipated, U.S. liquefied natural gas exports double by 2028. The fossil fuel industry says the country’s performance-based approach to pipeline safety gives pipeline companies, who know their systems best, the flexibility they need to make their facilities safe. “Our industry is committed to its goal of operating with zero incidents through comprehensive management systems and programs,” Robin Rorick, vice president of midstream policy at the American Petroleum Institute, said in a statement emailed to E&E News. “We will continue to work with PHMSA and industry experts to help protect the environment and communities where we live and work.” A PHMSA official said pipeline companies are required by law “to assess (and reassess) their systems on an ongoing basis to identify safety risks.” The agency has a long-standing policy against attributing remarks to staff members. “They must also maintain detailed records, accessible to PHMSA inspectors,” the official said in a statement to E&E News, “and those records need to justify operator claims as well as be subject to ongoing PHMSA oversight.” Congress is currently working on reauthorizing the nation’s pipeline safety laws. So far, lawmakers are focused on speeding up permitting for new pipelines — and are not revisiting the performance-based aspect of regulation. But PHMSA is currently changing its regulations to strengthen leak detection requirements, the agency official said. The final rule could be published as early as January. The official also pointed out that PHMSA enforcement fines have increased in recent years, reaching an all-time high of $12.6 million last year. Trump has promised to dramatically reduce regulation of the pipeline and oil industries, and executives from those industries are among his top donors.
DOE LNG Permit Study Ready by ‘Mid-December,’ Biden Official Tells Congress - The Department of Energy’s (DOE) review of U.S. LNG exports to non-free trade agreement (NFTA) countries is expected to be released in the coming weeks, according to agency officials, as the incoming Trump administration promises an end to a related permit pause. Graph showing commercially advanced North American LNG projects impacted by the Biden administration's DOE review. DOE Assistant Secretary Brad Crabtree said Wednesday the results of its review into the long-term economic and environmental impacts from global U.S. LNG exports should be published “by mid-December.” Biden administration officials had previously guided expectations to issue the study in early 2025. “By any measure, our LNG export posture is strong and will grow dramatically during the latter half of the decade, regardless of future export approvals,” Crabtree said during a House Oversight Subcommittee hearing. “With that context in mind, DOE needs to fully understand how additional authorized exports can impact our economy, community energy prices for domestic consumers and manufacturers, international partners and environment.”
Curbing Natural Gas Supply Chain Emissions Still Vital as Trump Takes Office, Lawmakers Say - The incoming Trump administration must reinforce U.S. efforts to limit greenhouse gas emissions (GHG) and press other nations to do the same in order to keep natural gas competitive as more buyers search for cleaner energy, government officials said at an industry conference in Washington, DC. (a chart breaking down average GHG emissions across fuel supply chains in Europe) U.S. natural gas producers and their counterparts across the supply chain have increasingly worked to track and abate GHG emissions. However, a lack of similar initiatives in other producing and consuming nations threatens to undermine those efforts. “It’s a global issue…We can’t do it alone,” said Rep. Jeff Duncan (R-SC). Duncan, who is retiring from Congress in January, said at the North American Gas Forum that the next Trump administration must find ways to influence other governments to reduce their emissions as they continue to grow.
Summit Midstream Completes Acquisition of Tall Oak Midstream III — Summit Midstream Corporation (SMC) has finalized its acquisition of Tall Oak Midstream III from Tailwater Capital. The deal includes cash, equity considerations, and potential contingent payments. This acquisition significantly boosts Summit’s natural gas portfolio, bringing its balance to about 50% natural gas-focused operations. Shareholders approved the acquisition during a virtual meeting, with nearly 77% participation and almost unanimous support. Summit’s leverage ratio, following this transaction, stands at approximately 3.8 times, as of Sept. 30. This move aligns with Summit’s strategy to enhance scale and creditworthiness while expanding its natural gas infrastructure.
U.S. inventories enter the winter with the most natural gas since 2016 – EIA -- Working natural gas in storage in the Lower 48 states ended the natural gas injection season with 3,922 billion cubic feet (Bcf), according to estimates based on data from our Weekly Natural Gas Storage Report released on November 7. U.S. inventories are starting winter 2024–25 with the most natural gas since 2016. Inventories are currently 6% above the five-year (2019–23) average, despite less-than-average injections into storage throughout the entire injection season, which runs April 1 through October 31. Less natural gas than the five-year average was injected in nearly every week during the 2024 injection season, in part because starting inventories were relatively full. Natural gas inventories in the Lower 48 states at the end of March 2024 (the end of withdrawal season) totaled 2,282 Bcf, 25% more than at the same time in 2023 and 40% more than the five-year average for March. This enabled storage operators to reach their end-of-season targets with smaller natural gas injections. Low natural gas prices in 2024 encouraged producers to curtail production, which also reduced natural gas available for injections. Net injections into natural gas storage during the injection season totaled 1,640 Bcf, 21% less than the five-year average. Weekly injections ranged from a maximum of 96 Bcf in late May to 10 Bcf in mid-July. Although natural gas is typically injected into storage in the summer, withdrawals occasionally occur, particularly in the Pacific and South Central regions. The U.S. South Central region has exhibited a unique seasonal pattern in recent years with weekly net natural gas withdrawals following early summer injections, particularly at the salt dome facilities, to meet summer cooling demand. For the week ending August 9, withdrawals in the South Central region and Pacific region combined totaled 29 Bcf, with a net withdrawal of 6 Bcf from U.S. natural gas storage, the first net withdrawal from U.S. storage during the summer since July 2016.Natural gas injections into storage for the weeks ending October 25 and November 1 (the last two weeks of injection season) exceeded their five-year averages, further boosting the volume of natural gas in storage. In our November Short-Term Energy Outlook, we forecast natural gas withdrawals during the 2024–25 heating season will total 1,957 Bcf and that inventories will be 6% above the five-year (2020–24) average at the end of March 2025.
NatGas Flowing to LNG Export Plants Close to All-Time Record High -- --Marcellus Drilling News -- The volume of natural gas flowing to U.S. LNG export facilities on Friday was on track to hit 14.6 billion cubic feet (Bcf), just shy of the all-time high of 14.7 Bcf recorded one year ago, in December 2023. The reason for the near-record high is that all LNG export facilities, including the up down up down up down Freeport LNG facility, were firing on all cylinders. Two weeks ago, one of Freeport’s three trains tripped off (see Freeport LNG Train 3 Down Again; Caused 11-Hour “Emissions Event”). When all three Freeport trains are working, the facility uses just over 2 Bcf/d of gas. On Friday, Freeport was set to hit just over 2 Bcf. Now, if we can keep it up and running!
Rising LNG Terminal Costs to Weaken Competitiveness of New U.S. Projects, Analyst Says (Reuters) — Rising costs of building and equipping new U.S. liquefied natural gas plants will reduce the competitiveness of U.S. gas exports, LNG analysts at Poten & Partners predicted on Tuesday. U.S projects have faced rising construction costs, with Venture Global's Plaquemines export plant under construction in Louisiana over budget by $2.3 billion, and Golden Pass LNG, a joint venture between Exxon Mobil and QatarEnergy, more than $2 billion over its original budget. Natural gas prices could also go to as high as $6 a million standard cubic feet because of increased demand from LNG export plants, a possible 20% growth in electricity usage and the need for significant investment in infrastructure, said Jason Feer, Poten and Partners' business intelligence chief. "We've got a lot of gas in the U.S., but we don't really have vast amounts of really cheap gas," Feer said. The Biden administration's export permitting pause likely will keep global LNG prices higher for longer and benefit existing exporters, Feer said at Poten's Global LNG Outlook conference. Feer added that for the firms proposing new export plants along the U.S. Gulf Coast, landing new customers will present a greater risk than regulation, and that even if the incoming Trump administration removed all the regulations, finding customers will still be a challenge. Among other risks facing LNG exporters is political pressure in China limiting its switch away from coal, potentially lifting its LNG demand by 5% over the next decade. Europe is highly likely to resume buying Russian gas if there is peace in Ukraine, Feer said. "There is this idea that China will switch from coal to gas. We think that is very unlikely... that will make China dependent on the U.S. or Qatar, that's expensive and a potential risk to their national security, so I don't see that happening," Feer said.
US natgas prices fall 5% to 2-week low on mild forecasts, widow maker in contango — U.S. natural gas futures fell about 5% to a two-week low on Tuesday on rising output and forecasts for milder weather and less heating demand next week than previously expected. Front-month gas futures for January delivery on the New York Mercantile Exchange fell 17.1 cents, or 5.3%, to settle at $3.042 per million British thermal units (mmBtu), their lowest close since Nov. 19. Looking ahead, futures for April 2025 traded higher than March 2025 (NGH25-J25) for the first time, an unusual step that some analysts said signals the market was already giving up on expectations of much higher prices this winter. March is the last month of the winter storage withdrawal season and April is the first month of the summer storage injection season. Since gas is primarily a winter heating fuel, traders have said summer prices should not trade above winter. The industry calls the March-April spread the "widow maker" because rapid price moves on changing weather forecasts have forced some speculators out of business, including the Amaranth hedge fund, which lost more than $6 billion in 2006. In the spot market, meanwhile, the coming of wintry weather across parts of the U.S. caused gas prices to rise to their highest since January in several regions, including the Waha hub in West Texas, Algonquin in New England, New York and at the Southern California Border. Next-day gas prices at the Algonquin jumped to $14.29 per mmBtu, boosting spot power prices to a four-month high of $122 per megawatt hour in the pipeline-constrained New England region. Power and gas prices usually spike in New England when the winter weather turns cold because there is not enough gas pipeline capacity into the six-state region to both fuel power plants and heat homes and businesses. That forces several generators to switch to more expensive oil and liquefied natural gas (LNG) to fuel power plants. Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 101.9 billion cubic feet per day (bcfd) so far in December, up from 101.5 bcfd in November. That compares with a record 105.3 bcfd in December 2023. Analysts expect producers to boost gas output in 2025 as rising demand from LNG export plants increases prices after drillers cut production in 2024 for the first time since the COVID-19 pandemic reduced usage of the fuel. Annual average gas prices at the Henry Hub will soar by over 40% in 2025 after dropping to a four-year low in 2024, according to analysts forecasts. Meteorologists projected the weather in the Lower 48 will turn from mostly colder than normal from now through Dec. 7 to mostly warmer than normal from Dec. 8-18. With less cold weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would drop from 135.9 bcfd this week to 127.7 bcfd next week. Gas prices traded at a one-year high of around $15 per mmBtu at the Dutch Title Transfer Facility benchmark in Europe and at an 11-month high of $15 at the Japan-Korea Marker benchmark in Asia on worries about low supplies from Russia and colder weather in Europe.
US natural gas prices steady as milder weather forecasts offset rising LNG feedgas (Reuters) -U.S. natural gas futures were little changed on Friday as rising output and forecasts for warmer-than-expected weather over the next two weeks offset an increase in the amount of gas flowing to liquefied natural gas export plants to a 10-month high. Front-month gas futures for January delivery on the New York Mercantile Exchange fell 0.3 cent to settle at $3.076 per million British thermal units. For the week, the contract was down about 9% after gaining about 49% over the prior six weeks. Some analysts have said that winter and the high prices it usually brings could already be over before the season officially starts now that the heavily traded March-April "widow maker" spread started trading in unusual contango this week. That means the April contract is priced higher than the March contract. It is possible that gas prices have already hit their 2024 peak in November when they reached $3.56 per mmBtu. Over the past five years, prices hit their yearly highs in January 2023, August 2022, October 2021 and 2020, and January 2019. In the spot market, cold weather in West Texas helped boost next-day gas prices at the Waha hub in the Permian shale, the nation's biggest oil-producing basin, to their highest level since January. Wintry weather in New England also boosted next-day gas prices to more than $14 per mmBtu and power to more than $100 per megawatt hour (MWh) in the gas pipeline-constrained six-state region. That compares with averages in New England of $2.55 per mmBtu for gas and $41 per MWh for power so far this year. Power and gas prices usually spike in New England when the winter weather turns cold because there is not enough gas pipeline capacity into the six-state region to both fuel power plants and heat homes and businesses. That forces several generators to switch to more expensive oil and liquefied natural gas to fuel power plants. Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 102.4 billion cubic feet per day so far in December, up from 101.5 bcfd in November. That compares with a record 105.3 bcfd in December 2023. Meteorologists projected the weather in the Lower 48 will turn from mostly colder than normal from now through Dec. 7 to mostly warmer than normal from Dec. 8-21. With warmer weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would drop from 137.3 bcfd this week to 130.6 bcfd next week and 124.6 bcfd in two weeks. The amount of gas flowing to the seven big operating U.S. LNG export plants rose to an average of 14.3 bcfd so far in December, up from 13.6 bcfd in November. That compares with a monthly record high of 14.7 bcfd in December 2023. On a daily basis, LNG feedgas was on track to hit a 10-month high of 14.8 bcfd after flows to Cheniere Energy's 4.5-bcfd Sabine Pass plant in Louisiana rose to a seven-month high of 5.1 bcfd.
Pickering on Permian: Marginal Barrels, Stripper Wells, More -Is the Permian Basin the world’s marginal barrel?“I suspect that it’s pretty close to that. Most people are producing flat out,” Dan Pickering, chief investment officer for Pickering Energy Partners, said at Hart Energy’s DUG Executive Oil Conference & Expo. “If we’re going to keep producing at 6 million barrels a day here, what’s the price required to get there?”Today, the Permian Basin remains the world’s most prolific oil and gas basin as operators have advanced drilling and completion techniques to boost production and improve breakeven prices. They are drilling 4-mile laterals, upsizing well spacing and using U-turn, or horseshoe, well designs to improve efficiency, boost production and lower costs. They are producing more with fewer rigs, and some are bolting on contiguous acreage to further unlock synergies.The action has improved production rates and breakevens, with ample producers outnumbering marginal ones. However, as the Permian Basin matures and operators talk about so-called Tier 2 and Tier 3 areas with less favorable reservoir rock quality and potentially lower output, thoughts are on the basin’s future, costs and the price of oil.Sure, the world still needs affordable oil and gas, especially in developing nations, even as the global drive to lower emissions continues with a push for more renewable energy and lower-carbon energy. But at what cost?“The basin is going to have to continue drilling. We’re on a treadmill and at 6 million barrels a day, you don’t stop spending and maintain production, right? We will see a decline if we don’t keep spending,” Pickering said.Stripper wells dominate the U.S. oil and gas well count. They account for less than 10% of the nation’s oil and gas production, with horizontal wells producing far more oil and gas, according to the U.S. Energy Information Administration. Hydraulically fractured horizontal wells in shale formations such as the Permian typically decline faster than vertical wells in conventional reservoirs. Predictions vary on when Permian Basin oil and gas production will peak, but analysts and experts see production growing in the near term.Jefferies’ model shows the basin peaking at around 7 MMbbl/d in the 2030.However, “none of that analysis accounts for new strata. None of that analysis accounts for new fracturing or stimulation techniques,” Jefferies’ Pete Bowden, the global head of industrial, energy and infrastructure investing, said in an exclusive video interview with Hart Energy. “And one of the things that my 25 years in the business has taught me is that good oilfields find a way to keep getting better. The Permian is certainly an example of that.”Enverus forecasts Permian production will be nearly 8 MMbbl/d by the end of the decade. Speaking during DUG EOC, Daniel Romero, the director of energy strategy for analytical firm Enverus, also said crude prices will too rise along with demand.The firm in October said the global economy will need about an additional 7 MMbbl/d of liquids production and about 40 Bcf/d of more natural gas by 2030. It expects North America will be capable of delivering 30% to 40% of this at mid-cycle prices of $70 to $80 WTI and $3.50 to $4/MMBtu Henry Hub prices.But Enverus pointed out that “sub-$60/bbl WTI PV-50 breakeven oil resource has become considerably scarcer in the U.S. since 2022. This is driving global investors and operators to start looking outside of the U.S. for low-cost oily locations.”The latest Federal Reserve Bank of Dallas survey of E&P firms show companies operating in the Permian’s Delaware need $64/bbl WTI to profitably drill a new well. It’s $62/bbl in the Permian’s Midland.WTI was trading at nearly $69/bbl early Nov. 27.In a cyclical business, oil prices can swing wildly with excess capacity and geopolitics at play.“In a $70 world, Tier 3 is optionality out in the future,” Pickering said, adding there are lots of good resources in the basin. Getting to Tier 2 and Tier 3 acreage will be a function of time and price, he said, noting the Permian is ways away from Tier 2 becoming Tier 1 and Tier 3 becoming Tier 2.“If the Permian is the marginal barrel in the world five years from now, prices are going up for sure because … the world’s still going to need our 6 million barrels a day,” he added before turning to stripper wells. “I think we’re going to have plenty of them. And eventually the business goes from how well can you drill wells to how well can you produce them.”The classification of marginal wells, which are not necessarily stripper wells (though the terminology is often interchanged), depend on the price of oil and production costs. A stripper well is defined by the U.S. Internal Revenue Service as a well that produces 15 barrels or less of oil per day or 90,000 cubic feet or less of natural gas per day.Looking ahead, Pickering sees big companies producing many wells at smaller volumes.“But that’s the history of this business. We’ve been doing that forever and people know how to do that,” he said. “I’m optimistic about both the small ball and the big ball, both being pretty active for the foreseeable future.”
Over 26,000 gallons of oil lost between Bottineau, Williams County spills - — A total 26,040 gallons of crude oil was lost in North Dakota after an explosion in Williams County on Friday, Nov. 29, and a leak in Bottineau County on Saturday, Nov. 30. According to a Monday release from the North Dakota Oil and Gas Division, approximately 17,640 gallons of oil was spilled after a tank operated by Hess Corp. exploded about 6.8 miles south of Ray in Williams County. A total of 126 gallons have since been recovered. The site also lost 2,520 gallons of produced water and recovered 126 gallons. The next day, a tank overflow about 6.6 miles northwest of Maxbass in Bottineau County led to a 8,400-gallon oil spill, half of which have since been recovered. The site, operated by Scout Energy Corp., also lost 3,360 gallons of produced water and recovered three-quarters, according to the release. A total 5,880 gallons of produced water were spilled between the two incidents and 2,646 gallons have been recovered. Around 4,326 gallons of oil have been recovered in total. Clean up efforts are underway, according to the release.
USCG responds to oil spill in San Juan Harbor in Puerto Rico - US Coast Guard Incident Management pollution responders from Sector San Juan responded to and began investigating a No. 3 fuel oil spill at the Puma Energy fuel dock facility in San Juan Harbor, Puerto Rico. As announced, the source of the oil discharge has been secured and most of the material is contained within the Puma Energy fuel dock area. Approximately, 1,000 gallons are estimated to have spilled into the water. On 27 November, Coast Guard watchstanders at Sector San Juan received a report from the National Response Center reporting the incident which occurred during a fuel transfer from the Marshall Islands flagged Motor/Tanker Dubai Green to the facility. During the transfer, ship crew and facility personnel reportedly noticed a sheen in the water, approximately 100 meters long and four meters wide, and stopped transfer operations to investigate. Coast Guard Incident Management Division personnel also arrived on-scene to investigate. Clean-up response crews deployed approximately 1,000 feet of boom to contain the fuel in the water within the Puma Energy dock facility and the impacted shoreline. In the following days, efforts will take place to recover the fuel from the water and identify any pockets of material in the harbor that may have escaped the containment area. Furthermore, the Coast Guard Federal On-Scene Coordinator for the incident along with Coast Guard Incident Management Division personnel will oversee clean-up efforts until completed. Coast Guard pollution responders are coordinating with the Environmental Protection Agency, the National Oceanic Atmospheric Administration, U.S. Fish and Wildlife and the Puerto Rico Department of Natural and Environmental Resources, among other entities, and monitoring for any signs of affected wildlife in the area. In addition, Puma Energy hired the Marine Spill Response Corporation as the Oil Spill Removal Organization that will be leading clean-up efforts for the incident. MSRC subcontracted All Environmental Services, Inc. to assist with clean-up and oil recovery efforts. “This incident highlights the importance of fuel facilities and vessels having updated response plans in place and that those plans are exercised frequently to ensure the quickest and most efficient response possible, and to prevent similar incidents from occurring in the future” said Chief Warrant Officer Jamie Testa, Coast Guard Federal On-Scene Coordinator. The Coast Guard is advising the public and local fishermen in the area to stay away from the incident site, to not touch any fuel material and to not conduct any fishing or activities in the vicinity until clean-up operations are completed.
Mexico LNG Projects Face Increased Political, Regulatory Risks, Expert Says -Political risk in Mexico is clouding the picture for commercially attractive LNG projects, according to Alex Munton, Rapidan Energy Group’s Global Gas and LNG research lead. “I don't think at this stage you can adequately insure against the political risk and regulatory changes being introduced in Mexico, and more certainty is going to be needed for some investment projects to move forward,” he told NGI’s Mexico GPI. Munton is Rapidan Energy Group’s Global Gas and LNG research lead based in Houston. He is a seasoned energy analyst with more than 20 years of experience in the industry. He oversees all aspects of Rapidan’s Global Gas and LNG Service, including product development, research and analysis, and bespoke offerings. Related Tags
Imperial Oil reports biomass spill into St. Clair River in Ontario - Imperial Oil Ltd on Tuesday said it is currently managing a minor biomass spill into the St. Clair River from its water treatment plant in Ontario, Canada. "This occurred this morning and has been contained within the site's outfall. Booms have been placed within that area of the river," Imperial said. As a precaution, a vac truck has been stationed at the area to prevent another carryover occurrence, the company said. Imperial was not immediately available to comment on the volume of the release.
BC’s Tilbury LNG Taking Next Step to Advance Second Expansion Project -FortisBC has filed an environmental assessment application with regulators in British Columbia (BC) to again expand its small-scale LNG facility to serve emerging markets. Aerial image of Tilbury LNG facility in Canada. Expand The application filed with the BC Environmental Assessment Office (EAO) would advance Tilbury LNG’s phase one expansion. The project would add a 142,400 cubic meter storage tank to boost storage capacity by 2.5 times. It would also add 2.5 million tons/year (Mt/y) of liquefaction capacity, mainly to serve provincial demand and growing marine refueling needs in the region.
Enbridge Scrapping Northern BC Natural Gas Pipeline as Project Backlog Swells to C$27B - Enbridge Inc. has canceled its planned Westcoast Connector Gas Transmission (WCGT) project in northern British Columbia (BC), allowing the environmental certificate to expire as it focuses on other growth opportunities across North America. Map showing BC's proposed and operational natural gas pipelines to serve under construction LNG facilities. The Calgary-based pipeline giant allowed the WCGT’s environmental certificate to expire in late November, ending a long-running competition with TC Energy Corp. and others to supply feed gas to proposed LNG export terminals near Prince Rupert. WCGT lost out to TC’s proposed Prince Rupert Gas Transmission (PRGT) system, which landed the Ksi Lisims LNG project as a customer in October 2023. The decision came as Enbridge's project backlog has swelled to C$27 billion (US$19 billion). The company on Tuesday announced plans to spend around C$7 billion on capital expenditures in 2025, excluding maintenance costs. The company this year has added C$7 billion in new capital projects and completed roughly C$1 billion in acquisitions.
Argentina Natural Gas Producers Committing to LNG as Vaca Muerta Output Grows -Argentina energy firm Pampa Energia SA has joined the Southern Energy SA consortium to develop a floating LNG export project in the province of Río Negro. The 2.45 million ton/year (Mt/y) project would be ready to ship out gas for the second half of 2027, Pampa executives said in a statement. Pampa joined Golar LNG Ltd. and natural gas producer Pan American Energy S.L. in the venture. Total investment would be $2.9 billion over 10 years. Plans are to liquefy and export natural gas sourced from the Vaca Muerta shale play in Argentina’s Neuquén Basin. Vaca Muerta is considered the world’s second largest shale gas resource.
Key Vaca Muerta Gas Pipeline Project Approved by Argentina Government (Reuters) - Argentina's government has approved a key $500 million private sector gas pipeline expansion project, the energy secretariat said on Monday, a key signal of state support to boost transport capacity as it ramps up domestic energy production. The project, proposed by major private local operator Transportadora de Gas del Sur (TGS), would expand transport capacity from the huge Vaca Muerta shale region to Buenos Aires province. The project will be tendered by the government. The project is a rare attempt by the private sector to take the lead expanding Argentina's gas pipeline network, which has traditionally been led by the state. Argentina, under new libertarian President Javier Milei, is luring more private investment to overturn an energy deficit and export more gas. TGS originally presented the plan in June and said its proposal, which is subject to it winning the tender, was to install six compressor tube sets at four plants. That would increase the amount of gas the existing pipeline could carry. "The initiative includes the expansion of the Perito Moreno gas pipeline between Tratayén (Neuquén) and Salliqueló (Buenos Aires) and work on four compressor plants," the energy secretariat said in a statement. "This will allow the company to add 14 million cubic meters of gas transportation capacity per day to the 21 million it already transports, so reaching 35 million cubic meters along the entire route," it added. Argentina is pushing to rev up output from Vaca Muerta, the world's second largest shale gas formation, and to build up the infrastructure to supply domestic demand and eventually allow liquefied natural gas (LNG) exports. TGS, if successful in the tender, has also pledged a further $200 million investment in a second phase to build 20 kilometers of new pipeline and add more compression capacity in an area that TGS already has under concession. "We understand that the tender should be launched in the next few days," TGS CEO Oscar Sardi said on Monday at an event in Buenos Aires, adding the complex installation of compressor plants required almost two years to get into operation. "We are playing against the clock," he added.
Argentina LNG Export Project Gathers Backing From Shale Drillers –-- A plan to export liquefied natural gas from Argentina is gaining momentum, with four drillers in the country’s heralded shale patch now signed on to supply a facility with the fuel. London-based oil company Harbour Energy Plc announced this week that it would acquire a 15% equity stake in the roughly $3 billion floating liquefaction project, or FLNG, spearheaded by driller Pan American Energy Group and FLNG vessel provider Golar LNG Ltd. Harbour recently acquired drilling assets in Argentina from Germany’s Wintershall Dea AG that include areas in the Vaca Muerta shale formation. Wintershall’s offshore venture with Pan American — which is 50% owned by BP Plc — and France’s TotalEnergies SE were also part of the acquisition. Harbour follows Pampa Energia SA, which said on Nov. 29 that it will have a 20% stake in the project, and Argentina’s top oil and gas producer state-run YPF SA, which also intends to pipe fuel to the FLNG. The facility is scheduled to start operations on the Atlantic coast in 2027. YPF has been developing a liquefied natural gas project of its own involving multiple FLNGs and, eventually, construction of an onshore plant. Even with various projects being analyzed, YPF’s chief executive has said that Argentina’s drillers should rally around one venture. Argentina’s LNG ambitions put it in competition with growth in the US and Qatar, two of the world’s top natural gas suppliers. Demand for the fuel has been on the rise in Europe, where importers are cutting back on gas piped from Russia, and in Southeast Asia, where new buyers are de-carbonizing their energy portfolios.
Norwegian piped gas exports to NW Europe edge up in November - Norway's pipeline gas exports to landed markets in Northwest Europe edged up in November compared with October, but were slightly down year on year, an analysis of S&P Global Commodity Insights data showed Dec. 4. Deliveries amounted to 9.8 Bcm in November, up 2% from 9.56 Bcm in October but down 1% on the year, the data showed. Year-to-date exports remain strong, however, with pipeline deliveries up 9% year on year to 103 Bcm in the January-November period. This is now on a par with deliveries in the first 11 months of 2022. According to the Norwegian Offshore Directorate, 2022 is currently seen as the peak year for gas output in Norway. Germany remains the biggest landing point for Norwegian gas, with supplies totaling 3.7 Bcm in November followed by the UK (2.8 Bcm), Belgium (1.3 Bcm), France (0.8 Bcm), Denmark (0.8 Bcm), and the Netherlands (0.4 Bcm). Norway is now the single biggest supply source of gas to the European market after Russian deliveries were sharply curtailed through 2022. Norwegian operators maximized production and European exports to help offset lost Russian volumes and to make the most of high prices, which hit record highs in summer 2022. Producers continue to look to ensure high output levels given ongoing strength in European gas prices. Platts, part of Commodity Insights, assessed the TTF month-ahead price on Dec. 3 at Eur48.49/MWh. Equinor CFO Torgrim Reitan said in October that gas prices reflected the fact that markets remain in a "vulnerable" state. Speaking to analysts following the release of the Norwegian producer's Q3 results, Reitan said Asian LNG demand and the expiry of the Russia-Ukraine gas transit deal at the end of this year were key "moving parts" to watch. The weather is also set to be a critical factor this winter following a mild 2023/24 season, Reitan said. "A normal winter would leave the gas storages around 40% full in April compared to 60% this year," he said. "So that will have an impact on prices during the winter." EU gas storage sites are currently filled to 84.7% of capacity, according to the latest data from Gas Infrastructure Europe. The European Commission last month raised an interim EU-wide gas storage filling target for Feb. 1 next year to 50% from 45% this year given concerns over Russian supplies via Ukraine. The higher target was part of interim goals set by the EC Nov. 29 for EU countries to meet in 2025 to ensure gas storage facilities are filled to at least 90% of capacity by Nov. 1 next year.
Shell, Equinor Combining UK North Sea Natural Gas and Oil Portfolio as Fossil Fuels Focus Strengthens --Shell plc and Equinor ASA have agreed to merge their UK North Sea natural gas and oil businesses to create the offshore region’s largest independent producer. The move, they said, would provide a ‘sustainable future’ for the mature basin to benefit the energy import-dependent island nation. Graph showing UK's natural gas production, including both onshore and offshore, associated and dry gas output through Oct. 2024. In the UK, Equinor now produces about 38,000 boe/d; Shell’s output is 100,000 boe/d-plus. The 50-50 joint venture (JV) in 2025 is expected to produce more than 140,000 boe/d, the partners estimated. According to the UK Office for Budget Responsibility (OBR), the UK North Sea in 2023 produced 1.6 million boe/d, 60% weighted to natural gas. The offshore region contributes a relatively small share of global output, or around 0.8% of natural gas and 0.7% of oil. “However, it remains a vital component of the UK's energy mix, meeting approximately 60% of the country's oil demand and 40% of its gas needs.”
Lynch lobbies up as he eyes Nord Stream 2 --American investor Stephen Lynch hired Wilmer Cutler Pickering Hale and Dorr LLP to lobby on commodity and energy transit infrastructure days before The Wall Street Journal reported he wanted to buy the Nord Stream 2 pipeline if it comes up for auction in a Swiss bankruptcy proceeding. Lynch called this “a once-in-a-generation opportunity for American and European control over European energy supply for the rest of the fossil-fuel era.” The lobbyist on the account is Rob Lehman, former chief of staff to Sen. Rob Portman (R-Ohio).S-3 Group registered to monitor issues related to “the responsible production of American oil and gas” on behalf of the American Exploration & Production Council, a trade association representing some of the country’s largest independent oil and natural gas companies. The lobbyist on the account is Matt Bravo, former director of floor operations for House Majority Leader Steve Scalise (R-La.).
Europe Sets More Aggressive Natural Gas Storage Targets, Pushing Prices Higher — Cold weather and renewed concerns over the pace of storage withdrawals are once again pushing European natural gas prices near record highs for the year. (a chart tracking European Union natural gas storage levels) The January Title Transfer Facility (TTF) contract gained 2% on Monday to finish at $14.95/MMBtu, or just 4 cents shy of this year’s highest close of $14.99 on Nov. 21. Colder weather is expected this week and next across northern and western Europe. Meanwhile, storage inventories are at 85.5% of capacity, below the five-year average of 88% and lagging behind the 95% level at this time last year.
European Gas Extends Losses With Russian Decree Easing Concerns - European natural gas prices extended this week’s loss after the Kremlin changed procedures to pay for Russian gas, easing concerns that flows to the region will be cut off. Benchmark futures dropped as much as 1.4% on Friday and are on track for a weekly decline of more than three 3%, the first since early November. On Thursday, President Vladimir Putin changed the way foreign buyers of Russian gas have to pay for supplies, easing concerns that US sanctions imposed on Gazprombank last month will lead to an early halt of supplies to Europe. While Gazprombank remains the authorized bank to handle payments for Gazprom PJSC, Russia now allows money transfers via third parties. This could allow foreign buyers of Russian gas to use accounts in other banks to convert foreign exchange payments into rubles and transfer the money to Gazprombank. While Europe relies on a number of suppliers beyond Russia for gas, faster-than-usual storage withdrawals this heating season have left the market vulnerable to signs of disruption. Inventories are currently about 84% full, lower than this time last year. Liquefied natural gas imports have also gained momentum recently and are helping to ease concerns around the supply outlook. Mild and windy conditions are forecast for the rest of the week, potentially helping the region to save fuel. Dutch front-month futures, Europe’s gas benchmark, fell 0.6% to €46.26 a megawatt-hour at 8:59 a.m. in Amsterdam.
Jordan Signs Deal to Use Egyptian FSRU Until 2026 (Reuters) - Egypt and Jordan have signed an agreement to allow Jordan to use an Egyptian floating storage and regasification unit (FSRU) until 2026, Jordan's energy ministry said on Monday. The FSRU will help Jordan secure liquefied natural gas supplies in case of emergencies ahead of the completion of the Aqaba LNG import terminal scheduled in the fourth quarter of 2026. The agreement includes determining priority use for FSRU between both sides in case of simultaneous needs, with around 350 MMcfgd allocated to Jordan. This would represent 50% of the LNG capacity of a single FSRU, or 25% in case of additional capacity. The ministry estimated the cost of gas at around $3 million per shipment and $5 million to transfer gas through the Egyptian gas grid. It said the cost of LNG bought by Jordan annually would not exceed $10 million. The agreement comes under efforts to provide Jordan with a less costly mechanism to supply LNG, according to the statement.
Liquid Gas Imports to Continue in Egypt Until 2030 -- The Egyptian government has decided to continue importing liquid gas into the country until 2030. Natural gas production in Egypt has declined to 4.3 billion cubic feet per day, falling short of the country's daily demand of 6 billion cubic feet, especially during peak summer months. Earlier in 2024, the government restarted the import of liquefied gas after stopping in 2018, when domestic production was supported by new gas discoveries at the time. The country has already reached agreements with Italian energy giant Eni and American company Apache to increase their output. To incentivize further production and exploration, Egypt has committed to settling outstanding payments to these companies. The government's strategy aims to balance domestic production and imports to ensure a stable supply of natural gas for the country's needs.
Adnoc, Chevron Sign on More Long-Term Natural Gas Buyers — Abu Dhabi National Oil Co. (Adnoc) has signed another sales and purchase agreement (SPA) to sell 1 million tons/year (Mt/y) of LNG from its Ruwais export project under development in Al Ruwais Industrial City. Chart and graph showing key natural gas price hubs for Asian markets. The company converted a heads of agreement with Malaysia’s Petronas into a binding 15-year deal to sell the super-chilled fuel beginning in 2028, when the Ruwais plant is expected to enter service. Adnoc sanctioned the 9.6 Mt/y Ruwais project earlier this year. It has so far committed 8 Mt/y of the project’s capacity to international buyers. The facility would boost Adnoc’s LNG production capacity to 15 Mt/y. Chevron Corp. also announced an SPA to sell 0.6 Mt/y of LNG from its global portfolio to Sembcorp Industries. Singapore-based Sembcorp generates power in 10 countries. Chevron said it would begin delivering the LNG in 2028 for a period of 10 years.
LNG Supply Delays, Asian Demand Growth Push Peak Natural Gas Price Volatility to 2028 --Commodity analysts are revising up forecasts for global natural gas prices over the next two years as growing global demand collides with a slowdown of new volumes hitting the market. Image showing a comprehensive market analysis of the global LNG futures settles according to Natural Gas Intelligence (NGI), highlighting key insights into energy market dynamics and gas data projections for the near future. Analysts with Morgan Stanely scrapped previous estimates for softer prices next year in Europe and Asia after tracking a more than 10% rise in global LNG demand in 2024. Most of that growth occurred in Asia, which is expected to keep a strong pull on cargoes into 2025 as industrial sectors recover. The firm revised its forecast for East Asian LNG prices to an average of $12/MMBtu next year, versus a previous estimate of $10. Title Transfer Facility prices were said to correlate with Asian rates, supported by lower storage inventories in Europe after the winter and the loss of Russian pipeline volumes.
Bangladesh's new LNG purchase policy draws Shell, BP, Glencore and Aramco (Reuters) - Shell, BP, Aramco and Glencore are among nearly two dozen firms Bangladesh has approved as suppliers of spot liquefied natural gas (LNG) as it seeks to boost competition and cut costs, the country's top energy official told Reuters. Bangladesh's spot market was previously dominated by Vitol, Gunvor and Excelerate Energy, said Muhammad Fouzul Kabir Khan, the country's de facto energy and power minister. But after the ousting of Prime Minister Sheikh Hasina in August, the interim government is moving to an open instead of private tender. The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business. The country of 171 million people, which made its first LNG import in 2018, bought 5.2 million metric tons in 2023, up 19% from the previous year, and analysts expect its demand to keep rising as population increases and domestic gas output falls. Bangladesh spends about 60 billion taka ($504 million) a year on LNG imports, mainly to run power plants, with more than half coming from government contracts with Qatar and Oman and the rest through the spot market. About half of Bangladesh's power-generation capacity is gas based, but many plants are running short of supply. "All the major players, the giants - Aramco, Shell, BP - have applied to supply. This is the advantage of opening up," Khan said late on Tuesday. "We are trying to open up to have more competition and save more." Khan said potential savings would depend on new orders placed by state-run Rupantarita Prakritik Gas Co Ltd (RPGCL). He did not say when that could happen. Saudi Aramco's 2222.SE trading arm Aramco Trading Co (ATC), BP Singapore, Shell International Trading Middle East and Glencore Singapore are among the 22 new firms on Bangladesh's list of 33 potential suppliers seen by Reuters. Vitol Asia, Gunvor Singapore and Excelerate Energy are among existing suppliers remaining on the list. Glencore GLEN.L declined to comment. Saudi Aramco, BP, Shell, Vitol, Gunvor and Excelerate Energy did not immediately respond to requests for comment. In November, RPGCL issued an invitation for companies to supply LNG on a spot basis. The new list of companies would replace the previous roster of 23 suppliers, an official at RPGCL parent Petrobangla said at the time. Bangladesh imports about 100 LNG cargoes annually, with more than 50 through direct contracts with Qatar and Oman and the rest as spot purchases from private suppliers, Khan said.
Pakistan Defers LNG Contract with Qatar to 2026, Citing Surplus (Reuters) — Pakistan has deferred an agreement to buy liquefied natural gas from Qatar for a year, Petroleum Minister Musadik Malik said on Wednesday, and will now receive the contracted LNG cargoes in 2026 instead of 2025. "We currently have a surplus of LNG, so we are not importing any new cargo," said Malik. There were no financial penalties for deferring, rather than cancelling, the order, he added. Annual power use in Pakistan, which gets over a third of its electricity from natural gas, has fallen 8-10% year-on-year over the past three quarters, its power minister told Reuters in November, primarily due to higher tariffs curbing household consumption. The South Asian nation has deferred five LNG cargoes from Qatar and is negotiating to defer five more with other markets, Malik told journalists, without disclosing the names of the sellers. The government said in November it was slashing its electricity tariffs over the winter to boost consumption and cut the use of natural gas for heating. Many power utilities in Pakistan have had to curtail or even halt operations in winter months due to demand dropping by up to 60% from peak summer levels. Malik told Reuters in June that Pakistan was unlikely to buy LNG cargoes on the spot market until at least the beginning of winter in November due to oversupply and high prices. Pakistan, which last bought a spot LNG cargo in late 2023, cancelled its spot LNG tender for delivery in January owing to oversupply and a lack of buyers in Pakistan at spot prices. Malik also denied local media reports that Pakistan was closing a deal to import one cargo of crude oil from Russia each month from January. He said his government had restarted talks with Russia and was looking to solve obstacles such as "insurance, reinsurance, deal structure, shipping lines and ship cargo size", but had not concluded a deal. The previous caretaker government had decided not to pursue a government-to-government agreement with Russia, allowing the private sector to step in, Malik said. Pakistan signed a deal with Russia in 2023 to import crude oil for local refining, which included a 100,000 metric ton shipment to state-owned Pakistan Refinery Limited. Under that arrangement, Pakistan paid for the crude at a discounted rate using Chinese yuan.
LNG Imports Rise 10.8% in October as Domestic Gas Output Drops 1.6% -India’s natural gas landscape in October 2024 showed a blend of growth and challenges. Liquefied natural gas (LNG) imports experienced a significant increase of 10.8 per cent year-on-year, reaching 2941 million standard cubic meters (MMSCM), while domestic production saw a decline of 1.6 per cent, totaling 3111 MMSCM. According to the latest report from the Petroleum Planning & Analysis Cell (PPAC), the country’s growing dependence on imported LNG to meet rising energy demands was evident, as domestic production struggled to keep pace. In October, the total natural gas available for sale was 5527 MMSCM, marking a 4.2 per cent increase from the same month last year. However, consumption decreased slightly to 6019 MMSCM, compared to September’s levels, reflecting uneven demand across sectors. Fertilizers were the largest consumer, accounting for 29 per cent, followed by city gas distribution (CGD) at 21 per cent, and power generation at 11 per cent. Refineries and petrochemicals together consumed 12 per cent of the available gas...
LNG Imports India: LNG imports surge 10.8% in October as domestic gas output falls by 1.6%, New Delhi: India’s natural gas landscape in October 2024 reflected a mixed bag of growth and challenges, with liquefied natural gas (LNG) imports rising sharply by 10.8% year-on-year to 2941 million standard cubic meters (MMSCM), while domestic production fell by 1.6% to 3111 MMSCM. The latest report from the Petroleum Planning & Analysis Cell (PPAC) highlights the country's increasing reliance on imported LNG to meet burgeoning energy demands, as domestic output struggles to keep pace. Total natural gas available for sale in October stood at 5527 MMSCM, marking a 4.2% increase compared to the same month last year. However, consumption marginally dipped to 6019 MMSCM in October 2024 from September's levels, underscoring uneven sectoral demand. Fertilizers accounted for the largest share at 29%, followed by city gas distribution (CGD) at 21%, and power generation at 11%. Refineries and petrochemicals collectively consumed 12% of the total gas available. The report highlights a concerning trend of declining domestic production, which fell to 3111 MMSCM in October 2024 from 3161 MMSCM in October 2023. Of this, only 2586 MMSCM was available for sale after accounting for technical losses, flaring, and internal consumption by gas-producing companies. This constitutes 83.1% of the gross production. In contrast, LNG imports, which jumped to 2941 MMSCM from 2653 MMSCM in October 2023, have become a critical element in sustaining the country’s energy supply. India’s reliance on LNG imports continues to grow, with the rise attributed to increased demand from industrial sectors and city gas distribution networks, particularly in urban areas where clean energy initiatives are gaining momentum.
QatarEnergy, Shell Sign Deal to Send More LNG to China in 11th SPA --QatarEnergy said Monday it has signed a long-term sales and purchase agreement (SPA) with Shell plc to provide 3 million tons/year (Mt/y) of LNG for delivery to China. QatarEnergy said deliveries under the SPA would begin next month. No other terms of the deal were announced. Shell, the world’s leading LNG trader, and QatarEnergy, among the world’s leading LNG producers, have 11 SPAs together. QatarEnergy CEO Saad Sherida Al-Kaabi said the deal “underlines our consistent ability to meet the diverse requirements of our customers and partners globally.”
QatarEnergy Signs Long-Term LNG Deal with Shell for China Delivery (Reuters) — State-owned QatarEnergy has signed a long-term sales and purchase agreement with oil and gas major Shell to supply it with liquefied natural gas (LNG) for delivery to China. The deal is for the supply of three million metric tons per annum year of LNG, said QatarEnergy in a statement on Monday, adding that the agreement will start in January 2025. QatarEnergy added that the agreement highlights the continued growth of China's LNG market, but did not say how long the duration of the supply deal with Shell would be. Four trading and industry sources said the volumes will go to Shell's supply pool under its portfolio in China. China is the world's largest importer of LNG. It shipped 71 million metric tons of the super-chilled fuel in 2023, and a record high of nearly 79 million metric tons in 2021, according to the country's customs data. Shell forecasts the LNG market will grow by around 50% by 2040 from around 400 mtpa in 2023 as Asian economies grow and as gas, the least polluting fossil fuel, replaces coal in power generation. Strong LNG sales helped boost Shell's third-quarter profits of $6 billion that exceeded forecasts by 12%. Shell, the world's biggest LNG trader, and other companies including BP say they have lost billions of dollars in profit from gas promised under long-term contracts but it was not delivered. Venture Global LNG contends it has not fully commissioned the Louisiana plant. Qatar is the third largest LNG exporter globally after the U.S. and Australia. It has exported 73 million metric tons of LNG so far this year, according to data from analytics firm Kpler. Between 2022-2023, QatarEnergy agreed a series of 27-year deals to supply Chinese buyers with new gas from North Field.
China Completes Full Pipeline for Power-of-Siberia Gas (Reuters) - China has built and connected the 5,111-km (3,175-mile) Power-of-Siberia pipeline to deliver gas from Russia's Siberian fields to users as far as the financial hub of Shanghai, Chinese state media reported on Monday. The completion will allow the project to reach its full annual designed capacity of 38 billion cubic meters in 2025, roughly 9% of China's consumption this year. Chinese builders added the last section, a 167-km line from Nantong to Luzhi in the eastern province of Jiangsu, around mid-November, completing the massive project seven months ahead of schedule. The pipeline has a diameter of 1.422 meters, allowable pressure of 12 megapascals and the largest transport capacity for a single pipeline, state television said. The Power-of-Siberia pipeline began pumping gas in late 2019, and Russia has been ramping up supplies since. It is slated to deliver 38 Bcm in 2025, state media said, a level 26% higher than the 30 Bcm estimated by analysts for 2024. Citing an official with state-run PipeChina, the report said Power-of-Siberia is currently sending 110 MMcmd, versus 15 MMcmd when the project first came on stream five years ago.
China-Russia east-route natural gas pipeline fully operational -- China's largest single-pipe natural gas transmission project, the China-Russia east-route natural gas pipeline, officially went into full operation on Monday. From construction to operation, the pipeline's critical equipment and core control systems have been entirely domestically produced, China Media Group (CMG) reported. With the full operation of this 5,111-kilometer natural gas pipeline, its annual transmission capacity is set to be raised to a peak of 38 billion cubic meters, benefiting about 450 million people along its route, according to the report. Notably, this world-class pipeline has achieved full localization of its critical equipment. For example, at Heihe station in Northeast China's Heilongjiang Province, the first along the pipeline, three domestically produced electric-driven compressors are continuously pressurizing natural gas and delivering it downstream, CMG reported. Acting as the "heart" of the natural gas compression stations, these compressors play a vital role. Across the entire length of the pipeline, there are 36 high-power compressor units in operation, all sourced from domestic manufacturers, according to the report. The pipeline has also achieved the full localization of both the hardware and software of its core control systems for the first time, the report said. The pipeline was built and commissioned in three sections: the northern, central and southern. It was completed on November 18, seven months ahead of schedule, the National Oil and Gas Pipeline Network Group (PipeChina), the builder of the project, said in a statement. As of November 18, the pipeline has safely and steadily delivered over 78 billion cubic meters of natural gas, PipeChina said in November. Once the pipeline reaches its maximum transmission capacity, it will account for nearly 10 percent of the country's total natural gas consumption annually, highlighting its critical importance, Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Monday. In 2023, the country's natural gas consumption reached 394.5 billion cubic meters, up 7.6 percent year-on-year, per data from the National Energy Administration. Piped natural gas is much cheaper than liquefied natural gas. Additionally, as a clean energy source, it plays a crucial role in driving the transition to a more sustainable energy future, Lin noted. In recent years, China's natural gas production has grown rapidly, but the surge in consumption has led to an increase in imports, therefore securing a diversified supply of imports is essential, Lin noted. The China-Russia east-route natural gas pipeline starts in Heihe in the north, and runs through nine provinces, autonomous regions and municipalities, reaching all the way to Shanghai. It is a key component of China's four major oil and gas strategic corridors and after the China-Central Asia gas pipeline and China-Myanmar natural gas pipeline, has become the third cross-border natural gas pipeline to supply China, according to the Xinhua News Agency. This year, China accelerated the expansion of its oil and gas pipeline infrastructure, adding over 4,000 kilometers of new pipelines and making steady progress toward building a unified national network, CMG said. The national natural gas network now boasts a daily supply capacity of over 1 billion cubic meters.
Spain’s Crude Oil Imports From Venezuela Hit the Highest Level Since 2006 --Thanks to a U.S. license for Spanish energy major Repsol to import Venezuelan crude, Spain’s crude oil imports from the South American country have hit this year the highest level since 2006, according to Spanish government data. So far this year, Spain has imported about 2.6 million metric tons of crude oil from Venezuela, per data from Spanish government agency Cores cited by Reuters. Back in 2006, Spain’s crude imports from Venezuela at this time of the year were roughly 2.7 million tons.Venezuela has boosted its crude oil exports to Western countries this year, thanks to eased U.S. sanctions and specific licenses granted to European companies including Repsol and Italy’s Eni.Repsol has a special U.S. license to import crude from Venezuela’s state oil firm PDVSA as a repayment of debts.Even after the six-month temporary U.S. sanctions relief ended in April 2024, the United States issued several licenses authorizing international majors to continue dealing, in part, with Venezuela and Venezuela’s crude.One of these specific licenses has been granted to Repsol, which has existing oil production in Venezuela, alongside U.S. Chevron, Italy’s Eni, Maurel & Prom, and Shell.Repsol, in joint ventures with PDVSA, has stakes in the offshore gas Perla Field (Cardón IV), one of Latin America’s largest offshore gas fields, a 60% stake in the onshore Quiriquire gas project, and interests in the Petrocarabobo heavy crude project and the Petroquiriquire joint venture.As a result of the license to Repsol, Spanish crude oil imports from Venezuela have surgedthis year.Between January and July 2024, Spain’s crude imports from the country holding the world’s biggest oil resources reached 1.7 million tons, exceeding the imports for the entire year 2023, which were a total of 1.4 million tons.Repsol has also raised production at its Venezuelan joint ventures with PDVSA, the Spanish firm’s CEO Josu Jon Imaz said in July.
DNO Discovers Oil in New Play Offshore Norway - DNO ASA announced a “play opener” oil discovery offshore Norway, its second significant discovery in two years. The Othello discovery is the first time moveable oil has been encountered in the Borr unit of the Vale Formation, DNO said. Othello was drilled in an eastern section of the basin previously known as “the dry belt.” The company drilled two wells in the formation, and the shallower prospect hit. Preliminary estimates show gross recoverable resources of 27 MMboe to 57 MMboe, with a mean estimate of 41 MMboe. DNO holds a 50% operated interest in the license. Aker BP ASA and Petoro AS hold 20% each, and Source Energy AS the remaining 10%. The partners are considering tying back the discovery to existing infrastructure. The ConocoPhillips Ekofisk hub is 25 miles west of Othello and Aker’s Valhall hub is 35 southwest. Last year, DNO announced the Norma gas condensate discovery in the Norwegian North Sea.
North Sea Oil Market Sees Biggest Trading Frenzy in 16 Years - The North Sea crude market just witnessed its largest trading frenzy in at least 16 years, adding to uncertainty over oil prices in the year ahead. Eight cargoes — or about 5.6 million barrels of crude — changed hands Monday in a pricing window run by Platts, a unit of S&P Global Commodity Insights. That’s the most since 2008, when Bloomberg started compiling the data. Trafigura Group and TotalEnergies SE were the main buyers, with Equinor ASA and Gunvor Group the only sellers. Almost all of the crude traded helps set the price of Dated Brent, the world’s most important pricing benchmark for actual barrels of oil, Dated Brent.The buying binge occurs at an unusual time — the North Sea crude market is generally quiet in December as traders start to close up their books — and adds to questions about where they think prices will go in the coming months. Benchmark futures have hovered, mostly, in a range between $70 and $80 a barrel since August as investors work their way through a fog of uncertainty. It’s not yet clear when the OPEC+ alliance will boost production, or when top-consumer China will be able to revive its economy, which faces the threat of US tariffs from the incoming Trump administration. Geopolitical risks in Ukraine and the Middle East still loom.The following table shows deals completed during a process called Market on Close that Platts assesses to determine benchmark oil prices. Prices are relative to Dated Brent:The North Sea oil market is often subject to significant buying and selling, and trading activity can have a far-reaching impact. Four of the five grades traded Monday — WTI Midland, Forties, Brent and Oseberg — help make up the Dated Brent benchmark. In June, Gunvor and Trafigura, two of the world’s largest oil traders, bid heavily for various benchmark grades, pushing up physical prices globally. Last month, Petroineos, a joint venture of state-owned PetroChina Co. and UK billionaire Jim Ratcliffe’s Ineos Group Plc, snapped up crude at the fastest pace in at least 16 years.
Oil spill from Druzhba pipeline in Poland, authorities report -An oil spill from the Druzhba pipeline was detected near the town of Pniewy in western Poland on Sunday, prompting local authorities to manage traffic and initiate emergency response measures. Officials confirmed that the incident does not pose a risk of fire or explosion. The leak, discovered in a field near a gas station on the outskirts of Pniewy, led to a strong smell of gas in the area. “During the investigation, it was determined that there was a spill of a substance resembling oil in a field in the area,” said Martin Halasz, spokesman for the regional State Fire Service. The Druzhba pipeline, a major conduit for oil supplies from Russia to eastern and central Europe, is managed by Polish energy firm PERN. Following the discovery, the company shut down one of the pipeline's pumping substations as a precaution. "The eastern section of the pipeline has already been shut down, but the remote system failed to close the western section, so manual shutdown is currently underway," Halasz explained. A chemical response team and the Provincial Fire Service Commander’s Operational Group were dispatched to the scene to assess and secure the area.
Sounion's crude oil transfer successfully completed near Suez - The transfer of 150,000 tons of crude oil (approximately 1,000,000 barrels) from the Greek-owned tanker Sounion to the tanker Delta Blue was successfully completed at an anchorage near Suez. According to sources from the Hellenic Ministry of Maritime Affairs and Insular Policy, the operation was carried out successfully with the support of the Greek rescue vessel Aegean Sea, without any unforeseen incidents, despite the serious condition of the tanker, which had been attacked with explosives by the Houthis off the coast of Yemen. The Greek-owned tanker was first attacked by drones on Wednesday, August 21, and its 25-member crew (23 Filipinos and two Russians) was evacuated the next day by a French destroyer to a safe location in Djibouti. On Sunday, October 7, the rescue vessel Aegean Sea, with a specialized team of 27 members, successfully extinguished 18 fire hotspots on the tanker. The tanker was then safely towed to an anchorage near Suez to facilitate the transfer of crude oil to another tanker.
OPEC oil output rises in November as Libya recovers, survey finds (Reuters) - OPEC oil output rose for a second month in November as Libya's production recovered after resolution of a political crisis, a Reuters survey found, though members making cuts pledged to the wider OPEC+ alliance kept output broadly steady. The Organization of the Petroleum Exporting Countries pumped 26.51 million barrels per day (bpd) last month, up 180,000 bpd from October, the survey showed on Tuesday, with Libya again posting the largest increase. Libyan output recovered after resolution of a dispute over control of the central bank, allowing full production to resume at oilfields and applying downward pressure on prices. The country is exempt from agreements by the broader OPEC+ group of producers to limit output. OPEC+ is scheduled to meet on Thursday and could extend output cuts into 2025 in the face of global demand concerns and rising output outside the group, sources have told Reuters. Other increases of 50,000 bpd each came from Nigeria and from Iran. There were no significant drops in output. Iraqi production edged lower, the survey found, reflecting efforts to boost compliance with its OPEC+ quota. OPEC pumped about 16,000 bpd above the implied target for the nine members covered by supply cut agreements, the survey found, with Gabon exceeding its target by the largest amount. The Reuters survey aims to track supply to the market and is based on shipping data provided by external sources, flows data from financial group LSEG, information from companies that track flows, such as Kpler and Petro-Logistics, and information provided by sources at oil companies, OPEC and consultants.
Libya Daily Oil Output Hits 11-Year High --Libya’s oil production has risen to the highest daily level in more than a decade, just months after a political crisis slashed the country’s output. Crude and condensate production hit 1.422 million barrels on Thursday, the National Oil Corp. said in a post on X. That exceeds the state oil-firm’s target by 22,000 barrels. It’s also the highest daily volume since 2013, according to the NOC. The surge marks a stunning turnaround for Libya’s oil industry this year. In August, a feud between the country’s rival eastern and western governments halved output, stoking fears of a renewed war. The two sides resolved their dispute a month later. The North African country is now planning its first tender for energy exploration since the 2011 civil war that ousted leader Moammar Al Qaddafi. Italy’s Eni Spa and BP Plc resumed drilling last month, ending a pause in place since 2014. Libya, home to the Africa’s largest oil reserves, in November boosted crude output to 1.14 million barrels a day, providing a sense of the nation’s oil rebound. The ramp-up would help bring foreign currency into the country, after seesawing production in recent years — largely the result of unrest — limited revenues. Power struggles have compounded years of neglect in developing or revamping the oil infrastructure. Still, the increase comes at a tricky time for the Organization of Petroleum Exporting Countries, of which Libya is a member. The producer group and its allies on Thursday delayed a revival of its production for three months, amid faltering demand in China and booming supplies from the Americas. While Libya is exempt from the OPEC+ system of production caps, its production feeds into the group’s performance, adding to global supplies.
Russia’s Crude Oil Shipments Surge Ahead of OPEC+ Meeting Russia’s crude oil shipments jumped by 570,000 barrels per day (bpd) last week, to 3.36 million bpd, just ahead of the OPEC+ meeting which will discuss on Thursday the group’s production plans for early next year.More vessels loading from Russia’s western ports drove the surge in seaborne shipments in the week to December 1, according to tanker-tracking data monitored by Bloomberg.The four-week average crude oil exports by sea also rose, for the first time in three weeks, per the data reported by Bloomberg’s Julian Lee on Tuesday.In the four weeks to December 1, Russian crude oil shipments from its oil export terminals averaged 3.13 million bpd, up by 50,000 bpd compared to the four-week average to November 24, according to Bloomberg’s estimates.The four-week average is a less volatile figure than weekly shipments as it is less affected by adverse weather conditions and other short-lived disruptions.The Russian shipments from the western ports on the Baltic and Black Seas recovered in the week to December 1, after two weeks of below-normal activity, per Bloomberg’s analysis.During the previous week to November 24, Russia’s crude oil exports by sea fell in the four weeks compared to the previous four-week average by the steepest volume since July, amid lower shipments to India, tanker-tracking data analyzed by Bloomberg showed last week.As of November 24, Russian exports were at around a two-month low.Now the more volatile weekly jump in shipments in the week to December 1 comes as the OPEC+ group, including Russia, meet on December 5 to discuss production levels and supply to the market.The latest market speculation is that OPEC+ is discussing a three-month extension of its production cuts until the end of the first quarter of 2025, Reuters reported on Tuesday, citing unnamed sources from the group.
OPEC+ May Be Facing Long-Term Production Cuts -- OPEC+ has been withholding 2.2 million barrels of oil supply daily for well over a year now—and it might have to start thinking about these cuts as a long-term policy. The market just keeps refusing to respond to them as OPEC+ wants. The idea of the production cuts was the same as the idea of all OPEC cuts before them: curb supply, let demand take care of any perceived or real surplus, watch prices go up, and then release the withheld supply. It has always worked before. It should have worked again. But it didn’t. It isn’t working this time because of two things: algorithmic trading and unrealistic expectations about Chinese demand growth. The latter factor determined an overwhelmingly bearish sentiment among oil traders, and the former amplified it out of any reasonable proportions. Some analysts are warning that oil is underpriced and the market is in for a correction, but they are lonely voices in a sea of demand pessimism. It is in this context that OPEC+ delayed its latest meeting that was due to take place—virtually—on Sunday but will instead take place next Friday. The reason given for the delay was a scheduling conflict, but the group may want to use the extra time to think where it is going over a longer term than a month from now. Because there are precious few factors working for OPEC+ and its goal for higher oil prices.One of these factors is the fundamentals situation in oil. Demand for oil keeps surprisingto the positive while non-OPEC supply growth—except in Guyana—is not really living up to the hype, with growth in the U.S. shale patch set toslow down, despite Trump’s presidency. Yet no one trading oil seems to care much about fundamentals because they are watching China and its oil demand fluctuations.The other factor that could potentially aid OPEC+ in its efforts to make oil more expensive is geopolitics. A Trump presidency will probably mean tighter sanctions on Iran, and that would, in turn, mean fewer Iranian barrels reaching international buyers, which would additionally crimp supply, potentially boosting prices. Interestingly, traders are still ignoring this even as analysts step up the warnings.“We think that oil prices are about $5 per barrel undervalued relative to the fair value based on the level of inventories,” Goldman Sachs’ co-head of global commodities Dan Struyven toldReuters recently. Echoing the sentiment, Morgan Stanley’s Martijn Rats suggested in comments to the publication that the whole oil surplus “story” is not yet a fact—and may never become a fact because producers tend to respond to the risk of a surplus by curbing production.Still, prices remain depressed, and whenever they do inch up, they do so modestly in response to a production outage or an escalation in the Middle East or Ukraine—and these jumps never last. There’s always some news report about Chinese demand or the latest from the International Energy Agency that quickly puts an end to the climb.This means that OPEC+ may need to get used to the thought of more permanent supply limits. Instead of talking about policy revisions every month, it might want to make the period between these revisions longer, as it did at the start of the latest round of cuts. Instead of giving the market any hint of a suggestion it might start bringing back barrels, however unrealistic such a move may be, OPEC+ might want to eliminate this additional source of bearish sentiment.
Oil Undervalued as Market Faces Deficit, Iran's Supply at Risk, Analysts Warn (Reuters) — Oil prices are undervalued due to a market deficit, with the potential risk to Iran's supply from possible sanctions under U.S. President-elect Donald Trump, according to the heads of commodities research at Goldman Sachs and Morgan Stanley. "We think that oil prices are about $5 per barrel undervalued relative to the fair value based on the level of inventories," Daan Struyven, co-head of global commodities research at GS told reporters on Wednesday. The oil market is estimated to be in a deficit of about half-a-million barrels per day over the past year, Struyven said, adding that China and the U.S. are likely to continue restocking strategic reserves for energy security. He said these factors, along with lower output from OPEC+ producers and a potential tightening of sanctions on Iran that could cut supply by around 1 million barrels per day, could push oil prices higher in the short term. Brent is projected to peak at about $78 a barrel by next June, before easing to $71 by 2026, as there is significant spare capacity available to address supply shortages whenever needed, Struyven said. Brent crude futures LCOc1 are trading under $73 a barrel on Wednesday after Israel agreed to a ceasefire deal with Hezbollah while OPEC+ is discussing a delay in unwinding of production cuts. Martijn Rats, chief commodity strategist at Morgan Stanley, told Reuters last week that oil prices should be a couple of dollars higher as inventories are low. "We can point at some of this to demand weakness, but there's also been some supply weakness and in many ways this story about this looming surplus, is a story for next year," he said. While the oil supply surplus is expected to reach 1 million bpd next year, driven by non-OPEC+ output, there is no historical precedent for such a surplus, as producers typically cut output and demand increases when prices drop, Rats noted.
Iraq surpasses Saudi Arabia, Mexico in weekly oil exports to US - Iraqi News – The US Energy Information Administration (EIA) announced on Sunday that Iraq was the second-largest oil exporter to the United States during the past week, surpassing Saudi Arabia and Mexico. The EIA mentioned that the average US imports of crude oil during the past week from eight major countries reached approximately 5.65 million barrels per day, representing a decline of 1.08 million barrels per day compared to the previous week, when US oil imports reached 6.73 million barrels per day, Shafaq News reported. Iraq’s oil exports to the United States reached 277,000 barrels per day last week, representing an increase of 40,000 barrels per day compared to the previous week, when Iraq exported 237,000 barrels per day to the US. The EIA indicated that most of the United States imports of crude oil during the past week came from Canada at an average of 4.08 million barrels per day, followed by Venezuela with an average of 267,000 barrels per day and Saudi Arabia with an average of 248,000 barrels per day. The United States imported an average of 227,000 barrels per day from Brazil, 151,000 barrels per day from Mexico, 146,000 barrels per day from Nigeria, 142,000 barrels per day from Colombia, and 118,000 barrels per day from Ecuador.
Oil Futures Higher on Syrian Attacks, Delayed Opec+ Meeting - Oil futures for January delivery opened Monday higher as a civil war in Syria reignited when rebels took control of the country's second-largest city Aleppo, resulting in airstrikes from the Syrian government and Russia. Jets pounded the cities of Idlib and Aleppo, killing at least 25 people, according to the Syrian civil defense group that operates in opposition-held areas, the Associated Press reported Sunday.The escalating conflict raised concerns about a wider regional war, which could disrupt oil production and supply routes. Last week Israel and Lebanon agreed a cease-fire, which initially eased fears of disruptions in oil output from Middle Eastern producers. Separately, oil futures markets continued focusing on the upcoming OPEC+ plus meeting scheduled for this Thursday.The meeting was originally scheduled for Dec. 1, but was pushed back to Dec. 5 as several ministers of member countries attended the 45th Gulf Summit in Kuwait Sunday, according to an OPEC statement released last week.The group was expected to announce a gradual increase of 2.2 million barrels per day to the global markets in 2025, but that decision now appears to be unlikely.The uncertainty about China's demand recovery, expectations of tariff wars, the escalation of the Russia-Ukraine conflict and ample crude supplies from Libya and the U.S. are some other factors to influence OPEC + member's decision to bring back more barrels to the global markets by 2025.However, additional crude production from the oil cartel would place crude prices below $70, according to analysts.In economic news, the U.S. Bureau Labor Statistics is scheduled to announce unemployment data for November on Dec. 6. The unemployment rate in the U.S. was steady at 4.10% in October, but markets will focus more on learning about wage increases in November as this will influence the U.S. Federal Reserve's decision on interest rates. Oil futures remained bullish Monday also as Energy Information Administration data released last week showed commercial crude oil inventories in the U.S. fell 1.8 million barrels in the week ended Nov. 22. In contrast, both gasoline and distillate fuel inventories rose from the previous week, due to higher demand expectations ahead of the Thanksgiving holiday week, adding 212,000 barrels (bbls) and 114,700 bbls last week, respectively. Near 9:54 a.m. EST, WTI for January delivery was trading near $68.38 bbl, up $0.38, and February Brent crude contract was at $72.15 bbl up $0.31. January RBOB rose $0.0159 gal to $1.9147, and January ULSD edged up $0.0040 gal to $2.1964.
Oil steady, traders hopeful on China demand but worried about Fed (Reuters) - Oil prices were little changed on Monday, as hopes of stronger demand stemming from higher factory activity in China was largely offset by concerns that the U.S. Federal Reserve will not cut interest rates again at its December meeting. Brent crude futures settled 1 cent lower at $71.83 a barrel. U.S. West Texas Intermediate crude rose 10 cents, or 0.15%, to $68.10. A private sector survey showed China's factory activity expanded in November at the fastest pace in five months, boosting Chinese business optimism just as U.S. President-elect Donald Trump has ramped up trade threats. Meanwhile, a ceasefire between Israel and Lebanon, which took effect last Wednesday, appeared increasingly fragile. The Israeli military said on Monday it was currently striking "terror" targets in Lebanon amid mutual accusations of ceasefire violations between Israel and Lebanese armed group Hezbollah.The Pentagon said that despite some incidents, the ceasefire between Israel and Lebanese armed group Hezbollah was holding."Increased geopolitical risks remain. Even though the ceasefire is underway in Israel, it seems evident that there are some misconceptions about the legitimacy of the ceasefire," .Traders also watched developments in Syria, weighing whether recent escalation could widen tensions across the Middle East and affect supply.Both crude benchmarks fell more than 3% last week, pressured by easing supply concerns from the Israel-Hezbollah conflict and 2025 surplus forecasts, despite expected sustained output cuts.The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, postponed the group's next meeting to Dec. 5. It will discuss delaying a planned oil output increase scheduled to start in January, OPEC+ sources told Reuters last week."Attention will be on the potential delay of the planned production hike, as an indefinite delay could alleviate downward pressure on prices," This week's meeting will decide policy for the early months of 2025."Money managers are sitting on the fence ... the market is looking for clarity between the implication of the forthcoming Trump administration and OPEC+ supply policy," Pressuring oil prices, Atlanta Federal Reserve President Raphael Bostic said he has an open mind about whether to cut interest rates again at the Fed's December meeting, with upcoming data on jobs important in shaping the decision.Higher interest rates increase the cost of borrowing, which can slow economic activity and dampen demand for oil.]Also pressuring oil, the dollar pushed higher again, after Trump on Saturday threatened 100% tariffs on BRICS member countries unless they commit to not creating a new currency or supporting another currency that could replace the dollar.A stronger greenback makes dollar-denominated oil more expensive for investors holding other currencies, hurting demand.
Uncertainty in the Market Ahead of the OPEC+ Meeting - The oil market ended the session slightly higher amid the uncertainty in the market ahead of the OPEC+ meeting later this week and an increasingly fragile ceasefire between Israel and Lebanon, which took effect last Wednesday. The crude market was well supported early in the session on optimism over strong factory activity in China. A private sector survey showed that China’s factory activity expanded at the fastest pace in five months in November. The market retraced some its losses seen in the previous week as it rallied to a high of $69.11 early in the session. However, the market gave up its gains and sold off to a low of $67.71 early in the afternoon amid the strength in the dollar. The January WTI contract retraced some of its losses ahead of the close and settled up 10 cents at $68.10, while the February Brent contract settled down 1 cent at $71.83. The product markets ended the session in mixed territory, with the heating oil market settling down 1.47 cents at $2.1777 and the RB market settled up 1.84 cents at $1.9172. Barclays said oil market fundamentals seem to be improving while heating demand for natural gas is expected increase sharply over the coming weeks. It maintained its long call spread recommendation in oil. It maintained its long $75-$80/barrel call spread recommendation on December 2025 Brent futures.The Israeli military said it was striking “terror” targets in Lebanon amid mutual accusations of ceasefire violations between Israel and Lebanese armed group Hezbollah.Syrian and Iraqi sources said hundreds of fighters from Iran-backed Iraqi militias crossed into Syria overnight to help the government fight rebels who seized Aleppo last week and Tehran pledged to aid Syria’s government. Two Iraqi security sources said at least 300 fighters, primarily from the Badr and Nujabaa groups, crossed the border late on Sunday. On Monday, Iranian Foreign Minister Abbas Araqchi said Syria’s military was capable of confronting the rebels but added that “resistance groups will help and Iran will provide any support needed”. Any prolonged escalation in Syria risks further destabilizing a region already impacted by the conflicts in Gaza and Lebanon, with millions of Syrians already displaced and with regional and global powers backing rival forces in the country.Atlanta Federal Reserve President, Raphael Bostic, said he has an open mind about whether to cut interest rates again at the Fed’s December meeting, with upcoming data on jobs important in shaping the decision. In an essay also released on Monday, he said his base case remains that inflation will continue to fall to the Fed’s 2% target, though it remains an open question how far and how fast interest rates should be reduced to ensure that happens while avoiding any undue damage to the job market. Federal Reserve Governor, Christopher Waller, said he was inclined to cut the benchmark interest rate at the December 17th-18th meeting as monetary policy remained restrictive enough to keep putting downward pressure on inflation. At the same time, he said upcoming data on jobs, inflation and consumer spending could still sway him to pause if it appears that progress on inflation is stalling.
Oil Prices Rise Amidst Middle East Tensions And Economic Stimulus Expectations - Oil prices climbed on Tuesday in the global commodities market, driven by expectations of a U.S. Federal Reserve interest rate cut, optimism about economic recovery in China, and escalating tensions in the Middle East that heighten supply concerns. Brent crude rose to $72.22 per barrel, while the U.S. benchmark, West Texas Intermediate (WTI), reached $68.38 per barrel. These increases come ahead of a critical meeting of the Organisation of Petroleum Exporting Countries (OPEC) and its allies (OPEC+), where members are expected to extend output cuts to counter risks of a global oil glut. Recent data from China has sparked optimism, suggesting an improvement in the country’s economic activity, bolstered by continued government support. This has raised hopes of increased oil demand from the world’s largest crude importer. In the U.S., anticipation surrounds the Federal Reserve’s meeting on December 18, with markets pricing in a 75% probability of a 25-basis-point interest rate cut. Lower interest rates typically stimulate economic activity, which could boost oil consumption and drive prices higher. Meanwhile, the fragile geopolitical landscape in the Middle East has intensified oil market anxieties. Despite a ceasefire agreement with Lebanon, Israel has resumed assaults, targeting Hezbollah missile platforms in southern Lebanon. The Israeli military confirmed bombing operations on Tuesday, reporting dozens of strikes on missile platforms. The attacks, occurring six days after the ceasefire, resulted in two fatalities, including a government official, and left many injured. The renewed violence threatens to disrupt oil supply routes, further supporting the rise in crude prices. As the OPEC+ meeting approaches, analysts expect the alliance to maintain its output cuts to stabilise prices. Combined with the potential for stronger demand from China and a more accommodative monetary policy in the U.S., oil prices are likely to remain volatile in the coming weeks. The convergence of geopolitical risks and economic drivers underscores the precarious balance of global energy markets, with the Middle East conflict and economic policies shaping the outlook for crude oil.
Oil rises on fears about Lebanon, further OPEC+ supply cuts (Reuters) - Oil prices rose more than 2% on Tuesday as Israel threatened to attack the Lebanese state if its truce with Hezbollah collapses, and as investors positioned for OPEC+ to announce an extension of supply cuts this week. Brent crude futures posted their biggest gains in two weeks, rising by $1.79, or 2.5%, to settle at $73.62 a barrel. U.S. West Texas Intermediate crude futures also rose the most since Nov. 18, gaining $1.84, or 2.7%, to close at $69.94 per barrel. Israeli forces have continued strikes against what they say are Hezbollah fighters ignoring last week's truce agreement in Lebanon. Top Lebanese officials have urged Washington and Paris to press Israel to uphold the ceasefire. The risk to the ceasefire has some oil traders worrying more about tensions in the Middle East, While the Lebanon conflict has not resulted in oil supply disruptions, traders will closely track tensions between Iran and Israel over the coming months, Also supporting oil prices, the Organization of the Petroleum Exporting Countries and allies will likely extend output cuts when OPEC+ meets on Thursday. The group is likely to extend supply cuts until the end of the first quarter next year, four OPEC+ sources told Reuters. OPEC+, which accounts for about half of the world's oil production, has been looking to gradually unwind supply cuts through next year. However, the prospect of a market surplus has pressured oil prices, with Brent trading nearly 6% below its average for December 2023. An extension of OPEC+ supply cuts will limit the market surplus and provide the oil market a softer landing than most forecasts expected. "Given a rise in compliance with production cuts from Russia, Kazakhstan and Iraq, the lower Brent price level and indications in press reports, we assume an extension of OPEC+ production cuts til April," Goldman Sachs analysts said in a note. The global oil demand outlook remains weak and China's crude imports are likely to peak as early as next year as demand for transport fuel begins to decrease, researchers and analysts said. U.S. crude oil inventories rose 1.2 million barrels in the week ended Nov. 29, market sources said citing data from the American Petroleum Institute. Fuel stocks also rose, they said. Rising inventories typically indicate weak demand. "Oil is not going to be in short supply next year," "Demand growth rates will slow in 2025, and we cannot count on China to account for half the global oil demand," he said. "(Oil) prices will roll down a bit,".
Oil sees biggest daily gain in 2 weeks on bets OPEC+ will extend production cuts - Oil futures settled higher Tuesday, scoring their largest one-day gains in about two weeks as some traders expect the Organization of the Petroleum Exporting Countries and its allies to further delay a partial unwinding of production cuts when they meet Thursday.
- -- West Texas Intermediate crude CL00 for January delivery CL.1 CLF25 rose $1.84, or 2.7%, to settle at $69.94 a barrel on the New York Mercantile Exchange.
- -- February Brent crude BRN00 BRNG25, the global benchmark, climbed $1.79, or 2.5%, at $73.62 a barrel on ICE Futures Europe. Brent and WTI saw their biggest one-day dollar and percentage gains since Nov. 18, according to Dow Jones Market Data.
- -- January gasoline RBF25 tacked on 2.4% to $1.96 a gallon, while January heating oil HOF25 added 1.8% to $2.22 a gallon.
- -- Natural gas for January delivery NGF25 settled at $3.04 per million British thermal units, down 5.3%.
"Right now, we are in a period of significant change and uncertainty for global economies," said Stephen Innes, managing partner at SPI Asset Management. Among the uncertainties are numerous questions: "Will [President-elect Donald] Trump follow through with his tariff threats? How will this impact U .S. interest rates? Can China's demand recover in the face of an [electric-vehicle] conversion? Will Trump manage to broker peace in Eastern Europe? Will the dollar remain oppressively strong, weighing on commodity prices?"Innes noted that "currently, every shift in the oil markets is transient. No one truly knows what will happen next." For now, he said, "the strengthening U.S. dollar, especially against emerging-market currencies like India's and China's, alongside OPEC+ production uncertainties, counterbalances the nascent signs of economic recovery in China and ongoing geopolitical tensions."'The strengthening U.S. dollar ... alongside OPEC+ production uncertainties, counterbalances the nascent signs of economic recovery in China and ongoing geopolitical tensions.'Stephen Innes, SPI Asset Management OPEC+ ministers are set to meet Thursday after a meeting that had been set for Dec. 1 was postponed. OPEC+ had earlier this year approved a plan to begin unwinding around 2.2 million barrels a day of production cuts in October but has subsequently delayed that plan. At present, it's scheduled to take effect at the end of December, but it may be further pushed back due to softness in the crude market and fears that a production rise would add to a surplus. "I'm cautious not to overinterpret the OPEC delays, which seem tied to scheduling conflicts with the 45th Gulf Summit in Kuwait," Innes said. "The consensus on [Wall Street] is still that plans to increase oil supply will likely be postponed for another month, or possibly even two or three months, to gauge the U.S. oil patch's response to Trump's 'drill, baby, drill' policy." The probability for no change to production plans stands at 58.3%, while there's a 36.1% probability that the group of producers will further delay an output increase, according to the CME's OPEC Watch Tool.So far this year, WTI has fallen around 5%, based on the front-month contract, while Brent has declined nearly 7%, according to Dow Jones Market Data.Innes said the only risk he sees disrupting his forecast of Brent falling to $65 per barrel by the second quarter of next year is "an unexpected supply disruption, as I'm banking on increased U.S. oil production next year."
WTI Holds Gains After Big Surprise Crude Draw | Oil prices were limping lower this morning (after yesterday's surge) after the weak ISM Services print as traders await this week's OPEC+ decision. API
- Crude +1.23mm
- Cushing +112k
- Gasoline +4.62mm
- Distillates +1.01mm
DOE
- Crude -5.07mm - biggest draw since August
- Cushing +50k
- Gasoline +2.36mm
- Distillates +3.38mm - biggest build since July
Completely the opposite of API's reported small build, the official data showed a large crude draw last week, but products saw large builds... Graphics Source: Bloomberg Even with the large addition to the SPR - total crude stocks still drew down by the most since August... US Crude production held at 13.5mm b/d - a record high... Algorithmic traders have been dumping bearish positions after futures surpassed both the $70-a-barrel psychological level and the 50-day moving average, which have provided resistance for previous rallies, said Dennis Kissler, senior vice president for trading at BOK Financial Securities. WTI Is holding right around that $70 level...As Bloomberg's Grant Smith reports, even before OPEC+ ministers start tomorrow’s meeting on oil production, traders are looking beyond it.For the past week, the cartel led by Saudi Arabia and Russia has been holding preliminary talks to once again delay plans for reviving halted barrels.The group is firming up an agreement — to be finalized at Thursday’s gathering — that would push back a sequence of monthly hikes from January until the second quarter.Unfortunately for the alliance, crude traders already assumed the pause was unavoidable and have priced it in. Benchmark Brent futures have barely budged in the week since OPEC+ began negotiations, hovering around $74 a barrel.That could be complacency: The Saudis have a habit of springing bullish surprises to deter short sellers.Nonetheless, investors are looking past the decision, focusing on oil-market conditions in early 2025 — and those don’t augur well for prices.Global demand growth is cooling as top consumer China falters, while supplies from the US, Guyana and Canada are booming, according to the International Energy Agency. A hefty surplus looms, even if OPEC+ doesn’t add a single barrel next year.
The Uncertain Ceasefire Between Israel and Hezbollah - The oil market traded lower on Wednesday and retraced some of its recent gains ahead of the OPEC+ meeting on Thursday. The market was well supported in overnight trading and posted a high of $70.51 by the uncertain ceasefire between Israel and Hezbollah, South Korea’s curtailed declaration of martial law and a rebel offensive in Syria that threatens to draw in forces from several oil producing countries. However, the market gave up its gains and retraced more than 62% of its move from Monday low of $67.71 to its high of $70.51 seen early in the morning as it posted a low of $68.49 ahead of the close. The January WTI contract settled down $1.40 at $68.54 and the February Brent contract settled down $1.31 at $72.31. The product markets ended the session lower in light of the larger than expected builds reported in distillates and gasoline stocks by the API and EIA. The heating oil market settled down 5.03 cents at $2.1674 and the RB market settled down 2.33 cents at $1.9391. The EIA reported that U.S. crude stocks fell by more than expected in the week ending November 29th as refiners increased their operations, offsetting an increase in crude imports. Crude inventories fell by 5.1 million barrels on the week to 423.4 million barrels. U.S. crude oil production increased by 20,000 bpd to a record 13.513 million bpd in the week ending November 29th. Refinery crude runs increased by 615,000 bpd last week, to their highest level since July 12th. Net U.S. crude imports increased by 1.64 million bpd, while crude exports fell by 428,000 bpd to 4.24 million bpd.OPEC+ sources stated that OPEC+ is likely to extend its latest round of oil production cuts by at least three months from January when it meets online on Thursday. One of the OPEC+ sources said the group was also looking at an option to extend the cuts throughout the first half of next year and another said a deeper cut was not a likely option.IIR Energy reported that U.S. oil refiners are expected to shut in about 21,000 bpd of capacity in the week ending December 6th, raising available refining capacity by 124,000 bpd. Offline capacity is expected to fall to zero in the week ending December 13th.The Organization for Economic Cooperation and Development said the world economy is set for steady growth in the next two years if resurgent protectionism does not derail a recovery in global trade. In its latest Economic Outlook, the OECD said the world economy is poised to grow 3.2% this year and 3.3% in 2025 and 2026 as lower inflation, job growth and interest rate cuts help offset fiscal tightening in some countries. Its latest forecasts were largely in line with its last review dating from September, when it had expected growth of 3.2% this and next year and did not yet have a forecast for 2026. As a cooling job market causes consumer spending to moderate, the OECD forecast that U.S. growth would ease from 2.8% this year to 2.4% in 2025 and 2.1% in 2026.
Oil prices end lower as investors look to OPEC+ decision -- U.S. oil futures finished lower Wednesday as pressure from uncertainty a day ahead of a decision by major oil producers on output levels outweighed support from weekly U.S. data showing a crude inventory drop of more than 5 million barrels. Investors also weighed news of deepening U.S. sanctions on Iranian oil exports.
- -- West Texas Intermediate crude for January delivery fell $1.40, or 2%, to settle at $68.54 a barrel on the New York Mercantile Exchange after gaining 2.7% on Tuesday.
- -- February Brent crude, the global benchmark, lost $1.31, or 1.8%, at $72.31 a barrel on ICE Futures Europe.
- -- January gasoline RBF25 declined by 1.2% to $1.94 a gallon, while January heating oil HOF25 lost 2.3% to $2.17 a gallon.
- -- Natural gas for January delivery NGF25 settled at $3.04 per million British thermal units, up a fraction of a cent for the session.
The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, are set to meet Thursday, after postponing a gathering that had been set for Dec. 1. OPEC+ had earlier this year approved a plan to begin unwinding around 2.2 million barrels a day of production cuts in October but subsequently delayed that plan. At present, the plan is scheduled to take effect at the end of December, but it is expected to be pushed back further due to softness in the crude market and fears that a production increase would add to a surplus. "While a delay to unwinding production cuts is expected, the rhetoric and guidance from the meeting will have the biggest influence," . Saudi Arabia is likely to keep its oil production tight and further push back plans to loosen it, the Wall Street Journal reported Wednesday, citing comments from Saudi officials. That report shows Saudi Arabia is "keen in keeping the market tight on the belief that they will be rewarded in the future for their fiscal and production sacrifices," . "The Saudi's must believe that demand will exceed current damped down expectations. They must expect that this demand increase will allow them to profit from a period of sustained higher prices for longer." Still, looking at the bigger picture for oil, traders are concerned about an eventual rise in supplies. President-elect Donald Trump will be taking office soon, U.S. energy regulations will be eased and oil drilling will increase, So even though the Saudis may not raise supplies in the short term, in the longer term it's just a "matter of time before they do and add a lot of supply to the markets," he said. Meanwhile, the U.S. Treasury Department on Tuesday announced sanctions on 35 entities and vessels that it said play a critical role in transporting Iranian petroleum to foreign markets. Other geopolitical developments have come into play as well. "Lebanon's cease-fire agreement appears fragile, and South Korea's political turmoil is amplifying crude's role as a hedge against geopolitical uncertainty," Against that backdrop, WTI and Brent oil futures climbed more than 2% on Tuesday. Israel on Tuesday said it would pursue a deeper war in Lebanon if its truce with Iran-backed Hezbollah collapsed, news reports said. Both sides have continued to fire on each other while trading accusations of violations of the agreement. In the U.S., the Energy Information Administration reported a bigger-than-expected decline of 5.1 million barrels in domestic commercial crude inventories for the week that ended Nov. 29. The report was expected to show a decline of 1.6 million barrels on average, according to a survey of analysts conducted by S&P Global Commodity Insights. Late Tuesday, the American Petroleum Institute reported a crude inventory increase of 1.2 million barrels, according to a source citing the data. The EIA also reported weekly supply increases of 2.4 million barrels for gasoline and 3.4 million barrels for distillates. The S&P Global Commodity Insights survey forecast inventory gains of 1.6 million barrels for gasoline and 800,000 barrels for gasoline. U.S. oil production was up by 20,000 barrels at 13.513 million barrels per day in the latest week, the EIA said, while crude stocks at the Cushing, Okla., Nymex delivery hub edged up by 100,000 barrels to 24.2 million barrels. Demand for gasoline rose, with total motor gasoline supplied, a proxy for demand, at 8.738 million barrels per day in the latest week, up from 8.506 million bpd a week earlier.
Crude Oil Prices Decline Amid Weak Demand In China And US - Crude oil prices dropped sharply on Thursday as weak demand projections from China and the United States—the world’s two largest oil consumers—sparked concerns in the global commodities market. Both nations are grappling with slowing economic performance, leading to expectations of reduced oil consumption. In the United States, the Energy Information Administration (EIA) reported an increase in strategic petroleum reserves, exerting downward pressure on prices. Brent crude fell to $72.33 per barrel, while the US benchmark, West Texas Intermediate (WTI), slipped to $68.46 per barrel. China’s economy has also shown signs of deceleration, with growth reaching 4.8% in the first nine months of 2024—falling short of the 5% annual target. November’s Purchasing Managers’ Index (PMI) revealed stagnation in the services sector, dropping 0.5 points month-on-month. The non-manufacturing PMI remained nearly static at 50.1, indicating limited momentum. Weak domestic demand and persistent deflationary pressures have further eroded China’s economic outlook, adding to concerns about reduced oil demand. In the US, economic signals also fueled bearish sentiment. The Institute for Supply Management (ISM) reported a 3.9-point decline in its services PMI, which fell to 52.1 in November—below market expectations. Additionally, October’s factory orders grew by a modest 0.2%, underperforming projections. EIA data also showed a 1.4 million-barrel rise in strategic petroleum reserves last week, reaching 391.8 million barrels, alongside a 2.4 million-barrel increase in gasoline inventories. These trends highlight weakening demand and contributed to the downward movement in oil prices. However, expectations of a US Federal Reserve interest rate cut helped temper the price decline. Federal Reserve Chairman Jerome Powell hinted at the possibility of rate adjustments, with market odds of a 25 basis point cut at the December 18 meeting rising to 78%. Attention is now shifting to the upcoming OPEC+ decision on oil production cuts for early 2025. The group is widely expected to extend its current supply cuts into the first quarter, a move that could help stabilize prices in the short term.
The OPEC+ Decision to Delay its Planned Output Increase - The oil market ended the session lower following the OPEC+ decision to delay its planned output increase by three months to April 2025. The market traded mostly sideways ahead of the OPEC+ meeting as it retraced some of Wednesday’s losses in overnight trading. However, the market sold off sharply to a low of $67.98 after a source said OPEC+ agreed to delay an output increase ahead of an official announcement as the meeting was still underway. The market, however, bounced off its low and traded to a high of $69.16 following the official OPEC+ announcement. Also, a weaker U.S. dollar lent some support to the market. The market later gave up most of the day’s gains and traded in and out of positive territory during the remainder of the session. The January WTI contract settled down 24 cents at $68.30 and the Brent contract settled down 22 cents at $72.09. The product markets ended the session in negative territory, with the heating oil market settling down 1.17 cents at $2.1557 and the RB market settling down 66 points at $1.9325.On Thursday, OPEC+ has agreed to keep oil production at the current levels for the first quarter of 2025. OPEC agreed to extend the 2 million bpd and the 1.65 million bpd of cuts until the end of 2026 from the end of 2025. The gradual unwinding of 2.2 million of cuts will start from April 2025 and will last until September 2026. The group also agreed to allow the United Arab Emirates to raise output by 300,000 bpd from April and until the end of September 2026, instead of the earlier plan to start it in January 2025.Russia’s Deputy Prime Minister Alexander Novak said that the OPEC+ group had decided to extend output cuts in order not to destabilize the global energy market, amid weaker seasonal fuel demand. He also said that the compliance with production quotas among the OPEC+ countries is high, while the global oil market is stable due to, among other things, the OPEC+ actions, adding that OPEC+ expected global oil demand to increase by 1 million bpd in 2025.PJK/Insights Global reported that gasoline stocks in the Amsterdam-Rotterdam-Antwerp storage hub in the week ending December 5thincreased by 13.57% on the week and by 9.45% on the year to 1.297 million tons, while gasoil stocks fell by 5.59% on the week but increased by 20.34% on the year to 2.13 million tons and fuel oil stocks increased by 13.13% on the week and by 7.01% on the year to 1.344 million tons. Naphtha stocks increased by 10.64% on the week and by 190.36% on the year to 572,000 tons and jet kero stocks increased by 2.15% on the week and by 39.89% on the year to 996,000 tons.The number of Americans filing new applications for unemployment benefits increased moderately in the week ending November 30th. The Labor Department said initial claims for state unemployment benefits increased by 9,000 on the week to a seasonally adjusted 224,000.
Oil prices settle lower despite OPEC+ delaying plans to boost production -- Oil prices settled lower Thursday, as concerns about growing supply of crude persisted, offsetting early gains following OPEC+'s decision to delay the restart of its oil production increases by three months. At 2:30 p.m. ET (19:30 GMT), Brent oil futures fell 0.3% to $72.09 a barrel, while West Texas Intermediate crude futures fell 0.4% to $68.30 a barrel. The Organization of Petroleum Exporting Countries and allies (OPEC+) has decided to delay the restart of its oil production increases by three months, representing the third postponement as crude prices remain under pressure. The additional production of 180,000 barrels per day was expected to start in January, but will instead start in April, and be implemented at a slower pace than previously outlined. The OPEC+ had slashed production by over 2 million barrels in the past two years, and is expected to keep supply limited amid concerns over slowing oil demand, especially in top importer China. The OPEC+ has consistently cut its forecasts for global demand growth in 2024 and 2025, citing uncertainty over a sluggish economic recovery in China. The concerns about tepid demand come in the wake of fears that the crude market will tip into oversupply next year amid a jump non-OPEC production. Wells Fargo analysts predict a shift in global oil market dynamics by mid-2025, forecasting improved fundamentals and stronger prices following a period of oversupply. They estimate a surplus of 1 million barrels per day in the first half of 2025, despite OPEC+ production cuts. "Downside price risks exceed upside ones until mid-2025," the analysts noted, but they expect better conditions in the second half of the year. The bank maintains a long-term price forecasts of $80 for Brent and $75 for WTI, supported by decelerating US shale production and Saudi Arabia's preference for prices above $70 per barrel. US oil inventories fall, but products rise Government data released on Wednesday showed US oil inventories shrank by a bigger-than-expected 5.07 million barrels in the final week of November. But gasoline and distillate stockpiles rose, indicating that overall fuel demand was still cooling in the world’s biggest fuel consumer. While demand for heating fuels is expected to increase during the winter season, a downturn in travel activity is expected to bring down overall oil demand. Middle East region in focus Oil markets registered some gains this week as the Israel-Hezbollah ceasefire teetered on the brink of collapse, with reports of violations from both sides. Israel also threatened to escalate its offensive against Hezbollah and Lebanon if the truce fell through. Meanwhile, Donald Trump's Middle East envoy has travelled to Qatar and Israel to kick-start the US President-elect's diplomatic push to help reach a Gaza ceasefire and hostage release deal before he takes office on Jan. 20, according to a report by Reuters.
OPEC Delay Reflects Early 2025 Lull, Saudi Prince Tells CNBC - OPEC+’s decision to delay the revival of its oil production was aimed at offsetting a seasonal demand lull early next year, Saudi Arabia’s energy minister said. “The first quarter is not a good quarter to bring volumes,” Prince Abdulaziz bin Salman told CNBC in an interview. “That quarter is known to be a quarter for building stocks.” OPEC+ agreed on Thursday to postpone a series of modest output increases from January to April, and slow the pace of those hikes when they eventually begin. Global oil demand typically begins to ease in the first quarter once winter fuel consumption tails off. For several months, the group has been seeking to restore output halted over the past two years, but been frustrated as faltering demand in China and swelling supplies from the Americas pressure crude prices. Many analysts predict that global oil markets will still face a surplus in 2025 even if OPEC+ doesn’t raise output. Despite deciding to postpone, Prince Abdulaziz said that the alliance “honestly believe the market next year will be better than what is being projected.” Oil traders have shown a lukewarm reception to Thursday’s decision, with futures declining in London to a two-week low below $72 a barrel.
Oil prices edge down as extended OPEC+ supply cuts highlight weak demand - Oil prices edged lower on Friday, with weak demand in focus after the OPEC+ group postponed planned supply increases and extended deep output cuts to the end of 2026. Brent crude futures fell 6 cents, or 0.1%, to $72.03 per barrel by 0336 GMT. U.S. West Texas Intermediate crude futures lost 1 cent to $68.29 per barrel. For the week, Brent was on track to drop more than 1%, while WTI hung on to a marginal 0.1% gain.29dk2902l The Organization of the Petroleum Exporting Countries and its allies on Thursday pushed back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026. The group, known as OPEC+ and responsible for about half of the world’s oil output, was planning to start unwinding cuts from October 2024, but a slowdown in global demand – especially in China – and rising output elsewhere have forced it to postpone the plan several times. “Sidelining the surprise drawdown in US crude stockpiles last week and OPEC+ extending plans to ramp up output until September 2026, oil prices eased further amid growing concerns over dented global demand and oversupplied markets,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. “With growing concerns over global demand for oil in 2025, even the softening of the US Dollar in the last couple of sessions doesn’t seem to mend the floor beneath oil prices,” she said. The latest extension puts OPEC+ output below major banks’ previous forecasts, which could provide some support for the market going forward, analysts at energy-focused consultancy FGE said. However, concerns that supply will still outstrip demand even going into next year weighed on prices further. Macquarie analysts modeled Saudi Arabian oil production remaining in the low-9 million bpd range in 2025, but expected that even with that supply discipline the market would be oversupplied by more than 1 million bpd. “Looking into next year, we forecast a heavy surplus, as non-OPEC supply growth is anticipated to meet the below-trend demand growth, lowering the call on OPEC supply and limiting the need for OPEC+ to reverse voluntary cuts,” they said in a client note. Markets were also looking out for the U.S. nonfarm payrolls report due later on Friday, to see whether it would support expectations of a rate cut at the U.S. Federal Reserve’s next meeting. The market is pricing in a 72% chance that the Fed will deliver a 25-basis-point rate cut when it meets on Dec. 17-18, up from 66.5% a week ago, CME FedWatch tool showed. .
Oil prices fall on supply glut fears despite OPEC+ output cut extension (Reuters) - Oil prices fell by more than 1% on Friday and cemented weekly losses as analysts projected a supply surplus next year on weak demand despite an OPEC+ decision to delay output hikes and extend deep production cuts to the end of 2026.Brent crude futures settled at $71.12 a barrel, shedding 97 cents, or 1.4%. U.S. West Texas Intermediate crude futures settled at $67.20 a barrel, falling $1.10, or 1.6%.For the week, Brent prices lost more than 2.5%, while WTI saw a drop of 1.2%. A rising number oil and gas rigs deployed in the United States this week, pointing to rising production from the world's biggest crude producer, also pushed prices lower.On Thursday, the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, pushed back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026.Weak global oil demand and the prospect of OPEC+ ramping up production as soon as prices rise have weighed on trading, "They're just waiting for better pricing and once they get that, they're going to start jumping in again," OPEC+, which is responsible for about half of the world's oil output, was planning to start unwinding cuts from October 2024, but a slowdown in global demand - especially from top crude importer China - and rising output elsewhere have forced it to postpone the plan several times."While OPEC+'s decision to hold off strengthens fundamentals in the near term, it could be seen as an implicit admission that demand is sluggish," analysts at HSBC Global Research said.Bank of America forecast that increasing oil surpluses will drive the price of Brent to an average $65 a barrel in 2025, while oil demand growth will rebound to 1 million barrels per day (bpd) next year, the bank said in a note on Friday.HSBC, meanwhile, now expects a smaller oil market surplus of 0.2 million bpd, from 0.5 million bpd previously, it said in a note.Brent has largely stayed in a tight range of $70-$75 per barrel in the past month, as investors weighed weak demand signals in China and heightened geopolitical risk in the Middle East."The general narrative is that the market is stuck in its rather narrow range. While immediate developments might push it out of this range on the upside briefly, the medium-term view remains rather pessimistic," PVM analyst Tamas Varga said.Also pressuring prices was the U.S. rig count, which grew for the first time in eight weeks, energy services firm Baker Hughes said on Friday in its closely followed report.Baker Hughes said oil rigs rose five to 482 this week, their highest level since mid-October, while gas rigs rose by two to 102, the highest since early November.Despite this week's rig increase, Baker Hughes said the total count was still down 37, or 6% below this time last year.A mixed U.S. jobs report, which showed a strong rebound in hiring but also a slight rise in the unemployment rate, extended oil's losses.
Oil prices end at their lowest in 3 weeks after OPEC+ fails to allay supply worries -Oil futures settled Friday at their lowest in three weeks, a day after a decision by the Organization of the Petroleum Exporting Countries and its allies to further postpone a planned reversal of production cuts failed to allay fears of a crude surplus.
- -- West Texas Intermediate crude for January delivery fell $1.10, or 1.6%, to settle at $67.20 a barrel on the New York Mercantile Exchange, leading to a 1.2% weekly fall for the front-month contract, according to Dow Jones Market Data.
- -- February Brent crude, the global benchmark, dropped 97 cents, or nearly 1.4%, to $71.12 a barrel on ICE Futures Europe, losing 1% on the week. Brent and WTI marked their lowest settlements since Nov. 15.
- -- January gasoline RBF25 lost 1.4% to $1.91 a gallon but ended 0.4% higher for the week, while January heating oil HOF25 shed 1.1% to $2.13 a gallon, for a weekly loss of 2.7%.
- -- Natural gas for January delivery NGF25 settled at $3.08 per million British thermal units, down 0.1% Friday, contributing to an 8.5% weekly loss.
"For the time being, OPEC's hands are tied," said Joseph Sykora, client portfolio manager and head of private investments at Aptus Capital Advisors. "Current demand is insufficient to meet free-market supply," he told MarketWatch late Thursday. "The market simply can't absorb OPEC's 6.5 million barrels per day of spare capacity without cratering price, which would be detrimental to many OPEC members' budget deficits, most of all Saudi Arabia." OPEC+ on Thursday agreed to again delay the unwinding of 2.2 million barrels a day of production cuts, postponing the start of the phaseout from January until April.Traders are "left assessing whether these moves are enough to counterbalance global demand and excessive supply challenges," Fawad Razaqzada, market analyst at City Index and Forex.com, said in market commentary. The lack of a more positive response in oil prices "shows the market is disappointed," he said.Anticipation of OPEC+'s move had provided support for crude earlier in the week, leaving the market vulnerable to profit-taking after the event occurred. Crude ended lower on Thursday.While the action taken by OPEC+ "eats quite heavily into the surplus" that was expected during 2025, the "extension and the slower return of barrels is not enough to push the market into deficit next year," Warren Patterson, head of commodities strategy at ING, said in a Friday note.The move still leaves the market in surplus in the first half of 2025, "although admittedly the surplus is more manageable" at around 500,000 barrels a day, versus 1 million barrels a day previously, he said.That means that downside for Brent is probably more limited in 2025 than previously thought, he said. ING now expects ICE Brent to average $71 a barrel next year, up from its previous forecast of $69 a barrel.Meanwhile, OPEC's hope may be for U.S. President-elect Donald Trump to reinstate sanctions on Iran, "wiping out the approximately 1.5 million bpd of supply that has come back online since the Biden administration took office," Sykora said. "That would give cover for OPEC to increase production without a material impact on price."U.S. producers are 'price sensitive, just like OPEC countries. They know they can't shove supply into an unwilling market without breaking the price.'Joseph Sykora, Aptus Capital AdvisorsSykora also said that while Trump is "certainly pro-hydrocarbon, there is little he can do to increase domestic production."U.S. producers are "price sensitive, just like OPEC countries. They know they can't shove supply into an unwilling market without breaking the price - an outcome both capital markets and OPEC won't tolerate," Sykora said. Data released Friday may have also contributed to oil's price decline. Baker Hughes Co. (BKR) reported that the number of active U.S. rigs drilling for oil was up by five to 482 this week. That suggests an upcoming increase in oil production.
Russia Accuses Ukraine of Supporting Al-Qaeda-Linked Fighters in Syria - On Tuesday, Russian Ambassador to the UN Vassily Nebenzia accused Ukraine of supporting militants in Syria fighting under the command of Hayat Tahrir al-Sham (HTS), an al-Qaeda offshoot that led the takeover of Aleppo.The accusation came a few days after the Kyiv Post reported that Islamist groups based in Idlib that are taking part in the offensive have received training from the Khimik group, a special unit of Ukraine’s Main Intelligence Directorate (abbreviated GUR or HUR).“Ukrainian military instructors from the GUR are present… training HTS fighters for combat operations,” Nebenzia said at the UN. He said HTS has “not only not concealed the fact that they are supported by Ukraine, but they are also openly flaunting this.”The Kyiv Post report cited posts on Islamist social media sites and said the GUR has trained HTS militants on tactics developed during the Ukraine war, including the use of drones. The Kyiv Post also cited a Ukrainian intelligence source who claimed the GUR’s Khimik group was responsible for a September 15 attack on a Russian military base outside of Aleppo.It was around that same time that Russian media reported that Ukraine had sent around 250 military specialists to Idlib to train extremist fighters. “The Ukrainian military is training militants affiliated with the Turkistan Islamic Party (TIP) under the command of Hayat Tahrir al-Sham for the use of drones, and technologies to develop them with regard to the ability to increase flight speeds, photography and targeting,” a source told Sputnik on September 17. TIP is a Uyghur militant group founded in Pakistan that seeks to create an Islamic state in China’s Xinjiang province and has a branch in Syria. TheKyiv Post report also mentioned TIP as one of the groups the GUR has trained.
Russia Accuses Ukraine Of Supporting AQ-Linked Fighters In Syria, & There Is Some Evidence While the issue of potential Ukrainian government support to Syria's Al Qaeda spin-off Hayat Tahrir al-Sham (HTS) has remained subject of intense speculation and rumor, Moscow has made the allegation official. Russian Ambassador to the UN Vassily Nebenzia issued a statement accusing Ukraine of stoking the armed insurgency which seeks to take over Syrian territory and threaten Assad. "Ukrainian military instructors from the GUR are present… training HTS fighters for combat operations," Nebenzia said at the UN on Tuesday. He went on to assert that HTS has "not only not concealed the fact that they are supported by Ukraine, but they are also openly flaunting this." Reports and images of Ukrainian equipment and drones in the hands of the jihadists during the capture of Aleppo have persisted for days. Nebenzia also turned his criticisms against UN officials for being "unable to summon the courage to call a spade a spade and to condemn these terrorist attacks" against Syria. A surprise report on December 1st in the staunchly pro-Ukraine Kyiv Post suggested this is all part of Ukrainian intelligence efforts to hit out at Russian targets outside the immediate theatre of the Ukraine war:According to reports on some Islamist social media sites, the rebel groups based in the Idlib region – which is said to include members of the Turkestan Islamic Party (TIP) – had received operational training from special forces troops from the Khimik group of Ukraine’s Main Intelligence Directorate (HUR). The training team focused on tactics developed during the war in Ukraine, including on the use of drones. HUR’s Khimik group was credited with the attack on a Russian military base on the southeastern outskirts of Aleppo on Sept. 15, in which Russian attack drones and “camouflaged improvised explosive devices,” were destroyed according to a Kyiv Post military intelligence source.That's when the Kyiv Post report, with the title Ukrainian Trained, Turkish Sponsored Syrian Rebels Lead Assault on Aleppo, detailed the following:It has been suggested that these Ukrainian special forces advisors are providing support to the current opposition attacks but there has been no independent verification of any such involvement.The suggestion of Ukrainian involvement could be seen as part of a broader trend of Kyiv’s forces targeting Russian forces abroad, including alleged direct support for an Islamist militia attack on Russian Wagner Group mercenaries and government forces on July 26 in Mali. Indeed reports of potential Ukrainian assistance to the jihadists based in Idlib have focused on drone usage, and additional damning evidence has appeared of late in the NY Times, such as in the following...State Department Syria regime change asset Mouaz Moustafa just told the NY Times he had advance notice of the Al Qaeda/HTS assault on Aleppo, and that it was coordinated with Ukraine's post-Maidan regime https://t.co/6Qz8Rf3TTw pic.twitter.com/EOBrxMf0ZpMouaz Moustafa is founder and head of the Syrian Emergency Task Force (SETF), which has long worked closely with US Congress and Western governments to arm anti-Assad fighters since the beginning of the war after 2011. As for the above mentioned Turkestan Islamic Party (TIP), it is among the most brutal terror groups which has long cooperated and associated with ISIS, or whichever Islamist faction happens to hold dominance in the region. It has long sought to also create an Islamic state in China’s Xinjiang province, and its fighters have poured into northern Syria over the years. If the Kyiv Post reporting is accurate, and Ukraine's intelligence directorate trained TIP militants, China would no doubt be intensely interested, and outraged.
Al-Qaeda Linked Militants Seize Major Syrian City of Hama - Just over a week after taking Aleppo, the Syrian Islamist fighters led by the Hayat Tahrir al-Sham (HTS) have seized another major city. This time,they have taken Hama, Syria’s fourth largest city, which had not fallen during the protracted Syrian Civil War.Senior commander of HTS forces, Hassan Abdul-Ghani, said tanks were used in the assault and that “hundreds of unjustly imprisoned individuals” were freed from the Hama Central Prison.Last week HTS and allies stoked apprehension when they seized the northern city of Aleppo, the nation’s second largest. Syria’s Army has tried to slow their advance with counterattacks, but so far has had limited success.The army confirmed it had redeployed out of Hama after reports of intense fighting, saying it did to so to avoid exposing civilians to battles. The army statement also reported suffering “heavy losses.”The HTS offensive has been backed strongly by the Turkey-backed rebels from the country’s northwest. There have been multiple reports thatTurkey is backing the offensive, and indeed that Turkey may even be the driving force in the recent push. HTS fighters seem increasingly well-equipped and confirmed as using tanks in their assault on Hama.With Hama taken, many analysts say that the next major target would be the city of Homs. That would be an obvious next step, as HTS continues their offensive south along the major M5 highway from Aleppo. Homs is just 25 km south of Hama. If Homs fell too, it is likely the capital city of Damascus would also be under major risk.Senior HTS commanders have made online posts announcing their gains, and one post called on the residents of Homs to rise up in revolution. HTS leader Abu Mohammad al-Julani has also released a video statement threatening to expand the war into Iraq if the Iraqi militia coalition Hashd al-Shaabi gets involved.
Al-Qaeda Linked Militants Advance, ‘Encircle Damascus’ - On Thursday, Hayat Tahrir al-Sham (HTS) Islamist militants captured the major city of Hama, just days after the fall of Aleppo. As some HTS forces entered the city, others continued south, circling the city en route to Homs and ultimately Damascus. HTS is a merger of assorted Sunni Islamist factions, and it has historic ties to al-Qaeda. (Its leader, Abu Mohammad al-Juliani, founded al-Qaeda in Syria, later Jabhat al-Nusra, still later the core of HTS.) The group has already seized, Aleppo, Syria’s most populous city, and Hama, fourth largest. Two days later, HTS’s staggering territorial gains continue as the militants are now attacking Homs, Syria’s third largest city, and have already reached the Damascus suburbs. Damascus is Syria’s capital and second most-populous city.The obvious next step after the fall of Hama was to advance southward and attack the city of Homs. Taking Hama and Homs effectively isolates the Alawites, Assad’s ruling group, on the coast, removing them as an obstacle to HTS al-Qaeda’s stated goal of taking Damascus.It was just Saturday morning when HTS fighters first entered Homs itself,and by the evening they had reported capturing Homs. As the city is heavily defended, considerable fighting is expected, and thousands of residents have fled in anticipation of major conflict, adding to the general chaos.Perhaps even more significant than the advance on Homs is that HTS forces have taken provinces further south. They say they have taken the Quneitra Province, which borders the Israeli-occupied Golan Heights. Thesouthern cities of Deraa and Suwayda, near the Jordanian border, have also fallen. There are also reports that the ancient city of Palmyra, further to the east, has fallen.Turkey has been increasingly public about their backing of the HTS with an eye toward regime change. President Recep Tayyip Erdogan has been saying Damascus is the goal for the extremist movement. The HTS has also reportedly been courting Israel for support.Israel seems supportive of the idea of Islamist jihadists taking over a country on their border, though it has shored up IDF forces along the Golan Heights. Israel is said to be preparing for the collapse of the Assad government.Israel has warned Iran against sending arms to the Assad government. Iran has reportedly begun evacuating some of personnel from Syria in the event the fighting worsens. Iraq is reportedly also considering sending aid to Assad, though HTS has threatened to expand the war into Iraq if they get involved.The official US position is that it prefers HTS to Assad, with National Security Adviser Jake Sullivan saying the US “won’t cry” if Syria is taken over by al-Qaeda linked militants. The US also sees this as an opportunityfor the Kurdish SDF to seize territory further east.Though the US still considers HTS a terrorist organization, it seems increasingly comfortable with the group. Historically, the US has funded multiple of the organizations which eventually merged into the HTS, with billions of dollars spent arming and training them with the ultimate goal of regime change. The current admission that the US prefers HTS to Assad, then, isn’t so much a change to long-standing policy as a willingness to publicly state so.
Report: Syrian Islamists Court Israel With Talk of Peace Deal - Former Israeli military intelligence officer Lt. Mordechai Kedar has added fuel to claims that Israel has ties with the Syrian Islamist fighters who have taken the city of Aleppo and surrounding area in the past week. Lt. Kedar says he is in “constant contact” with the Islamists and that they “do not consider Israel an enemy.” The talk of Israeli complicity with the Islamist offensive began virtually when the offensive started attracting attention. On Saturday the Syrian Army issued a statement saying that they are effectively fighting “the military arm of the Israeli enemy, falsely labeled as the ‘Syrian revolution.’”This is a particularly dramatic claim because the Islamists are led by the Hayat Tahrir al-Sham (HTS), which was formed by the merger of various Islamist organizations built around Syria’s branch of al-Qaeda. Indeed, the former Syrian al-Qaeda leader Abu Mohammad al-Julani is the present leader of HTS.But Lt. Kedar offers considerable detail about the ties with the HTS, however, referring to them as “Syrian revolutionaries” and insisting that they “must be supported.” Israel sees them as having a common interest in regime change in Syria.That doesn’t stop at the Syrian border either. The Islamists reportedly told Lt. Kedar that they are ready for a peace deal with Israel after they take over all of Syria and Lebanon. They also said they plan to open Israeli embassies in both Damascus and Beirut.How far the contact goes right now isn’t totally clear, but Lt. Kedar did say that he recently passed a “detailed” list of requested items from the Islamist forces to the Israeli government. He didn’t say what items were requested.
Israel Again Bombs Lebanon as Netanyahu Says War Is Not Over - Israel launched more strikes on southern Lebanon on Tuesday despite a ceasefire deal that was supposed to take effect last Wednesday as Israeli Prime Minister Benjamin Netanyahu said the war with Hezbollah is not over.Israeli strikes included an attack on the town of Shebaa, which killed a shepherd. According to The Associated Press, the death brought the total number of people killed by Israel in Lebanon since last Wednesday to 15.The heaviest day of Israeli bombing took place on Monday after Hezbollah fired back for the first time, launching two rockets toward Israeli-occupied territory in a “warning” shot in response to Israeli violations. A UNIFIL source told CNN on Monday that Israel violated the ceasefire around 100 times at that point, and the US and France have also reportedly conveyed that they believe Israel was violating the truce.Israel has claimed it’s responding to Hezbollah violating the ceasefire, pointing to the group’s presence in activity in southern Lebanon. But the ceasefire deal gave Hezbollah 60 days to withdraw its fighters and heavy weapons north of the Litani River. During that time, Israel is supposed to withdraw its forces from Lebanon, and the Lebanese Army is deploying troops to enforce the truce.“We are currently in a ceasefire, I note, a ceasefire, not the end of the war,” Netanyahu said on Tuesday. “We have a clear goal to return the residents, to rehabilitate the north. We are enforcing this ceasefire with an iron fist, acting against any violation, minor or serious.”The US State Department justified Israel’s ceasefire violations by saying Israel has the right to “defend itself.” State Department spokesman Vedant Patel was asked on Tuesday if the same right applies to Lebanon and refused to answer. The US gave assurances to Israel that it could strike Lebanon if it deemed the ceasefire deal was being violated.Israeli Foreign Minister Israel Katz threatened on Tuesday that if the war escalates, Israel will push deeper into Lebanese territory and target the Lebanese government. “If we return to war, we will act with strength, go deeper,” he said. “there will no longer be any exemptions for the State of Lebanon. If until now we separated the State of Lebanon from Hezbollah – and the entirety of Beirut from Dahiyeh, which took very hard hits – this will no longer be the case.”
After Days of Israeli Strikes on Lebanon That Violated Truce, Hezbollah Fires Back - Israel has launched dozens of strikes in Lebanon since a ceasefire was supposed to go into effect last week, and on Monday, Hezbollah fired back for the first time, launching two rockets toward Israeli-occupied territoryas a “warning” shot, causing no casualties. Now, Israeli officials are vowing a major response, signaling Israel will use Hezbollah’s response to repeated Israeli ceasefire violations as a reason to escalate. “Hezbollah’s firing at Mount Dov constitutes a serious violation of the ceasefire, and Israel will respond forcefully,” Israeli Prime Minister Benjamin Netanyahu said in a statement. “We are determined to continue enforcing the ceasefire, and to respond to any violation by Hezbollah — a minor one will be treated like a major one.” Shortly after Netanyahu’s threat, Israel carried out a series of airstrikes on areas of south Lebanon, killing at least five people. A source with the UN’s peacekeeping force in Lebanon, UNIFIL, told CNNthat Israel has violated the ceasefire agreement “approximately 100” times since it went into effect last Wednesday. The Lebanese government said Israel had violated it over 50 times. The Israeli violations have involved gunfire, artillery shelling, and airstrikes. According to Al Jazeera, Israel strikes since last Wednesday have killed 11 people. Hezbollah said that the rockets it fired on Monday were “defensive” warning shots in response to Israel killing and wounding civilians. Israeli officials have claimed that Hezbollah’s presence and activity in southern Lebanon is a ceasefire violation, but the agreement gives Hezbollah 60 days to move its fighters and heavy weapons north of the Litani River. During that time, Israel is also supposed to withdraw from towns in southern Lebanon.According to CNN, both the US and France have warned Israel that they believe the Israeli military has violated the ceasefire agreement. Axiosreported that the US has told Israel the ceasefire deal may unravel. The US shares some of the blame for the Israeli violations since it provided Israel with a letter to assure the Israeli military could launch unilateral strikes on Lebanon if it deemed the ceasefire was being violated. The assurances from the US, Israel’s biggest backer, were given separately from the actual agreement signed between Israel and Lebanon.
The Kind Of Ceasefire Where One Side Keeps Firing -Caitlin Johnstone - In less than a week of its supposed “ceasefire” agreement Israel has reportedly attacked targets in Lebanon around a hundred times, leading to a single retaliation from Hezbollah on Monday which resulted in zero casualties. As you might expect, Israel is now playing victim and shrieking bloody murder, vowing a major response against Hezbollah for daring to strike back while Israel violated its ceasefire agreement dozens of times. Apparently this was the kind of ceasefire where only one side has to actually cease firing. This is such a perfect example of everything Israel is. Scrolling through Twitter this morning I saw an Al Jazeera clip documenting evidence that IDF drones have been playing the sounds of crying babies to lure civilians out of their hiding places so they can be shot and killed, and then I sawa photo that an IDF soldier reportedly uploaded to his own social media depicting himself masturbating while gazing at the destruction of Gaza. I am not a religious person, so I don’t really resonate with words like “demonic” and “satanic” to describe Israeli criminality. But at the same time, I kind of get it. What adjectives are there to describe things like this? “Evil” is a pathetic understatement. Language fails. They’re not just depraved, they’re creative and enthusiastic about constantly finding new and innovative ways in which to be depraved. I love words and language more than probably anyone I know, but words always fail me on this front.
Former Israeli Defense Minister Says Israel Is Carrying Out Ethnic Cleansing in Northern Gaza - A former Israeli defense minister has said Israel is conducting an ethnic cleansing campaign in northern Gaza, where Israeli troops are forcibly expelling civilians under the threat of death. Moshe Yaalon, a former member of the ruling Likud party, was defense minister under Prime Minister Benjamin Netanyahu from 2013 to 2016 during the 2014 Gaza War. In comments on Saturday, Yaalon criticized the current Netanyahu government.“The path they’re dragging us down is to occupy, annex, and ethnically cleanse — look at the northern strip,” Yaalon said.When asked to clarify if he meant Israel is currently conducting ethnic cleansing or is headed in that direction, Yaalon pointed to what is happening on the ground in northern Gaza today.“There’s no Beit Lahia. There’s no Beit Hanoun. They’re now operating in Jabalia. They’re basically cleaning the territory of Arabs,” he said.The northern cities of Beit Lahia, Beit Hanoun, and Jabalia have been under a total siege since early October as part of an ethnic cleansing campaign that’s following an outline known as the “general’s plan.” In those areas, Israeli troops are demolishing homes, so Palestinian civilians have nowhere to return. Yaalon’s comments sparked a strong backlash in Israel, but he doubled down on Sunday. In another interview, the former defense minister said the term ethnic cleansing was “accurate” and asked “no other word for it.”
Amnesty International documents genocidal intent of Israeli leaders -Amnesty International, one of the world’s largest human rights organizations, has formally accused Israel of carrying out genocide in Gaza in a report published Wednesday. Since October 2023, Israel has killed at least 44,580 people in Gaza, according to official statistics, and the death toll has been estimated to be as high as 186,000 or more in a study published in The Lancet. In its exhaustive 296-page report, Amnesty International demonstrated that this mass killing was motivated by genocidal intent, which permeated from the top of the Israeli government to the soldiers doing the killing. The report brings together video, photographic, and textual evidence of hundreds of instances in which Israeli officials and members of the military made oral or written statements expressing their intention to kill the Palestinian people, drive them out of Gaza, and take their land. Summarizing the report, Amnesty International wrote, “Israeli forces have caused unprecedented destruction, at a level and speed not seen in any other conflict in the 21st century, leveling entire cities and destroying critical infrastructure, agricultural land, and cultural and religious sites, rendering large swathes of Gaza uninhabitable.” It declares that “Israeli forces have carried out acts prohibited under the Genocide Convention, with the specific intent to destroy Palestinians in Gaza.” Secretary-General of Amnesty International Agnès Callamard said, “Month after month, Israel has treated Palestinians in Gaza as a subhuman group unworthy of human rights and dignity, demonstrating its intent to physically destroy them.” The report, entitled “You Feel Like You Are Subhuman: Israel’s Genocide Against Palestinians in Gaza,” describes the “killing of civilians, destruction of civilian infrastructure, forcible displacement, the obstruction or denial of life-saving goods and humanitarian aid by Israel in Gaza.” More than 1.9 million people, or 90 percent of Gaza’s population, have been internally displaced. In a report last month, the UN’s human rights office alleged that 70 percent of verified deaths in Gaza were among women and children. “In isolation, these are serious violations of international humanitarian law or international human rights law,” declared the Amnesty Internatioanl report. “But looking at the broader picture of Israel’s military campaign and the cumulative impact of its policies and acts, the conclusion we came to is genocidal intent.” Callamard stated, “Our damning findings must serve as a wake-up call to the international community: this is genocide. It must stop now.” The report alleges that “The government of Israel imposed conditions of life in Gaza that created a deadly mixture of malnutrition, hunger, and diseases, and exposed Palestinians to a slow, calculated death.” It also claims that “The government of Israel also subjected hundreds of Palestinians from Gaza to incommunicado detention, torture, and other ill-treatment.” Explaining its methodology, the Amnesty report declared, “a finding of genocide may be drawn when the state intends to pursue the destruction of a protected group in order to achieve a certain military result, as a means to an end, or until it has achieved it.” The report demonstrates the systematic, nonstop way in which Israeli officials have publicly encouraged the extermination of the Palestinian people. The report notes: Among those who made such statements was Prime Minister Netanyahu, who referred on at least three occasions to the biblical story of the total destruction of the people of Amalek (also known as the Amalekites), killed in an act of revenge for their attack on the Israelites. The Amnesty International report demonstrates, moreover, that these were not merely overheated rhetorical statements made by Israeli leaders, but permeated all sections of the command structure of the Israeli army.
Gaza's Civil Defense Says Nearly 100 Killed by Israeli Attacks Over 24 Hours - Gaza’s Civil Defense said Sunday that Israeli attacks killed nearly 100 over the previous 24 hours as Israeli strikes continued to hit targets across the Strip. “Nearly 100 martyrs were killed in the Gaza Strip within 24 hours as a result of the continuous Israeli bombing operations on homes and citizens’ gatherings,” the agency said, according to Al Jazeera. Gaza’s Health Ministry put out a lower death toll in its daily update, saying 47 were killed, based on the number of dead and wounded Palestinians brought to hospitals. “The Israeli occupation committed six massacres against families in the Gaza Strip, resulting in 47 martyrs and 108 injuries arriving at hospitals during the past 24 hours,” the ministry wrote on Telegram.The ministry noted that there are a “number of victims” trapped under the rubble or in areas where rescue crews cannot reach them. The Civil Defense statement said it has been unable to work in northern Gaza, which has been under siege since early October as part of Israel’s ethnic cleansing campaign.“Until this moment, civil defense crews are prevented from exercising their duties in northern Gaza, and this has led to hundreds of citizens remaining under the rubble,” the agency said.The Civil Defense statement said the most deaths occurred in an Israeli strike on a house sheltering displaced Palestinians in Jabalia, northern Gaza, on Saturday. More than 40 Palestinians were killed in the attack.Also on Saturday, an Israeli strike on a vehicle in the southern city of Khan Younis killed five people, including three aid workers with the US-based World Central Kitchen. Israel claimed without evidence that one of the aid workers was a “terrorist.” WCK said that it suspended its operations in Gaza following the strike. “We are heartbroken to share that a vehicle carrying World Central Kitchen colleagues was hit by an Israeli air strike in Gaza,” the group said in a statement.
Israel-Hamas war: UN halts aid deliveries through Gaza’s main crossing after looting (AP) — The U.N. agency for Palestinian refugees said Sunday it is halting aid deliveries through the main cargo crossing into the war-ravaged Gaza Strip because of the threat of armed gangs who have looted convoys. It blamed the breakdown of law and order in large part on Israeli policies. In Israel, a former defense minister and fierce critic of Prime Minister Benjamin Netanyahu — and a hard-liner on the Palestinians — accused the government of ethnic cleansing in northern Gaza, where a military offensive continues.The U.N. agency’s decision could worsen Gaza’s humanitarian crisis as a second cold, rainy winter sets in, with hundreds of thousands of Palestinians in squalid tent camps and reliant on international aid. Experts already warned of famine in the north, which Israeli forces have almost completely isolated since early October.Philippe Lazzarini, the head of UNRWA, the main aid provider in Gaza, said the route leading to the Kerem Shalom crossing is too dangerous on the Gaza side. Armed men looted nearly 100 trucks on the route in mid-November. Kerem Shalom is the only crossing between Israel and Gaza that is designed for cargo shipments and has been the main artery for aid since the Rafah crossing with Egypt was shut in May. Last month, nearly two-thirds of aid entering Gaza came through Kerem Shalom, and in previous months it accounted for even more, according to Israeli figures.In an X post, Lazzarini largely blamed Israel for the breakdown of humanitarian operations in Gaza, citing “political decisions to restrict the amounts of aid,” lack of safety on routes and Israel’s targeting of the Hamas-run police force, which previously provided public security. “Yesterday we had assurances aid would be fine. We tried to move five trucks and they were all taken,” Scott Anderson, director of UNRWA affairs in Gaza, told The Associated Press. “So we’ve kind of reached a point where it makes no sense to continue to try to move aid if it’s just gonna be looted.” When asked whether UNRWA has seen evidence supporting Israeli claims that Hamas has been behind aid looting, he emphasized that there’s no systemic diversion of aid in Gaza.A spokesman for UNICEF, Ammar Ammar, confirmed the security situation was “unacceptable” and said it was evaluating its operations at the crossing.
Global arms trade soars in 2023, driven by deadly conflicts --The top 100 global arms producers increased weapons and military-related sales by 4.3 percent last year, according to new research, as nations react to a more volatile and dangerous geopolitical environment sparked by wars in Europe and the Middle East.The Stockholm International Peace Research Institute (SIPRI) said in a Monday report that sales reached $632 billion in 2023 among the world’s major arms producers.Those 100 companies have also increased their revenue by 19 percent between 2015 and 2023, researchers wrote.Lorenzo Scarazzato, a researcher at SIPRI, said “there was a marked rise in arms revenues in 2023 and this is likely to continue in 2024.”“The arms revenues of the Top 100 arms producers still did not fully reflect the scale of demand, and many companies have launched recruitment drives, suggesting they are optimistic about future sales,” Scarazzato said in a statement.The arms sales are inline with countries across the globe spending a record amount on defense in 2023, SIPRI said in a report earlier this year.According to the new report, while sales increased worldwide, the regions driving most of the growth include in Russia, which is fighting a war in Ukraine, and the Middle East, where Israel is fighting in Gaza and regionally against Iranian-backed proxy groups.Russia has two companies in the top 100 arms producers, which together saw a 40 percent increase from 2022 to around $25 billion.In the Middle East, six top arms producers — three of which are in Israel and the other half in Turkey — saw a collective 18 percent bump to $19.6 billion.Of the top 100 global defense companies, 41 of them are based in the U.S., and those firms recorded $317 billion in sales in 2023, a 2.5 percent increase from the year before.While a majority of the U.S. companies increased arms revenues, two of the world’s largest weapons producers, Lockheed Martin and RTX, saw a decrease in sales because of a struggle to ramp up production given supply chain issues.Europe and China also saw slight increases in arms sales, but those were among the smallest bumps recorded in 2023. China is struggling with a lagging economy, while Europe is slowly ramping up its defense spending after the war in Ukraine.The 23 top companies in Asia and Oceania saw a 5.7 percent increase, reaching $136 billion, as the Indo-Pacific in particular intensifies over competition and potential conflict between the U.S. and China.
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