1,166,000 barrel per day crude oil balance sheet error; DUC wells rise 1st time in 13 months; DUC backlog at 5.3 months

US oil prices fell for a second straight week, following a four week run up on increasing hostilities in the Middle East & Eastern Europe, after Iran and Israel exchanged attacks on each other’s territories but played down the likelihood of further counter-strikes…after falling 1.4% to $85.66 a barrel last week as ongoing ceasefire talks between Israel and Hamas in Egypt tempered the geopolitical risk premium underlying oil price strength, the contract price of the benchmark US light sweet crude for May delivery fell from a five week high in late weekend trading, after most of the 300 drones and missiles fired at Israel by Iran on Saturday were intercepted and did no damage. then moved lower in Monday as the risk premium associated with Iran’s threats eased after Iran said it considers its retaliation to be over, but pared those losses after Reuters reported that Israel's Netanyahu had summoned his war cabinet for the second time in less than 24 hours and settled 25 cents, or 0.3% lower, at $85.41 a barrel, as strong retail sales increased the likelihood that US interest rates would remain higher for longer and reduce demand for oil…oil prices rose in Asian trading early Tuesday amid unresolved tensions in the Middle East and better-than-expected economic data from China, the world's largest oil importer, and opened higher in New York, but gave up their gains and sold off to a low of $84.05 by mid-morning, as lowered geopolitical tensions allowed the market to retrace its previous rise, but partly recovered to settle just 5 cents lower at $85.36 a barrel as disappointing domestic economic data ​o​ffset Mideast supply fears…oil prices declined during early Asian trade Wednesday, following the late Tuesday release of American Petroleum Institute data reflecting bearish demand in the US, then extended their decline in US trading after the EIA confirmed the unexpected build in U.S. crude inventories, and settled $2.67 lower at $82.69 a barrel after Fed chair Powell stated that monetary policy needs to be restrictive for longer due to recent stronger-than-expected inflation readings….oil prices fell for a fourth day in overseas markets Thursday, following data indicating weak oil demand in the US, the world's largest oil consumer, and the growing opposition to the conflict in Palestine. but bounced off March lows in US trading to settle 4 cents higher at $82.73 a barrel, even as the international benchmark Brent and oil product prices remained in negative territory for the fourth consecutive session….oil prices spiked by over 4% in global markets on Friday after Israel carried out a series of strikes on Iran, including a site near their nuclear facilities, but backed off the highs in the New York session to settle 41 cents higher at $83.14 a barrel, after Tehran played down the incident and said it did not plan to retaliate​, and ​thus left oil prices down 2.9% on the week..

meanwhile, natural gas prices finished lower for the third time in four weeks, weighed down by a massive glut of gas in storage, and by negative spot power and gas prices in the Southwest US, where producers have been paying to have their natural gas disposed of...after falling 0.8% to $1.770 per mmBTU last week as producers exited the winter with almost 39% more gas in storage than normal for ​that time of year, the contract price for natural gas for May delivery opened six cents lower on Monday, on the lack of technical and fundamental support, and then fell steadily after ​bouncing to an intraday high of $1.746 at 10:00AM to settle 7.9 cents lower at $1.691 per mmBTU, on light seasonal demand, soft export data, and bullish production estimates….natural gas prices trended lower through midday Tuesday due to weak fundamentals, but spiked to an intraday high of $1.802 at 2:05PM after TC Energy reported "an incident" on their Nova Gas Transmission Ltd. (NGTL) system in Alberta, before retreating to settle 4.1 cents ​h​igher at $1.732 per mmBTU after TC Energy reported the affected section of the pipeline had been isolated and shut down..natural gas prices opened two cents lower and slid from the opening on Wednesday as TC Energy was able to contain the ruptured pipeline and fire, avoiding any material disturbances to operations, but mounted a recovery into the afternoon to close 2.0 cents lower on Wednesday at $1.712 per mmBTU on mild weather forecasts, an earlier drop in feedgas to LNG export plants​, and worries about the huge surplus of gas in U.S. storage…natural gas prices moved up early Thursday as traders assessed a mixed weather outlook against lighter production readings, then jumped after the EIA reported an injection of natural gas into storage that was in line with expectations and settled 4.5 cents higher at $1.757 mmBTU​, on forecasts for cooler weather next week than had been expected​, and on an increase in the amount of gas flowing to LNG export plants, including Freeport…after volatile trading on Friday, natural gas prices finished little changed​, slipping a half cent to $1.752 per mmBTU, as bullish forecasts for cooler weather next week and a continued drop in output offset bearish negative spot power and gas prices in the Southwest and a massive oversupply of gas in storage, and thus settled 1.0% lower for the week...

The EIA’s natural gas storage report for the week ending April 12th indicated that the amount of working natural gas held in underground storage rose by 50 billion cubic feet to 2,333 billion cubic feet by the end of the week, which left our natural gas supplies 424 billion cubic feet, or 22.2% above the 1,909 billion cubic feet that were in storage on April 12th of last year, and 622 billion cubic feet, or 36.4% more than the five-year average of 1,711 billion cubic feet of natural gas that had typically been in working storage as of the 12th of April over the most recent five years…the 50 billion cubic foot addition to US natural gas working storage for the cited week was in line with the 50 billion cubic foot addition to storage that analysts in a Reuters poll had forecast, but it was less than the 61 billion cubic feet that were added to natural gas storage during the corresponding second week of April 2023, and less than the average 61 billion cubic foot injection into natural gas storage that has been typical for the second week of April 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 April 12th indicated that despite a big jump in our oil exports, we again had surplus oil to add to our stored commercial crude supplies for the tenth time in twelve weeks and for the 18th time in the past 26 weeks, essentially due to a big jump in oil supply that the EIA could not account for….Our imports of crude oil rose by an average of 27,000 barrels per day to an average of 6,461,000 barrels per day, after falling by an average of 183,000 barrels per day over the prior week, while our exports of crude oil jumped by 2,018,000 barrels per day to average 4,726,000 barrels per day, which when used to offset our imports, meant that the net of our trade in oil worked out to a net import average of 1,735,000 barrels of oil per day during the week ending April 12th, 1,991,000 fewer barrels per day than the net of our imports minus our exports during the prior week. At the same time, transfers to our oil supply from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils averaged 395,000 barrels per day, while during the same week, production of crude from US wells was unchanged at 13,100,000 barrels per day. Hence our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a rounded total of 15,230,000 barrels per day during the April 12th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,913,000 barrels of crude per day during the week ending April 12th, an average of 131,000 more barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that an average of 483,000 barrels of oil per day were being added to the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending April 12th appear to indicate that our total working supply of oil from net imports, from transfers, and from oilfield production was 1,166,000 barrels per day less than what what was added to storage plus our oil refineries reported they used during the week…To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a [+1,166,000 ] 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 suggesting there was an error or omission of that magnitude in the week’s oil supply & demand figures that we have just transcribed…Moreover, since 518,000 barrels of oil demand per day could not be accounted for in the prior week’s EIA data, that means there was a 1,684,000 barrel per day difference between this week's oil balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, and therefore nonsense...however, since most oil traders react to these weekly EIA reports as if they were accurate, and since these weekly figures therefore often drive oil pricing (as is obvious to anyone who watches oil prices), and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably reliable by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer….there is also an aging twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had hoped to do about it)

This week’s average 483,000 barrel per day increase in our overall crude oil inventories came as an average of 391,000 barrels per day were being added to our commercially available stocks of crude oil, while an average of 93,000 barrels per day were being added to our Strategic Petroleum Reserve, the nineteenth SPR increase in twenty-six weeks, following nearly continuous withdrawals over the prior 39 months… Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports slipped to 6,437,000 barrels per day last week, which was 0.7% more than the 6,390,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at 13,100,000 barrels per day because the EIA’s rounded estimate of the output from wells in the lower 48 states was unchanged at 12,700,000 barrels per day, while Alaska’s oil production was 5,000 barrels per day lower at 431,000 barrels per day, but still added the same 400,000 barrels per day to the EIA’s rounded national total as it did last week…US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure matches that of our pre-pandemic production peak, and is also 35.1% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.

US oil refineries were operating at 88.1% of their capacity while processing those 15,913,000 barrels of crude per day during the week ending April 12th, down from their 88.3% utilization rate of a week earlier, and a below normal operating rate for early April, as US refineries have lagged normal operating rates since arctic cold penetrated to the Gulf Coast in mid January and froze off some operations… the 15,913,000 barrels of oil per day that were refined this week were 0.4% more than the 15,844,000 barrels of crude that were being processed daily during week ending April 14th of 2023, but 1.0% less than the 16,078,000 barrels that were being refined during the prepandemic week ending April 12th, 2019, when our refinery utilization rate was also at a below normal 87.7%..

Even with the increase in the amount of oil being refined this week, gasoline output from our refineries was a bit lower, decreasing by 25,000 barrels per day to 9,417,000 barrels per day during the week ending April 12th, after our refineries’ gasoline output had decreased by 538,000 barrels per day during the prior week. This week’s gasoline production was 0.6% less than the 9,475,000 barrels of gasoline that were being produced daily over week ending April 14th of last year, and 5.1% less than the gasoline production of 9,917,000 barrels per day during the prepandemic week ending April 12th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 38,000 barrels per day to 4,601,000 barrels per day, after our distillates output had increased by 33,000 barrels per day during the prior week. Even after seven production increases in the past nine weeks, our distillates output was 3.1% less than the 4,750,000 barrels of distillates that were being produced daily during the week ending April 14th of 2023, and 4.6% less than the 4,823,000 barrels of distillates that were being produced daily during the week ending April 12th, 2019…

With this week’s decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the ninth time in eleven weeks, decreasing by 1,154,000 barrels to 227,377,000 barrels during the week ending April 12th, after our gasoline inventories had increased by 715,000 barrels during the prior week. Our gasoline supplies fell this week because the amount of gasoline supplied to US users rose by 50,000 barrels per day to 8,662,000 barrels per day, and as our imports of gasoline fell by 21,000 barrels per day to 709,000 barrels per day, while our exports of gasoline fell by 152,000 barrels per day to 826,000 barrels per day.…After thirty-two gasoline inventory withdrawals over the past fifty-two weeks, our gasoline supplies were still 1.7% above last April 14th’s gasoline inventories of 223,544,000 barrels, but were about 4% below the five year average of our gasoline supplies for this time of the year…

With this week’s decrease in our distillates production, our supplies of distillate fuels fell for tenth time in thirteen weeks, following eight consecutive prior increases, decreasing by 2,760,000 barrels to 114,968,000 barrels over the week ending April 12th, after our distillates supplies had increased by 1,659,000 barrels during the prior week. Our distillates supplies fell this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 681,000 barrels per day to 3,666,000 barrels per day, even as our exports of distillates fell by 102,000 barrels per day to 1,478,000 barrels per day, while our imports of distillates fell by 14,000 barrels per day to 149,000 barrels per day.…Even with 30 inventory decreases over the past fifty-two weeks, our distillates supplies at the end of the week were 2.6% above the 112,090,000 barrels of distillates that we had in storage on April 14th of 2023, but were about 7% below the five year average of our distillates inventories for this time of the year…

Finally, even after our exports of crude oil jumped by nearly 75%, our commercial supplies of crude oil in storage rose for the 18th time in twenty-six weeks and for the 25th time in the past year, increasing by 2,735,000 barrels over the week, from 457,258,000 barrels on April 5th to 459,993,000 barrels on April 12th, after our commercial crude supplies had increased by 5,841,000 barrels over the prior week… With this week’s increase, our commercial crude oil inventories increased to about 1% below the most recent five-year average of commercial oil supplies for this time of year, while they were about 32% above the average of our available crude oil stocks as of the second weekend of April over the 5 years at the beginning of the past decade, with the big difference between those comparisons arising because it wasn’t until early 2015 that our oil inventories had first topped 400 million barrels. After our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, then jumped again after February 2021’s winter storm Uri froze off US Gulf Coast refining, but then fell due to higher exports relating to the Ukraine war, only to jump again following the Christmas 2022 refinery freeze offs, our commercial crude supplies as of this April 12th were still 1.3% less than the 465,968,000 barrels of oil left in commercial storage on April 14th of 2023, but were 9.1% more than the 421,753,000 barrels of oil that we still had in storage on April 15th of 2022, while still 6.7% less than the 493,017,000 barrels of oil we had in commercial storage on April 16th of 2021, after refinery damage from winter storm Uri left even more crude oil remaining after 2020’s pandemic precautions had left a glut of oil unused…

This Week’s Rig Count

In lieu of a detailed report on the rig count, we are again just including a screenshot of the rig count summary from Baker Hughes…in the table below, the first column shows the active rig count as of April 19th, the second column shows the change in the number of working rigs between last week’s count (April 12th) and this week’s (April 19th) count, the third column shows last week’s April 12th 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 21st of April, 2023…

DUC well report for March

Monday of the past week saw the release of the EIA’s Drilling Productivity Report for April, which included the EIA’s March data on drilled but uncompleted (DUC) oil and gas wells in the 7 most productive shale regions (click tab 3)….that data showed an increase in uncompleted wells nationally for the first time in 13 months and for just the 4th time out of the past 46 months, as drilling of new wells increased while completions of drilled wells decreased in March, even as both​ still remained well below the average pre-pandemic levels….for the 7 sedimentary regions covered by this report, the total count of DUC wells increased by 9 wells, rising from a revised 4,513 DUC wells in February to 4,483 DUC wells in March, which was also 16.1% fewer DUCs than the 5,387 wells that had been drilled but remained uncompleted as of the end of March of a year ago…this month’s DUC increase occurred as 868 wells were drilled in the seven regions that this report covers (representing 87% of all U.S. onshore drilling operations) during March, up by 4 from the 864 wells that were drilled in February, while 859 wells were completed and brought into production by fracking them, down from the 866 well completions seen in February, and down from the 1,050 completions seen during March of last year….at the March completion rate, the 4,522 drilled but uncompleted wells remaining at the end of the month represents a 5.3 month backlog of wells that have been drilled but are not yet fracked, up from the 5.2 month DUC well backlog of a month ago, and up from the eight year low of 4.6 months of January 2023, on a completion rate that is still more than 20% below 2019’s pre-pandemic average…

the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, was up by 7 from a month earlier, rising from 813 DUC wells at the end of February to 820 DUC wells at the end of March, as 83 new wells were drilled into the Marcellus and Utica shales during the month, while 76 of the already drilled wells in the region were fracked..

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Ohio House Republicans propose tax cuts, interest-free loans for gas pipelines - Cleveland.com – Two Ohio House Republicans introduced a plan to further subsidize the development of natural gas pipelines in Ohio.House Bill 349 – brought by state Reps. Don Jones, of Freeport, and Tim Barhorst, of Fort Laramie – would take $20 million of state funds to create a revolving loan program that charges no interest for five years to governments that purchase easements for pipelines.Additionally, the bill changes the property tax formula for pipeline owners, producing a significant reduction in their tax bill for up to 10 years. The Legislative Service Commission has not yet provided a fiscal note estimating the cost in terms of lost tax revenue, and Jones in an interview said he didn’t have a dollar number he could offer.The legislation would deepen Ohio’s investments and financial ties with the fossil fuel industry, as leading scientific bodies like the Intergovernmental Panel on Climate Change urge nations to pivot away from heat trapping fossil fuels and toward renewable energy sources to mitigate increasingly apparent effects of climate change.In recent years, Ohio Republican lawmakers have voted for a ratepayer-funded $700 million coal plant subsidy running through 2030; unlocked ratepayer-funded subsidies for gas pipelines feeding into speculative economic development sites; leased state parks and wildlife area to out-of-state gas drillers; and created new and restrictive rules around building new solar and wind generation facilities.The federal government, meanwhile, has revived an effort to frack Ohio’s only national forest.

Neighbors Complain of Foul Odor from Trumbull County Injection Well - An injection well in Southington Ohio is stirring up complaints. While some folks enjoyed the nice weather, some residents there say they couldn't, adding the stench is so bad you could smell the odor as you drove closer to the site, even with your windows up. The NAACP and FracTracker Alliance are teaming up to identify problems and lack of testing about this environmental justice issue. Some folks in Southington, have a problem with the injection wells that accept brine water from the fracking process to extract natural gas from the shale deep underground. "In 2018 we started with various elected officials to see what we could do to have this location shut down because of the fumes," Annett McCoy, NAACP 2nd Vice President of Ohio Conference, & President of the Trumbull NAACP said. The location of the deep injection well site on Highway 422 is half a mile away from the Leavittsburg High School and is closer to homes. Neighbors who didn't want to talk on camera tell 21 News the warmer it gets, or when there is rainfall the odor gets bad enough for residents to smell it from 2 miles away. The Ohio NAACP wants support reclassifying brine water as a hazardous substance so the community members, including doctors and people, can know what they are potentially being exposed to. The organization says this is an environmental justice issue for people who live in Trumbull Counties, and other rural areas where the injection and deep injection brine wells are located. If there is a chemical spill our first responders don't know what they're fighting against or how to protect themselves," McCoy explained." Dr. Ted Auch Midwest Program Director FracTracker Alliance says Ohio's lax state regulations and ODNR being a rubber stamp for the oil and gas industry need to be changed, so residents won't be left facing the fallout of potential earthquakes linked to or caused by deep well injection of the brine water. "When it comes back it comes back oftentimes as quite nasty brine, often quite radioactive brine that has to be disposed of in some way shape, or form. And that brine is being taken by brine haulers across the region to class II injection wells saltwater disposal well," said Auch added. No laws have been violated, but groups point out that is part of the problem, Ohio's lax laws that have made the state a dumping ground for Pennsylvania, and West Virginia. There is no state funding for testing for Volatile Organic Compounds.

American Enviro. Partners Shuts Doors, Lays Off “Dozens” of Workers -- Marcellus Drilling News - We now have more insight (possibly) into why radioactive frack wastewater handler and processor Austin Master Services (AMS) is in trouble with the Ohio Attorney General. Three weeks ago, Ohio AG Dave Yost took legal action seeking to force AMS to correct “egregious violations of Ohio law” regarding the storage of oil and gas waste that he says threatens the Ohio River and Martins Ferry’s drinking water supply (see Ohio AG Sues Austin Master Services for Unsafe Storage of Wastewater). AMS is a subsidiary of (owned and controlled by) American Environmental Partners (AEP). The Pittsburgh Post-Gazette reports that AEP recently closed its doors and laid off most (if not all) of its employees. AEP owns AMS and several other subsidiaries affected by AEP’s closure.

Strs Ohio Increases Position in The Williams Companies, Inc - Strs (State Teachers Retirement System) Ohio grew its holdings in The Williams Companies, Inc. (Free Report) by 37.3% during the fourth quarter, HoldingsChannel reports. The firm owned 58,418 shares of the pipeline company’s stock after acquiring an additional 15,872 shares during the period. Strs Ohio’s holdings in Williams Companies were worth $2,034,000 at the end of the most recent reporting period. The Williams Companies, Inc, together with its subsidiaries, operates as an energy infrastructure company primarily in the United States. It operates through Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services segments. The Transmission & Gulf of Mexico segment comprises natural gas pipelines; Transco, Northwest pipeline, Mountain West, and related natural gas storage facilities; and natural gas gathering and processing, and crude oil production handling and transportation assets in the Gulf Coast region.

17 New Shale Well Permits Issued for PA-OH-WV Apr 8 – 14 -- Marcellus Drilling News - Two weeks ago, for April 1 – 7, there were eight new permits issued (see 8 New Shale Well Permits Issued for PA-OH-WV Apr 1 – 7). However, all eight were issued in Pennsylvania. Both Ohio and West Virginia failed to issue any new permits two weeks ago. Fortunately, that changed last week. For the week of April 8 – 14, there were 17 new permits issued. Seven of those permits were issued in Pennsylvania, with the vast majority going to EQT (six permits, all in Greene County). Ohio issued four new permits last week, all of them to oil driller Encino Energy for Carroll County. West Virginia issued six new permits, with four going to EQT in Marion County and two going to Southwestern Energy in Brooke County. BRADFORD COUNTY | BROOKE COUNTY | CARROLL COUNTY | CHESAPEAKE ENERGY | ENCINO ENERGY | EQT CORP | GREENE COUNTY (PA) |MARION COUNTY | SOUTHWESTERN ENERGY

EQT swaps onshore Marcellus shale assets with Equinor plus $500 million – Equinor and EQT Corporation have agreed to swap Equinor’s operated position in the Marcellus and Utica shale formations in Ohio for a stake in EQT’s non-operated interest in the Northern Marcellus formation. Equinor will sell 100% interest in and operatorship of its onshore asset in the Appalachian basin, located in southeastern Ohio, in exchange for 40% of EQT’s non-operated working interest in the Northern Marcellus shale formation in Pennsylvania. The assets EQT is receiving include:

• Roughly 26,000 net acres in Monroe County, Ohio, with 2025E net production of approximately135 MMcfd, directly offsetting EQT-operated acreage.
• Roughly 10,000 net acres in Lycoming County, Pennsylvania, with 2025E net production of approximately15 MMcfd in existing EQT-operated assets.
• The remaining 16.25% ownership in EQT-operated gathering systems servicing core operated acreage in Lycoming County, Pennsylvania.

A gas buy-back agreement whereby Equinor will purchase gas from EQT at a premium to in-basin pricing through the first quarter of 2028Equinor will pay a cash consideration of $500 million to EQT to balance the overall transaction, swapping for resources that contribute to growing cashflows and further reducing CO₂ emissions intensity in the international portfolio.Following the transaction, Equinor will increase its average working interest from 15.7% to 25.7% in certain Chesapeake-operated Northern Marcellus gas units. To cover pre-existing gas sales commitments, Equinor will enter a gas buy-back agreement with EQT.“With this transaction, we continue to high-grade the U.S. portfolio and improve profitability by strengthening our gas position in the most robust part of the Appalachian basin. These assets are well positioned to leverage anticipated positive developments in the U.S. gas market,” said Philippe Mathieu, executive vice president for Exploration and Production International at Equinor. “This also means that we have now fully exited all operated positions onshore US,” Mathieu continued. EQT President and CEO Toby Z. Rice stated, "This transaction marks an extremely positive start to our divestiture program, bringing in over $1.1 billion of value, including synergies and development plan optimization, for 40% of our non-operated assets, while retaining gas price upside. We plan to opportunistically divest the remaining portion of our non-operated assets in Northeast Pennsylvania and have tremendous confidence in being able to achieve our de-leveraging goals." Since 2020, Equinor’s U.S. business has recorded $11 billion in earnings. Prior to this transaction, the Appalachian basin operated position was the last remaining operatorship held by Equinor in the US onshore.

EQT, Equinor Agree to Massive Appalachia Acreage Swap -- EQT Corp. and Equinor have agreed to a large-scale acreage swap in the Appalachian Basin, the companies said in separate press releases on April 15.Under the terms of the transaction, Equinor will sell 100% of its interest in and operatorship in the Marcellus and Utica shales in southeastern Ohio. In exchange, EQT will provide 40% of non-operated interest in the Northern Marcellus in Pennsylvania. At closing, the deal will mean that Equinor will have fully exited all operated positions onshore U.S.Equinor will pay cash consideration of $500 million to EQT to “balance the overall transaction,” Equinor said as the company swaps resources that contribute to growing cashflows and further reduce the international company’s portfolio.EQT said the deal for Equinor’s natural gas assets in Northeast Pennsylvania, represents approximately 225 MMcf/d of forecasted 2025 net production. Aside from $500 million payment from Equinor, based on recent strip pricing, EQT forecasts aggregate 2025 free cash flow of approximately $75 million from the non-cash consideration. EQT said it would receive the following assets and interests in the transaction:

• ~26,000 net acres in Monroe County, Ohio, with estimated 2025 net production of about 135 MMcfe/d directly offsetting EQT-operated acreage;
• ~10,000 net acres in Lycoming County, Pennsylvania, with 2025E net production of ~15 MMcfe/d in existing EQT-operated assets;
• The remaining 16.25% ownership in EQT-operated gathering systems servicing the E&P’s core operated acreage in Lycoming County, Pennsylvania; and
• A gas buy-back agreement whereby Equinor will purchase gas from EQT at a premium to in-basin pricing through the first quarter of 2028.

The buyback agreement from Equinor will follow its increased average working interest to 25.7% from 15.76% in certain Chesapeake Energy-operated Northern Marcellus gas units. Equinor will cover pre-existing gas sales commitments by entering into the gas buy-back agreement with EQT."This transaction marks an extremely positive start to our divestiture program, bringing in over $1.1 billion of value, including synergies and development plan optimization, for 40% of our non-operated assets, while retaining gas price upside,” EQT President and CEO Toby Z. Rice said. “We plan to opportunistically divest the remaining portion of our non-operated assets in Northeast Pennsylvania and have tremendous confidence in being able to achieve our de-leveraging goals." Philippe Mathieu, executive vice president for Exploration and Production International at Equinor, said the transaction high-grades its U.S. portfolio and improves its profitability by strengthening the company’s gas position in the most robust part of the Appalachian Basin.“These assets are well positioned to leverage anticipated positive developments in the U.S. gas market,” Mathieu said. “The proposed swap improves portfolio robustness with an expected reduction in well break-evens and upstream carbon intensity.”“The US is a core area for Equinor where we’re building a broad energy business within offshore and onshore oil and gas, offshore wind, and new low-carbon value chains,” Mathieu said.

Equitrans Agrees to $1.1M Fine for Major 2022 Natural Gas Storage Well Leak in Pennsylvania - The Pennsylvania Department of Environmental Protection (DEP) has fined Equitrans Midstream Corp. $1.1 million for a storage well that leaked 1 Bcf of natural gas into the atmosphere for more than 10 days in November 2022. In all, 223 tons of carbon dioxide, 27,040 tons of methane and 106 tons of volatile organic compounds (VOC) were released during the incident, which ended after 14 days when Equitrans plugged the well. The methane released during the incident accounted for 10% of the state’s recorded methane emissions during 2022. The VOCs released also were the highest of those recorded that year. DEP said the leak at Equitrans’ Rager Mountain Storage facility in Cambria County’s Jackson Township, about 70 miles east of Pittsburgh, violated the state’s Air Pollution...

EIA Apr DPR: M-U & Haynesville Slash Gas Production, Permian Soars -- Marcellus Drilling News -The latest monthly U.S. Energy Information Administration (EIA) Drilling Productivity Report (DPR) for April, issued yesterday (below), shows EIA believes shale gas production across the seven major plays tracked in the monthly DPR for May will decrease production from the prior month of April. This is the tenth month in a row that EIA has predicted shale gas production will decrease for the combined seven plays. However, it won’t decrease everywhere. Gas-focused plays like the Marcellus/Utica and the Haynesville will see the most significant drop in production (a combined loss of 359 MMcf/d). In contrast, the oily Permian play will see a massive boost in the production of “associated” natural gas — the gas that comes out of the ground along with oil. The Permian is also adding another 12,000 barrels per day of oil production in May.

Portion of Plaquemines LNG’s 2 Bcf/d Pipeline Project Ready for Service, Venture Global Says - The chances of feed gas being introduced to Venture Global LNG Inc.’s Plaquemines LNG project by the end of the year could be rising as the firm awaits approval to place a portion of its pipeline in service. Venture Global asked FERC to allow it to begin introducing natural gas to the 11.7-mile, 42-inch diameter second phase of its Gator Express pipeline system, which would connect to the Texas Eastern Transmission LP (Tetco) pipeline system controlled by a unit of Enbridge Inc. Pending swift approval, the firm told Federal Energy Regulatory Commission staff it aims to place all of the second phase equipment in service by the end of the week as crews work to complete the more than 15-mile, 42-inch diameter first phase of Gator Express.

US weekly LNG exports down to 22 shipments - US liquefied natural gas (LNG) exports decreased in the week ending April 10 compared to the week before, according to the Energy Information Administration.The agency said in its weekly report that 22 LNG carriers departed the US plants between April 4 and April 10, three shipments less compared to the week before.Citing shipping data provided by Bloomberg Finance, the EIA said the total capacity of these LNG vessels is 75 Bcf.Average natural gas deliveries to US LNG export terminals increased by 1.2 percent (0.1 Bcf/d) week over week, averaging 12.6 Bcf/d, according to data from S&P Global Commodity Insights.Natural gas deliveries to terminals in South Louisiana decreased by 0.9 percent (0.1 Bcf/d) to 8.3 Bcf/d, while natural gas deliveries to terminals in South Texas increased 6.8 percent (0.2 Bcf/d) to 3 Bcf/d.The agency said that natural gas deliveries to terminals outside the Gulf Coast increased 2.3 percent (less than 0.1 Bcf/d) to 1.3 Bcf/d.Cheniere’s Sabine Pass plant shipped eight cargoes and the company’s Corpus Christi facility sent three shipments during the week under review.Sempra Infrastructure’s Cameron LNG terminal and Venture Global LNG’s Calcasieu Pass facility each shipped three cargoes during the period.Also, the Elba Island terminal and the Freeport LNG facility each sent two cargoes, while the Cove Point terminal shipped one cargo.Freeport LNG, south of Houston, Texas is currently operating with only one of three trains.The EIA is expecting a 2 percent increase in US LNG exports this year compared to record 2023, while LNG exports are expected to rise 18 percent in 2025 due to new LNG terminals coming online.This report week, the Henry Hub spot price rose 2 cents from $1.86 per million British thermal units (MMBtu) last Wednesday to $1.88/MMBtu this Wednesday.The agency said the price of the May 2024 NYMEX contract increased 4.4 cents, from $1.841/MMBtu last Wednesday to $1.885/MMBtu this Wednesday.According to the EIA, the price of the 12-month strip averaging May 2024 through April 2025 futures contracts rose 1 cent to $2.829/MMBtu.The agency said that international natural gas futures increased this report week. Bloomberg Finance reported that weekly average front-month futures prices for LNG cargoes in East Asia increased 6 cents to a weekly average of $9.57/MMBtu.Natural gas futures for delivery at the Dutch TTF increased 17 cents to a weekly average of $8.58/MMBtu. In the same week last year (week ending April 12, 2023), the prices were $12.61/MMBtu in East Asia and $13.84/MMBtu at TTF, the agency said.

Three Things to Know About the LNG Market - Feed gas deliveries to U.S. LNG export plants ticked back up on Thursday after recent downturns as maintenance season gets underway. Overall, U.S. feed gas demand was nominated at 10.8 Bcf, up 5% from Wednesday. Nominations for the Freeport liquefied natural gas export terminal in Texas on Thursday were at 276 MMcf, or the highest in over a week. Flows to the terminal have been near zero after issues were reported by the facility to state regulators last week. Wood Mackenzie power data suggests all three of Freeport’s trains are likely offline. Two of the trains are undergoing inspections and work after damage caused by a winter storm in January. Vessels are still signaling their arrival at the facility, with two scheduled to load on Friday.

Freeport LNG Still Mostly Shut Down – 5 Days in Row at < 5% of Gas -- The problem-plagued Freeport LNG export plant remains out of order. The plant had been mostly offline following an episode of cold temps in January (see Freeport LNG Repairs Won’t be Done Until May – 2 Trains Offline). Freeport announced that two of the three trains at its facility would remain out of service for testing and repairs through May. In late March, Train 3 at the plant came back online (see Freeport LNG Maintenance Work Continues – Gas Flows to One Train). However, a new problem at Train 3 took it offline last week (see NatGas Flows to Freeport LNG Export Plant Drop to Near Zero, Again). According to Reuters, as of Monday this week, the plant has remained offline for five days running.

Freeport LNG’s Extended Drop in Feed Gas Adds Pressure to U.S. Natural Gas Demand –Flows of natural gas to Freeport LNG have remained at a trickle for a week, fueling market concern that possibly all three trains at the facility could be offline after a reported issue with Train 3 last week. Nominations for natural gas to the liquefied natural gas facility had been reduced to about one-fourth of the operational capacity for more than a month as the Freeport LNG Development LP continued maintenance and repairs on all three trains, according to Wood Mackenzie pipeline data. Freeport LNG is able to produce about 2 Bcf/d at full capacity. However, nominations to the terminal dropped further following a reported system issue on April 9 that tripped Train 3 offline for almost 15 hours. Since April 11, feed gas nominations to Freeport have been around 1% of...

Industry Rails Against Biden LNG Pause With Research on Environmental Advantages - U.S. natural gas trade groups this week unveiled a study to demonstrate that American LNG is mostly better for the environment than competing fossil fuels in overseas markets as they continue to push back against the Biden administration’s pause on export project authorizations. “American natural gas is not only critical to our economy, but it will help the world meet its climate goals,” said Anne Bradbury, CEO of the American Exploration and Production Council (AXPC) at a Washington, DC, event on Tuesday to release the report. “In most cases, U.S. LNG is cleaner than pipeline gas for Europe and Asia, and in all cases, it’s cleaner than heavier carbon fuels such as coal and Russian piped gas.” AXPC and LNG Allies sponsored the study, which was started in 2021

U.S. Power Sector Sets Another New Record for NatGas Demand in Q1 - Marcellus Drilling News - According to S&P Global Commodity Insights, U.S. power sector natural gas demand set another record high in the first quarter and has remained higher year over year into April. Demand from the power sector for natural gas totaled 32.7 Bcf/d (billion cubic feet per day) in the first quarter of 2024, up 2 Bcf/d from the first quarter of 2023. The trend has continued into April. Gas demand from power plants averaged 30.8 Bcf/d from April 1-18, which is 2.1 Bcf/d higher than the same period of 2023. However, whether the trend will continue through the rest of the year is an open question.

From LNG to Data Centers, Kinder Morgan Bullish on Natural Gas Growth - Producers of natural gas may be struggling with low prices, but for pipeline operators like Kinder Morgan Inc. (KMI), the outlook is anything but bearish. The Houston-based midstreamer, which transports about 40% of the natural gas consumed in the United States, kicked off the first quarter earnings season with stellar results and a positive message for proponents of the fuel. Executive Chairman Richard Kinder opened the earnings conference call Thursday by discussing the outlook for gas-fired electricity consumption to power artificial intelligence (AI) and data centers, a burgeoning demand segment that is dominating conversation in the gas industry.

Eyes on West Texas Natural Gas as Negative Prices Persist – North American natural gas prices got short-lived support through a Canadian maintenance event on Tuesday but overall continued to languish at well below $2.000/MMbtu. On Wednesday, the May New York Mercantile Exchange natural gas contract slipped 2.0 cents day/day to settle at $1.712. NGI’s U.S. Spot Gas National Avg. rose 12.5 cents to $1.165. TC Energy Corp. on Tuesday said that a rupture occurred on part of its NGTL system in Western Canada, briefly boosting natural gas prices. LNG demand has remained well below par recently, and was at around 10.3 Bcf/d Wednesday. Meanwhile, warm April weather has done little to spur natural gas demand. The market now turns to summer and cooling demand. “It will then be up to hotter than normal mid- and late May temperatures

West Texas Natural Gas Exports to Mexico Surged in 2023 as U.S. Cemented Role as Top Global Supplier - Natural gas pipeline exports from the United States to Mexico via West Texas rose 20% year/year to average 1.6 Bcf/d in 2023, according to the latest data from the U.S. Energy Information Administration (EIA). Gas flows from West Texas to Mexico “have grown steadily since 2017 as more connecting pipelines in Central and Southwest Mexico have entered service,” said EIA researchers led by Katy Fleury. Pipeline gas exports to Mexico overall averaged 6.1 Bcf/d, up 8% versus 2022. Texas accounted for 5.6 Bcf/d of the total, up 9% from 2022, with most of the growth coming from West Texas. South Texas remains the leading exit point for Mexico bound gas molecules, averaging 3.92 Bcf/d for the 30-day period ending April 10, according to Wood Mackenzie data.

US natgas prices climb 3% on rising LNG feedgas, cooler forecast (Reuters) -U.S. natural gas futures climbed about 3% on Thursday on forecasts for cooler weather and more demand next week than previously expected and with an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants, including Freeport LNG. That price rise also came after a federal report showed last week's storage increase was smaller than usual as low gas prices so far this year has prompted several producers to cut output. The U.S. Energy Information Administration (EIA) said utilities added 50 billion cubic feet (bcf) of gas into storage during the week ended April 12. That was in line with the 50-bcf build analysts forecast in a Reuters poll and compares with an increase of 61 bcf in the same week last year and a five-year (2019-2023) average rise of 61 bcf for this time of year. The build left stockpiles at around 36% above normal levels for this time of year. U.S. gas production fell by around 10% so far in 2024 as several energy firms, including EQT and Chesapeake Energy, delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in February and March. EQT is currently the biggest U.S. gas producer and Chesapeake is on track to become the biggest producer after its merger with Southwestern Energy SWN.N. Front-month gas futures NGc1 for May delivery on the New York Mercantile Exchange rose 4.5 cents, or 2.6%, to settle at $1.757 per million British thermal units (mmBtu). In the spot market, next-day gas prices at the Waha hub NG-WAH-WTX-SNL in the Permian Shale in West Texas rose to negative 88 cents per mmBtu on April 17, up from negative $1.13 on April 16 and a near four-year low of negative $2.86 on April 15, according to data from SNL Energy on the LSEG terminal. Spot power and gas prices have traded below zero in several parts of the country, including Texas, California and Arizona, in recent weeks. Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 98.3 billion cubic feet per day (bcfd) so far in April, down from 100.8 bcfd in March. That compares with a monthly record of 105.6 bcfd in December 2023. On a daily basis, output was on track to drop by about 2.8 bcfd over the past six days to a preliminary three-month low of 95.8 bcfd on Thursday. Meteorologists projected weather across the Lower 48 states would remain mostly near normal through April 26 before turning warmer than normal from April 27-May 3. LSEG forecast gas demand in the Lower 48, including exports, would rise from 91.8 bcfd this week to 95.9 bcfd next week. The forecast for next week was higher than LSEG's outlook on Wednesday. Gas flows to the seven big U.S. liquefied natural gas (LNG) export plants slid to an average of 11.9 bcfd so far in April, down from 13.1 bcfd in March. That compares with a monthly record of 14.7 bcfd in December. On a daily basis, LNG feedgas was on track to rise to a preliminary 10.8 bcfd on Thursday, up from 10.1 bcfd on Wednesday and a 15-month low of 9.2 bcfd on Tuesday when feedgas declined at several facilities, including Freeport LNG in Texas, Cameron LNG in Louisiana, and Cheniere Energy's LNG.N Sabine Pass in Louisiana and Corpus Christi in Texas. Since Tuesday, gas flows have increased to all of those plants, including Freeport. Feedgas at Freeport was on track to reach 0.3 bcfd on Thursday, up from near zero over the prior seven days.

Heavy Supply Overhang, Enduring West Texas Price Pressure Weigh Down Natural Gas Forwards – Lofty levels of natural gas in storage and a severe Permian Basin supply glut continued to cloud the outlook for prices. Natural gas forward prices fell in every region during the April 11-17 trading period, NGI’s Forward Look data show. Levels remained well below the $2.00/MMBtu level across the Lower 48, with exceptionally weak West Texas pricing persisting. Front month fixed prices at benchmark Henry Hub fell 5.3 cents for the period to end at $1.714. In line with recent natural gas spot pricing in West Texas, Waha and El Paso Permian fixed prices for May delivery exited the period in negative territory. Prompt month fixed prices at Waha dropped 12.8 cents week/week to end at negative 41.7 cents, Forward Look data show. El Paso Permian shed 11.3 cents to negative 36.7 cents. Natural gas markets emerged from winter in the doldrums. Demand proved modest throughout the heating season amid seasonally mild weather, while production reached record levels of about 107 Bcf/d in the heart of winter. The combination tilted the market into a state of imbalance. Now, with spring weather settled in and annual pipeline maintenance projects underway, including in the Permian, supply continues to outstrip demand. Supplies in storage remain far in excess of historical norms. This has weighed down prices through the shoulder season to date and dampened the outlook found in natural gas forwards. In West Texas, the challenge is particularly acute. Repair and upgrade projects in the region interrupted takeaway capacity at a time when a near-record level of associated gas production in the Permian is in need of buyers. This left excess supply stranded in the region at a time of year when demand is modest and, at the same time, when underground stockpiles are stout. As of mid-April, South Central regional storage was 33% above the five-year average, according to Thursday’s Energy Information Administration (EIA) storage print. Permian suppliers have paid to send away gas, resulting in negative spot prices for several weeks. Cash prices in the region have flipped negative multiple times over the course of last year and early 2024. They have now held in the red for weeks at Waha, and forwards show expectations for more. This traces to already limited takeaway capacity in the region. The 2.5 MMcf/d greenfield Matterhorn Express Pipeline, under development by MPLX LP and WhiteWater Midstream LLC, is projected to come online this year and should help. More is needed, though, according to analysts. “Takeaway capacity for gas is once again at the knife’s edge, and there really are no good alternatives to piping that incremental gas to market — for most producers, flaring at scale is no longer acceptable,” RBN Energy LLC analyst Sheela Tobben said. “While Matterhorn will help, it’s likely to fill up quickly, meaning even more gas takeaway will be needed.” Analyst Rob Wilson of East Daley Analytics agreed. He noted that Moss Lake Partners LP “is throwing its hat in the ring to build the next big gas pipeline out of the Permian” after the Matterhorn project. Moss Lake has started the pre-filing review process with federal regulators for the DeLa Express pipeline. The proposed 690-mile pipeline would move up to 2 Bcf/d from the Permian into Louisiana, Wilson said. Such projects are long term in nature. Demand from Gulf Coast LNG facilities also declined over the course of late March and early April because of maintenance events, amplifying the weak demand situation. Liquefied natural gas demand has become an increasingly prominent element of the U.S. market as global calls from Asia, Europe and elsewhere for American gas have increased in recent years. More momentum lies ahead. Five LNG export projects under construction along the Gulf Coast would boost U.S. export capacity from 14 Bcf/d to nearly 25 Bcf/d by the end of the decade. Currently, however, LNG feed gas volumes are running well below capacity. Continued lower production would also have a lasting impact. Natural gas production held near or below 100 Bcf/d for much of early April – far from the record levels reached earlier this year. Major producers, largely outside of the Permian, eased activity in recent weeks to balance the market. EIA reported a 50 Bcf injection into storage for the April 12 period. That proved in line with market expectations ahead of the EIA data. The median of a Bloomberg poll landed at 51 Bcf, while Reuters’ survey produced a median of 49 Bcf. NGI modeled a 55 Bcf increase. The actual result compared bullishly with a five-year average increase of 61 Bcf. Still, at 2,333 Bcf, total working gas in storage was 36% above the average of the past five years. Early estimates submitted to Reuters for the week ending April 19 showed an average increase of 64 Bcf. That compares with a five-year average increase of 59 bcf.

Energy Executives See Sub-$3 U.S. Natural Gas Prices Persisting Amid Supply Glut - Oil and natural gas executives in the Midcontinent and Rocky Mountain regions don’t expect Henry Hub natural gas prices to surpass $3/MMBtu for another two years, according to the first quarter 2024 energy survey published by the Federal Reserve Bank of Kansas City. The survey gauges current and expected oil and gas activity levels in the Tenth Federal Reserve District, as well as expectations for oil and natural gas prices. The Tenth District includes Colorado, Kansas, Nebraska, Oklahoma and Wyoming, along with 43 counties in western Missouri and 14 counties in northern New Mexico.

Gallons Of Oil Leaked From Shell Pipeline - Nearly 90,000 gallons of oil have leaked from a Shell \pipeline into the Gulf of Mexico about 90 miles off the Louisiana coast, the US Coast Guard has said. Chief Petty Officer Bobby Nash said the leak had been secured and cleanup crews would be dispatched to the area. Shell spokeswoman Kimberly Windon said in a statement that a helicopter spotted an oil sheen near the Glider subsea tieback system at the company's Brutus platform shortly before 8am on Thursday. She said: "There are no drilling activities at Brutus, and this is not a well control incident." Officials are investigating the cause of the leak, but Ms Windon said it was likely to have been caused by the release of oil from the subsea infrastructure. The oil apparently leaked from a line connecting four wells in the Green Canyon area of the Gulf of Mexico to the platform, and has left a miles-long sheen. The Bureau of Safety and Environmental Enforcement (BSEE) said there had been no reports of injuries. Shell Offshore reported the spill and shut the wells flowing into the line. Ms Windon added: "We are working with the United States Coast Guard and the National Oceanic Atmospheric Association to define the best approach to contain and clean up the sheen." About 88,200 gallons were reportedly released from the pipeline. The BSEE has tightened regulations for offshore operators since the 2010 BP Deepwater Horizon well blowout which spilled more than three million barrels of oil into the Gulf - the worst oil spill in US history. Shell said it has mobilised response vessels, including aircraft, to see if it can recover the spilled oil.

Biden administration aims to increase industry responsibility for decommissioning drilling platforms - The Biden administration on Monday finalized a new rule it says will reduce taxpayer responsibility for the process of decommissioning offshore oil and gas platforms. The decommissioning process is the final step in offshore fossil fuel extraction and involves dismantling the drilling platforms and returning the area to its predrilling state. Under existing regulations, taxpayers are responsible for any costs associated with the process that the companies themselves do not cover. The final rule would amend the regulation, simplifying the process by which it assesses a fossil fuel company’s finances and its responsibility for decommissioning. The Bureau of Ocean Energy Management (BOEM) estimated the rule would require $6.9 billion in new financial guarantees from the fossil fuel industry. Earlier estimates from the Government Accountability Office (GAO) project that the full decommissioning process costs about $40 billion to 70 billion, while the government had only secured about $3.5 billion in industry assurances under the existing rules. “This final rule updates, simplifies and strengthens outdated requirements to ensure that taxpayers are protected and current operators are held responsible for their end-of-lease cleanup obligations on the Outer Continental Shelf,” Interior Secretary Deb Haaland said in a statement. However, the advocacy group Earthjustice criticized the rule for not going far enough in addressing the outstanding costs, noting that the additional $6.9 billion would still leave about $30 billion unaccounted for. “This rulemaking is a step in the right direction and will alleviate the financial burden on American taxpayers who foot the bill for cleaning up after the oil industry in our oceans,” Earthjustice attorney Ava Ibanez Amador said in a statement. “But more reforms are needed. The oil industry continues to get away with paying far too little up front, extracting maximum profit, and leaving the rest of us on the hook. The oil industry has shown itself to be an irresponsible tenant in our public waters and it should be required to pay a much larger security deposit before it can start drilling.”

Federal Onshore Natural Gas, Oil Drilling Costs Rising as Interior Updates ‘Outdated’ Rules - The Biden administration earlier this month finalized revamped onshore natural gas and oil leasing rules, increasing the royalty rates and, for the first time in 60 years, bumping up the cost for bonding requirements. The Department of Interior’s Fluid Mineral Leases and Leasing Process final rule revised regulations under the purview of the Bureau of Land Management (BLM). BLM oversees more than 245 million acres of public land, primarily in 12 western states including Alaska. Interior cited “outdated fiscal terms of the onshore federal oil and gas leasing program, including for bonding requirements, royalty rates and minimum bids, which will increase returns to the public and disincentivize speculators and irresponsible actors.”

Drilling for oil on public land is about to cost a lot more - On Friday, the Department of Interior released a new rule that will impose stricter financial requirements for oil and gas companies that operate on federal public land – the first such change since 1960. The reform includes a jump in the amount of money that drilling companies must put forward to ensure cleanup of their wells. It also raises the royalty tax rate that operators pay on the minerals they extract on public land, which had not changed in more than a century. In a statement, Interior Secretary Deb Haaland said that the changes will “cut wasteful speculation, increase returns for the public, and protect taxpayers from being saddled with the costs of environmental cleanups.” The final version of the rule, which was released in draft form last summer, joins a flurry of climate and conservation moves by the Biden administration in recent weeks, including a strengthened methane emissions standards for oil wells on federal land and a renewable energy policy meant to promote wind and solar development. Environmental groups praised the rule as long overdue. “These new regulations are the kind of common-sense reforms the federal oil and gas leasing program has needed for decades,” said Athan Manuel, Sierra Club Lands Protection Program director, in a statement. The increase to bonding requirements means that the government will have substantially more money set aside to pay for cleaning up abandoned oil and gas wells. In order to drill, energy companies put forward funds, most often in the form of bonds purchased with a third-party surety company, to ensure that cleanup takes place. These bonds are held until the company plugs its wells. If the company performs the reclamation work itself, it gets its bonds back. If a company goes bankrupt or abandons its wells some other way, the government can use the money in the bonds to pay for plugging and environmental cleanup. Bonding levels need to be high enough to incentivize cleanup over abandonment, and Interior Department’s bonds hadn’t changed in more than six decades. A 2019 report from the Government Accountability Office found that between 84% and 99% of bonds for public land wells do not cover the full cost of cleanup. The new rule raises the minimum bond for a single public land oil and gas lease – which often contains multiple wells – from $10,000 to $150,000. For companies that operate multiple leases in the same state, the bond increases from $25,000 to $500,000. Despite these increases, the new bonding levels are unlikely to cover the complete cost of cleaning up the more than 90,000 unplugged wells overseen by the Bureau of Land Management. The same 2019 GAO report found a wide range of plugging costs for orphaned wells on public land, ranging from $20,000 to as much as $145,000 per well, with a median cost of $71,000 to plug the well and clean up the drilling site.

White House will 'make sure gas prices remain affordable' heading into summer, Biden advisor says --President Joe Biden’s top economic advisor said Thursday the White House will “make sure gas prices remain affordable” when asked whether the administration would consider tapping the Strategic Petroleum Reserve.There are of course things that have been done in the past and we’ll continue to very closely monitor, make sure that gas prices remain affordable for so many American families going into the summer driving season,” National Economic Advisor Lael Brainard said at Semafor’s World Economy Summit.Gasoline futures have risen nearly 29% this year with prices at the pump currently averaging $3.67 a gallon, according to the motorist association AAA. U.S. crude oil has gained 15% year to date on stronger demand, tighter supplies due to OPEC+ production cuts and mounting geopolitical risks in the MidEast and Eastern Europe.“We’re highly attentive to the international oil markets and domestic gas prices. We’ll continue to monitor closely and want to make sure that those gas prices remain in current ranges,” Brainard said. U.S. crude oil hit a high of $87.67 per barrel this year before pulling back to around $83 a barrel.Iran’s unprecedented weekend air assault on Israel has raised fears that an Israeli counterattack could trigger a wider war in the region that impacts crude oil supplies. The White House is keeping a close eye on “geostrategic risk” in the Middle East, Brainard said. And Ukraine’s repeated drone strikes on Russian oil refineries also have the Biden administration concerned about their effect on prices. Defense Secretary Lloyd Austin told Congress last week that those attacks could have “a knock-on effect in terms of the global energy situation.” White House climate advisor John Podesta said Tuesday that Biden “will do what he can to make sure” gasoline is affordable, noting that the administration has in the past tapped the Strategic Petroleum Reserve to ease prices at the pump.The White House released 180 million barrels from the SPR in 2022 as oil and gas prices surged in the wake of the Russian invasion of Ukraine. The reserve currently stands at about 365 million barrels, the lowest level in decades, a point of contention with Republicans in Congress.Russia’s decision to deepen its cuts by 470,000 barrels per day to meet its pledges to OPEC+ could prove particularly problematic, according to a March research note from JPMorgan. The price of global benchmark Brent crude oil could approach $100 by September — just two months before the November presidential election — without countermeasure, according to the firm.The chances of another release from the SPR will rise if gasoline prices move closer to $4 per gallon, which could happen as soon as May, according to JPMorgan. Despite the SPR’s low levels, the Biden administration has space to release another 60 million barrels of crude oil, according to the bank.Oil prices have pulled back more than 3% this week as war fears eased along with Israel’s decision not to strike back immediately against Iran, but the situation remains highly uncertain. Daniel Yergin, vice chairman of S&P Global, said oil prices above $90 a barrel presents a problem for the broader market.“It’s also a problem for inflation in general, and it’s a real problem if you’re an incumbent running for reelection,” Yergin told CNBC’s “Squawk Box” earlier this month.

USA Regional Banks Dramatically Step Up Loans to Oil and Gas A group of US regional banks is ratcheting up lending to oil, gas and coal clients, grabbing market share as bigger European rivals back away. The list of banks includes Citizens Financial Group Inc., BOK Financial Corp. and Truist Securities Inc., according to data compiled by Bloomberg. The companies have climbed between 13 and 40 steps up the league table for fossil-fuel lenders since the end of 2021, placing them among the world’s top 35 banks by number of deals. Fifth Third Securities Inc. and US Bancorp, already in the top 30, both ascended 10 steps in the same period. Since the start of 2022, the combined number of fossil-fuel loans provided by Citizens Financial, BOK Financial, Truist Securities, Fifth Third and US Bancorp rose more than 70% on an average annualized basis, compared with the preceding six years, the Bloomberg data show. Spokespeople for Truist, Fifth Third and US Bancorp declined to comment. Rory Sheehan, a spokesperson for Citizens Financial, said the bank supports initiatives enabling the transition toward a lower-carbon future. He also said the bank recognizes the role of the oil and gas industry. The development offers a glimpse of how the US banking landscape is being altered against a backdrop of stricter climate regulations across the Atlantic. US regional lenders — shaken by the crisis that followed Silicon Valley Bank’s meltdown — are participating in more fossil-fuel loans as banks in Europe begin to pull away for fear of getting caught on the wrong side of environmental, social and governance regulations and climate litigation. “Someone betting heavily that the demand for fossil fuels will keep on rising significantly is clearly taking a view that is at odds with existing forecasts,” “I would like to be very sure that they understand the implications of this kind of bet.” BNP Paribas SA, the European Union’s biggest bank, and ING Groep NV, the largest lender in the Netherlands, are among banks that are in the process of expanding restrictions on fossil-fuel clients. The companies, which are both currently fighting lawsuits brought by climate nonprofits, dropped about 10 places in the ranking of oil, gas and coal lenders over the past two years. Wall Street’s largest banks, meanwhile, remain among the absolute biggest lenders to the fossil-fuel industry. Last year, such loans were dominated by Wells Fargo & Co., Bank of America Corp. and JPMorgan Chase & Co., according to Bloomberg data.

Canadian Natural Gas Production Holds Strong, on Track for Record Year Despite Price Weakness - Natural gas production held near all-time highs through the first quarter in Canada, even as prices slumped following a mild winter that left supplies in storage at robust levels. That’s because producers are looking beyond near-term weakness and toward an anticipated jump in export demand, according to analysts. LNG Canada is slated to begin operations this year and is expected to draw down excess supplies to feed mounting global demand. Since the onset of Russia’s invasion of Ukraine in 2022, Europe has shifted away from Kremlin-backed energy and toward North American liquefied natural gas. Demand from Asia and other parts of the world also is projected to rise. Western Canadian natural gas production in March averaged 18.49 Bcf/d, reaching a fresh high for this month and...

Rupture on TC Energy's NGTL gas pipeline sparks wildfire in Alberta *(Reuters) - A section of TC Energy's (TRP.TO), opens new tab NGTL gas pipeline system in Alberta ruptured and caught fire on Tuesday, sparking a wildfire in a remote area, the company said. "An initial ignition of natural gas at the rupture site is now extinguished. We are working to support Alberta Wildfire in their response to contain a secondary fire," the company said in a statement on its website. TC said there were no injuries and it was working closely with first responders in the region. The fire broke out about 40 km (25 miles) northwest of Edson, Alberta, in Yellowhead County. Canadian broadcaster Global News said there was a plume of flames and smoke visible from many kilometres away. The Canada Energy Regulator (CER) said initial investigations indicated a rupture in a gas pipeline caused the fire, which was under control. TC Energy said it has isolated and shut down the affected section of the NGTL system, and the remainder of the system is operating normally with no commercial impact. The CER said it is sending inspectors to the area to monitor and oversee the company’s response and determine the impact of the incident. NGTL is TC Energy's natural gas gathering and transportation system that transports gas produced in Western Canadian Sedimentary Basin (WCSB) to markets in Canada and United States.

Alberta Pipeline Incident Sends Natural Gas Futures Higher - Natural gas futures jumped higher Tuesday afternoon after reports of a pipeline incident in Alberta broke up an otherwise quiet shoulder season day of trading. The May Nymex contract rose 4.1 cents day/day to settle at $1.732/MMBtu. Futures spiked higher around 2 p.m. ET without any immediate explanation. Market chatter soon turned to reports of an incident on TC Energy Corp.’s Nova Gas Transmission Ltd. (NGTL). TC Energy confirmed it was “actively responding to an incident involving the NGTL natural gas system” about 25 miles northwest of Edson, Alberta. “The affected section of the pipeline has been isolated and shut down,” a spokesperson said.

Firefighters battle wildfire near Edson, Alta., after natural gas line rupture | CBC News - A natural gas pipeline rupture Tuesday morning in west-central Alberta has sparked a wildfire. TC Energy activated its emergency response procedures after it was notified about the incident involving its Nova Gas Transmission Line in a remote location 40 kilometres northwest of Edson, Alta. The rupture occurred at about 11 a.m., TC Energy said in a statement. Edson is about 200 kilometres west of Edmonton and about 160 km northeast of the B.C.-Alberta border. "The pipeline incident did create a wildfire and so Alberta Wildfire, Yellowhead County and TC Energy are currently responding to the wildfire," said Caroline Charbonneau, Alberta Wildfire information officer for the Edson forest area. The fire was considered out of control Tuesday afternoon, but in update posted at 7 p.m., Alberta Wildfire said the fire was being held. "This means that given current weather conditions and resources, the wildfire is not anticipated to grow past expected boundaries," the update said, noting the wildfire covered about 10 hectares. The Canadian Energy Regulator (CER) said in a statement late Tuesday that it is responding to the incident. All TC Energy personnel working in the area were safely evacuated and there are no reported injuries, the regulator said. "CER inspectors will be onsite to monitor and assess the company's immediate response and verify that all reasonable actions are being taken to protect workers, the public and the environment," the CER said in its statement. Charbonneau said Tuesday afternoon that conditions were dry but firefighters were making good progress and no communities were threatened by the fire. Yellowhead County said in a statement that it "worked with the gas company to shut the pipeline in. There is no more leaking gas." The cause of the fire is still under investigation, the county said.

Alberta wildfire sparked by natural gas line rupture under control - A wildfire in west-central Alberta that was sparked by a natural gas pipeline rupture is under control, but an investigation into what caused the pipeline to break could take months or even years. As of Wednesday morning, there was very little fire activity left in Yellowhead County, where a 10-hectare fire burned on Tuesday about 40 kilometres northwest of Edson. "But for it to be considered extinguished, we're going to have to hot spot," said Caroline Charbonneau, area information co-ordinator with Alberta Forestry and Parks. "That means we'll have to dig into the ground, look and feel for hot spots, and then douse it with water. And that could take several days." There were no injuries, and the fire was never a threat to any surrounding communities. The affected pipeline segment was isolated and shut in and there is no more gas leaking from the pipeline. The Canada Energy Regulator had inspectors on site Wednesday to monitor the company's response and the Transportation Safety Board is investigating the incident. According to CER, there have been 12 natural gas pipeline ruptures in Canada since 2008, and Tuesday's incident near Edson was the first rupture on that particular pipeline within that time period. The 36-inch diameter pipe that ruptured is part of TC Energy's NGTL pipeline system, which transports natural gas from Alberta and northeast B.C. to domestic and export markets. The system spans 24,631 kilometres and connects with TC Energy's Canadian Mainline system, Foothills system and other third-party pipelines. The NGTL pipeline system is like a web made up of different lines that have been developed in stages. In 2022, there was a rupture on a separate part of the system that resulted in an explosion and fire near Fox Creek, Alta. There were no injuries. A TSB investigation into that incident took more than 14 months, and concluded that the pipeline ruptured due to reduced pipe wall strength caused by external corrosion. While the primary risk of a crude oil pipeline leak is an oil spill that harms the local ecosystem, natural gas pipeline ruptures can and do result in fires or explosions, said Bill Caram, executive director of the Pipeline Safety Trust, a U.S.-based non-profit organization. "Pipelines are quite safe, and when you look at incident rates compared to other modes of transportation like rail or truck, they are much less likely to have a failure," Caram said. "But what you don't get a sense of by looking at the risks of pipelines in that way is how catastrophic a failure can be when it does happen." According to the TSB, there were 19 recorded incidences of fires related to pipelines in Canada between 2012 and 2022. The TSB's most recent report on pipeline transportation safety in Canada states that in 2022 there were 100 companies transporting either oil or gas or both in the federally regulated pipeline system, which includes approximately 19,950 km of oil pipelines and approximately 48,700 km of natural gas pipelines. That year, there were 67 pipeline transportation accidents and incidents on federally regulated pipeline systems, according to the report. That number was well below the 10-year average of 112 occurrences, and was also the lowest number of occurrences since 2019, when 52 pipeline accidents or incidents were recorded by the TSB. The TSB defines a pipeline "accident" as an incident that results in a person being injured or killed, a fire or explosion, or significant damage to the pipeline affecting its operation. Less severe pipeline events that involve the uncontrolled release of a commodity or a precautionary or emergency shutdown are classified by the TSB as "incidents."

Natural Gas Would Still Form Base of Mexico Power System Under Sheinbaum Presidency - Mexico’s presidential frontrunner Claudia Sheinbaum of the ruling Morena party would continue the nation’s buildout of natural gas-fired power if she were to win the June 2 election. Speaking to business leaders in Mexico City on Monday evening, Sheinbaum highlighted that 3.250 GW of new generation, 91% of which was natural-gas fired combined cycle, were set to come online later this year. That includes the 932 MW Salamanca combined cycle plant in Guanajuato; the 256 MW El Sauz ll combined cycle plant in Querétaro; the 348 MW Manzanillo III combined cycle plant in Colima; the 437 MW San Luis Potosí power plant in Villa de Reyes; the 350 MW natural gas-fired Lerdo combined cycle in Durango; and the 499 MW combined cycle plant in Merida.

Environmentalists denounce a new oil spill in Campeche after platform explosion - Environmental organizations denounced that Mexico’s Safety, Energy and Environment Agency (ASEA) has repeatedly demonstrated its inability to address the causes of these incidents. Environmental civil society organizations detected a new crude oil spill in the vicinity of the Akal-B platform in the Campeche Sound, which caught fire and exploded on April 6. The signatory organizations indicated that they have satellite images in which they have been able to verify that the crude oil spill began around March 22 of this year (15 days before the Akal-B platform), and it remains active, accumulating 20 days of uninterrupted leak. “The crude oil spill is estimated to cover an area of approximately 390 km2, a size similar to that of the spill reported by several of the signatory organizations in July of last year,” they indicated. “Given this terrible situation, we urge transparent information, attention, mitigation and non-repetition measures; and more concern about Pemex and the safety of its workers, the safety of the communities that coexist with its infrastructure, the future of the oil company and its undeniable responsibility in the face of the world climate crisis,” environmentalists stressed. They denounced that the Safety, Energy and Environment Agency (ASEA) has repeatedly demonstrated its incompetence and inability to address the causes of these incidents and prevent these disasters, “despite being directly responsible for regulating and sanctioning Pemex.” It was pointed out that the frequency of accidents by Pemex has increased by 152% in the last two years, and the budget allocated to the maintenance of facilities has decreased by 49%, demonstrating that Pemex has made bad administrative decisions prioritizing the accelerated extraction of fossil fuels instead of investing in security and maintenance of its existing infrastructure. “The consequences are visible in the irreparable human losses of workers and the effects on the health of local communities and ecosystems impacted by fossil disasters,” they stated. So far, the explosion of the Akal-B platform has officially caused the death of two workers from the COTER company, and nine more injured. “The two workers join the list of more than 360 people who have died in Pemex accidents since 2009,” they stated.

Authorities investigate oil spill at Hagatna Marina - Local and federal officials are looking into an oil spill at the Hagatna Marina. The U.S. Coast Guard and Guam Environmental are investigating the source of the underwater oil spill and how much oil has actually flowed into the marina. The Port Authority of Guam confirmed it happened Monday around 10:30 p.m. The spill was reported as a private contractor was doing construction at the Guam Fishermen’s Co-op property. Officials said the contractor was excavating and dredging the rocks behind the co-op at the time. The co-op called on an environmental emergency response company to assist in containing the spill. Port General Manager Rory Respicio said, “Our safety division worked diligently with the emergency response contractor to ensure that the oil booms placed in the waterway did not impede or endanger the safety of our marina boaters.”

US Prepares To Reimpose Venezuela Oil Ban As Biden Seeks Scapegoat To Resume Draining SPR -- For much of the past year, we had joked that behind the facade of western Democratic ideals, was a cold hard truth: the price of oil must not be allowed to go up in an election year. This was obvious in Biden's "kid gloves" treatment of Iran's regime, it was obvious when the US implemented "sanctions" on Russian oil that were breached within months with zero enforcement, it was also obvious when the US president became best friends with Venezuela's dictator Nicolas Maduro last October when, in exchange for a few thousands barrels of Venezuela's oil, the US lifted sanctions on the person that for years was one of western "democracies" biggest enemies. Of course, there had to be some at least optical quid-pro-quo in exchange for the Biden detente so that the US president doesn't look not just senile but also totally stupid and incompetent, and sure enough Maduro agreed that he will hold "free elections" only to renege a few weeks later, while also rubbing Biden's face in Maduro's sudden leverage over the US president as we reported on various occasions: Biden courts Maduro to get a few hundred thousands barrels of oil so his record low approval doesn't drop even more, and now an emboldened Maduro is preparing to annex most of the sovereign state of Guayana

Spot LNG shipping rates continue to drop, European prices climb - Spot charter rates for the global liquefied natural gas (LNG) carrier fleet continued to decrease this week, while European prices rose compared to the week before.Last week, charter rates also fell compared to the week before.“Freight rates in the Atlantic and Pacific basins continue to fall for the third consecutive week, with the Spark30S Atlantic spot rate falling by $1,000 per day to $43,750 per day, and the Spark25S Pacific rate falling by $250 per day to $46,750 per day,” Qasim Afghan, Spark’s commercial analyst told LNG Prime on Friday.“The Spark30S Atlantic spot rate is at its lowest point when compared to the same period in the last four years,” he said.LNG freight rates remain low despite the fact that LNG carriers are still avoiding the Suez Canal due to the situation in the Red Sea and the lower LNG transits in the Panama Canal due to a drought situation. The Panama Canal Authority said in a statement this week that current forecasts indicate that steady rainfall would arrive in late April and continue for a few months. “If this remains the case, the canal plans to gradually ease transit restrictions, allowing conditions to fully normalize by 2025,” it said. The authority currently offers in total up to 27 transits per day. Europe to compete for cargoes at higher prices In Europe, the SparkNWE DES LNG front month jumped compared to the last week. “The SparkNWE DES LNG front month price for May delivery is assessed at $8.992/MMBtu and at a $0.225/MMBtu discount to the TTF,” Afghan said. He said this is a $0.945/MMBtu increase in DES LNG price, the largest weekly increase in SparkNWE DES LNG price in six months (October 2023), and the highest DES LNG price in three months (January 2024). “The NWE basis reached the narrowest differential to the TTF year to date this week as the arb to send cargo to Asia for US volumes remains open, requiring Europe to compete for cargoes at higher price levels,” Afghan said.

ExxonMobil Greenlights Another Stabroek Project Offshore Guyana - ExxonMobil keeps powering ahead in its offshore Guyana program even as a contract dispute and geopolitical tensions cast a shadow over the oil-rich project. The company made a final investment decision for the Whiptail development, its sixth project on the offshore Stabroek block. It has the necessary approvals in place and the offshore platform is under construction, the company said. Whiptail would produce 250,000 b/d of oil by 2027, bringing total production to 1.3 million b/d by this date. This would make Guyana one of the top producers in Latin America, easily surpassing neighboring Venezuela which now produces around 850,000 b/d.

Russia's crude oil exports at 11-month high in April, cross OPEC target to support prices - Russia’s seaborne crude exports soared to an 11-month high in the second week of April with flows from all major ports near peak levels. Last week’s jump propelled total weekly flows to the highest since May 2023, for a level that has been exceeded only twice since the start of 2022, vessel-tracking data compiled by Bloomberg show. The less volatile four-week average also rose sharply, climbing to the highest since early June. Weekly shipments were well above a target for this month that’s part of the OPEC alliance’s broader effort to curb supplies and support prices. Cargoes from Primorsk, Ust-Luga, Novorossiysk and Kozmino were close to historical highs. Primorsk on the Baltic handled 10 tankers in three of the past four weeks, possibly reflecting a diversion to exports of crude that would have been processed at refineries hit by Ukrainian drones. The port hasn’t handled more than 11 tankers in a week in data back to the start of 2022. Refining rates are languishing near an 11-month low as repairs continue. The jump in flows, combined with higher Urals crude prices, boosted Moscow’s oil earnings. The gross value of crude exports rose to $2.15 billion in the seven days to April 14 from $1.82 billion previously. Four-week average income added about $170 million to $1.92 billion a week. Separately, four-week average shipments to Asia continued to climb, following a similar pattern to that seen at the same time last year. Then, shipments to Asia — predominantly China and India — peaked at 3.6 million barrels a day in the four weeks to May 14, before dropping by about 1 million barrels a day over the following three months. The backlog of Russia’s Sokol crude that built up after being turned away by Indian refiners has now almost disappeared. About 9.1 million barrels, half of the total, have been delivered to refineries in China. Another 7 million barrels are finding their way back to India. Two cargoes have been delivered to Pakistan. That leaves just 1.4 million barrels still to show a destination, with another 700,000 barrels in a tanker that’s been anchored off India’s east coast since the start of April. All of the Sokol cargoes loaded since mid-February headed directly to China. Russia’s seaborne crude flows in the week to April 14 surged by 560,000 barrels a day to 3.95 million, reaching the highest since May 2023. The less volatile four-week average also soared, up by about 250,000 barrels a day to 3.66 million, to the highest since June. Weekly shipments were about 365,000 barrels a day higher than the average seen in May and June, or about 490,000 barrels a day above Russia’s April target, which is part of the OPEC alliance’s broader effort to curb supplies and support prices. The four-week average was about 200,000 barrels a day above the target.

Russia Quickly Restores Oil Refinery Capability Hurt By Ukrainian Attacks - News From Antiwar.com Russia has been able to swiftly repair oil refineries inside Russian territory that have been targeted by Ukrainian drones, Reuters reported on Monday.The report said the attacks initially reduced Russia’s oil production by 14% at the end of March, but after quick repairs, it is now down by 10% and expected to continue to increase.The Ukrainian attacks on Russia’s refineries provoked more Russian missile and drone strikes on Ukrainian energy infrastructure. According to The Washington Post, US officials say the Russian strikes have hurt Ukraine far more than the attacks on oil refineries hurt Russia.The Post report said that Vice President Kamala Harris told Ukrainian President Volodymyr Zelensky to stop targeting Russian oil refineries back in February over concerns it would disrupt the global oil market and provoke harsh Russian retaliation. But Zelensky brushed off the warnings, and the attacks continued.Russia has been much more successful in its attacks on Ukrainian infrastructure as its intelligence improves and Ukraine is running low on air defenses. Zelensky said on Tuesday that Ukraine was unable to prevent the destruction of one of its largest power plants, the Trypilska thermal power plant, because it didn’t have enough munitions.“There were 11 missiles flying. We destroyed the first seven, and [the remaining] four destroyed Trypillia,” Zelensky said. “Why? Because there were zero missiles. We ran out of missiles to defend Trypillia.”

Japan to retain oil and gas interests in Russia - Japanese companies will continue to participate in Russian energy projects on Sakhalin Island due to their importance for Tokyo’s energy security, the country’s foreign ministry announced on Tuesday. Tokyo will continue its “close cooperation” with the Group of Seven industrialized nations (G7) to pursue a “policy of tough sanctions” on Russia, the ministry said in its annual Diplomatic Bluebook, which reviews Japan’s foreign affairs activities. Japan is also set to further cut reliance on Moscow’s energy resources by phasing out oil and coal imports. However, Tokyo will retain its interests in the Sakhalin-2 liquefied natural gas (LNG) project and the Sakhalin-1 offshore oil and gas venture in Russia’s Far East, according to the foreign ministry. “In light of ensuring stable supplies in the medium and long term, Japan continues to view these projects as important in the field of energy security and intends to maintain its share,” it stated. Sakhalin-1 is a consortium for offshore oil and gas production. Its sister project, Sakhalin-2, is one of the world’s largest LNG ventures, supplying around 4% of the global market. Both projects faced disruptions in 2022 after Western energy majors including US ExxonMobil and Britain’s Shell opted to leave Russia after the West sanctioned the country over its military operation in Ukraine. Japan’s Sakhalin Oil and Gas Development Co (SODECO) owns a 30% stake in Sakhalin-1. In 2022, the Russian government allowed SODECO to keep its stake under the new domestic operator of Sakhalin-1 following the exit of ExxonMobil, the previous operator and former owner of a 30% stake. Exxon Neftegaz was disbanded as the operator of the project and all its assets and equipment were transferred to a new company managed by Rosneft subsidiary Sakhalinmorneftegaz-Shelf. Mitsui, along with Mitsubishi, have also retained their 22.5% combined stake in the Sakhalin-2 LNG project. Mitsubishi CEO Katsuya Nakanishi said in February that Russia’s LNG project remained “extremely important” for ensuring that Japan maintains a stable supply of energy.

Saudi’s February crude exports edge up to 6.317 million bpd - Saudi Arabia’s crude oil exports in February edged up to 6.317 million barrels per day (bpd) from 6.297 million bpd in January, data from the Joint Organizations Data Initiative (JODI) showed on Wednesday. The world’s largest oil exporter’s crude oil production increased by 0.6% to 9.01 million bpd while inventories fell by 6.73 million barrels to 145.09 million. JODI is provided with monthly export figures by Riyadh and other members of the Organization of the Petroleum Exporting Countries (OPEC) and publishes them on its website. Data showed that Saudi refineries’ crude throughput rose by 250,000 bpd to 2.675 million bpd in February while direct crude burning increased by 52,000 bpd to 360,000 bpd. Meanwhile, the country’s oil products exports rose by 147,000 bpd to 1.39 million bpd.29dk2902l Separately, Saudi Arabia has raised the official selling price for its flagship Arab Light crude oil for customers in Asia and the Mediterranean in May. Earlier this month, OPEC and allies including Russia, a grouping known as OPEC+, kept their oil supply policy unchanged and pressed some countries to increase compliance with output cuts.

China's Crude Oil Imports Hit A Record High In 2023 -China’s crude oil imports hit a record high in 2023, rising by 10% year-over-year and breaking the previous record from 2020 when the world’s top crude oil importer took advantage of the price crash to gorge on cheap crude. Last year, China’s crude oil imports averaged 11.3 million barrels per day (bpd), up by 10% compared to 2022, according to Chinese customs data compiled by Bloomberg and the U.S. Energy Information Administration (EIA). After China lifted the Covid-related restrictions in early 2023, Chinese refiners boosted imports to record-high levels last year, to support transportation fuel demand and produce feedstocks for China’s growing petrochemical industry, the EIA noted in an analysis published on Tuesday.Russia, thanks to cheaper crude supply, was China’s top source of crude imports last year, the data showed. Russia was also the supplier whose crude sales in China jumped the most. In 2023, Russia, Saudi Arabia, and Iraq were China’s main sources of crude oil imports. Compared with 2022, China’s 2023 crude oil imports increased the most from Russia, Iran, Brazil, and the United States.Between 2019 and 2021, Saudi Arabia was China’s top crude oil supplier, with Russia second with 15% of Chinese imports.In 2023, Russia was China’s top source of crude oil imports, supplying 19% of China’s crude oil imports, which averaged 2.1 million bpd, the EIA said.The surge in Chinese crude oil imports from Russia was the result of discounted Russian prices due to the Western sanctions and price caps on Russia’s crude.

House Votes to Sanction China's Purchase of Iranian Oil - The US House of Representatives overwhelmingly passed legislation Monday aimed at countering China’s purchase of Iranian crude oil as part of a package of bills being brought to the floor in response to Iran’s attack on Israel. The legislation was approved by a 383-11 vote, surpassing the requisite number needed to overcome a presidential veto. The legislation moves to the Senate where it faces an uncertain fate. The bill, H.R. 5923, Iran-China Energy Sanctions Act of 2023, expands secondary sanctions against Iran to cover all transactions between Chinese financial institutions and sanctioned Iranian banks used to purchase of petroleum and petroleum products, according to a summary of the bill. The legislation also requires the US to make a determination annually whether Chinese financial institutions have engaged in sanctionable conduct. About 80% of Iran’s roughly 1.5 million barrels a day of oil exports are sent to independent refineries in China known as “teapots,” according to the summary. The bill, introduced by New York Republican Representative Mike Lawler, clarifies that any transaction by a Chinese financial institution for the purchase of oil from Iran qualifies as a “significant financial transaction” for sanctions purposes. The measure, unanimously approved by the House Financial Services Committee in November, is one of several Iran-related bills that were slated to be considered Monday under an expedited procedure typically used to pass legislation that has bipartisan support. The sanctions, if passed into law and enforced, could result in an increase of as much as 20 cent per gallon on gasoline prices, consulting firm ClearView Energy Partners said in a note to clients Monday.

Iran-Iraq gas contract extension outcome of promoted energy diplomacy, says MP -- The extension of a contract to export Iran’s gas to Iraq is the outcome of promoting energy diplomacy, particularly with neighboring states, said a member of the Parliament’s Energy Committee on Saturday. Ramezanali Sangdovini told SHANA the 13th administration has established good relations with neighbors and other countries, including the members of BRICS and the Shanghai Cooperation Organization (SCO), leading to strong diplomacy. Capable knowledge-based companies were created, particularly in the oil and gas sectors, amid the enemy’s sanctions, said the lawmaker, adding the companies are now producing a great number of products needed by the oil industry, helping the energy sector develop. Mohammad Baqeri, a member of the Parliament’s Economic Committee, said the 13th administration inheriting tough conditions stemming from the sanctions and the previous government’s incompetence was faced with problems about exporting oil and non-oil products and has tried to improve the country’s economy since it took office in August 2021. Joining the international and extraregional agreements, the incumbent government has boosted its overseas synergy, said the legislator.

Iran's oil exports and tensions with the West (Reuters) - Iran, the third largest producer in the Organization of the Petroleum Exporting Countries (OPEC), produces about 3 million barrels of oil per day (bpd), or around 3% of total world output. Following are some facts on Iran's oil industry as anxiety mounts its supply could be disrupted and cause a surge in international oil prices because of extreme tension in the Middle East. Iran's oil production has been the target of successive waves of sanctions. The United States has sought to limit Iran's oil exports since President Donald Trump exited a 2015 nuclear accord between Western powers and Iran in 2018 and re-imposed sanctions aimed at curbing Iran's revenue. During Trump's term, Iran's oil exports slowed to a trickle. They have risen during President Joe Biden's tenure as analysts say sanctions have been less rigorously enforced, Iran has succeeded in evading them, and as China has become a major buyer, according to industry trackers. Although a member of OPEC and OPEC+ - which brings together OPEC and allies, including Russia - Iran, because of the sanctions imposed on it, is exempt from the group's output restrictionsthat are designed to support the oil market. Driven by strong Chinese demand last year and continuing into 2024, Iran's crude exports in March averaged 1.61 million bpd according to industry analysts Kpler, the highest since May 2023 when they were 1.68 million bpd, the highest since 2018. The peaks of 2018 reflected the easing of sanctions that followed the 2015 nuclear deal with Iran. Iranian crude and condensate exports reached 2.8 million bpd in May 2018, the highest since at least 2013 according to industry analysts Kpler. In May 2018, the crude oil portion of Iran's exports was 2.51 million bpd, Kpler found. According to OPEC data, that was the most since 2011 when Iran exported 2.54 million bpd on average. Iran's oil production reached all-time highs in the 1970s with a peak of 6.02 million bpd in 1974, according to OPEC data. That amounted to over 10% of world output at the time. Also in May 2018, the United States under Trump's presidency unilaterally withdrew from the 2015 deal and re-imposed sanctions, aiming to cut Iran's oil sales to zero. Iran stopped providing data on its oil exports, but assessments based on tanker tracking show they fell sharply in the next two years to below 200,000 bpd in some months of 2020, the lowest since at least 1980 according to OPEC data. In January-March 2021, China increased its imports of Iranian oil to almost 800,000 bpd in January and almost 1 million bpd in March, although imports dropped again in April of that year. In 2021, Iran and the United States began indirect talks meant to bring both countries back into full compliance with the 2015 nuclear deal. Iranian exports rose during 2022, ending the year above 1 million bpd. Analysts have said the higher exports appear to be partly a result of Iran's success in evading U.S. sanctions. Iran has for years evaded sanctions through ship-to-ship transfers and "spoofing" - or manipulating GPS transponders so that ships show up in different positions - and the country is getting better at such tactics, analysts have said. Analysts have also said the rise in exports appears to be the result of U.S. discretion in enforcing the sanctions.

Oil Markets Were Already Positioned for Iran Attack -- Oil markets were already positioned for Iran’s attack on Israel, analysts at FGE outlined in a flash alert sent to Rigzone. “Over the weekend, Iran launched a missile and drone attack on Israel in retaliation for Israel’s attack on Iran’s consulate buildings in Syria two weeks ago,” the analysts noted in the alert. “The market had been bracing for this scenario, with a huge amount of increased length seen in the market in recent weeks as a result,” they added. The FGE analysts noted in the alert that their base case “assumes that this event marks the peak of escalation in the current conflict and tensions can start to ease from here, albeit slowly”. They also warned that Iran’s attack could end up being the trigger for a very bearish move in oil prices. “As profits are taken and weak length is shaken out, prices should drop from recent highs,” the analysts noted in the alert, adding that there’s potential for prices to drop $5-10 per barrel in the immediate short term. “Following the likely sell off early this week, risk premiums will start to return, and prices will shift back towards $90 per barrel,” the analysts said in the alert. “As we move through 2Q, the market will then start looking toward OPEC+ and what the producer group plans for 3Q,” they added. The FGE analysts highlighted in the alert that their base case “still assumes some easing of cuts in 3Q by OPEC+, although our conviction on this scenario is limited”. “OPEC+ will need to be certain of two things, that U.S. supply growth is done and dusted, and that demand growth is OK,” they said. “Despite firm prices, the latest IEA stocks data for January will not have helped in convincing OPEC+ that these conditions are being met,” they added. The analysts stated in the report that a rollover of cuts and ongoing political risk and trade friction can see prices push higher, “towards $100 per barrel”. In a research note sent to Rigzone on Monday, J.P. Morgan analysts said oil shrugged off Iran’s attack on Israel as geopolitical risk premium was already priced in and revealed the company’s base case for oil remains at $90 Brent through May and $85 in the second half of 2024.

Standard Chartered Says Peak Oil Demand Is Not Imminent - The oil price rally has lately lost some steam, with WTI for May delivery and June Brent futures slipping more than 5% since Friday after the Energy Information Administration (EIA) released bearish weekly data that triggered demand concerns. According to the EIA, crude inventories rose 5.84 mb w/w and oil product inventories rose 6.57 mb; however, the builds relative to the five-year average were modest, at just 0.11mb for crude oil and 1.24mb for products. U.S. commercial inventories now stand 16.47mb below the five-year average, with crude inventories at Cushing 7.35 mb below the five-year average. The EIA also estimates U.S. crude oil output clocked in at 13.1 mb/d for a fifth consecutive week, 0.8 mb/d higher y/y but 0.2 mb/d lower than December 2023 production.Whereas the short-term oil price outlook appears murky, leading oil agencies remain largely bullish about the long-term outlook. Last week, the International Energy Agency (IEA) published its latest monthly Oil Market Report (OMR), including its first detailed 2025 forecast. The Paris-based energy watchdog predicted that global oil demand in 2025 demand will be 1.147 mb/d higher than 2024 levels, higher than the 1.0 mb/d estimate it had released in June 2023. Other leading agencies have predicted even higher demand growth in 2025: the EIA forecast is 1.351 mb/d, Standard Chartered’s forecast is 1.444 mb/d while the OPEC Secretariat has predicted a 1.847 mb/d increase in demand.Interestingly, over the medium-and long-term, only the IEA sees global oil demand peaking before 2030, even in its most optimistic forecast (high growth). However, the IEA says an oil demand peak doesn’t necessarily mean a rapid plunge in fossil fuel consumption is imminent, adding that it will probably be followed by “an undulating plateau lasting for many years.”The EIA is the most bullish on long-term oil demand, and has predicted a demand peak will come in 2050 while the OPEC Secretariat sees it coming five years earlier. Meanwhile, Standard Chartered has predicted global oil demand will hit 110.2 mb/d in 2030 and increase further to 113.5 mb/d in 2035. However, the commodity experts have not projected a demand peak beyond the end of their modeling horizon in 2035. According to StanChart, a structural long-term peak is very unlikely within 10 years despite a high probability of cyclical downturns over the period. StanChart has argued that the current gulf between demand views creates significant investment uncertainty which that’s likely to force longer-term prices higher. In other words, the energy agencies appear to agree that an oil demand peak is nowhere on the horizon.

Oil price news: Oil falls as traders await Israel's response to Iran attack - Oil retreated from last week’s high with traders awaiting Israel’s response to an unprecedented attack from Iran. Ahead of the strike this weekend, crude surged to a five-month high but fell after most of the 300 drones and missiles fired by Iran were intercepted. West Texas Intermediate traded below US$85 a barrel Monday, paring some losses after Axios reported that Israeli Defence Minister Yoav Gallant said Israel had no choice but to retaliate against Iran. “At this juncture, the outlook for oil seems to hinge on Israeli response to the attack,” JPMorgan Chase & Co. analysts including Natasha Kaneva wrote in a note to clients. “Nevertheless, with bellicose rhetoric coming from both sides, markets might continue to place a sizeable premium on the price of oil in the immediate term.” Oil has been one of the strongest performers in commodities this year as OPEC+ keeps a tight rein on supply to drain inventories and support prices. The increase in Middle East tensions has boosted prices in recent weeks, with analysts highlighting the possibility oil could once again hit $100 a barrel. Societe Generale SA revised its forecast notably higher, saying in a note that direct miltary action between the U.S. and Iran could send Brent to $140. Shipping risks have also been in focus after Iran seized a vessel, the MSC Aries, near the key Strait of Hormuz shortly before the strikes against Israel. The ship’s beneficial owner is part of Israel-linked Zodiac Group, according to data compiled by Bloomberg. The move raises fresh concerns over the safety of vessels in the region, adding to previous logistical disruptions. WTI for May delivery declined 1.4 per cent to $84.48 a barrel to 11:04 a.m. Brent for June settlement fell 1.3 per cent to $89.23 a barrel.

Oil prices slip after Iran attack, US economic data (Reuters) - Oil prices slipped lower on Monday after Iran's weekend attack on Israel proved to be less damaging than anticipated, easing concerns of a quickly intensifying conflict that could displace crude barrels. Brent futures for June delivery settled at $90.10 a barrel, down 35 cents, or 0.4%. U.S. crude futures for May delivery fell 25 cents, or 0.3%, to end at $85.41 a barrel, Oil dropped by more than $1 a barrel earlier in the session before paring some losses after Reuters reported that Prime Minister Benjamin Netanyahu had summoned his war cabinet for the second time in less than 24 hours, citing a government source. The benchmarks had risen on Friday in anticipation of Iran's retaliatory assault, with prices soaring to their highest since October. Israel's interception of Iran's attack, which involved more than 300 missiles and drones, calmed fears of a regional conflict affecting oil traffic through the Middle East. "The success of the Israeli defense implies that the geopolitical risk has pulled back considerably," Strong U.S retail sales data from the Commerce Department also hindered oil prices, Yawger added, by increasing the likelihood that interest rates in the world's biggest economy would remain higher for longer and reduce demand for oil. "The key term in that whole scenario is demand destruction," In the Middle East, Iran saying it considers its retaliation to be over has further lowered the geopolitical temperature, Meanwhile the Iranian drone and missile attack was "about as telegraphed a world event that people can remember." "They might as well have had big disco lights on them and towed banners with ‘come on, ladies and gentlemen, please shoot me down.’" The attack, which Iran called retaliation for an air strike on its Damascus consulate, caused only modest damage, with missiles shot down by Israel's Iron Dome defence system. Iran produces more than 3 million barrels per day of crude oil as a major producer within the Organization of the Petroleum Exporting Countries (OPEC). Middle East hostilities centred on the Israel-Hamas conflict in Gaza have had little tangible impact on oil supply so far. "If the crisis does not escalate to a point that creates supply disruptions, then there will be downside risk over time, but only once it becomes clear Israel has chosen a measured response," Rising U.S. oil output also weighed on oil prices, with the U.S. Energy Information Administration saying output from top shale-producing regions will climb by more than 16,000 barrels per day (bpd) to 9.86 million bpd, or the highest level in five months.

Oil Futures Fall on Doubt Hostilities Will Disrupt Supply -- Nearest delivered oil futures on the New York Mercantile Exchange (NYMEX) and Brent on the Intercontinental Exchange (ICE) ended down Monday, but off session lows, as markets unwound some of the geopolitical risk premium in crude oil prices bid up ahead of the weekend while a resilient U.S. economy is seen delaying interest rate cuts. A sense of uneasy calmness that a broader war in the Middle East might be averted after Israel has so far not retaliated against Iran for Tehran's direct attack over the weekend pressured the international and U.S. crude benchmarks that had rallied to six-month highs on April 12. The attack was expected with Tehran indicating it was in retaliation for the April 1 strike on its consulate in Damascus that killed several military leaders of the Islamic Revolutionary Guard Corps including two generals. Tehran said it considered the matter closed and Israeli allies, including the U.S., counseled Tel Aviv not to retaliate. Any Israeli response should it occur is not expected to target Iranian oil infrastructure. ICE June Brent settled down $0.35 at $90.10 a barrel (bbl) and NYMEX May West Texas Intermediate ended $0.25 lower at $85.41 bbl. Domestically, investors again shifted their expectations for when the Federal Open Market Committee (FOMC) would cut the federal funds rate following a Monday morning report from the U.S. Census Bureau showing greater-than-expected U.S. retail sales in March. Sales increased 0.7% in March from an upwardly adjusted February reading to 0.9% while 3.6% above a year ago, indicating consumer spending remains robust. The macroeconomic data prompted the Federal Bank of Atlanta's GDPNow model to call for first-quarter U.S. GDP growth of 2.8%, up from 2.4% on April 10. The retail sales report spurred a rally in the U.S. dollar to a 106.045 5-1/2 month high in index trading against a basket of foreign currencies, with the strong U.S. economy seen delaying interest rate relief by the Federal Reserve. CME FedWatch Tool again finds most investors do not see a reduction in the federal funds rate until September, with a 51.3% probability FOMC will maintain the policy rate in a 5.25% by 5.5% target range at its July meeting, up from 43.5% on Friday. Historically, consumer spending is tied to driving demand and strong economic growth to diesel fuel consumption. However, high interest rates for longer and the cumulative effect of inflation could prompt fewer road trips over the summer driving season while slowing recovery in manufacturing activity. The Federal Reserve of New York Monday morning in its Empire State Manufacturing survey said business activity in New York State continued to decline in early April, restraining demand for the middle-of-the-barrel fuel. NYMEX May ULSD futures settled $0.0309 lower at $2.6542 gallon, while the May RBOB contract ended down $0.0109 at $2.7839 gallon. The gasoline contract rallied to a $2.8516 gallon seven-month high on a spot continuous basis on Friday.

Oil prices up over escalating Middle East tensions, strong demand indicators in China Oil prices rose on Tuesday amid unresolved tensions in the Middle East and better-than-expected economic data from China, the world's largest oil importer. International benchmark Brent crude traded at $90.50 per barrel at 10.45 a.m. local time (0845 GMT), an 0.44% increase from the closing price of $90.10 per barrel in the previous trading session. The American benchmark West Texas Intermediate (WTI) traded at $85.56 per barrel at the same time, a 0.17% rise from the previous session that closed at $85.41 per barrel. Early on Monday, Israeli Army Chief of Staff Herzi Halevi said Israel would respond to the weekend's Iranian attack, which was launched in response to the April 1 attack on the Iranian Consulate in Damascus, Syria, killing at least 13 people, including seven military advisers. Following the statement, Iran's deputy foreign minister for political affairs issued a stern warning, saying that any fresh military action by Israel against his country would see a response "within seconds." The ongoing conflict in the Middle East, where the majority of global oil reserves are located, continues to put upward pressure on oil prices, triggering fears of possible supply disruptions in the region. Meanwhile, the National Bureau of Statistics (NBS) said Tuesday that China's economy grew above expectations by 5.3% in the first quarter of the year, despite the ongoing decline in the real estate market and weakening domestic demand. Strong economic data from China further supported upward price movements by indicating strong oil demand in the country. However, uncertainty over the timing of the US Federal Reserve's (Fed) interest rate limits upward price trends. Analysts are certain that the Fed will leave the policy rate unchanged in May, while the probability of the bank starting a rate cut fell to 20% in June and 40% in July. The probability of the Fed's first rate cut in September stands at 72%. “We will need to start a process at some point to bring interest rates back to more normal levels, and my own view is that process will likely start this year,” New York Fed President John Williams said Monday. Williams added that he did not see the latest inflation data as a "turning point" but noted that the figures will affect his own views and forecasts. The possibility of a rate cut suppressed oil prices, as generally high interest rates boost the value of the US dollar, making oil more expensive for holders of other currencies.

The Market's Perceived Risk to Supply Eased - The oil market traded lower for a second day on Tuesday as the market’s perceived risk to Middle East supply eased. The market was also weighed down by a stronger than expected U.S. retail sales report for March that further reinforced expectations that the U.S. Federal Reserve is unlikely to rush to cut interest rates. Overnight, the crude market rallied to a high of $86.18 following economic data indicating that China’s economy grew faster than expected in the first quarter. The market was also supported by Iran’s President Ebrahim Raisi stating that Iran would respond to any action against its interests after Israel on Monday warned it would respond to Iran’s weekend drone and missile attack. However, the market gave up its gains and traded to a low of $84.75 following the U.S. retail sales report. The market later traded back above the $85.00 level and settled in a sideways trading range during the remainder of the session. The May WTI contract settled down 5 cents at $85.36 and the June Brent contract settled down 8 cents at $90.02. The product markets settled in mixed territory, with the heating oil market settling down 29 points at $2.6513 and the RB market settling up 3.84 cents at $2.8223. Israelis awaited word on how Prime Minister Benjamin Netanyahu would respond to Iran's first-ever direct attack as international pressure for restraint grew amid fears of an escalation of the conflict in the Middle East. On Monday, Prime Minister Netanyahu summoned his war cabinet for the second time in less than 24 hours to weigh a response to Iran's weekend missile and drone attack. Military Chief of Staff Herzi Halevi said Israel would respond but provided no details. Meanwhile, Iran’s President, Ebrahim Raisi, said Iran will respond to any action against its interests, a day after Israel warned it will respond to Tehran's weekend drone and missile attack. Iran's Deputy Foreign Minister, Ali Bagheri Kani, told state TV on Monday night that Tehran's counteroffensive following any Israeli retaliation would be "a matter of seconds as Iran will not wait for another 12 days to respond". U.S. Treasury Secretary Janet Yellen said Iran's actions threaten stability in the Middle East and could cause economic spillovers. She said the U.S. would use sanctions, and work with allies, to keep disrupting Iran's "malign and destabilizing activity." She said Iran’s oil exports “remains in focus as a possible area that we could address.” Iran's Deputy Oil Minister, Morteza Shahmirzaei, said that his country was working to ensure that energy exports in the Middle East region are carried out without interruption after an attack on Israel. White House senior adviser John Podesta said U.S. President Joe Biden will do what he can to ensure affordable gasoline prices, when asked about future releases of crude oil from the SPR. Goldman Sachs said it expects oil prices to remain at the higher end of its forecast range, citing disappointing U.S. supply and a likely sticky geopolitical risk premium. HSBC sees a higher probability that OPEC+ will begin to unwind part of its supply cuts in the third quarter given high oil prices.

WTI Rally Stalls On Crude Build, White House Hints At SPR Release Oil prices fell for the second day in a row (albeit very modestly today) as the 'WW3-on / WW3-off' headline-swings (supply) are wearing on traders, and less-and-less dovish expectations for The Fed weigh on demand expectations"Oil traders are hunkering down as bears are increasingly afraid to bet on lower prices," At the same time, "bulls are pulling in their horns until they get clarity on what the Israeli response may be."Oil traders are waiting to see how the "diplomatic push for Israel to show restraint pays off," .Traders are expecting another crude build (the fourth in a row, albeit small), and a return to gasoline draws... API

• Crude +4.09mm (+600k exp)
• Cushing -169k
• Gasoline -2.51mm (-1.0mm exp)
• Distillates -427k (-400k exp)

API reported a much bigger than expected crude build (and offset that with a large gasoline draw)...WTI was hovering around $85.3 ahead of the API print and was thoroughly unimpressed by the mixed inventory data...

WTI Down For 3rd Day After Crude Inventory Build (Thanks To Surge In 'Adjustment Factor') Oil prices are extending their decline (third day in a row) this morning as, after a tumultuous period of geopolitics, traders are returning their focus to market fundamentals. A lack (so far) of response from Israel to Iran's retaliatory attack combined withThe American Petroleum Institute reporting a gain in US stockpiles before government data later Wednesday has key timespreads weakening in recent days, pointing to softening sentiment. DOE

• Crude +2.375mm (+600k exp)
• Cushing +33k
• Gasoline -1.154mm (-1.0mm exp)
• Distillates -2.76mm (-400k exp)

Crude stocks rose for the fourth straight week (well above expectations - but smaller than API), but that was offset by sizable product draws. Cushing stocks were flat...And in case you wondered, the 'ol 'adjustment factor' is back... to its highest in 2024...Source: Bloomberg The Biden administration continued (for now) to add to the SPR (see below for why that may end soon)... Graphs: Bloomberg US crude production was flat - near record highs WTI was trading around $84.40 ahead of the official data (though had been chopping around prior) However, Joe and Jerome still have a problem as pump-prices just keep going higher... President Biden “wants to keep the price of gasoline affordable, and we’ll do what we can to make sure that that happens,” White House senior adviser John Podesta says at the BloombergNEF Summit in New York, responding to a question about a potential release of oil from the nation’s Strategic Petroleum Reserve amid forecasts that already rising prices at the pump will spike this summer.

Oil down with US stockpile build signaling low demand -- Oil prices declined on Wednesday, with data indicating lower demand in the US, the world's biggest oil consumer, outweighing supply concerns from tension in the Middle East, Azernews reports, citing Anadolu Agency. International benchmark Brent crude traded at $89.72 per barrel at 11.13 a.m. local time (0811 GMT), a 0.33% fall from the closing price of $90.02 per barrel in the previous trading session. The American benchmark West Texas Intermediate (WTI) traded at $85.02 per barrel at the same time, a 0.40% drop from the previous session that closed at $85.36 per barrel. Prices declined during early Asian trade following the release of data reflecting bearish demand in the US. The American Petroleum Institute late Tuesday announced an estimated increase of 4.09 million barrels in US crude oil inventories, against the market prediction of a draw of 1.6 million barrels. Official statistics from the Energy Information Administration (EIA) will be released later in the day, and if a buildup in crude and gasoline stockpiles is revealed, prices are expected to fall further. Uncertainty over when the US Federal Reserve (Fed) will start interest rate cuts continues to influence oil prices. Analysts expect that the Fed will keep the policy rate unchanged in May, while the probability that the bank will start reducing interest rates decreased to 15% in June and 42% in July. The probability of the Fed's first interest rate cut in September is evaluated at 67%. Meanwhile, concerns over the spread of the conflict in the Middle East, home to the majority of the world's oil reserves, hindered price declines. Israel carried out an air attack on Iran's consulate building in Damascus on April 1. A total of seven people from the Iranian Revolutionary Guards Army, including two generals, died in the attack. On April 13, Iran launched an attack on Israel with hundreds of kamikaze unmanned aerial vehicles and ballistic and cruise missiles. Tension in the Middle East increased on Monday as Israeli Chief of Staff Herzi Halevi declared that Israel would retaliate against the Iranian attack. ---

The Oil Market Continued its Sell Off for the Third Consecutive Session -- The oil market continued its sell off for the third consecutive session on Wednesday as geopolitical concerns eased in the wake of the weekend attacks by Iran on Israel. The market was also pressured by the builds reported in U.S. crude stocks. The market opened lower and posted a high of $85.51 in overnight trading before it continued to trend lower. The API reported a build of 4.1 million barrels late Tuesday afternoon, while the EIA on Wednesday morning reported a build of over 2.7 million barrels on the week. The crude market retraced more than 62% of its move from a low of $80.30 to a high of $87.67 as it sold off to a low of $82.55 in afternoon trading. The market also seemed to remain pressured after Federal Reserve officials including Fed Chair Jerome Powell backed away on Tuesday from providing any guidance on when interest rates may be cut and stated that monetary policy needs to be restrictive for longer due to a recent stronger-than-expected inflation readings. The oil market traded sideways during the remainder of the session, with the May WTI contract settled down $2.67 at $82.69 and the June Brent contract settling down $2.73 at $87.29. The product markets ended sharply lower, with the heating oil market settling down 7.66 cents at $2.5747 and the RB market settling down 9.36 cents at $2.7287. The EIA reported that U.S. crude oil inventories in the week ending April 12th increased by 2.735 million barrels to 460 million barrels. U.S. Gulf Coast crude stocks increased by 3.4 million barrels in the week ending April 12th to 260.9 million barrels, the most since April 2023. The EIA report showed that U.S. weekly imports of Mexican crude fell to the lowest level on record for the second consecutive week as Mexico’s Pemex cut exports to supply more crude to its domestic refineries. Imports from Mexico fell to 208,000 bpd in the week ending April 12th. Mexican crude imports had fallen to 209,000 bpd in the first week of April, compared with average imports of about 733,000 bpd in 2023. Israel’s Prime Minister, Benjamin Netanyahu, said Israel will make its own decisions about how to defend itself, as western countries urged restraint in responding to Iran’s retaliatory attacks. The Prime Minister met with German and British foreign ministers, who both traveled to Israel as part of a coordinated push to keep confrontation between Israel and Iran from escalating into a regional conflict fueled by the Gaza war. The U.S. has stated that it is planning to impose new sanctions targeting Iran’s missile and drone program in the coming days and expects its allies to follow suit. Senior U.S. officials said the U.S. will not renew a license set to expire on Thursday that had eased oil sanctions imposed on Venezuela, moving to reimpose punitive measures in response to President Nicolas Maduro’s failure to meet certain election commitments. The U.S. Treasury Department announced that it had issued a replacement license giving companies 45 days to “wind down” their business and transactions in Venezuela’s oil and gas sector. IIR Energy reported that U.S. oil refiners are expected to shut in about 1.4 million bpd of capacity in the week ending April 19th, increasing available refining capacity by 8,000 bpd. Offline capacity is expected to fall to 988,000 bpd in the week ending April 26th.

Oil settles down 3% as demand worries outweigh Middle East supply risks Oil prices settled down 3% on Wednesday, pressured by a rise in U.S. commercial inventories, weaker economic data from China and U.S. progress on Ukraine and Israel aid bills. Brent futures for June settled down $2.73, or 3%, at $87.29 a barrel, while U.S. crude futures for May settled down $2.67 or 3.1% at $82.69 a barrel, their biggest fall since March 20. Oil prices have softened this week as economic headwinds curb gains from geopolitical tensions, with markets eying how Israel might respond to Iran's weekend attack. Analysts do not expect Iran's unprecedented missile and drone strike on Israel to prompt dramatic U.S. sanctions on Iran's oil exports. U.S. crude inventories rose by 2.7 million barrels to 460 million barrels last week, government data showed, nearly double analysts' expectations in a Reuters poll for a 1.4 million-barrel build. Oil prices continued to decline after U.S. House of Representatives Speaker Mike Johnson said the text of four bills providing assistance to Ukraine, Israel and the Indo-Pacific would be filed "soon today," with a fourth with "other measures to confront Russia, China and Iran" posted later in the day. "The market was waiting to sell off on indications of calming of tensions in the Middle East ... progress on these bills and a three-day delay in Israel's response to Iran is helping today," Top Federal Reserve officials including Chair Jerome Powell backed away on Tuesday from providing any guidance on when interest rates may be cut, dashing investors' hopes for meaningful reductions in borrowing costs this year. Britain's inflation rate slowed by less than expected in March, signaling that a first rate cut by the Bank of England could also be further off than previously thought. However, inflation slowed across the euro zone last month, reinforcing expectations for a European Central Bank rate cut in June. "A strengthening trend in the US dollar and the ability of crude stocks to increase in the face of reduced Mexican imports and increasing SPR refills are also sending off some bearish vibes," In China, the world's biggest oil importer, the economy grew faster than expected in the first quarter, but several other indicators showed that demand at home remains frail. Elsewhere, Tengizchevroil announced plans for scheduled maintenance at one of six production trains at the Tengiz oilfield in Kazakhstan in May. .

Oil prices down on Thursday amid weak demand, rising hopes of end to Middle East conflict - Oil prices decreased on Thursday following data indicating weak oil demand in the US, the world's largest oil consumer, and the growing opposition to the conflict in Palestine. International benchmark Brent crude traded at $86.77 per barrel at 11.17 a.m. local time (0817 GMT), a 0.6% fall from the closing price of $87.29 per barrel in the previous trading session. The American benchmark West Texas Intermediate (WTI) traded at $82.03 per barrel at the same time, a 0.8% drop from the previous session that closed at $82.69 per barrel. Data released by the Energy Information Administration (EIA) on Wednesday suggested an increase in US commercial crude oil inventories, putting downward pressure on oil prices. US inventories rose by around 1.1 million barrels to 2.7 million barrels, compared to the market expectation of an increase of around 1.6 million barrels. Meanwhile, Chinese Foreign Minister Wang Yi said on Thursday that his country supports Palestine's bid for full UN membership. "The Israeli-Palestinian conflict has caused a humanitarian disaster," the state-run Global Times quoted Wang as saying. He called for an “immediate and unconditional” cease-fire and the swift establishment of a humanitarian aid mechanism to prevent further escalation. The Palestinian application for full UN membership comes amid Israel's deadly offensive on the Gaza Strip, which has killed nearly 33,900 people since an Oct. 7 Hamas attack that has claimed 1,200 lives. By taking a stance against the war in Palestine, other countries increased expectations of an end to the conflict and reduced supply risks in the Middle East. In solidarity with Palestinians in Gaza, Yemen's Houthi group has been targeting cargo ships in the Red Sea owned or operated by Israeli companies that are transporting goods to and from Israel. A US-led coalition has conducted intermittent airstrikes since Jan. 12 targeting Houthi sites inside Yemen in response to the attacks in the region. The US dollar's decline against other currencies also helped to support oil prices by promoting trade with cheaper oil for other currency holders. The US dollar index fell to 105.79, a fall of 0.16%

The Oil Market Ended Slightly Higher on Thursday After it Saw Some Further Unwinding of the Geopolitical Risk Premium - The oil market ended the session slightly higher on Thursday after it saw some further unwinding of the geopolitical risk premium early in the session. The market was also pressured early in the session as it focused on fundamentals following the EIA weekly petroleum stock report on Wednesday showing a build of over 2.7 million barrels in crude stocks. In overnight trading, the market traded sideways before further selling pushed the market to a low of $81.56, a level not seen since the end of March. However, the crude market bounced off that level and retraced some of its previous losses as it rallied to a high of $83.47 in afternoon trading. The May WTI contract settled up 4 cents at $82.73, while the June Brent contract settled down 18 cents at $87.11. The product markets remained in negative territory for the fourth consecutive session, with the heating oil market settling down 4.08 cents at $2.5339 and the RB market settling down 1.5 cents at $2.7137. White House economic adviser, Lael Brainard, said the Biden administration wants to keep gas prices within current ranges as the United States heads into its summer driving season.A U.S. official said senior U.S. and Israeli officials will hold a virtual meeting on Thursday about Israel's plans for the southern Gaza city of Rafah as Washington seeks alternatives to an Israeli offensive. President Joe Biden has urged Israel not to conduct a large-scale offensive in Rafah to avoid more Palestinian civilian casualties in Gaza. The meeting comes as Israel considers launching an attack on Iranian targets in response to Iran's launching of drones and ballistic missiles last weekend against Israel.A senior Iranian official warned that Iran could world on building nuclear weapons if Israel attacks its nuclear facilities. Brigadier General Ahmad Haghtalab, the commander for security of Iran’s nuclear facilities, said Iran could change its nuclear policies, a reference to Supreme Leader Ayatollah Ali Khamenei’s pledge not to build nuclear weapons. He warned Iran would retaliate against Israeli nuclear sites if Israel hits Iran’s nuclear facilities.Later, Iran’s Foreign Minister, Hossein Amirabdollahian, told the U.N. Security Council that Israel “must be compelled to stop any further military adventurism against our interests” as the U.N. Secretary General, Antonio Guterres, warned that the Middle East was in a “moment of maximum peril.” The Secretary General urged maximum restraint. Data from the Environmental Protection Agency showed the United States generated fewer renewable fuel blending credits in March versus the previous month. According to the data, about 1.19 billion ethanol (D6) blending credits were generated in March, down from 1.21 billion in February. Biodiesel (D4) blending credits generated in March fell to about 648 million from about 743 million in February.

Crude Oil Price Surges As Israel Attacks Iran -- Crude oil prices surged globally on Friday in response to Israel’s strike on Iran. The Middle East battle has been going on longer than expected, and allegations of an Israeli attack in the Iranian city of Isfahan early on Friday have caused supply worries. The price of ICE Brent crude increased by 1% to $88 per barrel over the previous trading day. At the same moment, the U.S. benchmark West Texas Intermediate (WTI) was trading at $83.73 per barrel, up 1.2% from the previous session’s closing price of $82.73 per barrel. The bulk of the world’s oil reserves are found in the Middle East, where growing tensions have led to worries about serious supply problems that have supported higher oil prices. According to US and Iranian media, Israel carried out a strike inside Iran in response to Iran’s attack on Israel with hundreds of kamikaze unmanned aerial vehicles and ballistic and cruise missiles on April 13. Iran’s official state TV confirmed ‘massive explosions’ in the central Isfahan province but noted that no nuclear facilities were affected or targeted. The semi-official Mehr News Agency reported that three drones were destroyed in the skies above Isfahan province. The Israeli military has not commented on the reported attack yet but said a security meeting is currently underway at Israel’s Defense Ministry in Tel Aviv. Pipeline Vandalism: CDS, Others Plan Security Summit Meanwhile, the US, a permanent member of the United Nations (UN) Security Council, vetoed the draft resolution authored by Algeria on Thursday, demanding Palestine’s full membership in the UN. Palestine’s application for full UN membership amid a deadly Israeli offensive on Gaza was blocked with a vote of 12 in favor and two abstentions, including the UK and Switzerland. A council resolution needs at least nine votes in favor and no vetoes by the five permanent members to pass. The US began imposing sanctions once more on Venezuela, a member of the Organization of Petroleum Exporting Countries (OPEC), and revoked its authorization to export oil to international markets, which further shored up prices. Businesses will be forced to either apply for individual licenses from the US Department of Treasury or cease doing business with Venezuela by the end of May. This move is expected to drive up costs by inciting supply concerns.

Oil settles slightly higher as Iran plays down reported Israeli attack (Reuters) - Oil settled slightly higher on Friday, but posted a weekly decline, after Iran played down a reported Israeli attack on its soil, a sign that an escalation of hostilities in the Middle East might be avoided. Brent futures settled up 18 cents, or 0.21%, at $87.29 a barrel. The front month U.S. West Texas Intermediate (WTI) crude contract for May ended 41 cents higher, or 0.5%, to $83.14 a barrel. The more active June contract closed 12 cents higher at $82.22 a barrel. Both benchmarks spiked more than $3 a barrel earlier in the session after explosions were heard in the Iranian city of Isfahan in what sources described as an Israeli attack. However, the gains were capped after Tehran played down the incident and said it did not plan to retaliate. Investors had been closely monitoring Israel's response to Iranian drone and missile attacks on April 13 that was in turn a response to a presumed Israeli air strike on April 1 that destroyed a building in Iran's embassy compound in Damascus. Meanwhile, U.S. lawmakers have added sanctions on Iran's oil exports to a pending Ukraine aid package after Tehran's strike on Israel last weekend. Iran is the third largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), according to Reuters data. The International Monetary Fund expects OPEC+ to begin increasing oil output from July, media reported on Friday. OPEC+ members, led by Saudi Arabia and Russia, last month agreed to extend voluntary output cuts of 2.2 million barrels per day (bpd) until the end of June. That has helped keep oil prices elevated. As oil's risk premium has gradually unwound, prices have fallen around 3% since Monday. Both benchmarks posted their biggest weekly loss since February. Investors, however, are not ruling out the possibility that Middle Eastern tensions will disrupt supply. Analysts from Goldman Sachs and Commerzbank raised their Brent crude forecasts on Friday, taking into account geopolitical tensions as well as the prospect of rising demand and restrained supply by OPEC and allies (OPEC+). "Oil demand is growing at a healthy pace, and supply should be constrained due to the extensions of the voluntary production cuts of OPEC+," U.S. energy firms this week added oil and natural gas rigs for the first time in five weeks, energy services firm Baker Hughes said in its closely followed report on Friday. The oil and gas rig count, an early indicator of future output, rose by 2 to 619 in the week to April 19. Money managers cut their net long U.S. crude futures and options positions in the week to April 16, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

An Already Bad Situation in the Red Sea Just Got Worse -The seizure of a container ship by Iran in the Strait of Hormuz on Saturday is extremely concerning and threatens to put trade lanes in the Middle East at risk, Xeneta said in a release sent to Rigzone. “It has been reported that the MSC Aries was seized by Iran Revolutionary Guards 50 nautical miles (92km) northeast of Fujairah, an area close to the Strait of Hormuz that forms the entrance to the Arabian Gulf,” Xeneta, which describes itself as the leading ocean freight rate benchmarking and intelligence platform, stated in the release. “The latest incident follows ongoing conflict in the Red Sea region - the gateway to the Suez Canal - which has seen ocean freight container ships avoiding the area due to missile attacks by Houthi militia,” it added. Peter Sand, a Chief Analyst at Xeneta, said in the release, “an already bad situation in the Red Sea and Gulf of Aden has just got worse and could put ocean freight container imports and oil exports in the Middle East at risk”. “We don’t yet know the full details of the incident in the Strait of Hormuz, but any widening of the conflict, which has already resulted in huge disruption to ocean freight services in the Red Sea region, would be extremely concerning,” he added. “For example, Dubai is a regional hub for imports as well as sea-air corridors, with containers arriving by ocean via the Strait of Hormuz for onward travel by air to Europe and North America. If ships are impacted from sailing into the Arabian Gulf then the disruption would be considerable,” he continued. A statement posted on the official X account of the White House National Security Council Spokesperson said, “we strongly condemn the Iranian seizure of the Portuguese flagged, British-owned MSC Aries in international waters”. “The crew is comprised of Indian, Filipino, Pakistani, Russian, and Estonian nationals. We call on Iran to release the vessel and its international crew immediately,” it added. “Seizing a civilian vessel without provocation is a blatant violation of international law, and an act of piracy by the Islamic Revolutionary Guards Corps, a designated Foreign Terrorist Organization,” it continued. “It must be condemned unequivocally and we will work with our partners to hold Iran to account for its actions,” it went on to note.

Israel's Missile Defense Against Iran Attack Estimated to Cost Over $1 Billion - The activation of Israeli air defenses in response to an overnight Iranian drone and missile attack likely cost over $1 billion, according to Brig. Gen. Reem Aminoach, former financial advisor to the Israeli Defense Forces (IDF) chief of staff.The Iranian attack, which came in response to Israel bombing Iran’s consulate in Damascus, led to Israel activating several types of air defense systems, including the Arrow, David’s Sling, and the Iron Dome.“If we’re talking about ballistic missiles that need to be brought down with an Arrow system, cruise missiles that need to be brought down with other missiles, and UAVs, which we actually bring down mainly with airplanes—then add up the costs—$3.5 million for an Arrow missile, $1 million for a David’s Sling, and such and such costs for airplanes. An order of magnitude of 4-5 billion shekels ($1-1.3 billion),” Aminoach told Ynet. The US, the UK, and Jordan also helped Israel intercept drones. Israel claimed that 99% of the over 300 missiles and drones fired by Iran were intercepted, but some got through and damaged the Nevatim Airbase in southern Israel. Only one person was reported injured by the attack on Israel, a seven-year-old Bedouin girl who was hit with shrapnel, and no one was killed.For the Iranian side, launching the attacks cost significantly less than Israel’s defense. According to Middle East Eye, some estimates put the number at less than 10% of what it cost Israel to defend itself from the attack.On Sunday, Iranian Foreign Minister Foreign Minister Hossein Amirabdollahian said the Iranian attack on Israel was “limited” and said it only targeted military sites. “We sent a message early this morning to the White House and stated that this was a limited operation with minimum force only to secure our rights on legitimate defense and to punish the Israeli regime,” he said.

Iran hails Israel attack as a 'victory' — From President Ebrahim Raisi on down, Iranian officials are heaping praise on the attack the Islamic Revolutionary Guard Corpslaunched against Israel Sunday. The widespread response comes despite Israel saying 99% of Iran's missiles and drones were intercepted. Raisi said the IRGC had "taught a lesson to the Zionist entity," using Tehran's preferred term for Israel.Iran's Islamic Republic News Agency reported that a top Iranian lawmaker, Mojtaba Zonnouri, said the IRGC's "punitive operation" was a "victory" and "was a cause of pride for the people as it humiliated the Israeli regime." At the United Nations in New York, Iran's Ambassador Amir Saeid Iravani declared the operation was "completely in line with the Islamic Republic's inherent right to self-defense" after an airstrike in Damascus killed seven IRGC members, including two generals, on April 1. Iran blames Israel for the strike, but Israel has not claimed responsibility for it.Iravani added that Iran's missiles exclusively targeted "military objectives" and said Iran had "no intention of engaging in conflict with the U.S."Iran's English-language Press TV news site led with a story based on anonymous IRGC sources who claimed that "all hypersonic missiles in Iran's strikes against Israel hit targets." That claim could not immediately be confirmed.

Israel’s chief says it will respond to Iran’s missile strike (AP) — Israel’s military chief said Monday that his country will respond to Iran’s weekend attack, but he did not elaborate on when and how as world leaders urged against retaliation, trying to avoid a spiral of violence in the Middle East. The Iranian attack on Saturday came in response to a suspected Israeli strike two weeks earlier on an Iranian consular building in the Syrian capital of Damascus that killed two Iranian generals. It marked the first time Iran has launched a direct military assault on Israel despite decades of enmity dating back to the country’s 1979 Islamic Revolution. Iran launched hundreds of drones, ballistic missiles and cruise missiles at Israel in the attack. The Israeli military said that 99% of the drones and missiles were intercepted, by Israel’s own air defenses and warplanes and in coordination with a U.S.-led coalition of partners. Israeli military chief Lt. Gen. Herzi Halevi said Monday that Israel is considering its next steps but that the Iranian strike “will be met with a response.”Halevi gave no details. The army’s spokesman, Rear Adm. Daniel Hagari, said Israel will respond “at the time that we choose.”

Ex-Mossad Chief Says Hitting Iran's Nuclear Facilities 'On The Table' - Several statements were issued by Iranian leaders on Wednesday as they attended a military parade at a base north of Tehran which featured displays of attack drones and ballistic missiles, just days after Iran's unprecedented Saturday night attack on Israel.The head of Iran's military, Maj. Gen. Abdolrahim Mousavi, addressed the army gathering saying, "Currently, we are in a state of readiness to deal with possible evils, and what we displayed throughout the country today was a small part of our capabilities," as cited in state media.President Ebrahim Raisi was also present at the same annual military parade. He warned that even the "tiniest invasion" or attack by Israel will result in a "massive and harsh" response. Shortly after Raisi's firm warning, an interview was published by Sky News in which a former Israeli Mossad intelligence chief declared that as part of Israel's retaliation currently being mulled by the Netanyahu government, striking Iranian nuclear facilities"is on the table."The former director of the spy agency, named Zohar Palti, described that he has "no doubt" that PM Netanyahu could "attack sensitive facilities" in Iran as some cabinet ministers are urging it.Palti further said the question of deciding the timing of Israel's retaliation operation is "still ongoing" and that some officials are urging Netanyahu to attack "as soon as possible." However, others in Tuesday's war cabinet meeting argued for getting international backing especially from Western partners.While Tehran boasts of having "changed the equation in terms of establishing deterrence, The Wall Street Journal aptly describes the current state of things, and the possibility of miscalculation, as follows:Israel’s military has long followed a clear policy: When enemies strike, hit back so hard they won’t do it again. That deterrence is no longer working.Iran, after launching a massive missile-and-drone attack on Israel over the weekend, is threatening to strike again if Israel retaliates. Lebanese militia Hezbollah fires at Israeli forces almost every day despite frequent poundings by Israel. And Hamas continues to launch rockets at Israel even after being bludgeoned following its Oct. 7 attacks, which killed 1,200 people, according to Israeli officials.With no side willing to compromise for fear of showing weakness and all players seeking greater deterrence, the risk of stumbling into a regional war increases.

Israel's Latest Lie Is That It Has 'No Choice' But To Attack Iran -- by Caitlin Johnstone -- In an article titled “Israel vows to retaliate against Iran for missile attacks,” Axios reports that the Israeli defense minister has informed his American counterpart that Israel “has no choice” but to attack Iran for the retaliatory strike it launched in response to Israel’s deadly attack on the Iranian embassy in Damascus.“Israeli Minister of Defense Yoav Gallant told Defense Secretary Lloyd Austin Sunday that Israel has no choice but to respond to the unprecedented missile and drone attack launched by Iran over the weekend,” reports Axios, citing an anonymous US official and another unnamed source.The state of Israel has been churning out massive lies on a daily basis for the last six months, but this whopper could wind up being the most consequential.Obviously Israel has a choice as to whether it continues to escalate a conflict it initiated with an extreme act of aggression. This fraudulent apartheid ethnostate is so accustomed to crying victim every minute of every day that it will even pretend to be the victim of its own conscious decisions. As professor Jason Hickel put it on Twitter, “People need to understand that Israel *does not* need to retaliate. Iran’s action was a telegraphed response to Israel’s bombing of its consulate, which killed 16 people and violated the Vienna Convention. Iran says they now consider the matter closed. Israel must de-escalate.”Iran’s deputy foreign minister Ali Bagheri has made it clear that if Israel launches another attack against Iran, this time Iran’s response will be instantaneous instead of a twelve-day grace period with Tehran giving neighboring countries and the United States a 72-hour advance warning to ensure minimal damage to Israel.Predictably, the Biden administration is doing its usual phony schtick where it pretends to be a passive witness to all this, with National Security spokesman John Kirby telling the press that the White House plans to just “wait and see what the Israelis decide to do.”

King Abdullah Warns Israel He Won't Let Jordan Become "The Theater Of A Regional War" The threat of a broader Middle East-wide war looms as Israel mulls retaliation for the massive weekend Iran drone and missile attack, but so far on Tuesday regional actors are strongly signaling they want to see a return to the status quo. Saudi Arabia has rejected reports that its military shot down some of the inbound drones and missiles launched from Iran Saturday night. "There is no official website that published a statement about Saudi participation in intercepting attacks against Israel," Saudi government sources told Al Arabiya, after Israeli media claims circulated. Jordan too is seeking to present itself as a neutral power in the conflict, despite confirming over the weekend that it did shoot down some projectiles sent from Iran that flew into its airspace during the earlier attack. A statement from Jordan's cabinet had further clarified: "Some shrapnel fell in multiple places during that time without causing any significant damage or any injuries to citizens."On Tuesday, Jordan's King Abdullah II weighed in, saying he does not want to see his country become "the theater of a regional war" following the intercepts. "The king reinforced the nation's commitment to upholding its security and sovereignty above all other considerations. He stressed Jordan's aim was to safeguard its own sovereignty rather than defend Israel," according to a regional outlet. Still, Jordan's Foreign Minister Ayman Safadi had some strong words for Israel and the international community, saying external powers should stop Israeli Prime Minister Benjamin Netanyahu from "stealing" attention away from Gaza as he mulls escalation with a retaliatory attack aimed at Tehran. Even the Biden administration is strongly signaling to Israel that things must return to the status quo, even as threatening words continued to be issued between Tehran and Tel Aviv.On the diplomatic front, each side is seeking to get the backing of the international community, as Al Jazeera writes:Israel has launched a “diplomatic offensive” against Iran, calling for sanctions against the Islamic republic.Israeli Foreign Minister Israel Katz said on Tuesday that he has contacted 32 countries calling on them to impose sanctions against Tehran. The move comes as Israel mulls a military response to Iran’s attack on Israel. But Iran has continually lambasted the United Nations Security Council for failing to stop the escalating conflict, given there was no formal condemnation of the initial April 1st Israeli attack on Iran's embassy in Damascus. China too is urging stability and that there be no further escalation... China and Russia, however, have by and large stood by Iran's side in supporting failed efforts at getting the UNSC to issue condemnation of the attack which flattened an Iranian consulate building in the Syrian capital. Israel is vowing that Iran won't get off 'scot-free' but it's still unknown what happens next as far as a potential Israeli 'limited' strike on Iran or its proxies goes.

Iran fires at suspected Israeli drones near air base, nuclear site - Iran fired at drones suspected to be part of an Israeli attack near a major air base and nuclear site near the city of Isfahan early Friday.Air defense batteries were activated after reports of explosions near the air base, The Associated Press reported.The New York Times reported that television networks and officials in both countries downplayed the significance of the strike. Israeli officials said it was a limited response aimed to avoid escalating tensions with Iran, especially because it did not cause significant damage to military sites in Iran.Iranian officials told the Times that the strike had hit a military air base near Isfahan, but Brig. General Siavash Mihandoust, the senior military official in the city, told local television that any explosions heard Friday were from Iran shooting down “flying objects.”An Iranian official told Reuters there were no plans to respond against Israel.During a press conference in Capri, Italy, Secretary of State Antony Blinken said the U.S. has “not been involved in any offensive operations” when asked about the suspected Israeli strikes, calling them “reported events.”Italy’s foreign minister also said the U.S. told Group of Seven ministers that it had been informed “at the last minute” by Israel about the drones.“But there was no sharing of the attack by the U.S. It was … mere information,” Italian Foreign Minister Antonio Tajani added.The air base in Isfahan has been home to Iran’s fleet of American-made F-14 Tomcats, purchased before the 1979 Islamic Revolution. The facility in Iran operates three Chinese-supplied research reactors and handles fuel production for the country’s civilian nuclear program, the AP noted.

Former Defense secretary: Silence ‘deafening’ after Israel’s strike on Iran -Former Defense Secretary Mark Esper called Iran’s silence “deafening” after Israel struck near a major air base and nuclear site in the city of Isfahan early Friday.“This morning, the silence — from both sides, frankly — is deafening,” Esper, who served under former President Trump, told CNN’s Wolf Blitzer on Friday. “That nobody’s talking about what happened.”“So, I think, this appears to be the end of it right now. But we’ll see,” he continued.Iran’s air defense batteries were activated after reports of explosions near the air base, but both sides have downplayed the significance of the strike in the hours since.Israeli officials told The New York Times that it was a limited response aimed to avoid escalating tensions with Iran, especially because it did not cause significant damage to Iranian military sites. An Iranian official told Reuters that there were no plans to respond against Israel.During a press conference in Capri, Italy, Secretary of State Antony Blinken said the U.S. has “not been involved in any offensive operations” when asked about the suspected Israeli airstrikes, calling them “reported events.”Italy’s foreign minister said the U.S. told Group of Seven ministers that it had been informed “at the last minute” by Israeli officials about the drones, but there was “no sharing of the attack by the U.S.”Esper said he thinks the Israeli strikes, which were in response to Iran’s retaliatory attack last Saturday, was merely to send a message about the country’s capabilities.“The message being we can touch you, we can reach deep into Iran and we can hit very sensitive sites because Isfahan, as your reporters noted earlier, is where there’s a significant part of the Iran nuclear complex,” he said.The air base in Isfahan has been home to Iran’s feet of American-made F-14 Tomcats. The facility also operates three Chinese-supplies research reactors and handles fuel production for the country’s civilian nuclear program.

Report: Iran Attack Delays Israel's Invasion of Rafah - Iran’s reprisal attack on Israel has delayed Israeli plans to invade the southern Gaza Strip city of Rafah, CNN reported on Monday, citing Israeli sources.The sources said that the Israeli Air Force was set to drop leaflets on Rafah on Monday to tell the more than 1 million civilians who are in the city that an offensive was coming. But the plan was put on hold as the Israeli War Cabinet is debating how to respond to Iran firing over 300 missiles and drones at Israeli territory, which came in response to Israel bombing Iran’s consulate in Damascus.The US has claimed it’s opposed to an Israeli invasion of Rafah since it would incur huge civilian casualties and further disrupt aid coming in from Egypt. But the fact that Israel was planning to drop leaflets on the city demonstrates that President Biden is not putting any real pressure on Prime Minister Benjamin Netanyahu.US officials said last week that Israel has not presented any proposals on how to account for the safety of the more than 1 million civilians who are sheltering in the city, which has a pre-war population of about 275,000.The Israeli sources told CNN that they still plan to launch a full-scale assault on Rafah but are not sure when. The Israeli War Cabinet is focusing on how to respond to Iran and has agreed that an attack will happen, but it’s unclear where or when.

Israeli Forces Kill Five Palestinians Trying To Return to North Gaza - Five Palestinians were killed and 52 were wounded on Sunday when Israeli forces opened fire on a crowd trying to return to northern Gaza, The Associated Press reported, citing officials at the Awda Hospital in central Gaza.Thousands of displaced Palestinians attempted to return to northern Gaza on Sunday after they heard rumors that Israeli forces were allowing people in. But their hopes were dashed as Israeli troops opened fire on a crowd, and the Israeli military issued a new warning not to attempt to make the trek north. Israeli military spokesman Avichay Adraee wrote on X that northern Gaza is a “dangerous combat zone” and said all displaced Palestinians should stay in the south.While the UN estimates up to 84% of the homes in northern Gaza have been damaged or destroyed, Palestinians who fled the area six months ago are tired of being displaced and want to return. “We want our homes. We want our lives. We want to return, whether with a truce or without a truce,” said Um Nidhal Khatab, a Palestinian who spoke with AP. The issue of displaced Palestinians has been a major obstacle in indirect ceasefire negotiations between Hamas and Israel. Hamas wants the free movement of Palestinians in the Strip so those who desire can return north, but Israel has rejected the condition.

Israel Has Destroyed Nearly All Buildings in Gaza 'Buffer Zone' - Israel has destroyed nearly every building in Gaza along the Strip’s border with Israel to create a “buffer zone,” a plan that will result in Israel taking a significant chunk of Gaza’s territory.A report from the United Nations Satellite Center found that Israel has destroyed or damaged 90% of the buildings in Gaza within 1 kilometer of the border as of February 29. It found that 3,033 buildings were completely demolished, 327 were seriously damaged, and 266 were moderately damaged.According to Haaretz, the real number of demolished buildings is likely higher since Israeli forces are actually creating the buffer zone 1,200 meters within Gaza, 200 meters further inside the Strip than what the UN examined.According to an analysis from Adi Ben Nun, a Hebrew University geography professor, Israel’s buffer zone will take 16% of Gaza’s territory. Besides demolishing any buildings that are in the way, Israeli forces are also destroying agricultural land.Israeli officials have framed the buffer zone as necessary to prevent a future October 7-style attack, but it’s likely part of Israel’s long-term plans to control Gaza and potentially establish Jewish settlements in the Strip, an idea strongly supported by many Israeli ministers and Knesset members.

How Ultranationalist Zionists Seek the Destruction of the Al Aqsa Mosque to Produce the End Times - While we are consumed with the horrors of Gaza, other events in Jerusalem are gathering momentum that could plunge the Middle East into a conflict that could inflame the region for a generation.The Al-Aqsa Mosque is the third holiest site in Islam. It was from here that the Prophet Mohamed ascended into heaven and conversed with other prophets such as Abraham, Moses and Jesus. And now, American Evangelical Christians, together with Ultranationalist Israeli Zionists (many of whom are also American) intend to destroy it to make way for the building of the 3^rd Jewish Temple and the coming of the Messiah.It may surprise you to learn that there are currently more Zionist Christians than there are Zionist Jews in the US – most estimates put forward a ratio of 10 Zionist Christians to every Zionist Jew. Much of this can be put down to the popularity of the Scofield bible, first published in the early 1900s. The bible itself was the standard King James Bible, but what set the Scofield Bible apart were his copious notes or the “explainer” (Hasbara in Hebrew) as Scofield himself called it; wherein, he put his own explanations as to the meaning of the scriptural text.Scofield was described by his local newspaper, the Atchison Patriot as the “late lawyer, politician and shyster generally,” the article went on to recount a few of Scofield’s “many malicious acts,” including a whole series of forgeries in St. Louis, for which he got six months in jail.But then he saw the light and became a (non-ordained) Christian preacher and as such was taken under the wing of a prominent Jewish Wall Street lawyer, Samuel Untermeyer, who provided him with money, contacts and entry to New York society. In return, Untermeyer required that Scofield write a bible in such a way as to align Christians with Untermeyer’s pet project, Zionism.In “Unjust War Theory: Christian Zionism and the Road to Jerusalem,” Prof. David W. Lutz writes, “Untermeyer used Scofield, a Kansas City lawyer with no formal training in theology, to inject Zionist ideas into American Protestantism. Untermeyer and other wealthy and influential Zionists whom he introduced to Scofield promoted and funded the latter’s career, including travel in Europe.” It was during one such trip that he met Oxford University Press publisher Henry Frowde, who decided to publish the Scofield Bible and it has been in print, under that august imprint, ever since, providing it with endless gravitas.As an example of Scofield’s pro-Zionist explainer consider the following based on Genesis 12:3: ‘I will bless them that bless thee. And curse him that curseth thee.’ To which Scofield explained as meaning: “Wonderfully fulfilled in the history of the dispersion. It has invariably fared ill with the people who have persecuted the Jew—well with those who have protected him.” Which, John Hagee, the founder of Christians United for Israel (CUFI), further interpreted as meaning “The man or nation that lifts a voice or hand against Israel invites the wrath of God”.In rebuttal, Stephen Sizer in his, Christian Zionism: Road-map to Armageddon? says: “The promise, when referring to Abraham’s descendants, speaks of God blessing them [Abraham’s direct descendants], not of entire nations ‘blessing’ the Hebrew nation, still less the contemporary and secular State of Israel.” He went on to say: “Sustained by a dubious exegesis of selective biblical texts, Christian Zionism’s particular reading of history and contemporary events…sets Israel and the Jewish people apart from other peoples in the Middle East…it justifies the endemic racism intrinsic to Zionism, exacerbates tensions between Jews and Palestinians and undermines attempts to find a peaceful resolution of the Palestinian-Israeli conflict, all because ‘the Bible tells them so.’”The particular link between Evangelical Christians and Ultranationalist Zionist Jews stems from their shared eschatological beliefs: primarily that they must strive towards the coming of the Messiah. To this end they believe that in order for the Messiah to return the 3rd Jewish Temple should be built on the site of King Herod’s 2^nd Temple of which only the Western wall (or wailing wall as Christians often describe it) currently remains after it was destroyed by the Romans in 70 AD.The problem is that the Al-Aqsa mosque is built almost on top of it. The solution, we are told by Melissa Jane Kronfeld, a New York Jewish activist who runs the High on the Har organization, which leads of tours of the site is: “I believe it’s going to go, 100%. The whole thing is going to go to build a temple,” However, she insisted that the shrine and its golden dome should be preserved, but relocated. Which is somewhat missing the point, it isn’t the Al-Aqsa itself that is sacred, it is the location that makes it sacred. It was here that the Prophet stood, not in some sad, relocated Mosque in its new home in the Jordanian desert. All this begs a question: why not build the Temple on the large plot of land next to the Temple Mount, so the current West Wall becomes the East Wall, as a sign of equanimity? Just a thought.

Zelensky Angry That Israel Prioritized By West, Says Ukraine Running Out Of Missiles To Defend Airspace -On Wednesday Russian missiles slammed into the northern Ukrainian city of Chernihiv, killing at least 17 people and wounding scores more, according to local officials. The attack came during a busy time of the day in a downtown district.President Volodymyr Zelensky in the wake of the deadly strikes, which involved at least three missiles hitting targets, lashed out at the West for failing to provide more vital anti-air defenses and missiles. "This would not have happened if Ukraine had received enough air defense equipment and if the world’s determination to counter Russian terror was also sufficient," he stated. The wording of the statement strongly suggested his view that allies' determination is not sufficient, despite tens of billions already spent by the West. "Terrorists can destroy lives only when they first manage to intimidate those who are able to stop terror and protect life," he added.Later in the day, Ukraine emergency authorities reported that over 60 civilians were injured in the attack, in addition to the at least 17 dead - a casualty toll which could rise.In prior statements published Tuesday, Zelensky commented on last week's Russian attack which destroyed the largest power-generating plant in the Kyiv region. He described that his military had run out of missiles to mount an adequate defense."There were 11 missiles flying. We destroyed the first seven, and four (remaining) destroyed Trypillia. Why? Because there were zero missiles. We ran out of missiles to defend Trypillia," he told PBS.He and his top officials have of late accused the West of turning a "blind eye" at a moment they are simultaneously focusing on Israel's defense against Iran. Reuters has said there remains the possibility that at this rate Ukraine could run out of effective anti-air measures altogether:Reuters was not able to independently verify the account. Zelenskiy has earlier warned that Ukraine has already had to make tough choices about what to protect and said his country could run out of defensive missiles entirely if Russian attacks continued apace.