oil prices were down for a second week and hit a one month low on Thursday, as trading on fundamentals gave way to geopolitical concerns arising from the Saudi orchestrated dismemberment and subsequent killing of Washington Post columnist and Saudi insider Jamal Khashoggi, who apparently had information linking the Saudi royals to the 9-11 trade tower bombing and hence had to be shut up...after falling 4% to $71.34 a barrel in a broad based global market selloff last week, prices for US crude oil contracts for November delivery spiked to as high as $72.70 a barrel on Monday after Saudi Al Arabiya television warned that if the US sanctioned Saudi Arabia for the Khashoggi killing, we would "face an economic disaster that would rock the entire world,", but settled back to close just 44 cents higher at $71.78 a barrel on an outlook for long term weakness in oil demand...oil prices then rose another 14 cents to $71.92 a barrel in cautious trading on Tuesday as expectations of higher U.S.oil inventories offset reports of lower oil exports from Iran...after an initial rally to $72.43 a barrel on Wednesday, oil prices tumbled more than 3% to close down $2.17 at $69.75 a barrel, after the EIA reported an increase in US crude supplies that exceeded expectations for the 4th week in a row...oil prices fell another $1.10 to a one month low of $68.65 a barrel on Thursday, as oil traders’ concerns turned to the potential recessionary impact of the escalating trade war between the Trump administration and China...oil prices then bounced back 47 cents on U.S.-Saudi tensions over the Khashoggi killing on Friday, but still ended the week 3.1% lower than last Friday at $69.12 a barrel..
natural gas prices, on the other hand, ended the week higher on volatile trading on changing weather forecasts and concerns over winter supplies...natural gas prices first rose 8.1 cents to $3.242 per mmBTU on Monday as forecasts indicated the current cold snap would linger through October, then gave up three-tenths of a cent on Tuesday, and then rose another 8.1 cents to $3.240 per mmBTU on Wednesday, again on the likelihood of below-average temperatures east of the Rockies and concern that would exacerbate the storage crisis...but a forecast that the cold weather was breaking down precipitated a dramatic Thursday sell-off in November natural gas contracts, which ended 12.2 cents lower at $3.198 per mmBTU, after the natural gas storage report came in close to expectations...natural gas contracts for November delivery then rebounded 5.2 cents on Friday to end the week at $3.250 per mmBTU, a 2.8% increase on the week..
this week's natural gas storage report from the EIA for week ending October 12th indicated that natural gas in storage in the US rose by 81 billion cubic feet to 3,037 billion cubic feet during that week, which left our gas supplies 601 billion cubic feet, or 16.5% below the 3,638 billion cubic feet that were in storage on October 13th of last year, and 605 billion cubic feet, or 17.0% below the five-year average of 3,642 billion cubic feet of natural gas that are typically in storage after the second week of October....this week's 81 billion cubic feet increase in natural gas supplies was a bit below consensus expectations of an 85 billion cubic foot increase, but was a bit above the average of 79 billion cubic feet of natural gas that have been added to storage during the second week of October in recent years, still only the 5th average or above average inventory increase in the past fifteen weeks...natural gas storage facilities in the Midwest saw a 37 billion cubic feet increase this week, reducing their supply deficit to 12.0% below normal, while supplies in the East increased by 22 billion cubic feet but still saw their deficit fall to 8.5% below normal for this time of year...the South Central region saw a 24 billion cubic feet increase in their supplies, as their natural gas storage deficit decreased to 24.8% below their five-year average...however, a natural gas pipeline rupture in Canada cutoff imports to both the Mountain and Pacific regions, so Mountain region supplies fell 3 billion cubic feet and their deficit from normal rose to 16.9%, while there was just a 2 billion cubic feet addition to storage in the Pacific region, where the natural gas supply deficit rose to 23.3% below normal for this time of year....
to get an idea of what kind of temperature factors led to this past week's 81 billion cubic feet increase in natural gas stores, we'll take a quick look at the most recent average temperature summary from the EIA's natural gas storage dashboard:
the above graphic from the EIA's natural gas storage dashboard gives us both the average daily temperature from October 5th thru October 18th in each of the five natural gas regions, as well as the variance from normal for each of those daily temperature averages, as color coded at the bottom...to take temperatures in the East for example, the initial 68 and 69 degree averages on October 5th and October 6th are colored with the 2nd lightest shade of brown, indicating those average temperatures were 5 to 9 degrees above normal for the region on those dates...temperatures in the East from October 7th through the 11th are a darker shade of brown, indicating those average temperatures were 10 to 14 degrees above normal; however, the average temperatures in the East had dropped to 56 degrees by October 13th and 14th, and are thus color coded in light blue as being 1 to 4 degrees above normal...so this graphic gives us not only the actual average temperature for each region for each day, but also indicates how much that temperature deviated from the norm..
while the departure from normal helps us understand why a particular week may have deviated from past averages, what really matters for natural gas consumption is the actual temperature...for instance, an average temperature of 68 on a given day is not going to see much heating or cooling demand whether it is above normal in the Northeast or below normal in the deep south...what this graphic shows for week ending October 12th was that temperatures in the East were a bit warm and might have seen some air conditioning use, but not much; that temperatures in the Midwest probably saw little demand for cooling or heating, at least until the last two days of the period, that temperatures in the south central states were a bit warmer than normal and probably saw some modest air conditioning demand, and that temperatures in the Mountain States and Pacific states were cooler than normal and probably saw some demand for heating...however, since we are in this so-called "shoulder season" between the cooling season and the heating season, that means that we were able to store 81 billion cubic feet of natural gas in advance of the winter for for week ending October 12th...since we can see that the current week was much cooler nationally, we would expect that more furnaces will be clicking on nationally, and the associated natural gas surplus will be much less...
The Latest US Oil Data from the EIA
this week's US oil data from the US Energy Information Administration, covering the week ending October 12th, showed that because of lower oil exports, higher oil imports, and a slowdown in oil refining, we were able to add oil to our commercial crude supplies for a fourth week in a row, despite a modest hurricane related drop in domestic oil production...our imports of crude oil rose by an average of 218,000 barrels per day to an average of 7,615,000 barrels per day, after falling by an average of 658,000 barrels per day the prior week, while our exports of crude oil fell by an average of 794,000 barrels per day to an average of 1,782,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 5,833,000 barrels of per day during the week ending October 12th, 1,012,000 more barrels per day than the net of our imports minus exports during the prior week...over the same period, field production of crude oil from US wells was reportedly 300,000 barrels per day lower than the prior week at 10,900,000 barrels per day, which means that our daily supply of oil from the net of our trade in oil and from wells totaled an average of 16,733,000 barrels per day during this reporting week...
meanwhile, US oil refineries were using 16,316,000 barrels of crude per day during the week ending October 12th, 352,000 barrels per day less than the amount of oil they used during the prior week, while over the same period 774,000 barrels of oil per day were reportedly being added to the oil that's in storage in the US....hence, this week's crude oil figures from the EIA would seem to indicate that our total working supply of oil from net imports and from oilfield production was 357,000 fewer barrels per day than what refineries reported they used during the week plus what oil was added to storage....to account for that disparity between the supply of oil and the consumption or new storage of it, the EIA inserted a (+357,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that is labeled in their footnotes as "unaccounted for crude oil" (for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....
further details from the weekly Petroleum Status Report (pdf) show that the 4 week average of our oil imports slipped to an average of 7,695,000 barrels per day, still 3.5% more than the 7,435,000 barrel per day average that we were importing over the same four-week period last year....the net 774,000 barrel per day increase in our total crude inventories was due to an 927,000 barrel per day increase in our commercially available stocks of crude oil, which was partially offset by a 157,000 barrel per day decrease in the amount of oil in our Strategic Petroleum Reserve, likely part of a sale of 11 million barrels from those reserves to Exxon et al that closed six weeks ago....this week's crude oil production was reported as down by 300,000 barrels per day to 10,900,000 barrels per day because of a rounded 300,000 barrels per day decrease to 10,400,000 barrels per day in the rounded output from wells in the lower 48 states as Gulf of Mexico production was shut in due to Hurricane Michael, while a 13,000 barrels per day increase to 499,000 barrels per day in oil output from Alaska was not enough to impact the reported national total, which is now being rounded to the nearest 100,000 barrels per day....last year's US crude oil production for the week ending October 13th had fallen to 8,406,000 barrels per day in another hurricane impact, so comparing this week's oil production to that of a year ago is not meaningful...
meanwhile, US oil refineries were operating at 88.8% of their capacity in using 16,316,000 barrels of crude per day during the week ending October 12th, unchanged from 88.8% of capacity the prior week, a typical utilization rate for the refinery maintenance season....the 16,316,000 barrels per day of oil that were refined this week were once again at a seasonal high, for the 18th out of the past 20 weeks, 5.7% higher than the 15,439,000 barrels of crude per day that were processed during the week ending October 13th, 2017, when US refineries were operating at 84.5% of capacity, an inordinately low figure probably due to a spate of storms active in the Gulf region at that time...
despite the decrease in the amount of oil being refined this week, gasoline output from our refineries was quite a bit higher, increasing by 719,000 barrels per day to 10,430,000 barrels per day during the week ending October 12th, after our refineries' gasoline output had decreased by 239,000 barrels per day during the week ending October 5th...with that jump in gasoline output, our gasoline production during the week was thus 4.0% higher than the 10,031,000 barrels of gasoline that were being produced daily during the same week last year...meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) decreased by 213,000 barrels per day to 4,784,000 barrels per day, after that output had decreased by 1,000 barrels per day the prior week....even so, this week's distillates production was still fractionally higher than the 4,964,000 barrels of distillates per day that were being produced during the week ending October 13th 2017....
even with the big jump in our gasoline production, our supply of gasoline in storage at the end of the week still fell by 2,014,000 barrels to 234,156,000 barrels by October 12th, the 19th decrease in the past 34 weeks, a period encompassing the spring and summer weeks of higher gasoline consumption, when supplies usually trend lower....our supplies of gasoline fell this week because our exports of gasoline rose by 135,000 barrels per day to an October record high of 1,164,000 barrels per day, and because our imports of gasoline fell by 299,000 barrels per day to 394,000 barrels per day, and because the amount of gasoline supplied to US markets rose by 104,000 barrels per day to 9,182,000 barrels per day....but even after this week's decrease, our gasoline inventories are still at a seasonal high, 5.3% higher than last October 13th's level of 222,334,000 barrels, and roughly 10.4% above the 10 year average of our gasoline supplies for this time of the year...
meanwhile, with our distillates production somewhat lower, our supplies of distillate fuels also fell again, decreasing by 827,000 barrels to 132,638,000 barrels during the week ending October 12th, their fourth straight decrease after 8 straight weeks of increases...our distillates supplies decreased even as the amount of distillates supplied to US markets, a proxy for our domestic demand, fell by 836,000 barrels per day from last week's record high to 3,793,000 barrels per day, partly because our exports of distillates rose by 338,000 barrels per day to 1,305,000 barrels per day, while our imports of distillates fell by 22,000 barrels per day to 165,000 barrels per day....after this week's decrease, our distillate supplies ended 1.4% below the 134,487,000 barrels that we had stored on October 13th, 2017, and roughly 5.7% below the 10 year average of distillates stocks for this time of the year...
finally, despite higher oil exports and lower oil imports, our commercial supplies of crude oil increased for the 4th week in a row and for the 20th time in 2018, as they rose by 6,490,000 barrels during the week, from 409,951,000 barrels on October 5th to 416,441,000 barrels on October 12th...that increase means that our crude oil inventories are now about 2% above the five-year average of crude oil supplies for this time of year, and roughly 22% above the 10 year average of crude oil stocks for the 2nd weekend in October, with the disparity between those figures arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...but since our crude oil inventories had been falling through most of the past year and a half until just recently, our oil supplies as of October 12th were still 8.7% below the 456,485,000 barrels of oil we had stored on October 13th of 2017, 11.2% below the 468,711,000 barrels of oil that we had in storage on October 14th of 2016, and 6.3% below the 444,618,000 barrels of oil we had in storage on October 16th of 2015...
This Week's Rig Count
US well drilling rig activity increased for the third time in 4 weeks during the week ending October 19th, eclipsing this year's previous high set after the first week of June, and thus it's now the highest since March 20th 2015....Baker Hughes reported that the total count of rotary rigs running in the US increased by 4 rigs to 1067 rigs over the week ending on Friday, which was also 154 more rigs than the 913 rigs that were in use as of the October 20th report of 2017, but was still down from the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began their attempt to flood the global oil market...
the count of rigs drilling for oil increased by 4 rigs to 873 rigs this week, which was also 137 more oil rigs than were running a year ago, while it was well below the recent high of 1609 rigs that were drilling for oil on October 10, 2014...at the same time, the number of drilling rigs targeting natural gas formations rose by 1 rig to 194 rigs, which was also 17 more than the 177 natural gas rigs that were drilling a year ago, but way down from the modern high of 1,606 natural gas rigs that were deployed on August 29th, 2008...on the other hand, the last active rig categorized as "miscellaneous" was shut down this week, so there are no "miscellaneous" rigs deployed now, same as a year ago...
offshore drilling in the Gulf of Mexico fell by 3 rigs to 19 rigs this week, which was down from the 20 Gulf of Mexico rigs active a year ago...however, a single rig continued to drill offshore from Alaska this week, so the total national offshore count is at 20 rigs, same as a year ago, when there was no offshore drilling other than in the Gulf.....
the count of active horizontal drilling rigs was down by 1 rig to 926 horizontal rigs this week, which was still 155 more horizontal rigs than the 771 horizontal rigs that were in use in the US on October 20th of last year, but down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...on the other hand, the directional rig count was up by 2 rigs to 72 directional rigs this week, which was still down from the 80 directional rigs that were in use during the same week of last year....in addition, the vertical rig count was up by 3 rigs to 69 vertical rigs this week, which was also up from the 62 vertical rigs that were operating on October 20th of 2017...
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 pdf from Baker Hughes that 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 the 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 October 19th, the second column shows the change in the number of working rigs between last week's count (October 12th) and this week's (October 19th) count, the third column shows last week's October 12th active rig count, the 4th column shows the change between the number of rigs running on Friday and those on the equivalent weekend of 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 week’s case was on Friday the 20th of October, 2017...
as you can see, this week's drilling increase was all about Texas, as except for California, all other states that saw changes had their rig counts reduced...of the 8 rigs added in Texas, 4 were in the core Texas Oil District 8, or the Permian Delaware basin, and 2 were in Texas Oil District 7C, or the Permian Midland basin; so that means either that more than one Permian rig was shut down in New Mexico, or that some of the rig start ups in the Texas Permian region were conventional rigs that didn't involve horizontal drilling in the Permian itself...note that despite the 3 rig decrease in Gulf of Mexico rigs offshore from Louisiana, the state saw no changes in its overall rig count because of the addition of 3 land based rigs in the southern part of the state at the same time...meanwhile, other than the 1 rig decrease in Pennsylvania's Marcellus, all other rig increases or decreases in the basins shown above were oil rigs, but the natural gas rig count still rose by 1 because of a 2 rig increase in basins not tracked separately by Baker Hughes...
DUC well report for September
Monday of this past week saw the release of the EIA's Drilling Productivity Report for October, which includes the EIA's September data for drilled but uncompleted oil and gas wells in the 7 most productive shale regions...for the 24th consecutive month, this report again showed an increase in uncompleted wells nationally in September, even as drilling of new wells slowed while completions of drilled wells increased....like most previous months, this month's uncompleted well increase was due to a big increase of newly drilled but uncompleted wells (DUCs) in the Permian basin of west Texas, with modest increases of uncompleted wells in the Anadarko basin of Oklahoma and the Eagle Ford of south Texas also contributing...for all 7 sedimentary regions covered by this report, the total count of DUC wells increased by 192, from 8,197 wells in August to 8,389 wells in September, again the highest number of such unfracked wells in the history of this report, and up 32.5% from the 6,329 wells that had been drilled but remained uncompleted in September a year ago...that was as 1,437 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during September, down from 1,495 in August, while 1,281 wells were completed and brought into production by fracking, a increase of 11 well completions over the 1270 completions seen in August...at the September completion rate, the 8,389 drilled but uncompleted wells left at the end of the month represent a 6.5 month backlog of wells that have been drilled but not yet fracked...
as has been the case for most of the past two years, the September DUC well increases were predominantly oil wells, with most of those in the Permian basin...the Permian basin saw its total count of uncompleted wells rise by 194, from 3,525 DUC wells in August to 3,722 DUCs in September, as 619 new wells were drilled into the Permian but only 425 wells in the region were fracked...at the same time, DUC wells in the Anadarko basin region in & around Oklahoma rose by 31, from 1014 DUC wells in August to 1,045 DUCs in September, as 191 wells were drilled in the Anadarko basin during September, while 160 Anadarko basin wells were completed...over the same period, the number of DUC wells in the Eagle Ford of south Texas increased by 18 to 1,584, as 179 wells were drilled into the Eagle Ford while 197 Eagle Ford wells were fracked....on the other hand, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 22 wells, from 687 DUCs in August to 665 DUCs in September, as 114 wells were drilled into the Marcellus and Utica shales, while 136 of the already drilled wells in the region were fracked...in addition, the drilled but uncompleted well count in the Niobrara chalk of the Rockies' front range decreased by 15 wells to 407, as 181 Niobrara wells were drilled while 196 Niobrara wells were being fracked...similarly, DUC wells in the Bakken of North Dakota fell by 11, from 778 DUC wells in August to 767 DUCs in September, as 124 wells were drilled into the Bakken in September while 135 drilled wells in that basin were completed....lastly, the natural gas producing Haynesville shale of the northern Louisiana-Texas border region saw their uncompleted well inventory decrease by 3 wells to 199, as 47 wells were drilled into the Haynesville during September, while 50 Haynesville wells were fracked during the same period...thus, for the month of September, DUCs in the 5 oil basins tracked by in this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) increased by a net of 217 wells to 7525 wells, while the uncompleted well count in the natural gas basins (the Marcellus, Utica, and the Haynesville) decreased by 25 wells to 864 wells, although as the report notes, once into production, more than half the wells drilled nationally will produce both oil and gas...
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U.S. OKs startup of part of Enbridge Ohio-Michigan NEXUS natgas pipe - (Reuters) - U.S. energy regulators approved Canadian energy company Enbridge Inc's request to put part of its $2.6 billion NEXUS natural gas pipeline from Ohio to Michigan into service. NEXUS is one of several gas pipelines designed to connect growing output in the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers in other parts of the United States and Canada. Enbridge said the facilities the U.S. Federal Energy Regulatory Commission (FERC) on Wednesday allowed the company to put into service will enable it to transport about 0.97 billion cubic feet per day (bcfd). Once the 255-mile (410-km) NEXUS project is fully in service, it will be able to carry up to 1.5 bcfd of gas from the Marcellus and Utica shale fields to the U.S. Midwest and Gulf Coast and Ontario in Canada. NEXUS is a partnership between Enbridge and Michigan energy company DTE Energy Inc. Earlier this week, Enbridge said it put part of its $200 million Texas Eastern Appalachian Lease (TEAL) gas pipeline project into service. TEAL is an expansion of Enbridge's Texas Eastern system designed to deliver 0.95 bcfd of gas to NEXUS. When it started construction of the NEXUS pipe in late 2017, Enbridge estimated the TEAL and NEXUS projects would enter service in the third quarter of 2018. Enbridge said it completed the NEXUS project in September when it asked FERC for permission to put part of pipeline into service. New pipelines built to remove gas from the Marcellus and Utica basins have enabled shale drillers to boost output in the Appalachia region to a forecast record high of around 29.4 bcfd in October from 24.2 bcfd during the same month a year ago. That represents about 36 percent of the nation's total dry gas output of 81.1 bcfd expected on average in 2018. A decade ago, the Appalachia region produced just 1.6 bcfd, or 3 percent of the country's total production in 2008.
Trumbull County Residents Working To Limit Wastewater Wells – -- Much of the wastewater from Pennsylvania's fracking industry is trucked across the border to Ohio. Last year, Pennsylvania and West Virginia contributed nearly half of the more than a billion gallons of frack waste that were injected into underground wells in Ohio. In Trumbull County, Michelle Garman used to marvel at the 22-acres of land around her home in Vienna, Ohio, less than 10 miles from the Pennsylvania border. She didn’t know much about fracking then, let alone frack waste injection wells. But she remembers New Years Eve 2011, when a 4.0-magnitude earthquake shook nearby Youngstown, Ohio. Around a dozen smaller quakes followed. The state determined that the quakes were caused by an injection well. And one in New Castle, Pennsylvania was linked to fracking as well. The well believed to have caused the Youngstown quakes has been closed permanently. Garman’s view changed in 2013 when an injection well was built on the property next door. “How does it affect our health, my son’s health?” she wondered. “I mean, it is toxic. Plain and simple, that’s poison that they’re pumping into the ground.” On a recent evening, leaders from townships in Trumbull County gathered at the gazebo in the Brookfield town square. Brookfield Township trustee Gary Lees coached people on how to send letters to their representatives in Columbus asking them to consider legislation that would stop more injection wells in Trumbull County. Trumbull County already has 17, among the most in the state, and 6 more are in the works. In Hubbard Township, Bobcat LLC has applied to the Ohio Department of Natural Resources for an injection well. Pittsburgh-based Seneca Resources has drilled a new injection well in Brookfield Township, one of five it plans on the site. The company still needs state approval of its surface facility. State representative Glenn Holmes says people there are fed up. He references a petition against a plan for the five injection wells by Seneca Resources. “In a community of about 8,000 people, [we have] 5,000 signatures,” he said. “They don’t want it.” Holmes has proposed two bills in the Ohio House of Representatives meant to rein in injection wells. One,introduced last spring, would divert more than a third of fees Ohio collects from other state’s frack waste disposal to local governments. Last year, fees for this waste brought in more than $650,000. Holmes says counties should get a cut.
A Great Lakes pipeline dispute points to a broader energy dilemma – WTOP - Gov. Rick Snyder and Enbridge, a Canadian company, have reached an agreement over a leak-prone pipeline that runs beneath the Straits of Mackinac, the 4-mile-long waterway that divides Lake Michigan and Lake Huron.Rather than shut the 65-year-old pipeline down altogether, as environmentalists are demanding, or conduct routine maintenance, as Enbridge desired, Snyder is requiring Enbridge to replace the pipeline at an estimated cost of up to US$500 million without a deadline. While the lakes, beaches and livelihoods vulnerable to harm from a potential spill are perhaps unique to Michigan, the question of what to do about a host of aging pipelines across the U.S. is not. Nearly half of the nation’s pipelines currently operating were built before 1960. Amid rising oil and gas production, there are hard compromises to make between ensuring an adequate energy supply, protecting public safety, and reducing the nation’s reliance on fossil fuels – a key contributor to climate change. Approximately 3 million miles of pipelines move crude oil, natural gas and other hazardous liquids across the U.S. Most crude oil pipelines traversing the center of the country transport oil from western Canada and North Dakota southward to refineries in Texas and Louisiana. Much of this system dates back to the economic boom of the 1950s and 1960s. Indeed, roughly half of the crude oil pipelines operating today are at least 50 years old. More of the natural gas pipelines that span the county are concentrated around the Marcellus Shale formation, in eastern Ohio and Pennsylvania. And 60 percent of the 319,000 miles of pipelines currently transporting natural gas were installed before 1970. A recent Department of Energy report suggested that replacing just the cast-iron pipelines, which are the oldest and riskiest variety, would cost approximately $270 billion. Compared to hauling fuel by rail or truck, the Transportation Research Board, a nonprofit that serves as an advisory body to the White House, Congress and federal agencies, considers pipelines to be safer. Yet when pipeline accidents do occur, they are typically larger and impact the environment more directly than the alternatives. A big spill in the Straits of Mackinac could result in oil polluting over 1,200 miles of shoreline, cause $1.3 billion in damage and cost $500 million to clean up, Michigan Technological University researchers estimate.
Perhaps 29 New Natural Gas Fueled Electric Power Plants in PA, OH, & WV -- A new report shows that natural gas-powered energy plants either in operation or in various stages of development have attracted more than $25 billion worth of new investment to the Appalachian Basin.The report comes on the heels of an announcement Tuesday that the Lordstown Energy Center, a $1 billion, 940-megawatt combined cycle-energy plant, is now operational and producing electrical power.Some 29 new power plants, each with a capacity of 475-megawatts or greater, are in operation, under construction, or in the various stages of the permitting process in Ohio, Pennsylvania and West Virginia.When operating at full capacity, the 29 plants would generate a combined 26,086 megawatts of power. Total construction jobs would amount to 17,800, the industry group reports. DOWNLOAD CHART Ten plants are either in operation or slated for Ohio, 16 are in operation or in various stages of development in Pennsylvania, and three are in the works in West Virginia, the advocacy group reports. Among the plants under construction in Pennsylvania is the Hickory Run Energy Center in Lawrence County, Pa., which represents an $863 million investment. In addition to the Lordstown plant, in Ohio the $889 million Carroll County Energy plant is operating, the South Field Energy plant in Columbiana County, a $1.3 billion investment, is scheduled to begin construction soon. And permits have been issued for the Trumbull Energy Center, also in Lordstown, a $865 million project that remains in limbo pending resolution of a legal dispute. The plants are being constructed using local labor. Don Crane, former president of the Western Reserve Building and Construction Trades Council, described the labor agreement that employed the workers who built the Lordstown Energy Center as “the best labor agreement that anyone has ever seen on either side of the table in the oil and gas industry. It will be a model going forward that gets used often.” Moreover, many of the new power plants are being built on the sites of previous power plants or other industrial facilities. Ohio’s 10 new plants represent more than 9,000 megawatts of power and an estimated $9 billion worth of investment, the report found. The projects have the prospect of creating about 7,200 jobs during the construction phase.
Appalachia has 29 gas-fired power plants in various development stages— One of the biggest untold stories in the Utica Shale is the still-growing development of natural gas-fired power plants, Kallanish Energy reports. That assessment came from Jackie Stewart, managing director, energy and natural resources, for FTI Consulting, headquartered in Washington, D.C. “It’s the most exciting thing happening on Ohio … and it’s the greatest story in Ohio,” she said. She touted the shale boom in a talk on Wednesday at Utica Summit VI at Walsh University in North Canton, Ohio. The downstream-focused conference drew roughly 100 people, and was presented by Shaledirectories.com and the Canton Regional Chamber of Commerce. Ohio has 10 gas-fired power plants in operation, under construction or planned, offering a total of 9,294 megawatts of capacity, Stewart said. The 10 plants together have a price tag of $9.1 billion. They will produce roughly 7,200 construction jobs. Four Ohio gas-fired plants are operational and two are under construction. The Lordstown Energy Station in Trumbull County in northeast Ohio just became operational in the last few days, she said. The plants are replacing coal-fired plants that are being shut down and they provide baseload electricity renewables cannot provide, she said. What’s happening in Ohio is also spreading to its neighboring states in the Appalachian Basin, Stewart said. Pennsylvania has 16 gas-fired power plants in operation, under construction or on the drawing boards. Those plants together will cost an estimated $9.1 billion and produce 9,300 MW of electricity. They will create about 7,200 construction jobs. In addition, West Virginia has three plants in development. They would produce 2,050 MW of electricity and cost roughly $2.3 billion. They would create 1,900 construction jobs. That means the 29 gas-fired plants in the Appalachian Basin will cost about $20.5 billion and create more than 16,000 construction jobs, according to Stewart. Natural gas produces 26.7% of electricity in the 13-state PJM Interconnection region. Coal produces 32.2% and nuclear power produces 35.9% and renewables generate 5%.
Residents: Fracking disposal well would make Plum 'a dumping ground for the oil and gas industry' - Opening the state’s largest drilling and fracking wastewater disposal well in Plum could lead to earthquakes and contaminated groundwater, according to opponents of the proposal who testified at a state Department of Environmental Protection hearing Monday. More than a dozen speakers urged DEP regulators not to approve a permit sought by at Delmont-based Penneco Environmental Solutions, a subsidiary of Penneco Oil Co. The company wants to convert an old oil and gas well into a wastewater injection well allowed to accept more than 2.2 million gallons of salty and chemically laced fracking wastewater a month.“This injection well would put a lot of young families at risk,” said Angela Billanti, a member of Citizens 4 Plum, a community group opposed to the wastewater injection well. “This, along with new zoning that will allow the drilling of hundreds of shale gas wells, will make Plum Borough a dumping ground for the oil and gas industry.”In addition to accepting more wastewater than any other disposal well in the state, it would be the first such well in Allegheny County. Matt Kelso, a Plum resident and manager of data and technology for the Fractracker Alliance, a non-profit that maps shale gas industry operations, said the potential for earthquakes caused by the disposal well poses a significant risk, not only due to the underlying geology, but also because of the many abandoned mines in the area.“For decades, (the DEP) determined that the subsurface geology of most of Pennsylvania was unsuitable for underground injection. But now they are tasked with overseeing an oil and gas industry that produced 58 million barrels, or 2.4 billion gallons, of toxic liquid waste in 2017 alone,” Mr. Kelso said. “Just because there is more waste to deal with does not make our area suddenly suitable to be a dump for toxic liquid waste.”
Natural gas-fired power plants are being added and used more in PJM Interconnection -- The average annual capacity factors for natural gas-fired generators in the PJM Interconnection—the largest competitive wholesale electricity market in the United States—have increased in recent years, reflecting greater use of natural gas-fired generators in the region. The increase in PJM’s capacity factors for natural gas-fired generators is the largest of any regional transmission organization in the country in the past five years (2013–2017). Capacity factors are an indicator of how often a generator is run, and the combination of additions of natural gas-fired capacity in the region and higher capacity factors have meant that utilities in the PJM Interconnection have been generating more electricity using natural gas. Similar to the rest of the country, the share of natural gas-fired electricity generation in PJM has increased during the past five years as relatively low natural gas prices have made natural gas more cost-competitive with coal. Much of the increase in generation from natural gas is from generating units using combined-cycle technology. By comparison, the use of natural gas-fired combustion turbines in PJM has remained relatively constant. Average annual capacity factors for natural gas-fired combined-cycle generators in PJM first surpassed those of coal-fired generators in 2015. Relatively lower natural gas prices—in part because of PJM’s proximity to Appalachian natural gas production—have been a primary driver for increasing natural gas capacity factors. The monthly average cost of Central Appalachian coal in the PJM region averaged $2.76 per million British thermal unit (MMBtu) in 2013 and has only slightly increased since then, most recently averaging 3.30/MMBtu in 2017. In contrast, the monthly average price of natural gas at the Texas Eastern Transmission Market Zone 3 (TETCO M-3) hub, which generally reflects natural gas prices in Pennsylvania, New Jersey, and New York, fell below the price of coal on a dollar-per-MMBtu basis in mid-2014 and, with the exception of winter price spikes, has remained lower than the price of coal since then.
Gas leak prompts evacuations Friday near Oil City -- An unknown issue at a local oil and gas well site prompted local authorities to evacuate several homes near Oil City Friday evening. Carter County Emergency Management Director Paul Tucker said 20-30 homes were evacuated as a precaution after a natural gas leak was reported at a rural well site in northwestern Carter County. Tucker said the cause for the leak is still unknown and the extent and volume of gas leaked had not been reported. Evacuated residents were allowed to return home early Saturday morning.
Bird's Eye View of the Mountain Valley Pipeline - The controversial Mountain Valley Gas Pipeline has been under construction since the beginning of the year. Most of the trees on its 300 mile path have been cut and sections of pipeline and were being installed when the project hit a snag last week and a court issued a suspension for construction through streams and waterways. Flying over the Mountain Valley Pipeline last week in a small plane, pilot Hap Endler gets close enough to construction site that it looks a bit like one of those miniature train sets. Long sections of light green colored pipe, 42 inches in diameter, waiting to be buried, are easy to see from the air. But what you can’t see are the hundreds of water ways, some little more than a trickle that cross the pipeline’s path.“A lot of them are very small water bodies and some, including some of the agencies, would tell you, ‘don’t worry about it because they’re small, little streams.' The problem is those are some of the most valuable and sensitive streams that we have,” says David Sligh with a group called ‘Wild Virginia.’“Those are the homes of the Brook Trout, of the endangered Roanoke Log Perch, of mussels that are found nowhere else in the world. So, the fact that those places are so vulnerable means they should have more protection not less, and we believe, and scientists tell us, that (for) some of these streams, the populations will be wiped out,” Sligh says.We’re being flown over the pipeline, courtesy of a nonprofit conservation organization called Southwings. As we soar over mountainous terrain, interrupted by patchwork quilts of residential areas, farms, small towns and endless trees. Sligh points out what he believes to be violations of proper protocol and safety. But it’s not pipeline construction that has now been halted by the court in the decision announced last Friday. Only the crossing of any of the 383 streams and 142 wetlands in the pipeline's path,is on hold. And while that makes pipeline construction more difficult, it is not prohibited under the ruling.
Flood carries a piece of the Mountain Valley Pipeline into the hands of opposing landowner - It’s one thing for rain to wash mud and sediment away from where the Mountain Valley Pipeline is being built; that’s happened many times. But when part of the pipe gets swept away, that’s another story. It happened Thursday on Dale Angle’s cornfield in Franklin County. And Angle — who has been complaining for months about runoff from construction damaging his land — says he’s not ready to give Mountain Valley its pipe back. “They called this morning wanting me to sign a permission slip” that would allow company workers onto his property to retrieve two 80-foot sections of steel pipe that floated away, Angle said Friday. “I said I couldn’t do it right now. They’ve done destroyed enough of my property. I’m not going to let them do it again.” In recent weeks, Mountain Valley has been digging trenches to bury a 42-inch diameter pipe that will transport natural gas at high pressure through Angle’s 160-acre farm on its way from West Virginia to a connecting pipeline in Pittsylvania County. Sections of the pipe were laid along the construction right of way and left until they could be lowered into the ground. Two such sections were in a low-lying area, next to where Little Creek enters the Blackwater River, when Thursday’s torrential rains began. Angle, who says the bottom land is often completely covered by flood waters, was not surprised by what happened next. One section was washed about 60 feet from its spot, he said. The other one floated nearly 1,000 feet before lodging against some trees near the banks of the Blackwater. Both had clearly crossed a boundary line drawn earlier this year when Mountain Valley used its legal power of eminent domain to obtain an easement through Angle’s land, despite his fervent opposition. Although construction crews can do as they please along established rights of way and access roads, they must obtain permission before venturing onto adjacent private property.
The Quiet but Furious Nationwide War Against Pipelines - People here have seen what big industry can mean for water. Now fracked gas pipelines are being pushed through Appalachia, not only the one near my house but also the Mountain Valley Pipeline and the Atlantic Coast Pipeline. The MVP and the ACP would originate in northwestern West Virginia and run down through Virginia, parallel to each other about 100 miles apart in routes that will take them through national forests, the Appalachian Trail, waterways, and private land. A report earlier this year from the National Resources Defense Council warned that construction of the MVP and the ACP would cause erosion and stir up sediment in drinking water sources before they were even operational. Amy Mall, a senior policy analyst at the NRDC, told me, “Some people think erosion doesn’t sound so bad, but it’s considered a major source of water pollution. It increases turbidity, which makes it harder for plants and animals to live. Water temperature is also affected. Sedimentation can clog intakes for public water supplies. Quantity can also be impacted. Basically, these construction projects can crush an aquifer, so there’s no water available in a well anymore.” Chemical spills from the drilling process are also a risk, Mall added. After the pipelines are finished, residents will worry about explosions like the one that happened near our house in 2011, or about natural gas leaking out and contaminating their water—according to High Country News, between 2010 and 2017, 17.55 billion cubic feet of natural gas has leaked out of the country’s sprawl of pipes.Naturally, people are angry. Appalachian communities are mounting a stiff opposition to the MVP and the ACP, joining grassroots pipeline resistance around the country and internationally. Since February, local people have launched up to a dozen tree-sits in-the path of the Mountain Valley Pipeline. The tree-sits in the path of the MVP have meant that work crews can’t clear trees or operate heavy machinery without endangering activists. The current tree-sitters, Lauren Bowman and an activist going by the name “Nettle,” climbed to their platforms on September 4 and have been up there for more than a month. Before climbing her tree, Bowman posted a statement to the Appalachians Against Pipelines Facebook page, a group which supports MVP and ACP resistance. She wrote, “I am compelled to fight back against this pipeline because I cannot sit back and ignore what is happening to my home and to the mountains that I have known and loved since I was a child.”
Fragile Pipelines Pose an Increasing Risk in Gas-Hungry US – The kind of dramatic scenes that played out in suburban Massachusetts last month following a series of explosions and fires may serve as a warning of what lies ahead for the U.S., where an increasing reliance on natural gas is running up against aging infrastructure. While there’s no firm conclusion about what caused the series of deadly blasts on Sept. 14, a preliminary National Transportation Safety Board report on the incident released this week says it was linked to work being carried out to replace old pipes. And across the U.S. there’s an awful lot of old pipes: In all, the country has about 80,000 miles of unprotected bare steel and cast or wrought-iron natural gas pipes -- enough to wrap around the Earth three times -- much of which dates back to the early 1900s. "Aging infrastructure is clearly an issue in the U.S., especially on the East Coast where they have a lot of old cast iron pipes that are well known to fail," While those lines represent just 3.6 percent of all the pipes that deliver gas to consumers nationally, they pose the highest risk and account for 41 percent of all fatalities, according to the Pipeline and Hazardous Materials Safety Administration. PHMSA, as the regulator is also called, has urged operators to accelerate plans to replace the oldest lines because decades of wear and degradation has made them more brittle and prone to leaks or ruptures from ground movement. Exposure to rain and freezing temperatures is also a problem (modern gas lines installed in towns and cities are made of plastic, which is corrosion-resistant and less brittle, or from protected steel that won’t rust as easily).Utilities continue to spend billions of dollars to replace old lines. In Ohio, for example, the Public Utilities Commission oversees programs undertaken by utilities including Duke Energy Corp. But while those lines are being ripped out and replaced, there’s a huge build-out of new pipelines, driven by the shale-gas boom. And that’s prompted concerns that the regulatory environment hasn’t kept pace.
Cold Snaps Could Trigger Winter Pipeline Constraints in New England, Los Angeles, FERC Says -- Forecasters are expecting a warmer-than-average winter this year, but prolonged periods of cold temperatures could still trigger regional pipeline constraints in New York City, Boston and Los Angeles and increase the risk of price volatility, according to the 2018-2019 Winter Energy Market Assessment released Thursday by FERC's Office of Enforcement (OE). A bomb cyclone last winter drove cash prices north of $100/MMBtu in the Northeast. If similar conditions materialize this winter, "pipeline constraints on Algonquin Gas Transmission, Transcontinental Pipeline, and Tennessee Gas Pipeline could result in high gas prices at Transco Zone 6 near New York City, Algonquin Citygates in ISO New England Inc., and Transco Zone 5 South in PJM Interconnection LLC," OE said. The National Oceanic and Atmospheric Administration (NOAA) said in a separate winter outlook also released Thursday that it expects warmer-than-normal conditions across much of the northern and western United States. An El Nino event, which often signals wetter-than-average weather in the southern United States and drier conditions in parts of the North, is also likely to develop during the next few months, according to Mike Halpert, deputy director of NOAA's Climate Prediction Center. "The last winter that was impacted by El Nino was back in 2015-2016," Halpert said. “However, we're not anticipating a repeat of that winter, as this El Nino is expected to be much weaker than that one." Basis futures prices are up 47 cents/MMBtu in New York City and $3.40/MMBtu in Boston compared with the same time last year, OE said, suggesting "a market expectation that both regions may face pipeline transportation constraints this winter." A 13-cent increase in basis futures price at Dominion South -- a point representative of the Marcellus Shale region -- "is likely a result of recent increases in pipeline takeaway capacity out of the region leading to a reduction of the local natural gas production surplus." Basis futures are also up compared with last year at Southern California Border and Southern California Citygates, OE said.In its own Winter Fuels Outlook, released last week, the Energy Information Administration (EIA) said it expects Henry Hub prices during December, January and February to average $3.20/MMBtu, an 8% increase based on increased gas use in the electric power sector, growing natural gas exports from liquefied natural gas (LNG) facilities, and lower-than-average inventory levels.
Natural Gas Breaks Higher - Injections Pick Up The Pace At The 11th Hour - Price volatility in the natural gas futures market is nothing new for the energy commodity that has traded in a range from $1.02 to $15.65 per MMBtu since contracts began trading on the NYMEX division of the CME in 1990.Since the February 2018 high at $3.661 per MMBtu, the energy commodity had traded in a range from $2.53 to $3.053 on the continuous futures contract until the final week of September.The natural gas futures market has been growing, and open interest recently hit a new record at 1,699,571 contracts on October 4. The expansion of the metric is a result of the rising demand for hedging from producers and consumers aside from the speculation players who come to the market to profit from price volatility. On the supply side, quadrillions of cubic feet of the energy commodity in the Marcellus and Utica shale regions of the U.S., technological advances in extraction, and fewer regulations have combined to increase output to record levels.On the demand side, replacing coal with natural gas in power generation and shipments of LNG by ocean vessel around the globe have increased demand as supply rises. The rise in open interest reflects the growing scope of the U.S. natural gas market. As open interest and volumes in a futures markets rise, it can have a dampening impact on price volatility. The wild and explosive moves to levels above $10 per MMBtu in 2005 and 2008 have faded in the market's rearview mirror. However, the current level of stockpiles going into the season of peak demand is at a level where the price broke above its technical resistance level during the last week of September, and it remained above $3.053 at the end of last week as that price has now become technical support. Over recent weeks, the pace of natural gas injections into storage facilities around the United States has picked up. After an increase in stocks of 46 bcf for the week ending on September 21, they rose by 98 bcf during the final week on September. On October 11, the EIA reported an increase of 90 bcf bringing the total amount of the energy commodity in inventories to 2.956 trillion cubic feet. As the chart shows, stocks were 17.5% below last year's level and 17% below the five-year average as of October 5. While the injection slightly exceeded the increase last year at 87 bcf, the increases in stocks are coming at the eleventh hour when it comes to preparing for the upcoming peak season for demand of the energy commodity.
Prices Little Changed As Bullish Weather Forecasts Are Offset By Commencement Of New Pipeline Projects -- Highlights of the Natural Gas Summary and Outlook for the week ending October 12, 2018 follow. The full report is available at the link below.
- Price Action: The November contract rose 1.8 cents (0.6%) to $3.161 on a 23.0 cent range ($3.368/$3.138).
- Price Outlook: Prices continued higher and established a new weekly high for the 4th consecutive week. However, the market ended near the weekly low as new supply did begin flowing on the Atlantic Sunrise expansion, focusing market attention again on US production. However, there is still no indication of a +100 bcf injection and the chance for a triple digit injection has now passed.
- Weekly Storage: US working gas storage for the week ending October 5 indicated an injection of +90 bcf. Working gas inventories rose to 2,956 bcf. Current inventories fall (639) bcf (-17.8%) below last year and fall (598) bcf (-16.8%) below the 5-year average.
- Supply Trends: Total supply rose 0.4 bcf/d to 82.3 bcf/d. US production fell. Canadian imports rose. LNG imports fell. LNG exports fell. Mexican exports rose. The US Baker Hughes rig count rose +11. Oil activity increased +8. Natural gas activity increased +4. The total US rig count now stands at 1,063 .The Canadian rig count rose +13 to 195. Thus, the total North American rig count rose +24 to 1,258 and now exceeds last year by +118. The higher efficiency US horizontal rig count rose +8 to 927 and rises +141 above last year.
- Demand Trends: Total demand rose +0.9 bcf/d to +69.5 bcf/d. Power demand rose. Industrial demand fell. Res/Comm demand rose. Electricity demand rose +3,127 gigawatt-hrs to 78,378 which exceeds last year by +4,085 (5.5%) and exceeds the 5-year average by 5,364 (7.3%%).
- Nuclear Generation: Nuclear generation fell (5,035)MW in the reference week to 77,759 MW. This is (8,933) MW lower than last year and (4,855) MW lower than the 5-year average. Recent output was at 78,103 MW.
- The cooling season is now over. With a forecast through October 26 the 2018 total cooling index is at 5,629 compared to 4,850 for 2017, 5,495 for 2016, 4,402 for 2015, 3,451 for 2014, 4,811 for 2013, 7,212 for 2012 and 6,709 for 2011.
Natural Gas Winter Prices Rally as Current Cold Snap to Linger Through October - For the second weekend in a row, a bullish turn in the weather outlooks led to a sharp rally in core winter natural gas contracts to start the week, elevating November natural gas prices on Monday by 8.1 cents to $3.242. Spot gas prices also strengthened as the early-season cold snap drove up demand across much of the United States. The NGI National Spot Gas Avg. rose 17 cents to $3.135.
Natural Gas: Just When Things Seemed To Be Going So Well For Trump's America -- October 15, 2018: oh-oh. Maybe the Natural Gas Supply Association spoke too soon. From SeekingAlpha -- Bullish weather forecasts again led to a sharp rally in core winter natural gas contracts to start the week, boosting November natural gas prices by more than $0.08 to $3.242/MMBtu, and spot gas jumped $0.17 to $3.135/MMBtu as early-season cold drove up demand across much of the U.S.With unseasonably low temperatures expected to persist through the end of October, NatGasWeather expects the coming weather pattern to further raise storage inventory deficits vs. the five-year average to more than 650 Bcf and likely toward 700 Bcf.The background state will remain bullish for quite some time until record production finally shows signs of improving deficits, “something that’s not expected to happen until after October due to the coming colder-than-normal pattern," the forecaster says. In the SeekingAlpha note above, the writer suggests the deficit could trend toward 700 Bcf. In the graphic from last week, "stocks were 627 Bcf less than last year at this time and 607 Bcf below the five-year average.
Natural gas jumps on expectations of above-average cold, with supplies at decade low -- Natural gas prices jumped Monday on report of below-average cold weather expected across the U.S. at a time when gas supplies are at decade lows.Natural gas futures for November rose 2.6 percent, to $3.242 per million British thermal units."The updated model from over the weekend showed an early-season cold snap for the bulk of the country, which is the last thing consumers needed to have happen," said John Kilduff of Again Capital.Natural gas hit a high of $3.37 per mBtu a week ago Tuesday on a cold weather report, but that concern faded and a new 11-day to 15-day forecast shows a blast of cold across the U.S., particularly in the South and in the Midwest. "It's a different pattern," said Jacob Meisel, Bespoke Weather Services chief weather analyst. "You're seeing more risk that cold air masses get trapped across the East. Before, it looked like we'd get warm Pacific air into the East."Meisel said this year's weather pattern has been unusual, and it coincides with extremely low supply. "My early thoughts are for a warmer November into December and then some colder risk in January but primarily February," he said. "In October, we're actually looking at a top-five cooling demand days and a top-five heating demand. We started with near-record heat, and we flipped to cold. You always expect to get several weeks of low energy demand, and that's not happening."
Bullish Weather Forecasts Send Natural Gas Injections Lower - We expect a +85 Bcf change in the storage report for the week ended October 12. A storage report of +85 Bcf would compare with +50 Bcf last year and +79 Bcf for the five-year average. Natural gas storage is expected to be 3.177 Tcf by November 9. That's 671 Bcf below the five-year average. You can see that in the chart above and below: Sadly for the natural gas bears, the weather models showed increasingly cooler than normal conditions over the weekend resulting in further downward revisions in our natural gas injections.In addition, the latest ECMWF-EPS long-range outlook flipped from a bearish outlook in early November to a bullish one. Yes, the weather has been consistently turning bullish. With the latest weather forecast update, we will no longer be initiating a new DGAZ position as we wrote about last week. Given that we are now entering a period where weather model volatility dictates the movements in natural gas prices, we will need to avoid shorting into a bullish outlook such as this one. Of course, the daily model updates are more important, so we will be keeping a close eye on that, but so far, it's not supportive for the bears. As the weather turns bullish and heating demand gets an early start, we can see the overall increase below. The bump up we are seeing in 2018 is materially higher than the two previous years. This also is another reason why the natural gas storage deficit to the five-year average is expected to increase into November. On the supply side, we are seeing lower Canadian gas net imports due to a pipeline accident in Western Canada. Enbridge is currently trying to fix the rupture with no return date just yet: Overall, the natural gas market continues to be well supported due to a bullish weather outlook. The early bearish November outlook has now flipped to a bullish one, so we will not be initiating any new short position on the back of this update.
NYMEX November gas jumps 8.1 cents on weather-related issues, storage concerns — The NYMEX November natural gas futures contract jumped 8.1 cents and settled at $3.320/MMBtu Wednesday, largely driven by erratic weather and storage concerns. The front-month contract traded between $3.240/MMBtu and $3.338/MMBtu so far in the session. "Natural gas prices are getting a bounce because of the weather," said Phil Flynn, senior market analyst at Price Futures Group. The National Weather Service calls for a likelihood of below-average temperatures to continue across much of the Midwest, Northeast, Southwest and Texas, while above-normal temperatures are in the forecast for the rest of the US over the next six to 10 days. These extreme weather conditions during the shoulder season are providing support for prices, Flynn said. The offsetting weather patterns have resulted in cooling demand extending deep into the shoulder season along with a rise in heating demand. Residential and commercial demand rose over the past seven days and is estimated to stand at 23.7 Bcf Wednesday, according to data from S&P Global Platts Analytics. Over the next seven days, heating demand is set to average 24 Bcf/d, up from 16.9 Bcf/d in the year-ago period. The lingering cooling demand and strengthening heating demand is likely to cut into injections, dampening the market's expectation of a reduced storage deficit during the fall injection season, despite elevated production levels. "As we get closer to winter, the market is getting more and more nervous about [the storage deficit]," Flynn said. A consensus of analysts surveyed by S&P Global Platts expects an 83-Bcf injection for the week that ended October 12, down 7 Bcf from the strong build of 90 Bcf announced last week by the US Energy Information Administration, but largely in line with the five-year build of 79 Bcf for the same time.
November Natural Gas Plunges 12 Cents as Cold Seen Breaking Down; Spot Gas Crashes --A pullback in heating degree days for the end of October/early November laid the groundwork for a dramatic sell-off in natural gas futures Thursday that was further pressured by Lower 48 gas production returning to near record highs in recent days. With no surprises on the storage data front, the Nymex November gas contract went on to settle at $3.198, down 12.2 cents
EIA expects US natural gas production to jump nearly 1 Bcf/d - With four regions expected to see triple-digit increases from October to November, U.S. natural gas production from the lower 48 states’ seven most productive shale plays will jump nearly 1 billion cubic feet per day, according to Kallanish Energy.The most recent issue of the Drilling Productivity Report, which is produced by the Energy Information Administration, projects total production from the seven regions will increase by 957 million cubic feet per day (Mmcf/d), to 74.06 billion cubic feet per day, from 73.10 Bcf/d.The Appalachian Basin — the combined Marcellus and Utica shales — is expected to see the biggest month-to-month increase in gas production. The report projects an increase of 337 Mmcf/d, to 29.79 Bcf/d, from 29.45 Bcf/d.
Natural Gas Production From Big Seven Plays to Reach 74.06 Bcf/d in November, EIA Says- The U.S. Energy Information Administration (EIA) is projecting production from the nation's seven most prolific onshore unconventional plays -- the Anadarko, Appalachian and Permian basins, and the Bakken, Eagle Ford, Haynesville and Niobrara formations -- will increase in November, continuing a nearly two-year trend, with natural gas output forecast to reach 74.06 Bcf/d and oil production an estimated 7.71 million b/d. In its latest Drilling Productivity Report (DPR), released Monday, the EIA said it expects total gas production from the the seven key regions this month to reach 73.1 Bcf/d and oil production to be 7.61 million b/d.The plays have been on a roll since January 2017, when EIA estimated total gas production was 47.51 Bcf/d and total oil production was an estimated 4.54 million b/d.Natural gas production in November is expected to increase the most in the Appalachian Basin, which includes the Marcellus and Utica shales. Production is expected to reach 29.77 Bcf/d, up from 29.45 Bcf/d in October.EIA said it also is forecasting increased production in the Anadarko (7.4 Bcf/d from 7.31 Bcf/d), Bakken (2.56 Bcf/d from 2.53 Bcf/d), Eagle Ford (7.24 Bcf/d from 7.12 Bcf/d), Haynesville (9.74 Bcf/d from 9.63 Bcf/d), Niobrara (5.21 Bcf/d from 5.136 Bcf/d) and Permian (12.13 Bcf/d from 11.89 Bcf/d).Oil production is expected to increase in six of the seven plays. More than half of the increase is expected to come from the Permian, which is projected to hit 3.55 million b/d in November from 3.5 million b/d in October.Oil production is expected to reach 572,000 b/d in the Anadarko, 132,000 b/d in Appalachia, 1.35 million b/d in the Bakken, 1.44 million b/d in the Eagle Ford and 626,000 b/d in the Niobrara. Haynesville production is expected to remain flat at 43,000 b/d.The number of drilled but uncompleted (DUC) wells across the Big Seven ended September at 8,389, an increase of 192 from August, according to EIA.The bulk of the DUCs, and the largest increase in DUCs, came in the Permian, which rose 194 in September to 3,528. DUCs increased by 31 in the Anadarko to 1,045 and by 18 in the Eagle Ford to 1,584. DUC numbers decreased from August in Appalachia (minus 22), Bakken (minus 11), Haynesville (minus 3) and Niobrara (minus 15). The productivity of new oil wells in the Big Seven plays is expected to increase in November to 668 b/d, according to the DPR. New-well gas production per rig is also expected to increase to 3.79 MMcf/d.
EIA Oct '18 Drilling Report: Shale Gas Output Up Another 1 Bcf/d - Last month the U.S. Energy Information Administration’s (EIA) monthly “Drilling Productivity Report” (DPR) estimated that this month (in October) the country’s seven major shale plays would produce an amazing, all-time high of 73 billion cubic feet per day (Bcf/d) of natural gas production (see EIA Sep ’18 Drilling Report: Shale Output Flies Past 73 Bcf/d). EIA issued the October DPR yesterday (with numbers for November) and once again, production is going up. EIA estimates November production will hit 74 Bcf/d–another record-breaker.Month after month production in the Marcellus/Utica region, called “Appalachia” in the report, goes up roughly 1/3 Bcf. And yes, it happens again for November. EIA predicts Appalachia production will hit 29.8 Bcf/d–a full 40% of all shale gas production in the U.S., up 337 million cubic feet per day (~1/3 Bcf) from last month.Shale oil production also continues to rise in the coming month–from 7.6 million barrels this month to 7.7 million barrels next month. Below are the three charts the EIA doesn’t include in the official PDF of the report (for whatever reason). We think these are the three best charts they issue each month.Note the third chart above, DUCs (Drilled but UnCompleted wells). A DUC happens when drillers put the initial hole in the ground, including the lateral, but they don’t finish the job by fracking the well and bringing it online into production.In our region the DUC number went down by 22, indicating we’re drilling fewer new wells and completing and bringing online already-drilled wells instead. We’re burning off our DUC inventory. That’s been a trend for a number of months.A big surplus in DUCs (like that in the Permian) means they’re drilling holes in the ground like crazy and mothballing wells, waiting for new pipelines to connect them (or prices to go up) before bringing them online. The Permian adding over 100 DUCs a month has also been a trend for a number of months.
Low U.S. gas market stocks tempered by mild El Niño forecast -- U.S. natural gas stocks are going into winter at the lowest level for fifteen years despite a slightly faster rate of injections into storage over the summer than in 2016 or 2017. Low inventories have encouraged hedge funds to build their largest position in futures and options for more than eight years and pushed benchmark prices to their highest level for almost nine months. But pressure on stocks and prices is being tempered by the development of El Niño conditions over the Pacific which should lead to a relatively mild winter for much of the country. Higher prices will encourage power producers to run gas-fired units for fewer hours in the coming weeks and increase generation from coal, which has been languishing at multi-decade lows. The resulting switch from gas to coal should help boost gas stocks faster than normal in the remainder of the injection season and limit drawdowns in the early stages of the winter heating season, conserving scarce stocks. If the winter starts with prolonged cold periods in November and December, however, the gas market could come under severe pressure, with prices spiking. Working gas stocks in underground storage reached 3,037 billion cubic feet (bcf) on Oct. 12, according to the U.S. Energy Information Administration ("Weekly natural gas storage report", EIA, Oct. 18). Stocks have risen by 1,688 bcf since the injection season started on April 1, compared with increases of 1,586 bcf in 2017 and 1,325 bcf in 2016 (https://tmsnrt.rs/2J76aKS ). Even so, gas stocks are the lowest level since 2003, and the market has struggled to eliminate the deficit to the five-year average that developed during the long cold winter of 2017/18. Until a few weeks ago, most traders appeared unconcerned by low inventories and benchmark futures prices were stuck below $3 until the final week of September. Since then, hedge funds and other money managers have turned strongly bullish, increasing their net long position in futures and options by nearly 1,500 bcf over the last three weeks. Portfolio managers' net long position is the highest for 35 weeks, according to position records published by the U.S. Commodity Futures Trading Commission.
EIA data show weekly U.S. natural-gas supply above 3 trillion cubic feet for first time since Dec. 2017 - The U.S. Energy Information Administration reported Thursday that domestic supplies of natural gas rose by 81 billion cubic feet for the week ended Oct. 12. Consensus estimates called for build near 85 billion, according to Schneider Electric. Total stocks now stand at 3.037 trillion cubic feet, down 601 billion cubic feet from a year ago, and 605 billion below the five-year average, the government said. Stocks in storage haven't topped 3 trillion since late December 2017, EIA data show. November natural gas NGX18, +1.03% traded at $3.259 per million British thermal units, down 6.1 cents, or 1.8%, from Wednesday's settlement. It was trading at $3.247 before the supply data.
October 19 Natural Gas Weekly: Injection Season Is Likely To End In The 2nd Week Of November - We estimate that aggregate demand for American natural gas (consumption + exports) totaled around 530 bcf for the week ending October 19 (up 3.7% w-o-w and up as much as 15.0% y-o-y). The deviation from the norm stayed positive but increased marginally from +27% to +29% (see the chart below). According to our calculations, aggregate demand for U.S. natural gas (on a weekly basis) has been above 9-year norm since February 24, 2017. Last week, the weather conditions cooled down significantly across the country - but particularly in the Central, Midwest, and Southwest parts of the U.S. We estimate that the number of nation-wide heating degree-days (HDDs) has more than doubled in the week ending October 19, while the number of cooling degree-days (CDDs) dropped by 50% w-o-w to the point where they are no longer having any meaningful effect on consumption. In addition, non-degree-day factors - such as higher nuclear outages - spurred extra consumption in the Electric Power sector. Overall, total energy demand (measured in total degree-days) should be above last year's level by no less than 60%. Total exports dropped by 6% w-o-w, mostly due to weaker LNG sales (because of the base effect). According to Marine Traffic data, Sabine Pass served only four LNG tankers this week (total natural gas carrying capacity of 13 bcf), whereas last week, it served six vessels (total carrying capacity of 20 bcf). Despite the fact that flows to liquefaction at Cove Point have resumed (after a three-week maintenance), the terminal has not yet supplied any vessels since mid-September.We estimate that dry gas production has been expanding in annual terms for 72 consecutive weeks now. However, the daily rate of output has been unable to set a new all-time high for 24 days now. Currently, we project that dry gas production will average 88.2 bcf/d in October, 87.4 bcf/d in November, and 87.2 bcf/d in December. The aggregate supply of natural gas (production + imports) averaged around 93.0 bcf per day for the week ending October 19 (up 12.0% y-o-y, but down 0.3% w-o-w). Overall, total unadjusted supply/demand balance should be positive at around 119 bcf. The volume is some 20 bcf smaller than a week ago and 10 bcf below 5-year average for this time of the year (see the chart below).
Gulf Coast LNG Heading to Poland Under Long-term Deal -Polish Oil and Gas Co. (PGNiG) and Venture Global has signed 20-year sales and purchase agreements under which the former will receive U.S.-sourced liquefied natural gas (LNG) for domestic customers or for resale, Venture Global reported Wednesday. “These are the first long-term contracts for purchase of LNG from the U.S. announced in Central Europe,” Maciej Woźniak, vice president of PGNiG’s management board for trade, said in a written statement emailed to Rigzone. “The contract conditions in the USA are very attractive. The LNG price is based on the American Henry Hub index along with liquefaction costs.” The agreements will enable PGNiG to purchase LNG on a free on board (FOB) basis when commercial operations begin at the two LNG export facilities Venture Global is developing in South Louisiana, Venture Global stated. The company’s Calcasieu Pass LNG facility near Lake Charles is slated to start commercial operations in 2022 and its Plaquemines LNG project near New Orleans the following year, the company added. Under the deals, PGNiG will purchase 2 million tons per annum (mtpa) of LNG – 1 mtpa from each facility – for two decades. Venture Global stated the FOB arrangement means that it, as the seller, will deliver LNG to a tanker ship at the loading port and that the purchaser PGNiG will freely dispose of the load – including decide on the cargo destination. “Recently signed contracts are a milestone towards building PGNiG’s position in the global liquefied natural gas market,” noted Piotr Woźniak, president of PGNiG’s management board. “Thanks to the FOB formula, we will be able to decide, independently and based on our needs at a given time, whether the purchased LNG load should be directed to Poland or be used for further trading through our London office.” The 2 mtpa of LNG amounts to roughly 2.7 billion cubic meters of natural gas after regasification, Venture Global stated. Based on vessel capacity, that equates to more than 25 cargoes a year, the company added.
Bayou Bridge pipeline meets resistance from the L’eau Est la Vie camp - The swamps of southern Louisiana, a territory of the Atakapa-Ishak tribe, are the grounds of pipeline resistance as communities are rising to stop the Bayou Bridge pipeline (BBP).The 163-mile pipeline would transport crude oil from the Bakken oil fields of North Dakota and connect with the infamous Dakota Access Pipeline (DAPL) system to refineries in St. James Parish, Louisiana. The company behind the BBP, Energy Transfer Partners (ETP), is the same company responsible for the DAPL, which had police violently fend off peaceful Water Protectors at Standing Rock in 2017. The BBP was approved in December that year by the Army Corps of Engineers, and construction began at the end of January 2018. But on February 27, a preliminary injunction was issued to block the completion of an extension of the BBP because the Army Corps of Engineers had not met all the environmental assessment requirements. Despite this injunction, ETP continued construction with plans to complete the pipeline by the end of 2018.Pipeline construction would cut through the southern end of the Atchafalaya Basin, one of the last critical swamp habitats in the world, which is home to more than 65 species of reptiles and amphibians and more than 200 species of birds and fish. The pipeline path would cross 600 acres of wetlands and 700 bodies of water, some of which reportedlyprovide drinking water for around 300,000 families. Geographically speaking, southern Louisiana is greatly threatened by climate change impacts from flooding and intensified hurricanes, and the wetlands that the BBP could potentially destroy are vital sponges for floodwaters. If built, this pipeline would create the carbon equivalent of 30 new coal plants, which is contradictory to current climate change global mandates to reduce carbon emissions.The BBP would eliminate southern Louisiana’s best defense against climate crises while simultaneously contributing to intensified effects of climate change from its carbon emissions.
Oil Majors Offload Gulf of Mexico Fields to Hunt Bigger Finds -- Big Oil is giving up looking for singles and doubles in the Gulf of Mexico: Now it’s home runs or bust. Exxon Mobil Corp. and Royal Dutch Shell Plc, the world’s two biggest oil companies, have put a slew of assets in the Gulf up for sale in recent weeks, while Brazil’s state-run Petrobras this week sold the bulk of its production in the region to mid-cap explorer Murphy Oil Corp. The majors are not leaving the Gulf altogether but they are shifting priorities. They’re using oil’s climb to a four-year high above $86 a barrel to offload older assets that are past their peaks to focus on bigger, more profitable discoveries, either in the deepest reaches of the Gulf or unexplored seas elsewhere in the world. The message is clear: Go big or go home. “When oil was in the doldrums, companies were much happier to sit on assets that performed as expected,” said Oma Wilkie, a senior analyst at RS Energy Group. “But with Brent pushing $80, they can hopefully get top dollar for assets that are OK but not the best in the portfolio.” The sales come at a time when production from the Gulf has reached record levels -- 1.85 million barrels a day -- but has been dwarfed by the growth of onshore shale. The region now makes up just 17 percent of U.S. total production, down from 27 percent a decade ago. Exxon, Shell and Petrobras may have all put ‘for sale’ signs up but their reasons for doing so are different.
'The Guy Who Defended Company That Caused Worst Oil Spill in US History' Just Confirmed to Head DOJ's Environmental Division -- Democratic Sens. Joe Manchin (W.Va.) and Claire McCaskill (Mo.) joined with Senate Republicans on Thursday to confirm Jeffrey Bossert Clark—a climate-denying former attorney for the fossil fuel industry—to lead the Justice Department's Environment and Natural Resources Division. "Clark's blatant hostility toward environmental protection is good news for polluters, but awful news for the rest of us," warned Environmental Working Group (EWG) president Ken Cook. "The guy who defended the company that caused the worst oil spill in U.S. history is not likely to aggressively go after corporate environmental outlaws." The new assistant attorney general's nomination has been stalled for more than a year due to concerns about his history as a lawyer. Clark has represented B.P. in lawsuits that stemmed from the 2010 Deepwater Horizon oil spill and the U.S. Chamber of Commerce in suits attacking the U.S. government's authority to craft regulations that aim to cut greenhouse gas emissions.
Texas uses $100m from 2010 oil spill settlement for coast -- — Officials say more than $100 million from a settlement after the 2010 Deepwater Horizon oil spill in the Gulf of Mexico has been spent on restoring Texas coastal habitat. The Houston Chronicle reports details were announced Monday night during a public meeting in Galveston. Trustees of the Texas Implementation Group offered the update on how the overall $238 million in damages were being spent.The money comes from a 2016 settlement with BP, which leased the Deepwater Horizon rig that exploded in April 2010. The accident killed 11 workers and dumped millions of barrels of oil into the Gulf.Texas funds so far have been used to restore sea turtle, bird, and oyster coastal and wetland habitats, plus recreational improvements such as artificial reefs for fishing and diving.
LNG Project in South Texas Advances - NextDecade Corp. has secured a draft environmental impact statement (EIS) from the Federal Energy Regulatory Commission (FERC) for its Rio Grande LNG project near Brownsville, Texas, along with its associated Rio Bravo Pipeline, the company reported Friday afternoon. “We appreciate the FERC staff’s continued commitment to the review of our project,” Matt Schatzman, NextDecade’s president and CEO, said in a written statement. “The draft EIS represents a culmination of several years of analysis and evaluation in conjunction with multiple federal, state and local agencies and stakeholders.”FERC, which reviews and permits LNG facilities in the United States, issued the draft EIS as required by the National Environmental Policy Act. The document follows a detailed review of environmental, engineering, social and other aspects of NextDecade’s proposed project. The 27-million-tonne-per-annum Rio Grande LNG export facility would receive natural gas from the Agua Dulce gas hub near Corpus Christi via the company’s 4.5 billion cubic foot per day Rio Bravo Pipeline. FERC will issue a final EIS April 26, 2019, and has established a 90-day Federal Authorization Decision Deadline July 25, 2019, NextDecade stated. Pending a favorable FERC order, NextDecade stated that it expects to make a final investment decision on the project during Third Quarter 2019. In a 2017 interview with Rigzone, NextDecade founder and then-CEO (and current board chair) Kathleen Eisbrenner said the project could produce first LNG in 2022.
1 MMbpd Pipeline to Link Permian to Deepwater Ports - JupiterMLP is building a 670-mile oil pipeline linking the Permian to Texas' three deepwater ports. JupiterMLP, LLC anticipates a November open season for capacity on the 1 million barrel per day (MMbpd) crude oil pipeline it plans to build from the Permian Basin to Brownsville, Texas, the privately held midstream company announced Wednesday afternoon. Jupiter made the announcement after securing a funding commitment from Charon Systems Advisors that it reported is sufficient to build the approximately 670-mile pipeline, which it expects to become operational in Third Quarter 2020. “With the backing by Charon and the firm commitments that Jupiter has already secured on the Jupiter Pipeline, we will be holding an open season for the remaining capacity in November,” Albert Johnson, president of Jupiter Pipeline LLC, said in a written statement. “We are excited about our investment in Jupiter pipeline along with Jupiter management and our investment partners,” noted Adrayll Askew, partner of Charon. “We are fully committed to Jupiter’s long-term global strategy that focuses on the integration of the midstream supply chain and distribution of Permian crude oil to the world.” According to Jupiter, the pipeline’s Permian Basin origination points will be located near Midland, Pecos and Crane, Texas, and its offtake points will be near Three Rivers, Texas. The company added that it has completed engineering, design and right-of-way planning for the pipeline, which will directly link to Kinder Morgan’s Double Eagle and Crude & Condensate pipeline systems. As designed, the pipeline will be the only such conduit out of the Permian that can access Texas’ three deepwater ports – in Houston, Corpus Christi and Brownsville – and will enjoy direct access to a fully capable very large crude carrier (VLCC) facility, Jupiter added. In May, Jupiter announced that it had received all initial governmental and regulatory permits to load and unload vessels of up to 65,000 deadweight tons or Panamax-sized vessels at its Jupiter Export Terminal. The company is building the crude upgrading, processing and export terminal on a 270-acre site at the Port of Brownsville. Jupiter has already secured permits to construct more than 2.8 million barrels of storage in Brownsville and has additional permits on file to boost its storage capacity to more than 6 million barrels, the company stated Wednesday. In addition, it reported that it is in the final stages of securing a permit to construct a 170,000-barrels per day processing facility to convert light crude into on-spec gasoline and ultralow sulphur diesel.
West Texas pipeline to resume on schedule after spill, Company Says - Energy Transfer Partners LP said on Monday that a West Texas pipeline would resume operations on Saturday as planned after the pipeline spilled water with nontoxic green dye and residual crude oil near Abilene, Texas. The spill went into Button Willow Creek and then into Canyon Rock Lake during a recent test, Energy Transfer Partner said. It did not specify when the spill occurred, and the company could not immediately be reached for further comment. The spill involved an undisclosed amount of water, which contained “a very small amount of residual crude oil,” the Dallas pipeline operator said in an email. The area has been contained, crews have begun cleaning up the spill and no changes have been made to the pipeline’s maintenance schedule, spokeswoman Vicki Granado said in the email. The West Texas Gulf Pipeline is owned by Sunoco Logistics Partners LP, which is owned by Energy Transfer. The pipeline runs from Colorado City, Texas, to Longview, Texas, connecting there to the Mid-Valley long-haul pipeline system that transports crude to refineries in the Midwestern United States.
EPA Weighs Allowing Oil Companies to Pump Wastewater Into Rivers, Streams - For almost as long as there have been oil wells in Texas, drillers have pumped the vast quantities of brackish wastewater that surfaces with the oil into underground wells thousands of feet beneath the earth’s surface. But with concern growing that the underlying geology in the Permian Basin and other shale plays are reaching capacity for disposal wells, the Trump administration is examining whether to adjust decades-old federal clean water regulations to allow drillers to discharge wastewater directly into rivers and streams from which communities draw their water supplies. Technically speaking, drillers are allowed to do this in limited circumstances under federal law, but the process of cleaning salt-, heavy metal- and chemical-laden wastewater to the point it would meet state or federal water standards is so costly that it’s rarely done, experts say. “Technology is changing. At some point, if your disposal options are limited or it becomes so expensive you’re having to truck water to be disposed of several hundred miles away, companies will do it,” said Jared Craighead, legal counsel to Texas Railroad Commissioner Ryan Sitton. “It might not make sense today but maybe in a year or two.” The Environmental Protection Agency is consulting with experts and conducting public meetings around the country toward making a decision next summer, said Lee Forsgren, deputy assistant administrator at EPA’s Office of Water, Tuesday in Washington. “We’re very much in a listening mode now,” he said. The primary question facing the EPA is whether water standards can be adjusted so oil and gas companies can economically treat wastewater to be pumped into the water supply without contaminating drinking water supplies or killing off local wildlife.
DUCs continue climbing in Lower 48 - The number of drilled, but uncompleted wells located in the most productive/busiest basins/plays in the Lower 48 U.S. states continues to rise, up 2.3% from August to September, the Energy Information Administration’s Drilling Productivity Report (DPR) found. The number of so-called DUCs rose by 192 from August to September, even though just three of the seven regions surveyed reported an August-to-September increase, Kallanish Energy finds. The largest number of DUCs was in the Permian Basin, up 194, to 3,722 DUCs in September, from 3,528, the October DPR found. The next-largest increase was in the Anadarko, up 31 DUCs, or 3.1%, to 1,045, from 1,014. Four of the seven major drilling basins/plays reported a drop in DOCs, although the total decrease was just 51. The biggest August-to-September drop was in Appalachia (the Marcellus and Utica Shale plays combined), which reported a 22-DUC drop, to 665, from 687, the October DPR reported.
Enbridge outlines $1.4 billion worst-case scenario spill - A worst-case oil spill on Enbridge's planned new oil pipeline across northern Minnesota would cost an estimated $1.4 billion, a little more than the price of the company's mammoth spill in Michigan eight years ago. Enbridge was required to come up with the worst-case scenario by the Minnesota Public Utilities Commission (PUC), which conditionally approved the company's new Line 3 pipeline in June. Calgary, Alberta-based Enbridge filed the cost estimate Tuesday with the PUC, noting that the worst-case spill would involve pipeline ruptures near the Red, Mississippi or Red Lake rivers. The PUC will use the information in determining Enbridge's financial liabilities for a major spill. Before the PUC signs off completely on the controversial $2.6 billion Line 3 project, Enbridge has to meet several conditions, and the most critical involves its corporate guarantee and insurance coverage for spills. To calculate the worst case, Enbridge assumed a "full-bore rupture scenario where the pipeline is shut down and isolated after 13 minutes from the release occurring," the company said in a PUC filing. In that 13 minutes, "a conservative response time," the break would be detected, pumps would be shut down and valves closed, the filing said. The largest costs would involve mopping up environmental damage, including spill containment site cleanup and remediation. The damage costs incurred by businesses located near a pipeline break also would be significant, as would costs to Enbridge's reputation, the filing said. "The report confirms Enbridge has the ongoing financial ability to cover cleanup costs in the unlikely event of a worst-case pipeline release in a high consequence area," the company said in a statement. "This engineering analysis, by design, did not take into account timely response or mitigation efforts."
Tight Oil, Shale to Drive Majors' Output to New Highs -In a new report released by Wood Mackenzie, the potential of unconventionals in the Lower 48 is examined by looking at five U.S. majors (BP plc, Chevron Corp., Equinor ASA, Exxon Mobil Corp. and Royal Dutch Shell plc). “Following BP’s $10.5 billion deal with BHP, all of the supermajors have a footprint in the Permian Basin, and are poised to deliver an unprecedented phase of production growth that will see output reach new highs over the next decade,” Roy Martin, research analyst in WoodMac’s corporate upstream team, said in a release. In terms of value and volume, tight oil and shale gas will be essential to the majors’ portfolios. In fact, without their volumes, collective production from the majors would enter long-term decline from 2020, WoodMac finds. By the mid-2020s, U.S. unconventionals will generate $15-$20 billion of yearly cash flow and account for 20 percent of total upstream value. “U.S. unconventionals will drive the majors’ output to new highs,” said Martin. “Their investment in the resource theme is set to nearly double over the next five years, underpinned by tight oil.” “We think the advantages of scale in U.S. unconventionals will continue to manifest themselves as the industry shifts close to a ‘big company’ business – almost resembling conventional oil developments,” he added. The big player here seems to be ExxonMobil, who has the most acreage, biggest resource and highest peak production. Martin said no other major has comparable diversity across the Permian, Bakken, Eagle Ford, Haynesville and Marcellus plays. He also called BP’s deal with BHP “transformational” and makes it possible for BP to overtake Exxon to become the leading shale gas producer.
U.S. Shale’s Glory Days Are Numbered -There are some early signs that the U.S. shale industry is starting to show its age, with depletion rates on the rise.A study from Wood Mackenzie found that some wells in the Permian Wolfcamp were suffering from decline rates at or above 15 percent after five years, much higher than the 5 to 10 percent originally anticipated. “If you were expecting a well to hit the normal 6 or 8 percent after five years, and you start seeing a 12 percent decline, this becomes more of a reserves issue than an economics issue,” said R.T. Dukes, a director at industry consultant Wood Mackenzie Ltd., according to Bloomberg. As a result, “you have to grow activity year over year, or it gets harder and harder to offset declines.”Moreover, shale wells fizzle out much faster than major offshore oil fields, which is significant because the boom in shale drilling over the past few years means that there is more depletion in absolute terms than ever before. A slowdown in drilling will mean that depletion starts to become a serious problem.A separate study from Goldman Sachs takes a deep look at whether or not the shale industry is starting to see the effects of age. The investment bank says the average life span for “the most transformative areas of global oil supply” is between 7 and 15 years.Examples of these rapid growth periods include the USSR in the 1960s-1970s, Mexico and the North Sea in the late 1970s-1980s, Venezuela’s heavy oil production in the 1990s, Brazil in the early 2000s, and U.S. shale and Canada’s oil sands in the 2010s. Each had their period in the limelight, but ultimately many of them plateaued and entered an extended period of decline, though some suffering steeper declines than others.
Trump Plan to Ramp Up Fracking, Mining in National Forests Threatens Climate -- The Trump administration's plan to make it easier for industry to frack and mine in national forests would endanger the climate, wildlife and watersheds, the Center for Biological Diversity and other conservation groups said in submitted Monday to the U.S. Forest Service."The Forest Service shouldn't be complicit in the Trump administration's assault on America's public lands at the behest of fossil-fuel and mining companies," said Taylor McKinnon, a public-lands campaigner at the Center for Biological Diversity. "More fracking and mining, with fewer safeguards, would be disastrous for national forests and watersheds. Instead of weakening protections, Trump should clean up the mess the mining industry has already left behind in our forests." A Center for Biological Diversity analysis of federal oil and gas volume estimates shows that, outside of wilderness areas and national monuments, national forests contain 1.8 billion barrels of oil and 24 trillion cubic feet of natural gas. That would produce 2.4 billion tons of greenhouse gas pollution if fully developed—the equivalent of annual emissions from 601 coal-fired power plants. The proposed Forest Service oil and gas rulemaking would align its procedures with controversial new Bureau of Land Management policies that have been temporarily halted by a federal court because they prevent public input. The Center for Biological Diversity and other organizations are calling on the agency to improve transparency and public involvement in decisions about drilling, fracking and mining in national forests. The groups also want the Service to fully account for the toll fossil-fuel extraction and mining would take on public health, public lands, wildlife and the climate.
Iowa regulators question whether Dakota Access pipeline has enough insurance to protect against an oil spill - The Iowa Utilities Board is questioning whether the builder of the controversial Dakota Access pipeline has adequate insurance coverage to protect Iowans from potential oil spills.That crude oil pipeline spans four states from North Dakota to Illinois, cutting through 18 Iowa counties. In permitting the controversial project, the utilities board required that its builder, Dallas-based Energy Transfer Partners, secure $25 million in insurance coverage to protect against the potential of an Iowa oil spill.Energy Transfer has $50.1 million in total coverage across the four-state pipeline, but IUB officials say that doesn't prove that the company holds $25 million in Iowa-specific coverage. In essence, the board has argued that a catastrophic incident in one of the other three states could exhaust the pipeline's insurance coverage for Iowans.Dakota Access has maintained it secured more than adequate coverage. But the IUB has rejected that logic: On Tuesday, the board ordered the company to provide more information on how it would comply with the $25 million insurance requirement. Energy Transfer has 21 days to respond.IUB spokesman Don Tormey said the board had no further comment beyond its order to the company.The spat between the IUB and the pipeline operator represents just the latest controversy for a project that has sparked protests, arrests and lawsuits up and down the route. Most notably, the project led to a giant gathering of Native Americans near the Standing Rock Sioux reservation in North Dakota.
Colorado's anti-fracking measure would keep wells farther away from homes and schools - Colorado voters next month will decide how close is too close when it comes to oil and gas drilling. A statewide ballot measure known as Proposition 112 would keep new wells dramatically farther away from homes and schools, expanding the distance from a 500-foot minimum to 2,500 feet, the biggest statewide setback requirement in the country. It's a change the industry says would threaten its very existence.The spending has been lopsided, with the oil and gas industry raising some $30 million to defeat the measure. That's about 40 times more money than environmental groups have raised.Colorado Rising, the advocates promoting greater distances for well locations, hopes to gain an edge with unpaid volunteers who go door to door.Therese Gilbert is one of them. She's a mother and seventh-grade teacher from Greeley, the center of Colorado's oil and gas industry."This is my little petition bag," Gilbert says as she points to a small denim pouch that holds flyers, a water bottle and pens.In Loveland, located squarely in purple Larimer County, Gilbert explains to 31-year-old Democratic voter Susana Ruiz how Colorado wells have exploded and burned, putting health and the safety of children and workers at risk. In 2017, an oil tank fire killed one and injured three. A home explosion in Firestone last year that was linked to an oil well killed two people and severely injured another.Gilbert says she gets the most positive responses from women, and Ruiz does like the idea of more distance between new wells and schools. "Obviously I would want my children safe," she says. Proposition 112's half-mile setback would also apply to drinking water sources, rivers, playgrounds and gathering spots like amphitheaters. If voters approve, the new regulation would be greater than similar rules in places like Pennsylvania.
Oil-by-Rail Rises Once Again as Safety Rules Disappear - While a second oil-by-rail boom is well underway in North America, both the U.S. and Canada are taking steps that ignore or undermine the lessons and regulatory measures to improve safety since the oil train explosions and spills of years past.Canadian oil-by-rail now is operating at record levels, which are predicted to double by 2019. Favorable economics have led to a recent rise in oil-by-rail movements in the U.S. as well, with more Bakken oil moving by train to East Coast refineries.Meanwhile, in September the Trump administration finalized its rollback of a regulation requiring an updated braking system for oil trains, known as modern electronically controlled pneumatic (ECP) brakes, in a highly questionable regulatory process detailed on DeSmog last year.In North Dakota, the Department of Mineral Resources now plans to reverse a regulation which required even the minimal stabilization of oil transported by train, with “stabilization” referring to a process that removes some of the natural gas liquids that make Bakken oil so explosive. That move doesn't bode well for avoiding earlier scenarios in which rail operators dubbed oil trains as “bomb trains.”In September Canada committed to phasing out some of the unsafe older rail tank cars ahead of schedule, but a derailment earlier this year shows that this step is far from foolproof. On June 22, a train carrying Canadian oil that derailed in northwestern Iowa was using the newer DOT-117R tank cars, the same ones being phased in as the new standard. The derailment still resulted in the release of an estimated 230,000 gallons of tar sands oil into local floodwaters. And while track defects are the leading cause of train derailments (which, of course, lead to fires, explosions, and spills), the Trump administration has hit pause on efforts to regulate rail wear, which makes unlikely the possibility of new rules on this issue while Trump is in office.
California fire: Thousands evacuate as blaze threatens underground natural gas pipeline - Officials have evacuated 4,000 people and close an elementary school after a grass fire threatened an underground natural gas pipeline in the San Francisco Bay Area.The fire started on Wednesday in Bay Point, and was reportedly started after a power line fell, according to Chevron Pipe Line Company. That company operates the pipeline that was threatened by the fire.The company said that it cut supply to the gas line, and was working with firefighters to help evacuate the area in case something went wrong."Venting of the Bay Point gas line is resulting in a loud, shrieking noise that has been described as a jet-engine-like sound emanating from the Chevron Pipeline Facility," the Contra Costa County Fire Protection District said in a tweet. "This is a normal part of the risk-mitigation process. Please do not call 911".Fire officials said that Willow Cove Elementary School in Pittsburg would be closed on Thursday just in case something went wrong between the fire and the gas line. About 1,400 homes were evacuated in the area.
Evacuations Still In Place For Thousands As Crews Evaluate Bay Point Pipeline (CBS SF) — An evacuation order that affected thousands in Bay Point and Pittsburg remained in effect Thursday afternoon as crews worked to secure a major Chevron natural gas pipeline that was threatened by fire, officials said. Around 4,000 people were forced to flee from 1,400 homes, officials said. Assistant Fire Chief Terence Carey said a small vegetation fire erupted in the area Wednesday afternoon. Crews extinguished the fire without incident but were called back to the scene when they were alerted to a fire in a utility vault that threatened the pipeline. “There is an active fire in the vault,” Carey told reporters Thursday morning. “We are not sending our firefighters in there until we know it is safe.’ Drone video provided by the Pittsburg Police Department showed the utility vault on fire overnight. Under that vault sits a 12-inch high pressure natural gas line at risk of exploding. “It was realized very quickly that there was a high probability of danger,” said Carey. Chevron officials said they were contacted at around 8 p.m. Wednesday to notify them of the blaze. “Chevron Pipe Line Company was notified of a fire caused by an electrical power line falling, which started a fire near our valve junction on the Northern California Gas Line near Pittsburg,” a company statement said. “CPL immediately shut down the line and dispatched a field team to investigate.” The 12-inch, high-pressure natural gas line runs through the East Bay. The line affected by the blaze has been isolated from the rest of the pipelines, Hill said. He advised that didn’t mean the threat of an explosion was mitigated and said residents should still heed evacuation orders from Wednesday night in an abundance of caution because there is still a threat of an explosion.
Natural gas pipeline rupture in Canada affects U.S. energy markets - The October 9, 2018 rupture of Enbridge’s BC natural gas pipeline near Prince George, British Columbia, continues to affect natural gas supply, electricity generation, and petroleum refining in the U.S. Pacific Northwest. The BC Pipeline links natural gas production in northeastern British Columbia with distribution markets in Canada as well as Washington, Oregon, and Idaho. Imports of natural gas through the pipeline, which in the first half of the year averaged 1.1 billion cubic feet per day (Bcf/d) at the Sumas hub import point, fell to zero for a day after the rupture.The rupture occurred on the 36-inch diameter mainline, one of two pipelines that make up the BC Pipeline system. Both pipelines were shut down and depressurized following the rupture. On October 10, Enbridge restarted the second, smaller 30-inch diameter pipeline, which is now operating at 80% capacity. Operators were also able to transport natural gas from production areas in eastern British Columbia and Alberta through the Kingsgate import point to replace some of the disrupted supply. As of the morning of October 15, Enbridge had started constructing a temporary access road to the site of the rupture, but it has announced no timeline on when it will complete the repair work. The pipeline rupture forced some refineries in Washington to cut production, as the pipeline carries natural gas used to operate refining units. Royal Dutch Shell and Phillips 66 both shut down refineries in the region, resulting in an increase in wholesale gasoline prices in the Pacific Northwest. Retail gasoline prices in the area were already rising because of recent increases in crude oil prices. On October 15, the Monday following the pipeline rupture, the retail price of gasoline in Seattle rose 9 cents per gallon from the previous week’s value, the largest weekly increase since mid-2015. Also on that day, Seattle’s regular retail gasoline price was $3.48 per gallon, or about 60 cents per gallon more than the U.S. average, based on EIA’s weekly Gasoline and Diesel Fuel Update.
West Coast military installations eyed for US fuel exports (AP) — The Trump administration is considering using West Coast military installations or other federal properties to open the way for more U.S. fossil fuel exports to Asia in the name of national security and despite opposition from coastal states. The proposal was described to The Associated Press by Interior Secretary Ryan Zinke and two Republican lawmakers.“I respect the state of Washington and Oregon and California,” Zinke said in an interview with AP. “But also, it’s in our interest for national security and our allies to make sure that they have access to affordable energy commodities.”Accomplishing that, Zinke said, may require the use of “some of our naval facilities, some of our federal facilities on the West Coast.” He only identified one prospect, a mostly abandoned Alaska military base. The idea generated a quick backlash Monday from some Democrats and environmentalists. It’s tantamount to an end-run around West Coast officials who have rejected private-sector efforts to build new coal ports in their states.Washington Gov. Jay Inslee, a Democrat, called the proposal a “harebrained idea,” and said President Donald Trump should instead consider that climate change represents a national security threat.Boosting coal and gas exports would advance the administration’s agenda to establish U.S. “energy dominance” on the world stage. The potential use of government properties for exports underscores a willingness to intervene in markets to make that happen.The administration in recent months has cited national security as justification for keeping domestic coal-burning power plants online to prevent disruptions of electricity supplies. Zinke said the administration was interested in partnering with private entities in the use of federal facilities designated to help handle exports and cautioned that the idea is still in its early stages.
U.S. eyes military bases for coal, natural gas exports -- The Trump administration is considering using West Coast military bases or other federal properties as transit points for shipments of U.S. coal and natural gas to Asia as officials seek to bolster the domestic energy industry and circumvent environmental opposition to fossil fuel exports, according to Interior Secretary Ryan Zinke and two Republican lawmakers.The proposal would advance the administration's agenda of establishing American "energy dominance" on the world stage and underscores a willingness to intervene in markets to make that happen. It's tantamount to an end-run around West Coast officials who have rejected private-sector efforts to build new coal ports in their states.In an interview with The Associated Press, Zinke cast the proposal as a matter of national security to ensure U.S. allies have access to affordable fuels. The Trump administration also has cited national security as justification for keeping domestic coal-burning power plants online to prevent disruptions of electricity supplies. It's unclear which sites are under consideration other than one in Alaska. Experts said the possibilities are constrained by the need for a deep water port. Zinke said the administration is interested in partnering with private entities to ship coal or liquefied natural gas through naval installations or other federal facilities. He added it's still early in the process."I respect the state of Washington and Oregon and California," Zinke said. "But also, it's in our interest for national security and our allies to make sure that they have access to affordable energy commodities."Accomplishing that, he said, may require the use of "some of our naval facilities, some of our federal facilities on the West Coast."Zinke specified only one site that could serve as an export hub, for natural gas: the former Adak Naval Air Facility in Alaska's Aleutian Islands, which he suggested could receive fuel by barge from the North Slope. The base closed in 1997 and has been largely abandoned. Roughly 300 people live in the town of Adak, the westernmost community in the U.S.
Washington governor blasts plan to use West Coast military bases to ship coal, natural gas - The Hill - Washington Gov. Jay Inslee (D) on Monday slammed President Trump's proposal to use military bases to export coal from the West Coast to Asia, saying in a statement that the idea is "reckless." “This reckless, harebrained proposal undermines national security instead of increasing it, and it undermines states’ rights to enforce necessary health, safety and environmental protections in their communities," Inslee said. U.S. Interior Secretary Ryan Zinke on Monday told The Associated Press that the Trump administration is considering using military bases and federal properties in states such as Washington, Oregon and California to ship coal and natural gas to Asia. “I respect the state of Washington and Oregon and California,” Zinke told the AP. “But also, it’s in our interest for national security and our allies to make sure that they have access to affordable energy commodities.” Zinke also said the Trump administration is interested in partnering with private companies to handle the exports. Inslee in his statement said that "the men and women who serve at our military bases are there to keep our country safe, not to service an export facility for private fossil fuel companies." He added that he hasn't personally heard from the Trump administration and has instead had to rely on news reports for information about the potential exports. “Our state has been left in the dark about the Administration's latest scheme. We’ve seen the news reports but have yet to hear from them in person. This effort is just the latest attempt at an end run around Washington’s authority to safeguard the health and safety of our people," he said.
Four Huge LNG Tankers Pass Through Panama Canal in One Day - The Panama Canal Authority has announced that the Canal has reached a new milestone, after four LNG ships with beams of up to 160 ft (49 m) transited the waterway in a single day through the Neopanamax Locks. This breaks the record set by the Canal on 17 April 2018, when three LNG vessels transited the waterway on the same day.Ribera del Duero Knutsen (cargo capacity of 173 000 m3) and Maran Gas Pericles (cargo capacity of 174 000 m3) transited northbound, while Torben Spirit (cargo capacity of 174 000 m3) and Oceanic Breeze (cargo capacity of 155 300 m3) transited southbound, facilitating international trade between customers in South Korea, Japan, Chile and the US Gulf Coast.Resulting from the experience acquired with the transit of more than 4200 Neopanamax vessels, the Panama Canal introduced changes to its Transit Reservation System to offer two slots per day to LNG vessels. These modifications have allowed the expanded Canal’s capacity to be optimised, in order to meet specific demands such as the transit of four LNG vessels today.The modifications, which were announced in August this year and that came into effect on 1 October, also allow lifting certain daylight restrictions for LNG vessels, as well as meetings between LNG vessels in opposite directions in Gatun Lake. Panama Canal Administrator, Jorge L. Quijano, said: “The transit of these four LNG ships in just one day demonstrates the Panama Canal’s commitment to maximising the efficiency, flexibility and reliability of its service to all customers.” With these modifications now effective, the Canal claims that it has reinforced its ability to handle the growing LNG transit demand from the US once the different export terminals begin operation.
Mexico's state-owned oil giant just announced a major discovery that could transform the country's struggling industry --Mexico's state-owned oil producer, Pemex, on Tuesday said it had discovered about 180 million barrels of oil offshore.The reserves could boost Mexico's oil output, which has been in decline since 2004.They were found in the Manik well, roughly 52 miles offshore in the Gulf of Mexico, and the Mulach well, about 11 miles offshore.Pemex CEO Carlos Treviño said in a statement that the reserves were proven, probable, and possible, or 3P, meaning there's a high degree of certainty that the oil can be extracted. The company will need $7 billion to $10 billion in capital, including investments in oil rigs and pipelines, to develop the newly announced discovery and others found nearby in recent years, according to Reuters.The offshore fields combined could increase Mexico's production by up to 210 million barrels of oil and 350 million cubic feet of gas a day, Pemex said.Mexico earlier this year became the first Latin American country to join the International Energy Agency, an industry watchdog."The country's energy sector is in a period of profound change, catalyzed by comprehensive energy reforms the government has been enacting since 2013," the IEA said. These reforms includeending Pemex's monopoly and attracting new players into the oil industry. Pemex's discovery was announced just as the IEA urged larger oil producers to open the taps on output. Fatih Birol, the agency's head,said at a conference in London on Tuesday that US sanctions on Iran and shrinking production from Venezuela could tighten the market even further.
Mexico's Lopez Obrador pushes Big Oil to hurry, but offers little (Reuters) - At his first meeting with foreign oil majors, Mexico’s leftist president-elect pushed the companies to prove themselves by quickly pumping oil from recent finds, sources say, but gave no sign of offering up new fields to reverse dwindling output. President-elect Andres Manuel Lopez Obrador repeated a promise to respect more than 100 existing contracts awarded following a sweeping five-year-old energy overhaul as long as a review by his team finds no corruption. And he added: companies must show results, three executives who attended the meeting said. For U.S. independent Talos Energy, which is developing a high-profile, big offshore discovery announced last year along with partners Premier Oil and Sierra Oil & Gas, Lopez Obrador’s message was clear: quickly bring new streams of production online. “We know we have to exceed expectations and we’re trying to make sure we do that,” said Talos Energy CEO Tim Duncan, one of the executives who attended the session. At the Sept. 27 meeting, the president-elect also criticized the 2013 constitutional reform for failing to stop an extended output slide. Operators such as Talos and Italy’s Eni, which also announced a major offshore find last year, are on Lopez Obrador’s watch list to pump oil quickly, said Carlos Pascual, a former U.S. ambassador to Mexico who now helps run consultancy IHS Markit’s global energy business. “The focus on increased barrels is going to create greater pressure for some companies,” he said.
Fracking to restart in UK after last-minute legal bid fails -- The first fracking in the UK for seven years will start on Saturday, the shale gas company Cuadrilla has confirmed, after campaigners lost a last-minute legal challenge to block the operations. Lancashire resident Robert Dennett won an interim injunction last Friday against Lancashire county council, putting a temporary halt to the start of fracking at a well outside Blackpool. His lawyers argued on Thursday that the council’s emergency planning was inadequate in the event of an incident at Cuadrilla’s Preston New Road site. But on Friday a high court judge rejected the request for an injunction, on the grounds that the council had not failed in its duties regarding civil contingency planning. Justice Supperstone also dismissed an application for a judicial review of emergency planning. The court’s decision removes the final barrier to fracking starting again in the UK after a hiatus of seven years. Cuadrilla said it was delighted it could start operations as planned. “We are now commencing the final operational phase to evaluate the commercial potential for a new source of indigenous natural gas in Lancashire,” said the chief executive, Francis Egan. Lawyers for the company had said it was incurring costs of £94,000 for every day it was injuncted and prevented from fracking. The oil services firm Schlumberger has been contracted to undertake the hydraulic fracturing, more commonly known as fracking, which involves pumping water, chemicals and sand underground at high pressure to fracture shale rock 2km below the surface to release gas. The operation is allowed to run from 9am-1pm on Saturday, and then 8am-6pm Monday to Friday. In all, the process is expected to take around three months, because the company is proceeding slowly to monitor any seismic activity.
Fracking starts in Lancashire amid protests - Fracking for shale gas has begun in Lancashire amid protests over the controversial process.Energy firm Cuadrilla said it had started hydraulic fracturing at Preston New Road in Little Plumpton, on Monday, and it will continue for three months.It is the first time fracking has taken place in the UK since 2011, when the nascent industry was halted after it caused two small earthquakes in Lancashire.A spokesman for the company said: “Cuadrilla is pleased to confirm that it has started hydraulic fracturing operations at our Preston New Road shale gas exploration site.“Hydraulic fracturing of both horizontal exploration wells is expected to last three months after which the flow rate of the gas will be tested.”Earlier police closed off the site as about 50 protesters gathered ahead of the start of the process and a team had to cut a man and woman out of a set of tyres which they had apparently cemented their arms into.One activist sat on top of a van outside the site with a banner which read “Stop the Start” while another lay down in front of railings.Protester Ginette Evans, 60, from Fleetwood, said: “We’ll be monitoring the site 24 hours a day. It is definitely not over, it has just got serious.“The fight’s just really started.”
Protesters Block Site Where Fracking In UK Resumes After 7 Years - Protesters gathered on Monday morning outside a drilling site in northwest England, where fracking is returning for the first time in seven years, after a last-minute request for an injunction failed at court on Friday.The company that will go ahead with the fracking, Cuadrilla Resources, confirmed on Friday that it planned to go ahead with hydraulic fracturing operations at its Preston New Road shale gas exploration site in Lancashire on Saturday, October 13.On Friday, Justice Supperstone at the High Court in London dismissed a last-minute request for an interim injunction from a campaigner to prevent this from happening.“We are delighted to be starting our hydraulic fracturing operations as planned,” Cuadrilla’s chief executive Francis Egan said, commenting on the decision. Cuadrilla, however, had to postpone the drilling from Saturday to Monday due to a storm, with Cuadrilla saying that protests would not halt plans to start the fracturing operations today.Local police have closed off Preston New Road in both directions, while dozens of protesters gathered outside the Cuadrilla drilling site vow that their fight just “got serious.”Ginette Evans, 60, told Blackpool Gazzette:“We'll be monitoring the site 24 hours a day. It is definitely not over, it has just got serious. The fight’s just really started.”Anti-fracking group Reclaim The Power said on Twitter early on Monday that they are blockading Preston New Road for the start of ‘Green Great Britain Week’ to “stand with the Lancashire locals and stop the start of fracking to prevent climate chaos.”
Fracking protesters walk free after court quashes 'excessive' sentences - Three protesters jailed for blocking access to a fracking site have walked free after the court of appeal quashed their sentences, calling them “manifestly excessive”.Simon Blevins, 26, Richard Roberts, 36, and Rich Loizou, 31, were sent to prison last month after being convicted of causing a public nuisance with a protest outside the Preston New Road site near Blackpool, Lancashire. Blevins and Roberts were sentenced to 16 months and Loizou to 15 months. But on Wednesday afternoon the court of appeal ruled their sentences were inappropriate and they should be freed immediately. Soon after, the trio walked free from Preston prison, where they were greeted with hugs and cheers from dozens of supporters. To applause from the crowd, Loizou said: “If people break the law out of a moral obligation to prevent the expansion of fossil fuel industries they should not be sent to prison. “The fracking industry threatens to industrialise our beautiful countryside. It will force famine, flooding and many other disasters on the world’s most vulnerable communities by exacerbating climate change.“Fracking is beginning right now, so there has never been a more critical time to take action. Your planet needs you.”
UK parliament to probe gas storage adequacy — A House of Commons select committee will carry out an inquiry into whether the UK has enough gas storage after events last winter heightened concerns about supply security, its chair Rachel Reeves said today.The cross-party Business Energy and Industrial Strategy (BEIS) select committee will take evidence on 31 October to assess whether the government has the "necessary measures" in place to cope with a repeat of last March's gas deficit warning, Labour MP Reeves said."Following the closure of Rough there have been issues over our ability to ensure supply in the winter," she said at the Energy UK Annual Conference 2018.The UK issued its first gas balancing alert in seven years on 1 March, as cold weather and supply disruptions left the system short.While the system balanced without market intervention, it led to a record NBP prompt price spike and prompted calls from industrial users for a government review including subsidies for new and existing storage facilities. The UK government said Rough being available at the time would have made little difference to supply security and maintained the UK benefits from diverse supply sources. Parliament launching an inquiry elevates an issue that died down over the summer, with the BEIS ruling out a formal investigation. BEIS was not immediately available to comment on the announcement.The committee will also investigate "whether the market is mature and liquid enough to respond in an affordable way", Reeves said.Within-day gas traded above £3/th on 1 March and the day-ahead market closed at £2.30/th — up from an average 50.2p/th earlier in the winter — as the UK had to outbid continental hubs to secure enough supply. The Gas Security Group, a lobby group that represents major energy users, said the inquiry was "very timely". March 2018's events proved the government's arguments that the gas system was robust and could cope with bad weather "was not the case", the group said. Brexit including the UK's withdrawal from the EU's Internal Energy Market pose additional threats to supply security, it said. Even if the government changed position and deemed more gas storage was necessary and agreed to fund a new storage site, it could take several years before it could contribute to supply security.
110MM Barrel North Sea Field Comes Online - The North Sea Oseberg Vestflanken 2 field, which is said to contain recoverable resources of 110 million barrels of oil equivalent, came online on October 14, Equinor revealed Monday. The field is utilizing the first unmanned platform on the Norwegian Continental Shelf, Oseberg H, which is being remote operated from the Oseberg field center. Delivered at $795 million (NOK 6.5 billion), the project came in at more than 20 percent lower than the cost estimate of the plan for development and operation, Equinor highlighted. “With Oseberg H we take a huge technological leap forward. The fully automatic, unmanned and remote-operated platform is digitalization in practice and I am proud of Equinor and its partners having chosen this in-house developed solution,” Anders Opedal, Equinor’s executive vice president for technology, projects and drilling, said in a company statement. Arne Sigve Nylund, Equinor’s executive vice president for development and production in Norway, said, “with the Oseberg Vestflanken 2 development we keep expanding the massive infrastructure at the Oseberg field.” “This is a key contribution to renewing and securing long-term NCS activity,” he added.
Saint-Tropez cleans up after Mediterranean oil spill - French workers on Thursday scooped balls of tar off the beach in Saint-Tropez after oil that leaked from two ships which collided washed ashore in the Riviera resort. Authorities in Saint-Tropez said this week that 16 kilometers of coastline had been affected by the spill. One of them is the Pampelonne beach where screen siren Brigitte Bardot posed in the 1956 classic And God Created Woman. The oil is believed to have leaked from one of the ships involved in an accident off the French island of Corsica on October 7. Read also: Nikki Beach wants to remake itself as a chill resort brand Some 600 tons of bunker fuel leaked from the Cyprus-registered "Virginia" after it was rammed by a Tunisian freighter. Officials said most of the spill had been cleaned up, but that some of the residues had become trapped in seagrass that washed up ashore in Saint-Tropez. The beaches have been closed until the clean-up is complete.
Beaches closed on the French Riviera due to oil pellets — France’s Ecology Ministry says pellets of oil have reached Mediterranean beaches near Saint-Tropez on the French Riviera ten days after two cargo ships collided north of the island of Corsica. It said those beaches were closed to the public Wednesday and agents were going to be mobilized to collect the oil. Authorities have also deployed three anti-pollution ships equipped with nets along the coast in the Var region. The ministry says French and Italian maritime authorities have cleaned up “nearly all” the fuel spill that has spread in the Mediterranean Sea, using a skimmer to suck it up.A Tunisian cargo ship pierced a hole in the hull of a Cypriot container ship in the collision on Oct. 7, causing the fuel leak. No one was injured.
Oil's $133 Billion Black Market - Oil is still the world’s leading energy source, with growing demand, a fluctuating pricing system, and much of its production in volatile regions. The oil market’s value is larger than the world’s valuable raw metal markets combined, with an annual production valued at US$1.7 trillion. A flourishing black market is no surprise, with about US$133 billion worth of fuels stolen or adulterated every year. These practices fund dangerous non-state actors such as the Islamic State, Mexican drug cartels, Italian Mafia, Eastern European criminal groups, Libyan militias, Nigerian rebels and more – and are a major global security concern.The top five countries accused of oil trafficking – Nigeria, Mexico, Iraq, Russia, and Indonesia – are also producers. It is estimated that Nigeria alone loses US$1.5 billion a month due to pipeline tapping, illegal production and other sophisticated schemes. In Southeast Asia, about 3 percent of the fuel consumed is sourced from the black market, estimated to be worth up to US$10 billion a year. In Mexico, drug cartels launder drug revenues through the oil trade. Other countries are not immune. Turkey is not an oil producer yet serves as a major transit route for hydrocarbons flowing to Europe from OPEC countries like Iraq and Iran. As an energy hub, Turkey is strategically situated for the illegal trade and lost an estimated US$5 billion in tax revenue in 2017. An uptick in smuggling oil and other refined products began 2014, when ISIS took control of major Syrian and Iraqi oil fields.As with most commodities, the volume of oil smuggling is primarily linked to fluctuating prices. With climbing oil prices, illicit trade is expected to increase. The European Union is a prime example on how price disparities of fuel within its own member state countries tend to incentivize illegal trade producing counterintuitive routes. Lower oil prices in Eastern Europe have created maritime smuggling routes to the United Kingdom and Ireland. Ireland estimates it loses up to $200 million annually with fuel fraud, while up to 20 percent of fuel sold in regular gas stations in Greece is illegal. The legal complexities and ambiguities of the global oil and gas trade often create an opening for illegal activity.
India Targets Oil Traders for $1.5B Emergency Oil Reserve-- India is seeking $1.5 billion of investments from global oil producers and traders to build additional emergency crude reserves that will act as a buffer against volatility in oil prices. The plan is to build underground caverns that can hold a combined 6.5 million tons of crude at two locations, Indian Strategic Petroleum Reserves Ltd. Chief Executive Officer H.P.S. Ahuja said. The state-run ISPRL will collaborate with private entities, who will invest in the project, he said. Getting investors to build the storage facilities will lessen the strain on state finances and help Prime Minister Narendra Modi’s government meet its budget goals, while expanding strategic petroleum reserves to shield the economy from oil-price volatility. India, which meets almost 85 percent of its crude needs through imports, this month cut taxes on fuel sales to lower the burden of high oil prices on consumers. “We are taking the commercial model for building and filling the caverns, which will provide opportunity to the investor to make some profits,” Ahuja said. “India will continue to reserve first right over the crude stored in these caverns.” The two new reserves include 4 million tons of storage at Chandikhol in the eastern state of Odisha and a 2.5 million-ton facility at Padur in southern India’s Karnataka. India has built 5.33 million tons of underground reserves in three locations, including Padur, under an earlier phase that can meet 9.5 days of the country’s oil needs. The government purchased crude to fill the caverns in Visakhapatnam in Andhra Pradesh and half of another facility in Mangalore in Karnataka, while leasing out the other half to Abu Dhabi National Oil Co.
India Yet To Figure Out Way To Pay For Iranian Oil Imports - India hasn’t worked out yet a payment system for continued purchases of crude oil from Iran, Subhash Chandra Garg, economic affairs secretary at India’s finance ministry, said on Friday.India’s Oil Minister Dharmendra Pradhan has conveyed the message that his country would continue to buy Iranian oil to some extent, Garg told CNBC TV18 news channel, as quoted by Reuters.Recent reports have it that India has discussed ditching the U.S. dollar in its trading of oil with Russia, Venezuela, and Iran, instead settling the trade either in Indian rupees or under a barter agreement.India is Iran’s second-largest single oil customer after China and was expected to cut back on Iranian oil purchases, but it is unlikely to cut off completely the cheap Iranian oil that is suitable for its refineries.India wants to keep importing oil from Iran, because Tehran offers some discounts and incentives for Indian buyers at a time when the Indian government is struggling with higher oil prices and a weakening local currency that additionally weighs on its oil import bill.But the United States continues to insist that it expects Iranian oil buyers to bring their purchases down to zero.Earlier this week, Indian officials said that they hoped India could secure a waiver from the United States, because it has significantly reduced purchases of Iranian oil. Late last week, the United States hinted that it was at least considering waivers. Meanwhile, Special Representative for Iran Brian Hook is currently touring India and Europe to discuss U.S. foreign policy toward Iran, the U.S. Department of State said on Thursday.Special Representative Hook and Assistant Secretary of State for Energy Resources Francis R. Fannon are will be meeting with Indian government counterparts for consultations.“During this trip, Special Representative Hook will engage our allies and partners on our shared need to counter the entirety of the Iranian regime’s destructive behavior in the Middle East, and in their own neighborhoods,” the State Department said.
Asia's natural gas prices are rising. Now higher oil prices and tariffs could cause more pain -- Asia's liquefied natural gas prices are set to go up on the back of surging oil prices and tightening supplies, according to analysts.It comes at a time when demand for LNG is set to shoot up in Asia, driven by China's appetite for natural gas as it seeks to replace coal.If China — the world's number 2 importer of natural gas — imposes tariffs on LNG exports from the U.S., it may cause Chinese buyers further pain in the short run, the experts said. But that could also alter supply chains in Asia and benefit other producers, they added.Prices of Asia's natural gas jumped this year — in tandem with crude — as most of the region's long-term LNG contracts are linked to oil prices, Rajiv Biswas, Asia-Pacific chief economist at HIS Markit, told CNBC in an email."With world oil prices having moved higher in recent weeks as US sanctions on Iranian oil exports will be implemented in November, this is contributing to further upward pressure on Asian LNG contract prices," he added. Average Chinese gas import prices jumped 23 percent compared to a year ago in the second quarter, while Japanese contract prices were up 17 percent in the same period.When U.S. sanctions on Iran kick in next month, they could push oil prices to above $90 per barrel, some analysts predicted. During Asian trade on Tuesday afternoon, Brent crude was at $81.04 per barrel, and U.S. crude futures at $71.84 a barrel — up from above $60 per barrel at the start of this year.Asia's spot LNG market — which has been growing steadily — will also be hit in the short term. Biswas expects Asian spot prices to move even higher to $11.85 per million British thermal units (mmBtu) by January 2019. Spot prices for the October delivery in Asia were at $11.40 per mmBtu, up 30 cents in a week, according to a Aug. 24 Reuters report. Meanwhile, supply from Australia, the world's largest exporter of LNG, is tightening as domestic demand is fighting for a share of the pie with Asia. That situation will remain until 2028, according to Nicholas Browne, director of gas and LNG research at Wood Mackenzie.The bulk of growth in Asian demand is coming from China, as it switches from coal to gas.
China's LNG imports set to surge this winter with or without tariffs on US supply - Platts Snapshot video - As we move out of the summer and turn our attention to winter, all eyes are turning towards China. Total LNG imports to the country continue to push higher and are surely going to increase to new highs this winter as heating demand picks up. New regasification capacity will certainly help to handle the influx of supply, but utilization is expected to stay elevated. Furthermore, a recent proposal for tariffs on US LNG could complicate things this winter. With the uptick in imports, where will these volumes come from? Jeffrey Moore, S&P Global Platts Analytics Manager for LNG in Asia, examines the market.
Vice-Premier: Northern China Needs To Prepare For Winter - The northern region of Beijing-Tianjin-Hebei needs to make sure there is enough fuel for heating during the winter, Vice Premier Han Zheng has warned, as quoted by Reuters. The northern region is notorious for its high levels of pollution but last year it also became notorious for natural gas shortages that left millions of households without heating during the peak of winter.In a bid to prevent a repeat, the authorities are now in a rush to secure fuel supplies, and not just gas but coal as well. Last year, the central government criticized the local authorities for retiring coal plants before ensuring there would be enough natural gas to provide heating for the region and applying a “one size fits all” approach to the fight against pollution.Yet neither local nor central authorities are giving up on that fight. This winter will be difficult for the industrial sector in Beijing-Tianjin-Hebei, with the last member of the trio accounting for 25 percent of China’s total steel output. The government has already asked industrial producers to curb their activity ahead of winter to reduce the amount of particulate matter in the air if they haven’t already reduced their emissions by other means. The anti-pollution drive is paying off, too. Reuters reports that between January and September this year, the amount of particulate mater PM2.5 had fallen by a third from a year earlier thanks to the reduction in coal consumption and changes in industrial production practices.Natural gas is a big part of this transformation, including LNG. Last year, China became the world’s second-largest LNG importer, taking in some 38 million tons of the fuel, a 46-percent increase on 2016. Even so, some parts of the country suffered shortages because the gas could not reach them fast enough. As a result, China is now actively working on expanding its LNG storage capacity and pipeline network. It is also expanding its domestic natural gas production and storage capacity. In the past 10 years China’s natural gas consumption has risen fourfold to more than 25 billion cu ft daily. Now, companies are turning depleted gas fields into storage facilities as part of efforts to avoid a repeat of last winter’s shortage.
Exxon Mobil bets big on China LNG, sidesteps trade war (Reuters) - In the middle of a Sino-U.S. trade war, the world’s largest publicly traded oil and gas company is turning toward Beijing for business at a time when most of Corporate America is looking elsewhere to avoid the threat of tariffs. FILE PHOTO: The ExxonMobil Hides Gas Conditioning Plant process area is seen in Papua New Guinea in this handout photo dated March 1, 2018. ExxonMobil/Handout via REUTERS/File Photo Exxon Mobil Corp is placing big bets on China’s soaring liquefied natural gas (LNG) demand, coupling multi-billion dollar production projects around the world with its first mainland storage and distribution outlet. Its gas strategy is moving on two tracks: expanding output of the super-cooled gas in places such as Papua New Guinea and Mozambique, and creating demand for those supplies in China by opening Exxon’s first import and storage hub, according to an Exxon manager and people briefed on the company’s plans. That combination “will guarantee us a steady outlet for lots of our LNG for decades,” said the Exxon manager who was not authorized to discuss the project and spoke on condition of anonymity. One of the company’s top policy goals this year, the manager said, is building its Chinese client roster. “China’s natural gas demand is rising really fast, with imports soaring well over 10 percent annually at the moment because of the government gasification program and due to fast rising industrial demand, including in petrochemicals,” the Exxon manager said. For a graphic, click tmsnrt.rs/2CwGQgT
Global LNG Demand to Outperform - Demand for LNG will post strong growth to 2027, outperforming the wider energy complex, according to oil and gas analysts at Fitch Solutions Macro Research. “Emerging Asia will dominate growth, led by China. Asian emerging markets have been driving demand, globally, for a number of years, offsetting weakened growth in Japan and South Korea and declines in both Western Europe and North America,” the analysts said in a report sent to Rigzone. “This trend is set to continue, but with regional buyers increasingly diversified,” the analysts added. Fitch Solutions Macro Research said China will see its share progressively diluted, in part due to a slowdown in its own LNG import growth. “Its share will also be driven lower by the number of new buyers entering the market. This includes Bangladesh, the Philippines, Myanmar and Vietnam, which, according to our data, will together add almost 40.0 billion cubic meters [1.4 trillion cubic feet] of LNG demand by 2027,” the analysts added. “We also hold a strongly bullish outlook on the region's other existing buyers - India, Indonesia, Pakistan and Thailand,” the analysts continued. Outside of Asia the outlook for emerging market demand is more clouded, according to Fitch Solutions Macro Research. “LNG demand growth in MENA [Middle East North Africa] will slow, dragged down by rising regional output. Latin America tells a similar story, with strong domestic gas demand offset by higher local output and rising competition from piped gas,” the analysts said.
China Can’t Get Enough Of The World’s Cheapest Crude - Canada’s oil industry woes have been a topic of discussion in the media for some time now, what with the persistent delays in the Trans Mountain expansion, unyielding opposition to anything that involves pipelines, and the growing crude production from the oil sands. The latest news, however, is good news. Chinese refiners are buying growing amounts of Canadian crude, taking advantage of a substantial discount in its price to the U.S. benchmark, brought about by the above combination of factors. Earlier this month Bloomberg reported Chinese refiners were buying Canadian heavy that was trading at a discount of as much as US$50 to West Texas Intermediate. In a context of rising prices—all but Canadian crude, apparently—a $50-per-barrel discount is more than a good bargain. It’s an excellent bargain, especially for refiners who have just completed summer maintenance and plan to increase their imports on higher local fuel demand. China purchased 1.58 million barrels of heavy Canadian crude oil for loading in September, up by nearly 50 percent compared to the 1.05 million barrels it imported from Canada in April, Bloomberg said last week, quoting data by cargo-tracking and intelligence company Kpler. These imports are seen to continue rising this month as well, amid the height of construction season ahead of winter in China.This week, S&P Global Platts reported that Chinese companies had bought three cargoes of Canadian heavy crude, to load in Vancouver in November. More will follow: the huge discount of Western Canadian Select to WTI is not the only reason for this shift. The other reason has to do with supply. China’s two other main sources of heavy crude—Australia and Venezuela—are both going through a production decline albeit for different reasons. While the Venezuela situation is clear and unchanged, Australian heavy crude production has been on the decline due to natural depletion, S&P Global Platts notes. In fact, Woodside, the operator of the field that produces one of its benchmark heavy grades, Enfield, plans to stop pumping oil at the field by the end of this year.
Iran Sends Record Amount Of Oil To China - Tankers carrying some 22 million barrels of Iranian crude are on their way to the Chinese port of Dalian, Reutersreports, citing ship-tracking data, and noting this is a record-high amount of crude from Iran to be received by Chinese clients amid falling imports to other large clients, such as Japan and South Korea.Both countries earlier this month said they had completely suspended their purchases of Iranian crude ahead of the U.S. sanctions, which will enter into effect on November 5.Dalian is a major oil hub in China and, Reuters notes, Iran has used storage facilities at the port to keep crude during the previous international round of sanctions against Tehran. The usual rate of Iranian crude oil cargoes going into China has been between 1 million and 3 million barrels monthly. Reuters’ data confirms earlier reports from TankerTrackers.com, which repeatedly warned that Iran’s oil exports have not fallen by as much as official shipping data suggests: NIOC tankers began switching off their transponders to conceal their routes earlier this year. The Financial Times’ David Sheppard cited the satellite imaging data from the independent tracker service in a recent story: according to it, Iran’s oil exports have not fallen by half since April’s 2.5 million bpd as most media report. In fact, he says, the data suggests they’d fallen by a modest amount and as of mid-October totaled over 2.2 million bpd. China has never made a secret of its plans to continue buying Iranian crude despite attempts by Washington officials to persuade Chinese refiners to at least reduce their intake. At one point earlier this year, Beijing was said to have agreed not to increase the amount of Iranian crude it buys, but since then the trade row between China and the United States has deepened, casting a shadow over the likelihood of China sticking to its word.
Iran says oil exports, production holding up despite looming sanctions — Iran's oil exports have only declined "very slightly," while production has remained level, the managing director of National Iranian Oil Company said Tuesday. "We are very solid now" in terms of production outlook, Ali Kardor said at an oil and power conference in Tehran, though he conceded that this could change depending on how NIOC's sales volumes hold up. Iran faces the reimposition of US sanctions targeting its oil sales on November 5. Many buyers of Iranian crude are already ramping down their purchases ahead of the deadline. Oil exports from the country fell to their lowest level in at least two and a half years in September to 1.7 million b/d, from 1.92 million b/d in August, according to S&P Global Platts trade flow software cFlow, though some shipments not visible through vessel-tracking data are suspected to be taking place. About 1.5 million b/d of the September figure consisted of crude oil, while the remainder was condensate. Iran's crude production, meanwhile, dropped to 3.50 million b/d in September from 3.60 million b/d in August, the latest Platts OPEC production survey found. Iran, however, self-reported to OPEC that its September output was much higher at 3.76 million b/d, down from 3.81 million b/d in August. To get around the sanctions, Iran has reactivated its domestic exchange, or bourse, where private traders can buy Iranian crude to resell into the international market, rather than NIOC selling directly to refiners. NIOC aims to launch a sale of 1 million barrels on October 26. At the conference Tuesday, Kardor said the base price for the crude, which will be sold in 35,000 barrel lots, had been set at $79.15/b, pending market conditions. Many analysts doubt the bourse, last used four years ago when US and EU sanctions were in force, will be very successful, as any international buyers would still likely to be subject to US sanctions for dealing with Iranian entities. Iranian oil minister Bijan Zanganeh said the looming sanctions had impacted investment in Iran's oil industry, but he said Iran would try to find ways to finance technology and know-how through domestic markets to keep the oil flowing.
US 'confident energy markets will remain stable' after Iran sanctions: State Department official — The US is confident the oil market will have sufficient supply to avoid price spikes once sanctions on Iran's oil buyers snap back in three weeks, a top State Department official said Monday ahead of talks with EU officials. "We are confident that energy markets will remain stable," said Brian Hook, head of the State Department's Iran action group. "We are seeing a well-supplied and balanced oil market right now. We should focus on these fundamentals and not be distracted by the emotional and unbalanced claims coming from Tehran." "We are going to continue to coordinate very closely with oil producers," Hook said. "The US is doing its part to maintain supply." Hook said rising US crude exports are available to replace falling Iranian exports. Platts Analytics expects Iranian crude and condensate exports to fall to 1.1 million b/d by October loadings and to 800,000 b/d by Q4 2019, from 2.91 million b/d in April. Hook met Friday with Indian officials but declined to comment Monday on whether the countries had reached any deal for oil sanctions relief. India's oil minister said last week that two companies have made nominations to import Iranian oil in November despite the threat of sanctions.
Turkey's Tupras in talks with U.S. for Iran sanctions waiver: sources (Reuters) - Turkey’s top refiner, Tupras, is in talks with U.S. officials to obtain a waiver allowing it to keep buying Iranian oil after Washington reinstates sanctions on the Islamic Republic’s energy sector in November, industry sources said. The United States is preparing to impose the new sanctions on Iran’s oil industry after Washington withdrew from a nuclear deal between Tehran and other global powers earlier this year, but is also considering offering waivers to some allies that rely on Iranian supplies. NATO member Turkey depends heavily on imports to meet its energy needs and neighboring Iran has been one of its main sources of oil because of its proximity, the quality of its crude, and favorable price differentials. Turkey has already made efforts to cut its purchases ahead of the U.S. sanctions, but would prefer to keep up some level of Iranian oil imports past November, an industry source familiar with the matter said. “They would like to be able to continue importing 3-4 cargoes a month, like they did during the previous sanctions round. But if the U.S. would tell them to stop, they will oblige and work towards achieving that,” the source said. A Tupras spokeswoman was not available for comment. Turkey’s Energy Ministry was not immediately available for comment. Turkey imported around 97,000 barrels per day of Iranian oil in August and 133,000 bpd in September, compared with just over 240,000 bpd in April, tanker tracking and shipping data showed. And in the first two weeks of October, Turkey has purchased three 1 million barrel-cargoes of Iranian oil - a level that would equate to about 97,000 bpd if it made no other purchases this month.
60 Dead in Nigerian Pipeline Explosion - A fire that ignited at a Nigerian oil pipeline Friday has now claimed 60 lives, Reuters reported Monday.Officials gave a death toll of 16 on Friday, but a spokesperson for the National Emergency Management Agency (NEMA) updated that figure Monday.The fire broke out in southeast Nigeria near the city of Aba and was caused when vandals attempted to rob fuel from the pipeline, officials said."The incident occurred at about 1:30 a.m. Those burned are more than 30 with many others sustaining injuries," survivor Nnamdi Tochukwu told Al Jazeera Saturday.Nigerian National Petroleum Corporation (NNPC) spokesperson Ndu Ughamadu also blamed the fire on people attempting to steal fuel."I can't give the exact number of casualties for now, but the explosion was caused as a result of oil thieves who had hacked the line to intercept the flow of petrol from the Port Harcourt refinery to Aba," he told AFP, as Al Jazeera reported.Fires or explosions caused by pipeline robberies are a recurring problem in Nigeria, which is Africa's No. 1 oil producer and exporter. A 1998 pipeline explosion in the Niger Delta killed more than 1,000 and a 2006 fire at a vandalized pipeline killed about 269. Sometimes, the explosion occurs when villagers come to collect oil once the initial robbery has already taken place, increasing the death toll. This was the case with Friday's fire, NEMA coordinator Evans Ugoh told reporters, as Nigerian paper Vanguard reported."My team has visited the scene of the explosion and we discovered that victims of the incident took advantage of the pipeline leakage and were scooping the oil before fire caught on them," Ugoh said.
200 Dead In Nigeria Oil Pipeline Blast -- The number of casualties after an oil product pipeline explosion in Nigeria has reached 200, local media report, as people from local communities have gathered to protest the negligence of the Nigerian national Petroleum Corporation, which, they said, was the reason for the explosion. The pipeline exploded after it caught fire near the Aba Depot last week. NNPC at the time blamed the explosion on oil theft, which is still rampant in the Niger Delta despite many attempts by the government to put an end to the dangerous practice. The cause of the fire, the company said, could have been oil thieves trying to divert some of the fuel flowing along the pipeline from Port Harcourt to Aba. Protesters, however, claim that NNPC’s negligence led to leaks in the pipeline and it was these leaks that caused the explosion. Some 2,000 young people from communities in proximity to the pipeline system gathered at the Aba Depot and barricaded its entrance with a coffin containing the remains of one of the victims of the blast, Nigeria’s Vanguard reported.The latest updatefrom Reuters, however, puts the number of fatalities resulting from the pipeline blast at 60, as announced by the National Emergency Management Agency. Meanwhile, the System 2E pipeline system of which the exploded pipe is part, has been shut down, but will soon be up and running again.“We will resume the pumping of products very soon,” Reuters quoted an NNPC spokesman as saying. “We had put out the fire. We are now pumping water in the pipeline to detect other possible areas of leakages.”The System 2E network carries fuels from the two refineries in Port Harcourt to the southeastern and northern parts of Nigeria. The refineries, Reuters notes, have a capacity of 210,000 bpd but are operating at run rates that are a lot lower than this capacity.
Iraq presses customers for data in clamp down on Basra oil resales (Reuters) - Iraq’s state oil marketer SOMO is seeking data from its customers to see where their Basra crude cargoes were eventually consumed to catch buyers who may have flouted their purchase agreements, multiple industry sources said this week. Iraq, the second-largest producer among the Organization of the Petroleum Exporting Countries (OPEC), currently restricts the delivery of its long-term crude sales to the buyers’ own refining system, the sources said. However, the company did not enforce the rule in past years to ease sales of its rising supply and to gain market share from other producers. Now, SOMO wants to stamp out the resales and divert some cargoes sold under the long-term contracts to its own trading business to maximize the profits from its oil sales, the sources said. The scrutiny on the Basra resales comes ahead of SOMO’s decision next month how much oil it will supply to its term buyers in 2019. Spot sales of Basra have slowed as traders await SOMO’s decision. Basra crude sold by equity producers is not subject to any destination restrictions and can be sold around the world, the sources said. The producers include BP Plc, Lukoil , Malaysia’s Petronas, and PetroChina . SOMO has confronted customers who have sold cargoes without seeking consent from the state marketing company, said one of the sources familiar with the matter. “It is a contractual obligation on customers not to re-sell the cargos without prior consent from SOMO,” he said. Iraq has said it plans to increase Basra crude exports from its southern ports to 4 million barrels per day (bpd) in the first quarter of 2019, up from the current record high of 3.62 million bpd. SOMO is expected to re-allocate some supplies to new partners such as China’s state-run Zhenhua Oil to boost trade volumes to the country, the world’s largest oil importer and Iraq’s biggest customer. “As for volumes for next year, if to Zhenhua or to any other company, it will be discussed and decided in November,” said the source familiar with the matter. In recent years, demand for long-term Basra crude has exceeded its supply, prompting SOMO to make changes to its annual allocations. While SOMO used to sign term agreements with trading companies, it now only has term deals with companies that own refineries, the sources said.
Saudi Arabia assures OPEC there will be no crude shortage (Reuters) - Saudi Arabia has assured OPEC that it is “committed, capable and willing” to ensure there will be no shortage in the oil market, OPEC’s secretary-general said on Wednesday. Mohammed Sanusi Barkindo, the secretary general of the Organization of the Petroleum Exporting Countries, was responding to a question on whether the cartel’s relationship with Saudi Arabia and global production of oil will be impacted by the disappearance of Saudi journalist Jamal Khashoggi. Khashoggi - a prominent critic of Saudi Arabia’s Crown Prince Mohammed bin Salman - has been missing for more than two weeks after visiting the Saudi Arabian consulate in Istanbul. Turkish officials say they believe Khashoggi was murdered inside the consulate. The journalist’s disappearance has resulted in global pressure on Saudi Arabia, the world’s largest oil exporter. U.S. lawmakers have blamed the Saudi leadership and many high profile guests have pulled out of a major Saudi Arabia investment conference in protest. Barkindo cited a speech by Saudi Arabia’s oil minister Khalip al-Falih at a conference in New Delhi on Monday, and said Saudi Arabia is ready to ensure that there is no oil shortage. “As OPEC, we remain focused on our common objectives,” Barkindo said. Saudi Arabia has “a healthy spare capacity to serve as a buffer against any emergency,” he added.
Saudi Arabia Lifts West Coast Oil Export Capacity By 3 Million Bpd - Saudi Arabia has added 3 million bpd of oil export capacity to its West Coast on the Red Sea after the upgrade of Saudi Aramco’s Yanbu South Terminal, the state oil giant said on Wednesday.The Yanbu terminal in the port city on the Red Sea coast of western Saudi Arabia is now integrated with the existing crude oil supply network and adds 3 million barrels per day to Saudi Aramco’s export capacity through the West Coast, the company said.The increased export capacity from the Saudi West Coast comes as the Kingdom looks for routes other than the ones from its East Coast and via the Strait of Hormuz, the world’s most important oil chokepoint, which Iran threatened earlier this year to close should the U.S. drive Iranian oil exports to zero.The Strait of Hormuz is the world’s most important chokepoint, with an oil flow of 18.5 million bpd in 2016, the EIA estimates. The Strait connects the Persian Gulf with the Gulf of Oman and the Arabian Sea and is the key route through which Persian Gulf exporters—Saudi Arabia, Iran, Iraq, Kuwait, Qatar, the UAE, and Bahrain—ship their oil.Most of Saudi Arabia’s seaborne oil exports pass through the Strait of Hormuz, but an East-West pipeline in the Kingdom carries crude oil from the eastern oil fields to Yanbu, which lies north of another oil chokepoint around the Arabian Peninsula—Bab el Mandeb. The Bab el-Mandeb Strait is one of the three crucial chokepoints around the Arabian Peninsula. Located between Yemen, Djibouti, and Eritrea, Bab el-Mandeb connects the Red Sea with the Gulf of Aden and the Arabian Sea.Aramco also plans to launch the overhauled Muajjiz oil terminal on the Red Sea this year, which would increase the total Saudi loading and export capacity to 15 million bpd. While Saudi Arabia is raising its oil export capacities, it has recently started to vow that it will boost its oil production as well. Saudi Energy Minister Khalid al-Falih said earlier this week that the Saudis are currently pumping 10.7 million bpd—very close to the all-time high of 10.72 million bpd—and would further increase that production in November.
Saudi-Kuwait Neutral Zone oil fields seen offline for a while on talks setback — Talks between Saudi Arabia and Kuwait over two shared oil fields have broken down after months of promise, shutting in some 500,000 b/d of anticipated oil production for the foreseeable future, sources close to the projects told S&P Global Platts. Workers involved in the Neutral Zone fields' restart are no longer optimistic that any resolution will occur, the sources said, as a recent meeting between Saudi Crown Prince Mohammed bin Salman and Kuwaiti Emir Sabah al-Ahmed failed to resolve issues of sovereignty over the long-contested area. "Dead as a doornail," a source said, of prospects for the fields' return, adding that the only hope may be through international arbitration. "It will not be easily fixed," another source said of the dispute. The stand-off looks set to cut off a source of crude that many market watchers were counting on to offset a looming supply squeeze as US sanctions hit Iran early next month. The offshore Khafji field, owned by Saudi Arabia's Aramco Gulf Operations Co. and Kuwait Gulf Oil Co, was shut down in October 2014 by Aramco, who cited new government emissions standards for gas flaring. The onshore Wafra field is operated by KGOC and Saudi Arabian Chevron. It was shuttered in May 2015, with Chevron saying it had encountered difficulties in securing work and equipment permits. Crude output in the two fields is shared equally between Saudi Arabia and Kuwait, and the two sides have been negotiating over their restart since early summer. As recently as September 23, Kuwaiti oil minister Bakheet al-Rashidi told reporters at an OPEC/non-OPEC monitoring committee meeting in Algiers that Neutral Zone production could resume as soon as January, eventually adding up to 400,000 b/d in supplies at full ramp-up. Saudi counterpart Khalid al-Falih said at the same meeting that the dispute over the fields, which he said had a combined capacity of 500,000 b/d, could be resolved "in the very near future." But a September 30 meeting between the Saudi crown prince, known as MBS, and Kuwait's Sheik Sabah, did not go well, sources said, with the Kuwaiti side insisting that Chevron, the only international oil company with a concession in the Neutral Zone, no longer operate the Wafra field.
Leaked Document: OPEC+ Struggling To Lift Oil Production - OPEC and its Russia-led non-OPEC allies are struggling to fully deliver on the oil production increase of 1 million bpd promised in June, Reuters reported on Friday, quoting an internal OPEC document that it has seen.OPEC and allies agreed in June to relax compliance rates with the cuts to 100 percent from the previous over-compliance. The respective leaders of the OPEC and non-OPEC nations part of the deal—Saudi Arabia and Russia—have been interpreting the eased compliance as adding a total of 1 million bpd to the market.The document that Reuters has seen, however, showed that the significant production increases in Saudi Arabia and Russia were offset by declines in Iran, Venezuela and Angola within OPEC, and by production drops in Mexico, Kazakhstan, and Malaysia from non-OPEC. Increasing production “is a work in progress,” OPEC Secretary General Mohammad Barkindo said this week. At an event in India he also reiterated OPEC’s position that “our current view is that the market is at the moment adequately supplied and well-balanced, though in a fragile state.”According to the internal OPEC document prepared for a technical panel meeting scheduled for Friday, OPEC—excluding Nigeria, Libya, and Congo—increased its combined production by 428,000 bpd in September compared to May. Saudi Arabia put the most extra barrels on the market and boosted its production by 524,000 bpd in September compared to May. Iraq, Kuwait, and the United Arab (UAE) also increased their production, according to the document seen by Reuters. However, Iran’s production slumped by 376,000 bpd in September from May, Venezuela’s output plunged by 189,000 bpd, and Angola saw its production drop by 17,000 bpd between May and September.
Is Saudi Arabia About To Enter The Arctic Gas Game? - Now that global oil markets have gotten used to Saudi-Russian oil production cooperation that first hit the scene in early 2017 in an effort to reign in global price concerns, it appears that the two fledgling allies are also going to cooperate in the liquefied natural gas (LNG) sector. And this time too, it looks as if the alliance could take aim at U.S. energy ambitions. The kingdom’s media savvy energy minister Khalid Al-Falih said at the India Energy Forum in Delhi on Monday that Saudi state-owned Saudi Aramco is open to the idea of marketing some of the LNG from the proposed Russian Arctic LNG 2. “Aramco has the mandate to go global and not only invest in downstream but also invest in gas and LNG. We have looked at projects in Africa and the Mediterranean, and of course the Arctic with some Russian companies, Novatek. The idea is that Aramco will trade that [LNG] globally and bring some of that to India and other markets,” Al-Falih said. “We have looked at projects in Africa and the Mediterranean, and of course the Arctic with some Russian companies, Novatek,” he added. Arctic LNG 2 will be a mammoth facility and increase Russia’s gas ambitions for not only pipeline gas to Europe but to key LNG markets in Asia that account for over 70 percent of global LNG demand, with that demand growth projected to increase amid China’s ramped up natural gas usage. The project envisages the construction of three LNG trains at 6.6 million tons per annum (mtpa) each, or 535,000 barrels of oil equivalent per day. It is seen starting up sometime between 2022 or 2023. As far back as the beginning of the year, Saudi Arabia and Russia indicated that they could become LNG partners when Aramco and Novatek signed a MoU over possible cooperation in Arctic LNG 2. Aramco is “seriously” studying investing in the planned Arctic LNG plant, Saudi Energy Minister Khalid Al-Falih told reporters in Riyadh on February 14 at a joint briefing with his Russian counterpart. Saudi King Salman is keen to strengthen energy ties between the two nations following their oil-cuts collaboration that helped drive crude’s recovery, according to Al-Falih.
Near Term Future of Saudi Oil Sector Examined Verisk Maplecroft’s near term view of Saudi Arabia’s oil and gas industry is “cautiously optimistic,” according to Torbjorn Soltvedt, Verisk’s principal analyst for the Middle East and North Africa. “This owes a lot to the current oil price environment and more to Riyadh securing a highly favorable OPEC agreement in June,” Soltvedt told Rigzone. “The agreement will prove important domestically because it has given Saudi Arabia a great deal of flexibility to adjust output based on oil price movements and developments in Iran and Venezuela. We have already seen this in action; an initial ramp-up in production in June, followed by a cut in July,” Soltvedt added. The Verisk representative said the scaling back of “some of the more disruptive parts of Vision 2030” is also “welcome news” for Saudi Arabia’s oil and gas industry but warned that the broader political environment in Saudi Arabia “still demands caution.” “The recent recovery in oil prices has removed much of the immediate pressure on the ruling Al Saud dynasty,” Soltvedt said. “But Saudi Arabia is still facing perhaps the most challenging period in its 85-year history amid growing tensions with Iran, greater socioeconomic pressure and a shift away from the traditional rule-by-consensus approach within the Al Saud family,” he added.
Oil prices ease as funds continue profit-taking: Kemp (Reuters) - Hedge fund managers have continued to take profits on their bullish positions in crude oil as the late summer rally has faded and fears about oil consumption and the state of the economy have replaced concerns over sanctions on Iran. Fund managers cut their combined net long position in the six most important petroleum futures and options contracts by 36 million barrels in the week to Oct. 9 after trimming it by 19 million barrels the week before. Liquidation was concentrated in Brent (-6 million barrels) and WTI (-37 million), while fund managers left positions unchanged in U.S. heating oil and added them in U.S. gasoline (+2 million) and European gasoil (+6 million). Net positions in Brent and WTI have been cut by a total of 71 million barrels over the last two weeks after being raised by 177 million during the five previous weeks (https://tmsnrt.rs/2OtbNcn ). The earlier bullishness was driven mostly by concerns about a possible shortage of crude oil once U.S. sanctions on Iran go into effect from early November. But in recent weeks Saudi Arabia, Russia and some other oil producers have pledged to boost their oil output to make up for any shortfall and stop prices spiralling higher. More importantly, and possibly in response to the surge in oil prices, the U.S. government has indicated it may show some flexibility to allow refiners to continue purchasing some Iranian oil. Portfolio managers remain relatively bullish on Brent, with net length of 476 million barrels, reflecting lingering concerns about the impact of sanctions on the availability of seaborne crude as well as the strength in global consumption.
Al Arabiya op-ed warns of oil spike and 'economic disaster' if US sanctions Saudi Arabia -Oil prices could surge to all-time highs if the U.S. imposes economic sanctions against Saudi Arabia, according to an opinion piece written by the general manager of Saudi Arabia-based Al Arabiya television.The warning from Al Arabiya's Turki Aldakhil comes amid heightened tensions between Saudi Arabia and the West, after journalist Jamal Khashoggi — a U.S. resident and prominent critic of Crown Prince Mohammed bin Salman — disappeared after entering the Saudi consulate in Istanbul on Oct. 2.Turkish authorities claim Khashoggi was murdered and his body removed. Saudi Arabia has fiercely denied that."If U.S. sanctions are imposed on Saudi Arabia, we will be facing an economic disaster that would rock the entire world," Aldakhil wrote on Sunday."It would lead to Saudi Arabia's failure to commit to producing 7.5 million barrels. If the price of oil reaching $80 angered President Trump, no one should rule out the price jumping to $100, or $200, or even double that figure."International benchmark Brent crude traded at around $81.43 Monday morning, up around 1.2 percent, while U.S. West Texas Intermediate (WTI) stood at $72.12, slightly more than 1 percent higher.Energy watchers are closely monitoring Brent, which has pulled back from recent multiyear highs but remains firmly established above $80 a barrel.So far this year, the price of oil has surged more than 25 percent, prompting some investors to bet that areturn to triple-digits could be just around the corner. Meanwhile, the U.S. is banking on Saudi Arabia to curtail soaring energy prices and help offset lost Iranian oil supply. But, in theory, an escalation of tensions in the Middle East could send prices sharply higher.
Oil Jumps After Saudi Official Floats Trial Balloon Op-Ed Envisioning Oil Weapon Devastation -- WTI Crude prices are up around 2% in the early Sunday trading after Saudi Arabia appears to be now attempting to go on the offensive and is lashing out as it does damage control in the aftermath of journalist Jamal Khashoggi's alleged murder inside the Saudi consulate in Istanbul nearly two weeks ago. What likely sparked the risk premium was the fact that Turki Al Dakhil, who heads the Saudi state-owned Arabiya news network, wrote in an article that U.S. sanctions against Saudi Arabia could wreak havoc on the global economy by taking oil prices to $200 a barrel and more. Faisal bin Farhan, a senior adviser to the Saudi embassy in Washington, said on Twitter that these comments didn’t represent the Saudi leadership. “The most powerful weapon Saudi has is oil and its investments,” said Fawaz Gerges, a professor of international relations at the London School of Economics. “ I doubt Saudi will decrease the production of oil to the world economy because it will hurt itself and I doubt that Saudi will withdraw its investments.” And the reaction to the threat - though modest for now - will not please President Trump
The case of the missing Saudi journalist is creating major worries around the oil -As Saudi Arabia pushes back against international pressure that it played a role in the disappearance of a prominent journalist, analysts are warning there could be fallout for global oil markets. Relations between the kingdom and the some parts of the international community have deteriorated rapidly after Jamal Khashoggi, a journalist who resided in the U.S., disappeared early this month after visiting the Saudi consulate in Istanbul. Turkey reportedly believes the Washington Post journalist and critic of the Saudi administration was deliberately killed inside the building and his body removed. Riyadh has dismissed the claims. The stock market in Saudi Arabia plunged on Sunday, and analysts believe oil could be the next to be affected. Robert Carnell, chief economist head of research at ING, said the incident "opens a new source of risk." "Any Saudi retaliation will presumably mainly come through reduced oil supply and higher prices. That won't help market sentiment," he wrote in a note on Monday. Oil prices rose on Monday afternoon during Asian trade, with Brent crude jumping 1.29 percent to $81.47 per barrel, and U.S. crude futures rising 1.14 percent to $72.15 a barrel. U.S. President Donald Trump said on Saturday there would be "severe punishment" for Saudi Arabia if it turned out that Khashoggi was killed in the consulate. But the Middle Eastern country said on Sunday it would retaliate to possible economic sanctions taken by other states over the case, the state news agency SPA reported, quoting an official source.
Why the market is suddenly concerned Saudi Arabia will weaponize oil in Khashoggi dispute -- The oil market is on edge after Saudi Arabia issued a combative statement that some are interpreting as a veiled threat to wield crude as a weapon in the ongoing scandal over missing dissident Jamal Khashoggi. The question is whether Saudi Arabia — the world's largest oil exporter, a close ally of President Donald Trump and the de facto leader of OPEC — would take that extraordinary step, one it has not taken since the Arab oil embargo of 1973-1974. To be sure, the current leadership in Riyadh is facing unprecedented scrutiny over allegations that the kingdom ordered the abduction of Khashoggi, a Saudi journalist and Washington Post columnist. Turkey says it believes that Saudi agents detained and killed Khashoggi at the kingdom's consulate in Istanbul. Saudi Arabia denies those claims.The scandal has caused businesses, influential individuals and media companies to drop out of this month's Future Investment Initiative, a conference in Riyadh meant to attract investment in the kingdom. The United States and European nations have threatened punishment if Saudi Arabia is found to be behind Khashoggi's alleged murder.That has caused Saudi Arabia to react forcefully. Here's why Riyadh's response is roiling the oil market.In interview excerpts released Saturday, Trump told the CBS program "60 Minutes" that the kingdom would face "severe punishment" if the allegations against it turn out to be true. This came after U.S. lawmakers raised the prospect of applying sanctions against Saudi individuals meant to punish human rights abuses.The following morning, the Saudi Press Agency issued a statement saying Riyadh rejects all threats of economic sanctions, political pressure and false accusations, adding that it will respond to any action with "greater action." What caught the eye of many oil market watchers was a reminder in the statement that "the Kingdom's economy has an influential and vital role in the global economy." Some took that as a veiled threat that Saudi Arabia could withhold supply and let oil prices rise.
Oil weapon has proved a double-edged sword- Kemp - (Reuters) - The oil shocks of 1973/74 and 1979/80 are now mainly remembered for the disruption and hardship they caused in the major oil-consuming countries. But they marked a lasting inflection point in the development of the oil market and almost all the changes were adverse to OPEC in the long run. Following the oil shocks, global oil consumption grew more slowly while non-OPEC production rose more rapidly. Members of the Organization of the Petroleum Exporting Countries initially benefited from a gusher of windfall revenues, but in the long term the oil shocks were disastrous. OPEC's market share fell and its members were left with excess production capacity that remained a problem until the 2000s. OPEC’s responsibility for the shocks remains debatable: the market was on an unsustainable trajectory before 1973 as low prices boosted consumption without encouraging a similar increase in non-OPEC output. But the events of the 1970s and 1980s demonstrate clearly why oil cannot be employed as a weapon without doing long-lasting damage to the interests of the producer countries. OPEC members have never again resorted to the oil weapon - not out of goodwill to consumers but because it did not work and did long-term harm to their own economies. More generally, the oil shocks demonstrate why very high prices are damaging to the interests of OPEC countries, a lesson that was painfully re-learned when prices collapsed in 2014. OPEC members were the biggest losers from the oil shocks of the 1970s as surging prices accelerated the development of alternative sources of supply (https://tmsnrt.rs/2J1jPmI). In real terms, oil prices quintupled from $11 per barrel in 1970 to $58 in 1974 and then almost doubled again to $110 in 1980 (“Statistical review of world energy”, BP, 2018). In nominal terms, OPEC members’ export revenues jumped from $14 billion in 1970 to $116 billion in 1974 and $265 billion in 1980 (“Annual statistical bulletin”, OPEC, 2018). But revenues fell to just $72 billion in 1985 and did not pass their previous peak until 2004, even in nominal terms. OPEC's own share of production, which had been increasing and peaked at 52 percent in 1973, fell to just 28 percent by 1985.
Oil prices rise amid Saudi tensions, but demand outlook drags -- Oil prices rose on Monday as tension over the disappearance of a prominent Saudi journalist stoked supply worries, balancing concerns over the long-term demand outlook. Crude markets were also supported in the wake of data that showed South Korea did not import any oil from Iran in September for the first time in six years, before U.S. sanctions against the Middle Eastern country take effect in November. Brent crude were up 25 cents at $80.68 a barrel by 2:28 p.m. ET. U.S. crude futures ended Monday's session up 44 cents to $71.78 a barrel. Last week, both contracts fell by more than 4 percent as U.S. stock markets tumbled. Rising geopolitical tension between the U.S., the world's top oil consumer, and Saudi Arabia, one of the biggest oil producers supported prices on Monday. Riyadh has been under pressure since journalist Jamal Khashoggi, a critic of the kingdom and a U.S. resident, disappeared on Oct. 2 after visiting the Saudi consulate in Istanbul. U.S. President Donald Trump threatened "severe punishment" if it is found that Khashoggi was killed in the consulate.Saudi Arabia said it would retaliate to any action against it over the Khashoggi case, state news agency SPA reported on Sunday, quoting an official source. This comes at a critical time for global oil markets, which are bracing for U.S. sanctions against Iran due to come into force Nov. 4. The United States is still aiming to cut Iran's oil sales to zero, Washington's special envoy for Iran said on Monday.
Oil Ends Up In Volatile Trade Amid Saudi Tensions, Global Macro Fear - - Oil prices settled higher on Monday in volatile trade after the disappearance of a prominent Saudi journalist caused a spike in geopolitical tensions and sent crude markets soaring before global macro uncertainties cut gains. Crude oil WTI futures settled up 44 cents at $71.78 per barrel. U.K. Brent oil futures, its global peer, were up 18 cents at $80.61 by 3:26 PM ET (19:26 GMT). Jamal Khashoggi, a columnist for the Washington Post and a Saudi royal insider-turned-critic entered the Saudi consulate in Istanbul, Turkey, on Oct. 2 and has not been seen since. Tensions in the Middle East typically drive crude prices up. The Khashoggi matter has reignited diplomatic wrangling between Saudi Arabia and Turkey that followed Saudi Crown Prince Mohammed bin Salman’s labeling of Ankara in March as part of a “triangle of evil” alongside Iran and Islamic extremists. In the latest spat, Turkish sources say they have recordings to prove Khashoggi was murdered and dismembered, but haven’t made those public. Saudi authorities say Khashoggi left the consulate after his visit, but haven’t provided evidence either. The fallout from the Khashoggi matter has widened to affect a business conference in Riyadh later this month, dubbed “Davos in the desert” where some notable attendees, including World Bank head Jim Kim, have pulled out. President Donald Trump has weighed in, saying Saudi King Salman had denied knowledge about Khashoggi’s whereabouts in a phone call but that the White House has ordered Secretary of State Mike Pompeo to "immediately get on a plane" to Saudi Arabia. After oil’s initial spike over the crisis, traders turned their attention to global economic uncertainties, and crude prices gave back much of their early gains. Since last week, a wobbly Wall Street, soaring U.S. Treasury yields and Federal Reserve plans for higher interest rates through 2020 have led to risk aversion.
Oil prices rise on signs of falling Iranian oil exports -- Oil prices fell on Tuesday following evidence of higher U.S. oil production and increasing U.S. crude inventories, but reports of a fall in Iranian oil exports helped to limit losses. Brent crude was down 33 cents a barrel at $80.45 by 10:39 a.m. ET (1439 GMT). U.S. light crude was 29 cents lower at $71.49. "Shale oil production continues unabated in the United States," said Carsten Fritsch, commodities analyst at Commerzbank. "Rising U.S. oil production is one key reason why the global oil market is likely to be amply supplied next year."Oil production from seven major U.S. shale basins is expected to rise by 98,000 barrels per day (bpd) in November to a record of 7.71 million bpd, the U.S. Energy Information Administration (EIA) said.The largest change is forecast in the Permian Basin of Texas and New Mexico, where output is expected to climb by 53,000 bpd to a new peak of 3.55 million bpd.U.S. oil production has increased steadily over the last five years, reaching a record high of 11.2 million bpd in the week to Oct. 5. But infrastructure has not kept pace with rising output, filling domestic tanks."Once pipelines and oil terminals are built connecting the Permian to the U.S. Gulf Coast, then there will be a big step up in U.S. crude oil exports," Harry Tchilinguirian, oil strategist at French bank BNP Paribas told Reuters Global Oil Forum. U.S. crude stockpiles are expected to have risen last week for the fourth straight week, by about 1.1 million barrels, according to a Reuters poll ahead of reports from the American Petroleum Institute (API) and the U.S. Department of Energy's Energy Information Administration (EIA).
Oil Prices Under Pressure As US Shale Supply Soars - Ongoing production gains in the U.S. are putting some downward pressure on oil prices. The EIA said that it expects large gains from the shale patch next month (more below). Saudi Arabia shocked the oil world by seeming to threaten to engineer a price spike if the U.S. took action against Riyadh over the apparent murder of Saudi journalist Jamal Khashoggi. However, President Trump does not appear interested in taking action over the incident, taking Saudi assurances at face value. Sec. of State Mike Pompeo traveled to Riyadh to meet with the Saudi king, and all signs suggest that both sides are eager to put the issue behind them. Iran’s oil minister Bijan Zanganeh said that the U.S. won’t bring global oil prices down by “bullying” other nations. “The oil market is suffering from short supply and this cannot be resolved by words. Trump thinks he can bring the oil prices down by bullying,” Zanganeh said. He added that the rise of oil prices was a “self-inflicted pain” caused by U.S. sanctions and that the U.S. “has done most of the things it could do, and there is not much left to do against Iran.” In the first two weeks of October, Iran’s oil exports averaged 1.3 million barrels per day (mb/d), down sharply from the 1.6 mb/d it averaged in October, and down from the recent peak of 2.5 mb/d in April. Sanctions on Iran take effect on November 4, and most analysts see exports falling further over the next few weeks. Bloomberg reported on the signs that the Permian basin is overheating, including high costs for frac sand, six-figure salaries for truck drivers, and clogged roads from truck traffic make West Texas one of the deadliest places to drive in the country. Output is still growing, but pipeline bottlenecks have cut the monthly growth rate down by three-quarters. Schlumberger has warned producers that drilling wells too closely together has led to lower productivity, raising the prospect that drilling efficiencies are bumping up against their limits. The latest Drilling Productivity Report from the EIA shows strong gains expected for next month. The EIA predicts the U.S. will add 98,000 bpd in November compared to a month earlier. Unsurprisingly, the Permian leads the way with 53,000 bpd in growth, followed by the Eagle Ford (+15,000 bpd), the Bakken (+13,000 bpd) and smaller contributions from the Anadarko, Appalachia and Niobrara.
Oil up; Iran, Saudi supply worries offset U.S. supply growth (Reuters) - Oil prices edged up in cautious trade on Tuesday as expectations of higher U.S. shale output and inventories vied with worries that crude supply from the Middle East could be disrupted by looming U.S. sanctions on Iran and growing tensions with top exporter Saudi Arabia. U.S. Senator Lindsey Graham accused Saudi Crown Prince Mohammed bin Salman of ordering the murder of Saudi journalist Jamal Khashoggi and said the prince was jeopardizing relations with the United States. U.S. President Donald Trump said the Saudi crown prince intends to expand an investigation into the disappearance of Khashoggi and that the prince did not know what happened in the Turkish consulate where Khashoggi apparently disappeared. “The focus within the oil trade during the next couple of weeks is likely to be on Iran and Saudi Arabia,” “We don’t expect the Kingdom to be as accommodative to the White House requests for stronger production,” he said, adding that the Saudis could cut as much as 500,000 barrels per day of production “as a warning shot should the U.S. opt to impose any type of sanction in response to the Khashoggi developments.” Trump has urged the Organization of the Petroleum Exporting Countries to raise output to help cover a shortfall due to new U.S. sanctions on Iran. The market has been supported by reports that Iranian crude exports may be falling faster than expected ahead the Nov. 4 deadline on sanctions. Brent crude rose 63 cents, or 0.8 percent, to settle at $81.41 a barrel, while West Texas Intermediate (WTI) crude ended the session up 14 cents at $71.92 a barrel. Last week, oil prices slumped as global stock markets fell, but a recovery in financial markets, boosted by earnings growth helped provide support to oil prices on Tuesday, traders said.
WTI Jumps Above $72 After Surprise Crude Draw - Against expectations of a 2.5mm barrel build, API reported Crude stocks drewdown in the latest week by 2.13mm barrels, sparking a kneejerk gain in WTI crude back above $72...API
- Crude -2.13mm (+2.5mm exp)
- Cushing +1.5mm
- Gasoline -3.4mm
- Distillates -246k
After 3 weeks of crude builds, API reported a draw in the latest week... And WTI spiked back above $72 on the headline crude draw...
Oil Rises After Industry Reports Surprise US Crude Stock Draw - -- Oil popped higher after an industry report showed an unexpected decline in U.S. crude inventories. Futures rose from the settlement in New York on Tuesday after the industry-funded American Petroleum Institute was said to report U.S. crude inventories dipped 2.13 million barrels last week. That would be the first decline in four weeks if Energy Information Administration data confirms it on Wednesday. Hurricane Michael shut in production in the Gulf of Mexico during the reporting period, which may contribute to the inventory decline. “Hurricane Michael is the deciding factor on why inventories didn’t continue to climb,” said Thomas Finlon, director of Energy Analytics Group Ltd. in Wellington, Florida. The loss of production “doesn’t all come back at once. It gradually comes back on.” Oil markets were roiled in recent days as the mystery over the disappearance of prominent Saudi critic Jamal Khashoggi deepened, drawing tit-for-tat threats of punitive action by the U.S. and the Saudi regime. On Monday, media reports emerged that said the kingdom was considering saying Khashoggi perished in a botched interrogation inside the Saudi consulate in Istanbul. West Texas Intermediate for November delivery traded at $72.21 a barrel at 4:43 p.m. in New York after ending the session at $71.92 on the New York Mercantile Exchange. Total volume traded Tuesday was about 11 percent below the 100-day average. Brent for December settlement rose 63 cents to close at $81.41 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $9.65 premium to WTI for the same month. The API was also said to report that inventories at the key pipeline hub in Cushing, Oklahoma, rose by 1.53 million barrels last week. Gasoline and distillate supplies both fell, according to the data. A Cushing increase would be the fourth consecutive one if EIA data confirms it.
Oil prices steady as industry data shows unexpected drop in inventories - Oil pries held gains after an industry report showed an unexpected drop in American crude stockpiles, while traders continued to assess simmering tensions between the U.S. and Saudi Arabia over a missing journalist. Futures in New York rose as much as 0.7 percent, advancing for a fourth day. The American Petroleum Institute was said to report inventories fell 2.13 million barrels last week, in contrast to forecasts for a gain in a Bloomberg survey before government data Wednesday. Meanwhile, Donald Trump said in a tweet that the Saudi crown prince “totally denied any knowledge” of what happened to dissident Jamal Khashoggi, as the U.S. president faces rising pressure to act against the regime. Crude has increased about 20 percent this year as concerns linger that demand may outstrip supply with American sanctions on Iran set to be implemented early next month. While the Organization of Petroleum Exporting Countries and its allies say they remain committed to boosting production, questions remain over their spare capacity. Meanwhile, geopolitical tensions continue to hound sentiment, with the trade war ongoing between the U.S. and China. “Prices are rising today as the unexpected decline in U.S. inventory data comes at a time when tensions between the U.S. and Saudi Arabia are boiling,” according to Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp. “I’m looking for more disruptions in the Middle East with the tensions. I’m still bullish until data proves me wrong on the supply front” after the start of sanctions on Iranian oil. West Texas Intermediate for November delivery traded 11 cents higher at $72.03 a barrel on the New York Mercantile Exchange at 11:04 a.m. in Singapore. The contract is on course to rise for a fourth day, the longest winning streak in almost two months. Total volume traded was about 25 percent below the 100-day average. Brent for December settlement rose as much as 38 cents to $81.79 on the London-based ICE Futures Europe exchange, and traded at $81.51. The global benchmark crude was at a $9.61 premium to WTI for the same month. In the U.S., a drop in crude inventories as signaled by the API data would be the first decline in four weeks. Analysts in a Bloomberg survey forecast government data to show a 2.5-million-barrel gain. Meanwhile, stockpiles in the nation’s storage hub of Cushing, Oklahoma, climbed by 1.5 million barrels, according to the API, which would be the fourth consecutive increase if confirmed by the Energy Information Administration’s data Wednesday
Iran says Trump cannot bring oil prices down by 'bullying' (Reuters) - U.S. President Donald Trump cannot bring oil prices down by “bullying” other nations, Iran’s oil minister said on Tuesday, adding that the market was suffering from short supply. U.S. sanctions on Iranian oil exports are due to kick in on Nov. 4. The U.S. administration has been pushing its allies to cut Iranian oil imports and encouraging Saudi Arabia, other OPEC states and Russia to pump more oil to meet any shortfall. “The oil market is suffering from short supply and this cannot be resolved by words. Trump thinks he can bring the oil prices down by bullying,” Iranian Oil Minister Bijan Zanganeh said, according to the semi-official news agency ILNA. Benchmark Brent crude has been trading above $80 a barrel LCOc1. Zanganeh said the rise of oil prices was a “self-inflicted pain” caused by U.S. sanctions against Iranian energy exports, and could be resolved by lifting the measures. “Everyone is worried and Trump has failed to reassure them. That’s why the market is in turmoil,” he said. Zanganeh also said the United States “has done most of the things it could do, and there is not much left to do against Iran,” according to comments reported by Iran’s ISNA agency. Washington said this month it would consider waivers for Iranian oil buyers such as India, although it said they would eventually have to halt imports from Iran, the third biggest oil producer in the Organization of the Petroleum Exporting Countries.
Why the market should expect Saudi Arabia to send oil prices lower over journalist's disappearance --Saudi Arabia could soon take action to push oil prices lower, one analyst told CNBC Tuesday, as part of a "settlement" plan to alleviate diplomatic tensions with the U.S.It comes at a time of international outcry after journalist Jamal Khashoggi — a U.S. resident and prominent critic of Crown Prince Mohammed bin Salman — disappeared after entering the Saudi consulate in Istanbul on Oct. 2.Turkish authorities claim Khashoggi was murdered and his body removed. Saudi Arabia vehemently denies that."My guess is the quid quo pro is likely going to be that the Saudi's end up pumping as aggressively as they can. And so, all things being equal, I think this is probably negative for the oil price," Michael Harris, founder of Cribstone Strategic Macro, told CNBC's "Squawk Box Europe" on Tuesday.Harris said rising diplomatic tensions between Saudi Arabia and the West could ultimately become "hugely problematic" if it triggered oil prices to spiral out of control. That's because investors would then need to worry about Riyadh's leverage in the energy market."But I think the exact opposite is going to be happening. The Saudi guilt is going to play into the oil price," he said. International benchmark Brent crude traded at around $80.20 Tuesday morning, down around 0.7 percent, while U.S. West Texas Intermediate (WTI) stood at $77.23, almost 0.8 percent lower.U.S. Secretary of State Mike Pompeo landed in Saudi Arabia to meet King Salman Tuesday morning, amid mounting pressure on the kingdom to explain the fate of Khashoggi.President Donald Trump has threatened "severe punishment" if it is found Khashoggi was killed in the Turkish consulate, prompting Saudi Arabia's state news agency to respond by saying it would retaliate against any economic sanctions. Escalating diplomatic tensions between the strategic allies has prompted speculation among oil traders that Riyadh could be tempted to weaponize its oil dominance.
WTI Plunges Below $70 To 1-Month Lows After Bigger-Than-Expected Crude Build - WTI extended losses this morning after a brief bounce on API's unexpected crude draw, pushing down to one-month lows below a $70 handle after DOE reported an unexpectedly large crude build. DOE:
- Crude +6.49mm (+2.5mm exp)
- Cushing +1.78mm
- Gasoline -2.016mm (+600k exp)
- Distillates -827k
This is the 4th weekly build for crude (and Cushing stocks) in a row... Bloomberg Intelligence Energy Analyst Fernando Valle notes that gasoline margins will remain challenged as demand wanes after summer driving season. WTI traded with a $70 handle ahead of the DOE data - at the low end of the last week's range - and then legged down on DOE's big crude build...losing the $70 handleHowever, not everyone agrees with the market's direction: “Our basic premise is that prices will move higher,” said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London. “As Iran’s supply losses are fully realized and Venezuela suffers continuous decline, global spare production capacity will ebb and -- against a backdrop of average inventories -- the market will become more sensitive to adverse supply shocks.” Meanwhile, WTI Midland’s discount to WTI at Cushing narrowed to $4.50/bbl on Tuesday, smallest since June 21...
Oil prices sink as US crude stockpiles rise by 6.5 million barrels - Oil prices extended losses on Wednesday after U.S. inventory data showed a much larger than expected rise in U.S. crude stockpiles. U.S. commercial crude stockpiles rose by 6.5 million barrels in the week to Oct. 12, the U.S. Energy Information Administration reported. A Reuters survey of eight analysts estimated crude stocks rose by about 2.2 million barrels last week. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.8 million barrels, EIA said.Brent crude was down $1.77, or 2.2 percent, at $79.64 a barrel by 10:41 a.m. ET (1441 GMT), after gaining $1.15 in the previous three sessions. The global benchmark, which hit a two-week low last week as equity markets dropped, is trading around $6 below a four-year high of $86.74 reached on Oct. 3.U.S. light crude oil fell $1.99, or 2.8 percent, at $69.93.Gasoline stocks fell by 2 million barrels, compared with analysts' expectations in a Reuters poll for a 1.1 million-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 827,000 barrels, versus expectations for a 1.3 million-barrel drop, the EIA data showed.Also underpinning sentiment is the scandal over the disappearance of prominent Saudi critic and journalist Jamal Khashoggi, who disappeared two weeks ago after entering the Saudi consulate in Istanbul.U.S. President Donald Trump gave Saudi Arabia the benefit of the doubt in the case even as U.S. lawmakers pointed the finger at the Saudi leadership and Western pressure mounted on Riyadh to provide answers. Saudi Arabia has said it will conduct an investigation into the disappearance, U.S. Secretary of State Mike Pompeo said before departing the kingdom for Turkey.
Large Crude Build Forces Oil Prices Lower - A day after the oversensitive oil market yet again demonstrated surprise at API’s estimate of a 2.13-million-barrel crude oil inventory draw, the Energy Information Administration’s official figures refuted that: the authority reported an increase in U.S. commercial crude oil inventories of 6.5 million barrels for the week ending October 12. EIA’s report comes amid relatively stable prices as the tension between Saudi Arabia and the Untied States prompted by the suspicious disappearance of Washington Post columnist Jamal Khashoggi was countered by oil demand forecasts from OPEC and the International Energy Agency.Both the oil producers’ cartel and the international authority this week had bad news for oil bulls, forecasting demand growth will slow down both this year and in 2019. Although in his comment on the news Bloomberg’s Julian Lee said that this does not necessarily mean oil prices will follow down, it was reason enough for Brent and WTI to stop rising so fast. The EIA said refineries processed 16.3 million bpd of crude last week, compared with 16.2 million bpd a week earlier. They churned out 10.4 million bpd of gasoline, versus 9.7 million bpd a week earlier, and 4.8 million bpd of distillate, down from 5 million bpd in the prior week. At the time of writing, Brent crude was trading at US$81.55 a barrel, with WTI at US$72.12, both up from yesterday’s close slightly. Prospects remain mixed. Just yesterday Goldman Sachs warned of an oil surplus on the global market, to emerge in 2019 because of higher utilization of spare capacity. This, the investment bank’s commodity analysts said, would offset the loss of Iranian crude after the November sanctions enter into effect and swing the market into an excess of supply. What’s more, Saudi Arabia’s warning it will retaliate if the United States decides to punish it for Khashoggi’s disappearance, seems to have lost whatever substance it had when it was made on Sunday. As Reuters’ John Kemp noted, “self-interest makes it improbable the government will retaliate by reducing oil sales or trying to drive up prices,” which has reduced the upward potential for oil for the time being.
OPEC daily basket price stood at US$79.50 barrel Wednesday - The price of OPEC basket of fifteen crudes stood at US$79.50 a barrel on Wednesday, 17th October, 2018, compared with $79.02 the previous day, according to OPEC Secretariat calculations. The fourteen crudes, from separate OPEC member countries, includes a mix of blends and light and heavy crudes, including the UAE’s Murban.
Don't mention the oil price - U.S. legal threat prompts change at OPEC (Reuters) - OPEC has urged its members not to mention oil prices when discussing policy in a break from the past, as the oil producing group seeks to avoid the risk of U.S. legal action for manipulating the market, sources close to OPEC said. Proposed U.S. legislation known as “NOPEC”, which could open the group up to anti-trust lawsuits, has long lain dormant, with previous American presidents signaling that they would veto any move to make it law. But U.S. President Donald Trump has been a vocal critic of the Organisation of the Petroleum Exporting Countries, blaming it for high oil prices and urging it to increase output to relieve pressure on a market hovering around four-year highs. That has made OPEC and its unofficial leader, Saudi Arabia, nervous about what it might mean for NOPEC, or No Oil Producing and Exporting Cartels Act. The decision to refrain from discussing a preferred oil price level — one way the group can guide market expectations — underlines how Trump’s aggressive stance on the oil market is unsettling OPEC and testing ties between allies Riyadh and Washington. In July, senior OPEC officials attended a workshop in Vienna with international law firm White & Case to discuss the NOPEC bill, and the lawyers advised avoiding public discussion of oil prices and rather talk about the stability of the oil market, two sources familiar with the matter said. OPEC officials were also advised to explore diplomatic lobbying channels to try and prevent the NOPEC bill from becoming law, one of the sources said. On Aug. 1, the OPEC secretariat sent a letter to the ministers making a similar recommendation. “We solemnly believe that market stability, and not prices, is the common objective of our actions,” UAE Energy Minister Suhail al-Mazroui, who holds the rotating OPEC presidency this year, wrote in the letter, seen by Reuters. “I would like to call upon OPEC Member Countries, as well as our participating Non-OPEC colleagues, to refrain from any reference to prices in their commentary about our collective efforts or oil market condition,” he added.
OPEC has 'no price objective' in its decisions: Barkindo - CNBC interview - Mohammad Barkindo of the Organization of the Petroleum Exporting Countries says there is a "perception" of "increasing tightness" in the oil market due largely to factors such as geopolitics.
Putin Hints At New Russia-Saudi Axis- No Reason To Spoil Saudi Ties Over Khashoggi Killing - Russian President Vladimir Putin finally weighed in on the disappearance (and purportedly brutal slaying) of Saudi dissident Jamal Khashoggi during a speech in Sochi on Thursday. His verdict? Russia doesn't have enough information about the incident to justify spoiling their relationship with Saudi Arabia (and, by extension, the rest of OPEC, which has mostly backed Saudi Arabia during the burgeoning diplomatic crisis), according to Reuters. Putin's take is hardly surprising: Russia's work with OPEC, which created a new Russia-Saudi axis to help manage global oil production and push up prices, has helped revive the Russian economy (while angering President Trump). Of course, Russia would be overjoyed to step in to any void left by the US if lawmakers force a rupture in the US-Saudi relationship, as evidenced by the recent agreement to sell Russian S-400 missiles to the Saudis. Two weeks ago, Putin criticized the US and its sanctions against Russia, Iran and others, saying the US was "making a colossal mistake" and risked undermining the dollar in its role as the global reserve currency. The IMF now believes Russian GDP will grow by 1.8% next year, up from a previous report published in July, which projected Russia's GDP growth at 1.7% in 2019, with growth supported by stronger domestic demand and higher fuel prices.
Oil prices ease as supply outlook improves: Kemp(Reuters) - Oil prices and calendar spreads have softened significantly this month as traders became more confident about the availability of supplies towards the end of the year and into early 2019. Iran's exports have not declined as much as predicted a couple of months ago and it is now clear they will not fall to zero, even after U.S. sanctions are re-imposed next month. Refiners in Turkey, India and possibly China are reportedly negotiating with U.S. officials over waivers to enable them to continue purchasing at least some Iranian oil after Nov. 4. At the same time, Saudi Arabia and other Gulf producers have boosted their exports in response to the earlier rise in prices and pressure from the United States to cool the market. Traders, meanwhile, have become more cautious about the consumption outlook for the rest of 2018/19, with most indicators pointing to a loss of economic momentum outside the United States. As a result, most major forecasters are now predicting a significant acceleration in non-OPEC oil supplies in 2019 as well as slower growth in consumption, shifting the outlook from one of continuing deficits back towards a surplus. In part, the improved supply picture has come about because the surge in oil prices during August and September forced both the White House and Saudi Arabia to adapt their positions. The United States has softened its insistence on forcing Iran's exports towards zero, while Saudi Arabia has ramped up its own exports in October and November to alleviate fears about a possible shortage. In effect, the oil market found the pain threshold for the U.S. administration, which lies at around $80 per barrel for Brent, and pushed prices high enough to enforce a partial course correction from policymakers.
Oil slips below $80 on rising US stockpiles - Oil fell $1 a barrel to below $80 on Thursday as the fourth weekly increase in U.S. crude inventories suggested ample supply, while Saudi-U.S. tension and falling Iranian exports lent support.Brent crude, the global benchmark, was down $1.25, or 1.6 percent, at $78.80 a barrel at 8:45 a.m. ET (1245 GMT). It has dropped by about $8 from a high of $86.74 reached on Oct. 3.U.S. crude was down $1.01, or 1.5 percent, at $68.74, after falling 3 percent in the previous session to settle below $70 for the first time in a month.U.S. crude inventories rose 6.5 million barrels last week, the Energy Information Administration said on Wednesday, the fourth straight weekly increase and almost three times what analysts had forecast.Inventories rose sharply even as U.S. crude production slipped 300,000 barrels per day (bpd) to 10.9 million bpd last week due to the effects of offshore facilities closing temporarily for Hurricane Michael."Stocks are building," said Olivier Jakob, oil analyst at Petromatrix. "It's a continuous trend. Week after week, it does start to add up."Oil prices had been rising this week on concern about a decline in Iranian exports due to U.S. sanctions and tension between the United States and Saudi Arabia after the disappearance of Saudi journalist Jamal Khashoggi.U.S. lawmakers pointed the finger at the Saudi leadership over the disappearance of the Saudi critic, suggesting sanctions could be possible. Saudi Arabia denies that it had any role in Khashoggi's disappearance. But President Donald Trump on Wednesday gave Saudi Arabia the benefit of the doubt in the journalist's disappearance, suggesting the White House may not take additional action against Saudi Arabia.
Oil Ends Down Again; Questions Linger Over Iran Sanctions - With a little more than two weeks to go until the most-anticipated development in oil markets this year, traders look flummoxed about the impact of Iran oil sanctions due Nov. 4. Prices for New York-traded WTI futures and its U.K. peer Brent settled down again on Thursday after falling 3% the previous day, as U.S. oil inventories showed an outsized build for a fourth week running. Data from TankerTrackers, an independent oil cargo surveyor, showed on Wednesday that Iran exported 2.2 million barrels per day in the first two weeks of October, not far from the peak of 2.7 million bpd it shipped in May before the U.S. decision to reimpose sanctions against the Islamic state. Meanwhile, Turkey's top refiner, Tupras, was in talks with U.S. officials to obtain a waiver allowing it to keep buying Iranian oil after Nov. 4, Reuters reported, citing industry sources. A mix of confusing signals from Saudi Arabia's crisis over missing journalist Jamal Khashoggi to varying supply-demand reports from sources tracking the global movement of crude added to market noise in the latest session. "I feel like this is a classic 'gut check' to the bulls in front of the Iran sanctions as ... everyone (got) into a bullish frenzy, where the derivatives traders bought futures, the physical traders bought cargos and we all talked ourselves into being long $85 Brent, as everyone was talking about $100 oil," said Scott Shelton, broker at ICAP (LON:NXGN) in Durham, N.C.. "The buying is done now, (but) I still find us to be on the bottom of the range. We may stay here for a while as the market mentally struggles with the WTI spreads being contango and the spread yield to being long WTI has evaporated," Shelton added. WTI's front-month contract, November, settled down $1.10, or 1.6%, at $68.65 per barrel, after hitting a one-month low at $68.47. November WTI's spread, or difference, with the ensuing month December was a negative 10 cents, a situation described in commodity markets as contango. Since financial speculators in crude do not take delivery of physical oil, they roll out of the front-month to the subsequent month before contract expiry. A negative yield at that moment will mean loss of money. Brent, the global benchmark for crude, was down 52 cents, or 0.5%, at $79.53 by 2:46 PM ET (18:46 GMT).
Oil Trades Near Lowest Level in a Month-- Oil traded near the lowest level in a month after a bigger-than-expected gain in American stockpiles overshadowed tensions between the U.S. and Saudi Arabia over a missing critic of the kingdom. Futures in New York were little changed, after plunging 3 percent Wednesday, the biggest drop since August. U.S. crude inventories rose 6.49 million barrels last week, the Energy Information Administration reported, more than twice the rate forecast in a Bloomberg survey before the data was released. Meanwhile, President Donald Trump and his top diplomat cautioned against putting the entire U.S.-Saudi relationship at risk over dissident writer Jamal Khashoggi. Crude bumped higher this year as uncertainties persisted over whether the Organization of Petroleum Exporting Countries and its partners can offset potential supply losses from U.S. sanctions on Iran that kick in early next month. The gains were further supported by the escalating U.S.-Saudi tensions after Trump pledged “severe punishment” should the Saudis be linked to Khashoggi’s disappearance. “The looming Iranian supply disruption and the conflict between the U.S. and Saudi Arabia are pushing traders to take a cautious stance at the moment,” Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone from Seoul. “That comes after prices dropped sharply on Wednesday as U.S. crude stockpiles surged more than what the market had expected.” West Texas Intermediate for November delivery traded 11 cents lower at $69.64 a barrel on the New York Mercantile Exchange at 2:25 p.m. in Singapore. The contract declined $2.17 to $69.75 on Wednesday. Total volume traded was about 9 percent below the 100-day average. Brent for December settlement was at $79.89 a barrel on the London-based ICE Futures Europe exchange. The global benchmark’s premium was at a $10.25 to WTI for the same month, after settling at the highest level since June 11 on Wednesday. In the U.S., nationwide crude stockpiles have risen for four straight weeks in the longest streak of gains since early 2017. Inventories in the American storage hub of Cushing, Oklahoma, have also increased by about 1.8 million barrels last week to more than 28 million barrels, the highest level in almost four months.
Oil plunges 11% in just 2 weeks, shrugging off Iran sanctions and Saudi tension -Talk of oil prices spiking to $100 has been replaced by another discussion: How low can crude futures go?The oil market has undergone a spectacular reversal, even against a backdrop of looming U.S. sanctions onIran, OPEC's third-largest crude producer, and rising tensions between Washington and Saudi Arabia, the world's biggest oil exporter.U.S. crude futures fell to a nearly five-week low of $68.47 on Thursday, plunging more than $8 a barrel from this month's four-year high at $76.90. That's a remarkable 11 percent plunge from peak to trough over just two weeks.Meanwhile, Brent crude bottomed out at $78.69 a barrel on Thursday, down $8, or 9.3 percent, from its four-year high at $86.74 on Oct. 3.There are three reasons oil prices have fallen so far so fast, said Matt Smith, director of commodity research at tanker-tracking firm ClipperData.First, the supply of oil held in U.S. storage tanks has risen sharply over the last four weeks. U.S. crude stockpiles are up by 22.3 million barrels through last week. That's the biggest increase over that four-week period since 2015, when storage levels were rising toward all-time highs in a heavily oversupplied market.Second, Brent crude's spike above $86 a barrel two weeks ago sparked fears that the high cost of oil would start to erode demand for the commodity. In recent weeks, OPEC and the International Energy Agency have knocked down their forecasts for growth in oil demand in light of a weaker outlook for global economic gains. Last, crude got swept up in a sell-off last week that saw investors dump risk assets. During the two-day stock market rout alone, crude futures fell by more than 5 percent.
Oil prices edge up, but set for a weekly loss on stock build, trade row --Oil prices rose on Friday on signs of surging demand in China, the world's second-biggest oil consumer, although the market was heading for a second week of losses on rising U.S. inventories and concern that trade wars were curbing economic activity.Benchmark Brent crude oil jumped $1.14 a barrel, or 1.4 percent, to a high of $80.43 before easing back to around $80.06, up 77 cents by 11:36 a.m. ET. U.S. light crude was 71 cents higher at $69.36.For the week, Brent crude was 0.2 percent lower while U.S. crude was down 2.9 percent, both on track for a second consecutive weekly decline, and down around $7 a barrel from four-year highs reached in early October."After two consecutive days of slide the oil market is staging a half-hearted come-back," said Tamas Varga, analyst at London brokerage PVM Oil. "Maybe it is down to some pre-weekend short-covering."Refinery throughput in China, the world's largest oil importer, rose to a record high of 12.49 million barrels per day (bpd) in September as some independent plants restarted operations after prolonged shutdowns over the summer to shore up inventories, government data showed on Friday.Undermining sentiment were official figures showing China's economic growth slowed in the third quarter to its weakest pace since the global financial crisis, with gross domestic product expanding by only 6.5 percent, missing estimates.The data raised concerns that China's trade war with United States was beginning to hit growth, which may limit oil demand.Also denting confidence was evidence this week that U.S. oil inventories had risen sharply. U.S. crude stocks last week climbed 6.5 million barrels, marking a fourth straight weekly build and almost triple the amount analysts had forecast, the U.S. Energy Information Administration said on Wednesday.
Where Have The Oil Bulls Gone? - The oil market is suddenly rather sanguine about a supply shortage in the short run. “The concerns about a tightening of supply, which dominated markets until two weeks ago, have abated despite the fact that the reasons for them (falling Iranian oil exports, declining oil production in Venezuela, reduced spare capacities) still apply,” Commerzbank said in a note. The bank said that the recent uptick in inventories provides some cover, and traders are no longer on edge about shortages. “Nonetheless, we believe it is still too early to sound the all-clear for the oil market.” Oilfield services companies are expected to post mediocre figures when they report third quarter results in the coming days. Oil producers have been under pressure to keep costs low, which means less revenue for servicers as more drillers are doing work in-house. Also, U.S. tariffs are driving up the cost for projects. “The risk for a number of (oilfield service) firms is to the downside,” Brad Handler, a Jefferies equity analyst in New York, told Reuters. The overuse of sanctions by the Trump administration is undermining their effectiveness, according to Jacob Lew, the U.S. Treasury Secretary under President Obama, and Richard Nephew, the lead on Iran sanctions during the Obama administration. “Today, Washington is increasingly using its economic power in aggressive and counterproductive ways, undermining its global position and thus its ability to act effectively in the future,” Lew and Nephew write in a Foreign Affairs essay. Jeff Currie, head of commodities research at Goldman Sachs, said that $100 oil is not “very likely.” “We're not saying $100 oil cannot happen. It's not our base case nor do we think it's very likely,” Currie told S&P Global Platts in an interview. Reaching $100 would require a “sustainable loss in all of Iran's oil exports for an extendable period of time.” The latest EIA report showed another strong increase in inventories, which helped push down prices mid-week. The data release also revealed a sudden drop in production, but that figure is an anomaly due to hurricane-related outages. Also, the effort by the Trump administration to smooth over tension with Saudi Arabia tamped down geopolitical concerns. “The inventory numbers were a real bearish surprise,” Michael Lynch, president of Strategic Energy & Economic Research, told Bloomberg. “That combined with the gradual lessening of tension” between the U.S. and Saudi Arabia “has taken some of the steam out of the market.”
Oil Set for Weekly Loss - -- Oil is poised for a second weekly drop after a larger-than-expected gain in American crude stockpiles eclipsed tensions between the U.S. and Saudi Arabia over the disappearance of a prominent critic of the kingdom. Futures in New York headed for a 3.4 percent loss this week as government data showed U.S. inventories grew by more than double what analysts had forecast. Prices were little changed on Friday after President Donald Trump said it “certainly looks” like missing journalist Jamal Khashoggi is dead and warned of “very severe” consequences for the killing. Also in oil markets, the front-month contract traded below the following month’s settlement in New York, flipping into negative territory this week in a condition known as contango. That signals oil traders are turning less optimistic on the near-term direction of the market. The U.S. inventories data “was a complete shocker, sending oil markets spiraling lower,” said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp. “Price action and discovery suggests traders are no longer concerned about how high prices will go but rather how quickly they will fall. As for today, at least, the bid on dip mentality has run for cover.” Crude’s rally has staggered since hitting a four-year high earlier this month as the growth in U.S. inventories for a fourth week added to concerns over the lingering trade war between America and China. In the midst of mounting tensions surrounding Saudi Arabia, data showed the world’s largest oil exporter boosted crude output in August as it sticks to its OPEC pledge to pump more. West Texas Intermediate for November delivery traded 23 cents higher, or up 0.4 percent, at $68.88 a barrel on the New York Mercantile Exchange at 7:32 a.m. in London. The contract declined 1.6 percent to $68.65 on Thursday. Total volume traded was about 25 percent below the 100-day average. Brent for December settlement was at $79.60 a barrel on the London-based ICE Futures Europe exchange, up 31 cents. The contract fell 1 percent to $79.29 on Thursday, and is down 1.1 percent for the week. The global benchmark’s premium was at a $10.66 to WTI for the same month.
Baker Hughes: US rig count up 4 units to 1,067 - The US drilling rig count was up 4 units to 1,067 rigs working for the week ended Oct. 19, according to Baker Hughes data. The count is up 154 units from the 913 rigs working this time a year ago.Land-based rigs rose 7 units to 1,044 for the week. Offshore units fell by 3 to 20 rigs working, while those drilling in inland waters remained unchanged at 3 rigs working.Oil-directed rigs were up 4 units from last week to 873 units working, and up from the 736 rigs drilling for oil this week a year ago. Gas-directed rigs were up 1 unit to 194, and up from the 177 units drilling for gas a year ago. Unclassified rigs were down 1 unit, leaving no units working. Among the major oil and gas-producing states, Texas saw the largest increase in rigs for the second week in a row with another 8-rig jump to 540. California, with its 2-rig gain to 15 units working, was the only other state to see an increase for the week. Eight states were unchanged this week: Louisiana, 64; North Dakota, 52; Colorado, 33; Wyoming, 30; Ohio, 17; West Virginia, 13; Utah, 6; and Kansas, 1. Oklahoma and Pennsylvania each dropped a single rig to reach 141 and 44, respectively.With a loss of 2 units each, New Mexico, at 100, and Alaska, at 3, saw the largest drop in rigs for the week. Canada’s rig count fell by 4 for the week. With 191 rigs running, the count falls short of the 202 units drilling this week a year ago. Canada lost 4 oil-directed rigs to reach 123 units for the week. Its gas-directed rig count remained unchanged at 68.
Oil Up on Day, but U.S. Crude Loses 3% After Rough Week - - Oil prices rose on Friday, but remained at an inflection point after a rough week. Reports of record Chinese demand for crude and of producers’ struggling to boost output suggest prices should be higher. But surging stockpiles and a rise in drilling activity in the U.S. indicate the path of least resistance is lower. The conflicting themes were on display as Brent, the global benchmark for oil, posted a drop of nearly 1% on the week, while WTI had a weekly loss of 3%. Some think WTI will return to its recent perch above $70 per barrel and dismiss this week’s tumble as aberration, or simply profit-taking, ahead of the expiry of its front-month November contract on Monday. “Despite the weakness into contract expiration, nothing has changed,” said Phil Flynn, an analyst at Chicago’s Price Futures Group, who’s typically bullish on oil. He referred to an earlier 3% selloff in WTI on Aug. 15, which he said was ahead of contract expiration as well. “That was just a correction," he said. "So is this down move.” Others, such as Phil Davis at PSW Investments in New York, believe WTI should trade at $65 or below in coming weeks and that Brent might slip another $5 or so to hover around $75. “Logically, oil is overpriced with the kind of builds we’ve seen in U.S. crude lately and the growing notion that the Iran sanctions might not hit as hard as thought. The only problem is finding the right entry point to short WTI and Brent,” Davis said. WTI settled up 47 cents, or 0.7%, at $69.13 per barrel. The U.S. crude benchmark gave back much of its early gains on data showing the U.S. rig count had risen to March 2015 highs after drillers added four rigs this week. Brent settled up 49 cents, or 0.6%, at $79.78. In Friday's trading, oil was supported by government data showing refinery throughput in China, the world's largest oil importer, rising to a record high of 12.49 million barrels per day in September as some independent plants restarted operations after prolonged shutdowns over the summer to shore up inventories. OPEC, meanwhile, was struggling to add barrels to the market after agreeing in June to increase output, according to an internal document seen by Reuters.
Turkish paper reports: Saudi journalist's watch may have transmitted evidence of his death -Missing Saudi journalist Jamal Khashoggi may have recorded his own death, a Turkish newspaper reported Saturday morning. Khashoggi turned on the recording function of his Apple Watch before walking into the Saudi consulate in Istanbul on October 2, according to Sabah newspaper. The moments of his "interrogation, torture and killing were audio recorded and sent to both his phone and to iCloud," the pro-government, privately owned newspaper paper reported. The Turkish newspaper said conversations of the men involved in the reported assassination were recorded. Security forces leading the investigation found the audio file inside the phone Khashoggi left with his fiancé, according to Sabah.Upon noticing the watch, Sabah reports, Khashoggi's assailants tried to unlock the Apple Watch with multiple password attempts, ultimately using Khashoggi's fingerprint to unlock the smart watch. They were successful in deleting only some of the files, Sabah reported.However, on its website, Apple does not list fingerprint verification as one of the Apple Watch's capabilities. A representative from the company confirmed to CNN the watches do not have the feature.It was not immediately clear whether it would have been technically feasible for Khashoggi's Apple Watch to transfer audio to his phone, which he had given to his fiancée before entering the consulate.CNN cannot independently verify the Sabah report and is seeking comment from both Saudi and Turkish officials. CNN intelligence and security analyst Robert Baer cast doubt on the claim, saying it was too far for a Bluetooth connection and that Khashoggi was unlikely to have anticipated transmitting a recording in advance. "I think what's happened, clearly, is the Turks have the Saudi consulate wired, they have transmitters," he told CNN's Anderson Cooper.
Saudi media: Any US sanctions over Khashoggi would 'stab its own economy to death' -- As international pressure mounted on Saudi Arabia over the case of missing journalist Jamal Khashoggi, the kingdom came out swinging Sunday, threatening to retaliate and spelling out the ways in which Riyadh would punish the US if it imposed sanctions. Khashoggi, a columnist for The Washington Post and Saudi royal insider-turned-critic, went missing after entering the Saudi consulate in Istanbul on October 2 to obtain paperwork that would allow him to marry his Turkish fiancée. His disappearance has drawn international condemnation and sparked warnings from US President Donald Trump on Saturday of "severe punishment" if the Saudis are found to be behind his death. Britain, France and Germany also said on Sunday they were demanding a "credible investigation." In a statement Sunday on the official Saudi Press Agency attributed to "an official," the kingdom rejected any threats of economic sanctions or political pressure and said it would "respond with greater action." But in a strongly worded op-ed published later on Sunday, Turki Aldakhil, general manager of the Saudi-owned Al-Arabiya news channel, warned that if the US imposed sanctions on Riyadh "it will stab its own economy to death," cause oil prices to reach as high as $200 a barrel, lead Riyadh to permit a Russian military base in the city of Tabuk, and drive the Middle East into the arms of Iran. "The information circulating within decision-making circles within the kingdom have gone beyond the rosy language used in the statement," Aldakhil wrote, referring to the earlier comment. "There are simple procedures, that are part of over 30 others, that Riyadh will implement directly, without flinching an eye if sanctions are imposed," he said. "If US sanctions are imposed on Saudi Arabia, we will be facing an economic disaster that would rock the entire world," he added. "if the price of oil reaching $80 angered President Trump, no one should rule out the price jumping to $100, or $200, or even double that figure."
Saudis Break 45-Year Taboo with Veiled Oil Threat -- For 45 years, it’s been considered out of bounds for Saudi Arabia. But all of a sudden, Riyadh made what many read as a veiled threat to use the kingdom’s oil wealth as a political weapon -- something unheard of since the 1973 Arab embargo that triggered the first oil crisis. Saudi Arabia, the world’s biggest oil exporter, said on Sunday it would retaliate against any punitive measures linked to the disappearance of Washington Post columnist Jamal Khashoggi with even “stronger ones." In an implicit reference to the kingdom’s petroleum wealth, the statement noted the Saudi economy “has an influential and vital role in the global economy.” Roger Diwan, a longstanding OPEC watcher at consultant IHS Markit Ltd., said the Saudi comments broke “an essential oil market taboo.” While few think that Saudi Arabia is prepared to follow through, even the suggestion of using oil as a weapon undermines Riyadh’s long-standing effort to project itself as a force for economic stability. Jeffrey Currie, the head of commodities research at Goldman Sachs Inc., said Middle East tensions impacting the oil market have now "broadened to include Saudi Arabia." The anxieties were exacerbated by an opinion piece penned by Turki Al Dakhil, who heads the state-owned Arabiya news network and is close to the Royal Court, in which he openly talked about using oil as a weapon. “If President Trump was angered by $80 oil, nobody should rule out the price jumping to $100 and $200 a barrel or maybe double that figure,” he wrote. The Saudi embassy in Washington later said Al Dakhil didn’t represent the official position of the kingdom and Saudi officials, speaking privately, said there wasn’t a change in the long-held policy that oil and politics don’t mix. On Monday, Khalid Al-Falih, the Saudi energy minister, used a speech in India to soothe concerns, pledging his country will continue to be a responsible actor and keep oil markets stable.
Suspects in journalist's disappearance linked to Saudi crown prince: report - Several suspects that Turkish authorities have identified involving the disappearance of dissident Saudi journalist Jamal Khashoggi have been linked to Crown Prince Mohammed bin Salman or his security detail, according to a new report.One of the suspects identified by Turkish authorities was Mohammed's travel companion, seen exiting planes with him in Paris and Madrid and photographed standing guard during visits to Houston, Boston and the United Nations this year, The New York Times reports.Witnesses and other records have linked three other suspects in Khashoggi's disappearance to Mohammed's security detail, while a fifth suspect has top positions in the country's Interior Ministry and medical establishment, according to the Times. The newspaper reported that the fifth suspect is "a figure of such stature that he could be directed only by a high-ranking Saudi authority." After speaking with Mohammed,President Trump said Tuesdaythat the crown prince "totally denied any knowledge" of Khashoggi's fate.The U.S.-based journalist, who has been critical of Saudi leadership, disappeared after entering the Saudi consulate in Istanbul on Oct. 2.Turkish authorities have accused the Saudi government of killing and dismembering Khashoggi inside the consulate. Trump suggested on Monday after speaking with Saudi Arabia's King Salman that "rogue killers" may be responsible for the death of Khashoggi.
NYT Identifies Four Suspected Saudi Hit Squad Members As 'Close Associates' Of Crown Prince -- After two days of non-stop news pertaining to the widening backlash to the disappearance of Saudi insider-turned dissident journalist Jamal Khashoggi, who is widely suspected to have been murdered inside the Saudi consulate in Istanbul during a trip to obtain a marriage license, the New York Times waited until 6:30 pm ET to drop one of the biggest bombshells yet. Citing sources from within the Turkish government (who have taken the lead in directing the international outrage by first leaking information about Khashoggi's killing, then following that up with claims that they had substantive evidence), the NYT reports that Turkish officials have linked four members of the 15-man Saudi hit squad purportedly sent to ambush Khashoggi to Crown Prince Mohammad bin Salman, who earlier today denied having any knowledge of the killing during a conversation with President Trump and Secretary of State Mike Pompeo.One of the men is a diplomat who has been frequently spotted in the Crown Prince's company, including being photographed with MbS during his visit to the US earlier this year. Three others have been linked to MbS's security detail. A fifth was a doctor and autopsy expert, whose presence suggests that Khashoggi's murder was a premeditated hit - not the actions of "rogue operatives" as the Saudi government and Trump have suggested. The news is bound to produce a fresh round of outrage directed at MbS, whose authoritarian crackdown on political rivals within Saudi Arabia, as well as his escalation of the conflict in Yemen (which Saudi Arabia has blithely supported with arms and financing) and the kidnapping last year of the Prime Minister of Lebanon have undermined his reputation as a reformer (a reputation that, ironically, the NYT first helped to burnish). Turkish authorities have said that the 15-man team flew into Istanbul on two chartered jets on Oct. 2, the day Khashoggi walked into the embassy only to never be seen or heard from again. Flight records indicate that some or all of the men left later that day, and that their planes stopped in Dubai on the way back to Saudi Arabia. Turkish officials told the Times that all 15 suspects are Saudi security officers, intelligence agents or government employees. At least 9 of them worked for the Saudi security services, military or other government ministries. One of the men was identified as Maher Abdulaziz Mutreb, a diplomat who is one of the Crown Prince's closest associates.
Saudi Arabia’s crown prince went a ghastly step too far --According to news reports, Saudi Arabia’s leaders might be preparing to announce that journalist Jamal Khashoggi was indeed killed inside the country’s consulate in Istanbul on Oct. 2. Apparently they plan to explain away his death as a botched abduction attempt carried out by “rogue” killers — an extremely unlikely scenario, given the ruthlessly centralized structure of the Saudi regime.Whatever happens next, it is already clear that Saudi Arabia’s crown prince and de facto ruler, Mohammed bin Salman, has gone a ghastly step too far in his ruthless pursuit of absolute power.Khashoggi, 59 at the time of his reported death, was far more than an excellent reporter and analyst of his beloved kingdom. As one of its leading critics (a role that included his stint as a Post columnist), he became a high-profile symbol of the daunting struggle for media freedom throughout the Arab world today. Most ironically, he had respect for the reforms being undertaken by the very Saudi prince who probably gave the orders for his suspected extrajudicial murder. Khashoggi’s unpardonable sin was to call for debate not about the crown prince’s social reforms, which he wholeheartedly supported, but about the crown prince’s stifling intolerance for anyone who cast even a speck of dirt on his highly polished image as the kingdom’s long-awaited savior. I have known Khashoggi for at least two decades, and we were scheduled to have lunch together as soon as he returned from Istanbul to discuss the status of his efforts to obtain a green card allowing him to become a permanent resident in the United States. He had a book project in mind to write at the Wilson Center in Washington, where I am a Middle East fellow after working for 35 years for The Post, including four years as its Middle East correspondent. The Wilson Center had offered him a fellowship, but he needed his green card first.
Settling The Khashoggi Case Is A Difficult Matter --The negotiation over the Khashoggi case will be extremely difficult. The protagonists are headstrong and dangerous people. The issue could easily escalate. The Ottoman empire ruled over much of the Arab world. The neo-Ottoman wannabe-Sultan Recep Tayyip Erdogan would like to regain that historic position for Turkey. His main competition in this are the al-Sauds. They have much more money and are strategically aligned with Israel and the United States, while Turkey under Erdogan is more or less isolated. The religious-political element of the competition is represented on one side by the Muslim Brotherhood, 'democratic' Islamists to which Erdogan belongs, and the Wahhabi absolutists on the other side.There are more tactical aspects to this historic conflict. When the Saudis cut ties with Qatar it was Turkey that sent its military to prevent a Saudi invasion of the tiny but extremely rich country. This gave Erdogan the financial backing he urgently needs. In response to that the Saudis offered several $100 millions to prop up the YPK/PKK proxy force the U.S. uses to occupy north-east Syria. These Kurdish groups fight a guerrilla war within Turkey and are a threat to its unity.The effective Saudi ruler, clown prince Mohammad bin Salman (MbS), made a huge mistake when he ordered the abduction (or murder) of the Saudi journalist Khashoggi in Istanbul. The botched operation gave Erdogan a tool to cut the Saudis to size. But he needs U.S. support to achieve that. The recent release of the U.S. pastor (and CIA asset) Andrew Brunson is supposed to buy him good will with U.S. President Donald Trump. But Trump build his Middle East policy on his Saudi relations. He can not go berserk on them. Some solution must be found.
Saudis to admit journalist Khashoggi was killed by mistake: reports -- Saudi Arabia is preparing an official account that will admit journalist Jamal Khashoggi was killed after entering the Saudi consulate in Istanbul, according to multiple reports on Monday.It is not clear how much responsibility Saudi Arabia will take for the journalist's death, as reports indicate that while an official narrative is being prepared it is not complete.The kingdom will reportedly deflect responsibility for the death away from Crown Prince Mohammed bin Salman by saying Khashoggi's death was "unintentional" and the result of a "botched operation" by Saudi agents who were not authorized by the government's top authorities, two sources told CNN. "We are hearing from the sources at this stage that [the operation] was not carried out with the proper clearance," CNN's Clarissa Ward said on air."There will be plenty of people who will have difficulty swallowing that narrative, [saying] it's hard to believe anything of this nature, of this sensitivity, could possibly take place without those in power in Saudi Arabia … being privy to it on some level," Ward noted. A source familiar with Saudi plans told The New York Times earlier Monday that Saudi Arabia was planning to indicate the killing was done by an incompetent intelligence official.The Wall Street Journal also reported Saudis are weighing admitting one of their intelligence officials killed Khashoggi by mistake.A joint team of Saudi and Turkish investigators on Monday began their search of the Saudi consulate in Turkey, where Khashoggi went missing on Oct. 2. Turkish reports have indicated Saudi agents were likely working on orders from Riyadh when they allegedly dismembered and killed Khashoggi. Turkey said they have unreleased video and audio evidence of the incident. Saudi Arabia has so far denied a role in Khashoggi's disappearance.
Saudi Arabia To Admit Khashoggi Killed During "Botched Interrogation" - As the Saudis prepare to pin Khashoggi's murder on "rogue killers", just as President Trump had advised, the office of Turkey's attorney general has leaked the first findings from Turkish prosecutors' search of the Saudi consulate to Al Jazeera (a news organization that his financed by Qatar, a geopolitical nemesis of the Kingdom, which took place on Monday, nearly two weeks after Khashoggi disappeared. In addition to reportedly discovering evidence that Khashoggi had been killed inside the consulate, Turkish investigators also found "evidence of tampering" - suggesting that the Saudis tried to cover up the crime. Though it may have been a coincidence, a team of professional cleaners was spotted entering the consulate early Monday. A source at the Attorney General's office, speaking on the condition of anonymity, told Al Jazeera "they have found evidence that supports their suspicions that Jamal Khashoggi was killed inside the Saudi consulate," our correspondent Jamal Elshayyal reported from Istanbul. "This is a significant step forward after several days of an impasse," he said. The Attorney General's office also said their team inside the consulate found evidence of "tampering", Elshayyal added. Meanwhile, CNN is reporting that Saudi Arabia is preparing to admit that Khashoggi was killed as the result of an interrogation that went wrong, citing two unnamed sources. One source cautioned that a report was still being prepared and could change, CNN said. The other source said the report would likely conclude that the operation was carried out without clearance and that those involved will be held responsible, the news outlet said. Considering that Saudi Arabia is effectively a Medieval Theocracy that still beheads hundreds of people every year via sword, we imagine the men who actually killed Khashoggi (and according to Turkish flight records, they were almost certainly men) must be feeling pretty anxious right about now.
Saudis Plan To Pin Khashoggi Slaying on ‘Rogue’ General - The Kingdom of Saudi Arabia is starting to float a trial-balloon explanation for its apparent slaying of journalist Jamal Khashoggi, The Daily Beast has learned, in hopes of escaping the consequences of an episode that has shaken whatever geopolitical confidence existed in Crown Prince Mohammed bin Salman. According to two sources familiar with the version of events circulating throughout diplomatic circles in Washington, the Saudis will place blame for Khashoggi’s murder on a Saudi two-star general new to intelligence work. That line is in keeping with President Donald Trump’s Twitter-borne speculation that “rogue killers” may be responsible for whatever happened to Khashoggi inside Saudi Arabia’s Istanbul consulate on Oct. 2. Three other former U.S. officials did not have direct knowledge of the inchoate Saudi line but told The Daily Beast they expect Riyadh to blame a fall guy. The Saudis are considering admitting that the general received approval from the Crown Prince to interrogate Khashoggi on the suspicion that he was a member of the Muslim Brotherhood, the Islamist political faction whose rise during the Arab Spring prompted the Saudis and their allies in the United Arab Emirates to sponsor a wave of reaction. They also are considering intimating that Khashoggi received money from Gulf rival Qatar. But, the Saudi story continues, this overeager general exceeded bin Salman’s intentions. He improvised a rendition to send Khashoggi from Turkey back to Saudi Arabia—and botched it, killing him. Then he lied to his Saudi superiors about what happened. “It’s ludicrous in the extreme. Saudi Arabia doesn’t work that way. They don’t freelance operations.”
Coverup Deal Will Blame Khashoggi Death On Extreme Torture - The coverup of the murder of Jamal Khashoggi, killed on behalf of the Saudi clown prince Mohammad bin Salman, proceeds apace. It is part of a deal between Turkey and Saudi Arabia under the aegis of the United States. The haggling over the details will take a while.Several media report of a test ballon, floated to find out if an 'alternative' story will fly:Saudi Arabia was preparing an alternative explanation of the fate of a dissident journalist on Monday, saying he died at the Saudi Consulate in Istanbul two weeks ago in an interrogation gone wrong, according to a person familiar with the kingdom’s plans. In Washington, President Trump echoed the possibility that Jamal Khashoggi was the victim of “rogue killers.” ..[O]n Monday, a person familiar with the Saudi government’s plans said that Mr. Khashoggi was mistakenly killed during an interrogation ordered by a Saudi intelligence official who was a friend of the crown prince. The person, who spoke on condition of anonymity, said Prince Mohammed had approved interrogating or even forcing Mr. Khashoggi to return to Saudi Arabia under duress. But, the person said, the Saudi intelligence official went too far in eagerly seeking to prove himself in secretive operations, then sought to cover up the botched job. One might expand on that fairytale: "The Saudi general who allegedly botched the interrogation of Jamal Khashoggi mysteriously died in a Saudi air force plane crash on the same day the coverup story was floated."
Saudis To Blame Top General For Journalist's Killing- NYT - Less than a day after the New York Times published a report claiming that US intelligence agencies believe Crown Prince Mohammad bin Salman gave the order to murder and dismember a former Saudi insider turned critic inside the kingdom's consulate in Istanbul, the Grey Lady has published yet another scoop claiming that the Saudis have selected a scapegoat who will most likely take the fall for the killing of Saudi journalist Jamal Khashoggi. Anonymous officials with knowledge of the Saudis' plans said the kingdom is close to blaming to Gen. Ahmed al-Assiri, a high-ranking intelligence official and adviser to the crown prince, as the man responsible for masterminding the plot. The report followed another anonymously sourced report from earlier in the week claiming the Saudis were preparing to admit that Khashoggi had been killed during a botched interrogation. Though the kingdom still has "a few more days" to complete its investigation, according to Secretary of State Mike Pompeo, scrutiny of General Assiri has intensified as the kingdom believes he would blaming him could provide "a plausible explanation for the killing" while "helping to deflect blame from the crown prince" as calls for MbS's ouster intensify. Perhaps to add an element of plausibility to the story, the Saudis are also expected to say that MbS "signed off" on the murder plot. General Assiri, who previously served as the spokesman for the Saudi-led military intervention in Yemen, is close enough to the crown prince to have easy access to his ear and has considerable authority to enlist lower ranking personnel in a mission. The Saudi rulers are expected to say that Mr. Assiri received verbal authorization from Prince Mohammed to capture Mr. Khashoggi for an interrogation in Saudi Arabia, but either misunderstood his instructions or overstepped that authorization and took the dissident’s life, according to the two of the people familiar with the Saudi plans. They spoke on the condition of anonymity because they were not authorized to brief journalists.
Saudi Media Casts Khashoggi Disappearance as a Conspiracy, Claims Qatar Owns Washington Post -- In Saudi Arabia, major media outlets have cast the disappearance and apparent murder of Saudi dissident and Washington Post journalist Jamal Khashoggi as a foreign conspiracy to denigrate the image of the kingdom. The media accounts, which come from outlets run with the backing of Saudi Arabia and other Persian Gulf monarchies, are spinning the coverage of Khashoggi’s disappearance as a plot by rival governments and political groups to hurt the kingdom — going so far as to make false claims about the Washington Post’s owners.The English-language arm of the news channel Al Arabiya, for instance, claimed that reports of Khashoggi’s detention inside the Saudi consulate in Istanbul were pushed by “media outlets affiliated with the outlawed Muslim Brotherhood and Qatar” — the pan-Arab Islamist political movement and rival Persian Gulf monarchy, respectively. A subsequent story on Al Arabiya casts doubt that Khashoggi’s fiancée, Hatice Cengiz, is truly who she says she is, claiming that her Twitter profile shows that she follows “critics of Saudi Arabia.”Al Arabiya is owned by the Saudi royal family and based in Dubai, one of the Gulf monarchies that has sided closely with Saudi Arabia amid the regional row with Qatar and others. It’s among a handful of other Saudi- and Gulf-controlled outlets — such as Al Riyadh Daily, Al-Hayat, and the Saudi Gazette — that toe their governments’ line, including frequently casting a conspiratorial light on critics of the governments’ human rights records.
Saudi Arabia's oil weapon doesn't work: Kemp - (Reuters) - Saudi Arabia is unlikely to employ its so-called "oil weapon" in the diplomatic crisis over the disappearance of a journalist after visiting the country’s consulate in Istanbul.Experience from the last time Saudi Arabia tried to use oil sales as a diplomatic instrument in 1973/74 shows such action does not work and the kingdom itself would be the biggest victim.Despite some of the impassioned rhetoric in Saudi media, self-interest makes it improbable the government will retaliate by reducing oil sales or trying to drive up prices.That has not stopped some veiled threats to weaponise oil production and prices, but they should be interpreted as an urgent plea for support and understanding rather than a serious threat."If U.S. sanctions are imposed on Saudi Arabia, we will be facing an economic disaster that would rock the entire world," according to one heated editorial ("U.S. sanctions would mean Washington is stabbing itself", Al Arabiya, Oct. 14)."Riyadh is the capital of (global) oil and touching this would affect oil production before any other vital commodity," the editorial warned.If the price of oil reaching $80 a barrel angered U.S. President Donald Trump, "no one should rule out the price jumping to $100, or $200, or even double that figure", the author said bluntly. The government’s official response has been more circumspect but it nonetheless warned that it would respond to any action with even greater retaliation and pointed to the kingdom’s "influential and vital role in the global economy".
Saudis Must Cough Up Billions To Settle Khashoggi Case --The Khashoggi case, discussed here, will be moved off the news pages even faster than assumed. A CNN correspondent just tweeted this: Erdogan spox: "At the request of Saudi Arabia, a joint working group will be established to uncover the events surrounding Jamal Khashoggi." Translation: Erdogan spox: "Our Sultan received a sufficient down payment to start negotiating about the burial of the case."Prediction:Erdogan will use the 'joint working group' to squeeze as much as he can out of the Saudis. (A deal may even include a political settlement of the Saudi blockade of Erdogan's sponsor Qatar.)Yesterday 22 Senators signed a request to Trump to investigate the Khashoggi case under the Global Magnitsky Act. The Trump administration has 120 days to finish the investigation and to report back to the Senate. Any person or organization found to be involved in the kidnapping and possible murder of Khashoggi could then come under U.S. sanctions.Those 120 days are the time-frame for Erdogan to use the thumbscrews the Saudi fuckup in its consulate in Istanbul handed him. The Saudi clown prince Mohammad bin Salman will get squeezed like never before. It will cost him billions to purchase the video of the Khashoggi killing the Turkish government claims to have. Erdogan will not be the only one to profit from the issue. The Senate move gives Trump enormous leverage over the Saudis. He will use it.Trump loudly claimed that he personally closed a $110 billion deal in which the Saudis purchase more useless weapons. There never was a 'deal', only some non-binding letters of intent. The Saudis have been reluctant to follow through. They did not pony up the $15 billion for the U.S. made THAAD missile defense systems Trump 'sold' them and even talked with Russia about buying the much cheaper and better S-400
The Full Story of Why MbS Might Have Wanted Jamal Khashoggi Dead - This was not a straightforward snatch and grab attempt. The officers sent to Istanbul to deal with Jamal Khashoggi were given clear instructions; return with Khashoggi alive or kill him there.That order did not come from any senior general or bureaucrat, but straight from the de-facto head of the largest Royal family in the world that controls the world’s largest proven oil reserves.It comes from the last remaining bastion of medieval court politics, ironically supported by the seemingly unstoppable tide of global populism.A giant of a man yet with an approachable demeanor, Jamal Khashoggi had an intimidating contact list that included leaders, politicians, businessmen and, what would help lead to his tragic death, the numbers of some of the most senior members of the House of Saud.Khashoggi was the go-to man for almost every Western journalist, think-tanker and academic looking for a quick soundbite from a reliable source on Saudi Arabia, popular Saudi reactions to Western policies.Indeed, in his work with The Washington Post, he pursued writing with a new vigour, often smiling wryly as he read the online threats and insults from Saudi government trolls and their systematic campaigns. In one answer to them, Jamal talked about how sad he was at their existence. History will vindicate those jailed and tortured while it would ignore these trolls entirely, he tweeted. The inner peace that Jamal found infuriated and enraged the rash and impulsive Mohammed bin Salman. Surrounded by a coterie of aggressive, eager to please loyalists with little experience, his anger reached untold limits. With an almost chronic addiction to social media, the crown prince would scour the virtual newsfeeds daily on his iPad, to examine firsthand the impact of the campaigns engineered by his adviser. With all the resources that eight million barrels of oil a day bring, being unable to stop Khashoggi’s influence was a constant reminder of the limits of authoritarianism against unrestricted freedom. Having publicly humiliated and demoted the strongest royal in the kingdom to become crown prince, MbS had effectively wiped out all opposition within the family. And with a list of disgruntled Saudi royals courtesy of Jared Kushner, he was able to target every one of them, removing them from public posts, scaring them into fleeing or imprisoning them in what was the greatest protection racket in history. Members of MbS’s personal elite squad – Al-Ajrab Sword Brigade – began working with colleagues from the General Intelligence service and forensic experts to plan their move. As soon as reports came from the consulate in Turkey that he had come in to ask for divorce papers, Riyadh set things in motion. He was told to come back after a week in which all logistics were planned out and overseen by MbS and his advisers. Alive or dead, finishing within an hour was imperative.
Did Saudis, CIA Fear Khashoggi 9/11 Bombshell? -- The macabre case of missing journalist Jamal Khashoggi raises the question: did Saudi rulers fear him revealing highly damaging information on their secret dealings? In particular, possible involvement in the 9/11 terror attacks on New York in 2001. Even more intriguing are US media reports now emerging that American intelligence had snooped on and were aware of Saudi officials making plans to capture Khashoggi prior to his apparent disappearance at the Saudi consulate in Istanbul last week. If the Americans knew the journalist’s life was in danger, why didn’t they tip him off to avoid his doom? Jamal Khashoggi (59) had gone rogue, from the Saudi elite’s point of view. Formerly a senior editor in Saudi state media and an advisor to the royal court, he was imminently connected and versed in House of Saud affairs. Khashoggi’s articles appeared to be taking on increasingly critical tone against the heir to the Saudi throne, Crown Prince Mohammed bin Salman. The 33-year-old Crown Prince, or MbS as he’s known, is de facto ruler of the oil-rich kingdom, in place of his aging father, King Salman.While Western media and several leaders, such as Presidents Trump and Macron, have been indulging MbS as “a reformer”, Khashoggi was spoiling this Saudi public relations effort by criticizing the war in Yemen, the blockade on Qatar and the crackdown on Saudi critics back home. However, what may have caused the Saudi royals more concern was what Khashoggi knew about darker, dirtier matters. And not just the Saudis, but American deep state actors as as well. He was formerly a media aide to Prince Turki al Faisal, who is an eminence gris figure in Saudi intelligence, with its systematic relations to American and British counterparts. Prince Turki’s father, Faisal, was formerly the king of Saudi Arabia until his assassination in 1975 by a family rival. For nearly 23 years, from 1977 to 2001, Prince Turki was the director of the Mukhabarat, the Saudi state intelligence apparatus. He was instrumental in Saudi, American and British organization of the mujahideen fighters in Afghanistan to combat Soviet forces. Those militants in Afghanistan later evolved into the al Qaeda terror network, which has served as a cat’s paw in various US proxy wars across the Middle East, North Africa and Central Asia, including Russia’s backyard in the Caucasus. Ten days before the 9/11 terror attacks on New York City, in which some 3,000 Americans died, Prince Turki retired from his post as head of Saudi intelligence. It was an abrupt departure, well before his tenure was due to expire. There has previously been speculationin US media that this senior Saudi figure knew in advance that something major was going down on 9/11. At least 15 of the 19 Arabs who allegedly hijacked three commercial airplanes that day were Saudi nationals.
UK minister pulls out of Saudi summit -- The UK's International Trade Secretary Liam Fox has pulled out of attending an investment conference in Saudi Arabia next week.It comes amid allegations the country was behind the killing of Saudi journalist Jamal Khashoggi.Mr Khashoggi has not been seen since entering the Saudi consulate in Istanbul on 2 October, where Turkish officials allege he was killed.Saudi Arabia, which denies the killing, allowed investigators inside overnight.The Dutch and French finance ministers, as well as several other politicians and business leaders, have said they are pulling out of the event. However, a number of major businesses - including Goldman Sachs, Pepsi and EDF - are still intending to go despite growing pressure for a boycott.A spokesman for Dr Fox said "the time is not right for him to attend" the conference in Riyadh."The UK remains very concerned about Jamal Khashoggi's disappearance... those bearing responsibility for his disappearance must be held to account."On Thursday, the Washington Post published Mr Khashoggi's last column - a call for press freedom across the Arab world.The newspaper said the column had been submitted by Mr Khashoggi's translator the day after he was reported missing.It had initially held off from publishing the column, but decided to go ahead after accepting Mr Khashoggi was not going to return safely.
Why pressure on Saudi Arabia could 'escalate quickly', and bring pain for everyone else -- With Saudi Arabia denying a role in the sudden disappearance of a prominent journalist — and vowing to push back against any effort at international retribution — the chances are growing that the crisis could escalate, and ricochet across the global economy. On Sunday, the world reacted to last week's vanishing of Jamal Khashoggi, a Washington Post columnist and critic of the Saudi Government. The West has threatened consequences for the kingdom, which is suspected of having captured the journalist at a Saudi consulate in Istanbul. The governments of the United Kingdom, France and Germany on Sunday called for a "credible investigation to establish the truth about what happened, and — if relevant — to identify those bearing responsibility for the disappearance of Jamal Khashoggi, and ensure that they are held to account." Although Saudi Arabia has fiercely denied any involvement, reports suggest Riyadh may been behind Khashoggi's disappearance, with Turkey airing suspicions that the journalist may have been killed by Saudi operatives. For the moment, the suspicions alone have imperiled Saudi Arabia's carefully crafted plans to reform its economy and burnish its image abroad. Meanwhile, the reformist image cultivated by Crown PrinceMohammed bin Salman (MBS) is also in jeopardy."Right now, this episode is eroding all the good will and trust built up by MBS," said Jonathan Schanzer, senior vice president at the Foundation for Defense of Democracies (FDD), a national security think tank. He called for caution in the face of a lack of actionable evidence against Saudi Arabia, and cast doubt on intelligence and reporting from Turkey that implicated Riyadh.
Saudi Arabia could hike oil prices over the Khashoggi case. Here's why it would backfire -- Fears are spreading that Saudi Arabia, in retaliation against the growing global outcry caused by the disappearance of Saudi journalist Jamal Khashoggi, may hit back at potential economic sanctions byweaponizing its oil dominance.Saudi Arabia's not-so-veiled threat issued in a government statement Sunday emphasized its "vital role in the global economy" and that any action taken upon it will be met with "greater action". But as oil ticks upward, a look at history and geopolitics suggests that while a Saudi-driven oil price spike would bring pain for much of the world, it would ultimately backfire on itself."If this is something the Saudis were allowed to do, they'd be really shooting themselves in the foot," Warren Patterson, commodities analyst at ING, told CNBC's Squawk Box Europe on Tuesday. "In the short to medium term we'll definitely see an incremental amount of demand destruction, but the bigger issue is in the longer term." Any action in withholding oil from the market, he said, "would only quicken the pace of energy transition." The crisis began after Turkish officials alleged that Khashoggi, a U.S. resident and Washington Post contributor, was murdered on orders of the Saudi government after he was last seen entering the Saudi consulate in Istanbul on October 2. The Saudis have fiercely denied this claim, but have so far provided no evidence to the contrary, sparking furor in Congress, where momentum is building to impose sanctions on weapons imports to the kingdom. Media companies and corporate executives are pulling out of Saudi Arabia's annual investment conference, scheduled for late October, in droves.
Global Boycott Of Saudi Investment Summit Accelerates After Journalist's Disappearance - What the mass slaughter of civilians and even bombing a school bus full of children in Yemen couldn't do, the murder of one of their own did: a growing list of major media companies have declared they are pulling out of a high profile investment summit in Riyadh set to start on October 23rd over the alleged Saudi state murder of Washington Post columnist and Saudi "insider" critic Jamal Khashoggi. So far the list of media sponsors declaring their withdrawal from the Saudi-hosted Future Investment Initiative (FII) event include the Financial Times, Bloomberg, CNN and CNBC, as well as president of the World Bank, Jim Yong Kim, who indicated on Friday he would not be attending, according to The Guardian. Notably the event has been described as largely the brainchild of the kingdom's de facto ruler, crown prince Mohammed bin Salman, who is trying to draw international investments for his much-hyped and ambitious Vision 2030 project. But as of late Friday a burgeoning list of key names who say they will shun the summit are as follows: Arianna Huffington, Patrick Soon-Shiong (LA Times owner), CNBC anchor Andrew Ross Sorkin, Bob Bakish (Viacom chief executive), Dara Khosrowshahi (Uber’s chief executive), and the Economist’s editor-in-chief, Zanny Minton Beddoes, among others.
Ban Saudi Oil – Ilargi - According to Middle East Eye, Richard Branson, Andrew Ross Sorkin, Economist editor-In-chief Zanny Minton Beddoes, World Bank president Jim Yong Kim, New York Times, Financial Times, Uber CEO Dara Khosrowshah, Viacom CEO Bob Bakish and AOL founder Steve Case have all withdrawn from Saudi Arabia’s Future Investment Initiative conference, to be held this month in Riyadh. Branson also put a $1 billion investment plan on hold.Also, on Wednesday, former US energy secretary Ernest Moniz said that he had suspended his role on the board of Saudi Arabia’s planned mega business zone NEOM, to which he was named on Tuesday. The Harbour Group, a Washington firm that has been advising Saudi Arabia since April 2017, ended its $80,000 a month contract on Thursday. JPMorgan CEO Jamie Dimon is still scheduled to speak at the conference, as is Mastercard CEO Ajay Banga, but they won’t risk the damage to their reputations. All this is due, obviously, to the disappearance of Jamal Khashoggi, a former close aquaintance of the Saud family, who moved to the US and wrote for the Washington Post (how’s Amazon’s Saudi business, Jeff Bezos?) after falling out with the House of Saud. As the what someone actually labeled “unfolding diplomatic crisis” takes shape, there is really only one thing to say about these people and organizations: they are the worst group of hypocrites ever. And their reasons to boycott the conference must be questioned.Because before Khashoggi vanished they all apparently though it was quite okay to go feed at the Saud trough, despite the still ongoing slaughter of millions of people in the ‘war’ in Yemen. Which makes one suspect it’s not so much about their principles but about their public image. Donald Trump said he won’t stop weapons sales to the Saudi’s because they would just buy their arms from someone else, like Russia (it would be interesting to get Putin’s view on Khashoggi). And while Trump is completely wrong here, at least he’s not hypocritical about it. Not selling guns and tanks is by no means the most forceful action vs MBS and his dad, and not just because they can buy them elsewhere. What’s much stronger as a protest against what apparently happened to Khashoggi is to hit the Sauds where it hurts: in their wallet. That wallet is being filled by the sale of oil.Simply stop buying their oil. Tell Shell and Exxon and BP and Total to get the hell out of the country. It’s just that to top off the hypocrisy, the best -only?- replacement for Saudi oil is Russian oil, and the US and Europe are engaged in a long drawn out smear campaign to isolate Russia from their world order.
Khashoggi misinformation highlights a growing number of fake fact-checkers - Days after the reported murder of Washington Post contributor Jamal Khashoggi at the Saudi Consulate in Istanbul, misinformation has ballooned.Saudi media outlets reported a conspiracy theory that Khashoggi’s fiancée is fake in an apparent effort to discredit Turkish and American intelligence. Reuters fell for a fake news story about the firing of a Saudi general consul. Some accounts are promoting a nonsensical video from a guy who wears a strainer on his head. And the Saudi government itself has threatened anyone who spreads “fake news” online with lengthy prison terms and heavy fines.But perhaps the most illuminating bit of misinformation about the situation was a bogus Saudi fact-checking account.Called Middle East Guardians, the fake outlet — whose Twitter account had only existed since September — built on prior media reports and published a photo that it claimed had been altered to add in Khashoggi’s Turkish fiancée, Hatice Cengiz, after the fact. BuzzFeed News reported that, since Cengiz told the media she waited outside the Saudi Consulate for hours and Khashoggi never returned, she’s become a target for people claiming the whole incident is a smokescreen to make Saudi Arabia look bad. A photo forensics expert analyzed Middle East Guardians’ work and concluded it was bogus and Twitter later suspended the account. Aside from the elements of classic, breaking news-related misinformation, the entire debacle is a good example of how misinformers are increasingly posing as fact-checkers to dupe online audiences.
Killing Jamal Khashoggi Was Easy. Explaining It Is Much Harder Philip Giraldi - Getting to the bottom of the Jamal Khashoggi disappearance is a bit like peeling an onion. It is known that Khashoggi entered the Saudi Arabian Consulate in Istanbul on October 2nd to get a document that would enable him to marry a Turkish woman. It is also known, from surveillance cameras situated outside the building, that he never came out walking the same way he entered. The supposition is that the fifteen men, which may have included some members of Crown Prince Muhammad bin Salman’s bodyguard as well as a physician skilled in autopsies who was carrying a bone saw, constituted the execution party for Khashoggi. There are certain things that should be observed about the Turks, since they are the ones claiming that the disappearance of Khashoggi may have included a summary execution and dismemberment. The Turkish intelligence service, known by its acronym MIT, is very good, very active and very focused on monitoring the activities of foreign embassies and their employees throughout Turkey. They use electronic surveillance and, if the foreign mission has local employees, many of those individuals will be agents reporting to the Turkish government. In my own experience when I was in Istanbul, I had microphones concealed in various places in my residence and both my office and home phones were tapped. A number of local hire consulate employees were believed to be informants for MIT but they were not allowed anywhere near sensitive information. As Turkey and Saudi Arabia might be termed rivals if not something stronger, it is to be presumed that MIT had the Consulate General building covered with both cameras and microphones, possibly inside the building as well as outside, and may have had a Turkish employer inside who observed some of what was going on. Which is to say that the Turks certainly know exactly what occurred but are playing their cards closely to see what they can derive from that knowledge. The two countries have already initiated a joint investigation into what took place. Turkey’s economy is in free fall and would benefit from “investment” from the Saudis to create an incentive to close the book on Khashoggi. In other words, Turkey’s perspective on the disappearance could easily be influenced by Saudi money and the investigation might well turn up nothing that is definitive.
Audio Offers Gruesome Details of Jamal Khashoggi Killing, Turkish Official Says - NYT — Saudi agents were waiting when Jamal Khashoggi walked into their country’s consulate in Istanbul two weeks ago. Mr. Khashoggi was dead within minutes, beheaded, dismembered, his fingers severed, and within two hours the killers were gone, according to details from audio recordings described by a senior Turkish official on Wednesday.The government of Turkey let out these and other leaks about the recordings on Wednesday, as Secretary of State Mike Pompeo visited Ankara, in an escalation of pressure on both Saudi Arabia and the United States for answers about Mr. Khashoggi, a prominent Saudi dissident journalist who lived in Virginia and wrote for The Washington Post.The new leaks, which were also splashed in lurid detail across a pro-government newspaper, came a day after Mr. Pompeo and the Trump administration had appeared to accept at face value the promises of the Saudi rulers to conduct their own investigation into Mr. Khashoggi’s disappearance — regardless of Turkish assertions that senior figures in the royal court had ordered his killing.As the Saudis and the Americans tried to put the crisis behind them, the brutality described in the leaks served as a reminder of why Mr. Khashoggi’s disappearance has triggered an international backlash more severe than countless mass killings or rights violations. Mr. Trump, for his part, pushed back by questioning the Turkish claims, telling reporters on Wednesday that the United States had asked for copies of any audio or video evidence of Mr. Khashoggi’s killing that Turkish authorities may possess — “if it exists.” “I’m not sure yet that it exists, probably does, possibly does,” Mr. Trump told reporters in the Oval Office, adding: “I’ll have a full report on that” when Mr. Pompeo returned. “That’s going to be the first question I ask.”
‘Sawed while still alive’? Gruesome ‘taped’ details of Khashoggi’s alleged murder cause media stir - After a Turkish daily said it obtained a recording from the Saudi consulate in Istanbul related to journalist Jamal Khashoggi, a London-based outlet published an ultra-graphic description of his alleged murder and dismemberment. A three-minute audio recording of Khashoggi’s said to reveal what happened to him at the Saudi consulate has been leaked to the Turkish daily Sabah, but the paper has yet to release it. It is said to have been recorded by the journalist’s Apple Watch. But the London-based Middle East Eye claims to know what’s on the tape citing a source. It alleges the journalist was dragged into a study, where he was dismembered with a bone saw while he was still alive. The source also cites alleged witnesses hearing harrowing screams which only stopped, according to the claims, when the journalist was drugged with an unknown substance. Salah Muhammad al-Tubaigy, the head of forensic evidence in the Saudi general security department, was singled out, as he can reportedly be heard in the recording urging his colleagues to listen to music while dismembering Khashoggi’s body with a bone saw.
Suspected member of Khashoggi ‘hit-team’ dies in mysterious ‘traffic accident’ in Saudi Arabia -- A member of the 15-man team suspected in the disappearance of Saudi journalist Jamal Khashoggi has died in an accident back in Saudi Arabia, according to Turkish media, prompting suspicion of a cover up. Meshal Saad al-Bostani, a 31-year-old lieutenant in the Saudi Royal Air Force, is believed to have died in a 'suspicious car accident' in the Saudi capital Riyadh, sources told the Turkish Yeni Safak - the one that earlier covered the shocking details of the murder. A still taken from a Turkish police CCTV video, released by the Sabah newspaper, identified Bostani as he passed through Istanbul's Ataturk airport on October 2.He, along 14 other Saudi citizens allegedly arrived and left Turkey on the same day and are alleged by Turkish police to have tortured and murdered Khashoggi after he entered the Saudi consulate.The unconfirmed death of Bostani has already prompted accusations on social media that a cover up was underway by those who orchestrated Khashoggi's disappearance.In the Name of Allah, I posted about 2 days ago that members of that hit team would soon be killed. --They need to go to the Turkish consulate, local news media INTERPOL for safety (Then tell the truth about Saudi Crown Prince Mohammed Bin Salman plot)— Muhammad (@jamiat33) October 18, 2018 Saudi Arabia isn't safe for anyone, not even their own citizens. I urge everyone to leave the country.
The greatest embarrassment’: Inside the kingdom, Saudis rattled by handling of Jamal Khashoggi case The dissident Saudi journalist who disappeared after entering his nation’s consulate in Istanbul may have run afoul of the Saudi leadership over family business dealings rather than his public criticism of the kingdom, sources have told The Independent.Jamal Khashoggi, scion of a powerful Saudi family, was caught up in the paranoid machinations of Saudi Crown Prince Mohammad bin Salman, in his zeal to consolidate his power, eliminate rival royals, and seize the assets of his country’s billionaires to finance his ambitious vision for the kingdom, according to two sources.“It was decided that Jamal no longer had protection,” said one source, a businessperson based abroad who said he was told by a senior Saudi royal family member that the prince wanted to question Mr Khashoggi over whether he was collaborating with powerful royal factions seeking to weaken his rule. “There is no middle ground in the court now. You are either friend or enemy. For Jamal, he got caught in the middle.” A US-based analyst with extensive ties to the kingdom cited Saudi sources as saying that Mr Khashoggi’s disappearance was rooted not in what he had written or nuanced public criticism of the Saudi leadership but in his proximity to power. “It was not about his position as a journalist and what he was saying, but his position in broader Saudi society,” the analyst said, speaking on condition of anonymity in order to continue being able to travel to Saudi Arabia. The global uproar over the alleged Saudi operation against Mr Khashoggi has rattled the kingdom, insiders say, spurring talk of a leadership crisis within the upper echelons of power. Saudi authorities have denied involvement in any attempt to harm Mr Khashoggi, and many Saudis say they feel besieged, with both supporters and critics of the royal family suddenly fearful for the future and reputation of the kingdom.
Killing Jamal Khashoggi Was A Saudi Warning Shot - Long before Jamal Khashoggi disappeared, Saudi Arabia had a history of cracking down on dissidents. Little tolerance exists inside the kingdom for activism and dissent. Even abroad, critics have not been safe: Saudi princes critical of the regime have gone missing while living in Europe.But Khashoggi was not an ordinary dissident. He had started an advocacy group called Democracy for the Arab World Now, which aimed to bring together reformer intellectuals and political Islamists in pursuit of building democracy in the Arab world. Khashoggi also had links to Muslim Brotherhood, a transnational Islamist movement that has had tremendous influence in the region but one that Saudi Arabia regards as a regional threat and terrorist organization. His political engagement had become especially alarming for Saudi crown prince Mohammed bin Salman, given Khashoggi’s once very close relations to the royal family and his in-depth knowledge of issues and networks within the kingdom. Khashoggi had become a “dissident” only recently, but he did so with a level of ambition that triggered Mohammed bin Salman insecurity. The crown prince, known as MBS, tried and failed to bring Khashoggi back to Saudi Arabia from the U.S. Khashoggi expressed his distrust of the Saudi authorities, and continued his activism. Khashoggi had become a 'dissident' only recently, but he did so with a level of ambition that triggered Mohammed bin Salman’s insecurity.So the crown prince, it seems, had him tortured and killed. The message was clear: Anyone who challenges the Saudi regime and tries to create alternatives to the current Saudi rule will be punished in the harshest way possible. It is a stark warning to dissident members of the Saudi diaspora and their supporters. Given the backlash from the business world ― which probably will intensify as gruesome details of the violence inflicted on Khashoggi trickle to the press ― MBS will likely be more cautious, at least in short-term. In long term, though, businesses and policymakers will need to signal consistently ― in public and in private ― that, despite the potential damage that sanctions on Saudi Arabia might do to the global economy, there are values that the international community is not ready to sacrifice. The challenge for the international community is to decide what those values are.” Indeed.
Saudi Journalist’s Disappearance Reshapes Mideast Power Balance —Just over two weeks since the disappearance of Saudi journalist Jamal Khashoggi inside the kingdom’s Istanbul consulate, the fallout is threatening to reshape the balance of power in the Middle East and impair U.S. leverage in the region. Turkish officials say Mr. Khashoggi was killed and dismembered inside the consulate shortly after he entered on Oct. 2, stirring global revulsion and widespread condemnation of Saudi Arabia. The Saudis said the journalist left the compound unharmed the same day, but provided no evidence. The biggest geopolitical danger so far has been to the stability of the strategic alliance between the U.S. and Saudi Arabia. Trump administration officials have been careful to stress the importance of ties in recent days, but any lasting damage would be a serious setback for Saudi plans to lead the Middle East, and for U.S.-Saudi efforts to contain Iran. Israel’s strategic interests—such as weakening Iran—would also be under threat. The main winner appears to be Turkey’s President Recep Tayyip Erdogan, who has seized the moment to improve relations with Washington at a critical juncture, burnish his country’s international image—and challenge Saudi regional aspirations. Turkey “is the only country that can lead the Muslim world,” he declared this week. Iran, meanwhile, had the luxury of sitting back and enjoying how its main adversary appeared to sabotage itself just as international criticism has mounted over civilian casualties in the Saudi-led military campaign in Yemen. “Saudi Arabia is now on the back foot. The brewing criticism over Yemen has exploded with the Khashoggi tragedy,” “Riyadh now has to spend capital to recover from these crises instead of pursuing other goals, domestic and regional.” President Trump has stopped short of blaming the Saudis for Mr. Khashoggi’s death until an investigation is completed, and repeatedly highlighted the importance of U.S. weapons sales to the kingdom. Even if the weapons contracts survive the controversy, the image of Saudi Arabia and especially of its young crown prince, Mohammed bin Salman, has taken a hit in Washington that could be irreparable.
Saudi regime admits Khashoggi was killed in its Istanbul consulate --The Saudi Arabian monarchial regime finally admitted late Friday that dissident Saudi journalist and Washington Post correspondent Jamal Khashoggi was killed on October 2 inside its consulate in Istanbul, Turkey. The acknowledgment comes after more than two weeks in which Saudi officials insisted that Khashoggi left the consulate unharmed and that they had no knowledge of his whereabouts.The admission that Khashoggi was in fact killed was presented by the country’s chief public prosecutor in a statement delivered on national television. It was made in the face of detailed reports by Turkish investigators that a 15-man team of Saudi intelligence agents, with close ties to the heir to the throne and de facto ruler Crown Prince Mohammed bin Salman, was flown into Istanbul to assassinate Khashoggi. The journalist was viewed with hostility by the Saudi regime because of his criticisms of the crown prince and the murderous US-backed war being waged by Saudi Arabia in Yemen.Khashoggi had visited the consulate on September 28 to finalise divorce proceedings from his Saudi wife so he could marry his Turkish fiancée. He returned on October 2 to pick up documents.Turkish officials say that audio and video recordings in their possession show that the journalist was seized by the hit squad and brutally tortured and murdered, after which his body was dismembered and taken out of the building in suitcases by the Saudi operatives. The remains may have been flown to Saudi Arabia, though Turkish police have been conducting searches in forested areas on the outskirts of Istanbul. The alternative version of events advanced by the Saudi regime is a fantastic and brazen attempt to substantiate its absurd claim, echoed by the Trump administration, that “rogue killers” carried out the murder without the knowledge of the crown prince or other key figures in the Saudi ruling elite. US Secretary of State Mike Pompeo held meetings with Saudi King Salman and the crown prince on Tuesday, during which they agreed that an “accounting” of what had happened to Khashoggi would be presented.
Saudi Arabia fires 5 top officials, arrests 18 Saudis, saying Khashoggi was killed in fight at consulate — The Saudi government acknowledged early Saturday that journalist Jamal Khashoggi was killed inside the Saudi Consulate in Istanbul, saying he died during a fistfight, but the new account may do little to ease international demands for the kingdom to be held accountable. The announcement, which came in a tweet from the Saudi Foreign Ministry, said that an initial investigation by the government’s general prosecutor found that the Saudi journalist had been in discussions with people inside the consulate when a quarrel broke out and escalated to a fatal fistfight. The Saudi government said it fired five top officials and arrested 18 other Saudis as a result of the initial investigation. Those fired included Crown Prince Mohammed bin Salman’s adviser Saud al-Qahtani and deputy intelligence chief Maj. Gen. Ahmed al-Assiri. The announcement marks the first time that Saudi officials have acknowledged that Khashoggi was killed inside the consulate. Ever since he disappeared on Oct. 2 while visiting the mission, Saudi officials have repeatedly said that he left the consulate alive and that they had no information on his whereabouts or fate. He had gone to the consulate to obtain a document he needed for his upcoming marriage.
Saudi Royal Family Considering Replacement For Crown Prince bin Salman- Report - The major French daily Le Figaro on Thursday published a bombshell story which reports the Saudi royal family is actively considering a replacement to crown prince Mohammed bin Salman (MbS) as next in line to succeed his father King Salman as the kingdom finds itself under the greatest international pressure and scrutiny it's faced in its modern history over the murder of journalist Jamal Khashoggi — widely believed to have been killed on orders of MbS himself. The Li Figaro report's unnamed diplomatic source says the Allegiance Council, which is historically the body responsible for approving the order of succession to the throne, is currently meeting in secret (translation from the French): For several days, the Allegiance Council for the ruling Saudi family is meeting in the utmost discretion, says a diplomatic source to Le Figaro in Paris. The information has been confirmed by a Saudi Arabian contacted in Riyadh. Composed of a delegate representing each of the clans — at least seven — of the royal family, this body, responsible for inheritance problems, examines the situation created by the disappearance, still unresolved, more than a fortnight ago, of the journalist dissident Jamal Khashoggi at the Saudi consulate in Istanbul. The report in France's oldest top three national newspapers further suggests the ruling family is seeking to replace the 33-year old MbS with his much less ambitious and more predictable brother, Prince Khalid bin Salman.
New Saudi airstrike hits bus carrying civilians in Yemen - At least 17 people were killed and 20 injured in a Saudi-led airstrike on Yemen's Hodeida on Saturday. The attack presumably targeted a Houthi rebel checkpoint in the city's Jebel Ras area, but instead destroyed a bus full of civilians, medical sources said. Other reports said another bus was also hit during the bombing."The final toll is not determined yet because body parts of many victims are mixed with each other," said spokesman for the rebel-controlled Health Ministry Youssef al-Hadari.Many of the wounded were reported to be in critical condition. Witnesses cited by the DPA news agency said that the victims were attempting to flee the fighting in the port city, where the forces allied with the Saudi coalition have been trying to dislodge the rebels since June. Hodeida plays a key role for supplying food to Yemen civilians, as 80 percent of all imports and aid enter the country through its port.A coalition spokesman said that the Saudi-led forces would probe the incident. A similar Saudi-led airstrike in August killed 51 people, including 40 children who were taking a bus for a school trip. The attack triggered global outrage and accusations of a war crime. While Riyadh eventually acknowledged "mistakes" over the attack, coalition spokesman Turki al-Malki later denied it was a war crime and disputed numerous sources who stated the victims were children.
Yemen could be 'worst famine in 100 years' – BBC - The United Nations is warning that 13 million people in Yemen are facing starvation. It's calling on the military coalition, led by Saudi Arabia, to halt air strikes which are killing civilians, and contributing to what the UN says could become "the worst famine in the world in 100 years". Yemen's civil war began three years ago, when Houthi rebels, backed by Iran, seized much of the country, including the capital Sanaa. Saudi Arabia, backed by the US, the UK and France, is using air strikes and a blockade - in support of the internationally-recognised government. At least 10,000 people have been killed in the conflict and millions are displaced. Our international correspondent Orla Guerin, producer Nicola Careem and cameraman Lee Durant sent this report from Sanaa. It contains some distressing scenes.
After UAE 'Murder Squad' Revelations, How Many More Private US Hit Teams Are Under Gulf Regimes- “There was a targeted assassination program in Yemen. I was running it. We did it” — confessed Hungarian Israeli security contractor Abraham Golan who heads the Delaware-based military contractor Spear Operations Group to BuzzFeed News as part of a lengthy new tell-all exposing an outrageous story of US covert ops gone wild. Except the bombshell report is not exactly about covert ops, but about the even less regulated underbelly and shady world of American special forces and intelligence operatives going "free agent" and contracted by uber-wealthy American Gulf allies who are building their own private armies to operate off the books assassination teams. "The revelations that a Middle East monarchy hired Americans to carry out assassinations comes at a moment when the world is focused on the alleged murder of journalist Jamal Khashoggi by Saudi Arabia." — BuzzFeedNow that the world is finally waking up to the truly ruthless and murderous machinations of America's favorite "oil and gas" Gulf autocratic sheikdoms, especially in light of the newly emerged grisly details of journalist Jamal Khashoggi's death and dismemberment by a Saudi assassination squad, we must ask: are the new BuzzFeed UAE 'kill team' revelations but the tip of the iceberg? Surely there are more such ex-Special Forces groups flush with Gulf cash and patronage out there with a license to kill? The stunning details of the BuzzFeed investigation suggest so — this may not be an uncommon phenomenon. EXCLUSIVE: The United Arab Emirates has hired US ex-special ops soldiers to carry out targeted killings in war-torn Yemen https://t.co/rb6o8coP6S Green Beret, Navy SEAL, and CIA paramilitary veterans were hired under the aegis of Spear Operations Group to become what BuzzFeed describes as the private "murder squad" for the United Arab Emirates (UAE) and its de facto ruler, Crown Prince Mohammed bin Zayed Al Nahyan (MBZ). Starting in 2015 the UAE sent a group of about a dozen mostly American private contractors to Yemen to conduct targeted killings of prominent clerics and political figures who had run afoul crown prince MBZ in the war-torn country, where the Emirati military has played a lead role in the ongoing Saudi coalition bombing campaign.
As Assad recovers, Syria is returning to stability -- I escaped late last month to Syria, where children were returning to school after the summer holidays. Large tracts of the country have recently been liberated from the control of jihadi groups, meaning that in some places children are going back to school for the first time in five years. At Sinjar elementary school in Idlib province, I found the local headmaster painting the school sign. Five years ago rebels gave him the choice of closing down or being killed. He was confined to his house while the school buildings were converted into an arsenal. He took me into a room where an alert, motivated, mixed class of about 25 children spoke of their dreams of becoming doctors, engineers and teachers. Just 150 yards away, the jihadi emir, known as Al Yemeni, had forced people to watch public beheadings. Locals said there had been 80 beheadings during half a decade of jihadi rule. Schooling did not cease in all rebel areas. A 35-year-old headmistress in the south Damascus suburb of Douma told me her school had continued to operate under the control of the Saudi-backed rebel group Jaish al-Islam. However her students, girls between 13 and 16 years old, were forced to wear the hijab and banned from clapping their hands and taking public exams. Lessons in music, art and sport were banned. I was supplied with a press minder. Fadi was a travel guide before the war but had to close his business when it started. He went to work in the oilfields in Deir Ezzor, but was kidnapped by Free Syrian Army fighters. They had already beheaded three of his companions when he talked his way out of trouble, claiming a nonexistent acquaintance with a local al Qaeda warlord. Fadi and I went to Mhardeh, a Christian town to the west of Idlib province. A car mechanic told us how his wife and three children had been killed by a rocket attack a few weeks ago. He was broken: ‘I have lost all my feelings.’ Mhardeh is surrounded by rebel villages which have pounded it with artillery fire for five years. The devastation is unbelievable. Think Dresden, Stalingrad. Much worse than the Blitz. Miles of total destruction. In the old city centre of Homs, I find a family living deep among the ruins. They returned two months ago, six years after being driven out by a rebel attack in which their daughter was killed. Kemal, a security guard at the bus station, looked round his tiny home, walls smashed by shells and wide open to the elements, as his wife provided coffee. He said: ‘There is nothing sweeter than my own house. I am the most happy man in the world because I am back home.’
Israel orders immediate halt of fuel deliveries to Gaza - Israel's Defence Minister Avigdor Lieberman has ordered an immediate halt to fuel deliveries headed to the besieged Gaza Strip in response to what he said were attacks against Israeli soldiers and civilians, his office announced on Friday. The announcement on Friday follows the killing of six Palestinians by Israeli forces during the ongoing March of Return protests. "Israel will not tolerate a situation in which fuel tankers are allowed to enter Gaza on the one hand, while terror and violence are used against [Israeli] soldiers and Israeli citizens on the other," the statement from Lieberman's office read. Qatari-bought fuel began arriving on Tuesday in a bid to alleviate the humanitarian situation in the besieged enclave and prevent any escalation in Israeli-Palestinian violence. "The Qatari fuel to the Gaza strip's power plant today is aimed at partially improving electricity [supply] in Gaza," Hamas spokesman Hazem Qassem said at the time. The fuel deliveries were aimed at easing months of protests along the separation fence east of Gaza, which has been under a crippling Israeli and Egyptian blockade for more than a decade. Last week, Lieberman's office announced a further reduction to the Gaza's fishing zone, from nine nautical miles to six. Lieberman said the measure was in response to "riots" along the fence dividing Israel and Gaza and a midweek beach protest in which fishing boats and demonstrators gathered at the northwest end of the Gaza Strip. The United Nations has warned that Israel's 11-year blockade of the strip has resulted in a "catastrophic" humanitarian situation. Under the UN-brokered deal, Qatar pays for the fuel which is then delivered through Israel with UN monitoring, a diplomatic source said. A Qatari official, speaking to Reuters news agency on Sunday, said Doha planned to help with Gaza's power crisis "at the request of donor states in the UN, to prevent an escalation of the existing humanitarian disaster".
Israeli soldiers, bulldozers storm Khan Al-Ahmar – PNN: A large Israeli army force stormed the Khan Al-Ahmar on Monday morning, accompanied by three military bulldozers. The residents of the area and the Popular Resistance committee confronted the raid, during which IOF arrested one of the young men who stood up to the bulldozers of the occupation. The military vehicles of the occupation army were deployed on the main road between Jericho and Jerusalem, where the village is located, and intensified their presence in the area. This morning as well, settlers of Kfar Adumim flooded the village with sewage water. It is noteworthy that the settlers flooded the village’s land a few days ago with sewage as well, which caused great harm to citizens and their livestock.
Israeli forces hold 100 Palestinian athletes inside stadium -- Heavily armed Israeli forces held some 100 athletes, on Wednesday evening, at a Palestinian stadium in the al-Khader village in the southern occupied West Bank district of Bethlehem. Locals said that Israeli forces stormed the stadium and banned Palestinian players and administers, including coaches, who represent several sports teams, from leaving the premises after their training session ended. Israeli forces threatened players and administers at gunpoint, searched and interrogated some of the players.
Israel’s 50-Year Time Bomb The Trump White House and the Netanyahu government are fostering an extraordinary time bomb between Israel and Palestine in the name of “peace and progress,” warned a recent report by the International Monetary Fund (IMF). The report unsurprisingly said that “deepening rifts between key stakeholders and surging violence in Gaza further imperil prospects for peace.” While economic and strategic polarization is steadily deepening between the two sides, the “peace initiatives” of the Trump White House are undermining half a century of American diplomacy and pushing the region closer to an abyss. In the past, the Netanyahu government has vehemently opposed all parallels with South African apartheid. Unfortunately, new data suggests that under apartheid South African blacks had more to hope for than Palestinians today. Last year, Palestinian living standards were about 7.3 percent ($2,494) of the Israeli level ($34,135). After more than two decades of new wars and friction, terrorism and restrictions, the catch-up has amounted to less than a percentage point. Let’s set aside political debates about the causes and only focus on economic facts; i.e., changes in income polarization. And let’s compare the last two decades of apartheid South Africa with the past two decades between Israel and Palestinians. In the mid-70s, black South Africans’ annual per capita income relative to white levels was about 8.6 percent; that is, two percent higher relative to the Palestinian level vis-a-vis the Israelis. As the apartheid came to an end in a series of steps that led to the formation of a democratic government in 1994, black South Africans’ annual per capita income relative to the whites climbed to almost 14 percent whereas the comparable Palestinian level remained only half of that figure last year (Figure b).
All-Out War Coming- Record Number Of Israeli Tanks Amassed On Gaza Border - After months of violence and widespread protests along the Israeli-Gaza border fence, Israeli is quickly ramping up its military presence with a show of force a day after launching deadly airstrikes on Gaza in response to what officials say were two rockets fired from the strip earlier this week. Reuters has reported some 60 Israeli tanks and armored personnel carriers now stationed at a deployment area along the border as of Thursday, which is the largest reported mustering of forces since the 2014 war between Israel and Hamas. Special UN envoy for the Middle East, Nickolay Mladenov, told the UN Security Council on Thursday that "we remain on the brink of another potentially devastating conflict, a conflict that nobody claims to want, but a conflict that needs much more than just words to prevent".One of the rockets launched Wednesday reportedly landed in the sea, however, Israeli officials said it came dangerously close to densely populated Tel Aviv. Hamas, for its part, denied responsibility for the rocket launches and said it would investigate. Meanwhile Israel retaliated in Wednesday airstrikes on Gaza, which reportedly killed at least one Palestinian while injuring several more. Israeli Prime Minister Benjamin Netanyahu further convened his security cabinet on the same day of the Gaza rocket launches and promised to take "very strong action" if such attacks continued.
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