finding the missing US oil production while waiting for the OPEC meeting

the regularly scheduled biennial meeting of OPEC will take place at their headquarters in Vienna on Wednesday of this week, and the swirl of rumors and speculation as to what might come out of it has been the major factor in oil price swings this week, while dominating the rest of the week's oil related news...you might recall that at the end of September, OPEC members met in Algiers and agreed to cut their oil production back to 32.5 million barrels a day, without making any commitments on how those cuts would be achieved, leaving those important details to be worked out at this November 30th meeting...while that apparent agreement voiced after the September meeting was enough to cause an immediate $3 a barrel spike in the price of oil, within a few days it became obvious that both Iran and Iraq had not agreed to the figures OPEC had published for their production, and hence were not on board with the cuts...in the weeks since, the oil markets have remained on edge about the possible outcome of this coming meeting, jumping or diving on the slightest mention pro or con from major oil ministers involved in the negotiations...at the same time, most of the OPEC countries attempted to pump as much oil as they could, hoping to improve their negotiating position at this week’s meeting, and as a result OPEC's production of oil rose from the already elevated level of 33.2 million barrels a day at the time of the September meeting to a record high 33.643 million barrels a day in October....so you can all get an idea how the major players in this stack up, we'll include a small bar graph of their October production, which is taken from a Friday Bloomberg article about the failure of a planned meeting between OPEC and non-OPEC oil producers...

this graphic shows the major OPEC oil producers in blue and non-OPEC producers who have indicated a willingness to negotiate with OPEC on production limits in red; other large producers of oil, such as China, Canada, Norway, Kazakhstan and the US are obviously not included...in round numbers, OPEC countries have to find 1.15 million barrels a day in production cuts to meet their stated target of 32.5 million barrels a day...the Saudis have said they'd be willing to cut back a half million barrels, which doesn't even get them half way to what they need...but Iran says its current production is at 3.8 million barrels a day, higher than the 3.65 million barrels a day OPEC estimates it produces, and they want to pump 4.2 million barrels a day before they'd even be willing to freeze output...likewise, Iraq disputes OPEC figures that peg the nation's output at less than 4.2 million barrels per day; they say they're pumping 4.7 million barrels a day and that they should be exempt from production cuts anyway, because they've been at war with ISIS and other Islamic militants...meanwhile, the Russians are already planning a 300,000 barrel per day output increase for 2017, and while they have said they'd be willing to give that up and freeze at today's levels, they will not cut from where they are today...so we can already see that given the intransigence of these major producers, achieving anything like a 1.15 million barrel per day cuts seems nearly impossible...and we haven't even counted Nigeria and Libya, who are exempt from the cuts because civil strife has severely restrained output in both countries...both of those counties could easily add a million barrels per day of oil output each by next year, should their production be allowed to return to normal...still, if OPEC should announce an agreement to cut to 32.5 million barrels a day and the market believes them, it could boost oil prices into the $50 to $60 a barrel range, which is the figure at which most US drillers say they would put all their stacked rigs back into the field...

so, despite what appears to be the unlikely possibility that a meaningful freeze or cut could be negotiated, news of this week's coming meeting continued to move oil prices last week....after closing last week with a 5.3% increase at $45.69 a barrel, the expiring contract price for December US crude rose $1.80, or 3.9%, to finish Monday at $47.49 a barrel, after Putin was quoted saying “We will do everything that our partners from OPEC are expecting" in affirming Russia's willingness to freeze production...at the same time the contract for January WTI crude, which became the new front-month contract on Monday, rose $1.88, or 4.1%, to end at $48.24 a barrel... with January contract prices now being quoted, oil prices faltered on Tuesday and slipped to $48.03 a barrel, as word was that Iraq and Iran still remained hesitant about an output cut...against the backdrop of the simultaneous release of the weekly EIA data and the Baker Hughes rig count, oil prices fell again on Wednesday, as doubts persisted that OPEC could agree to a production cut large enough to make a significant dent in the global glut of crude, recovering  by the end of the day to end & closing down 7 cents at $47.96 a barrel...then on Friday, after OPEC made it known that they would also ask non-OPEC oil producers to make big cuts in output, the Saudis suddenly pulled out of planned Monday talks with non-OPEC nations including Russia, saying they want an OPEC deal in place before they would send anyone to the non-OPEC talks...against that backdrop, oil prices fell nearly $2 a barrel that afternoon to close the week at $46.06 a barrel, thereby erasing all but 37 cents of Monday’s increases...

The Latest Oil Stats from the EIA

Wednesday's release of oil data for the week ending November 18th by the US Energy Information Administration indicated the third consecutive large increase in our oil refining and a concurrent large drop in our imports of oil, which thus resulted in a draw-down of our supplies of crude oil and a corresponding increase in our supplies of the products made from it...for the same report, the crude oil fudge factor that was needed to make the weekly U.S. Petroleum Balance Sheet (line 13) balance increased to +419,000 barrels per day, from last week's +256,000 barrels per day, which means that 419,000 more barrels of oil per day showed up in our final consumption and inventory figures this week than were accounted for by our crude production or import figures, meaning that one or several of this week's metrics were off by that amount...that's now the 5th large positive adjustment in a row, and as a result the cumulative daily average of that adjustment has risen to +116,000 barrels per day, meaning the EIA's figures remain out of balance for the whole year...but since these figures still continue to drive oil prices and hence oil field activity, we'll continue to track them as long as the market participants continue to follow them...

so, for the week ending November 18th, the EIA reported that our imports of crude oil fell by an average of 845,000 barrels per day to an average of 7,578,000 barrels per day, the 5th week in a row wherein our oil imports changed by more than 10% as last week our imports rose by 981,000 barrels per day, the prior week they fell by 1,553,000 barrels per day, and the week before that they rose by 1,979,000, as tankers that had been held offshore by hurricane Matthew made it into port...while i've seen no reason for the ongoing extreme volatility in weekly imports, those swings meant that the 4 week average of our oil imports reported by the EIA's weekly Petroleum Status Report (62 pp pdf) actually rose this week to an average of 8.1 million barrels per day, 13.3% higher than the same four-week period last year...meanwhile, our exports of crude oil fell by an average of 12,000 barrels  per day to an average of 469,000 barrels per day for the week, in data that is not directly comparable to last year's exports of 445,000 barrels per day during the equivalent week

at the same time, the EIA reported that production of crude oil from US wells rose by 9,000 barrels per day to an average of 8,690,000 barrels per day during the week ending November 18th, the sixth increase in 7 weeks, as output from Alaskan fields fell by 3,000 barrels per day for the second week in row, while production from well in the lower 48 states was 12,000 barrels per day higher....that still left the week's domestic oil production 5.2% lower than the 9,165,000 barrels of crude we produced during the week ending November 20th of last year, and 9.6% below the record 9,610,000 barrels per day of oil production that we saw during the week ending June 5th 2015...our oil production for the week ending November 18th was also 529,000 barrels per day, or 5.8% lower than what we were producing at the beginning of this year, which we're citing as an interim benchmark, since our otherwise declining production had also been rising in the last few months of 2015...since we're talking about OPEC oil production this week, and since it's been two years since OPEC tried to overwhelm US production with their won, we'll also include a graph of the recent track of US oil production...

the above graph comes from the online version of the OilPrice Intelligence Report, which was prepared Friday of this week with the headline "Saudis Withdraw From Non-OPEC Meeting, But Odds For Deal Are Still Good"...this graph shows the EIA's Monthly U.S. Field Production of Crude Oil from January 2014 up until August 2015 in blue, and the EIA's Weekly U.S. Field Production of Crude Oil in yellow, with both expressed in thousands of barrels of oil per day...notice that the monthly data is actual confirmed production, unlike the weekly estimates that the markets follow and we quote weekly, which are based on a small sampling of refineries...that confirmed data indicates that production of crude oil from US wells was at 8,744,000 barrels per day during August, the highest level in three months...in contrast to that, we reported oil production of 8,445,000 barrels per day for the week ending August 5th, 8,597,000 barrels per day for the week ending August 12th, 8,548,000 barrels per day for the week ending August 19th, 8,488,000 barrels per day for the week ending August 26th, and 8,458,000 barrels per day for the week ending September 2nd, which means we reported an August mean production of 8,511,000 barrels per day, or 233,000 barrels per day short of what was actually being produced...so right here we have a prime example of the kind of errors that are in the weekly data, which the balance sheet "fudge factor" covers for...the monthly data shows that US oil production fell no more than 10% from the peak, and as of August was only down around 7% from the average production of the summer of 2015...thus these two years of oil prices generally half of what they were in mid-2014' barely dented US oil output, and makes a joke of the early forecasts that our output would fall to 5 million barrels per day...

returning to this week's estimates, the EIA also reported that the amount of crude oil used by US refineries rose by an average of 271,000 barrels per day to an average of 16,397,000 barrels of crude per day during the week ending November 18th, as our refinery utilization rate rose to 90.8% during the week from last week's 89.2%, but was still lower than the refinery utilization rate of 92.0% of the week ending November 20th last year...US oil refining has thus increased by 949,000 barrels per day in the past three weeks, and is now only down 3.1% from the pre Labor Day high of 16,930,000 barrels per day, at which time refinery utilization rate had peaked at 93.7%...the rate of crude oil refined this week nationally is now up 0.1% from the 16,380,000 barrels of crude per day US refineries used during the week ending November 20th last year, and up 2.8% from the 15,957,000 barrels per day that were being refined during the equivalent week in 2014... 

however, even with the increase in the amount of crude oil being refined, refineries’ production of gasoline apparently fell by 452,000 barrels per day to 9,700,000 barrels per day during the week ending November 18th, the 2nd large weekly drop in gasoline production, after a apparent record high prior week...you might recall that when that apparent production record was set two weeks ago, we pointed out that it was mostly due to a swing of 554,000 barrels per day in the fudge factor for gasoline, which is shown in Table 2 on page 7 of the U.S. Petroleum Balance Sheet, which the footnote tells us is an "adjustment to correct for the imbalance created by the blending of fuel ethanol and motor gasoline blending components"...that fudge factor swung by 692,000 barrels per day this week, from +353,000 barrels per day to -339,000 barrels per day, rendering the week over week gasoline production comparison useless...the year over year comparison shows that gasoline production was still up 1.6% from the 9,544,000 barrels per day of gasoline produced a year ago, a more likely increase than the 8% & 12% jumps in gasoline output being reported two weeks ago...also reasonable is the EIA report that refinery output of distillate fuels (diesel fuel and heat oil) rose by 96,000 barrels per day to 5,080,000 barrels per day during the week ending November 18th....that puts the week's distillates output 1.1% higher than the 5,023,000 barrels per day that was being produced during the same week last year, and 3.7% higher than the 4,900,000 barrels per day of distillates we produced during the equivalent week of 2014...     

the large drop in gasoline production figures are further called into question by the EIA report that our gasoline supplies rose by 2,317,000 barrels to 224,026,000 barrels as of November 18th, as our domestic consumption of gasoline fell by 335,000 barrels per day to 9,024,000 barrels per day and as our gasoline imports rose by 34,000 barrels per day to 855,000 barrels per day...as a result, our gasoline inventories as of November 18th were 3.4% higher than the 216,732,000 barrels of gasoline that we had stored on November 20th of last year, and 8.5% higher than the 206,424,000 barrels of gasoline we had stored on November 21st of 2014....at the same time, our distillate fuel inventories rose by 327,000 barrels to 149,239,000 barrels by November 18th, only the 2nd increase in our distillate supplies in 9 weeks....and despite the withdrawal of nearly 15.8 million barrels of distillates from storage over the past 9 weeks, our distillate inventories were still 5.6% higher than the distillate inventories of 141,364,000 barrels of November 20th last year, and 31.9% above the distillate inventories of 113,146,000 barrels of November 21st, 2014…

finally, with that big drop in our oil imports, our inventories of crude oil fell by 1,255,000 barrels to 489,029,000 barrels by November 18th, the first drop in our oil supplies in four weeks....however, with 2 hurricanes interfering with oil imports over the last 12 weeks, our oil stockpiles are now more than 6.2 million barrels below the 495,238,000 barrels we had stored at the end of August, thus slipping at a time of year when oil supplies are usually rising, and are now thus 4.5% below their April 29th peak of 512,095,000 barrels...however, we still ended the week with 7.2% more crude oil in storage than the 456,035,000 barrels we had stored as of the same weekend a year earlier, and 39.4% more crude oil than the 350,704,000 barrels we had stored on November 21st of 2014... 

This Week's Rig Count

because of the holiday, the weekly Baker Hughes rig count report was released on Wednesday, November 23rd, and thus covers changes in drilling activity for just the five days from November 18th to the 23rd...nonetheless, they reported that drilling rig activity increased for the 9th time out of the last 10 weeks, as the active rig count rose by 5 rigs, from 588 rigs on November 23rd to 593 rigs on November 23rd...that was still down from the 744 rigs that were deployed as of the November 25th report last year, and down from the recent high of 1929 drilling rigs that were in use on November 21st of 2014...

rigs deployed drilling for oil rose by 3 rigs to 474 rigs during the abbreviated week, which was still the most oil rigs we've had working since January 29th, as oil drilling activity has only been down once in the past 22 weeks...but oil drilling was still down from the 555 oil directed rigs that were working on November 25th a year ago, and down from the recent high of 1609 oil rigs that were drilling on October 10, 2014...at the same time, the count of drilling rigs targeting natural gas formations increased by 2 rigs to 118 rigs, which still left active gas rigs down from the 189 natural gas rigs that were in use a year ago, and down from the recent natural gas rig high of 1,606 natural rigs that were deployed on August 29th, 2008...one rig that was classified as miscellaneous also remained active, an increase from a year ago, when no such miscellaneous rigs were working...

offshore drilling activity remained unchanged at 23 rigs, all of which were in the Gulf of Mexico, down from 30 in the Gulf and in total last year at this time...the number of working horizontal drilling rigs increased by 5 rigs to 475 rigs this week, which was still down from the 569 horizontal rigs that were in use on November 25th of last year, and down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...meanwhile, the count of both vertical rigs and directional rigs were unchanged from last week, with 66 vertical rigs in use, down from last year's 109 rigs, and 52 directional rigs deployed, down from the 66 directional rigs that were working on November 25th 2015...

the details on this week's changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary from Baker Hughes which shows those changes...the first table below shows weekly and year over year rig count changes for the major producing states, and the second table shows weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of November 23rd, the second column shows the change in the number of working rigs between last week (November 18th) and this week (November 23rd), the third column shows last week's November 18th active rig count, the 4th column shows the change in the number of rigs running this Wednesday from the equivalent Wednesday a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this  case was for November 25th of 2015...   

what's obviously most notable in this week's tables is that the increase in drilling was driven by a 4 rig increase in Pennsylvania's Marcellus, and that while there was a 3 rig increase in Texas, it was not in the Permian, which is where more than half of the new rigs added since May have been concentrated...since gas directed rigs were only up by 2, that 4 rig increase in the Marcellus means gas drlling rigs were reduced elsewhere, and where that is is not shown in our major basins above, as Baker Hughes has the 2 gas rig reduction listed under "other"...the 3 rig drop in Wyoming drilling is similarly not in any major basin, since the only major basin that extends into Wyoming is the Denver-Julesburg Niobrara, which showed a 2 rig increase...and we should note that of the states not shown above, Mississippi saw a doubling of its active rigs count from 2 rigs to 4, which is still down from the 7 rigs that were drilling in Mississippi through November of last year..

+++++++++++++++++++++++++++++++

Barberton residents want to vote on leasing park land to hospital - - Some of the folks opposed to the Barberton City Council’s leasing of the Tuscora Park ball field to Summa Barberton Hospital for use as a paved parking lot want the question to be put before voters. This week, a petition with 668 signatures was submitted to Finance Director Ray Flickinger, who is stipulated by Ohio law to receive the petitions and submit them to the Summit County Board of Elections. The election board will need to determine if at least 489 signatures are valid (equal to 10 percent of the Barberton ballots cast in the last gubernatorial election.) Resident Ken Masich said he has served on two Charter Review Commission efforts and believes in rules. He said the city charter says voters get the last say in cases where park property is “vacated.” But city officials have argued a ballot issue is not required because they are “leasing” and not selling the five acres. Masich said “fancy lease language” was a way to circumvent the law, and created a “slippery slope” that could set a precedent for going over voters for other park uses, such as putting up cellphone towers, drilling for oil or gas or fracking. “If you’re going to give up this land, it needs to go to the people,” Masich said

6th Circuit upholds dismissal of challenge to Ohio land used for fracking | Reuters: A U.S. appeals court has upheld dismissal of a whistleblower lawsuit brought by Ohio residents who argued a watershed district improperly granted leases for oil and gas exploration on land deeded to it by the federal government for flood control. The three residents, who oppose hydraulic fracturing, argued the Muskingum Watershed Conservancy District's sale of the lease rights to private companies violated a 1949 deed and required the property to revert back to the federal government. To read the full story on Westlaw Practitioner Insights, click here: bit.ly/2fqhnWp

Ohio Residents Lose Fight Over Fracking Leases - – Fracking can continue in 18 Ohio counties after the Sixth Circuit ruled that leases for oil and gas reserves do not violate the state’s deed to the land.The Muskingum Watershed Conservancy District, a political subdivision of the state also called MWCD, covers one-fifth of Ohio and was created to manage flooding and conserve water in the southeastern part of the state.Five years ago, the district, which includes 18 Ohio counties, executed the first of several lease agreements granting private firms the right to develop oil and gas reserves on land granted by the federal government in 1949, including the right to use the controversial hydraulic fracturing, or fracking, extraction method.  Ohio residents, led by plaintiffs Leatra Harper, Leslie Harper and Steven Jansto, opposed the plan to allow fracking in the watershed.Studies have raised serious concerns that the chemicals used in fracking wells, including bromic acid and hydrochloric acid, may contaminate groundwater and pose hazardous risks to humans and wildlife.With legal support from the Southeastern Ohio Alliance to Save Our Water, the residents used the terms of the federal government’s deed of land against the district.They argued that MWCD’s effort to lease fracking rights was an “attempt to alienate” the land, because it was no longer being used for recreation, conservation or reservoir development. Under the terms of the deed, the lease agreement allegedly triggered the reversion of the land back to the federal government.However, the federal government declined to intervene in the action, and a judge dismissed the lawsuit based on the False Claims Act’s public-disclosure provision, finding the residents did not show they were original sources of the information in the leases.The Sixth Circuit affirmed Monday that the residents have no viable challenge to the district’s fracking leases.

Investigating the Health Impact of Fracking - Yale News - Elise Elliott, a fifth year doctoral student in Public Health, is conducting research on the front lines of the debate over the health effects of fracking. To better understand the possible health effects of fracking, Elliott led a team of scientists from Yale to eastern Ohio, where fracking began in 2011 and has expanded dramatically over the past five years. They collected water and air samples and administered health questionnaires to 66 residents of Belmont County, looking at reported health problems and studying environmental pollutants. They used residential proximity to gas wells to compare their findings. Elliott designed, planned, and implemented the study, overseen by Professor Deziel.“Quantification of the potential exposure to toxic and carcinogenic chemicals by monitoring drinking water and air in people’s homes is a critical factor in understanding the public health impact of hydraulic fracturing,” says Elliott. She first became interested in environmental health issues when she learned about the chemical contamination of drinking water sources.   Following the fieldwork in Ohio, Elliott worked with a team at Yale to analyze the water samples for the presence of organic compounds related to fracking. Limited earlier studies have suggested an increase in hospitalizations, adverse birth outcomes, and respiratory or skin irritation in areas where hydraulic fracturing occurs. The analysis is ongoing, and when it is complete, the new data will provide insight into whether contaminants are present and whether they are associated with elevated health problems in Belmont County. 

Abandoned oil and gas wells are still leaking methane The development of oil and gas has a 150-year history in the US, with wells stretching across the nation from California to Texas to Pennsylvania. We continue to reap the benefits of the infrastructure we built in earlier eras. But the downside to this long history comes in the form of millions of abandoned, poorly documented wells scattered throughout the country. Recently, a team of researchers examined some of the abandoned wells in Pennsylvania to build a better picture of how this history continues to impact us today. Measurements of methane emissions revealed that abandoned wells may still be a significant source of methane to the atmosphere. Methane is one of the more common greenhouse gases, and its warming potential is 86 times greater than carbon dioxide over a 20-year period. So limiting methane emission is an important strategy to curb global warming. Unfortunately, little is known about the ways old wells contribute to methane emissions because they are outside of our greenhouse gas emission inventory system. Despite the long presence of these wells in the US, there isn't much data about what happens to them after they're abandoned. Many attributes can influence leakage, including depth, plugging status, well type (oil or gas), geographic location, and abandonment method. To tackle this problem, a group of researchers analyzed a compilation of historical documents and modern databases, and they also did some present-day field work. During the field investigations, the scientists visited numerous Pennsylvania wells to measure the flow rate of methane, the presence of different carbon isotopes in the methane, and the concentration of a variety of other gases. Their analysis focused on a few key well attributes, including depth, plugging status, well type, and proximity to subsurface energy extraction and coal mining.

Natural Gas Gains as Winter Weather Approaches - Natural gas price rose to a three-week high on Monday, as colder weather boosted optimism over demand for heating consumption. Futures for December delivery settled up 10.7 cents, or 3.8% to $2.950 a million British thermal units on the New York Mercantile Exchange. Prices traded at the highest level since Oct. 31, and were up three of the past four sessions. The natural gas market has been under pressure from warmer-than-average temperatures this month, as well as a record level of supply in storage. However, the approach of the winter season and colder temperatures has given prices a boost, as investors bet that heating demand will pick up and help work through high levels of inventory. “The market now agrees that some cold weather is coming,” said Kent Bayazitoglu, director of market analytics at Gelber & Associates, in a client note. “For more than a month, there have been multiple indicators of this occurring…Finally these indicators are starting to play out.” Exports of natural gas have also exceeded imports this month, which analysts have read as a positive development for future demand. “Once touted as potentially the largest importer of LNG globally, the U.S. just completed its natural gas market 180,” Barclays analysts wrote in a Sunday note. “Export levels should continue to grow, something we see as supportive of U.S. natural gas prices.” However, without a substantial pick up in winter demand, natural gas prices may still face challenges in the coming months, traders said. “Unless we just get severe cold for over a month, I don’t think you’re going to see this turn into a major bull market,”

Natural Gas Prices Rise to 3-Week High on More-Normal Temperatures - WSJ: Natural gas prices closed at a three-week high on Tuesday, as forecasts for more-normal temperatures in the coming weeks boosted the outlook for demand. Futures for December delivery settled up 3.2 cents, or 1.1% at $2.9820 a million British thermal units on the New York Mercantile Exchange, the highest close since Oct. 31. Prices have risen in four of the past five sessions. Forecasts for cooler temperatures have helped boost natural gas prices, after weeks of warmer-than-average weather have weighed on demand. Andy Huenefeld, price-risk manager at Kinect Energy Group, formerly known as U.S. Energy Services, said the market transition into the winter season has helped support prices, as cold weather should lead to withdrawals from record high storage levels. “We are seeing expectations for heating... kind of ramp up over the past several days,” Mr. Huenefeld said. Investors are also looking to storage numbers from the U.S. Energy Information Administration, scheduled for release on Wednesday, which will signal whether demand is impacting record inventory numbers. Analysts and brokers surveyed by The Wall Street Journal expect an average of 4 billion-cubic feet to have been added to inventories in the week ended Nov. 18. Trading activity will be muted for the shortened holiday week, analysts noted. Going forward, prices should depend largely on whether the winter season will lead to an uptick in demand, as natural gas is largely used to heat homes in the U.S., and prices rise with colder temperatures.

Natural Gas Prices Rise on Cooler Weather -- Natural gas prices rose to a one-month high, as cooler forecasts continue raising expectations for increased demand. Natural-gas futures for December delivery settled up 5.9 cents, or 1.9%, at $3.085 a million British thermal units on the New York Mercantile Exchange. A five-session winning streak has produced gains of 14% and the best two-week run since the end of 2015. The December contract gained 24.2 cents, or 8.5%, this week. The December contract expires on Monday and options expired at Friday’s settlement, which came early because of the U.S. Thanksgiving holiday weekend. The more actively traded January contract gained 5.5 cents, or 1.8%, to $3.202/mmBtu. Friday’s weather forecasts were mixed, broadly predicting some below-average temperatures settling in, though not temperatures as cold as previous forecasts’. That matters less, though, because the longer-term trend has been a return toward normal, cool temperatures for late November, seemingly an end to the historic warmth that started the autumn, said Tom Saal, a broker at INTL FCStone Latin America in Miami. About half of U.S. homes use natural gas for heat, making winter weather the most-common driver for demand and prices. Autumn is usually the time when traders position themselves for the winter-heating season, and many this year have been betting that a decline in drilling activity and record gas consumption from power plants will start erasing a glut that has plagued the market. “Let’s just call it a normal winter or close-to-normal winter, that all in itself has a chance to eat away at” the glut, said Dean Hazelcorn. “There’s no reason not to like natural gas.”

US EIA says Gulf Coast jet production highest on record -  The amount of jet fuel produced by US Gulf Coast refiners reached its highest level ever recorded during the week ended November 18, Energy Information Administration data showed Wednesday. Gulf Coast jet output climbed 24,000 b/d to 946,000 b/d, reaching its highest level since EIA began reporting it in 1990. "Probably one of the reasons [I am] hearing jet getting smoked," said a jet trader. Airlines have been ramping up service heading into the Thanksgiving holiday weekend, and that was reflected in jet fuel demand figures last week. EIA said product supplied, which measures demand, climbed 374,000 b/d to 1.92 million b/d. That marked its highest level since reaching 1.96 million b/d on October 20, 2000. November 18, marked the start of the airlines' Thanksgiving travel season. Airlines for America predicted that 27.3 million passengers will travel on US airlines through November 29, a year-on-year increase 2.5%. The airlines have added capacity to accommodate the increased demand. S&P Global Platts assessed benchmark Gulf Coast 54 grade jet fuel on Colonial Pipeline at the NYMEX December ULSD futures contract minus 13.50 cents/gal Tuesday, unchanged from Monday.

Drill, baby, drill? Election reignites offshore-oil debate - The controversy over drilling for oil in the Atlantic Ocean has been reignited by the election of Donald Trump, and environmentalists and coastal businesses say it could be the first major fault line that divides them from the new president. The Obama administration has moved to restrict access to offshore oil drilling leases in the Atlantic, as well as off Alaska. Commercial oil production has never happened off the East Coast - and environmentalists consider that a major victory during Obama’s tenure. But President-elect Trump has said that he intends to use all available fuel reserves for energy self-sufficiency - and that it's time to be opening up offshore drilling. While supporters say that expanded oil exploration is poised to become one of Trump’s signature accomplishments, environmentalists and other opponents see oil drilling policy as a looming conflict. Jacqueline Savitz, vice president of the ocean conservationist group Oceana, said she fears a return to the hard-fought struggles environmentalists faced with the previous Republican administration. "We’re hoping we’re not about to fall back into the “drill, baby, drill” way of thinking," she said. "Offshore drilling in the Atlantic is not a good investment." The American Petroleum Institute, a key voice of the oil and gas industries, has long said more aggressive drilling is needed for the U.S. to remain a world leader in energy production. The group accused Obama in May of lacking a long-term "vision" for fossil fuels extraction; its leaders say that Trump's presidency represents a new dawn and that they intend to hold him to his word about fossil fuels.

What happens when Texas becomes a net natural gas demand region - Some 3.2 Bcf/d of new LNG export capacity will be coming online along Texas’s Gulf Coast over the next two and a half years, and 8 Bcf/d of new natural gas pipeline capacity is under development to transport vast quantities of gas through Texas to the Mexican border. But while gas-export opportunities abound, Texas gas production is down, mostly due to a big fall-off in Eagle Ford output, so exporters will need to pull gas from as far away as the Marcellus/Utica to meet their fast-growing requirements. That will flip Texas from a net producing region to a net demand region once when you factor in exports that will flow through the state. This profound shift will put extraordinary pressure on Texas’s unusually complex network of interstate and intrastate pipeline systems, which will need to be reworked and expanded to deal with the new gas-flow patterns. It also will have a significant effect on regional gas pricing––putting a premium on Texas prices. These issues and more are addressed in RBN’s latest Drill Down Report, highlights of which we discuss in today’s blog. One thing that U.S. natural gas producers have to be thankful for this week––and likely for many years into the future ––are the prospects for growing foreign demand for U.S. gas supplies. The potential for piping additional billions of cubic feet a day of Texas, Marcellus/Utica and other gas to Mexico and shipping increasing volumes of super-cooled gas as LNG to South America, Europe, and Asia is good news for gas producers, who need new demand sources to gobble up their product… well, enough Thanksgiving and turkey references­­––you get the idea.

Adding Oil To The Glut, Part 2; Eagle Ford Production Increased 46.5% Per Well In 2015 – Filloon -- At SeekingAlpha:

• Mega-frack style completions are showing even bigger improvements in the Eagle Ford than the Bakken
• Operators are increasing the number of stages, and volumes of frack sand and fluids with good results
• Completion design is still in its infancy, and we believe better technologies and design are on the way
• The Bakken and Eagle Ford improvements are nothing short of spectacular, and the reason breakevens continue to head lower

Adding To The Oil Glut,Part 3, Midland Basin Production Increases 262% Per Well In 2015 - Summary:

• We continue to see production increases per well in all major US basins.
• The Midland Basin has thrived using newer well designs, as production per well has increased 262% from 2014 to 2015.
• We expect further growth in the Permian as lower well costs and increasing production provides the possibility of a significant improvement in the coming years.

Lower oil prices have had impact on the US oil industry. Not only have prices decreased from over $100/bbl, the US Oil ETF (NYSEARCA:USO) has also declined precipitously. A large number of rigs are now offline, but more has changed. The number of employees has decreased significantly. Most of the workforce may never go back to work, unless we see oil prices improve a great deal. The probability is low. Not only is OPEC able to increase production, it has a lower breakeven price than the best core US areas.

Understanding lease operating expenses (LOE) and how they drive production -  With today’s low crude oil and natural gas prices, the survival of exploration and production companies depends on razor-thin margins. Lease operating expenses––the costs incurred by an operator to keep production flowing after the initial cost of drilling and completing a well have been incurred––are a go-to variable in assessing the financial health of E&Ps. But it’s not enough for investors and analysts to pull LOE line items from Securities and Exchange Commission filings to find the lowest cost producers, plays, or basins. More than ever we need to understand—really, truly, deeply—what LOEs are, why they matter, how they change with commodity prices, production volumes, and other factors, and how we should use them when comparing players and plays. Today we begin a series on a little-explored but important factor in assessing oil and gas production costs.  A key metric in assessing how well (or how poorly) E&Ps are doing on the cost side of the ledger is LOEs, which as we said are the costs incurred by an operator to keep production flowing after the initial cost of drilling and completing a well have been incurred. What’s included in the LOE “basket”? For one thing, the costs associated with employees known as “pumpers,” “well tenders,” or “lease operators,” who regularly monitor and maintain onshore wells. Their wages, vehicle expenses, gasoline costs, and any other expenses they have for items they use while tending to the wells (such as methanol for de-icing) are all LOEs. Other LOE elements come from operating and maintaining the on-site production equipment used to keep wells flowing and to process the hydrocarbons they produce so that they will be in a form suitable for transportation away from the lease. However, not all well costs are included in the LOE basket. For example, the initial cost to purchase and install the equipment is capitalized as part of the “producing property,” but the expenses for fuel used to power and maintain equipment at the lease site are included among LOEs.

Residents file class-action suit over man-made earthquakes | News OK: — Residents of the town hit by Oklahoma's worst earthquake have filed a class-action lawsuit against dozens of energy companies, accusing them of triggering dozens of temblors by injecting wastewater from oil and gas production underground. Pawnee residents filed the suit Thursday against at least 27 companies, saying they operate wastewater injection wells even though they know the method causes earthquakes. The lawsuit seeks an unidentified amount for property damage and devaluation, plus emotional distress. A magnitude 5.8 earthquake struck Pawnee in September. The lawsuit claims 52 more have hit the area since. Oklahoma has had thousands of earthquakes in recent years. Nearly all have been traced to underground wastewater disposal.Regulators have asked oil and gas producers to either close injection wells or reduce the volume of fluids they inject.

Fracking Causes Earthquakes. Period. | Food & Water Watch - The oil and gas industry and its supporters would like to dismiss the fact that many new earthquakes sweeping across the nation are fracking-related. It has already been shown that underground injection of fracking wastewater can induce seismicity, but a new, significant study by researchers at the University of Calgary has linked fracking to earthquakes in Western Canada. In May of 2015 Food & Water Watch released research on fracking and earthquakes. In it we explained that fracking itself could induce seismicity, but that these tremors tended to be smaller and less frequently felt than those produced from underground injection control wells. The new University of Calgary study reaffirms that fracking can trigger “stress changes” or “pore-pressure changes due to fluid diffusion along a permeable fault zone” resulting in – you guessed it – earthquakes. Likewise, just five months ago a Seismological Research Letters study linked fracking (not injection of fracking waste) to most of the inducted seismicity in Western Canada. However, fracking-induced earthquakes are not only occurring in Western Canada, nor are these the only recorded incidents or studies on the matter. In 2011 fracking was associated with a 3.8 magnitude earthquake in British Columbia, two earthquakes large enough to be felt in Blackpool, England, and another one that was large enough to be felt in Garvin County, Oklahoma. In 2014 a Seismological Research Letters study found that fracking was the likely culprit of about 400 small tremors from October to December 13, 2013. Of those, 190 occurred within a 39-hour period after fracking began at a nearby well. Although the tremors were not large enough to be felt by residents, one of the authors said in a press release, “…the earthquakes were three orders of magnitude larger than normally expected.” Later that year, two fracking-induced earthquakes in Poland Township, Ohio caused the Ohio Department of Natural Resources to order a company in the vicinity to cease drilling and fracking in the Utica Shale until a cause was pinpointed. Fracking had activated a previously unknown fault causing a swarm of 77 earthquakes in just eight days.

Feds block mining near Yellowstone National Park - The Obama administration on Monday blocked mining on 30,000 acres of public land near Yellowstone National Park. Under an order from Interior Secretary Sally Jewell, federal officials will ban new mining claims on 30,0000 acres of U.S. Forest Service land near Yellowstone’s northern entrance in Montana.  The order means federal agencies will not issue new permits for mining gold or other metals in the region for at least two years. During that time, the Interior and Agriculture Departments will consider whether to withdraw the land from mine permitting programs for up to 20 more years. “There are good places to mine for gold, but the doorstep of Yellowstone National Park is not one of them,” Jewell said in a statement. “As we celebrate 100 years of the National Park Service, today’s action helps ensure that Yellowstone’s watershed, wildlife and the tourism-based economy of local communities will not be threatened by the impacts of mineral development.” The two-year ban does not apply to current mining activities in the area. The fate of a long-term ban will depend on who President-elect Trump selects to lead his Interior Department, though Trump himself has been hostile to environmental regulations that he says threaten American jobs.

Wyoming and Montana file legal challenge to BLM methane rule (AP) — Wyoming and Montana are pushing to block a rule that President Barack Obama's administration issued last week seeking to restrict how oil companies burn off natural gas on public lands. In the federal lawsuit filed Friday in Cheyenne, the states argue that the U.S. Bureau of Land Management lacks authority over air quality issues. Energy companies frequently "flare," or burn off, large volumes of natural gas at drilling sites because it makes less money than oil. Wyoming Gov. Matt Mead says his state already has effective limits on venting and flaring of natural gas. The federal rule seeks to reduce waste and harmful methane emissions to address climate change. Although the incoming Republican administration of President-elect Donald Trump could rescind the rule, doing so would likely take months.

Another EOG High-IP Well In The Bakken -- November 21, 2016 I track high-intensity fracks here.  Note the amount of proppant: *31247, 1,613, EOG, West Clark 103-0136H, Clarks Creek, 37 stages, 21.1 million lbs, s12/10/15; TD, 12/20/15; TVD, 10,552 feet; TD, 17,965 feet; again, only a 1.5 section lateral; 960-acre spacing; middle Bakken; t5/16; cum 114K 9/16;

Sunoco Logistics acquiring Energy Transfer (AP) — Sunoco Logistics Partners L.P. is buying rival Energy Transfer Partners in a stock deal worth about $20 billion that the energy companies' hope will boost their operations. But shares for both companies fell in afternoon trading. The deal comes as Energy Transfer Partners remains at the center of controversy over the Dakota Access oil pipeline that will transfer oil from North Dakota to Illinois. Construction of the $3.8 billion pipeline has been the object of protests for months by the Standing Rock Sioux, whose reservation lies near the pipeline route, and the tribe's allies, who fear a leak could contaminate their drinking water. Energy Transfer shareholders will receive 1.5 common units of Sunoco stock for each Energy transfer share they own. Based on Sunoco's closing price Friday, the deal was worth about $21.31 billion. The deal is expected to close in the first quarter. The companies said they expect the deal to produce more than $200 million in commercial benefits and savings annually by 2019. Kelcy Warren, current chairman of Energy Transfer, will be CEO of the new company. Michael J. Hennigan is currently CEO of Sunoco Logistics and is expected to have a management role with other executives after the deals. Shares of Newtown Square, Pennsylvania-based Sunoco Logistics fell $2.05, or 7.9 percent, to $24.14 in afternoon trading. Shares of Dallas-based Energy Transfer Partners fell 3.50 percent, or 8.9 percent, to $35.86.

Energy Transfer to merge its pipeline network with Sunoco Logistics in $20 billion deal | Fuel Fix: Dallas pipeline magnate Kelcy Warren is merging the two pipeline arms of his Energy Transfer empire — Energy Transfer Partners and Sunoco Logistics Partners — in a $20 billion deal to simplify the number of publicly traded businesses. Philadelphia-based Sunoco Logistics Partners would actually acquire Dallas’ Energy Transfer Partners with the publicly traded Energy Transfer Equity remaining the overall parent business. Warren would become the chief executive officer of the merged pipeline business, Energy Transfer announced Monday morning.Energy Transfer is the primary owner of the controversial Dakota Access Pipeline, which is 85 percent complete, but mired in delays by the Obama administration and ongoing protests by environmentalists and Native American tribes. The proposed merger, which would close by the end of March, is not expected to impact the project. Energy Transfer and Sunoco said the deal will give them increased scale and cost savings. Energy Transfer previously acquired Sunoco in 2012 for more than $5 billion, but maintained them as separate public businesses. Energy Transfer’s fourth publicly traded business, Sunoco LP, would remain the gas station and convenience store wing of the Energy Transfer umbrella. Energy Transfer president and chief operating offer Mackie McCrea would become chief commercial officer of the merged Sunoco Logistics entity under Warren.

Police clash with North Dakota pipeline protesters, arrest one | Reuters: Hundreds of protesters opposed to a North Dakota oil pipeline project they say threatens water resources and sacred tribal lands clashed with police who fired tear gas at the scene of a similar confrontation last month, officials said. An estimated 400 protesters mounted the Backwater Bridge and attempted to force their way past police in what the Morton County Sheriff's Department initially described as an "ongoing riot," the latest in a series of demonstrations against the Dakota Access Pipeline. A statement from the agency said one arrest had been made by 8:30 p.m. local time (0230 GMT Monday), about 2 1/2 hours after the incident began 45 miles (30 miles) south of Bismark, the North Dakota capital. About 100 to 200 protesters remained after midnight. The Backwater Bridge has been closed since late October, when activists clashed with police in riot gear and set two trucks on fire, prompting authorities to forcibly shut down a protesters encampment nearby. The Morton County Sheriff's Department said officers on the scene of the latest confrontation were "describing protesters' actions as very aggressive." Demonstrators tried to start about a dozen fires as they attempted to outflank and "attack" law enforcement barricades, the sheriff's statement said. Police said they responded by firing volleys of tear gas at protesters in a bid to prevent them from crossing the bridge.Activists at the scene reported on Twitter that police were also spraying protesters with water in sub-freezing temperatures and firing rubber bullets, injuring some in the crowd.

As Dakota pipeline saga drags on, rancor builds | Reuters: The September decision by the Obama administration to delay final approval for the Dakota Access Pipeline was intended to give federal officials more time to consult with Native American tribes that have faced dispossession from lands for decades. But the delays have also caused increased consternation among company officials and led to growing violence between law enforcement and protesters, with both sides decrying the actions of the other in recent days. Energy Transfer Partners LP's $3.7 billion Dakota Access project has drawn steady opposition from environmentalists and Native American activists, led by the Standing Rock Sioux tribe. Their tribal lands are adjacent to the Missouri River, where federal approval is needed to tunnel under a 1-mile (1.6 km) stretch to complete the pipeline. The activist movement has grown steadily since the tribe established Sacred Stone Camp in Cannon Ball, North Dakota, in April, a temporary site founded as a point of resistance to the pipeline. The movement has remained strong even as temperatures have turned frigid. The most violent clashes took place over this past weekend. Police used water hoses in below-freezing temperatures to keep about 400 protesters at bay, a move criticized by activist groups, the American Civil Liberties Union and elected officials concerned about freedom of expression and the escalation of violence. "Almost the entire camp was in shock," Salim Matt Gras, 64, of Hamilton, Montana, said at the main camp. "They talk about using non-lethal weapons, but when you're talking about soaking people with freezing water in frigid temperatures, that's life-threatening."

The Conflicts Along 1,172 Miles of the Dakota Access Pipeline - NY Times interactive map - The construction of a crude oil pipeline through four states has spurred months of clashes near the Standing Rock Sioux Reservation in North Dakota. Protesters, concerned about the pipeline’s environmental impact, have been trying to stop the construction of its Missouri River crossing.Though legal disputes about water safety, Native American lands and eminent domain have delayed the project, the pipeline is nearly complete. The pipeline has to travel across hundreds of waterways. At least 22 of these crossings, highlighted in blue, have to be drilled deep under large bodies of water.The pipeline crosses disputed Sioux land that was promised to the tribe in the 1851 Treaty of Fort Laramie but was later taken away.An alternative route north of Bismarck, N.D., was proposed but rejected because of its proximity to areas that supply water.There have been large protests at the Lake Oahe crossing over potential water contamination and the damage of sacred tribal sites. The Missouri River is the Standing Rock Sioux Tribe’s primary source of drinking water.The police confronted hundreds of protesters on Monday. Nearly 300 people were treated for injuries resulting from the use of police force, according to the Standing Rock Medic and Healer Council.The crossing at the James River was rerouted to avoid three other bodies of water, which made the pipeline two miles longer. In September, the Yankton Sioux Tribe filed a lawsuit against the Army Corps of Engineers, challenging the authorization of the pipeline construction. The route near Sioux Falls, S.D., was initially rejected by the City Council because of its proximity to a landfill west of town. The Iowa Utilities Board granted around 200 parcels of land, highlighted in yellow, for pipeline use under eminent domain. The owners of 17 parcels sued. In early November, protesters set up an encampment to block construction near the Des Moines River crossing. Another protest camp was set up near the Mississippi River crossing in late August and lasted until construction there was completed.

Water Cannons Fired at Water Protectors, Hundreds Injured - Hundreds of water protectors were injured at the Standing Rock encampments Sunday evening when law enforcement blasted them with water cannons in freezing temperatures. The attacks came as water protectors used a semi-truck to remove burnt military vehicles that police had chained to concrete barriers weeks ago, blocking traffic on Highway 1806. Water protectors' efforts to clear the road and improve access to the camp for emergency services were met with tear gas, an LRAD (Long Range Acoustic Device), stinger grenades, rubber bullets and indiscriminate use of a water cannon with an air temperature of 26 degrees Fahrenheit. "It is below freezing right now and the Morton County Sheriff's Department is using a water cannon on our people, that is an excessive and potentially deadly use of force," Dallas Goldtooth of Indigenous Environmental Network said. Some flares shot by law enforcement started grass fires which were ignored by the water cannons and had to be extinguished by water protectors. Law enforcement also shot down three media drones and targeted journalists with less lethal rounds. National Lawyers Guild legal observers on the frontlines have confirmed that multiple people were unconscious and bleeding after being shot in the head with rubber bullets. One elder went into cardiac arrest at the frontlines but medics administered CPR and were able to resuscitate him. The camp's medical staff and facilities are overwhelmed and the local community of Cannonball has opened their school gymnasium for emergency relief. Hundreds are receiving treatment for contamination by CS gas, hypothermia, and blunt traumas as a result of rubber bullets and other less lethal ammunition.

"It Feels Like A Warzone": 400 North Dakota Pipeline Protesters Clash With Police; 167 Injured - In the latest in a series of protests against the North Dakota oil pipeline project, overnight an estimated 400 protesters clashed with police who fired tear gas at the scene of a similar confrontation last month. The protesters mounted the Backwater Bridge and attempted to force their way past police in what the Morton County Sheriff's Department initially described as an "ongoing riot." Protesters say the pipeline threatens water resources and sacred tribal lands. According to Reuters, one arrest had been made by 8:30 p.m. local time (0230 GMT Monday), about 2 1/2 hours after the incident began 45 miles (30 miles) south of Bismark, the North Dakota capital. About 100 to 200 protesters remained after midnight. The Backwater Bridge has been closed since late October, when activists clashed with police in riot gear and set two trucks on fire, prompting authorities to forcibly shut down a protesters encampment nearby.The Morton County Sheriff's Department said officers on the scene of the latest confrontation were "describing protesters' actions as very aggressive." Demonstrators tried to start about a dozen fires as they attempted to outflank and "attack" law enforcement barricades, the sheriff's statement said. Police said they responded by firing volleys of tear gas at protesters in a bid to prevent them from crossing the bridge. Activists at the scene reported on Twitter that police were also spraying protesters with water in sub-freezing temperatures and firing rubber bullets, injuring some in the crowd. A total of 167 demonstrators have been injured according to a medic on site, as cited by Indigenous Rising Media. The police were reportedly targeting demonstrators’ heads and legs. Seven people have been hospitalized for severe head injuries. Three of those injured are reportedly elders of the Standing Rock Sioux tribe.

Dakota Access Pipeline Protester Might Lose Arm After 'Shot With a Concussion Grenade' During Police Standoff - Sophia Wilansky, a water protector from New York, was seriously injured and could lose her left arm following Sunday evening's standoff with police over the controversial Dakota Access Pipeline (DAPL).  According to a GoFundMe page launched on her behalf, the 21-year-old was handing out bottles of water to fellow protestors when she was allegedly "shot with a concussion grenade" by authorities. "This was the response of police and DAPL mercenaries as she and other brave protectors attempted to hold the line against the black snake in service of protecting our water," the GoFundMe description states.  Photos of Wilansky's graphic injury have surfaced on social media. She was one of the hundreds who were injured at the Standing Rockencampments on Sunday. Eyewitnesses say that law enforcement used tear gas, pepper spray, a Long Range Acoustic Device, stinger grenades, rubber bullets and water cannons to blast away pipeline protestors in freezing temperatures. In a statement, the Standing Rock Medic & Healer Council has called Sunday's clash "a mass casualty incident" with approximately 300 injuries "identified, triaged, assessed and treated by our physicians, nurses, paramedics and integrative healers working in collaboration with local emergency response."  The council says the 300 injuries were the "direct result of excessive force by police over the course of 10 hours" and at least 26 people were taken to three area hospitals, with many patients needing treatment for hypothermia.

Dakota Access Pipeline protester ‘may lose her arm’ after police standoff - A 21-year-old woman was severely injured and may lose her arm after being hit by a projectile when North Dakota law enforcement officers turned a water cannon on Dakota Access pipeline protesters and threw “less-than-lethal” weapons, according to the woman’s father.  Sophia Wilansky was one of several hundred protesters injured during the standoff with police on Sunday on a bridge near the site where the pipeline is planned to cross under the Missouri river.  Graphic photographs of her injured arm with broken bones visible were circulated on social media.  “The best-case scenario is no pain and 10-20% functionality,” said Wayne Wilansky, Sophia’s father, who travelled to Minneapolis where his daughter underwent eight hours of surgery on Monday. He said his daughter had been hit by a concussion grenade thrown by a police officer and that the arteries, median nerve, muscle and bone in her left arm had been “blown away”.  Sophia will require additional surgery in the next few days and her arm may still have to be amputated, he added. “She’s devastated. She looks at her arm and she cries,” he said.  Sophia Wilansky is one of thousands of activists who have travelled to the Standing Rock Sioux reservation in North Dakota to attempt to halt the construction of the pipeline. Members of the Standing Rock Sioux tribe established a “spiritual camp” on the banks of the Missouri in April. The tribe fears the pipeline will jeopardise their water supply and say that construction has disturbed sacred burial grounds. The activists, who call themselves “water protectors”, have faced a heavily militarised police force. More than 400 protesters have been arrested by law enforcement officers who have deployed pepper spray, teargas, rubber bullets, Tasers, sound weapons and other “less-than-lethal” methods.  Following Sunday’s confrontation 26 protesters were taken to hospital and more than 300 injured, according to the Standing Rock Medic & Healer Council. Most of the injured had hypothermia after being hit by a water cannon in below-freezing weather.

Exclusive Video: #noDAPL Protestors Share Experiences of Police Repression (video and transcript)

• DEMONSTRATOR: We got a bunch of water protectors out here demonstrating on a public roadway and the police who are paid to protect and serve us are shooting teargas and flashbang grenades and shooting a cannon of mace at all of us. Those that don’t clear out have shields and they’re shooting those people with rubber bullets right now.
• REPORTER: Where were you when you got shot?
• LOTUS: Right up here. I was standing there like this. Standing there like this. Then they sprayed the mace. They’re spraying out the bear mace. They’re spraying it at us, I was standing there like this. Spray it on me I just go like this to keep it out of my eyes. Then I think they started throwing in the teargas. Then like some noise went off really loud and then they just shot me.

NoDAPL Water Protector Sophia Wilansky lost most of her forearm when hit by a concussion grenade. Please contribute to her medical fund. - Last night, Sophia Wilansky was catastrophically injured when a concussion grenade thrown by police defending the Dakota Access Pipeline company hit her left arm and exploded. Sophia, a 21-year-old climate activist, was heading to bring water to the unarmed people who were being attacked for several hours by Morton County Sheriff forces. She was successfully delivered to emergency surgery in Minneapolis. A generous group of Climate Hawks Vote members have pledged to match any contributions made to support Sophia's medical costs. Your $5 contribution will be doubled to $10 if you make it now: Contribute $5 to support Sophia's medical fund with Climate Hawks Vote.All funds raised will go to Sophia's medical fund. The Morton County Sheriff’s Department is falsely claiming that she was injured by a propane explosion caused by the protectors. The grenade pieces that have been removed from her arm in surgery will be saved for legal proceedings. Sophia is currently in stable condition. Below is information about her injuries and surgery from her father, lawyer Wayne Wilansky: A grenade exploded right as it hit Sophia in the left forearm taking most of the undersurface of her left arm with it. Both her radial and ulnar artery were completely destroyed. Her radius was shattered and a large piece of it is missing. Her medial nerve is missing a large section as well.  All of the muscle and soft tissue between her elbow and wrist were blown away. Sophia will have surgery again tomorrow as bit by bit they try to rebuild a somewhat functioning arm and hand. The first surgery took a vein from her leg which they have implanted in her arm to take the place of the missing arteries. She will need multiple surgeries to try to gain some functional use of the arm and hand. "There are no words to describe the pain of watching my daughter cry and say she was sorry for the pain she caused me and my wife," her father says. "I died a thousand deaths today and will continue to do so for quite some time. I am left without the right words to describe the anguish of watching her look at her now alien arm and hand." Your $10 will be doubled to $20 to support Sophia's medical fund.

Hundreds of Veterans to Join Water Protectors at Standing Rock to Protest Dakota Access Pipeline - Hundreds of veterans are preparing to join the Water Protectors at the Standing Rock Sioux Reservation in North Dakota early next month to peacefully protest the Dakota Access Pipeline (DAPL).  A Facebook page for the event, Veterans Stand for Standing Rock , has more than 600 confirmed reservations with more than 4,500 other people expressing interest.  High-profile veterans including U.S. Rep. Tulsi Gabbard of Hawaii and retired Baltimore police officer/whistleblower Michael A. Wood, Jr. plan to attend.  "This country is repressing our people," Wood Jr. told Task & Purpose . "If we're going to be heroes, if we're really going to be those veterans that this country praises, well, then we need to do the things that we actually said we're going to do when we took the oath to defend the Constitution from enemies foreign and domestic."  The "operations order" states:  "In response to the assertion of treaty rights, citizen rights, tribal rights and protection of the most valuable of resources, water, the Sioux tribes and allied comrades, are under sustained assault by agents of and working for private interests under the color of law. First Americans have served in the United States Military, defending the soil of our homelands, at a greater percentage than any other group of Americans. There is no other people more deserving of veteran support and this situation encapsulates whether we are called heroes for violence and cashing paychecks or for justice and morality."  They say their mission is to "prevent progress on the Dakota Access Pipeline and draw national attention to the human rights warriors of the Sioux tribes regarding the United States lack of treaty enforcement."

Veterans Organizing “Like a Military Unit” to Defend DAPL Protesters from Militarized Police - Resistance to the Dakota Access Pipeline (DAPL) is about to get a major boost. On Dec. 4, U.S. military veterans — possibly numbering in the hundreds — plan to gather “like a military unit” to stop the Dakota Access Pipeline.  Having witnessed the police state brutality inflicted on Native Americans attempting to protect sacred land and natural resources, the former service members feel compelled to stand with the Standing Rock Sioux.According to the Veterans for Standing Rock GoFundMe page: “We are veterans of the United States Armed Forces, including the U.S. Army, United States Marine Corps, U.S. Navy, U.S. Air Force and U.S. Coast Guard and we are calling for our fellow veterans to assemble as a peaceful, unarmed militia at the Standing Rock Indian Reservation on Dec 4-7 and defend the water protectors from assault and intimidation at the hands of the militarized police force and DAPL security.” Rep. Tulsi Gabbard from Hawaii, a combat war veteran, will be joining the act of resistance, according to the Facebook page Veterans Stand for Standing Rock. As Task and Purpose notes, federal government ignored their duty under the National Historic Preservation Act to consult the Standing Rock Sioux before approving DAPL. Some of the pipeline construction will take place on sacred land that was taken from the tribe over the past 150 years, and the pipeline will be buried under the tribe’s drinking water source. The main man behind it all is Wes Clark, Jr., son of Gen. Wesley Clark, a former Supreme Allied Commander who ran for the Democratic presidential nomination in 2004. Clark Sr. called for action on climate change, and this motivation is also driving his son to fight against DAPL. Wes Clark, Jr., is best known as a co-host for the Young Turks, and sees the Dec. 4 resistance at DAPL as “the most important event up to this time in human history.

Sheriffs Refuse to Send Troops to Standing Rock as Public Outrage and Costs Mount - Agents with the U.S. Customs and Border Protection will be the latest agency assisting Morton County Sheriff Department deputies to guard Dakota Access pipeline construction as it prepares to drill under the Missouri River. But as tensions mount, along with costs to keep up with militarized attacks on water protectors, there are signs that North Dakota’s resources are stretching thin. Sheriff Kyle Kirchmeier announced the aid of CBP officers Monday following the most violent confrontation yet near the Standing Rock Sioux reservation. Dozens of activists were hospitalized after Sunday night’s standoff when police sprayed water on hundreds of people in 26-degree temperatures and fired what has been described as concussion grenades. One activist, Sophia Wilansky, 21, may face the amputation of her arm. Even before Sunday’s subfreezing assault on the Backwater Bridge, the escalating violence, the masses of arrests—528 as of Monday—and even the routine response to demonstrations were taking their toll on local agencies. The policing costs have reached nearly $15 million. The courts are taxed. The jail is burdened. The 34 local law enforcement officers are stressed. All this comes amid an increasingly loud public outcry against the militarized policing.

The Latest: AG approves ranch sale to pipeline developer - KSWO (AP) - The Latest on the protest against the Dakota Access oil pipeline (all times local): 4:30 p.m. North Dakota's attorney general has signed off on a purchase of ranch land by the company developing the Dakota Access pipeline. Energy Transfer Partners bought some 6,000 acres of ranch property near an encampment where the Standing Rock Sioux and others have protested the pipeline for months. The company said the land, part of a century-old operation known as the Cannonball Ranch, would give its workers better access to its construction sites and the finished pipeline. State law generally bars corporations from owning agricultural land, though there are exceptions. Attorney General Wayne Stenehjem said in a statement Tuesday that the purchase was temporarily necessary for commercial development. He said he would monitor how the land is used to make sure the company is complying with the corporate farming law.

Army Corps Sends Eviction Notice to Standing Rock -- The chairman of the Standing Rock Sioux Tribe, Dave Archambault II, received at letter today from the district commander of the Corps of Engineers, John Henderson, informing him that the Army Corps will be "closing the portion of the Corps-managed federal property north of the Cannonball River to all public use and access effective December 5, 2016."  This decision is necessary to protect the general public from the violent confrontations between protestors and law enforcement officials that have occurred in this area, and to prevent death, illness, or serious injury to inhabitants of encampments due to the harsh North Dakota winter conditions. The necessary emergency, medical, and fire response services, law enforcement, or sustainable facilities to protect people from these conditions on this property cannot be provided. I do not take this action lightly, but have decided that it is required due to the concern for public safety and the fact that much of this land is leased to private persons for grazing and/or haying purposes as part of the Corps' land management practices ... The Corps of Engineers has established a free speech zone on land south of the Cannonball River for anyone wishing to peaceably protest the Dakota Access pipeline project ... Any person found to be on the Corps' lands north of the Cannonball River after December 5, 2016, will be considered trespassing and may be subject to prosecution under federal, state, and local laws.  This letter comes just 12 days after the Army Corps announced that it would delay a decision on granting an easement to Energy Transfer Partners after determining that "additional discussion and analysis are warranted in light of the history of the Great Sioux Nation's dispossessions of lands, the importance of Lake Oahe to the Tribe, our government-to-government relationship and the statute governing easements through government property." The $3.8 billion pipeline project is now in its final stretch with more than 80 percent of the pipeline already constructed .

Army Corps of Engineers to close Standing Rock protest camp - The Army Corps of Engineers announced Friday it will be closing a portion of its property north of the Cannonball River, near where the Dakota Access Pipeline protesting camp is located, and establishing a free speech zone south of the river. In a letter to the leader of the Standing Rock Sioux Tribe, the USACE announced it will close the portion of corps-managed federal property north of the Cannonball River on Dec. 5, to: "protect the general public from the violent confrontations between protesters and law enforcement officials that have occurred in this area, and to prevent death, illness, or serious injury to inhabitants of encampments due to the harsh North Dakota winter conditions."The land is leased to private citizens for Corps land management practices, the letter reads, meaning the general public, including protesters, can be on the Corps' lands. Anyone found on the land after Dec. 5 will be considered trespassing.The Corps established a free speech zone south of the Cannonball River for people "wishing to peaceably protest the Dakota Access Pipeline project." The letter calls upon the Standing Rock Sioux Tribal leader, Dave Archambault II, to encourage members of the tribe and other protesters to move to the south side free speech zone or "more sustainable location for the winter."  In a statement, Archambault said the Tribe is "deeply disappointed" in the United States' decision, but added that their resolve is "stronger than ever."He also expressed disappointment in the timing of the decision, which comes the day after Thanksgiving."The best way to protect people during the winter, and reduce the risk of conflict between water protectors and militarized police, is to deny the easement for the Oahe crossing, and deny it now," Archambault said.

Trump offloaded investment in company building controversial pipeline, ethics questions mount - Dallas Business Journal: The disclosure comes as worries have mounted about whether Trump would tilt policy decisions to favor his investments and business dealings. Trump told The New York Times that he would like to create a separation between him and his businesses but has not given any details. Ethics groups have called on Trump to divest his holdings, but no law requires him to do so. "We think it's high time for them to revisit conflict of interest law," said Jordan Libowitz, a spokesman for the Citizens for Responsibility and Ethics in Washington. (Click on the slideshow to view holdings Trump has in other Dallas-based companies. Hicks did not immediately say if Trump has divested from any of them.) The U.S. Army Corps of Engineers extended its review of a critical juncture of ETP's Dakota pipeline under Lake Oahe earlier this month, potentially pushing the decision into next year under the new administration. Local Native American tribes and environmentalists protesting the project claim the pipeline threatens sacred cultural sites and the local water supply. ETP executives are still confident a pipeline deal can get done this year to avoid any overlap with Trump. Lawyers for the Army said in a court filing Monday they would need until Dec. 30 to respond to ETP’s motion to expedite the project, which was filed after the Army said it would continue deliberations.

For Standing Rock Sioux, new water system may reduce oil leak risk | Reuters: For months, North Dakota's Standing Rock Sioux tribe has been protesting the Dakota Access Pipeline's planned crossing under the Missouri River, adjacent to their lands, in part due to worries about contamination of their primary water source. As of early next year, however, the Native American tribe will be gathering their water 70 miles (113 km) downstream of the oil pipeline's location, thanks to a long-awaited water treatment plant. The reservation, which spans North and South Dakota, currently gets water 20 miles away from the pipeline's planned location. While the scope of contamination of a future oil leak is difficult to predict, the distance from the pipeline to the new intake could reduce widespread contamination risks, regulators and environmental analysts said. The Standing Rock Sioux say the new supply point is not enough to ease their concerns over the pipeline. The developer behind the pipeline, Energy Transfer Partners LP (ETP.N), has vowed not to reroute the line. "Just because the new intake is 70 miles away doesn't mean our water is still not threatened," said David Archambault, chairman of the Standing Rock Sioux tribe. The project, which has received little attention in the months-long fight over the Dakota Access pipeline, has been a goal for the Sioux for more than a decade. It was first funded in 2009.

World's Largest Methanol Refinery to Be Built Along the Columbia River -  Communities on the frontlines of fossil fuel development are taking a stand against dangerous fossil fuel projects. Take a look at the big fight in the small town of Kalama, Washington. The Chinese government is planning to build the world's largest methanol refinery to convert fracked natural gas to liquid methanol for export to China to make plastics.  This four-minute video on the Kalama methanol refinery shows why these residents of this town are fighting and winning:  From a greenhouse gas perspective, this fight is a big deal. The methanol refinery alone would use more natural gas than all industry in Washington combined. Flip it around: If we win this one battle and stop the methanol refinery, we stop the equivalent of doubling industrial natural gas usage in Washington State. While the gas industry tries to spin natural gas as clean, new science shows just the opposite. The bulk of natural gas is methane, a potent greenhouse gas. Methane leakage from gas wells and pipelines led scientists to conclude that fracked gas can be as bad coal for our climate . And it gets worse. Gas production in North America relies heavily on fracking , a process famous for polluting air and water, endangering the health of nearby residents.  On the Columbia River, we're no stranger to the fossil fuel industry's pipe dreams. Liquefied natural gas. Coal. Oil-by-rail. Our communities have celebrated major victories. The fossil fuel industry's love affair with the Columbia ignores our region's fierce passion for clean air, salmon and standing up for our neighbors. The coal and oil projects that remain—the nation's largest proposals for coal export and oil-by-rail terminals—face a high-profile movement led by cities, businesses, Tribes, faith leaders, conservationists and others to hold the line on short-sighted, high-impact fossil fuel proposals.  But the Kalama methanol refinery represents a new wave of fossil fuel export. This project would drive demand for massive new pipelines and lock the Pacific Northwest into a half century or more of fracked natural gas consumption, further delaying the transition to cleaner energy alternatives.

End of downturn at hand? Operators’ behavior suggests so – The way US E&P operators are adding rigs, planning activity ramp-ups, preparing to raise capex and looking forward to renewed production growth in 2017, you’d be tempted to write finis to a harrowing two-year industry downturn. During third-quarter 2016 earnings calls in the last few weeks, oil operator after operator unveiled what became surprisingly repetitive near-term plans: stirring the production pot by slipping a rig or two into the field during the final months of this year, kicking up the capital budget modestly and then returning to production growth in 2017. “Third quarter results tell the story of good, old fashioned American ingenuity,” Robert W. Baird analyst Ethan Bellamy told S&P Global Platts. “Costs are down, productivity is up, and capital is flowing into the most productive regions.” CEOs certainly displayed sunnier dispositions on conference calls than a couple of quarters ago when the specter of what then was a recent period of $30/b oil was fresh in their minds. But now, with a new year looming, oil executives seemed energized by their victory over a low-priced oil world after two years of squeezing costs and efficiencies from oil fields and developing precise completion designs to extract still more oil and gas per well. So they appeared willing to open the purse strings a bit next year—and if oil prices cooperated, rev up the drilling machine and production spigot in the months to come.But beneath their show of confidence, oil executives appeared mindful of the sobering and ongoing volatility of oil prices. Most clearly conveyed that any stepped-up activity would be done prudently until price signals indicated otherwise. Larger operators in particular said higher prices of mid-$50s/b to $60/b were needed for next-stage growth.

Tesla Shock Means Global Gasoline Demand Has All But Peaked - The International Energy Agency forecasts that global gasoline consumption has all but peaked as more efficient cars and the advent of electric vehicles from new players such as Tesla Motors Inc. halt demand growth in the next 25 years. That shift will have profound consequences for the oil-refining industry because gasoline accounts for one in four barrels consumed worldwide.  “Electric cars are happening,” IEA Executive Director Fatih Birol said in an interview in London, adding that their number will rise from little more than 1 million last year to more than 150 million by 2040. The cresting of gasoline demand shows how rapidly the oil landscape is changing, casting a shadow over an industry that commonly forecasts decades of growth ahead. Royal Dutch Shell Plc, the world’s second-biggest energy company by market value, shocked rivals this month when a senior executive said overall oil demand could peak in as little as five years. The IEA doesn’t share Shell’s pessimism. While the agency anticipates a gasoline peak, it still forecasts overall oil demand growing for several decades because of higher consumption of diesel, fuel oil and jet fuel by the shipping, trucking, aviation and petrochemical industries.  For Philip Verleger, president of the consultant PKVerleger LLC in Colorado and a veteran oil-market analyst, the IEA’s outlook is one of the more optimistic outcomes for the global industry.“Refiners across the globe can only hope that this forecast turns out to be right -- because all the indications are today that consumption is going to begin dropping not in 2030, but probably in 2020,” said Verleger. “It’s the best news a dying patient can hope to get.”The projections are part of the analysis the Paris-based IEA did for its “World Energy Outlook 2016” flagship report. The agency forecast that gasoline demand will drop to 22.8 million barrels a day by 2020 from 23 million barrels a day last year. By 2030, consumption will rebound slightly, reaching a peak of 23.1 million barrels a day, before falling again toward 2040. The forecast is more pessimistic than the one released a year ago, when the IEA saw robust demand growth from now until 2030.

Electric Cars Provide Little Threat To Oil Demand | OilPrice.com: Chevy is about to release its all-electric Bolt. Tesla will soon put its Model 3 on sale. More than a dozen additional EV models will be launched in the next few years. Battery costs are falling fast, making EVs close to becoming cost-competitive with the internal combustion engine. Yet, oil demand will continue to rise, at least for another 25 years. That conclusion comes from the International Energy Agency, which does not see oil demand reaching a peak until at least 2040. In its recently released World Energy Outlook, the IEA projects only tepid growth for EVs, with the EV stock rising from 1.3 million in 2015 to a cumulative total of 150 million by 2040. That would only displace a meager 1.3 million barrels of oil per day (mb/d), which to be sure, would have some price impact, but it would not represent any sort of existential threat to the oil industry. In fact, the IEA sees oil demand continuing to rise, jumping by about 13.5 mb/d between now and 2040, rising from 94.1 mb/d to 107.7 mb/d. EVs have made substantial progress to date. Battery prices have plunged by more than two-thirds since 2010. EV sales continue to grow, up 20 percent in the first half of this year in the EU compared to the same period in 2015, and up 130 percent in China. Charging stations have climbed around the world, jumping from 110,000 in 2014 to 190,000 a year later. Much of the gains so far have been achieved with a heavy dose of policy support. The U.S. has a $7,500 tax credit for the purchase of EVs. China and much of Europe have similar incentives. Other policies include exemptions on registration fees, free parking in certain areas, free charging at public charging stations, and access to HOV lanes. Continued policy support will be critical to the success of EVs.

Obama scraps Arctic lease sales through 2022 -  The Obama administration on Friday ruled out Arctic drilling from its 2017-22 plan for US offshore oil and natural gas lease sales, arguing the Gulf of Mexico and Alaska's Cook Inlet hold the best potential and lowest risks. Republicans attacked the plan for locking up too much of the country's offshore energy resources when the economy needs a boost. The US Chamber of Commerce called on the incoming Trump administration and Republican majority in Congress to "immediately rescind and replace" the plan while continuing with the planned lease sales. Trump could scrap the plan, but the legal process to do so could stretch two to three years, making it hard for his administration to schedule additional lease sales much sooner than 2020, when the first of the canceled Arctic sales was to be held. He has said he wants to open more federal lands and waters to oil and gas development. The 2017-22 plan announced Friday offers 11 potential lease sales in four planning areas, including 10 in the Gulf of Mexico -- one in 2017; two each in 2018, 2019, 2020 and 2021; and one in 2022 -- and one off the coast of Alaska in the Cook Inlet in 2021. The Interior Department excluded the Beaufort and Chukchi seas from leasing after "receiving extensive public input and analyzing the best available scientific data." "The plan focuses lease sales in the best places -- those with the highest resource potential, lowest conflict, and established infrastructure -- and removes regions that are simply not right to lease," said Interior Secretary Sally Jewell. "Given the unique and challenging Arctic environment and industry's declining interest in the area, forgoing lease sales in the Arctic is the right path forward."

Obama Halts Arctic Oil Leases and Undoing It Won't Be Simple for Trump - No new offshore oil and gas leases will be offered in the Alaskan Arctic through 2022, according to a new five-year plan for offshore drilling released Friday by the Obama administration. President-elect Donald Trump could overturn the ban, but that could take years and may not draw much industry interest if oil prices stay low. The Interior Department's five-year plan laid out all of the proposed auctions for drilling rights on the outer continental shelf of the United States. It allowed for no leases between 2017 and 2022 in the Beaufort or Chukchi seas, Arctic waters north and west of Alaska. A prior draft of the plan included the potential for offshore drilling in both the Beaufort and Chukchi Seas when it was released in March. The current plan limits potential leases in the next five years to the Gulf of Mexico and the Cook Inlet off south-central Alaska. "The plan focuses lease sales in the best places—those with the highest resource potential, lowest conflict, and established infrastructure—and removes regions that are simply not right to lease," Interior Secretary Sally Jewell said. "Given the unique and challenging Arctic environment and industry's declining interest in the area, foregoing lease sales in the Arctic is the right path forward." Some Republicans voiced opposition to the plan before it was even published. "This would not only unilaterally harm Alaska's economy and kill thousands of good jobs, it fundamentally misunderstands what is going on in the country right now," Sen. Dan Sullivan (R-Alaska) said on the Senate floor on Thursday. "It fundamentally misunderstands the enormous opportunity of energy for America." "Shell had to spend 7 years and $7 billion to get permission from the Obama administration to drill one exploration well in 100 feet of water," Sullivan said. "And eventually they just said we give up, we're leaving."

Ryan vows to undo Obama drilling plan | TheHill: House Speaker Paul Ryan (R-Wis.) on Friday said Republicans will look to undo an offshore drilling plan released by President Obama that blocks oil exploration in the Arctic Ocean. “In its final days, the Obama administration is throwing up more barriers to American energy development. This plan to exclude the resource-rich Arctic from exploration possibilities squanders our ability to harness the abundant, affordable energy sources that power our economy,” Ryan said in a statement.  “Our Better Way agenda outlines a plan to unleash our energy potential and create American jobs. That’s why we will work to overturn this plan, and to open up the Arctic and other offshore areas for development.” Ryan joined much of the oil industry in slamming the drilling plan, a five-year policy that will allow for oil lease sales in the Gulf of Mexico but not the Atlantic or Arctic Oceans. The industry had hoped Obama would allow drilling in the Arctic as part of the plan. “Our national energy security depends on our ability to produce oil and natural gas here in the U.S., and this decision could very well increase the cost of energy for American consumers and close the door on creating new jobs and new investments for years,” American Petroleum Institute President Jack Gerard said in a statement. “We are hopeful the incoming administration will reverse this decision.” Undoing the drilling plan will take time. Because the plan is not a regulation, it is not subject to the Congressional Review Act, which allows Congress to undo executive branch rules.President-elect Donald Trump has spoken about allowing more offshore drilling, and he could rewrite the drilling plan to expand exploration in the Arctic and beyond. But that’s a lengthy process — the current plan was years in the making. Even so, some environmental groups are so concerned about the prospect of Trump expanding drilling that they’re asking Obama to issue an emergency order to withdraw some of the Arctic Ocean from the drilling program altogether, something they say he can do under existing law.

Bella Bella Fights Massive Diesel Spill After Tugboat Runs Aground - ICTMN.com: Bella Bella, British Columbia, is in the heart of the Heilsuk Nation, where harvesting clams, crab and kelp, and fishing for salmon, herring and other marine creatures is the lifeblood for all who live there. Now those waters have been poisoned by 52,850 gallons of diesel that they are still struggling to clean up a month after it happened. On October 13 the Nathan E. Stewart tug was traveling under a waiver that allowed it to transit Canadian waters without a Canadian marine pilot when it went ashore and sank in Seaforth Channel. More than 52,850 gallons (200,000 liters) of diesel fuel spilled into the coastal waters near the isolated community of Bella Bella when the tugboat ran aground and ripped open two fuel tanks onboard. Thousands of years of tradition and rich culture now hang in the balance as spill response crews struggle to contain the massive diesel spill while efforts have been plagued by harsh weather and high swells, making containment nearly impossible. “At the moment unfortunately things are stalled,” said Heiltsuk Council Member Jess Housty earlier this month. “In order to get the tug dragged out to deeper waters and lifted onto a salvage barge, we need a good weather window, and we haven’t got one, and likely haven’t got one coming for another few days.” The spill could not have happened at a worse time, as the community was in the middle of harvesting food for the winter months. It also came as the federal government develops an oil tanker ban for the Central Coast of British Columbia to protect the largest temperate rainforest in the world, the Great Bear Rainforest.

Could we yet witness Keystone XL pipeline return from the dead? - Capitol Crude podcast - It's alive! After being buried in the White House policy graveyard last year by President Barack Obama, the Keystone XL pipeline is back from the dead following Donald Trump's election win. TransCanada is considering applying again for a permit for the 1,700-mile pipeline and Trump has vowed to approve it. But it's not a done deal. Jane Kleeb, the founder of Bold Nebraska and, arguably, the leading voice in the fight against Keystone XL, talks with S&P Global Platts senior editors Brian Scheid and Meghan Gordon on the renewed effort to stop the pipeline from being built.

Groundbreaking study shows link to fracking and earthquakes: In a University of Calgary study of earthquakes west of Fox Creek, Alberta, the geoscientists discovered a link between fracturing, or fracking, and earthquakes in the region. According to the new study published in the journal Science November 17, seismic activity in northwest Alberta over the last five years was likely caused by fracking, a process in which chemically-laden water and sand are injected into shale formations under high pressure to release oil or gas.  Researchers mapped out over 900 seismic events that occurred near the Duvernay shale deposit around the Fox Creek and Duncan Canyon area, dating back to December 2014. This includes the 4.8 magnitude earthquake that occurred on January 12, in Northern Alberta that was considered to be the strongest fracking-induced earthquake ever, reports EcoWatch.Under current rules, according to CBC News, if an earthquake in the Fox Creek area is a 4.0 magnitude or above, operations must be ceased immediately. Repsol did just that after the January earthquake. The study found there were two main causes for the earthquakes. The first is the immediate pressure increases as the fracking process is occurring. "We were able to show that what was driving that was very small changes in stress within the Earth that were produced by the hydraulic fracturing operations," said David Eaton, co-author of the study, reports DeSmogBlog. The second cause comes from pressure changes created by lingering fracking fluids. A fault will shake when the fluids seep into tiny spaces in the porous rock, causing increased pore pressure. "If that pressure increases, it can have an effect on the frictional characteristics of faults," Eaton told the Globe and Mail. "It can effectively jack open a fault if the pore pressure increases within the fault itself and make it easier for a slip to initiate."

Argentina plans railway to help lower shale drilling costs - Argentina's national government is in the preparatory stages for equipping an aging railway and laying new train tracks to service the Vaca Muerta shale play. Jorge Ocampos, a legislator in the province of Rio Negro, made a presentation of the $1.2 billion project late Wednesday, according to a statement Thursday. The railway is to run from the port city of Bahia Blanca in Buenos Aires province through Rio Negro to Anelo and Rincon de los Sauces, a town and city at the heart of Vaca Muerta activities in the southwestern province of Neuquen. The project also includes building more roads and highways, Ocampos said in the statement.While there is no start date for the project, Ocampos said the cargo train is scheduled to be in operation in five years, citing a plan drafted by the national Ministry of Transport. The ministry did not respond to a request for further information. The Diario Rio Negro newspaper reported that the project involves revamping 1,300 km of lines from Bahia Blanca to Neuquen City, and laying 250 km of new tracks from Chichinales, Rio Negro to Anelo and Rincon de los Sauces. The train would help lower the cost of moving proppant for fracking from national or foreign suppliers, the paper reported, citing unnamed sources in the Ministry of Transport. With the project, the government wants to increase the transport speed to 90 km/hour, and run eight to 10 trains per day, the paper said.

Oil and Gas: Venezuela oil company PDVSA delays bond payments - (AP) — Venezuela's state oil company reportedly is delaying $404 million in bond payments in an apparent sign that the oil giant's financial woes are worsening amid the slump in petroleum prices.  A JPMorgan analysts' note said Monday that the oil company PDVSA is taking advantage of a grace period to delay payments on 2021, 2024 and 2035 bonds. The terms of the bonds permit PDVSA to put off payment for 30 days before being considered in default. Analysts do not expect the company to default, but the delay highlights cash flow problems and raises the specter of non-payment. PDVSA is the lifeblood of Venezuela's faltering economy, which is beset by high inflation and shortages of basic goods. Oil is virtually the country's only source of export revenue.

Nigerian economy shrinks further in Q3 on declining oil output -  The Nigerian economy shrank further by 2.24% year-on-year in the third quarter on the back of a slump in oil production, the country's economic mainstay, according to government figures Monday. Nigeria, which was Africa's largest oil producer until a few months ago, slipped into recession after its economy shrank by 2.06% in Q2, as the impact of militant attacks on oil facilities weighed on the country's economy. Data released on Monday by the National Bureau of Statistics showed that Nigeria's oil production averaged 1.63 million b/d in Q3, lower than the average 1.69 million b/d output in Q2, and 25% lower than the 2.17 million b/d production a year ago. "As a result, real growth of the oil sector slowed by 22.01% (year-on-year) in the third quarter of 2016. As a share of the economy, the oil sector contributed 8.19% of total real GDP, down from figures recorded in the corresponding period of 2015 and the preceding quarter of 2016 recorded at 10.27% and 8.26% respectively," the government agency said. Nigerian oil output has fallen sharply this year as renewed militancy in the oil-rich Niger Delta region resurfaced after some years of relative calm. Production was slashed from 2.2 million b/d earlier in the year after militants continued to bomb facilities, and at one point this year left four Nigerian crude export grades -- Bonny Light, Brass River, Forcados and Qua Iboe -- under force majeure. The attacks have continued even with the government trying to reach a peace deal with militants and activists in the Niger Delta following Nigerian President Muhammadu Buhari meeting with leaders around three weeks ago.

Oil wildcatters flee African deep water to weather rout - Drillers burned by a two-year slump in crude prices are slowing exploration of deep-water prospects off the coast of Africa, undermining a key driver of growth on the continent. In the 25 years since 1982, African oil output doubled to more than 10 million barrels a day. Now, with prices sitting below $50 a barrel, international drillers have cut their plans for capital expenditure in the next five years by $100 billion, according to a Nov. 2 report by Wood Mackenzie Ltd. The change could drop the region’s oil production 46 percent by 2030, the report said. Hardest hit: Nigeria and Angola, countries that are already struggling economically and depend on oil for almost all their foreign income. To revive deep-water exploration on the continent, crude prices would have to rise to $60 to $70 a barrel, according to Keith Myers, managing director of the consulting firm Richmond Energy Partners. “Africa suffered the most of any region in terms of the decline in frontier exploration," Myers said in an e-mail. Deep-water exploration was “the driver for production growth in the region.” In September, the number of offshore oil and gas rigs in Africa fell to just nine, down from a high of 48 in November 2014, according to Baker Hughes Inc. data. That’s the lowest level in more than a decade. Overall, the number of rigs on the continent dropped to a five-year low of 77. “We’re being more disciplined,” said Oliver Quinn, director of Africa and global new ventures at Ophir Energy Plc, speaking at the Africa Oil Week conference in Cape Town this month. The London-based explorer has plans to drill three to five frontier wells over the next two years, split between Africa and Asia, according to Quinn. “We don’t want to go out and spend capital that we can’t replenish to do exploration,” he said.

USGC distillate exports to Europe at 1 mil mt in Nov to date -  A total of about 1 million mt of US Gulf Coast distillates could land in Europe and North Africa in November, according to an estimate based on Platts trade flow software cFlow. S&P Global Platts calculates cargo volumes based on the size of each ship and standard diesel export sizes from the US to Europe. In total, 25 vessels were spotted on the US Gulf Coast-Europe route, including eight heading towards the Mediterranean. Of the 17 ships sailing towards Northwest Europe, nine are heading towards the Amsterdam-Rotterdam-Antwerp hub. Some cargoes originally expected to discharge in Europe diverted over the course of last week, resulting in a lower arbitrage volumes week on week. This notably included the Medium Range tanker Turquoise, originally headed for Milford Haven in the UK and now en route for Brazil.Trading sources said that on the back of healthy demand, Latin America was competing with Europe to attract US barrels, even though arbitrage economics to ship distillate across the Atlantic remain poor. In October, about 1.16 million mt of distillates were exported from the US Gulf Coast to Europe.

UK gas-for-power demand hit 71-month high November 23 -  The amount of natural gas used by UK power stations to generate electricity neared a six-year high Wednesday, confirming the 2016 trend of gas -for-power demand posting large year-on-year gains, data from National Grid showed. Gas-for-power demand in the UK hit 79 million cu m Wednesday, the highest for a single day since mid-December 2010, after having climbed from 74 million cu m Tuesday and 69 million cu m Monday. This pushed the month-to-date average up close to the 70 million cu m/d mark, higher than the October average of 65 million cu m/d where total monthly gas-for-power demand was above the 2 Bcm mark for only the second time since January 2011.Gas-for-power demand in the UK this year so far is almost 50% higher than the 2015 period on the back of coal-fired power plant closures and more favorable generation economics. Moreover, cumulative gas-for-power demand since the beginning of the winter-delivery period on October 1 of 3.6 Bcm is already closing in on the Q4 2015 total of 3.7 Bcm and is on course to be the highest for a fourth quarter this decade. The month-ahead clean spark spread -- the theoretical margin available to a 50%-efficient HHV gas-fired power plant including emissions -- was assessed at GBP24.253/MWh Wednesday by S&P Global Platts, with the quarter-ahead equivalent at GBP20.876/MWh. However, gas-fired generation economics were expected to become tighter in the short term with the Summer 2017 spark spread at GBP6.135/MWh and the Summer 18 peer at GBP2.688/MWh. Nonetheless, with coal-fired power plants expected to be more expensive to run than gas-fired power plants in the coming years, gas can be expected to continue to be the majority fuel in the UK generation mix in the coming years despite the narrower spreads.

NYMEX December gas settles 10.7 cents higher at $2.95/MMBtu -  The NYMEX December natural gas futures contract continued to rally on Monday as traders reacted to colder weather encompassing much of the northern tier of the nation. The December contract settled at $2.95/MMBtu, up 10.7 cents from Friday's close. "This rally isn't what I would call bullish, but the market is certainly less bearish than a few weeks ago," Kyle Cooper of ION Energy Group said. "If we have even normal temperatures this winter, I think gas supplies will be at a premium during 2017." Monday's price gains coincided with a revised long-term National Weather Service forecast that now calls for below-average temperatures into next week for major gas-consuming regions of the Mid-Atlantic, Great Lakes and Southeast.According to the weather service, strong northwesterly winds on the backside of a low-pressure system brought heavy lake-effect snow Monday from Michigan to upstate New York. The colder weather is a relief to gas pipeline and storage operators as the storage stocks reached a record 4.047 Tcf for the week ended November 11, according to the US Energy Information Administration. Demand forecasts are providing support for Monday's pricing gains. According to Platts Analytics' Bentek Energy, total US demand is expected to climb to 83.2 Bcf Monday and average about 82 Bcf for Thanksgiving week. Dry gas supplies for the Lower 48 states were expected at 71.8 Bcf Monday and remain close to that level for the week ahead.

Producers urged to ignore conventional oil, gas at their peril -  The future for conventional oil projects is far from over despite the recent slump in large finds and an industrywide shift to developing tight oil, delegates at an upstream event in London heard last week. While fewer conventional exploration wells are being drilled as a result of the upstream spending collapse in the wake of the oil price slump, many in the industry have prematurely concluded that sources of conventional oil are running out, according to the head of exploration research at Wood Mackenzie Andrew Latham. "People do tend to look at the total volumes being added in recent years and conclude that we are running out of subsurface potential, I find that unlikely," Latham told the PETEX conference. "It's our view that conventional exploration is a perfectly viable growth and renewal option, particularly for those that are good at it."Conventional oil finds will remain a key driver of new production growth, Latham said, particularly as industry costs come down and access to new acreage begins to ease. Some 10 million b/d of current global oil production is being sourced from conventional oil finds made since 2000, he said, a figure that is likely to double to around a fifth of total world oil production by the mid-2020s. Pointing to new exploration plays such the prolific gas carbonate geology offshore Egypt and Cosmos' recent finds in Senegal and Mauritania, Latham said discovered volumes of conventional oil and gas remain, on a per well basis, on par with historical averages. "In reality, a lot of exploration's recent decline is nothing more than the fact that it's drilling fewer wells in the downturn," he said.

Indonesia allows private companies to build domestic refineries -  The Indonesian government has issued a new regulation allowing private companies to build and operate domestic refineries with the aim of accelerating construction of new projects and cutting Indonesia's dependency on fuel imports, a government official told S&P Global Platts late Monday. Under a decree issued November 10, private companies can now import crude or condensate to meet their refining needs and can export refined products if domestic needs have been met. They will also be able to sell their products on the retail market and will be appointed to distribute subsidized fuel by the government, energy and mines ministry spokesman Sujatmiko said. Indonesia still appoints some companies, besides state-owned Pertamina, to distribute fuel throughout Indonesia.Separately, the government plans to invite bids on new mini-refinery in Maluku, in the eastern part of Indonesia, this year. About three to five investors have expressed interest in participating in the tender, oil and gas director general I Gusti Wiratmaja Puja said on the directorate general's website. Maluku is an area estimated to have about 3,000-3,500 b/d of crude that could be refined at the proposed refinery, Puja said. The government will also invite bids for other locations next year, Puja said.

China's teapot refiners making ripples overseas. -- On the last day of October 2016, the first-ever shipment of Chinese motor gasoline to the U.S. was delivered to Buckeye’s Reading terminal in New York Harbor. The vessel took a circuitous route to New York, taking on cargo in the Hong Kong lightering zone, stopping in South Korea to take on another parcel of clean product, dropping off some benzene in Houston, and then finally heading to New York. That complicated journey suggests that the economics of a regular China-to-East Coast gasoline trade route are not there (at least for now), but the shipment highlights a trend: China is becoming more assertive as an exporter of petroleum products and the implications are global. In an international market defined by oversupply, inroads by China necessarily result in other producers losing market share. In today’s blog, we examine the impact of rising clean petroleum product exports—particularly from China, but also from India—and the corresponding ripple effects both on the world market and on U.S. refiners. A structural shift in China’s desire to improve the efficiency of privately held, so-called “tea-pot” refineries has opened the door to tea-pot refiners being free—for the first time—to export their clean products to the global market. Clean products include gasoline and middle distillates (diesel, fuel oil, jet fuel). Further supporting this emerging trend is that these same tea-pot refiners are finding it harder to sell their products in their home market. The combination of tighter Chinese environmental regulations and slowing domestic demand growth have created a surplus of Chinese petroleum products, which are now finding their way to compete overseas. As you might expect, the first area in the U.S. to feel the impact of a larger outflow of petroleum products from China is the West Coast. U.S. West Coast imports of middle distillates—gasoil and jet fuel—from China more than doubled to 11,600 b/d through the middle of November 2016 compared to the average last year. In 2015, Chinese imports were less than 6% of total middle distillate deliveries to the West Coast, while so far in 2016, China’s market share stands at 9.6%. While the short-term impact is muted, it may only be the beginning. While middle distillate exports from China to the West Coast are up, ClipperData’s cargo tracking data shows that there were no similar exports of gasoline into the West Coast—including blending components and naphtha. This is partly because Chinese refiners cannot meet stringent West Coast gasoline specifications, but also because China, overall, is short gasoline (though its exports of gasoline are growing, as we’ll get to in a moment).

Major investment needed to avoid output fall at Iran's South Pars natural gas field: Petropars - Iran will need to invest heavily in compression platforms at its giant South Pars gas field if it is to arrest falling gas and condensate production, the CEO of state-owned energy firm Petropars said Sunday. "Many phases of the South Pars gas field have entered the dropping region of production plateau. To overcome the production drop, compression platforms have been planned to compensate the drop in reservoir pressure," Petropars CEO Hamid Akbary said at the Condensate and Naphtha forum in Dubai. Studies have already begun for the compression platforms and the first engineering, procurement and construction contracts are expected in 2018, he added, saying the required investments are "substantial." This is the first time any Iranian official has spoken about production from South Pars falling naturally unless mitigated, Iman Nasseri, a senior consultant with Facts Global Energy, said at the Dubai conference.Iran's condensate production has exceeded 610,000 b/d this year, with 561,000 b/d of this -- or around 90% -- coming from the 16 operating phases at the giant offshore South Pars gas field in the Persian Gulf, Akbary said. The latest additions to the project were phases 17, 18 and 19, which came into operation this year, Akbary said. In addition, eight new phases are currently being installed at the field. Phases 20 and 21 will become operational in 2017, Akbary said, while phases 13 and 22-24 are expected to begin in 2018. Iran hopes the entire development will be completed in 2021. By then, South Pars condensate production will exceed 1 million b/d.

Oil at 3-week high as Russia’s Putin feeds expectations for OPEC output deal - Oil futures settled at a three-week high on Monday, buoyed by a renewed push by members of the Organization of the Petroleum Exporting Countries to resolve differences ahead of next week’s key meeting and non-OPEC Russia’s apparent willingness to freeze production. December West Texas Intermediate crude tacked on $1.80, or 3.9%, to settle at $47.49 a barrel on the New York Mercantile Exchange on the contract’s expiration day. That was the highest settlement for a front-month contract since Oct. 28, according to data from Dow Jones. January WTI crude which is the new front-month contract, added $1.88, or 4.1%, to end at $48.24 a barrel. January Brent crude on London’s ICE Futures exchange rose $2.04, or 4.4%, to $48.90 a barrel.On Monday, oil prices got a boost as Putin voiced his “belief that an output deal will be reached later this month,” Craig Erlam, senior market analyst at OANDA, said in a note to clients.  Putin said he sees a “high probability” that an agreement to curb oil production will be reached at the Nov. 30 meeting in Vienna.  “We will do everything that our partners from OPEC are expecting. To freeze crude production is not an issue for us,” Putin said Sunday at a news conference in Lima after an Asia-Pacific Economic Cooperation summit, according to Reuters. Russia isn't a member of OPEC, but is among the world’s biggest oil producers.

Oil Wagers Surge To 9 Year Highs As OPEC Decision Looms - In the aftermath of Trump victory and as an OPEC 'deal' decision looms, hedge funds, oil producers, and consumers have placed the largest number of bets on WTI's next move since August 2007. Producers and merchants increased short positions, or protection against lower WTI prices, to the highest level since March 2011. They added 66,613 bearish contracts over the past two weeks as prices retreated from last month’s peak at above $50 a barrel. Money managers’ net-long position in WTI advanced for the first time since mid-October,climbing by 3,906 futures and options to 163,321. Shorts climbed 14 percent while longs rose 8.1 percent.While WTI is exuberantly rising this morning on the heels of Putin's positive 'deal' comments... We note that Oil VIX costs are at their highest in 7 months suggesting traders expect significant price swings no matter what.As Bloomberg reports, “There’s tension in the market, with both producers and consumers worried about what OPEC does or won’t do on Nov. 30,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “They want to be protected from surprising price moves.”“I suspect that when the OPEC meeting is over there will have been a lot more smoke than fire,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “If they don’t come up with a convincing agreement, they’ll be forced to revisit the issue before long.”

Oil prices rise to highest this month on hopes of OPEC deal | Reuters: Oil prices rose on Tuesday to their highest this month as a growing consensus emerged in the market that OPEC would overcome internal disputes and scepticism to strike a deal that materially reduces crude output. Some warned a failure by the Organization of the Petroleum Exporting Countries to reach agreement at a Nov. 30 meeting, or, more importantly to implement it, would send prices crashing as a two-year glut of crude remained unabated. Many in the market think OPEC would harm its reputation if a deal were not struck and so focus has shifted to which countries would bear the brunt of the cuts, when exactly the global market could become balanced and how the cartel could raise prices without triggering a burst in U.S. shale oil output. Brent crude oil futures were up 22 cents a barrel at $49.12 by 1212 GMT (7:12 a.m. ET), having earlier risen $1 in a push against the $50 mark for the first time since the end of October. U.S. West Texas Intermediate (WTI) crude futures were up 14 cents at $48.38 a barrel. Prices were boosted by comments from a Nigerian official attending an OPEC technical meeting, which is trying to hammer out details of a deal, that it was likely all countries would be "on board" by the end of Tuesday. OPEC is trying to bring its 14 member and non-OPEC producer Russia to agree on a coordinated cut to prop up the market by bringing production into line with consumption.

Russia, Saudi Arabia On Shaky Common Ground -- Zeits -- November 21, 2016 - From SeekingAlpha:

• President Putin this morning re-iterated Russia’s position in the production control negotiations
• While Russia’s “bid” falls far short of Saudi Arabia’s “ask,” Russia may win this negotiating round
• However, to achieve a durable oil price response, OPEC and Russia need to achieve market re-balancing in substance, not just before the media
• Saudi Arabia has significant negotiating power, as its sponsorship for the production pact is vital for Russia's and other producers' export revenues

Goldman Now Expects OPEC To Reach Production Cut Deal, Raises Oil Price Forecast -- Among the reasons for today's rebound in oil prices, as noted earlier, is renewed hope that OPEC will reach a deal during the cartel's upcoming meeting in Vienna on November 30. The catalysts include Iraq and Iran, both of whom signaled optimism surrounding the proposed OPEC supply-cut deal, while Russian President Vladimir Putin said his nation is ready to freeze crude output at current levels, and sees no obstacles to an agreement. To emphasize this, moments ago Putin was quoted by newswires as reiterating a position he laid out over the weekend:  PUTIN SAYS WILL NOT BE DIFFICULT FOR RUSSIA TO FREEZE OIL OUTPUT.  On the other hand, Iraq, OPEC’s second-biggest producer, said it would offer proposals this month to help the producer group reach an agreement on an output freeze to shore up prices. Curiously, there was no mention of Iraq actually agreeing to cut production and by how much, or just how much of the delta to 32.5 mmbpd Saudi Arabia is willing to absorb. As Bloomberg notes, details of the Iraq proposals were not provided in an e-mailed statement from the Iraq Oil Ministry on Monday, probably for a simple reason: there were none, as OPEC's strategy remains simple: jawbone shorts into further covering ahead of the OPEC meeting. The nation’s “legitimate demands” shouldn’t be considered as obstacles to reaching an accord, Oil Minister Jabbar al-Luaibi said in the statement. Iraq has sought an exemption from joining any production cuts, arguing that its fight against Islamic State justifies special treatment. The Organization of Petroleum Exporting Countries agreed in September in Algiers to cut their collective output to 32.5 million to 33 million barrels a day. While quotas will be decided at OPEC’s Nov. 30 meeting, Libya, Nigeria, Iran and Iraq have said they should be exempt.“Iraq’s legitimate demands should not be perceived as an obstacle to reaching a new agreement to freeze production,” al-Luaibi said in the statement. Iraq looks forward to “reaching a fair agreement that would take into consideration everyone’s interests and that puts an end to the glut.” Iraq will take “new proposals and ideas” to OPEC this month to help members reach an accord, al-Luaibi said in the statement. An agreement will “help achieve the common objectives of the producers, including market stability and shoring up prices to acceptable levels.”

OPEC Technical Talks Falter As Key Members Reject Cut -- Oil prices hit recent highs on Monday on OPEC deal hopes, but hit a snag on Tuesday as Iraq and Iran remain hesitant towards an output cut. Oil prices soared on Monday following news that OPEC is making progress on a deal to cut production. The potential breakthrough is coming from Iraq, which is widely seen as the most obstinate of all OPEC members (along with Iran), arguing that it needs higher production to pay for its war against the Islamic State. Iraqi officials said they will offer three new proposals at the technical meeting taking place this week in Vienna. The WSJ reports that the proposals “will be consistent with OPEC policy and are designed to bolster the unity of the group,” although few specifics were available. “All of the options will be logical and in line with OPEC policy,” Iraqi oil minister said. WTI spiked by nearly 4 percent and Brent was up 4.6 percent on Monday before falling back a bit on Tuesday afternoon.  On top of the new openness from Iraq, commentsfrom other prominent OPEC and non-OPEC officials buoyed the markets further. Iran’s oil minister said that it’s “highly probable” that OPEC reaches a deal. Russian President Vladimir Putin said he sees no obstacles to a deal. “It is likely everybody will be on board by the end of the day,” said Ibrahim Waya, a Nigerian official. One last thing that could boost the chances of a deal: the latest proposal being discussed in Vienna is a deal that could last for just six months rather than a year, making it easier to stomach for some of the holdouts.

Oil Slides: OPEC "Deal" Suddenly In Jeopardy --Earlier today, oil spiked and pushed stocks to new all time highs, after the Nigerian OPEC delegate Ibrahim Waya said that not only is "everyone on board" ahead of the November 30 Vienna cartel summit, but that he expected details of the output accord would be finalized today.That, however, was put in question later in the morning when OPEC members said that Iran, Iraq and Indonesia were all said to have "reservations" about a proposed 4.5% production cut. Worse, according to the news, it appeared as if Iran would not be part of the exempt from production cuts group at all, contrary to the Algiers agreement, suggesting that Saudi Arabia had changed its mind once again.And now, moments ago, oil tumbled to intrday lows on the latest batch of headlines according to which the OPEC Vienna "deal" is now suddenly in jeopardy when Bloomberg reported that the OPEC committee is said to defer the issue of Iran and Iraq - the second and third largest producers in OPEC - to the November 30 meeting altogether, confirming what the skeptics knew all along - that not only will a deal not be finalized today, but that a deal may not even happen next week in Vienna, as the rift between what Saudi Arabia is willing to "cut" to reach a deal and what it demands from its key competitors in a jockeying for market share, remains as wide as ever. Oil promptly dropped to day's lows on the news.

Oil Slides After Bigger Than Expected Gasoline Build -- After a day of frenetic OPEC headlines being all that matters, oil traders may briefly focus on fundamentals as API reports an unexpectedly large build in gasoline inventories ( +2.68mm vs 900k exp). Overall crude, cushing, and distillates saw inventory draws which left wti slightly lower post-data. API

• Crude -1.28mm (+1mm exp)
• Cushing -140k (-100k exp)
• Gasoline +2.68mm (+900k exp)
• Distillates -350k

After last week's across the complex builds, it was ony gasoline that saw a build this week (which fits seasonally)

OPEC's Matrix: If 1 Million Bpd Are Cut, Oil Will To Rally To $59 - While the market has taken the latest round of "optimistic" jawboning by OPEC members in stride, sending crude higher by 4 percent ahead of next week's meeting in Vienna where the terms of the OPEC production cut are expected to be finalized, the reality is that a favorable outcome may be problematic. As Bloomberg's Julian Lee explained overnight, "OPEC says it’s close to a deal to cut oil output for the first time since 2008, a move that may halt a 2 1/2-year price slump. The actions of individual member states tell a different story. The simple math supporting cuts looked solid at OPEC’s meetings in June and December. Prices then were way below most members’ fiscal break-even points. An output cut now of 1.5 million barrels a day, or 5 percent, would need to boost the oil price by only $2.50 a barrel for OPEC nations collectively to be better off. A $5 price increase would boost the value of what they pump by about $100 million a day."  As Lee notes, while OPEC Secretary-General Mohammed Barkindo has been touring member nations to shore up support for an agreement before the Nov. 30 meeting, culminating with a trip to Doha for talks last week, "the meeting didn’t resolve much. It certainly didn’t tackle any of the thorniest questions that OPEC must still overcome if coordinated measures are to happen."   Meanwhile, OPEC production continues to surge, hitting new all-time highs this month, effectively leaving the cartel little option but to reduce supply, however even with a cut it would only bring down production to a level seen as recently as May of this year. As a result, as Bank of America notes, downward oil price pressures are now coming mostly from within the cartel itself. "Will OPEC decide to end the price war or not? For starters, it is important to note that the cartel is running with very limited spare production capacity. As a result, we would argue that it makes good economic sense to end the price war, or at least declare a truce, at this stage." While BofA is not expecting a return to the old regime, where Saudi micromanaged global oil stocks, it does project OPEC crude supply to drop sequentially (Chart 16). Under this scenario, BofA's base case, WTI crude oil prices will average $55/bbl in 1H17 and $59/bbl over the course of the year. The cut would enable a fast rebalancing of global crude markets and possibly a shift into backwardation. Moreover, the deal would likely incorporate a production freeze from Russia.

Will We Ever See $100 Oil Again? | OilPrice.com: A report from auditors PricewaterhouseCoopers (PwC) has revealed that oil prices are unlikely to climb back to the $100 level, and will have a limited rise from the current spot price to between $60 and $70 per barrel over the next few years. The rise, which would pull oil prices up from the below $50 per barrel mark where it has sunk since late October, should facilitate a rise in capital expenditure (capex), PwC argued. The report highlights the precipitous decline in global upstream capex, where some commentators have said that there has been a 40 percent reduction in this genre of spending, compared to the highs of 2014. Oilfield service companies have also been battered by a broad decrease of drilling activity, and operational costs. For example, there has been a 30 percent decrease in the day rates for drilling ships this year, compared to two years ago. In a chilling statement for oil companies, the report concluded that there is no longer a ‘ceiling’ of $100 barrels of oil that there used to be, before prices started to slide in the second half of 2014. Research and development is also an area that has been badly hit, with oilfield service companies spending less, a significant trend as they spend more as a percentage of sales compared to the major oil companies. A lack of innovation could be costly to competitiveness in some areas, such as the North Sea in the UK the report opined.New technology is essential to allay the lack of attractiveness of the zone, due to the high costs of production.

US Crude Production Rises As Rig Count Reaches 10-Month Highs -- For the 24th week of the last 26, oil rigs rose (by 2) to 474, the highest since January 2016. US crude production rose again last week tracking the lagged trend of rising rig counts in the US. Notably US crude production looks set to rise given the rig count moves (and if OPEC agrees a deal and spooks prices higher, that production may well arrive sooner).

US Rig Count up 5 This Week to 593; Pennsylvania up 4 - ABC News: number of rigs exploring for oil and natural gas in the U.S. increased by five this week to 593. A year ago, 744 rigs were active. Depressed energy prices have curtailed exploration although the rig count has been rising in recent weeks. Houston oilfield services company Baker Hughes Inc. said 474 rigs sought oil and 118 explored for natural gas this week. One was listed as miscellaneous. Pennsylvania gained four rigs, Texas three and Colorado two. Wyoming declined by three, New Mexico two and North Dakota one. Alaska, Arkansas, California, Kansas, Louisiana, Ohio, Oklahoma, Utah and West Virginia were unchanged. The U.S. rig count peaked at 4,530 in 1981. It bottomed out in May at 404. The weekly tally, normally released Friday, was released Wednesday because of Thanksgiving.

BHI: US rig count up 5 in short holiday week - Oil & Gas Journal - The overall US drilling rig count increased by 5 to 593 during a week ended Nov. 23 that was shortened by the Thanksgiving Day holiday, according to Baker Hughes Inc. data.The latest movement comes after last week’s 20-unit jump, the largest since April 2014 (OGJ Online, Nov. 18, 2016). Up in 22 the past 26 weeks, the count has added 189 units since bottoming at 404 on May 27.Oil-directed rigs gained 3 units this week to 474, an increase of 158 since May 27. Gas-directed rigs rose 2 units to 118, up 35 since Aug. 26 due in part to a resurgent Marcellus shale. One rig considered unclassified remains operating.All 5 of the units to come online are land-based, horizontal rigs, bringing those tallies to 568 and 475, respectively. The horizontal count is now up 161 since May 27. Despite a 1 unit loss this week to 228, the Permian has been the primary catalyst for the US drilling rebound since last spring.  Drilling rigs, drilled but uncompleted wells, and anticipated barrels of production continue to mount in the basin, where one operator in particular has undertaken a large expansion of its acreage position over the past year. Midland-based Concho Resources Inc. said it now plans to run 8 rigs in the northern Delaware basin during 2017 following its agreed upon acquisition of 16,400 net acres in the region announced this week (OGJ Online, Nov. 21, 2016). The new rig count for the area will double the firm’s 2016 average.   In its third-quarter earnings report published prior to the latest acquisition agreement, the firm said it intended to allocate 35% of its total 2017 drilling capital to the northern Delaware, accounting for 7 rigs working (OGJ Online, Nov. 14, 2016). Spreading its presence around the basin, Concho since January has also acquired acreage in the southern Delaware and Midland basins. The Permian is up 94 units since May 13.Helping advance the gas-drilling rebound, Pennsylvania led the major oil- and gas-producing states with a 4-unit rise this week to 29, an increase of 16 since July 8. The Marcellus also gained 4 units and now totals 38, up 17 since Aug. 12.Texas tallied 3 more units to bring its count to 279, up 106 since May 27. Colorado and the DJ-Niobrara each rose 2 units to 22 and 20, respectively. Elsewhere, the Mississippian increased a unit to 4.North Dakota and its Williston basin each dropped a unit to 33. New Mexico lost 2 units to 29. Wyoming decreased 3 units to 13. The Cana Woodford relinquished 2 units to 38.US offshore rigs and those drilling in inland w aters remain at respective totals of 23 and 2.

WTI Spikes After Iraq Headlines, Unexpected Crude Inventory Draw - A crude draw and bigger than expected gasoline build overnight from API did nothing for oil prices as OPEC headlines dominate trading and DOE data confirmed API with a modest crude draw and bigger than expected Gasoline build. Oil prices are rising on Iraq headlines even as crude production rose very modestly.  DOE

• Crude -1.255mm (+1mm exp)
• Cushing -97k (+300k exp)
• Gasoline +2.317mm (+900k exp)
• Distillates +327k (-1mm exp)

Confirming API data, DOE reports a bigger than expected Gasoline build and modest crude draw (as crude imports dropped 845k last week). Notably Distillates are still building at a time when seasonal norms should see a draw.  US Crude Production rose very modestly on the week.

Is OPEC Playing The Oil Markets Again? -- Oil prices moved back up closer to $50 per barrel on the sudden surge in optimism surrounding an OPEC deal. With the meeting just days away, everybody is playing ball and sticking to the script, and the odds of an agreement have improved markedly compared to a few weeks ago. Iraq offered three proposals to OPEC members, showing a renewed willingness to negotiate after weeks of disputing production data and demanding an exemption from the proposed cuts. Details of the proposal were kept quiet, but Iraqi officials sounded cooperative in an emailed statement. “Iraq’s legitimate demands should not be perceived as an obstacle to reaching a new agreement to freeze production,” Iraqi oil minister Jabbar al-Luaibi said, according to Bloomberg. Iraq is optimistic about “reaching a fair agreement that would take into consideration everyone’s interests and that puts an end to the glut.” Officials from Iran, Nigeria and even Russia also offered positive words about the prospects of an accord.m Oil prices shot up by more than 4 percent on Monday on the news. Oil has rallied once again in recent days after dropping into the low-$40s per barrel. Now back up close to the $50 per barrel threshold, OPEC has once again succeeded in jaw-boning the oil market.Goldman Sachs hiked its oil price forecast this week by a substantial amount. The investment bank expects oil prices to average $55 per barrel in the first half of 2017, up sharply from the previous estimate of $45 to $50. The bank is now “tactically bullish” on oil. “With greater confidence that the global oil market can finally shift into deficit later next year, we now believe that there is a strong rationale for low-cost producers to deliver a swift production cut to normalize inventories,” Goldman analysts wrote in a research note this week. In fact, Goldman Sachs sees prices rising across a range of commodities next year. The optimism has not trickled over into the oil futures market, at least not yet. Hedge funds and other money managers have stepped up their short bets on crude oil ahead of the OPEC meeting, covering against a steep downfall in prices should OPEC fail to come to terms. While the short positions on oil were notable, trading volume in general is way up. Bloombergnotes that as of mid-November, oil price volatility was at a seven month high. Bets on oil futures reached 1.47 million contracts for the week ending on November 15, the largest trading volume in nearly a decade.

Oil prices edge down on doubts about OPEC-led cuts | Reuters: Oil prices fell slightly on Wednesday amid investor doubts that OPEC will agree to a production cut large enough to make a significant dent in the global glut of crude as U.S. drilling rises. Members of the Organization of the Petroleum Exporting Countries (OPEC) will meet next week on Nov. 30 in Vienna to decide on the details of an agreement to cut output that the group has been trying to hammer out since September. Oil prices fluctuated throughout the day, starting lower in the morning and later briefly turning positive after the Energy Information Administration said U.S. crude stocks unexpectedly fell 1.3 million barrels last week after three straight weeks of builds. Reports that U.S. drillers added rigs this week tempered the gains ahead of the settlement. [RIG/U] In the U.S. market, West Texas Intermediate (WTI) crude oil futures CLc1 settled down 7 cents, or 0.2 percent, at $47.96 a barrel. Brent crude futures LCOc1 settled down 17 cents, or 0.35 percent at $48.95 a barrel. Calendar spreads, the difference in price between one month and the next in the futures market, showed little signs that traders are pricing in a big change in market fundamentals. The front to second-month WTI calendar spread traded at its widest level in seven months on Tuesday, although it narrowed slightly on Wednesday. The one to six-month spread traded at one of the widest levels since August. The WTI cash roll, which allows physical traders to roll long positions forward, traded down to negative $1.80 a barrel on Tuesday, the weakest since March. All are indications that traders expect little change in oversupply in the market in the near term.

Oil Prices Await Effect of OPEC Deal - WSJ: OPEC will meet next week amid a growing consensus the cartel will strike a deal to cut crude production. A question remains: How much would that actually affect oil prices? The days of $100 a barrel oil prices are over, oil-industry analysts said, no matter how strong any deal that the Organization of the Petroleum Exporting Countries cuts in Vienna on Wednesday. The more likely scenario is that a strong statement from OPEC, the 14-nation cartel that controls a third of the world’s oil production, would put a floor under prices of $50 a barrel in 2017, analysts said. A credible deal, with production targets for each country and enforcement mechanisms, could send prices above $55 a barrel, analysts said.“It’s looking more like a deal will go ahead,” said Warren Patterson, commodity strategist at ING Bank. “However, it will be important what the details around the deal will actually end up being.” Conversely, a breakdown in talks would send oil plunging back down to $40 a barrel or less, analysts said. “The stakes are high that an agreement will be reached,” said Rob Thummel, portfolio manager at Tortoise Capital Advisors, which manages $15 billion in energy assets. Underscoring the uncertainty about the deal’s prospects, banks polled by The Wall Street Journal kept their price forecasts largely unchanged from the previous month. The 14 banks in the survey predict that international Brent crude will average at $56 a barrel next year while U.S. benchmark West Texas Intermediate will average $54 a barrel next year. On Friday, Brent was trading at $48.54 a barrel while WTI was at $47.60 a barrel. Those prices are still down by more than half from mid-2014. OPEC agreed in September to reduce its record output, but its members have since increased production even more, complicating its calculations for a cut. That means the nitty-gritty details of any OPEC agreement on Wednesday will be more important than usual. OPEC members produced 33.643 million barrels a day in October, a record, after agreeing in September to cut down to between 32.5 million and 33 million barrels a day. Saudi Arabia is now backing a push for OPEC to cut to the 32.5 million mark and get Russia and other big producers outside of OPEC to join in with a cut of 500,000 to 600,000 barrels a day.

Dubai crude spreads rally mid-week ahead of OPEC meeting -  Benchmark Dubai crude intermonth spreads rallied Wednesday in Asia ahead of a meeting next week at which OPEC members are expected to reach consensus on the terms of a final production agreement that would limit the group's output. The spread between December and January Dubai crude swaps was seen at a one-month high of minus 29 cents/b Wednesday at 13:33 pm Singapore time (0533 GMT). It was last assessed at minus 36 cents/b Tuesday, up from a nine-month low of minus 66 cents/b on November 8, S&P Global Platts data showed. The gaining of momentum in the market around a potential OPEC production cut was putting upward pressure on the Middle Eastern sour crude market amid expectations those barrels would be the first impacted by any cuts, trading sources said Wednesday. "The market may feel OPEC may reach some agreement at the end of this month," said a North Asian crude trader, adding that the physical Middle East sour crude market also remained strong amid steady end-user demand.OPEC will meet in Vienna on November 30 to work through the details of a proposed production freeze at 32.5 million-33 million b/d from early 2017. "Market [is] certainly pricing in OPEC cuts, which means if [there were to be] any non-agreement next week, then market [will] dump hard," said a Singapore-based crude trader.

In Last Minute Twist OPEC Demands Big Production Cuts From Non-OPEC Members; Russia Balks - With less than a week to go until the much anticipated OPEC meeting in Vienna on November 30, the oil exporting cartel still seems unable to determine the terms of production cut quotas, who will be exempt from cutting, and even who will participate. According to Reuters, in the latest twist to emerge, as OPEC tries to find the sweet spot for production that reduces the oversupply of crude, the organization will ask non-OPEC oil producers to also make big cuts in output, as it seeks to share the burden of declining output and prevent market share gains by non-OPEC nations. The oil minister of Azerbaijan was quoted as saying the cartel may want non-OPEC producers to cut output by as much as 880,000 barrels per day (bpd). "It could be expected that OPEC members may ask non-OPEC countries to cut production volumes for the next six months starting from Jan. 1 2017 ... by 880,000 barrels from the total daily production," Azeri newspaper Respublika quoted the country's oil minister, Natig Aliyev, as saying. Reuters countered that according to an OPEC source the group had yet to decide on the final figures to be discussed on Nov. 28, when OPEC and non-OPEC experts meet in Vienna. As previously reported, OPEC is expected to discuss production cuts of 4.0-4.5% among its members at the Vienna meeting to comply with the roughly 1.2mmbpd reduction as set forth in the Algiers meeting which expects total OPEC output of 32.5-33.0mmbpd, but Iran and Iraq still have reservations about how much they want to contribute. A cut of 880,000 bpd would represent less than 2% of current total non-OPEC output. Shortly after the report came out, Russian energy minister Alexander Novak said Russia was working with Kazakhstan and Mexico, though not the United States, on joint output curbs, but reiterated Moscow preferred to freeze output over cuts. He said that a freeze would be “quite a difficult and harsh situation for us as our plans envisioned an output growth next year." In an amusing twist, Russia floated the concept of a "pro-forma" cut, saying that by keeping its production fixed, it would be an effective "cut" to its 2017 production plan.

Update On OPEC November, 2016, Meeting -- Zeits -- November 25, 2016 --From Zeits at SeekingAlpha:

• Iraq’s statement of support for a 1-million-barrel production cut signals continued success at the negotiation table
• The chances are high that progress is being made not only on the text of the resolution at the meeting, but also with the implementation mechanism
• OPEC’s ability to put in place a successful price support policy should not be underestimated

Keep this in perspective:
        WTI at about $47 right now
        breakevens below $25 in the Bakken right now (posted earlier)
        OPEC has yet to meet; tea leaves suggest OPEC is getting its act togther

Feature: OPEC scrambles to clinch oil output freeze deal ahead of Vienna meeting -  OPEC meets Wednesday with its credibility on the line, as ministers race against a self-imposed deadline to finalize a long-debated oil output freeze aimed at hastening the market's rebalancing and shoring up slumping prices. Details of the freeze pact, first unveiled in Algiers in late September, remain in flux, with various countries -- even from outside the producer group -- talking up their positions through the media, as they angle for leverage. Oil prices, which have whipsawed over the last two months, have risen in the past week on reports that OPEC members were apparently narrowing their differences. But close watchers say the stubbornly lingering obstacles -- including individual country allocations, exemptions for certain members and which production statistics to use -- may yet be a bridge too far."Ultimately, I do believe members are trying to reach a deal, but right now, it's hard to know what is posturing as part of a negotiating position and what is an absolute red line," said Yasser Elguindi, a Philadelphia-based analyst with Medley Global Advisors. "Unless the positions staked out so far are negotiable, it's quite possible that there will not be a deal in Vienna." All that has been settled at the moment is what was announced in Algiers: a goal for OPEC to freeze production between 32.5 million b/d to 33 million b/d, which would require a cut of between 640,000 b/d to 1.14 million b/d from October levels, according to the organization's own estimate. If finalized, it would be OPEC's first coordinated cut since 2008. Any deal will have to be based on goodwill and trust, as OPEC has no formal authority to enforce compliance within its own membership, let alone externally among the non-OPEC producers it hopes to engage. By all accounts, OPEC kingpin Saudi Arabia is eager to seal the freeze to provide some fiscal relief, but all along, it has been insistent that any cut burdens have to be shared equitably and transparently, as it withdraws from its long-standing role as the market's sole significant swing supplier. While Saudi Arabia is apparently willing to exempt Libya and Nigeria from the freeze as they recover from internal strife, it has been less amenable to requests from Iraq and Iran for relief.

The Economy Needs Higher Oil Prices – Goldman Sachs - OPEC is closing in on a deal to cut production, which will surely cause oil prices to rise. Oil is already almost back to $50 per barrel, so cuts of nearly 1 million barrels per day could boost prices well into the mid-$50s, even up towards $60 per barrel. That will provide a windfall to oil producers around the world and the sacrifice for OPEC members will be more than paid for by higher revenues. For example, Iraqi officials say that for every $1 increase in the price of a barrel of oil, their revenues jump by $1 billion per year. As a result, the odds of rising crude oil prices are high. But while that could be welcomed by the industry, consumers might not be as excited to see cheap gasoline disappear. After all, U.S. motorists have enjoyed two years of incredibly cheap fuel. Will rising oil prices put a dent in already tepid U.S and global economic growth? Perhaps not. As Bloomberg reported, Goldman Sachs wrote in a Nov. 22 research note that the global economy could benefit from higher oil prices. That conclusion may not be obvious, but here is the logic the investment bank lays out: Higher oil prices lead to a wave of capital that flows into major oil producing countries such as Saudi Arabia. Unable to use all the capital, Saudi Arabia sends the excess savings back into the global financial system. Banks then use that capital to lend. Interest rates also fall as the financial markets are more liquid. The end result is lower interest rates, more financial liquidity, higher asset values and ultimately greater consumer confidence. In short, higher oil prices could boost economic growth. These conclusions echo those from a team of IMF economists from earlier this year. In March, the IMF said that the assumed connection between oil prices and GDP (falling oil prices will boost GDP as consumers have more money in their pockets) is not as solid as previously thought. Many analysts, including those at the IMF, once assumed that although oil producing countries such as Saudi Arabia would be damaged from low oil prices, the benefits to consuming countries would more than offset those losses, delivering net benefits to the global economy.

Oil Slides As Saudis Refuse To Attend Non-OPEC Producers Meeting --WTI crude prices were already fading this morning, after a subdued day yesterday, but the first major headline from Vienna has sparked further weakness as Reuters reports that Saudi Arabia has told OPEC it will not attend a meeting with non-OPEC producers on Monday. Reuters reports that Saudi Arabia wants a deal agreed before they will agree to send anyone to the NOPEC talks. For now the reaction is modest (even with a heavy volume spike)

Saudis Said to Quit Russia Talks as OPEC Deal No Closer  - Saudi Arabia pulled out of planned talks with non-OPEC nations including Russia as disagreements about how to share the burden of supply cuts stood in the way of a deal to boost prices just days before a make-or-break meeting in Vienna. OPEC officials were scheduled to meet with non-members including Russia on Monday before a ministerial meeting in Vienna two days later. The meeting was later canceled entirely after the Saudis decided not to take part. Instead, the group called another internal meeting to try to resolve its own differences, particularly the question of whether Iran and Iraq are willing to cut production, said two delegates, asking not to be identified because the deliberations are sensitive. Saudi Arabia wants an OPEC deal in place before conversations with other producers such as Russia, one delegate said. The setback suggests that Saudi Arabia remains split from its two biggest Middle Eastern rivals at the Organization of Petroleum Exporting Countries. Iran insists it should be allowed to restore output to pre-sanctions levels, while it remains unclear if Iraq is still disputing the OPEC supply estimates that would provide the basis for any cuts. With less than a week until the crucial ministerial meeting, the refusal of just one major producer to participate could scuttle the whole of the agreement reached in September in Algiers. "The whole Algerian deal wasn’t clear from beginning and their approach was ‘leave it to later’,” said Abdulsamad al-Awadhi, a former OPEC official for Kuwait who is now an independent analyst in London. Two months after the initial accord "OPEC leaders are confused and the group’s founding members can’t solve differences, but they want to have a deal with non-OPEC. This is a tough call." Brent fell 3.6 percent to $47.24 a barrel in London on Friday. In New York, West Texas Intermediate fell to $46.06 a barrel.

OilPrice Intelligence Report: Saudis Withdraw From Non-OPEC Meeting, But Odds For Deal Are Still Good -- Oil prices held steady just below $50 per barrel at the end of the week, before falling back a bit as a result of bearish Saudi rhetoric. Iraq added momentum to the market in the lead up to the Vienna summit, agreeing to shoulder some of the burden for the cartel’s production cuts. After resisting for weeks, Iraq’s Prime Minister said that his country will participate. “Iraq will cut its output to preserve prices,” Al-Abadi told reporters in Baghdad on November 23. Iraq was one of the largest stumbling blocks to a deal, so things are looking pretty good for some sort of agreement next week. If they succeed, the deal would take effect in January.. To fall into the range that OPEC set out in Algiers – between 32.5 and 33.0 million barrels per day – OPEC will need to cut between 600,000 and 1.1 million barrels per day. Taking the midpoint, or about 900,000 barrels per day, would go a long way to erasing the global supply surplus. However, Saudi Arabia is reportedly on board with an aggressive approach: Making cuts of 1.1 mb/d in order to take output down to 32.5 mb/d, plus asking Russia and other non-OPEC countries to contribute another 500,000 to 600,000 barrels per day in reductions. If that were to occur, the agreement could take 1.6 percent of global supplies off the market. OPEC has surprised and disappointed the oil markets many times in the past two years, so nothing should be taken for granted. But if a deal is signed, oil prices could rise substantially. A survey of analysts conducted by The Wall Street Journal finds that oil watchers think prices would rise to $55 per barrel if OPEC succeeds, but could fall to $40 per barrel or less if they don’t. Needless to say, the stakes are high. IEA executive director Fatih Birol sees oil prices climbing to about $60 per barrel if OPEC succeeds in cutting output. That would be a boon to OPEC but it could also provide a spark to U.S. shale, which is already holding up with oil prices below $50 per barrel. Production from the Permian basin in particular will continue to soar if oil prices rise. Already very profitable at today’s prices, the Permian has captured a growing share of global oil investment this year. If output from the U.S. rises, the IEA says the OPEC deal could lead to another downturn in prices within nine months to a year. In other words, the OPEC deal may only provide a short-term boost to prices, which will lead to higher output and another downturn. 

Oil Erases The Week's Gains After Reports Monday OPEC/NOPEC Meeting Cancelled - Having topped $49 earlier in the week, hopes of a 'freeze' deal are fading fast as first Saudi Arabia abandons Monday's planned meeting with non-OPEC producers and now Reuters reports a delegate confirming Monday's OPEC/NOPEC meeting has been cancelled...

Can OPEC Get It Right At Long Last? | OilPrice.com: OK, 2016 – this is it. This is your last chance to get something right. OPEC meet on November 30th to do a deal that would see the biggest oil producers across the world agree to limit output for the first time since 2008. Do NOT let us down. The omens – well, at first glance, they look good folks. The last meeting ended on a somewhat ambiguous 'let's nail those details down later' note, but credit where credit's due - the lengthy discussions, endless phone-calls and flurry of negotiations have taken place, and made ground. Algerian Energy Minister Noureddine Boutarfa told reporters, “The goal was to prepare for Vienna. We won't turn back on the decision made in September in Algeria. All the countries, 11 present in today's meeting, agreed to support the Algiers Accord.” OPEC Secretary-General Mohammed Barkindo said “all hands are on deck” to ensure the deal is made. Obviously, the stumbling block was Iran. After the Obama administration agreed to the nuclear deal, Iranian oil Minister Bijan Zanganeh was determined to see his country's production rise to pre-sanctions levels, and it's been widely reported that any talk of a freeze would have to be around the 4 million bpd mark. Since the end of last week, insiders have reported that the majority of members will accept giving Iran greater flexibility than any other member state and ask for a freeze at 3.92m bpd. This is more than Tehran is currently producing – about 3.6 – 3.7m bpd. On Saturday Zanganeh said “it is highly likely” that OPEC will reach agreement.

Why Saudi Arabia’s Oil Giant Aims to Be Big in Chemicals, Too - WSJ: Saudi Arabian Oil Co. has been the world’s single largest crude producer for decades. It wants to be a lot more than that now, as a new petrochemical complex shows. Among the Dutch corn fields here is a tangle of pipes, vats and catalyzers that the company uses in its Arlanxeo plant to transform what was oil into synthetic rubber for products ranging from auto-engine hoses to plastic wine corks. Aramco, as it is commonly known, until recently focused on pumping great quantities of oil and, like the Standard Oil companies of John D. Rockefeller, processing it through its refineries. Aramco now aims to vastly expand its petrochemical operations, turning itself into a modern integrated energy company along the lines of Exxon Mobil Corp.Thousands of miles away, near the Saudi Arabian city of Al Jubail on the Persian Gulf, an army of workers is finishing the $20 billion Sadara petrochemical complex, an Aramco joint venture with Dow Chemical Co. Sadara will use ethane refined by Aramco nearby to make a petrochemical called butadiene to ship world-wide to facilities, likely including its Dutch plant. Aramco, one of the world’s most powerful and secretive companies, is undergoing an unprecedented makeover, as the oil-price rout hurts its revenue and uncertainty clouds the future of fossil-fuel demand. Its transformation is intertwined with a long-term plan to diversify the Saudi economy. That plan, led by a powerful deputy crown prince who wants his nation to grow beyond being a petrostate, is accelerating the Aramco shift in ways now becoming clear. By positioning the company to generate more domestic jobs and non-oil revenue, Aramco aims to help provide the funding needed to carry out the prince’s vision.

Honeymoon is over for new Saudi leader as reform pain kicks in - One of hundreds of thousands of Saudis who studied in the US on a government-funded programme, the 30-year-old mechanical engineering graduate has yet to find a job which he spent years training for. Instead, he makes an uncertain living, operating an illegal airport taxi, risking fines from the police.  “The economy is bad, where are the jobs?” he says. “All my friends are cursing the government.”  His generation’s travails highlight the peril of reform for Deputy Crown Prince Mohammed bin Salman, who, just a few months ago, was hailed as a vibrant contrast to Saudi Arabia’s previous generations of gerontocracy. The powerful prince has spearheaded plans for economic diversification as the kingdom grapples with low oil prices. His vigour for bold reform was matched by his determination to check Iran’s regional influence by launching an air campaign against the Islamic republic’s proxies in the war in Yemen.  But under the 31-year-old’s stewardship, the Middle East’s largest economy has plunged to the brink of its first non-oil sector recession for three decades. Unpaid government invoices have savaged business confidence; cuts to public sector workers’ benefits have hit consumer spending; and Saudi Arabia’s expensive intervention in Yemen has cost lives and triggered international opprobrium. “The honeymoon is indeed over,” says one fund manager. “There has not been one bit of good news for the government — from the economy to the disaster in Yemen.” The domestic grumbling is ramping up pressure on Prince Mohammed as he oversees a highly ambitious reform programme intended to wean the kingdom off its dependence on oil and develop the private sector to create jobs for young Saudis. His plans are laid out in two documents, “Vision 2030” and the National Transformation Plan [NTP], which were released to much fanfare earlier this year. Many Saudis acknowledge the need to transform the kingdom and understand the impact of low oil prices on the economy. But voices of dissent are emerging over the means and pace of change.

Obama Seeks to Fortify Iran Nuclear Deal - WSJ: The Obama administration is considering new measures in its final months in office to strengthen the landmark nuclear agreement with Iran, senior U.S. officials said, with President-elect Donald Trump’s first appointments foreshadowing an increasingly rocky road for the controversial deal. Action under consideration to buttress the pact includes steps to provide licenses for more American businesses to enter the Iranian market and the lifting of additional U.S. sanctions.The effort to shore up the agreement was under way before the election and is not aimed at boxing in Mr. Trump, who opposes the deal, the officials said. Officials also acknowledged the proposals are unlikely to make the nuclear agreement more difficult to undo. Mr. Trump’s first two picks for his national security team—retired Army Gen. Mike Flynn as national security adviser and Rep. Mike Pompeo (R., Kan.) as Central Intelligence Agency director—are hard-liners on Iran who have voiced opposition to the nuclear deal. Trump transition team officials didn’t respond to questions about their plans for the agreement or the current administration’s efforts to shore it up. During the presidential campaign, Mr. Trump talked at times of ratcheting up sanctions on Iran, but also said U.S. companies shouldn’t be at a disadvantage in entering the Iranian market. “All of these countries are going to do business with Iran,” Mr. Trump said at a campaign event in September 2015. “They’re going to make lots of money and lots of other things with Iran...And we’re going to get nothing.” \Within the Obama administration, officials say they recognize that there is little they can do from a policy perspective if the incoming administration is determined to scuttle the accord. But they plan to make a forceful case to the president-elect’s team of the grim consequences they believe the U.S. would face if it ended up being blamed for the agreement’s failure.

Iran warns of retaliation if U.S. breaches nuclear deal | Reuters: Extending U.S. sanctions on Iran for 10 years would breach the Iranian nuclear agreement, Iran Supreme Leader Ayatollah Khamenei said on Wednesday, warning that Tehran would retaliate if the sanctions are approved. The U.S. House of Representatives re-authorized last week the Iran Sanctions Act, or ISA, for 10 years. The law was first adopted in 1996 to punish investments in Iran's energy industry and deter Iran's pursuit of nuclear weapons. The Iran measure will expire at the end of 2016 if it is not renewed. The House bill must still be passed by the Senate and signed by President Barack Obama to become law. Iran and world powers concluded the nuclear agreement, also known as JCPOA, last year. It imposed curbs on Iran's nuclear program in return for easing sanctions that have badly hurt its economy. "The current U.S. government has breached the nuclear deal in many occasions," Khamenei said, addressing a gathering of members of the Revolutionary Guards, according to his website. "The latest is extension of sanctions for 10 years, that if it happens, would surely be against JCPOA, and the Islamic Republic would definitely react to it." The U.S. lawmakers passed the bill one week after Republican Donald Trump was elected U.S. president. Republicans in Congress unanimously opposed the agreement, along with about two dozen Democrats, and Trump has also criticized it. Lawmakers from both parties said they hoped bipartisan support for a tough line against Iran would continue under the new president.

Syria and Iraq caught between the “new analysts’ and the politicised media - The wars in Syria and Iraq celebrated the unfortunate end of the “free and independent press” and the rise of the “neo-analysts”. They sit in far-off lands, with no ground knowledge of the war, collecting information and analysing the colourful bin of social networking sites. They have even the temerity to believe they can dictate to the US administration what measures should be taken, who to support and, as if they had mastered the “art of war”, they even push for a nuclear war with Russia. It is most surprising to see respectful media rushing to embrace the opinion of these “neo-Analysts”, in fact only because what these amateurs say happens to match what mainstream media desire to hear. So we see for example a “Hezbollah Lebanon expert” or “Shia group expert” in Iraq only because he can count (he collects and analyses the Shia flags and groups he sees on Facebook and Twitter) but has never met commanders or leaders of the groups that should fall within his field of expertise in both countries. Also, many so-called “Syria experts” have never even seen the streets of Damascus, Homs, Hama, Aleppo or any other Syrian city even in peace time before 2011. Of course, Twitter and Facebook are the sufficient and unique sources of information because they have no other alternative sources. It is quite interesting, amazing in fact, to see these people producing articles and having easy access to reputable publications.However, the views of the US administration and the one of the “neo-analysts” – are in conflict in terms of professional ethics, values and principles, even though they are both based on fighting terrorism. Journalists, and analysts, are astonishingly supporting “Qaidat al-Jihad” in Syria, fiding enough space even to report the “Islamic State” (ISIS/ISIL) material when fighting against the Iraqi Army and the so-called (sectarian) “Popular Mobilisation Units ” (al-hashd al-Sha’bi – PMU) in Iraq.

New Onslaught Of Airstrikes In Aleppo Hit World-Famous Cat Sanctuary - Renewed airstrikes in Aleppo this week have killed at least 32 people, including children. The attacks, which struck a children’s hospital and a blood bank, were carried out by either Syrian or Russian warplanes, Reuters reported, citing the Syrian Observatory for Human Rights. The bombings also hit an internationally celebrated animal sanctuary that was hailed as a place of peace and hope in the war-torn city. The sanctuary was a refuge for hundreds of cats as well as local children who would spend time with the animals and play on an adjacent playground.  Excuse us today we can not show you the cats,because .... ladies and gentlemen, this is our home of Ernesto cats today. pic.twitter.com/XiaVzAOH6x  Mohammad Alaa Aljaleel, the man who runs the sanctuary and cares for the cats, is alive, said Alessandra Abidin, an Italian woman who helps Aljaleel run a Facebook group to communicate with his supporters.  Aljaleel, an electrician and ambulance driver, has stayed behind in Aleppo to care for the city’s many stray cats, some of which had been left behind when their owners fled the region. He told the BBC in a September interview that he would stay and protect the animals, “no matter what.” House of cats Ernesto in Aleppo pic.twitter.com/V2YTlkMpk6 On Wednesday, Abidin announced on social media that bombs had hit the sanctuary and killed multiple cats and a dog (warning: graphic images). The dog, named Hope, was known as the sanctuary’s mascot. The strike also hit Aljaleel’s house, killing two cats, including a tabby that had been entrusted to him by a young girl when her family fled to Turkey.

There are no more working hospitals in eastern Aleppo -  (AFP) - There are no more functioning hospitals in the rebel-held eastern part of Syria's Aleppo, where more than 250,000 people are living under siege and many need urgent medical care, the UN has said. Health facilities have repeatedly been targeted during the country's brutal civil war, a pattern that has continued in a ferocious government assault launched last Tuesday to recapture eastern Aleppo. "There are currently no hospitals functioning in the besieged area of the city," the World Health Organization (WHO) said in a statement on Sunday, citing reports from its partners in the area. "More than 250,000 men, women and children living in eastern Aleppo are now without access to hospital care," the United Nations agency added. WHO noted that some health services in the devastated area "are still available through small clinics," but that trauma care, major surgeries and other responses to serious conditions have stopped.

Eastern Aleppo Could Be ′Gone by Christmas′ - Following a visit to Damascus, UN special envoy Staffan de Mistura was "very worried" about the future of east Aleppo. In an interview published in Friday's "Süddeutsche Zeitung" newspaper - following an interview he gave to DW earlier this week - de Mistura repeated that if the bombing continued as it had up until now that "by Christmas, there would be no east Aleppo anymore."He had the impression that the government was seeking to accelerate its military activity in the embattled city, control of which is split between the regime and various rebel forces. He said it was possible that Assad's forces would succeed in taking over the eastern rebel-occupied part of the city when it was almost destroyed. In such a case, he said tens of thousands of refugees would make their way to Turkey. The head of the Syrian "White Helmets" urban rescue volunteer group told Reuters news agency on Thursday that besieged residents of Aleppo were about 10 days from starvation. De Mistura said he feared that if no lasting political solution was found, coming years would see guerilla warfare in rural areas and car bombs in the cities. He also said no one, including Russia, wanted such situation. Along with Iran, Russia is among the biggest supporters of Syrian President Bashar al-Assad."That's why we believe that there must be a compromise for east Aleppo," de Mistura said. He also said that lasting victory against the terror groups "Islamic State" and the Nusra Front would only be possible if there was an "inclusive political solution" in Syria.

Conflict Has Displaced More Than Half The Syrian Population: All efforts to even enforce partial cease fires in places like the city of Aleppo have not been successful. Another one is planned to come into effect on Friday. Needless to say that, like in any other armed conflict, the civilian population suffers most. According to data compiled by VoxEU, more than half of Syrians are on the move, either within Syria itself or have fled to neighbouring countries or further afar. As our chart shows, the number of refugees who have been voluntarily offered shelter by third parties is minimal. This chart shows how many people have been displaced in Syria and where they have found shelter

Turkey Warplanes on Alert After Syrian Strike on Turkish Troops: — Turkish F-16 warplanes were put on emergency standby Thursday after Ankara accused the Syrian government of having carried out an airstrike on Turkish troops operating in northern Syria that left three soldiers dead and 10 others wounded, one critically. Western diplomats expressed concern the airstrike overnight Wednesday by a Syrian air force L-39 Albatros light-attack warplane marks a highly dangerous turn of events in the five-year-long Syria conflict and risks bringing Syria and Turkey into a major clash.Initially, the death of the soldiers near the town of al-Bab, northeast of Aleppo, was blamed on the Islamic State (IS) terror group. But in a statement Thursday the Turkish military said the Syrian air force was responsible. The bodies of the killed soldiers were transferred to the southern Turkish border town of Kilis. "In the air strike assessed to have been by Syrian regime forces, three of our heroic soldiers were killed and 10 soldiers wounded, one seriously," according to a Turkish armed forces statement. The Syrian government has so far failed to comment. A pro-opposition network of activists, the Syrian Observatory for Human Rights, disputed Ankara's claim, saying it believed the Turkish deaths were caused by an IS suicide bomb. President Recep Tayyip Erdogan and Prime Minister Binali Yıldırım held emergency phone calls with Defense Minister Fikri Isık and the Chief of General Staff Gen. Hulusi Akar before placing a gag order on the Turkish media, ordering broadcasters not to report on the attack. Yıldırım vowed later that the attack will “not be left unanswered." He told reporters that the alleged air strike won't affect the Turkish army’s determination to clear northern Syria of "terrorist groups." "This attack and other such attacks will be retaliated,” he said.

Donald Trump Jr. Held Talks on Syria With Russia Supporters —Donald Trump’s eldest son, emerging as a potential envoy for the president-elect, held private discussions with diplomats, businessmen and politicians in Paris last month that focused in part on finding a way to cooperate with Russia to end the war in Syria, according to people who took part in the meetings.Thirty people, including Donald Trump Jr., attended the Oct. 11 event at the Ritz Paris, which was hosted by a French think tank. The founder of the think tank, Fabien Baussart,and his wife, Randa Kassis, have worked closely with Russia to try to end the conflict. Ms. Kassis, who was born in Syria, is a leader of a Syrian group endorsed by the Kremlin. The group wants a political transition in Syria—but in cooperation with President Bashar al-Assad, Moscow’s close ally. The disclosure of a meeting between the younger Mr. Trump and pro-Russia figures—even if not Russian government officials—poses new questions about contacts between the president-elect, his family and foreign powers. It is also likely to heighten focus on the elder Mr. Trump’s stated desire to cooperate with the Kremlin once in office. In an interview, Ms. Kassis said she pressed the younger Mr. Trump during the meeting on the importance of cooperating with the Russians in the Middle East. “We have to be realistic. Who’s on the ground in Syria? Not the U.S., not France,” Ms. Kassis said from Moscow. “Without Russia, we can’t have any solution in Syria.” Of the president-elect’s son, she said: “I think he’s very pragmatic and is flexible.”

Keep It Simple, Stupid...Why Oil & Commodity Demand Is Set To Fall Indefinitely - Following James Carville's sage advice, I will attempt to explain to president-elect Trump, Fed-head Yellen, and the average American why global oil, commodity, and consumer demand is set to collapse using the Carvillian principle..."keep it simple stupid". The combined 35 OECD wealthy nations (list HERE) plus China, Russia, and Brazil represent70% of global oil consumption while they represent about 40% of global population(chart below).  In comparison, Africa and India (combined) make up 8% of oil consumption despite being 33% of global population (& nearly 100% of all present and future net population growth).