oil imports at a 22 year low, refining slowest in 16 months; global oil production down a million barrels per day..

oil prices pushed to a three month high this week, largely on the news that OPEC had met its production cut quota in January, and was cutting oil output even further in February...after falling 4.6% to $52.72 a barrel on global trade and economic concerns last week, prices o​f US crude contracts for March delivery fell 31 cents to $52.41 on Monday, as concerns about the lack of progress in U.S.-China trade talks overshadowed price support from OPEC-led supply curbs... however, oil prices jumped to over $54 a barrel during early trading on Tuesday on an OPEC report showing they had sharply cut output in January, but faded near the close to end at $53.10 a barrel, a​n​ increase​ ​of 69 cents on the day....oil prices again rallied on the OPEC report early Wednesday, trading as high as $54.60 a barrel, but prices reversed again after the EIA reported US crude oil inventories rose to their highest since November 2017, with March oil prices ending up 80 cents, or 1.5 percent, at $53.90 a barrel...oil prices then rose on the OPEC output cuts for a third day on Thursday, but the gains were capped after a report showing the steepest decline in U.S. retail spending since 2009 heightened fears of a economic slowdown, with oil prices finishing 51 cents higher at $54.41 a barrel...however, an outage at Saudi Arabia’s largest offshore oilfield and the announcement that the Saudis would cut over half a million barrels per day more in March than the OPEC deal called for sent prices surging on Friday, with US crude rising $1.18 or 2.2% to close the week at a 3-month high of $55.59 a barrel, 5.4% higher than the previous Friday​'s​ close...at the same time, the April Brent crude oil contract price rose $1.68 on Friday to settle at $66.25 per barrel, ​finishing with a week-over-week gain of $4.15 a barrel, or 6.7%, propelled by a Russian pledge to speed up their production cuts in conjunction with the OPEC effort....

natural gas prices, meanwhile, eked out a small increase, after a cold blast at the end of the week lifted prices back into the plus column...after fall​ing ​15.1 cents to an eleven month low of $2.583 per mmBTU last week, natural gas contracted for March delivery jumped 5.9 cents on Monday, and another 4.6 cents on Tuesday, on forecasts for colder weather at the end of February...however, gas gave up those gains and fell 11.3 cents on Wednesday, when the weather models flipped back to warmer, with significantly more warm​th in the East in the 8 to 14 day forecast...after falling two tenths of a cent on a slightly bearish storage report on Thursday, natural gas prices rebounded 5.2 cents to close the week at $2.625 mmBTU, as weather models added back demand and LNG exports rose, tightening up supply balances...

the natural gas storage report for the week ending February 8th from the EIA indicated that the quantity of natural gas held in storage in the US fell by 78 billion cubic feet to 1,882 billion cubic feet over the week, which meant our gas supplies ​ended the period 30 billion cubic feet, or 1.6% below the 1,912 billion cubic feet that were in storage on February 9th of last year, and 333 billion cubic feet, or 15.0% below the five-year average of 2,215 billion cubic feet of natural gas that have typically been in storage as of the 2nd weekend in February....this week's 78 billion cubic feet withdrawal from US natural gas supplies was a bit below analyst's consensus expectation that 85 billion cubic feet of stored gas would be needed, and was quite a bit less than the average of 160 billion cubic feet of natural gas that have been withdrawn from US gas storage during the same winter week over the last 5 years...as you can see on the temperature map from the EIA below, the densely populated Midwest, East, and South Central regions of the country were all warmer than normal during the period, and hence saw below normal withdrawals of natural gas from storage...however, it was cooler than normal in the Pacific states, where 17 billion cubic feet of gas were needed from storage, against their normal draw of 9 billion cubic feet for the first full week of February, and hence their supply deficit increased to 30.5% below the normal for this time of year...the Mountain states also saw an above normal draw of 10 billion cubic feet, against their normal 7 billion cubic feet withdrawal, and saw their natural gas supplies fall to 29.6% below normal for the 2nd weekend in February....

The Latest US Oil Supply and Disposition Data from the EIA

this week's US oil data from the US Energy Information Administration, reporting on the week ending February 8th, indicated a large drop in our refinery throughput, a corresponding large drop in our oil imports, a modest drop in our oil exports, and a modest addition of surplus oil to our commercial supplies of crude oil ...our imports of crude oil fell by an average of 936,000 barrels per day to an average of 6,210,000 barrels per day, ​a 22 year low, ​after rising by an average of 63,000 barrels per day the prior week, while our exports of crude oil fell by an average of 506,000 barrels per day to an average of 2,364,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,846,000 barrels of per day during the week ending February 8th, 430,000 fewer 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 estimated to be unchanged at a record 11,900,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from wells totaled an average of 15,746,000 barrels per day during this reporting week...

meanwhile, US oil refineries were using 15,768,000 barrels of crude per day during the week ending February 8th, 865,000 fewer barrels per day than the amount of oil they used during the prior week, while over the same period 519,000 barrels of oil per day were reportedly being added to the oil that's in storage in the US....thus, 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 541,000 fewer barrels per day than the oil that was added to storage plus what refineries reported they used during the week....to account for that disparity between the supply of oil and the disposition of it, the EIA inserted a (+541,000) 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)....  

since our oil imports have now dropped to the lowest level since the first week of 1997, we'll include a graph of that ​oil ​import history below...note, however, that there were extenuating circumstances ​impacting​ this week's imports; first, the embargo of oil imports from Venezuela reduced deliveries to the Gulf Coast a​s​ ​oil tankers in transit remained offshore, and secondly, the shutting down of the Keystone pipeline due to a leak near St. Louis stopped its oil deliveries from Canada...both of those ​supply ​interruptions also impacted the availability of heavy sour crude to those US oil refineries that are optimized for it...

further details from the weekly Petroleum Status Report (pdf) indicate​d​ that the 4 week average of our oil imports fell to an average of 7,158,000 barrels per day last week, now 11.2% less than the 8,063,000 barrel per day average that we were importing over the same four-week period last year.... the 519,000 barrel per day increase in our total crude inventories was all added to our commercially available stocks of crude oil, while the oil stored in our Strategic Petroleum Reserve remained unchanged....this week's crude oil production was reported unchanged at 11,900,000 barrels per day because the rounded estimate for output from wells in the lower 48 states was unchanged at 11,400,000 barrels per day, and because Alaska's production was also unchanged at 498,000 barrels per day, ie not enough to change the rounded national total...last year's US crude oil production for the week ending February 9th was at 10,271,000 barrels per day, so this week's rounded oil production figure was 15.9% above that of a year ago, and 41.2% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 85.9% of their capacity in using 15,768,000 barrels of crude per day during the week ending February 8th, down from the prior week's 90.7% of capacity, and the lowest capacity utilization rate in 16 months....the 15,768,000 barrels per day of oil that were refined this week was also the lowest in 16 months, 2.4% below the 16,162,000 barrels of crude per day that were being processed during the week ending February 9th, 2018, when US refineries were operating at 89.8% of capacity... 

with the big drop in the amount of oil being refined, the gasoline output from our refineries was also lower, falling by 237,000 barrels per day to 9,619,000 barrels per day during the week ending February 8th, after our refineries' gasoline output had decreased by 48,000 barrels per day the prior week....but even with the decrease in this week's gasoline output, our gasoline production was still a bit higher than the 9,592,000 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 537,000 barrels per day to 4,764,000 barrels per day, after that output had increased by 102,000 barrels per day the prior week....with that decrease, this week's distillates production was almost 1.0% below the 4,811,000 barrels of distillates per day that were being produced during the week ending February 9th, 2018.... 

even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week rose by 408,000 barrels to 258,301,000 barrels by February 8th, after rising by 513,000 barrels over the prior week....our gasoline supplies rose this week mostly because the amount of gasoline supplied to US markets fell by 425,000 barrels per day to 8,648,000 barrels per day, after decreasing by 491,000 barrels per day the prior week, while our imports of gasoline fell by 168,000 barrels per day to 457,000 barrels and as our exports of gasoline rose by 64,000 barrels per day to 959,000 barrels per day....having set a record high three weeks ago, our gasoline inventories are still at a seasonal high for the second weekend of February, 3.7% higher than last February 9th's level of 249,073,000 barrels, and roughly 4% above the five year average of our gasoline supplies ​at this time of the year...

even with the increase in our distillates production, our supplies of distillate fuels still managed to increase for the 7th time in twenty-one weeks, rising by 1,087,000 barrels to 140,200,000 barrels during the week ending February 8th, after our distillates supplies had decreased by 2,257,000 barrels over the prior week...our distillates supplies increased this week because the amount of distillates supplied to US markets, a proxy for our domestic demand, fell by 906,000 barrels per day to 3,767,000 barrels per day, not surprising considering the reduced demand for heat oil, while our exports of distillates rose by 36,000 barrels per day to 1,265,000 barrels per day, and while our imports of distillates fell by 21,000 barrels per day to 438,000 barrels per day...but even with this week's increase, our distillate supplies are still 0.8% below the 141,367,000 barrels that we had stored on February 9th, 2018, and remain roughly 2% below the five year average of distillates stocks for this time of the year...

finally, with the cutback in refining and falling exports​ more than offsetting falling imports​, our commercial supplies of crude oil in storage increased for the 5th time in the past 11  weeks, rising by 3,633,000 barrels over the week, from 447,207,000 barrels on February 1st to 450,840,000 barrels on February 8th ...with weekly increases now in 15 out of the last 21 weeks, our crude oil inventories are roughly 6% above the five-year average of crude oil supplies for this time of year, and nearly 30% above the 10 year average of crude oil stocks for the second weekend of February, with the disparity between those figures arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories have mostly been rising since this past Fall, after ​generally ​falling until then through most of the previous year and a half, our oil supplies as of February 8th were thus 6.8% above the 422,095,000 barrels of oil we had stored on February 9th of 2018, while still remaining 13.0% below the 518,119,000 barrels of oil that we had in storage on February 10th of 2017, and 4.6% below the 472,823,000 barrels of oil we had in storage on February 12th of 2016...    

OPEC's Monthly Oil Market Report

with the news of OPEC's production cuts moving the oil markets​ this week​, we're next going to review OPEC's February Oil Market Report (covering January OPEC & global oil data), which was released on Tuesday of this past week, and which is available as a free download, and hence it's the report we check for monthly global oil supply and demand data...the first table from this monthly report that we'll look at is from the page numbered 57 of that report (pdf page 67), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate...for all their official production measurements, OPEC uses an average of estimates from six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as an impartial adjudicator as to whether their output quotas and production cuts are being met, to thus resolve any potential disputes that could arise if each member reported their own figures...

as we can see on this table of official oil production data, OPEC's oil output dropped by 797,000 barrels per day to 30,806,000 barrels per day in January, from their revised December production total of 31,603,000 barrels per day...however that December figure was originally reported as 31,578,000 barrels per day, so their production for January was effectively a 772,000 barrel per day decrease from the previously reported figures (for your reference, here is the table of the official December OPEC output figures as reported a month ago, before this month's revisions)...

as we can tell from the far right column on the table above, most of the OPEC member​s​ contributed output cutbacks to this month's production reduction, led by a the 350,000 barrel per day drop in the oil output from Saudi Arabia, the 146,000 barrel per day drop in the oil output from the United Arab Emirates, and the 90,000 barrels per day drop in the oil output from Kuwait....except for Iraq and Nigeria, the oil output from OPEC members as shown above is already pretty close to the output allocations assigned to each member after their December 7th meeting, when they agreed to cut 800,000 barrels per day as part of a 1.2 million barrel per day cut agreed to with Russia and other oil producers...this can be seen in the table of OPEC production allocations we've included below:

the above table came from a February 6th post on Saudi cuts and OPEC allocations at S&P Global Platts, which has more details: the column of numbers shows average daily production quota in millions of barrels of oil per day for each of the OPEC members for the first 6 months of this year, as was agreed to at their December 2018 meeting...note that Venezuela and Iran, who's oil exports are being sanctioned by the Trump administration, and Libya, which has been beset by disruptive civil strife, are exempt from any production quotas, yet their output also continues to fall...

the next graphic we'll include shows us both OPEC and world oil production monthly on the same graph, over the period from February 2017 to January 2019, and it comes from page 58 (pdf page 68) of the February OPEC Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale...    

OPEC's preliminary estimate indicates that total global oil production fell by 1.03 million barrels per day to 99.32 million barrels per day in January, after December's total global output figure was revised up by 330,000 barrels per day from the 100.02 million barrels per day global oil output that was reported a month ago, as non-OPEC oil production fell by a rounded 230,000 barrels per day in January after that revision, with decreased oil output from Canada, the former Soviet Union, and China the major reasons for the non-OPEC production​ ​decrease....OPEC also reported that global oil output during January was 1.73 million barrels per day below global oil output in January a year ago, but the February 2018 OPEC report online (pdf) indicated January 2018 global output was at 97.66 million barrels per day, so we have to assume that they should have reported that global oil production in January was 1.73 million barrels per day greater than the revised global output in January a year ago...after the big January decrease in OPEC's output, their January oil production of 30,806,000 barrels per day represented just 31.0% of what was produced globally during the month, down from the 31.6% share they reported for December....OPEC's January 2018 production was reported at 32,302,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year, excluding Qatar from last year's total and new member Congo from this year's, are now producing 1,210,000 fewer barrels per day of oil than they were producing a year ago, with a 496,000 barrel per day decrease in output from Venezuela and a 1,075,000 barrel per day decrease in output from Iran from that time more than offsetting the production increases of 236,000 barrels per day from the Saudis, 214,000 barrels per day from the Emirates, and 234,000 barrels per day from Iraq...   

however, despite the 1.03 million barrels per day decrease in global oil output we've seen during January, we still had a modest surplus in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us... 

the table above comes from page 31 of the February OPEC Monthly Oil Market Report (pdf page 41), and it shows regional and total oil demand in millions of barrels per day for 2018 in the first column, and OPEC's estimate of oil demand by region and globally quarterly over 2019 over the rest of the table...on the "Total world" line in the second column, we've circled in blue the figure that's relevant for January, which is their revised estimate of global oil demand during the first quarter of 2018...       

OPEC's estimate is that during the 1st quarter of this year, all oil consuming regions of the globe will be using 99.02 million barrels of oil per day, which was revised from their estimate of a month ago that we'd be using 99.10 million barrels of oil per day....meanwhile, as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were still producing 99.32 million barrels per day during January, which means that there was a surplus of around 300,000 barrels per day in global oil production as compared to the demand now estimated for the month...    

we should also note that ​the ​previous estimate for 2018's oil demand was revised 30,000 barrels per day lower with this report, a figure which we've highlighted in green...that revision wasn't consistent over the whole year, however, as the 2018 demand table on page 30 of the February OPEC Monthly Oil Market Report (pdf page 40) shows demand for the 3rd and 4th quarters revised 50,000 barrels per day lower, while ​2018's ​1st and 2nd quarter oil demand was unrevised from previously published figures...we're not going to review all of 2018's monthly surplus and deficit figures anymore now, but we should note that December's global output total was revised up by 330,000 barrels per day at the same time as demand was revised 50,000 barrels per day lower, which means that December's global oil surplus would now figure to have been 420,000 barrels per day, rather than the 40,000 barrels per day indicated by last month's report...that, and the other demand revisions mean that for all of 2018, global oil demand exceeded production by roughly 38,370,000 barrels, a comparatively tiny net oil shortfall that would be the equivalent of roughly 9 hours and ​10 minutes of global oil production at the revised December production rate...

This Week's Rig Count

drilling activity in the US saw another small increase this week, but it still remains below the levels of this past Fall, when both oil and natural gas prices were considerably higher....Baker Hughes reported that the total count of rotary rigs running in the US rose by 2 rigs to 1051 rigs over the week ending February 15th, which was also 76 more rigs than the 975 rigs that were in use as of the February 16th report of 2018, but down from the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC announced their attempt to flood the global oil market...  

the count of rigs drilling for oil rose by 3 rigs to 857 rigs this week, which was also 59 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 10th, 2014...at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by one rig to 194 natural gas rigs, which was still 17 more rigs than the 177 natural gas rigs that were drilling a year ago, but way down from the modern era high of 1,606 natural gas targeting rigs that were deployed on August 29th, 2008...

offshore platforms drilling in the Gulf of Mexico increased by 2 to 21 this week, with the addition of one rig offshore from Texas and one rig offshore from Louisiana...that meant there were 3 more Gulf rigs running than were drilling a year earlier, when 17 rigs were deployed offshore from Louisiana and a rig was also active offshore from Texas...since there is still no other offshore drilling off either coast or off Alaska at this time, nor was there during the same week of 2018, this week's Gulf of Mexico totals are again identical to the overall US offshore totals...

in addition, another drilling platform also started up on an inland body of water in Louisiana this week, where their are now two such "inland waters" rigs drilling, up from one inland waters rig a year ago..

the count of active horizontal drilling rigs decreased by 8 rigs to 915 horizontal rigs this week, which was still 76 more horizontal rigs active than the 839 horizontal rigs that were in use in the US on February 16th of last year, but was down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014....in addition, the vertical rig count decreased by 2 rigs to 66 vertical rigs this week, which was still up by one from the 65 vertical rigs that were in use during the same week of last year...on the other hand, the directional rig count increased by 12 rigs to 70 directional rigs this week, which was still down from the 71 directional rigs that were operating on February 16th of 2018... 

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 February 15th, the second column shows the change in the number of working rigs between last week's count (February 8th) and this week's (February 15th) count, the third column shows last week's February 8th active rig count, the 4th column shows the change between the number of rigs running on Friday and those running before 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 the 16th of February, 2018...     

the negative basin counts we see above just about account for this week's 8 rig drop in horizontal rigs, and a net of one more horizontal ​rig ​was pulled from basins not tracked separately by Baker Hughes...the 5 rig d​rop in the Permian basin included three rigs pulled from Texas Oil District 7C, or the southern Permian Midland, and two rigs pulled out of the Permian Delaware in New Mexico; activity in Texas Oil District 8, or the core Permian Delaware, remained unchanged, with 314 rigs still drilling there...in rigs drilling for natural gas, two horizontal rigs were added in the Haynesville of northern Louisiana, while one horizontal rig was added in West Virginia's Marcellus; at the same time, three horizontal rigs were pulled out of the Marcellus in Pennsylvania, and one rig of the 5 horizontal gas rigs drilling in the Arkoma Woodford of Oklahoma was switched​ from targeting natural gas​ to target oil....note that other than in the major producing states shown above, drillers in Alabama also started up a rig this week, after 2 weeks of no drilling in th​at state; a year ago, Alabama had one rig active, and has generally seen one or two rigs running most weeks over the past three years...

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Conservative Ohio voters want most of Ohio’s electricity to come from renewable sources-- Ohio’s political conservatives strongly favor renewable energy over coal and especially over nuclear power, a new poll commissioned by the Ohio Conservative Energy Forum has found. “Conservatives in Ohio are strong supporters of renewable energy, with a clear majority, 70 percent, wanting 50 percent or more of their energy to come from renewable sources,” concluded Jim Hobart, a partner at Public Opinion Strategies, a national polling firm which does research for Republican candidates. The poll was the third such survey Public Opinion Strategies had done for the the Ohio Conservative Energy Forum. It found growing support for clean energy. And a willingness to pay extra for it. Conservative Ohio voters “also view renewable energy as a job creator in the state, with low-income conservatives and conservative men being especially likely to say that the increased use of renewables would create jobs in Ohio,” Hobart’s summary of findings points out. The random telephone survey of 400 conservative Republican and independent voters in January, with a margin of error of 4.9 percent, also sought to determine how conservatives “feel” about various generating technologies and about energy efficiency.The findings indicate that conservatives are very positive about energy efficiency, natural gas and solar power but less positive about wind energy and coal and the least positive about nuclear energy. The poll also concluded that conservative Ohioans think property owners should have the right to generate electricity on their property and get paid for it, whether it be wind or solar. More to the point, it found that conservatives would support more reasonable wind turbine property setback rules than the rules adopted without debate by lawmakers in 2014.

Nuclear watchdogs warn against blurring energy, military uses at Ohio fuel plant -- A planned nuclear fuel plant in Ohio could help enable the nation’s next wave of carbon-free electricity, a fleet of small reactors providing continuous power to the grid.The U.S. Department of Energy fuel facility would be unique in part because it could also produce material for use in nuclear weapons. That crosses a potentially dangerous line, nuclear watchdog groups say — one that could undercut efforts to prevent the spread of nuclear weapons. The Department of Energy announced plans last month to contract with Centrus Energy Corp.’s American Centrifuge Operating subsidiary to reopen a nuclear fuel plant in Piketon, Ohio, about 70 miles south of Columbus where Appalachia’s foothills start rising from sprawling farmland.The new project would likely resemble an earlier pilot program there that ended in 2015, but with various updates and technical fixes. It would also require U.S.-only sources, in lieu of some foreign components and technology. DOE is proposing the company as the sole source for the work, and the agency’s notice suggests the demonstration project’s fuel could be used for both civilian and military purposes. On the civilian side, the project’s fuel would be used for research and development of next-generation nuclear reactors. Designs for those smaller reactors call for fuel known as HALEU, which stands for high assay low-enriched uranium. HALEU can have between 5 and 20 percent of uranium’s U-235 isotope. That’s the form that undergoes fission readily. In contrast, most U.S. commercial reactors use fuel with 3 to 5 percent U-235. Natural uranium is about 99 percent U-238. On the defense side, HALEU could be used for small mobile reactors to power on-the-go military operations. Beyond that, DOE’s requirement for U.S.-only technology could also let the plant’s fuel be used to make tritium. That radioactive isotope of hydrogen is used in nuclear weapons. The possible crossover uses for the Piketon plant’s fuel could conflict with the country’s positions on nuclear nonproliferation.

The World’s Most Dangerous Nuclear Weapon Just Rolled Off the Assembly Line - Last month, the National Nuclear Security Administration (formerly the Atomic Energy Commission) announced that the first of a new generation of strategic nuclear weapons had rolled off the assembly line at its Pantex nuclear weapons plant in the panhandle of Texas. That warhead, the W76-2, is designed to be fitted to a submarine-launched Trident missile, a weapon with a range of more than 7,500 miles. By September, an undisclosed number of warheads will be delivered to the Navy for deployment. What makes this particular nuke new is the fact that it carries a far smaller destructive payload than the thermonuclear monsters the Trident has been hosting for decades - not the equivalent of about 100 kilotons of TNT as previously, but of five kilotons. According to Stephen Young of the Union of Concerned Scientists, the W76-2 will yield “only” about one-third of the devastating power of the weapon that the Enola Gay, an American B-29 bomber, dropped on Hiroshima on August 6, 1945. Yet that very shrinkage of the power to devastate is precisely what makes this nuclear weapon potentially the most dangerous ever manufactured. Fulfilling the Trump administration’s quest for nuclear-war-fighting “flexibility,” it isn’t designed as a deterrent against another country launching its nukes; it’s designed to be used.  This is the weapon that could make the previously “unthinkable” thinkable. Ranking some weapons as “low-yield” based on their destructive energy always depended on a distinction that reality made meaningless (once damage from radioactivity and atmospheric fallout was taken into account along with the unlikelihood that only one such weapon would be used). In fact, the elimination of tactical nukes represented a hard-boiled confrontation with the iron law of escalation, another commander’s insight — that any use of such a weapon against a similarly armed adversary would likely ignite an inevitable chain of nuclear escalation whose end point was barely imaginable. One side was never going to take a hit without responding in kind, launching a process that could rapidly spiral toward an apocalyptic exchange. “Limited nuclear war,” in other words, was a fool’s fantasy and gradually came to be universally acknowledged as such. No longer, unfortunately.

Radioactive road deicer rules under review by Ohio legislature; debate over public safety continues - cleveland.com – Ohio Department of Transportation snowplows had been spreading AquaSalina, a deicing solution, on the state’s roadways for years when an environmental group last year obtained an unreleased Ohio Department of Natural Resources report that found high levels of radioactivity in the product. After the 2017 report became public, state government and company officials attempted to debunk it, criticizing the testing protocol and findings as flawed and “worthless.” A team of scientists from ODNR’s division of Oil and Gas Resources Management/Radiation Safety Section, and the Environmental Safety Section compiled the seven-page report. The team tested 14 samples of AquaSalina from six locations in Cuyahoga, Summit, Tuscarawas and Guernsey counties. All of the samples were found to contain elevated levels of radioactivity in excess of state limits on the discharge of radioactive materials. The average radioactivity in AquaSalina also exceeded the drinking water limits for Radium 226 and Radium 228 by a factor of 300. Human consumption of any amount of AquaSalina is highly discouraged, the report said. “Heavy metals and radiologicals accumulate in the soil and become problematic for drinking water,” said Trish Demeter, the Ohio Environmental Council vice president of Policy, Energy. “They don’t just go away. The more you use deicers the more these toxins build up over a long period of time.” Members of the state legislature rejected the reports’ findings, introducing a law last year that would ease regulations on AquaSalina, treating it as a commodity rather than toxic waste derived from oil- and gas-drilling operations. The law would also prevent ODNR from imposing any additional requirements. Additionally, the bill would require testing of AquaSalina no more than four times per year and would not require ODNR to test the brine for radium or heavy metals.

Loud booms reported near Youngstown injection well site not earthquakes - — The state of Ohio has found no evidence of earthquake activity connected with loud booms residents reported hearing in the Youngstown area near deep-injection wells used for fracking wastewater.The (Warren) Tribune Chronicle reports Ohio's Department of Natural Resources began monitoring for seismic activity after Brookfield Township residents reported hearing loud, explosion-like noises coming from injection-well drilling sites off State Route 7 around New Year's Eve.Department spokesman Steve Irwin said a month of 24/7 monitoring didn't detect any seismic activity.Injection wells force wastewater from the gas and oil industry deep underground as a means of disposal.  Anti-fracking groups in the area have opposed such wells for years, noting their ties to earthquake activity and questioning the potential for other negative environmental impacts.

Cabot to drill two more exploratory wells in Ohio by Dec. 31 - Cabot Oil & Gas has drilled three exploratory wells in north-central Ohio and intends to add two additional wells before the end of the year, Kallanish Energy reports.The three wells drilled are all in Ashland County, between Cleveland and Columbus. That drilling began last June.The wells are in Green, Vermilion and Mohican townships north and northeast of Loudonville. One of the three wells has been hydraulically fractured.The Houston-based company, a major player in the Marcellus Shale in Pennsylvania, reported it is unclear where the fourth and fifth well will be drilled, it told the Columbus Dispatch newspaper last week.The company is interested in the Knox formation in Ashland, Richland, Holmes, Wayne and Knox counties at the western edge of Ohio’s Utica Shale. That formation is below the Utica, and is north and west of Ohio’s main Utica drilling area.Cabot Oil & Gas had announced plans to spend $75 million in the first half of 2018 to look closely at two exploratory areas. The company gave no clue as to where that exploratory wells might be drilled. If the tests reveal that additional drilling is warranted in the second half of 2018, Cabot is prepared to sell off assets to fund that work, the company said in releasing its 2018 operating plan.  It later announced it had scrapped one exploration area as a failure. Analysts said that was likely the High Alpine area of Texas.  Cabot has promised to comment on the second exploration area during the company’s Q3 2018 earnings call later this year. Analysts that is Ohio’s Ashland County area. Ashland County is where Oklahoma-based Devon Energy drilled for oil in the early days of Utica Shale drilling — with little or no success.

Natural Gas Under Pressure Can Go Out of Control Within the Earth - Some friends and I were at lunch when the subject of a fracking well near the Beaver Run Reservoir “connecting” to older shallower wells came up. This occurred in Westmoreland County, PA, a few miles southeast of Pittsburgh. What had happened, the well pressure in the new Utica well dropped suddenly and the pressure in four older surrounding “conventional” wells rose. (The older wells were vertical and did not reach the depth of the well being drilled.) The new well is located, rather carelessly, beside the reservoir, which provides water for something like 150,000 people. The worry was that fluids would come all the way to the surface and fracking chemicals would get in the reservoir. Also, explosions or fires could occur at the older wells. One of our group pointed out that the representations you see in publications show the shale layers like a wedding cake, uniform thickness, parallel and horizontal, which is not an accurate representation. Shale layers are certainly not uniform and not without defects, fractures or fissures. We agreed that ”communication” through the geologic layers is not new. That is, gas having enough pressure to penetrate horizontally (and perhaps vertically) outside the intended boundaries. I recalled discussion with friends in Doddridge County of how some conventional well owners were beneficiaries of fracking, it improved the production of their shallow wells! That was years ago and continues. Someone over there pointed out to me an abandoned old well that was frosted over from the fracked well gas that had leaked into it. We all knew that gas under pressure cooled when the pressure was relieved. In that case, enough to cause frost in summer, even. Others of our lunch group could tell related stories. Leaks from around casing not properly sealed is likely the cause of most leaks that destroy well and surface waters. Drillers are impatient to start after the cement is placed around the pipe designed to protect surface water, it costs them hundreds of dollars an hour to have an idle rig. So pressure comes on before the cement is fully set up. They have been known to supply clean water to people near their rig, acknowledging fault. It is usually stopped when the driller leaves the neighborhood, though.

CNX reports suspected cause of Utica Shale well problem near Beaver Run Reservoir -- CNX Resources Corp. said a problem with the casing in its compromised Utica Shale well in Westmoreland County was the likely root of high pressure gas that flooded nearby shallower wells two weeks ago.The Cecil-based company told investors that the problem at its Shaw 1G well in Westmoreland County occurred about a mile underground.  It’s still early in the investigation, the company cautioned in its annual report filed on Thursday, “but based on the information we have at this time, we believe the issue is isolated to this well and was caused by a casing integrity issue that occurred at a depth below approximately 5,200 feet, allowing gas traveling up the wellbore to escape at that point.” At that depth, according to the well record filed with the state, there were two pipes in the ground, one a 9.6-inch diameter steel casing and inside of it a 5.5-inch diameter production casing. The narrower pipe, which is the conduit for the gas to travel up the wellbore, was cemented to the wider one at that depth. But the cement stopped a few hundred feet above that. Operators are not required to cement the production pipe all the way to the surface. When the gas escaped from the wellbore at that depth, it made its way to nine vertical wells, drilled to a depth between 3,700 feet and 3,900 feet, according to the DEP. Those were the ones that the company was flaring to relieve the pressure as it worked to “kill” its problematic well. When that was accomplished late on Monday by pumping heavy mud into the wellbore below the 5,200 foot mark, the pressures at the impacted shallow wells began to drop. By Friday evening, only four of the nine were still flaring. The others had returned to an acceptable pressure, CNX said.

Isolated 'casing issue' likely caused problems at gas well near Beaver Run Reservoir, company reports -- A pressure anomaly that recently forced the shutdown of a Utica shale gas well near Beaver Run Reservoir was likely caused by a “casing integrity issue” about a mile underground, CNX Resources told investors. The update was contained in a footnote in the company’s 2018 annual report , posted late last week to its website. “While the company is continuing to evaluate the cause of this incident, it appears that the pressure anomalies that the company observed were caused by a casing integrity issue that occurred at a depth below approximately 5,200 feet, allowing gas traveling up the wellbore to escape into shallower formations,” the note said. “CNX believes this issue is isolated to this well.” The significant loss of pressure during fracking operations at the Shaw 1G well on Jan. 25 was accompanied by pressure increases at several nearby shallow oil and gas wells not owned by CNX, the company said. All hydraulic fracturing operations on the four-well Shaw pad remain suspended while CNX continues to investigate the incident, the company said. Meanwhile, test results from Beaver Run Reservoir since the incident have come back normal so far, said Matthew Junker, spokesman for the Municipal Authority of Westmoreland County. The reservoir serves as the public water source for about 130,000 customers of the municipal authority living in northern Westmoreland County.

One of the oldest US refineries in trouble again in Philadelphia: court filings (Reuters) - Philadelphia Energy Solutions Inc, owner of the largest and oldest refinery on the U.S. East Coast, is facing another financial crisis just months after emerging from a controversial bankruptcy, according to two sources and a Reuters review of court filings. PES, which exited bankruptcy in August, saw its cash balance fall to $87.7 million at the end of 2018, down from $148 million just three months earlier, a $61 million decline, according to a post-bankruptcy financial report filed late last month. The company entered bankruptcy roughly a year ago with $43 million cash on hand, court documents show. Refineries based on the East Coast suffer from difficult economics due to the cost of shipping crude oil from West Texas or Canada, but PES has had other problems at the plant in South Philadelphia including weak gasoline margins and high debt costs. The company filed for bankruptcy in January 2018, blaming its woes largely on the costs of complying with the U.S. Renewable Fuel Standard, a 2005 law that requires refiners to either blend biofuels like ethanol into fuel or purchase credits, called RINs, from competitors who do. PES does not have those blending capabilities, so it has to pay for credits. But a Reuters analysis showed other factors played a role in the bankruptcy, including the withdrawal of more than $590 million in dividend-style payments from the company by its investor owners. After filing for bankruptcy, the company was given a waiver for half of its $350 million in liabilities related to biofuels credits by the U.S. Environmental Protection Agency. Poor gasoline margins have hurt the company’s bottom line as well. PES’s weak cash position forced the refiner to significantly scale back a planned $90 million maintenance project that began in January, according to two sources familiar with the plant’s operations. Refiners perform maintenance to keep units operating reliably and safely, protecting themselves from costly unplanned outages. 

Investigation: Clorox Selling Pool Salt Made From Fracking Wastewater -  You might be shocked to learn that a Clorox product used to treat swimming pools came from fracking wastewater. Public Herald has discovered that Eureka Resources, a company based in Pennsylvania, has been treating wastewater from shale gas development — a.k.a. “fracking” — and packaging the crystal byproduct as “Clorox Pool Salt” for distribution since 2017. The way it works is fracking wastewater gets trucked to Eureka Resources where it’s treated and turned into salt. From there, workers at the facility package the salt into Clorox bags and pallet them for shipment. While Eureka uses Clorox packaging, and trades in Clorox products, they never deal directly with Clorox. The bags are palleted for an unnamed third-party distributor to be sold to regional stores like Wal-Mart, Home Depot, and Lowes. Eureka Resources stands by their product safety, citing its own four-step patented treatment system that involves pretreatment, distillation, crystallization and dewasting. The company has operated since 2008 in Pennsylvania, currently with two treatment facilities: one in Williamsport and the Standing Stone Facility in Wysox who produces the pool salt. Eureka states the Standing Stone facility is “capable of producing clean distilled water, concentrated brine, dry sodium chloride (NaCl) salt and approximately 30% calcium chloride (CaCl)” out of water that contained carcinogens, trade-secret chemicals, heavy metals, and high levels of radioactive material. The solids leftover after wastewater treatment, often referred to as sludge, are hauled to area landfills that can accept radioactive waste.

US' Laurel Pipeline expected to flow both east and west by mid-2019: Buckeye CEO — Buckeye Partners expects to be able to use the Laurel Pipeline bi-directionally for transporting refined products by the middle of this year, as it waits for federal regulators to rule on a tariff petition, said CEO Clark Smith Friday. Providing bi-directional service on the Laurel Pipeline will allow Midwest refiners to move more gasoline and diesel from Michigan and Ohio east into Pennsylvania. Presently, the line runs from Philadelphia refineries west to the Pittsburgh area. "We are currently projecting that we'll be able to commence pipeline movements on this project by mid-2019,"  No timeline was given for when FERC would hand down the ruling necessary for the pipeline to operate across state lines, but Clark said, once received, Buckeye would start hydro-testing the pipeline to check its integrity and expects to "commence pipeline movements within 60 to 90 days of receiving FERC approval," Smith said. The second phase of the Michigan-Ohio pipeline project will bring refined products from refineries in Detroit and Ohio southeast to the Altoona area of central Pennsylvania. No capacities were given for either project, but Buckeye said previously it expected initial west-to-east rates to be 40,000 b/d. However, seasonal factors could impact Buckeye's timeline for bi-directional movements on Laurel. Bob Malecky, Buckeye's head of domestic pipelines and terminals, said the company had a "somewhat short window" of about 90 days by which to receive the FERC ruling and conduct the hydrotest. After that, there will be a delay of four to five months to reverse the pipeline. He did not elaborate on specific reasons.

Pennsylvania halts permits for natural gas pipelines (AP) — Pennsylvania is halting construction permits for natural gas pipelines operated by Texas-based Energy Transfer LP, as the governor on Friday said the company has failed to respect the state’s laws and communities. The state Department of Environmental Protection said Energy Transfer is not fixing problems related to an explosion last year, and piled yet another penalty onto a company project in the state. State agencies already have imposed millions of dollars in fines and several temporary shutdown orders on Energy Transfer projects, while a county prosecutor is demanding documents from the company. "There has been a failure by Energy Transfer and its subsidiaries to respect our laws and our communities," Gov. Tom Wolf said in a statement Friday. "This is not how we strive to do business in Pennsylvania, and it will not be tolerated." The Department of Environmental Protection said Energy Transfer hasn't stabilized the soil and erosion around its Revolution pipeline in western Pennsylvania, as it was ordered to do in October. As a result, it is halting construction permits on the company's pipelines in the state, it said. "This hold will continue until the operator corrects their violations to our satisfaction," Environmental Protection Secretary Patrick McDonnell said in a statement.

Lancaster businesses waiting to be paid more than $1M for work on Atlantic Sunrise pipeline -- When the controversial Atlantic Sunrise gas pipeline was gearing up to be built through Lancaster County in 2017, Rob Warihay was one of the cheerleaders touting the benefits to local businesses. Now, the co-owner of Warihay Enterprises is still waiting to be paid $1.8 million for work his Manheim-based commercial landscaping business completed for the pipeline last November. He’s had to max out the company’s line of credit to survive and is paying interest on the credit. “It wasn’t fun,” he said. Warihay’s firm is one of 77 businesses in Pennsylvania — from a Morgantown hardware store to a York ice maker to owners of portable toilets and pest-control services — that are still waiting to be paid $7.7 million for services they rendered on the Atlantic Sunrise and Mariner East gas pipelines. The companies were stuck with unpaid bills after Welded Construction — the large Ohio-based pipeline builder that was the main contractor on both pipeline projects — declared bankruptcy last October. The bankruptcy filing came after the owners of both pipelines refused to pay Welded.  Some 77 Pennsylvania businesses, both large and small, still have unpaid bills and have prepared claims to be filed in U.S. Bankruptcy Court of the District of Delaware. The deadline for filing isn’t until Feb. 28, and about 10 new claims are rolling in each day.

Cabot's Sneaky Attack on Pennsylvania Cancer Survivor Reveals Dirty Agenda to Silence Environmentalists -  Cabot Oil & Gas, a company with $765 million in assets in 2017, doesn't like environmental nonprofits meddling in its dirty business in Pennsylvania. And the company is delivering this message by targeting Ray Kemble—a local 63-year old who just survived his fourth cancer surgery—with a $5 million lawsuit for speaking out about Cabot and fracking. If corporate injustices were measured on a scale of one to ten, Cabot's latest disgraceful maneuver would be a rock-solid eleven. Back in 2010, Cabot settled a number of lawsuits brought by Dimock homeowners who claimed that the company had poisoned their groundwater, decreased their property values and threatened their health and safety. Kemble was one of those plaintiffs who signed a settlement agreement that included some unknown nondisclosure terms. It's a secrecy provision that Cabot often uses to keep its dirty practices hidden and one that state and federal regulators have cited as a hinderance to a full investigation into the impact of fracking on groundwater and public health. While its exact terms remain concealed, Cabot's lawyers want us all to take their word for it that Kemble is in violation of the nondisclosure provision of the agreement because he has exercised his First Amendment right to warn others of the risks of fracking and encourage an end to this inherently harmful practice. Kemble's effective advocacy made him a target of Cabot's ire, and now they've taken aim and fired off a lawsuit that seeks to strip him of all he has left in the world, and then some.  Cabot's recent filing with the court asked the judge to place a cancer patient with no resources in jail until its lawyers have had a chance to interrogate him. The judge rejected its request and after the hearing, Cabot's spokesperson tried to deflect from the corporation's persecution of Kemble by claiming that it is really just using the courts to go after groups that have provided financial support to Kemble and others who have been victimized by Cabot's irresponsible fracking operations. Cabot can only continue to operate by violating the fundamental rights of others. It threatens the property rights of homeowners whose groundwater is poisoned and whose property values plummet. It even relies on judges to overturn juries who grant Cabot's victims monetary damages for the harm Cabot has caused, while paying off politicians. And now the corporation wants to put an end to people's rights to speak freely about fracking.

Leaders Debate Ethane Cracker Pros and Cons — The 42-mile drive from Washington to Potter Township represents the proverbial scenic route as it winds through rural and wooded areas north into Beaver County.  Eventually, the relative tranquility gives way to the panorama of a massive construction project: the Shell Chemical Appalachia Petrochemical Complex, taking shape on a 340-tract along the Ohio River and representing a $6 billion investment by one of the giants of the oil and gas industry, Royal Dutch Shell. The purpose of the plant is to break up molecules of ethane — a byproduct of the tri-state region’s natural gas stream being tapped by hydraulic fracturing, or fracking — into smaller molecules as a step in the creation of plastics. By industry parlance, the process involves molecules being “cracked,” hence the common reference to cracker plants. As is the case with any endeavor of such a major scope, the Shell project has its supporters and detractors.  Those in favor cite job creation as a major plus: some 6,000 workers are needed during construction and 600 full-time employees when the plant goes into operation in the early 2020s. Further employment opportunities could arise with the development of a regional pipeline system connecting natural gas suppliers with the Shell complex and other similar plants, if built. Then there’s the flipside. As executive director of the Breathe Project, a clearinghouse for information on air quality in southwestern Pennsylvania, Matt Mehalik brought the perspective of impact to the atmosphere. “We still have a serious air-quality problem in southwestern Pennsylvania, and adding to our airshed burden will only make things worse,” he told the forum’s audience. “We consistently get failing grades from the American Lung Association: three F’s several years in a row, the only place outside of California with that distinction.” His reference was to the association’s State of the Air report, issued in April and citing Allegheny County, Pennsylvania, and its dismal performance in three measures of air pollution: days with elevated ozone, and daily and annual values for fine-particle pollution. Ozone is generated by the reaction of volatile organic compounds – released by the burning of materials such as gasoline, wood, coal or natural gas – with nitrogen oxides. Such conditions make breathing difficult, especially for children, older adults and people with asthma, according to the Philadelphia-based Clean Air Council, which has a regional office in Pittsburgh. Mehalik also spoke about the market, or lack thereof, for what cracker plants produce. “All this is to make plastic. The world doesn’t need it for ginned-up demand in Asia, because that’s the only scenario where the industry might generate a profit. There’s no projected demand growth in most of North America.”

Wolf’s support for pipeline-safety bills boosts bipartisan advocates -- A raft of bills on pipeline safety may have a better chance of becoming law in Pennsylvania after Gov. Tom Wolf formally backed some of them in a statement that strongly criticized Sunoco’s construction of the Mariner East pipelines. Most of the bills failed to move through the Legislature during the previous session, but were reintroduced in early January amid rising public concern about the safety of lines carrying highly explosive materials such as natural gas liquids through densely populated areas. Although the bills’ future remains unclear, the prospects for at least some of them brightened on Feb. 8 when Gov. Wolf called on the Legislature to fill what he called “gaps” in the law that have restricted the ability of his administration to protect public safety and the environment during pipeline construction and operation. The Democratic governor urged the “speedy passage” of bills that would give the Public Utility Commission authority over where pipelines can be built; would require operators to disclose details of any pipelines that are within 1,000 feet of a school; would require carriers of natural gas or its liquids to coordinate with local emergency officials; and would require installation of shutoff valves in so-called high-consequence areas.

New York regulators move to address Con Edison's moratorium on new gas service  - Northeast utilities have been warning for some time that they need more gas capacity in the region, and Con Edison has been pursuing innovative "non-pipe" solutions as a way to address the shortage. But last month the utility announced it had no choice but to stop taking new applications in some areas, and the news appears to have gotten the attention of state regulators. New York regulators took multiple steps Thursday to address potential gas shortages that have led Consolidated Edison to declare a hold on some new service requests, including approving $223 million in measures like efficiency and electrification that are aimed at reducing system demand.  The Public Service Commission (PSC) also announced it will hold public hearings in Westchester County next week, to take comment on the utility's planned moratorium.  Con Edison last month announced that due to rising gas demand and a dearth of new supply, it would stop taking applications for new gas connections in most of Westchester County, beginning March 15. The utility said it could soon face more demand for gas "than the existing interstate system can bring into our area."

New York State PSC approves Con Edison plan to reduce natural gas demand in supply-constrained areas - The New York State Public Service Commission (PSC) recently authorized Consolidated Edison Company of New York, Inc. (Con Edison) to immediately begin implementing a $223 million initiative to reduce natural gas demand in the utility’s supply-constrained areas of its gas distribution system. “The PSC is providing Con Edison with the ability to deploy non-traditional solutions to address the customer needs currently met with natural gas and expects Con Edison to use these tools to help its customers and protect [the] environment,” Commission Chair John B. Rhodes said. “Con Edison needs to move quickly and put forward innovative solutions designed to meet current and future energy demands throughout its [service] territory.” The recently approved solutions focus on energy efficiency measures and deploying heat pump technology to support electrification. The PSC denied Con Edison’s proposal to incentivize shareholders to add supply enhancements such as compressed or liquified natural gas supply sources but noted that the company is not prohibited from pursuing such projects without shareholder incentives. Supply limitations and increased demand led Con Edison to suspend new natural gas connection in the majority of its Westchester County, New York natural gas service territory starting on March 15 to maintain reliability for existing customers and critical facilities. Department of Public Service staff is currently conducting an analysis and review of the market conditions that led to the company’s decision and how utilities are meeting customer needs.

SHALE@10: In N.Y., farmers think about what might have been - E&E News  — When Kevin "Cub" Frisbie wants to see what shale can do for a place, all he has to do is get in his pickup and drive 15 miles south to Bradford County, Pa.There, the pavement on the road smooths out. There are new hotels and a new Dunkin' Donuts. In front of the family farms, Frisbie, a farmer himself, will notice the new silos and equipment. "All this, there's just nothing but commerce going on, commerce going on," he said.Crossing back into Tioga County, N.Y., Frisbie will pass the retired feed mill and the shuttered storefronts of Broad Street. He'll pass farms that he knows are right on the edge of survival, and he might pass the home of an old friend, a dairy farmer, who ignored a hernia for too long — and didn't have health insurance anyway — and died of surgery complications last year."Fifteen years ago, these two counties were very similar," said Frisbie, a grain and crop farmer who's president of the Tioga County Farm Bureau. What changed, to him, is obvious: Pennsylvania allows fracking, and New York, under Democratic Gov. Andrew Cuomo, banned it. "It's a desolate area, we could use some jobs, we could use some income. And he turned his back on us."

Trump raises fracking, abortion in meeting with Cuomo - President Trump on Tuesday suggested that New York Gov. Andrew Cuomo (D) open the state up to fracking to improve its economy, and he also raised concerns about the state's recent legislation that expanded access to abortion. The two New Yorkers spoke at the White House after Cuomo requested a meeting to discuss a provision in the Republicans' 2017 tax-cut law that caps the state and local tax (SALT) deduction at $10,000. The meeting largely focused on economic issues, though Trump brought up abortion as well, the White House said. Deputy press secretary Judd Deere said in a statement that Trump listened to Cuomo's concerns about SALT, and "reiterated the negative impact that high taxes in states like New York have on hardworking families and job creators." "The President discussed economic growth opportunities for the State of New York, including helping lower energy prices throughout the entire Northeast by allowing low-cost, American energy to thrive with fracking and pipeline systems," Deere said. "The two also discussed the need to update America’s outdated infrastructure system." Cuomo signed a ban on fracking in New York roughly four years ago, citing health risks. The practice involves injecting water and chemicals underground in order to fracture rocks and release natural gas. The governor has faced criticism for the stagnating economy in parts of upstate New York, where fracking could provide a boost. Trump earlier this month suggested that those in upstate New York struggling to find prosperity should "go to another state where they can get a great job." Tuesday's meeting came after Cuomo earlier this month said that personal income tax receipts declined in the state in December and January. He attributed that decline to the cap on the SALT deduction. Cuomo has argued that the rule disproportionately harms residents of New York and other high-tax states like California and New Jersey.

Oil spill causes fire in Allegany – About 150 gallons of oil spilled from an oil well in Allegany Tuesday morning, causing a fire near the intersection of Flatstone Road and Chipmonk Road. Members of the Allegany Fire Department dispatched around 5:35 a.m. Tuesday and remained at the scene until 10:30 a.m. Incident Response and Mitigation (IRM) Services were also at the scene and contained the oil spill quickly. IRM Services reported no threat to the Allegheny River or water supplies at this time. Officers from the Cattaraugus County Office of Emergency Services, Health Department and New York State Department of Environment Conservation remained on scene to investigate further. The oil well is reportedly owned by Vertical Energy Inc. in Sugar Grove, Pennsylvania, according to the Cattaraugus Couint Office of Emergency Services.

Proposed Meadowlands power plant would be NJ's biggest greenhouse gas polluter -- A controversial, natural gas-fired power plant proposed for the Meadowlands would emit more carbon dioxide and other greenhouse gases than any existing power plant in New Jersey, according to a review of federal data. In fact, North Bergen Liberty Generating station's estimated 2.6 million metric tons of carbon dioxide emissions would tie it with the Phillips 66 Bayway Refinery in Linden as the top single greenhouse gas producer in the Garden State. Opponents of the plant are concerned that the New Jersey Department of Environmental Protection would not consider the impact of greenhouse gases as officials evaluate a slate of air permits that will determine if the power plant is built. But federal permitting rules have required the state to consider greenhouse gas emissions when evaluating most power plant proposals since 2010, DEP spokesman Larry Hajna said on Thursday. "Yes, greenhouse gas emissions will be evaluated as part of the application," Hajna said. Opponents who gathered in Ridgefield Park on Friday to protest the power plant said they were told by top-level DEP staffers at a recent private meeting that the agency would not consider carbon dioxide emissions in reviewing the plant's permit applications. Proposed by the Mitsubishi subsidiary Diamond Generating Corp., the plant would be one of the largest electricity generators in the state, at 1,200 megawatts. But none of the electricity would go to New Jersey consumers. It would instead be transmitted by cable under the Hudson River to New York City. 

Enbridge Gave Massachusetts Studies by Climate Denier, ALEC Associate in Gas Project Assessment -  As part of an ongoing health evaluation of a proposed and contested Boston metro area gas compressor station, the energy distribution company Enbridge shared with the State of Massachusetts materials from dubious and controversial sources. As documents obtained by DeSmog reveal, these include studies by a climate change denier and an official associated with the American Legislative Exchange Council (ALEC), the Koch brothers-backed group working to undermine environmental regulations. For critics of the project, this newest revelation raises further questions about the appropriateness of constructing the 7,700-horsepower station, which would release noxious gases while propelling natural gas through pipelines, in a densely populated area between Weymouth and Quincy, south of Boston. “To be taking the work of climate deniers at this time is unconscionable,” said Alice Arena, who heads Fore River Residents Against the Compressor Station (FRRACS), a citizen group that has been fighting the project for the past four years. As part of a state-directed health impact assessment (HIA) for the compressor station, Enbridge supplied the Metropolitan Area Planning Council (MAPC) — the agency charged with conducting the assessment — with materials relating to compressor stations and air pollution. Governor Charlie Baker ordered the HIA before the state provides any new permits for the station, following pressure from activist groups.

Enbridge still sees New England potential in US natural gas expansion plans - — Canada's Enbridge will continue to push regulators in the US at the local, state and federal level to allow it to build new natural gas transmission infrastructure that can serve New England consumers with production from the nearby Appalachian Basin, CEO Al Monaco said Friday. The pipeline operator is seeing strong utilization on its Texas Eastern Transmission and Algonquin Gas Transmission systems and it believes that being able to move more supply from closer basins in the US Northeast would be a significant growth opportunity. Environmental opposition in the region to fossil-fuel development has helped scuttle or delay some major gas projects in New England. Among them, the Access Northeast project that Enbridge is involved in is currently stalled. Officially, the company hasn't given up on that project or other opportunities. Monaco said the demand is there, largely because the pipeline-constrained region experiences high energy prices during peak periods such as the winter. "It's never been more clear that we need additional natural gas infrastructure and nowhere is that more evident than in the US Northeast," Monaco said during a conference call with analysts to discuss fourth-quarter financial results. He said New England consumers are saddled with "higher priced, lower reliability peaking supply from oil generation and foreign LNG imports, and this is actually an unbelievable irony when the Marcellus is sitting right next door to this market." "We'll continue to work with regulators and local politicians to bring forward solutions to this problem," Monaco said. Despite the proximity of the Marcellus and Utica shale plays, New England imports significant volumes of gas from Canada via pipeline and other countries via LNG tanker to meet peak demand. Market experts blame insufficient west-to-east and south-to-north pipeline capacity to transport gas there from producers in Pennsylvania and West Virginia.

Pipeline fight drags on, tempting intervention from Trump - Pipeline executives are urging President Donald Trump to assert federal authority over interstate pipelines and prevent states from blocking projects that run within their boundaries. The lobbying is another front in a legal and political fight that shows no signs of ending since New York state blocked a series of pipeline projects carrying natural gas to New England from the gas-rich Marcellus shale in Pennsylvania three years ago. That has left multi-billion dollar investment decisions facing more uncertainty as environmental activists target pipelines in their fight to reduce fossil fuel consumption. Congress has been reluctant to intervene in a debate encompassing two deeply partisan issues in climate change and federal authority over state regulators. At the same time courts have so far upheld states’ ability to use environmental law to block pipelines projects that have come under fire for their contribution to greenhouse gas emissions. Even if Trump intervenes to overrule states, any relief would likely be a long time coming. A deluge of lawsuits from environmental groups would almost certainly follow, tying up the executive action in court for years, said Steve Weiler, a Washington energy attorney. “It probably wouldn’t be implemented in this president’s administration,” he said. “Nothing’s going to happen quickly.” The uncertainty around permitting pipelines comes as U.S. natural gas production shows little sign of slowing down, as hydraulic fracturing continues to unlock shale gas deposits from Texas to Pennsylvania. In November, U.S. gas production exceeded 2.6 trillion cubic feet, enough to heat 45 million U.S. homes for a year and up 30 percent from five years ago. But the climate change movement is also gaining momentum after a series of dire forecasts, including one from the federal government last year that predicted that crop failures, wildfires and flooding would shrink the U.S. economy by 10 percent by 2100 if greenhouse gas emissions are left unchecked.

Shale drilling tests to start in West Virginia this week - -- Testing is set to begin this week in West Virginia as part of an effort to advance hydraulic fracturing techniques that would allow the extraction of natural gas to be done more efficiently.The drilling tests are being carried out by the Marcellus Shale Engineering and Environmental Laboratory (MSEEL), a research partnership between West Virginia University, Northeast Natural Energy, and the U.S. Department of Energy's National Energy Technology Laboratory (NETL).The tests will seek to improve gas recovery from horizontal drilling and hydraulic fracturing, a method in which rock is fractured by pressurized liquid, releasing the natural gas. They will be carried out near Core, W.Va., which is located about 15 miles northwest of Morgantown.Previous research by WVU and Northeast Natural Energy led to the creation of stimulation zones that offered the best well sites around natural fractures in the shale. These sites were monitored using seismic and fiber optic distributed temperature and acoustic sensing, a method that is too costly to be used on all wells. "Therefore, aided by advanced numerical modeling developed by WVU, the project team will compare the use and results of new completion/stimulation techniques at the Core site to the large array of relatively cost-prohibitive techniques used in the Morgantown Industrial Park wells," said Robert Vagnetti of NETL.

Antero agrees to $3.15m fine in W.Va. pollution settlement (AP) - A Colorado-based natural gas producer has agreed to pay a $3.15 million civil penalty to resolve pollution violations at 32 drilling sites in West Virginia. The U.S. Department of Justice says in a news release the agency and the West Virginia Department of Environmental Protection reached a proposed settlement with Antero Resources Corp. over allegations of Clean Water Act violations at sites in Doddridge, Harrison and Tyler counties. In addition to the fine, the settlement filed in federal court for the state's northern district requires the company to conduct restoration, stabilization, and mitigation work at impacted sites as well as provide mitigation for aquatic resource impacts. The violations involved the unauthorized disposal of dredged and fill materials into waters near sites where Antero built well pads and other structures involved in hydraulic fracturing, also known as fracking. 

Large Natural Gas Producer to Pay West Virginia Plaintiffs $53.5 Million to Settle Royalty Dispute -- As our investigation detailed, EQT Corp. had been accused of deducting a variety of unacceptable charges from natural gas royalty checks.  The second-largest natural gas producer in West Virginia will pay $53.5 million to settle a lawsuit that alleged the company was cheating thousands of state residents and businesses by shorting them on gas royalty payments, according to terms of the deal unsealed in court this week. Pittsburgh-based EQT Corp. agreed to pay the money to end a federal class-action lawsuit, brought on behalf of about 9,000 people, which alleged that EQT wrongly deducted a variety of unacceptable charges from peoples’ royalty checks. The deal is the latest in a series of settlements in cases that accused natural gas companies of engaging in such maneuvers to pocket a larger share of the profits from the boom in natural gas production in West Virginia. This lawsuit was among the royalty cases highlighted last year in a joint examination by the Charleston Gazette-Mail and ProPublica that showed how West Virginia’s natural gas producers avoid paying royalties promised to thousands of residents and businesses. The plaintiffs said EQT was improperly deducting transporting and processing costs from their royalty payments. EQT said its royalty payment calculations were correct and fair. A trial was scheduled to begin in November but was canceled after the parties reached the tentative settlement. Details of the settlement were unsealed Wednesday.  Under the settlement agreement, EQT Production Co. will pay the $53.5 million into a settlement fund. The company will also stop deducting those post-production costs from royalty payments. The company says it wants to “turn over a new leaf” in its relationship with the state’s residents.

Can the pipeline be stopped? State board ponders its next move on MVP - Wading back into what could become a legal quagmire, the State Water Control Board may soon decide whether to revoke its earlier approval for a natural gas pipeline under construction in Southwest Virginia. The unusual proceeding was initiated in December, when the board voted 4-3 to reconsider a water quality certification for the Mountain Valley Pipeline. When it first issued the certification in 2017, the board determined there was a reasonable assurance that work on the buried pipeline would not contaminate nearby streams and wetlands. Since then, the Virginia Department of Environmental Quality has found more than 300 violations of erosion and sediment control measures. What will happen next seems as clear as the muddy water that frequently flows from construction sites. If the board were to reverse its earlier position, “it doesn’t necessarily kill the project, although it’s possible that it could,” said Jill Fraley, an associate professor at the Washington and Lee School of Law who specializes in environmental law. Mountain Valley could address the board’s concerns and apply for a new certification. Or it could turn to the Federal Energy Regulatory Commission, which has ultimate authority over the 303-mile pipeline. Or it could sue the water board. Whatever the next step might be, loss of state certification could further delay a project that — despite earlier regulatory and legal setbacks — is more than halfway completed.

EQM expects to complete WV-VA Mountain Valley natgas pipe fourth-quarter 2019 (Reuters) - EQM Midstream Partners LP said on Thursday it expects to complete the $4.6 billion Mountain Valley natural gas pipeline from West Virginia to Virginia in the fourth quarter of 2019 despite remaining legal challenges against the project. The company said in its fourth quarter earnings release that Mountain Valley was about 70 percent complete. EQM said it is working through the project’s remaining legal challenges, including securing a Nationwide 12 Permit from the U.S. Army Corps of Engineers for stream and waterbody crossings. In November, the U.S. Court of Appeals for the Fourth Circuit agreed with arguments from environmental groups and vacated the project’s Nationwide 12 Permit because its proposed construction methods violated a special condition in West Virginia, requiring stream crossings to be completed within 72 hours. 

TransCanada to finish West Virginia Mountaineer natgas pipe in Q1 - (Reuters) - TransCanada Corp placed about 45 percent of its Mountaineer XPress natural gas pipeline in West Virginia into service in January and expected to finish the rest of the project in February and March:  The company said in its fourth quarter earnings release on Thursday that it boosted the estimated cost for Mountaineer to $3.2 billion from a previous forecast of $3.0 billion.The company said it also planned to put its $600 million Gulf XPress gas pipeline into service along with Mountaineer. When TransCanada started work on Mountaineer early last year, it estimated it would complete the project by the end of 2018 at a cost of $2.6 billion. The company boosted that estimate to $3.0 billion in April 2018. The Mountaineer and Gulf projects are two of several pipes designed to connect growing output in the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers elsewhere in the United States and Canada.The 2.6-billion cubic feet per day (bcfd) Mountaineer project includes 170 miles (274 kilometers) of new pipeline in West Virginia, while the 0.88-bcfd Gulf project includes seven new compressor stations in Kentucky, Tennessee and Mississippi. One billion cubic feet is enough gas to power about 5 million U.S. homes for a day . New pipelines built to remove gas from the Marcellus and Utica have enabled shale drillers to boost Appalachia output to a record high of 31.6 bcfd in February versus 26.9 bcfd in the same month a year ago.   That represents about 38 percent of the nation's total dry gas output of 83.3 bcfd in 2018. A decade ago, Appalachia was responsible for just 1.6 bcfd, or 3 percent, of the country's total production.

Atlantic Coast Pipeline delayed until 2021, cost up by $3B  (AP) — The completion of a natural gas pipeline running through West Virginia, Virginia and North Carolina has been delayed and its costs are increasing by up to $3 billion. The Fayetteville Observer reports Atlantic Coast Pipeline LLC announced Friday that the 600-mile (965-kilometer) pipeline is not expected to be in full service until 2021. It was initially expected to be in service this year. The project was projected to cost between $4.5 billion and $5 billion when first announced. Now the company projects a total cost of $7 billion to $7.5 billion. A spokesman for pipeline partner Dominion Energy, Karl Neddenien, blames delays for the cost increases. Some work was suspended last year over questions related to a national permit, while residents and environmental groups have sued to stop the project.

Need for Atlantic Coast Pipeline Falls — The demand the huge Atlantic Coast Pipeline was intended to meet is disappearing, according to documents from the corporations behind the project. Dominion and Duke Energy own almost all of the pipeline, as well as the electric utilities it would supply with natural gas. When applying for a federal permit, they argued it was needed to meet rising electricity demand in North Carolina and coastal Virginia. But Cathy Kunkel, an energy analyst with the Institute for Energy Economics and Financial Analysis, said utility filings in those states now show the outlook has changed dramatically - in part because of competition from cheap, renewable energy. "Dominion is not projecting any increase in natural-gas demand until 2032,” Kunkel said. “Duke is still planning to build some natural-gas plants, but most of that has shifted to the late 2020s." The energy companies say they need more pipeline capacity to move fracked gas out of the Marcellus and Utica fields of northern West Virginia, where the price for it is artificially depressed by a transportation bottleneck. The 600-mile pipeline across the three states has faced a number of setbacks, including lawsuits by landowners and conservationists. It was recently announced that the total cost of the project would rise to $7.5 billion, and its opening would be delayed until 2021. If the builders can get state utility regulators' approval, they can shift the full expense of the line onto ratepayers, along with a guaranteed profit. But Kunkel said investors in the utilities may be starting to worry about the financial risks. "The project has been delayed by these court challenges, it's also over-budget,” she said. “And if the state regulators say, 'You clearly don't need all of the gas capacity that you signed up for here; we're not going to let you charge it to your ratepayers,' then that would be a very significant blow." 

Florida Court Orders Oil Drilling In Everglades To Move Ahead - A court decision in Florida earlier this week illustrates the difficulties involved in drilling for oil and natural gas in environmentally sensitive areas. The inevitable tensions between environmental conservation and the exercise of property rights can become especially challenging to resolve when they take place in a state where existing oilfield regulations are inadequate and outdated. That is what is happening in Florida this week, where a three-judge panel of the state's First District Court of Appeal ruled on Tuesday that the state’s Department of Environmental Protection (DEP) acted improperly in denying a permit to drill the first exploratory oil well in the Everglades in half a century. The DEP had initially denied the permit when it was filed in 2016 by mineral owner Kanter Real Estate LLC, citing threats to surface and groundwater.After an administrative law judge, E. Gary Early, issued a finding that the five-acre parcel of land on which Kanter wants to drill the well is in fact isolated from groundwater and the local public water supply, and published a "recommended order" for the project to move forward, DEP officials once again denied the permit. The Court of Appeal ruled, in a 14-page decision, that "DEP Secretary Noah Valenstein improperly rejected 'factual findings' by" Judge Early and that "state law requires agencies to accept administrative law judges’ findings of fact unless they are not supported by 'competent, substantial evidence.'" The Court of Appeals decision now sends the matter back to DEP, which is now ordered to issue the permit.  Barring further appeals, court injunctions in lawsuits filed by activist groups or executive action by new Florida Governor Ron DeSantis - who campaigned against hydraulic fracturing (aka, "Fracking") during the election season last Fall - the permit will probably be issued in the coming weeks.

Fla. House, Senate differ on 'fracking' bans - As Gov. Ron DeSantis supports a "fracking" ban in Florida, competing measures to prevent the controversial oil-drilling technique were approved Wednesday by House and Senate panels with far different levels of support. The Senate Environment and Natural Resources Committee unanimously backed a fracking-ban bill (SB 314) that is sponsored by committee Chairman Bill Montford, D-Tallahassee, and favored by conservationists. Meanwhile, the House Agriculture & Natural Resources Subcommittee, in a 9-6 vote, approved its version (PCB ANRS 19-01). The House proposal has drawn scorn from environmental groups for not going far enough, though it is also opposed by the Florida Petroleum Council, which supports fracking. Fracking, short for hydraulic fracturing, involves injecting water, sand and chemicals underground to create fractures in rock formations, allowing natural gas and oil to be released. While supporters say fracking increases production and holds down energy costs, opponents argue it threatens water supplies and can cause environmental damage. Environmentalists object to the House bill because of a definition of fracking as injecting a "high rate" of fluids into the ground. Aliki Moncrief, executive director of the Florida Conservation Voters, said the definition excludes a technique called "matrix acidizing," which utilizes many of the same chemicals used in the fracking process. "Definitions matter, they require clarity because they have to pass the test of time," Moncrief told the House panel. "You all know probably 1,000 times better than I do that a law banning fracking will be picked apart. Special interests who disagree with the intent of banning fracking, they're going to look for every loophole they can find so that the law doesn't apply to them."

Two fracking ban bills passed today, but critics say one isn’t green enough. - Both House and Senate committees voted positive on bills banning fracking Wednesday afternoon, but only one left those in the environmental community content.The House bill, put forward by the Agriculture and Natural Resources Subcommittee, passed without an amendment environmentalists say was necessary in order for them to support it.The amendment, filed by Rep. Evan Jenne, included language that defines matrix acidization as part of the definition of fracking.Matrix acidizing is performed by pumping acidic fluids into a well at a pressure low enough to often not be considered “fracking” by definition. Operators use acid to dissolve minerals and bypass formation damage around the well.Rep. Holly Raschein, who filed the bill, said it wasn’t her intent to “slip daylight past a rooster.”“This is not the only time this bill is going to be heard,” the Key Largo Republican said. “Today we didn’t want to have a knee-jerk reaction. This is a very important issue, a complex issue and one that I do not take lightly.”Gov. Ron DeSantis made fracking bans a priority this year after he unveiled sweeping measures to protect Florida's vulnerable aquifer and clean up the state's water supply.  Jenne, a Dania Beach Democrat, explained that because Florida is largely a porous plateau of limestone, matrix acidizing could be the most likely fracking technique to be used in Florida.

First unit at Sasol's Lake Charles chemical plant starts output - Sasol on Wednesday began production at the first of seven units at its giant Lake Charles chemical plant in the US, boosting shares in the South African petrochemical group. The plant in Louisiana, which will cut the company’s reliance on fuel, has an expected output of 1.5 million tonnes of ethylene, a chemical used in industries such as packaging, detergents and adhesives.  Sasol, whose main business transforming coal to liquid fuel helped apartheid era South Africa side-step a 1980s oil embargo, expects the project to add $1.3 billion to its annual core earnings, or Ebitda, in the 2022 fiscal year. The company reported core earnings of R46 billion ($3.32 billion) in the 2018 financial year. The capital expenditure on the project could top $11.8 billion, Sasol said in profit guidance last week. 

Don't expect many US LNG exporters to build without firm supply deals, established players say - — Cheniere Energy, the biggest US exporter of LNG produced from shale gas, will continue to only advance new liquefaction projects that are backed by long-term offtake contracts, an executive said Tuesday at an S&P Global Platts conference in Houston. The strategy comes as the trend of some deep-pocketed developers building terminals without such deals in place first picks up steam and as competition for securing buyers increases. The positive final investment decision last week by ExxonMobil and Qatar Petroleum to build their Golden Pass export terminal in Texas without the announcement of a long-term offtake contract followed Shell-backed LNG Canada's similar decision in October for its British Columbia facility. The moves signaled the willingness of major energy companies with existing LNG volumes in their portfolios to accept a level of risk that was unheard of in the North American market until recently. Analysts have wondered whether that would catch on with more developers. "At Cheniere, we would not be comfortable basically taking spread risk," said Oliver Tuckerman, the company's vice president of commercial structuring and corporate development. "If you own the resource and you are very comfortable with your cost structure, I get it ... and to a certain extent you have that with the Qataris and Exxons. We just don't see that as a good business and that is not something we are going to entertain."   Brad Phillips, director of strategy and research at Freeport LNG, which is expected to start its export terminal in Texas later this year, said at the conference that the Golden Pass decision was a chance for Qatar to invest in the US, and he viewed the LNG Canada decision as a unique opportunity for its global partners. "I don't see the US model shifting to that," Phillips said. The officials and an energy consultant said they don't anticipate the demise of the long-term contract in the US LNG export market anytime soon. "They don't have to all be 20 years, but there has to be some amount of the capital returned with some level of certainty,"

Workers prepping for pipeline bore across Mississippi  – Workers with Michels Corp. Construction are prepping the area between Elsah and Chautauqua for the Spire STL Pipeline. The work includes clearing a wide swath of woods to the top of the bluff for placement of the underground pipeline. The St. Louis-based utility company is constructing a 65-mile natural gas pipeline through Scott, Green and Jersey counties. The cost is estimated between $210 million and $225 million. Workers have clear-cut a gash into the bluffs about one-half mile northwest of Mississippi Street in Elsah. The pipeline will go under the river at that point. Specifically, the Mississippi River will be crossed using horizontal directional drill techniques to lessen the environmental impact. Nicknamed the Spire STL Pipeline, construction began this month and, if everything goes according to schedule, will be completed as soon as July. Motorists and pedestrians should avoid getting too close to the construction. In preparing for this project, Barth said Spire conducted extensive surveys and research to locate and protect all eagle nests, including consulting with multiple agencies including U.S. Fish and Wildlife Service, the Illinois and Missouri Departments of Natural Resources and the Missouri Department of Conservation. During the surveys, they didn’t find any eagle nests within the vicinity of the project and don’t anticipate that construction will affect eagle watching, she said. Spire Inc. will own and operate the pipeline. Spire is a public utility holding company based in St. Louis. According to Spire’s website, the new pipeline will “provide significant benefits to more than 647,000 homes and businesses in the entire St. Louis region.”

Keystone pipeline in major oil leak - Part of the Keystone pipeline were shut due to a leak of oil in Missouri, with some 6,814 liters released into the environment. Enbridge Inc.'s Platte pipeline was also closed temporarily as a precaution. The Keystone pipeline takes 590,000 barrels of crude oil per day from northern Alberta, Canada, to U.S. refineries. On February 6, 2019, TransCanada shut down the pipeline on between Steele City, Neb., and Patoka, Ill., and dispatched crews to assess the situation. Although the leak has been detected and repaired, the pipeline currently remains shut. During this time, almost 7,000 liters of oil (equivalent to 43 barrels) had trickled out in the surrounds of St. Charles County. At the same time, Enbridge's Platte crude pipeline was also shut, due to uncertainty as to where the leak was coming from. However, according to Missouri Department of Natural Resources no leaks were detected and the fault rested with the TransCanada operation. Commenting on the incident, TransCanada spokesman Terry Cunha told CBC: "Following overnight activity and excavation, preliminary investigation has led TransCanada to believe that the oil discovered in St. Charles County likely originates from the Keystone Pipeline system and we will continue to conduct our activities accordingly." In terms of the environmental impact, Cunha adds: "Specialists continue to affirm there is no threat to public safety or the environment." Brian Quinn, a spokesman for Missouri’s Natural Resources Department, informed The Financial Post that Keystone will remain closed until repairs are made and a full safety assessment can be made.  Meanwhile, TransCanada continues to accumulate oil supply contracts as part of its plans to expand oil distribution to the U.S. via the construction of its controversial Keystone XL pipeline, the fourth phase of the overall Keystone project. The new pipeline will add an additional 1,179-miles (1,897 kilometers) of pipes, with the capacity to carry 830,000 barrels of oil each day.

Missouri agency says work ongoing to find cause of oil leak(AP) — The Missouri Department of Natural Resources says crews are still working to clean up and identify the cause of an oil pipeline leak in suburban St. Louis. Agency spokesman Brian Quinn said contractors for the pipeline company, TransCanada Corp., were assessing an excavated segment of the Keystone pipeline Wednesday to pinpoint the problem. The leak was discovered last week near St. Charles. The department estimates the leak at about 43 barrels, or 1,800 gallons (6,800 liters). It says oil didn’t reach any waterway. Quinn says about 31 barrels of oil have been collected, and crews have removed more than 1,000 cubic yards of soil. The department is working to identify nearby wells for groundwater testing. A TransCanada spokesman says the pipeline remains closed from Steele City, Nebraska, to Patoka, Illinois.

TransCanada's Keystone pipeline still partly shut after St. Charles County oil leak - TransCanada said on Monday a stretch of its Keystone crude pipeline from Nebraska to Illinois remained shut after a leak was discovered in St. Charles County last week.The oil leak — estimated to be at least 43 barrels or about 1,800 gallons — occurred north of St. Charles near Highway C, about 1,700 feet south of the Mississippi River.The cause and source of the spill have not been determined and there is no estimated timeline for a restart, TransCanada spokesman Terry Cunha said in an email. The closure affects the line that runs from Steele City, Neb., to Patoka, Ill.The 590,000 barrels-per-day Keystone pipeline system is a critical artery taking Canadian crude from northern Alberta to refineries in the U.S. Midwest.TransCanada told Keystone shippers last week it was declaring force majeure on shipments affected by the shutdown, according to a notice seen by Reuters. Force majeure is a declaration that unforeseeable circumstances prevented a party from fulfilling a contract.Canadian pipelines have been running at capacity as a production surge in Alberta overwhelmed existing pipeline infrastructure, forcing the Alberta provincial government to order production cuts starting last month.Western Canadian heavy crude has attracted greater demand in recent days following U.S. sanctions against Venezuela’s state oil company.

ExxonMobil marks multibillion-dollar start up with celebration - The startup of an ethane cracker at the Baytown Olefins Plant along with two new polyethylene lines at the Mont Belvieu Plastics Plant, all part of ExxonMobil’s multibillion-dollar North American Growth Project, was cause for celebration as community dignitaries welcomed plant managers and leaders to town for some festivities. Jason Duncan, who took over as Baytown Olefins’ plant manager Oct. 1, leads at a time when the plant just started up a 1.5 million ton-per-year ethane cracker at the complex in July. The new cracker, part of ExxonMobil’s $20 billion Growing the Gulf initiative, provides ethylene feedstock to new performance polyethylene lines at the company’s Mont Belvieu plastics plant, which began production in fall 2017. The ethane cracker at the Baytown complex and the Mont Belvieu plant represent the largest ExxonMobil chemical investment to date.   The expansions also created more than 10,000 construction jobs along with 4,000 in nearby communities and 350 permanent jobs. Duncan said the North American Growth project also invests in the community and the future of both Baytown and Mont Belvieu.   Duncan also thanked Lee College for providing the workers through the Community College Petrochemical Initiative, which involves nine colleges with Lee College as the lead. The program trains welders, pipe fitters, instrument technicians, machinists and process technicians.

Open season expanded on Gray Oak Pipeline to add USGC Kinder Morgan delivery points — Open season is underway to add Kinder Morgan delivery points at or near the Houston Ship Channel to the 900,000 b/d Gray Oak pipeline currently under construction, Phillips 66 Partners said Monday, giving Permian crude shippers greater access to refineries and export facilities. Phillips 66 Partners and Kinder Morgan said in a joint statement that the connection between the Permian Basin and Kinder Morgan's crude and condensate delivery points near the Houston Ship Channel "would be achieved through a connection in South Texas." Additional delivery points will give Gray Oak crude options to avoid expected congestion at other USGC locations, such as Corpus Christi, which is expected to worsen as Permian-to-USGC pipelines come online. Construction is underway on the Gray Oak Pipeline, which will provide 900,000 b/d of crude oil transportation from the Permian to USGC locations, including Buckeye's Southern Gateway project in Corpus Christi. "We have received 360 miles of pipe and started construction on all of the 17 tanks," Phillips 66 Partners CFO Rosy Zuklic said Friday on the fourth-quarter results call. "We remain on track for pipeline completion for the fourth quarter this year." Kinder Morgan's Double Eagle and Crude and Condensate (KMCC) systems already feed into Phillips 66's 256,000 b/d Sweeny, Texas, refinery. The 100,000 b/d Double Eagle pipeline is a joint venture between Kinder Morgan and Magellan, and carries Eagle Ford shale to Corpus Christi. The 300,000 b/d KMCC pipeline delivers Eagle Ford crude and condensate to multiple locations along the USGC, including Phillips 66's Sweeny refinery. Sanford C. Bernstein & Co. analyst Jean Ann Salisbury estimates the 3 million b/d of new Permian-to-USGC pipeline capacity coming online in the next 18 months - including Gray Oak - will put a strain on USGC export facilities already stretched by today's 2 million b/d of crude exports.  Gray Oaks will also deliver crude into Buckeye's new crude export facility under construction in Corpus Christi -- the South Texas Gateway Terminal. Phillips 66 Partners has a 25% stake in the terminal, which will have two deepwater docks, planned storage capacity of 6.5 million to 7 million barrels, and is expected to start up in mid-2020.

Waha price collapse signals worsening gas supply glut in the Permian. - The U.S. natural gas market last week was again reminded of the hair-trigger conditions that Permian producers and marketers are operating under — with gas production pushing against available takeaway capacity, all it takes is an otherwise minor/routine maintenance event on even one West Texas takeaway pipeline to send regional gas prices spiraling into negative territory. Waha Hub gas prices last week collapsed to their lowest level ever, with intraday trades even going negative — meaning some had to pay the market to take their gas. This wasn’t the first time that’s happened in the Permian — a similar event occurred in late November 2018 — but it was the worst to date and signals a heightened supply glut in the region, at least until the first new takeaway pipeline comes online in the fourth quarter of this year. Today, we explain the recent price weakness in West Texas and implications for Permian basis in 2019. Gas market participants have long been bracing for mayhem in the West Texas physical market. We’ve written extensively in the RBN blogosphere over the past couple of years about the onslaught of gas supply from the basin, the rapidly worsening takeaway capacity constraints and the resulting deterioration of Permian gas prices. (These are trends we update on a weekly basis in our NATGAS Permian report, along with our outlook.) A little over a year ago, in Help On the Way, and again later last year in Blame It On Texas and Hell in Texas, we laid out the timing and extent of pipeline constraints that the region was facing, along with the slew of pipeline projects announced to provide a relief valve for gas leaving the region. And, finally, our Trouble Every Day series outlined potential ways that Permian producers could ride out the constraints until that capacity relief arrives.

Report- Texas crude oil production breaks 1970s record - Crude oil production in Texas has beaten a previous record set in the 1970s, a new report from the Texas Independent Producers Royalty Owners Association stated.Texas oil wells produced more than 1.54 billion barrels of crude in 2018, beating the previous record of 1.28 billion barrels set in 1973, TIPRO reported in its annual "State of Energy Report" early Monday morning.  Natural gas production also grew, reaching 8.8 trillion cubic feet in 2018, the report stated. Crude oil production reached 1.26 billion barrels in 2017 – just shy of breaking the 1973 record, Railroad Commission of Texas figures show. Oil companies reached their record production figures in 2018 despite a 40 percent commodity price drop during the fourth quarter. In addition to record production numbers, the oil and natural gas industry also grew in employment numbers. The industry finished 2018 employing 880,681 people, a 5 percent increase over 2017 employment figure, TIPRO reported. Texas accounted for more than 352,000 of those jobs, or about 40 percent, TIRPO reported.

Drilling Down- Chevron to ramp up Permian Basin drilling projects -  Oil giant Chevron is preparing for a large round of drilling in the Permian Basin of West Texas. The California oil company filed 12 drilling permit applications with the Railroad Commission for horizontal drilling and hydraulic fracturing projects on its DR State Wise Unit lease in Culberson County. Located off FM 652 between Guadalupe Mountains National Park and the town of Orla, all 12 drilling projects target the Ford West field of the Wolfcamp geological formation down to a depth of 9,000 feet. Chevron closed 2018 with a nearly $14.9 billion profit on $166.3 billion of revenue. The company attributes part of those profits to a production increase in the Permian Basin where it holds more than 2.2 million acres of leases.  Chevron filed for 124 drilling permits in Texas last year. The company’s nearly 2,300 Texas leases produced nearly 28.9 million barrels of crude oil, more than 116.6 billion cubic feet of natural gas and nearly 5.4 million barrels of condensate during the first 11 months of 2018.

US rig count falls 15 on week to 12-month low- S&P Global Platts Analytics - The US oil and natural gas rig count declined by 15 this week to 1,099, marking its lowest level since February 2018, data released Thursday by S&P Global Platts Analytics shows. Oil-directed rigs were down by 21 on the week to 854 as they continued to decline from a multiyear high at 933 in December. Gas-directed rigs edged up by six this week to 223, but remained sharply lower compared to a mid-November high at 281. The number of drilling rigs with no specified orientation was unchanged on the week at 17. The continued slowdown in US drilling activity comes as West Texas Intermediate crude oil prices continue to hover in the low-$50/b area. On Thursday, the prompt-month contract was assessed at $54.41/b, down from an October high at more than $76/b, S&P Global Platts data shows.  Despite recent increases in both spot and forward oil prices, many producers have announced plans during recent fourth-quarter 2018 earnings calls to reduce rig activity this year. The Permian Basin continued to lead the recent decline in drilling activity, with rig count in the play falling by 20 to 452 for the week ending February 13. After reaching a multiyear high at 499 rigs in mid-November, drilling activity in the basin has slowed sharply since early January. In Oklahoma's SCOOP/STACK basin, rig count retreated by three this week to 97 -- its lowest since late-2017. In North Dakota's Bakken Shale, the rig count was also lower this week, down by two to 57, marking an 11-month low. In the Denver-Julesburg, rigs were flat on the week at 30. In the Eagle Ford, rig count edged up by three this week to 94. In both the Colorado and South Texas plays, drilling activity has slowed from recent highs in early January and early December, respectively. In contrast to the crude-heavy basins, drilling in the largest US dry gas plays has continued to accelerate this year in a trend that appears to be moving independently from gas prices. After hitting a more-than-four-year high at $4.70/MMBtu in November, the prompt-month NYMEX Henry Hub contract has declined sharply in recent weeks. On Wednesday, the contract settled at $2.573, just above a 12-month low settlement price in early February. In the Marcellus Shale, rig count edged up by two this week to 65. In the nearby Utica, drilling rigs were down one on the week to 16. At 81 rigs, the combined count across the two Appalachian basins this week is now at its highest in recent history. In the Haynesville, rig count was flat on the week at 66 and remains down just two from a recent multiyear high at 68 rigs in late January.

Baker Hughes- US rig count gains 2 units to 1,051 - Oil & Gas Journal - The US drilling rig count is up 2 units to 1,051 rigs working for the week ended Feb. 15, according to Baker Hughes data. The count is also up 76 units from the 975 rigs working this time a year ago. With a 1-unit loss week-over-week, 1,028 rigs are drilling on land. The number of rigs drilling offshore gained 2 units to reach 21 rigs. Those units drilling in inland waters gained a single rig to reach 2 units for the week. US oil-directed rigs are up 3 from last week to 857 units working, and up 59 units from the 798 rigs drilling for oil this week a year ago. Gas-directed rigs are down 1 unit at 194 yet up 17 from the 177 units drilling for gas a year ago. Among the major oil and gas-producing states, only five saw a week-over-week increase. Louisiana, at 66 units working, was up 4 rigs for the week. Wyoming gained 3 rigs to reach 37. West Virginia, Alaska, and California with respective counts of 18, 12, and 11 were each up 1 unit this week. Colorado and three other states remained unchanged this week. These were Colorado, 35; Ohio, 18; Utah, 8; and Kansas, 0. Oklahoma, at 119, and North Dakota, at 57, were down 1 unit each this week. Texas and New Mexico, at respective counts of 509 and 109, were both down 2 units. Pennsylvania, down 3 units this week, reached 44 rigs working. Canada’s rig count is down 16 units for the week. At 224 rigs, the count is 94 fewer than the 318 units drilling this week a year ago. Ten of the dropped rigs are gas-directed, bringing the count to 72 for the week. Oil-directed rigs in Canada are down 6 rigs to 152. [Native Advertisement]

EIA adds new play production data to shale gas and tight oil reports -- In December 2018, U.S. shale and tight plays produced about 65 billion cubic feet per day (Bcf/d) of natural gas (70% of total U.S. dry gas production) and about 7 million barrels per day (b/d) of crude oil (60% of total U.S. oil production). A decade ago, in December 2008, shale gas and tight oil accounted for 16% of total U.S. gas production and about 12% of U.S. total crude oil production.   EIA recently updated its methodology and production volume estimates for U.S. shale gas and tight oil plays to include seven additional plays, increasing the share of shale gas by about 9% and tight oil by 8% compared with previously estimated shale production volumes. The update captures increasing production from new, emerging plays as well as from older plays that had been in decline but are rebounding because of advancements in horizontal drilling and hydraulic fracturing. The selected plays are identified by examining the reservoir names reported by operators to state agencies. EIA uses the third party data source, Drillinginfo, which collects and distributes well level data gathered by the states. The most productive of the newly added plays is the Mississippian formation, which is located mainly in Oklahoma within the Anadarko Basin. The mainly carbonate rock type lies above the Woodford play and has produced liquids and natural gas for some time, but newer completion techniques have driven recent production gains.  The remaining six plays are smaller and are included in the rest of U.S. tight oil and shale gas categories.

• The Burket and Geneseo formations in the Appalachian Basin of Pennsylvania and West Virginia increased production in recent years. These dry shale gas formations lie above the Marcellus Shale but are thinner and do not cover as large an area as the Marcellus.
• The Uteland Butte member of the Green River Formation in the Uinta Basin of Utah is composed primarily of limestone, dolostone, and organic rich mudstones and siltstones.
• The Turner, Frontier, Sussex-Shannon, and Teapot-Parkman formations are located in the Powder River Basin of Wyoming and lie below and above the Niobrara formation, the basin’s primary hydrocarbon-bearing formation. They are mainly fine-grained sandstone with interbedded silt and shale.

Walz says state will continue court appeal of Enbridge pipeline approved by PUC  - Gov. Tim Walz will continue pursuing a court appeal started by his predecessor that could block Enbridge from building a controversial $2.6 billion oil pipeline across northern Minnesota. Under former Gov. Mark Dayton, the Commerce Department appealed the Minnesota Public Utilities Commission’s (PUC’s) decision to allow Enbridge to build the pipeline, a replacement for its aging and corroding Line 3. Last month, the Walz administration said it would review the appeal.“By continuing that process, our administration will raise the Department of Commerce’s concerns to the court in hopes of gaining further clarity for all involved,” Walz said in a statement. “As I often say, projects like these don’t only need a building permit to go forward, they also need a social permit. Our administration has met with groups on all sides of this issue, and Minnesotans deserve clarity.”The Commerce Department, an arm of the governor’s administration, represents the public interest before the PUC, which is an independent agency whose members are appointed by the governor to staggered six-year terms. In a statement, Enbridge called Walz’s decision “unfortunate,” saying the PUC’s approval came after a “thorough” review that took four years.

Minnesota governor sides with environmentalists on pipeline (AP) — Minnesota Gov. Tim Walz said Tuesday that his administration will keep pursuing an appeal of an independent regulatory commission’s approval of Enbridge Energy’s plan to replace its aging Line 3 crude oil pipeline across northern Minnesota, siding with environmental and tribal groups in his biggest decision since becoming governor last month. The state Public Utilities Commission approved the project last summer. Then-Gov. Mark Dayton’s Department of Commerce appealed that decision in December, as did several groups opposed to the project. The Minnesota Court of Appeals last week dismissed those appeals as premature and sent the dispute back to the commission for further proceedings. That move forced the Walz administration to take a stand by Tuesday after weeks of studying whether to continue to appeal or let the matter drop. The Commerce Department argued under Dayton that Enbridge failed to provide legally adequate long-range demand forecasts to establish the need for the project, but the commission concluded the Calgary, Alberta-based company met its requirements. Other groups fighting the project say it threatens oil spills in pristine waters in the Mississippi River headwaters region where Native Americans harvest wild rice and claim treaty rights, and that it would aggravate climate change. “When it comes to any project that impacts our environment and our economy, we must follow the process, the law, and the science,” Walz said in a statement. “The Dayton administration’s appeal of the PUC’s decision is now a part of this process. By continuing that process, our administration will raise the Department of Commerce’s concerns to the court in hopes of gaining further clarity for all involved.” While Line 3 opponents applauded Walz for heeding the department’s concerns, Republican legislative leaders said the Democratic governor made a big mistake. Enbridge said it expects to ultimately prevail. Enbridge wants to replace Line 3, which was built in the 1960s, because it’s increasingly subject to cracking and corrosion, so it can run at only about half its original capacity. It says the replacement will ensure reliable deliveries of Canadian crude to Midwest refineries. It’s already in the process of replacing the Canadian segments and is running the short segment in Wisconsin that ends at its terminal in Superior. 

Minnesota tribe asks: Can wild rice have its own legal rights? - Star Tribune -- Minnesota’s natural wild rice holds deep cultural, spiritual and economic importance for the state’s American Indian tribes.Now, in one part of the state at least, the native grass holds even more: its own legal rights.Girding for a fight against a proposed oil pipeline, the state’s largest Indian tribe, the White Earth Band of Ojibwe, has passed a tribal law granting wild rice its own enforceable legal rights, much like those enjoyed by American citizens. They include the rights to “flourish, regenerate, and evolve.” A similar law has been adopted by the 1855 Treaty Authority, a tribal group representing beneficiaries of an 1855 land pact the Chippewa tribes made with the U.S. government.The laws make it illegal for any business or other entity to violate the plant’s rights.It appears to be the first time in the United States that a plant species has been granted legal personhood, although last year the Ponca Tribe in Oklahoma passed what’s believed to be the first law to codify the rights of nature as a whole.It also puts White Earth on the leading edge of an environmental movement known as “rights of nature,” championed by a Pennsylvania nonprofit called the Community Environmental Legal Defense Fund (CELDF). Attorneys with the tribe and the nonprofit say American law treats nature as property, and that environmental protection laws have failed as a result.Whether the novel legal concept holds up in court remains to be seen.

Probe of natural-gas spill continues - Williams is continuing its investigation into what caused a Jan. 18 rupture of a natural gas pipeline and resulting spill of liquid gas condensates into Parachute Creek, but says the incident didn't contaminate groundwater. Shawn Whitmore, operations manager for the oil and gas pipeline and processing company's Piceance Basin assets, told the Garfield County Energy Advisory Board late last week that the company is completing excavation of the rupture site about six miles north of Parachute and has had an investigative team on site to determine how the pipeline broke. He said Williams won't put the line back in service until it can be "absolutely confident" of the line's integrity. The 16-inch diameter line ruptured in the middle of the night and was reported by a Caerus Oil and Gas employee. Within a half hour, Williams had acted to shut down the line. By then the line had leaked an estimated 13 barrels (546 gallons) of hydrocarbons and another 13 barrels of water produced in gas development. Whitmore estimated that Williams has recovered about 12 barrels of the hydrocarbons and 12 barrels of produced water. He said snowmelt runoff as the temperatures rose that day carried condensates into the creek, and the first day testing showed benzene levels of 9.4, 9 and 8.5 parts per billion in the creek, with the levels being lower at each test site downstream. Subsequent testing for benzene and other condensate constituents have shown nothing above Colorado Oil and Gas Conservation Commission limits, which include 5 ppb for benzene, he said. The gathering line transports gas from wells to Williams' gas processing plant in the Parachute Creek area. The line went into service in the 1990s, Whitmore said. Some wells were shut in due to the line being out of service.

Three brine spills in Bakken over weekend - Three brine spills were recorded over the weekend in the Bakken. The largest was 440 barrels of brine spilled about 10 miles southwest of New Town at a site owned by Marathon Oil Company. The spill happened Friday, February 8th and authorities say it was do to a valve connection leak. Another spilled 255 barrels of brine six miles northwest of Manning on Saturday February 9th at a site owned by Lime Rock Resources III-A, L.P. When the spill was reported, 135 barrels of brine were cleaned up and they are working on taking care of the remaining barrels. That was due to equipment failure and they are still working on cleaning it up. Six and a half miles from Williston 245 barrels of brine spilled at a site owned by Oasis Petroleum North America LLC. The spill happened Friday, February 8th and it was also due to valve connection leak. 243 barrels have been cleaned up.

Extreme cold leads to saltwater spills at North Dakota wells — Cold temperatures contributed to three recent saltwater spills at oil and gas wells in the North Dakota oil patch. The state Oil and Gas Division says the spills happened Friday near New Town and Williston and Saturday near Manning. They totaled 940 barrels, or nearly 39,500 gallons. All three leaks were contained on-site, and most of the spilled saltwater has already been recovered. Saltwater, or brine, is a byproduct of energy production. The spills were reported by Marathon Oil, Oasis Petroleum and Lime Rock Resources, who cited equipment malfunctions. Oil and Gas Division spokeswoman Katie Haarsager tells The Bismarck Tribune that initial reports indicate freezing temperatures were a factor in all three incidents. The National Weather Service says Williston hit a record 43 degrees below zero on Friday.

Tank overflow causes brine spill in Bottineau County - A tank overflowed and caused 1,100 barrels, or 46,200 gallons, of brine to spill at an oil site in Bottineau County, according to the North Dakota Oil and Gas Division.The company 31 Operating reported the spill occurred Sunday at a central tank battery about 8 miles east of Mohall. The company reported the brine was contained within a dike and cleanup is underway.  Katie Haarsager, spokeswoman for the Oil and Gas Division, said the incident was caused by a tank that overflowed. Cold temperatures contributed to the incident and prevented an alarm from going off, Haarsager said. A state inspector has been to the site and will monitor additional cleanup, regulators said.

Spill contaminates Bowman County creek - A pipeline spill from an enhanced oil recovery system in Bowman County has contaminated Kid Creek, a North Dakota Department of Health official said Thursday. Denbury Onshore reported about 75 barrels, or 3,150 gallons, of source water spilled on Feb. 7 about 10 miles south of Marmarth. Source water is groundwater used for enhanced oil recovery that contains a higher level of dissolved solids and minerals than fresh water, but is lower in chlorides than produced water, the health department said. Kid Creek flows into the Little Missouri River. The spill occurred near a well site about a quarter mile from a stock dam and 1¼ miles away from the river, said Bill Suess, spill investigation program manager for the health department. The spill was reported on Feb. 8 and a health department inspector was there the same day, Suess said. But because of freezing conditions, it took longer to confirm the contamination had reached the creek, he said. The department will continue to monitor the investigation and cleanup. The health department has investigated previous spills involving the same company, including a spill two years ago that involved 2,000 barrels, or 84,000 gallons, of source water that flowed into Skull Creek in Bowman County.

Protest highway shutdown lawsuit claims include extortion — Standing Rock Sioux tribal members and others who are suing over a five-month shutdown of a North Dakota highway during protests against the Dakota Access oil pipeline have broadened their claims to include allegations of extortion and media manipulation by state and county officials.Plaintiffs allege the closure of a stretch of state Highway 1806 was aimed not only at protesters who had gathered in the thousands in camps near the two-lane road but also at influencing the tribe’s position on the camps and reporters’ coverage of the prolonged clash. It played out over six months in 2016 and 2017 and resulted in 761 arrests.The new filing by plaintiff’s attorney Noah Smith-Drelich references several alleged documents in support of the argument, including a government strategic plan he says detailed concessions authorities wanted from the tribe, such as a public decree to vacate the camps.“Defendants’ true purpose for discriminatorily closing the road in question ... (was) to extort political concessions from the Standing Rock Sioux tribe,” Smith-Drelich wrote in an amended complaint filed earlier this month. The lawsuit also alleges the highway closure made it “substantially more difficult for local press in particular to independently obtain firsthand evidence of what was happening in or around the camps,” making reporters more reliant on government accounts of protesters as being “violent and criminal, and of the (protest) movement as defined by mayhem.”

North Dakota prepares to file lawsuit for $38 million in pipeline protest costs — North Dakota is preparing to file a lawsuit against the U.S. Army Corps of Engineers seeking $38 million in costs associated with the Dakota Access Pipeline protests, said Attorney General Wayne Stenehjem. The federal government did not respond within six months to a claim North Dakota filed in July seeking compensation for law enforcement and other costs to respond to several months of protests. North Dakota alleges that the state incurred $38 million in expenses resulting from the corps’ failure to enforce the law when the agency allowed people to camp without permits on federal land. The state filed the claim under the Federal Tort Claims Act and the corps did not respond by the deadline of Jan. 23, Stenehjem said. “The statute says if they don’t respond, that is the same as a denial,” Stenehjem said. The next step is for North Dakota to file a lawsuit in federal court to recover damages. “We have a six-month window in which we can file a lawsuit for that money, which is what we’re working on,” Stenehjem said. Public affairs officials with the corps did not return an email seeking comment on Monday, Feb. 11. In July, a corps spokeswoman said the agency doesn’t comment on litigation. An estimated 1,400 law enforcement officers and 300 other personnel from 11 states and 23 state agencies responded to the protests, according to the state’s claim. The state alleges the protests that began in August 2016 and continued through February 2017 were aggravated by the “negligent and unlawful conduct by the corps.” In August 2017, the Department of Justice awarded $10 million to help reimburse North Dakota for protest costs. 

North Dakota to sue feds over pipeline protest police costs  (AP) — North Dakota will sue the federal government to try to recoup the $38 million it spent policing the prolonged protests against the Dakota Access oil pipeline — a tactic one expert believes has little chance of success.The Army Corps of Engineers didn’t respond to an administrative claim filed last July, so a lawsuit is the next step, Attorney General Wayne Stenehjem said Tuesday. He didn’t have an estimate on the cost, which will be funded either through his department’s existing budget or through a state fund set up for such litigation.Justice Department spokesman Wyn Hornbuckle declined comment.Thousands of opponents of the $3.8 billion pipeline that’s been moving North Dakota oil to Illinois since June 2017 gathered in southern North Dakota in 2016 and early 2017, camping on federal land and often clashing with police, resulting in 761 arrests over six months.   North Dakota contends the Corps allowed protesters to illegally camp without a federal permit. The Corps has said protesters weren’t evicted due to free speech reasons.   University of St. Thomas law professor Gregory Sisk, an expert on civil litigation with the federal government, considers North Dakota’s case “a long shot.” He said lawsuits that essentially allege the government failed at its job typically don’t succeed, and he gives North Dakota “a 1 in 10 chance.” Stenehjem said he thinks the state has “a solid claim.” He said he heard similar skepticism when the state sued Minnesota several years ago over a law that impacted North Dakota electricity exports, and “we won.”

North Dakota Seeks to Restrict Access to Public Records After Standing Rock Reporting Exposed Law Enforcement Abuses - North Dakota lawmakers are considering a bill to restrict the release of records related to security operations involving “critical infrastructure” — a category that includes fossil fuel pipelines. The bill comes after The Intercept and other media outlets published stories documenting law enforcement surveillance and coordination with private security during the Dakota Access pipeline protests, many of which were based on records released under the North Dakota Open Records Act.The bill, known as Senate Bill 2209, would amend the North Dakota Century Code to bar the disclosure of public records involving “security planning, mitigation, or threats” pertaining to critical infrastructure facilities. It specifically forbids the release of any critical infrastructure “security systems plan,” which it defines as “records,” “information,” “photographs,” “videos,” and “communications” pertaining to the “security of any public facility” or any “privately owned or leased critical infrastructure.” Among several examples of critical infrastructure systems included in the bill are “utility services, fuel supply, energy, hazardous liquid, natural gas, or coal.” According to Jesse Franzblau, a transparency law expert and policy analyst at Open the Government, while some of the language in the bill is similar to exemptions in federal laws that restrict public access to critical infrastructure information, “several parts of the bill obviously seem very tailored toward pipeline-related construction and also, given the timing, toward keeping information on security operations against pipeline protesters a secret.”

How A General-Turned-Oil Lobbyist Helped Push Through The Dakota Access Pipeline - A retired high-ranking officer in the U.S. Army Corps of Engineers played a significant role lobbying his former agency to push through the permitting process for the controversial Dakota Access Pipeline, new documents show. The trove of emails, released last month as part of ongoing litigation by the Standing Rock Sioux Tribe against the Corps, sheds light on how retired Brig. Gen. Robert Crear worked to leverage his government connections on behalf of Energy Transfer Partners, a major partner in the pipeline.   Jan Hasselman, a lawyer with Earthjustice who has been representing the tribe, read the emails with dismay. “It is totally unacceptable that a former high-ranking government official should be allowed to lobby his former agency on behalf of private interests,” he told HuffPost. “And it is so common that no one even looks twice.” Crear had a decadelong career in the Corps, where he served as chief of staff and commanding general, as well as head of the massive Task Force Restore Iraqi Oil infrastructure project in the early 2000s. When he retired in 2008, he opened a private consultancy and joined AUX Initiatives, a lobbying firm that represents a host of oil companies.  The newly uncovered emails suggest that in late 2014, Dallas-based Energy Transfer Partners brought in Crear after it decided that the environmental review and permitting process was not moving fast enough through the Corps. Crear wasted no time. Emails and meeting notes document numerous written communications, phone calls and meetings he arranged between ETP representatives and Corps officials in three districts and the agency’s Washington headquarters. They suggest that the former brigadier general exploited his professional capital and acquaintance with Corps personnel to push the project through the regulatory process.

Admitted pipeline vandalizer fights racketeering lawsuit — A Phoenix woman who has publicly admitted to vandalism along the route of the Dakota Access oil pipeline in two states is asking a judge to dismiss her as a defendant in a $1 billion federal racketeering lawsuit filed by the pipeline developer. Ruby Montoya was one of millions of people around the world who shared a “common purpose” of stopping the $3.8 billion pipeline built to move North Dakota oil to Illinois, and Texas-based Energy Transfer Partners has failed to show any link between her and a criminal enterprise, said defense attorney Lauren Regan with the Civil Liberties Defense Center. “Advocating for the protection of the climate through a reduction in fossil fuel infrastructure is on its face constitutionally protected, and not a basis for a RICO claim,” Regan wrote in a recent court filing. ETP sued Earth First, BankTrack and Greenpeace in August 2017, alleging they worked to undermine the pipeline project and the company. A judge later dismissed both Earth First and BankTrack as defendants and criticized the lawsuit for being vague. The company added five individuals as defendants in August 2018 , including Montoya and Jessica Reznicek. The two women in July 2017 released a public statement admitted to damaging valves and setting fire to construction equipment along the pipeline route in Iowa and South Dakota.Regan notes that neither woman has been criminally charged. She also refutes ETP allegations that Montoya was a spokeswoman for the anti-pipeline group Mississippi Stand and was trained in “eco-terrorist techniques” through Earth First.U.S. District Judge Billy Roy Wilson ruled last year that ETP had failed to make a case that Earth First is an entity that can be sued. The Center for Constitutional Rights had argued that Earth First is a philosophy or movement similar to Black Lives Matter, and thus can’t be sued.“Plaintiffs cannot seem to grasp the fact that (Earth First) is not an organization and does not have ‘members,’” Regan wrote, maintaining that Mississippi Stand is similarly an entity with no structure or leadership.

Racketeering lawsuit by Dakota Access developer dismissed (AP) — A federal judge on Thursday dismissed a $1 billion racketeering lawsuit that the developer of the Dakota Access oil pipeline filed against environmental groups and activists, saying he found no evidence of a coordinated criminal enterprise. Texas-based Energy Transfer Partners sued Greenpeace, BankTrack and Earth First in August 2017, alleging the groups worked to undermine the $3.8 billion pipeline that’s now shipping oil from North Dakota to Illinois. The company’s accusations included interfering with its business, facilitating crimes and acts of terrorism, inciting violence, targeting financial institutions that backed the project, and violating defamation and racketeering laws. The groups maintained the lawsuit was an attack on free speech. U.S. District Judge Billy Roy Wilson last year dismissed Earth First and BankTrack as defendants, saying ETP had failed to make a case that Earth First is a structured entity that can be sued and that BankTrack’s actions in imploring banks not to fund the pipeline did not amount to radical ecoterrorism. Wilson on Thursday granted motions to dismiss from Greenpeace and individually-named defendants that the company added to the lawsuit last August. The judge said ETP’s claim failed to establish several necessary elements required by the Racketeer Influenced and Corrupt Organizations Act, including that the defendants worked together on a criminal enterprise. “Donating to people whose cause you support does not create a RICO enterprise,” and “posting articles written by people with similar beliefs does not create a RICO enterprise,” Wilson wrote. Later in his ruling he added that “acting in a manner similar to others, without any sort of agreement or understanding, does not make you part of a RICO enterprise.”

As lawsuits over climate change heat up, oil industry steps up spurious attacks on its critics  - The oil industry has been depicting itself lately as the target of a conspiracy by scientists, local government officials and climate change activists to make it look bad.It would be odd to think that a conspiracy is necessary to punch holes in the fossil fuel companies’ public reputation, but here’s the argument presented by the Independent Petroleum Association of America (IPAA), one of the industry’s leading lobby organizations.“In a highly-coordinated move,” the IPAA declares on its website, “nearly 30 scientists, government officials and third-party organizations recently joined the fledgling climate litigation campaign.” The IPAA labeled this a “free-for-all” and quoted an industry newsletter calling the campaign “a carefully orchestrated effort by local governments in California and elsewhere to use state law to collect damages from companies producing and marketing fossil fuels.”If you think this sounds like a Goliath pretending to be a David, you are right. The litigation campaign IPAA refers to is a cluster of lawsuits pioneered in 2017 by the California counties of San Mateo, Imperial Beach, Marin, and Santa Cruz, and the cities of Richmond, Oakland, and San Francisco, among other jurisdictions, against more than 20 oil and gas companies.The plaintiffs assert that the companies freely promoted the use of their products even though they were aware of the products’ effect on global warming — information the industry allegedly suppressed for years. The municipalities are asking that the companies be forced to help pay for the damage wreaked by climate change, including drought, wildfires, sea level rise, and extremes of heat and precipitation. Since the filing of the California cases, similar lawsuits have been filed by Rhode Island, Washington’s King County (that is, Seattle), Baltimore, and New York City. The oil companies succeeded in transferring the state lawsuits to federal court, where they expect to face less liability under the law. The plaintiffs’ argument that the cases belong back in state court is being heard by the U.S. 9th Circuit Court of Appeals in San Francisco.

Safety officials concerned by sharp increase in oil train traffic from Canada - Oil imports by rail from Canada have hit a historic high, meaning more oil trains are rolling across Minnesota and raising the alert level of local emergency managers. Rail shipments from Canada to the United States more than doubled during 2018 as Canadian oil production outstripped the capability of pipelines to ship the stuff, including the six Enbridge-owned lines crossing northern Minnesota.  “It is a case of supply overtaking pipeline capacity, so oil moves to the next available form of transportation — trains,” said Kevin Birn, an oil industry analyst with IHS Markit in Calgary.  Oil train traffic through Minnesota from North Dakota was also up noticeably in 2018, though nowhere near peak levels of 2014. The North Dakota rail uptick is largely rooted in oil price shifts. Minnesota isn’t much of a destination for oil by rail, but it’s a significant transshipment point. Canada’s two big railroads, the Canadian National (CN) and the Canadian Pacific (CP), have major routes in the state, the former running through the Twin Ports, the latter through the Twin Cities. The BNSF Railway also moves some Canadian crude in Minnesota. BNSF said it’s seen a “moderate” increase in Canadian oil shipments. Canadian Pacific declined to release any oil train details. Canadian National said its total oil shipments jumped 77 percent from 2018’s third quarter to the fourth quarter, though it didn’t disclose more specific data. Over the last four months of 2018, 299 oil trains on the Canadian National’s tracks crossed from Ontario at Ranier, Minn., up from 121 during the same time a year ago, said Willi Kostiuk, emergency management coordinator for Koochiching County.    Oil trains typically have 100 tank cars, each carrying around 30,000 gallons. High-profile accidents thrust oil trains into the spotlight a few years ago, the biggest being a fiery 2013 disaster in Lac-Mégantic, Quebec, that killed 47 people. A year later, a BNSF oil train crashed and burned near Casselton, N.D., about 20 miles west of Fargo. Over 1,400 people were evacuated, but there were no injuries.

U.S. issues new rules requiring rail oil spill response plans (Reuters) - The U.S. Transportation Department on Thursday issued final rules requiring railroads to develop oil spill response plans and to disclose details of shipments to states and tribal governments after a series of high-profile incidents. The department’s Pipeline and Hazardous Materials Safety Administration said the rules, first proposed in July 2016, would “improve oil spill response readiness and mitigate effects of rail accidents and incidents involving petroleum oil and high-hazard flammable trains.” The new regulation “is necessary due to expansion in U.S. energy production having led to significant challenges for the country’s transportation system,” the agency added. The new rules apply to High Hazard Flammable Trains transporting petroleum oil in a block of 20 or more loaded tank cars and trains that have a total of 35 loaded petroleum oil tank cars. They require railroads to establish geographic response zones and ensure that personnel and equipment are staged and prepared to respond in the event of an accident. The new rules take affect in August and come after regulators reviewed more than a dozen oil car derailments from 2013 through 2016. The rules partially address recommendations made by the National Transportation Safety Board after a 2013 crude-by-rail derailment killed 47 people in the town of Lac Megantic in Quebec and released 1.6 million gallons of crude oil. 

The World Oil Market and U.S. Policy: Background and Select Issues for Congress, Congressional Research Service, updated February 4, 2019

Lawmakers introduce bill to ban drilling in Alaska wildlife refuge - A bipartisan group of House lawmakers introduced legislation Monday that would ban oil and natural gas drilling in Alaska’s Arctic National Wildlife Refuge (ANWR).The bill from Reps. Jared Huffman (D-Calif.), Alan Lowenthal (D-Calif.) and Brian Fitzpatrick (R-Pa.) would repeal a section of the 2017 GOP tax-cut law that, for the first time, opened part of the refuge for drilling. “Not only is the refuge one of the last great expanses of untouched wilderness in America, it is home to tremendous ecological diversity. It’s one of the last bastions of true wildness left on the planet,” Huffman said at a Monday news conference, flanked by Lowenthal and representatives of environmental groups and the Gwich’in people, an Alaska Native group.  “This is a deeply unpopular thing in the United States. People don’t want it. They haven’t asked for it,” he said. “And they will not accept that the wildest place in our country is on track to be sacrificed at the altar of Big Oil.”“We can’t give the oil and gas industry the green light to permanently destroy one of our nation’s last truly wild places,” said Lowenthal. Huffman chairs the House Natural Resources Subcommittee on Water, Oceans and Wildlife. Lowenthal chairs the Energy and Mineral Resources subpanel.

Bipartisan Bill Seeks to Ban Drilling in Arctic National Wildlife Refuge - A bipartisan group of House lawmakers introduced a bill on Monday would block oil and gas drilling in Alaska's Arctic National Wildlife Refuge (ANWR). Reps. Jared Huffman (D-Calif.), Alan Lowenthal (D-Calif.) and Brian Fitzpatrick (R-Pa.) aim to repeal a little-known Arctic drilling provision that was quietly snuck into the Tax Cuts and Jobs Act. The new bill—called the "Arctic Cultural and Coastal Plain Protection Act"—states that "oil and gas activities are not compatible with the protection of this national treasure." Inclusion of the drilling measure in the 2017 tax bill helped Republicans secure the vote of Sen. Lisa Murkowski of Alaska, who has long sought to open part of ANWR for oil and gas development. Even though the majority of voters across the political spectrum oppose ANWR exploitation and the area was kept off-limits thanks to Obama-era policies, the tax law, which passed with only GOP support, allowed drilling for the first time the refuge's coastal plain. The 1.5-million-acre coastal plain, also known as the 1002 Area, is believed to hold a vast and untapped trove of oil. Debate over opening the area for fossil fuel exploration has been at the center of political debate for decades. Environmentalists worry that drilling would harm native wildlife. An analysisfrom the Center for American Progress and Conservation Science Partners describes the coastal plain as the "biological heart" of the Arctic refuge that hosts one-third of all polar bear denning habitat in the U.S. and one-third of the migratory birds that come to the Arctic Refuge.

US crude oil production expected to hit records this year and next - U.S. oil production is anticipated to break records in the next two years — and prices are primed to increase slightly, according to an energy study released Tuesday.The Energy Information Administration (EIA) said Tuesday that crude oil production is expected to rise to an average of 12.4 million barrels a day in 2019 and 13.2 million barrels per day in 2020. That’s up from January’s average of 12 million barrels a day, an increase of 90,000 barrels a day from December.The expected increases will come from the Permian region of Texas and New Mexico, according to EIA.The U.S. last September surpassed Russia and Saudi Arabia as the top crude oil producer.The report additionally found that the oil prices are expected to increase from January’s average of $59 per barrel to an average of $61 a barrel in 2019 and $62 a barrel in 2020.This January’s oil prices had increased $2 a barrel from the previous month but were still $10 a barrel less than last January’s average.The Trump administration has hailed U.S. crude oil production as a necessary component of America’s fight for energy independence. In his State of The Union address last week, he said the U.S. had “unleashed a revolution in American energy,” that has led to historic energy export highs and economic growth. The focus has increasingly been on oil and natural gas production as coal and nuclear plants in the U.S. continue to shutter at a rapid pace.

Prices Slide As Temperatures Rise And The EIA Storage Withdrawal Falls Short Of Expectations -Highlights of the Natural Gas Summary and Outlook for the week ending February 8, 2019 follow. The full report is available at the link below.

• Price Action: The March contract fell 15.1 cents (5.5%) to $2.583 on an 18.4 cent range ($2.733/$2.549).
• Price Outlook: While the EIA withdrawal of (237) bcf was well below some estimates, the extreme cold was concentrated and conservation measures likely limited withdrawals in the upper Midwest. At the same time, LNG exports were low and quite simply the South did not witness extreme temperatures. Thus, on a temperature adjusted basis, the withdrawal was considered slightly bullish. The market has established a new weekly low for 3 consecutive weeks, but that is not yet extended. CFTC data indicated a (5,872) contract reduction in the managed money net long position as longs liquidated and shorts covered. Total open interest rose 77,783 to 3.544 million as of January 08. Aggregated CME futures open interest fell to 1.306 million as of February 08. The current weather forecast is now cooler than 8 of the last 10 years. Pipeline data indicates total flows to Cheniere’s Sabine Pass export facility were at 3.3 bcf. Cove Point is net exporting 0.8 bcf. Corpus Christi is exporting 0.274 bcf. Cameron is exporting 0.000 bcf.
• Weekly Storage: US working gas storage for the week ending February 1 indicated a withdrawal of (237) bcf. Working gas inventories fell to 1,960 bcf. Current inventories fall (118)bcf (-5.7%) below last year and fall (425) bcf (-17.8%) below the 5-year average.
• Supply Trends: Total supply rose 1.0 bcf/d to 84.7 bcf/d. US production rose. Canadian imports rose. LNG imports fell. LNG exports rose. Mexican exports rose. The US Baker Hughes rig count rose +4. Oil activity increased +7. Natural gas activity decreased (3). The total US rig count now stands at 1,049 .The Canadian rig count fell (3) to 240. Thus, the total North American rig count rose +1 to 1,289 and now trails last year by (11). The higher efficiency US horizontal rig count fell (2) to 923 and rises +91 above last year.
• Demand Trends: Total demand rose +10.6 bcf/d to +120.5 bcf/d. Power demand rose. Industrial demand rose. Res/Comm demand rose. Electricity demand fell (283) gigawatt-hrs to 82,990 which exceeds last year by +5,101 (6.5%) and exceeds the 5-year average by 4,426 (5.6%%).
• Nuclear Generation: Nuclear generation fell (1,327)MW in the reference week to 93,527 MW. This is (1,156) MW lower than last year and +922 MW higher than the 5-year average. Recent output was at 93,382 MW.

The heating season has begun. With a forecast through February 22 the 2018/19 total cooling index is at (2,219) compared to (2,033) for 2017/18, (1,794) for 2016/17, (1,859) for 2015/16, (2,209) for 2014/15, (2,456) for 2013/14, (2,151) for 2012/13 and (2,092) for 2011/12.

Natural Gas Gaps And Runs But Struggles To Maintain Gains - Natural gas bulls were greeted by a solid gap up last evening in the March contract, which continued running through the morning. However, afternoon model guidance trended a bit less impressive, and on the day the March contract settled just 2.3% higher.  The March contract was still the strongest on the day with weather being the clear catalyst for the move higher. In fact, later in the morning selling seemed to be led by later contracts along the strip.  The move was primarily driven by more bullish weather model guidance over the weekend, as in our Morning Update we noted a significant move higher in GWDDs relative to Friday's expectations.  This fit very well with our expectations at the end of last week, as in our Pre-Close Update on Friday we noted that the March contract could rally into the $2.7-$2.75 range and that we should trend colder over the weekend.  Despite these colder changes, we did see models trend slightly warmer in the Southeast this afternoon, cutting into gas gains. This was seen on recent Climate Prediction Center forecasts this afternoon.  Traders are also bracing for what should be a relatively small withdrawal compared to what we saw the last few weeks, with DTI/TCO reporting their smallest combined draw since the week containing New Year's.  Traders will have to weigh colder weather risks against this upcoming storage announcement, as well as the latest daily balance data from LNG exports to weather-adjusted power burns.

Colder End Of February Keeps Gas Bid - It was another day of strength at the front of the natural gas futures curve as the March contract logged a gain slightly less than 2% on the day. Gains were strongest at the front of the strip, though all of Cal19 seemed to trade about equally. The April/October J/V contract spread continues to bounce after setting a low last Friday. Yesterday, in our Afternoon Update, we outlined our Slightly Bullish sentiment heading into the overnight trading session even with some slightly warmer weather models. Prices bounced overnight on a colder 6z GEFS weather model, and we reiterated our "Slightly Bullish" sentiment this morning even after we revised down our GWDD forecast slightly as we saw balances supportive for prices today with more Week 3 and 12z model run cold risks. Then colder 12z GFS/GEFS weather model guidance helped rally the March gas contract up towards our $2.7 resistance level. Meanwhile, we continue to track long-range weather trends to update our March forecast accordingly. That was a key focus in our Seasonal Trader Report, which over the past few weeks accurately predicted the cold trend we are now seeing in February. Of note in today's Report was a recent trend stronger in upstream El Nino conditions into March on the American CFSv2 climate model guidance.

Models Flip Back Warmer And Gas Crashes Lower - After two days of gains on colder weather model guidance, key models flipped warmer last night and again this afternoon to hit the front of the natural gas strip hard. The March contract sold off the most accordingly, dipping over 4% on the day.   Later contracts found decently more support overall.   This sent the April/October contract spread to a new low settle.   The culprit was primarily overnight weather model guidance that trended far warmer. We outlined this in our Morning Update.   Afternoon weather model guidance trended warmer as well, leading the Climate Prediction Center to show significantly more Week 2 warm risks in the East.   Meanwhile, traders were positioning ahead of an EIA print tomorrow that should be quite unimpressive. We saw a far smaller weekly GWDD count than the previous week and it was far more in line with the second gas week of the year.

Weekly Gas Storage: Draw Slows - The EIA released its weekly Natural Gas Storage Report today, outlining how national natural gas stocks have changed in the last week. In total, the EIA reports natural gas stocks fell by 78 Bcf last week, decreasing to 1,882 Bcf from 1,960 Bcf. This is 1.6% below the 1,912 Bcf that was in storage at this point last year and is 15.0% below the five-year average of 2,215 Bcf. This week’s storage draw was in line with expectations, as analysts predicted a draw of 85 Bcf. Most regions saw a draw this week, with the largest in the Midwest and East regions where stocks fell by 30 Bcf and 24 Bcf. Stocks in nearly every region are below the five-year average. Gas in storage in the Pacific region is the farthest below the five-year average for the amount of gas in storage...

US storage of working natural gas continues downtrend last week - (Xinhua) -- Working natural gas storage in the contiguous United States was 1,882 billion cubic feet (about 53.3 billion cubic meters) as of last Friday, a net decrease of 78 billion cubic feet from the previous week, the U.S. Energy Information Administration (EIA) said in a report on Thursday. At the level of 1,882 billion cubic feet, the natural gas storage decreased by 1.6 percent from this time last year, the report said. EIA said on Wednesday that natural gas storage operators reported their largest withdrawals of the 2018-19 heating season, totaling 237 billion cubic feet for the week ending Feb. 1. This level was the 12th largest total net withdrawal of working natural gas in the Lower 48 states since 2010. However, as winter demand season is coming to an end and shale gas production continues to rise, U.S. inventories of working natural gas is expected to increase. The contiguous United States, or Lower 48 states, consists of the 48 adjoining states of the United States, plus the District of Columbia, which excludes the non-contiguous states of Alaska and Hawaii, and all off-shore insular areas. Working natural gas is defined as the amount of natural gas stored underground that can be withdrawn for use. Working natural gas storage capacity can be measured in two ways: design capacity and demonstrated maximum working gas capacity. According to EIA, the strong growth in U.S. natural gas production will put downward pressure on prices in 2019.

Natural Gas Finally Rebounds With Colder Risks And Tighter Balances - The March natural gas contract rebounded a couple percent today as weather models began adding back demand and weather-adjusted demand continued to impress. It was the March contract that was again strongest on the day, with firm cash prices helping it lead throughout. The result is two straight days with the March/April spread bouncing. In our Morning Update our sentiment turned back Slightly Bullish on overnight GWDD additions and tighter balances at these lower price levels. We specifically highlighted too that afternoon 12z model guidance should trend even colder to support prices and that Week 3 forecast risks were more supportive. LNG exports came back this week as well, helping to tighten up balances. We track these daily for clients in our Note of the Day. Heading into the weekend, we released our Pre-Close Update which outlines how we expect weather model guidance to adjust over the weekend and how natural gas prices are most likely to react next week. We've also been outlining the latest weather-adjusted balances in our Note of the Day, outlining how demand at these price levels has been acting. 

Can US Gas Production Keep Up With Demand? - In the previous article, I discussed the global nature of the oil markets. The natural gas markets, on the other hand, are far more localized due to the difficulty in transporting natural gas. That means that natural gas in the U.S. could be $3 per million British thermal units (MMBtu), but double or triple that level in Japan or Europe. Natural gas production in the U.S. has exploded since the beginning of the shale gas boom. From 2005 to 2015, U.S. dry natural gas production increased by 50 percent. Natural gas prices fell in response. From 2005 to 2008, annualized natural gas prices hovered in a range from just under $7/MMBtu to nearly $9/MMBtu. In 2009, the average annual price of natural gas fell below $5/MMBtu, and it has never been above that level on an annualized basis since then. On the other hand, the annualized price has been below $3/MMBtu in four of the past ten years. But natural gas demand has been strong. Natural gas exports to Mexico have now exceeded 5 billion cubic feet per day (Bcf/d), equal to about 7 percent of U.S. daily production. Consumption by the electric power sector increased by nearly 50 percent from 2005 to 2016, reaching 27 Bcf/d. Industrial demand has also increased by 30 percent as some manufacturing relocated to the U.S. to take advantage of low gas prices. Demand has also increased from liquefied natural gas (LNG) exports. The Energy Information Administration recently announced that LNG exports reached 3.9 Bcf/d in December. But that’s a drop in the bucket compared to what is forecast. This expected surge begs the question of whether U.S. natural gas supplies can continue to keep pace. I read an article earlier this week that correctly noted that to date, most of the U.S. natural gas production growth has been in the Appalachia Region. Appalachia production has exploded since 2009 from below 2 Bcf/d to more than 30 Bcf/d in 2018. The EIA forecasts that the Appalachia will continue to produce 52 percent of cumulative production of U.S. shale gas through 2050. The article I read questioned whether Appalachia growth could continue its blistering pace, but it overlooked an important new source of U.S. natural gas. 

BP's vision of the near future sees renewable power and natural gas dominating energy - In a not-too-distant future, renewable energy becomes the world's biggest source of power generation. A quarter of the distances that humans travel by vehicle will be in electric cars. U.S. dominance in the oil market begins to wane, and OPEC's influence is resurgent, as crude demand finally peaks. That is the vision laid out by British oil and gas giant BP on Thursday in its latest Annual Energy Outlook. The closely followed report lays out a vision through 2040 for Earth's energy future, provided government policy, technology and consumer preferences evolve in line with recent trends. BP forecasts that the world's energy demand will grow by a third through 2040, driven by rising consumption in China, India and other parts of Asia. About 75 percent of that increase will come from the need to power industry and buildings. At the same time, energy demand will continue to grow in the transportation sector, but that growth will slow sharply as vehicles become more efficient and more consumers opt for electric cars. But despite the increase in supply, BP thinks two-thirds of the world's population will still live in places with relatively low energy consumption per head. The takeaway: The world will need to generate more energy. Most of that new energy — as much as 85 percent — will come from burning natural gas and drawing on renewable power, according to BP's main scenario. By the end of the next two decades, BP thinks renewables will provide most of the world's electric power, as wind, solar and other renewable energy sources spread through the system at a faster pace than any fuel throughout the course of human history. Meanwhile, natural gas consumption will grows by 50 percent over the next 20 years, increasing in virtually every corner of the globe, the forecast said. The electric power sector and industry will drive the increase, though the fastest growth will be in the transportation sector, albeit from a low base. BP sees most of the new supplies coming from the U.S., Qatar and Iran, with China and Russia playing a smaller role. Also during the period, shipments of liquefied natural gas — a form of the fuel chilled to its liquid state and exported by ship — will continue to grow, ultimately accounting for 15 percent of gas trade by 2040.

Climate groups threaten lawsuit to force Shell to ditch oil - Climate activists are preparing legal action aimed at forcing Royal Dutch Shell to exit the oil business.A coalition of environmental groups in the Netherlands said Tuesday that they will hand over a court summons on April 5 if Shell does not change its business model to comply with the Paris climate accord.The groups have accused Shell of "deliberately obstructing" efforts to keep global warming well below 2 degrees Celsius, the key goal of the Paris agreement. Pressure on companies has been building since the UN warned last year that the world has only 12 years to avert a climate disaster.The oil giant was first threatened with a lawsuit last year by the Dutch branch of Friends of the Earth. Greenpeace and ActionAid joined the initiative on Tuesday, along with four other groups.  Shell,  which is headquartered in the Netherlands, has said it "strongly supports" the Paris agreement. It has committed to halving the carbon footprint of the energy it sells by 2050. But the climate activists argue that its fossil fuel activities are inconsistent with the document signed by nearly all of the world's governments in Paris in 2015.  "The company has no concrete plans to align its business strategy with the commitments contained in the agreement," Joris Thijssen, the director of Greenpeace Netherlands, said in a statement. The legal action threatened by the groups would seek to establish that Shell is responsible under Dutch law for its contributions to climate change and for associated environmental damage.

This Is Just The Beginning Of Europe's Gas War  --In a move that should not surprise energy pundits nor even those that follow geopolitical news in Europe, on Thursday Russian gas giant Gazprom said it’s looking to gain an even larger gas market share in Europe following record-high 2018 exports, as it expects a decline in Europe’s gas output combined with rising demand. Last year Gazprom sold more than 200 billion cubic meters (bcm) of natural gas to Europe, including Turkey, while its gas market share in the region rose to more than a third, Reuters said in a report on the matter.  Elena Burmistrova, in charge of the Gazprom’s exports, said the company would be able to offset a production decline in the EU, mainly at the Netherlands’ Groningen, once Europe’s largest natural gas field. “North Sea production is also gradually declining ... So, the space for Russian gas is being freed up,” she said on the sidelines of the European Gas conference in Vienna. Gazprom’s statement comes as EU gas production is projected to spiral downward over the next 12 years. Regardless of possible development of non-traditional gas resources, production will decline by 43% against the 2013 level,Russia’s National Energy Security Fund (NESF) said recently. Moreover, the Paris-based International Energy Agency (IEA) forecasts that EU gas production will halve by 2040.  This dwindling production also comes as a number of EU states are poised to break away from over-reliance on both nuclear and coal needed for power generation, leaving opportunities for renewables, particularly solar and wind power, as well as liquefied natural gas (LNG) imports. However, all of these sources will take more time and funding to develop before they can add a more significant percentage of the bloc's energy mix going forward. Moreover, competing for more gas market share in Europe will see both geopolitical and energy stakes increase, pitting Russian piped gas exports, but also more LNG, as the country develops its LNG sector, against higher priced U.S. and Qatari LNG. Meanwhile, Qatar (the global LNG export leader and the U.S. which will soon be the third largest LNG exporter) could agree to tie-ups in LNG, both for economic and geopolitical motivations in the mid to long term. Qatar is already investing heavily in the U.S. LNG sector as a pure diversification play as U.S. production begins to take off, competing for both European and Asian market share. The Asia-Pacific region accounts for 72 percent of global LNG demand, with that amount projected to increase to 75 percent amid rampant Chinese LNG demand.

EU agrees deal to regulate Russia's Nord Stream 2 gas link  - — Russia's planned Nord Stream 2 gas pipeline direct to Germany is set to face EU market rules after negotiators agreed informally to change the EU's gas directive to apply to offshore gas links, the European Commission said late Tuesday. Russia's planned Nord Stream 2 gas pipeline direct to Germany is set to face EU market rules after negotiators agreed informally to change the EU's gas directive to apply to offshore gas links, the European Commission said late Tuesday. This means the 55 Bcm/year Nord Steam 2 could have to comply with EU rules on regulated tariffs for the section of pipeline in Germany's territorial waters. This could give Ukraine -- a rival transit route -- information that helps it price its own Russian gas transit services to the EU more competitively. Ukraine has already committed to applying EU market rules to its gas transit system to Europe. "Ensuring that all major gas pipelines to and from third countries are operated efficiently under a regime of transparent regulatory oversight will...guarantee non-discriminatory tariff setting," the EC said. The new rules are likely to enter into force in the next few months, according to an EU diplomatic source. That means Nord Stream 2 -- which is planned to be online at the end of this year -- would be treated as a new pipeline and thus not eligible for the same kind of waivers available to existing pipelines. The Nord Stream 2 project company, which is 100% owned by Russia's Gazprom, would have to ask Germany -- the country where it connects to the EU -- for an exemption to avoid having to apply the new rules. Germany would then have to consult with Russian authorities before deciding on an exemption based on EU rules.

Azerbaijan to become a more significant supplier of natural gas to Southern Europe - Azerbaijan is an important supplier of crude oil and natural gas in the Caspian Sea region, particularly to European markets. Azerbaijan’s exports of natural gas are poised to become a more significant part of the country’s economy. Azerbaijan produced about 600 billion cubic feet (Bcf) of dry natural gas in 2017 and exported about 210 Bcf, according to EIA’s International Energy Statistics. Azerbaijan is planning to expand its natural gas exports to Europe. European Union (EU) leaders consider connecting Azerbaijan’s Shah Deniz natural gas field to Southern Europe to be a step toward the strategic goal of diversifying Europe’s natural gas supply. Southern and Eastern Europe, in particular, have limited supply options for natural gas because of geographic constraints and infrastructure limitations. The Trans-Balkan pipeline, which supplies Russian natural gas to the Balkan countries and Turkey through Ukraine, is one of the region’s only existing supply routes. In 2017, the Trans-Balkan pipeline transported about 600 Bcf of natural gas to the EU border in Romania, according to the International Energy Agency. Although the proposed Azerbaijani volumes—about 565 Bcf—will bring a smaller amount of natural gas to Southern Europe, they could help mitigate potential natural gas supply disruptions by providing another option to satisfy regional natural gas demand. The Shah Deniz field, which is about 40 miles southeast of Baku in the Caspian Sea, contains most of Azerbaijan’s natural gas. In 2017, the field produced about 360 Bcf of natural gas and about 19 million barrels of condensate. The main markets for Shah Deniz gas have been Azerbaijan, Georgia, and Turkey.

Is A Natural Gas Cartel Forming? -It has now been over two months since Qatar made the decision to leave OPEC, with many analysts providing informed views on Qatar’s future energy strategy. This article aims to provide an analysis of Qatar’s pivot toward natural gas, and the potential implications for global energy security.Qatar has long been a key player within the LNG export market, comprising 26.50 percent of global seaborne LNG trade in 2017 (Figure 1). It was likely with this in mind that Saad al-Kaabi, the country’s energy minister, stated that Qatar is leaving OPEC in order to focus on its LNG strategy. Conservative projections for the long-term viability of crude, Qatar’s marginal position within the Organisation of Petroleum Exporting Countries (OPEC), and its relatively prominent position within LNG markets, culminated in a pragmatic decision to re-focus its policy towards the development of natural gas assets. This article compares the characteristics of both OPEC and the Gas Exporting Countries Forum (GECF), assessing the efficacy of Qatar’s transition towards the development of gas assets.  In order to understand how the world's major economies will respond to the growing roll of natural gas as a primary energy source, it is important to first analyse the availability and location of the world's gas reserves. Figure 2 displays OPEC members, GECF members and GECF observers, whilst Table 1 displays production share, reserve share and R/P ratio of crude oil and gas across different regions.As is the case with the crude oil trade, the largest natural gas deposits do not correspond with the largest demand centres, prescribing significant international trade of both crude oil and natural gas. However, when comparing the two fuels, it quickly becomes apparent that the overall distribution of natural gas reserves are more concentrated than the distribution of crude oil reserves, in the sense that the three countries that hold the largest natural gas reserves, Russia, Qatar and Iran, have roughly 48.13 percent of the global total, whilst the three countries with the largest crude oil reserves, Venezuela, Saudi Arabia and Canada, hold 43.52 percent of world oil reserves. Conversely, when considering the regional distribution of the respective primary energy sources, natural gas is more diverse. The Middle East holds 47.61 percent of global crude oil reserves, as opposed to 40.09 percent of natural gas reserves, with CIS representing a significant region of natural gas reserves at 30.61 percent.

Mexico to give a $5.2 billion stimulus package to Pemex — The Mexican government will give a $5.2 billion stimulus package to state-owned oil company Pemex, President Andres Manuel Lopez Obrador said Friday. "Pemex has the whole backing from the Finance Secretariat and the Mexican government," Lopez Obrador said in a webcast press conference. In recent years, Pemex borrowed to finance operations until becoming the world's most indebted oil operator with $104 billion in net debt, half of which is due through Lopez Obrador's presidential term, which ends in 2024. Despite this debt leverage, Pemex's production fell to 1.71 million b/d in December from a peak production of 3.4 million b/d in 2004. The fiscal stimulus package announced Wednesday is a collection of previously announced plans in recent weeks by Lopez Obrador's administration. This includes a projected revenue increase of $1.6 billion as a result of stopping fuel theft, a $1.3 billion capital injection and $600 million/year tax deductions for E&P expenses. The new element announced on Friday is the advance payment of $1.8 billion from the federal government for pension and labor liabilities. Lopez Obrador has previously said that the $2.9 billion from the capital injection and savings from fighting fuel theft will be used to build the $8 billion, 340,000 b/d refinery in Dos Bocas. Carlos Urzua, Mexico's finance secretary, said that the federal government would do all additional capital infusions Pemex requires to strengthen its financial position. Starting this year, Pemex isn't going to finance new debt and focus on conventional oil projects, Pemex's general director, Octavio Romero Oropeza, said during the press conference. "Pemex for years spent large resources in Chiocontepec [tight oil play] and deepwater projects with nothing to show," he added. Now, the company will focus on shallow water and conventional onshore projects, where development can be accelerated with low production costs, Oropeza said. Pemex is implementing its plan to develop 16 offshore and four onshore discoveries, which have 1.9 billion boe of 2P reserves.

Venezuela sanctions leave oil market short of heavy crude  - (Reuters) - U.S. sanctions on Venezuela's state-owned oil company are tightening the global oil market and sending refiners around the world scrambling to find replacements for the country's diesel-rich heavy and extra heavy crudes. Venezuela's heavy crudes, such as Merey, have few close substitutes, with the nearest being grades such as Brazil's Marlim, Mexico's Maya, Canada's Bow River and Cold Lake, or Iraq's Basra Heavy. Most of those crudes have an even higher sulphur content than Venezuela's, which will require extra processing to make fuels of acceptable quality, and in any event the quantities are limited in the short term. Venezuela sanctions have arrived in a market that was already likely to be short of medium and heavy crudes because of U.S. sanctions on Iran and OPEC's output cuts. The major oil exporters in the Middle East Gulf (Saudi Arabia, Iraq, United Arab Emirates, Kuwait and Iran) market mostly medium and heavy crudes. U.S. sanctions on Iran and Venezuela, together with OPEC's output cuts, have therefore removed mostly medium and heavy oils from the market, leaving lighter grades relatively unaffected. The result is that prices of medium and heavy crudes have surged relative to their lighter counterparts since the middle of January. Mars, a medium crude grade from the U.S. Gulf, has moved to a rare premium over Louisiana Light Sweet. Oman, another medium crude, has moved to a premium over Brent, a light one.   Venezuela has the world's largest proven oil reserves, amounting to around 300 billion barrels, ahead of Saudi Arabia on 265 billion and Canada at 170 billion ("Statistical review of world energy", BP, 2018). But the country's oil industry has been in relative and absolute decline for the last 50 years as problems of producing and marketing its heavy crudes have been compounded by an unattractive investment regime and mismanagement.

Venezuela pressures foreign partners on oil venture commitments: sources (Reuters) - Foreign partners of Venezuela’s PDVSA are facing pressure from the state-run oil firm to publicly declare whether they will continue as minority stakeholders in Orinoco Belt projects following U.S. sanctions, three people familiar with the matter said. The sanctions on Petroleos de Venezuela (PDVSA), imposed last month in an attempt to dislodge Venezuelan President Nicolas Maduro, barred access to U.S. financial networks and oil supplies for the PDVSA joint ventures, pressuring Venezuela’s already falling crude output and exports. PDVSA’s Orinoco Belt joint venture partners, mostly U.S. or European companies, are facing difficulties getting cashflow out of the country as a result of the sanctions, straining their ability to continue production and exports. PDVSA has been in talks with the companies to persuade them to commit publicly to the joint ventures, the sources said in recent days. France’s Total SA, Norway’s Equinor ASA, Russia’s Rosneft and U.S.-based Chevron hold minority stakes in joint ventures with PDVSA that produce crude and operate oil upgraders capable of converting Venezuela’s extra-heavy oil into exportable grades. PDVSA did not reply to a request for comment. On Monday, Venezuelan Oil Minister and PDVSA head Manuel Quevedo said on a visit to India that relations with international oil companies including Chevron were continuing. A manager at Rosneft said last week that the company did not expect oil output to decline at its projects in Venezuela this year, adding that the company saw the current situation in Venezuela as temporary. Rosneft did not respond to a request for comment on Tuesday. The four crude upgraders are capable of converting up to 700,000 barrels per day. The oil is exported by the joint ventures and each partner receives its share of the exports. Total believes it can stay in Venezuela, its Chief Executive Patrick Pouyanne said on Monday, although last week the company said its bank accounts were blocked and it had evacuated its foreign employees. Rosneft has continued working normally at its Petromonagas joint venture with PDVSA, according to the sources. Equinor declined to comment on operational issues, referring questions to Petrocedeno, its joint venture with PDVSA. Chevron’s operations in Venezuela are continuing, a spokesman said on Monday, reiterating that the company was committed “to the country’s energy development in compliance with all applicable laws and regulations.” 

U.S. Warns The World Against Buying Venezuelan Oil - In December, the Senate passed a parallel resolution 56-41, but a blocked vote by House Republicans prevented it from ever reaching the floor of the House. It was the first time the Senate had ever used congressional authority handed to them in the War Powers Act of 1973.U.S. National Security Advisor John Bolton has warned countries and companies against buying crude oil from Venezuela, after the Latin American country’s Oil Minister Manuel Quevedo said during a surprise visit to India that Venezuela wants to sell more oil to the fast-growing Indian market.In a tweet with a Bloomberg article on Venezuelan-Indian oil relations attached, Bolton wrote: “Nations and firms that support Maduro’s theft of Venezuelan resources will not be forgotten. The United States will continue to use all of its powers to preserve the Venezuelan people’s azsets and we encourage all nations to work together to do the same.”“We have a good relationship with India and we want to continue this relationship. The relationships with India will continue, the trade will continue and we will simply expand all the trade and relationship,” Indian outlet Business Today quoted the Venezuelan minister as saying on the sidelines of the Petrotech conference in India this week. At the start of the Venezuelan political crisis last month, Indian media reported that the Asian country continues to be one of the main buyers of Venezuelan crude oil. Indian refiners keep buying more than 400,000 bpd of oil from the troubled Latin American country, which is sitting on the world’s largest crude oil resources.In separate Venezuela-and-sanctions-related news, Bulgarian security officials said on Wednesday that they had blocked several bank accounts in a local bank that have received millions of euros from Venezuela’s state oil firm PDVSA, on which the U.S. slapped sweeping sanctions at the end of January. Bulgaria’s security services and prosecutor’s office were tipped off by the U.S. about those money transfers and have blocked transfers out of the bank accounts.

Exclusive: Venezuela shifts oil ventures’ accounts to Russian bank – document, sources (Reuters) - Venezuela’s state-run oil company PDVSA is telling customers of its joint ventures to deposit oil sales proceeds in an account recently opened at Russia’s Gazprombank AO, according to sources and an internal document seen by Reuters on Saturday. PDVSA’s move comes after the United States imposed tough, new financial sanctions on Jan. 28 aimed at blocking Venezuela’s President Nicolas Maduro’s access to the country’s oil revenue. Supporters of Venezuelan opposition leader and self-proclaimed interim president Juan Guaido said recently that a fund would be established to accept proceeds from sales of Venezuelan oil. The United States and dozens of other countries have recognized Guaido as the nation’s legitimate head of state. Maduro has denounced Guaido as a U.S. puppet seeking to foment a coup. PDVSA also has begun pressing its foreign partners holding stakes in joint ventures in its key Orinoco Belt producing area to formally decide whether they will continue with the projects, according to two sources with knowledge of the talks. The joint venture partners include Norway’s Equinor ASA, U.S.-based Chevron Corp and France’s Total SA. Even after a first round of financial sanctions in 2017, PDVSA’s joint ventures managed to maintain bank accounts in the United States and Europe to receive proceeds from oil sales. They also used correspondent banks in the United States and Europe to shift money to PDVSA’s accounts in China. State-run PDVSA several weeks ago informed customers of the new banking instructions and has begun moving the accounts of its joint ventures, which can export crude separately. The decision was made amid tension with some of its partners, which have withdrawn staff from Caracas since U.S. sanctions were imposed in January. The sanctions gave U.S. oil companies working in Venezuela, including Chevron and oil service firms Halliburton Co, General Electric Co’s Baker Hughes and Schlumberger NV, a deadline to halt all operations in the South American country.

Erdogan Says Venezuelan Gold Will Be Processed in Turkey  — Turkey’s President Recep Tayyip Erdoğan said on Tuesday that Venezuelan gold would be processed in the Central Anatolian province of Çorum. Speaking at a rally ahead of local elections on March 31, the president said Çorum would reach a new level in terms of gold trade amid reports that Venezuela sells most of its gold to Turkish refineries.On Monday Reuters reported that Venezuela uses some of the proceeds to buy consumer goods such as pasta and powdered milk, citing people with direct knowledge of the trade.Trade between the two nations grew eightfold last year.Venezuelan President Nicolas Maduro’s gold program has developed in tandem with his deepening relationship with Turkey’s Erdoğan. Both leaders have been criticized internationally for cracking down on political dissent and undermining democratic norms to concentrate power. A Nov. 1 executive order signed by US President Donald Trump bars US persons and entities from buying gold from Venezuela. It does not apply to foreigners. Ankara has assured the US Treasury that all of Turkey’s trade with Venezuela is in accordance with international law.

Venezuela opposition takes steps to seize oil revenue as Maduro issues threat (Reuters) - Venezuela’s opposition-controlled congress named new temporary boards of directors to state-oil firm PDVSA on Wednesday, in an effort to wrest the OPEC nation’s oil revenue from increasingly isolated socialist President Nicolas Maduro. Maduro lashed out at the congress leader, Juan Guaido, saying in an interview that he would face the courts “sooner or later” for violating the constitution, after Guaido invoked constitutional provisions last month to assume an interim presidency. Although many Western countries have recognized Guaido as legitimate head of state, Maduro retains control of state institutions and Guaido needs funds if he is to assemble an interim government. Controlling PDVSA’s U.S. refiner Citgo Petroleum, Venezuela’s most valuable foreign asset, would go some way to helping in that, though seizing the reins of PDVSA itself seems improbable while Maduro remains in power. “We have taken a step forward with the reconstruction of PDVSA,” Guaido said on Twitter, just after congress named the directors. “With this decision, we are not only protecting our assets, we also avoid continued destruction.” PDVSA’s crude output has slumped to 70-year lows, due to crushing debts, widespread corruption, and little maintenance of its infrastructure. The administration of U.S. President Donald Trump, which backs Guaido, imposed sanctions on Venezuela’s oil sector on Jan. 28, aimed at curbing exports to the United States and upping the pressure on Maduro. 

US shale oil growth could offset Venezuela shortfall: IEA— The continued strong growth of US shale oil will soften the blow from the recent US sanctions on Venezuela's state-owned oil company PDVSA, the International Energy Agency said Wednesday, as it once again raised its estimates for non-OPEC supply on the back of robust US shale flows. The Paris-based market watchdog also trimmed its forecast for the demand for OPEC's crude this year but kept its growth estimate for oil demand in 2019 unchanged at 1.4 million b/d. US liquids output, however, is forecast to rise by 1.52 million b/d in 2019, consolidating the US as the world's biggest oil producer with average production hitting almost 17 million b/d this year, the IEA said in its latest monthly oil market report. The latest US forecast is around 200,000 b/d higher than previously estimated after stronger than expected US shale and NGL output in the fourth quarter of last year was carried through to 2019, an IEA official said. US liquids output jumped by a massive 2.2 million b/d last year as shale rebounded on firmer prices. Although US oil supply growth is set to slow this year following a near 40% fall in crude prices in Q4, the IEA noted that US crude production alone this year is still expected to grow by more than Venezuela's current output of around 1.26 million b/d. "Sanctions are already making it difficult for PDVSA to export oil," the IEA said "Even so, headline benchmark crude oil prices have hardly changed on news of the sanctions. This is because, in terms of crude oil quantity, markets may be able to adjust after initial logistical dislocations." The IEA's comments echo similar observations by the US Energy Information Administration, which on Tuesday predicted that US crude oil production growth will offset decreases in OPEC production and the impact of sweeping sanctions on Venezuelan crude flows through 2020. But the IEA also cautioned that crude quality, rather than quantity, will be an important issue moving forward, highlighting that the loss of Venezuela's predominantly heavy, sour crudes will be felt most acutely by the market due to the US sanctions. While the supply of US oil output which is predominantly light and sweet continues to inch higher, the heavy sour barrels remains tightly supplied, the IEA said, squeezing US Gulf Coast refiners who are mostly geared towards processing heavier crudes.

Washington Eyes Crackdown On OPEC - Legislation targeting OPEC is suddenly gaining steam in the U.S. Congress, raising alarm bells for the cartel.On Thursday, the House Judiciary Committee passed a bill that would allow the U.S. Justice Department to sue members of OPEC for manipulating the oil market. The so-called “NOPEC” bill would remove sovereign immunity, exposing member countries to antitrust regulation.The bill has appeared in the past under prior administrations. But previous presidents from both political parties have opposed taking punitive action, fearing damage to the U.S.-Saudi relationship.Times have changed. President Trump has repeatedly posted angry tweets about OPEC, blaming it for high gasoline prices. That led to a revived push for the NOPEC legislation. The murder of Saudi journalist Jamal Khashoggi may have also been a turning point, erasing a lot of goodwill for Saudi Arabia in Washington.In theory, OPEC members could face confiscation of their assets in the United States. Saudi Aramco, for instance, controls Motiva Enterprises, which owns the largest oil refinery in the country in Port Arthur, Texas.According to the Financial Times, the prospect of the NOPEC bill becoming law has raised alarm bells not just for OPEC, but also for international oil companies who fear reprisals abroad. Companies like ExxonMobil and BP have major stakes in projects in places like Nigeria and Iraq. These OPEC-member countries could retaliate if they face punitive action from the U.S. government. The FT reports that the oil majors, along with the American Petroleum Institute and the U.S. Chamber of Commerce, are lobbying against the NOPEC legislation. Analysts speculate that Qatar exited OPEC in 2018 not just because of its rivalry with Saudi Arabia, but also because it has major interests in the U.S., and does not want to face antitrust action. Qatar Petroleum, along with ExxonMobil, just gave the final investment decision for the $10 billion Golden Pass LNG project in Texas.

BP CEO Bob Dudley warns oil market uncertainty could lead to a 'real crunch' --A flurry of intensifying risks could trigger an energy market "crunch" over the coming months, according to the chief executive of BP. His comments come at a time when energy market participants expect U.S. sanctions on crisis-stricken Venezuela, as well as OPEC-led production cuts, to offset a potential supply glut this year.When asked whether production cuts from the so-called OPEC+ coalition were likely to help stabilize oil prices, Dudley replied: "Well, there's a lot of variables here and there's a lot of things that could lead to a real crunch."Speaking to CNBC's Dan Murphy at an energy forum in Cairo, Egypt, Dudley cited "tragic circumstances" in Venezuela, uncertainty in Libya, rising production levels from the Permian Basin and the impact of U.S. sanctions on Iran."So, the OPEC+ countries agreed to reduce production in the first quarter, we don't even really have data from it. We will have to see what the data looks like but the markets feel tight to me." "We plan BP on a sort of fairway, which I think is good for the world, between $50 a barrel and $65. That's good for producers and consumers," Dudley said.  Brent crude, the international benchmark for oil prices, was trading at $61.90 a barrel Tuesday morning, up 0.6 percent, while West Texas Intermediate (WTI) stood at $52.68, 0.5 percent higher. OPEC and its allied producers, including Russia, agreed to impose output cuts from the beginning of January in order to prevent a global supply overhang. The Middle East-dominated group began capping supply in partnership with Russia and several other nations in January 2017 to end a punishing downturn in oil prices. The oil industry is generally optimistic that the measures imposed by OPEC and non-OPEC members could help balance the energy market over the coming months. But, some are concerned supply-side risks were not receiving enough attention. When asked whether he would like to see OPEC and non-OPEC producers taking further action to support the energy market at their next meeting in April, Dudley replied: "I think as an international oil company subject to the markets, I shouldn't have a view about that actually." "I think what is important is when prices are too high or too low, it leads to all kinds of unintended consequences," he added.

South Africa Oil Discovery Could Be A Game-Changer One of the promising hotspots for oil and gas exploration drilling this year - South Africa’s offshore - has just yielded a massive natural gas and condensate find that could open a new exploration province for oil majors and change the energy fortunes of South Africa. France’s major Total said this week that it had made a significant discovery on the Brulpadda prospects off the southern coast of South Africa.“With this discovery, Total has opened a new world-class gas and oil play and is well positioned to test several follow-on prospects on the same block,” said Kevin McLachlan, Senior Vice President Exploration at Total. According to Total’s chief executive Patrick Pouyanne, the discovery could hold 1 billion barrels of oil equivalent of gas and condensate resources. The operator of the license, Total, and its partners Qatar Petroleum, CNR International, and South African consortium Main Street, now plan to acquire 3D seismic data this year, followed by up to four exploration wells on the license.“It is exciting for our country that this discovery has been made. It is potentially a major boost for the economy, and we welcome it as we continue to seek investment to grow our economy,” South Africa’s Mineral Resources Minister Gwede Mantashe said, commenting on the major gas discovery. The African Energy Chamber (AEC) also hailed the first major deepwater discovery off South Africa, saying, “This is a great first step for the country which still relies on imports of oil and gas despite the great reserves believed to be in its soil and waters.” According to AEC, the discovery could change the course of South Africa’s economy and help to reduce the country’s dependence on oil and natural gas imports. “The oil industry hopes this will be a catalyst and encouragement for all policy makers to work on an enabling business environment for exploration and drilling activities in South Africa,” NJ Ayuk, Executive Chairman at the Chamber, said. South Africa is currently working on new legislation that would separate the conditions for exploring and exploiting oil and gas resources from those for traditional minerals. Commenting on Total’s discovery, Andrew Latham, vice president, global exploration at natural resources consultancy Wood Mackenzie, said: “Even though the well isn’t an oil discovery, if Brulpadda proves to be anywhere near as big as the estimates of up to 1 billion barrels of oil equivalent resources, it will still be a game-changer for South Africa.”

BP has invested more money in Egypt than anywhere else in the last two years, CEO says - BP has invested more money in Egypt in the last two years than anywhere else, the oil giant's Chief Executive Bob Dudley told CNBC. "Today (the scale of our operations) is very big," Dudley told CNBC Monday. "We produce oil in the Gulf of Suez but really our focus in the last five years has been this big push for natural gas. All across from the Nile Delta, to the east, to the west of the Nile Delta, it's helping power the country and other companies are here as well." "In the last two years we've invested more money in Egypt, in both of those years, than in any other country in the world for BP, so it's a really important place for us," he told CNBC's Dan Murphy.  Egypt might lack the oil producing clout of its OPEC neighbors to the west (Libya and Algeria) and east (Saudi Arabia) but it's pushing to become a Mediterranean energy hub, particularly in the natural gas sector. Cairo is expected to become a net gas exporter by the end of 2019 and the country has seen widespread interest in its natural gas potential — particularly after the success of Egypt's Zohr gas field, an offshore natural gas field in the Mediterranean Sea operated by Italian energy firm Eni. Foreign direct investment (FDI) in Egypt's oil and gas sector reached $10 billion in the full fiscal year of 2017/18, the country's Petroleum Minister Tarek El-Molla told an Egyptian newspaper last August, and expects at least the same in 2018/2019. In December, El Molla said Egypt had signed over 12 exploration and production agreements with international oil companies (IOCs) during 2018. The petroleum minister told CNBC in January that Egypt's gas reserves could even be a catalyst for peace in the region.  The Egyptian economy has been on an upward turn since the political tumult brought on by civil unrest during the Arab Spring of 2011 and the overthrow of then-President Hosni Mubarak. In 2016, Egypt was forced to request a three-year, $12 billion loan from the international Monetary Fund (IMF). As ever, the IMF aid came with strings attached, requiring the government to embark on a reform program that included cutting fuel subsidies, introducing VAT and floating its currency, the Egyptian pound. Egypt has been praised by the IMF for adhering to the program and the Fund sees its budget deficit and unemployment rate declining further this year; the IMF predicts GDP growth of 5.5 percent in 2019.

Rosneft Boss Wants Russia Out Of OPEC Deal - Rosneft’s chief executive Igor Sechin wants Russia to quit its production control deal with OPEC, Reuters reported last week, citing sources that have seen a letter Sechin wrote to President Putin. According to the sources, Sechin sees the OPEC deal as a threat to Russia that benefits the United States, but the likelihood of his opinion leading to a pullout from the deal is limited.  Sechin is one of the closest allies of Putin and one of the most powerful figures in Russian politics. As Forbes’ Kenneth Rapoza wrote last year, many politicians and big business executives seem willing to face Putin on a bad day. Less so are those willing to face Rosneft’s chief. What’s more, Sechin is not the only one unhappy with the OPEC deal. “The letter is a threat to the deal extension. But anyway, Putin is the ultimate decision maker,” one of the Reuters sources said. The perspectives of Russia’s President and the biggest players in its oil industry may differ here. For Putin, the OPEC deal is really a geopolitical tool rather than a tool for raising oil prices. Russia does not need prices higher. In fact, if they go too high, they will hurt the Russian economy. For the oil industry, however, it’s about the oil and the markets more than it is about geopolitics. Russia first joined forces with OPEC to exert more control over international oil prices in late 2016, when the first OPEC+ production cut agreement was sealed. It aimed to remove some 1.8 million bpd from the oversupplied global market that had pressured prices to below US$30 per barrel for Brent crude. The cuts worked so well that prices rebounded significantly, prompting last year a reversal, as large oil importers found it harder to keep buying at previous rates. Another rebound followed, reinforced by the reimposition of U.S. sanctions against Iran, which would substantially reduce the availability of Iranian crude on international markets. The effect of the sanctions, however, did not unfold quickly and the granting of sanction waivers to the largest Iranian oil importers led to another slump in oil prices. That’s when OPEC started talking about a new round of cuts. To be fair, Russia was reluctant about joining this round from the start. Moscow budgets lower than current prices, so higher prices were not a necessity for Russia. But the geopolitical agenda is still there, so it was hardly a surprise that despite the conspicuous reluctance, Russia eventually signed up for the new cuts, but at a lower rate than last time. Yet despite this, Russia has also made clear it would rather pass on the opportunity for a closer relationship with OPEC.

Russia's Sechin raises pressure on Putin to end OPEC deal (Reuters) - Igor Sechin, head of Russian oil giant Rosneft and one of Vladimir Putin’s closest allies, has written to the Russian president saying Moscow’s deal with OPEC to cut oil output is a strategic threat and plays into the hands of the United States. The letter did not say whether the agreement in place since 2017 between the Organization of the Petroleum Exporting Countries (OPEC) and other large oil producers led by Russia to cut output should be extended or not. But according to two well-placed industry sources, the letter was a clear signal to other senior Russian officials involved in energy policy that Sechin wants the deal to come to an end. There is no guarantee Putin will back Sechin’s view because the president sees the pact with OPEC as part of a much bigger puzzle involving dialogue with OPEC’s leader Saudi Arabia over Syria and other geopolitical issues. “The letter is a threat to the deal extension. But anyway, Putin is the ultimate decision maker,” one of the sources said. Reuters has seen a copy of the letter with no date or header. A government source said it was sent at the end of December. The so-called OPEC+ deal has helped oil prices double to more than $60 per barrel. It has been extended several times and, under the latest deal, participants are cutting output by 1.2 million barrels per day (bpd) until the end of June. OPEC and its allies will meet on April 17-18 in Vienna to review the pact. Should Russia abandon the deal, it would result in a steep oil price crash or force Saudi Arabia to carry most of the burden of cutting output to continue propping up global crude prices. Riyadh has said it will not do this alone. A price crash would deal a severe blow to U.S. oil firms as they operate fields where it is more expensive to extract oil, but would benefit the broader U.S. economy. The United States, which overtook Russia and Saudi Arabia as the world’s biggest oil producer last year, is not participating in the output cuts. 

$60 to $70 is a fair price for a barrel of oil, Egypt's petroleum minister says - There is a fair price for a barrel of oil and OPEC and its non-OPEC partners are close to achieving it through their deal to cut production, according to Egypt's Petroleum Minister Tarek El-Molla."It is in the range between $60 and $70 a barrel … somewhere in this bracket of price," El Molla told CNBC on Sunday when asked if oil prices were at an acceptable level to keep producers and consumers happy."If prices of crude increase significantly we would start to see inflation and an exaggeration in the slowdown in consumption from the other side. If we see prices go down below a certain price then we will see a slowdown in investments," he said."So, actually, the fair equation is to have a balanced price between the producers and the consumers whereby each party is happy and to continue the growth of the global economy."  Egypt is a significant oil and natural gas producer in the Middle East although it's not a member of OPEC and its output is dwarfed by members of the oil producing group and other non-OPEC producers like Russia.  Egypt is aiming to boost production modestly in 2019, to 670,000 barrels a day, although its output still trails that of others in the region. The latest figures from OPEC's monthly report in January showed that Egypt's oil producing neighbors to the west, Libya and Algeria, produced 928,000 barrels a day and a million barrels a day respectively in December. OPEC lynchpin Saudi Arabia produced 10.5 million barrels a day.  OPEC and non-OPEC producers including Russia (collectively known as 'OPEC plus') have  last agreed in December to cut oil production by 1.2 million barrels a day in order to put a floor under prices, which have fallen due to rising oil supply and lackluster demand amid an uncertain global growth outlook.

Fund buying slows on crude but Venezuela supports diesel: Kemp (Reuters) - Hedge funds added more bullish positions in crude at the start of February but at a much slower pace than before, as optimism about OPEC output cuts was tempered by renewed anxiety about the U.S.-China trade talks. Hedge funds and other money managers increased their net long position in Brent crude futures and options for the eighth time in the last nine weeks but by just 1 million barrels. Fund managers added new short positions (+13 million barrels) for the week ended Feb. 5, almost as fast as new long positions (+15 million) suggesting much greater dispersion of views about where oil prices will go next. Funds added short positions at the fastest rate for nine weeks since the week ending Dec. 4 in a sign at least some managers think prices have peaked after the recent rally (https://tmsnrt.rs/2ULZTZE ). OPEC's aggressive output reductions and U.S. sanctions on Venezuela have removed significant volumes of crude from the market since the start of the year, boosting prices. But doubts about progress in the U.S.-China trade talks and the outlook for the global economy have returned, with equity prices stalling and bond yields dropping, spilling across into concerns about oil consumption. In contrast, portfolio managers added another 8 million barrels of long positions in European gasoil futures and options, taking the overall net long position to 30 million barrels. Funds remain more cautious on gasoil (with long positions outnumbering short ones by just 2.6:1) than on Brent (where the ratio was 4.8:1), reflecting concerns about the economy, but also suggesting more upside potential.  Perhaps more immediately and importantly, U.S. sanctions on Venezuela are hitting the availability of medium and heavy-density crudes, which are particularly suited for making gasoil. The same medium and heavy crude shortage that has pushed medium grades to a rare premium over their lighter counterparts may also be encouraging fund managers to turn a bit more bullish on diesel. 

Oil prices fall as U.S. rig count rise, trade concerns -- Oil prices fell on Monday as an uptick in U.S. drilling, a shutdown caused by a fire at a major U.S. refinery and concerns about U.S.-Chinese trade talks all overshadowed support from OPEC-led supply restraint. Benchmark Brent oil were down 59 cents, or 0.95 percent, to $61.51 a barrel. U.S. West Texas Intermediate(WTI) crude fell 89 cents or 1.78 percent to $51.78.  "Oil prices are still trying to figure out what lead to follow. On the one hand, there is the OPEC+ cut story, now coupled with increasing issues around Venezuelan supply", Vienna-based consultancy JBC Energy said. "At the same time, it has to be argued that a lot of the economic data that has been released over the last few days has really not been too encouraging, and U.S.-Chinese trade talks are also seemingly not progressing very fast."Energy firms in the United States last week increased the number of oil rigs operating for the second time in three weeks, pointing to a further rise in U.S. crude production, a weekly report by Baker Hughes said on Friday.WTI prices were also weighed down by the closure of the second largest crude distillation unit (CDU) at Phillips 66's Wood River, Illinois, refinery following a fire on Sunday. Trade talks between Washington and Beijing resume this week with a delegation of U.S. officials travelling to China for the next round of negotiations.  The United States has threatened to increase tariffs already imposed on goods from China on March 1 if the trade talks do not produce an agreement, a move which could help slow growth in fuel demand.

Oil prices fall; slow progress in trade talks counters OPEC cuts (Reuters) - Oil prices fell about 1 percent on Monday as worries surrounding the resumption of U.S.-China trade talks overshadowed support from OPEC-led supply restraint. Brent crude futures lost 49 cents, or 0.8 percent to $61.61 a barrel by 12:53 p.m. EST (1753 GMT). U.S. West Texas Intermediate (WTI) crude fell 65 cents, or 1.2 percent, to $52.07 a barrel. Trade talks between the United States and China resumed with working level discussions before high-level discussions later in the week. While Beijing struck an upbeat note, it also expressed anger at a U.S. Navy mission through the disputed South China Sea. This cast a shadow as the two countries try to reach a deal before the March 1 deadline when U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent. On Thursday, U.S. President Donald Trump said he did not plan to meet with Chinese President Xi Jinping before the March 1 deadline, dampening hopes of a quick trade pact. Escalating U.S.-China trade tensions have cost both countries billions of dollars and disrupted global trade and business flows, roiling financial markets. “There’s a lot of uncertainty about what’s going on with this trade war, whether they’re going to get anything done,” said Phil Flynn, oil analyst at Price Futures Group in Chicago. “You’ve got concerns about slowing growth.” Still, oil prices have been buoyed this year by output curbs from the Organization of the Petroleum Exporting Countries and its allies, including Russia, a group known as OPEC+. The deal, effective from January, aims to cut 1.2 million barrels per day until the end of June to forestall a supply overhang. Suhail Al Mazrouei, the Energy Minister of the United Arab Emirates, said on Monday the oil market should achieve this balance in the first quarter of 2019. OPEC and its allies meet on April 17 and 18 in Vienna to review the agreement, but a draft cooperation charter seen by Reuters fell short of a new formal alliance among the producers. U.S. sanctions on Venezuela, along with older sanctions on fellow OPEC member Iran, have also prevented crude prices from falling further.

OPEC cut production by nearly 800,000 barrels a day in January, pumping just above its oil target - OPEC fell just short of its production goal in January, as a fresh round of output cuts from the 14-nation producer group got under way. The slight miss comes as the group once again cut its outlook for global oil demand in 2019. OPEC also slightly increased its forecast for supply from the United States and other non-OPEC nations. OPEC is partnering with 10 nonmember nations, including Russia, to keep 1.2 million bpd off the market. The so-called OPEC+ alliance aims to prevent another price-crushing oil glut like the one that gripped the market between 2014 and 2016. In January, OPEC managed to remove 797,000 barrels per day from the market by holding back supply. The group aimed to cut a combined 812,000 bpd in a bid to drain oversupply from the oil market. Total OPEC production stood at just over 30.8 million bpd in January, down from 31.6 million bpd in December, according to independent sources cited by the group in its monthly report. The biggest cuts by far came from top OPEC producer Saudi Arabia. The kingdom pumped about 10.2 million bpd in January, down 350,000 bpd from December and nearly 100,000 bpd below its official quota under the output cutting deal. The kingdom will continue to cut production, reducing output to about 9.8 million bpd in March, Saudi Energy Minister Khalid al-Falih told the Financial Times in an article published on Tuesday. The next biggest cuts came from the United Arab Emirates and Kuwait, though UAE pumped slightly above its quota last month. Altogether, most of the participating OPEC countries exceeded their quota during the first month of the deal, though some just barely pumped above target.

OPEC produced 30.81 mil b/d in Jan, 220,000 b/d above 2019 demand for its crude oil  — OPEC has painted a bearish picture for 2019, with demand for its crude oil expected to fall due to weak demand growth and a sharp rise in output from producers outside the group. The group's 14 members pumped 30.81 million b/d in January, down from 31.60 million b/d in December, according to its Monthly Oil Market Report Tuesday. Oil prices have recovered since December, when they fell to a 15-month low, with ICE Brent trading above $62/b this week. At the last OPEC meeting in Vienna, the group's members agreed to slash output by 812,000 b/d, with Russia and nine other non-OPEC allies committing to a cut of 383,000 b/d for the first six months of 2019. OPEC's research division estimates demand for its crude will average 30.62 million b/d in the first half of 2019, around 190,000 b/d lower than last month. Demand for OPEC crude in 2018 averaged 31.60 million b/d. Demand growth in 2019 was revised down to 1.24 million b/d due to "lower economic expectations from OECD Americas, Europe, as well as Latin America and the Middle East," the report said. Global oil demand is estimated to average 100 million b/d this year, compared with 98.76 million b/d in 2018, OPEC said. The group pegged 2018 global oil demand growth at 1.47 million b/d. In another bearish sign, non-OPEC oil supply growth in 2019 was revised up to average 2.18 million b/d due to production increases expected in the US, Brazil, Russia, the UK, Australia, Kazakhstan and Ghana. The report however acknowledged that the growth in the US sector could be faced with further pipeline capacity constraints in North America, both in Texas and Alberta, as well as changes in the intensity of drilling and completion in the US shale industry. Saudi Arabia's crude output fell 350,000 b/d in January to average 10.21 million b/d, according to an average of the six secondary sources that OPEC uses to gage production. The kingdom, however, self-reported production of 10.24 million b/d, its lowest since May 2018 and a fall of 401,000 b/d month on month.

Don't expect US sanctions against Venezuela to fuel a rally in oil prices, IEA says --Energy market participants may be able to adjust to U.S. sanctions against Venezuela's crude industry, the IEA said in its closely-watched report on Tuesday. The report comes at a time when tensions in Venezuela are reaching boiling point, with the oil-rich, but cash-poor, country in the midst of the Western Hemisphere's worst humanitarian crisis in recent memory.President Donald Trump's administration imposed targeted crude sanctions on Caracas late last month. The surprise move was designed to bar President Nicolas Maduro's access to oil revenue that has helped his embattled administration remain in power."The imposition of sanctions by the United States against Venezuela's state oil company Petroleos de Venezuela (PDVSA) is another reminder of the huge importance for oil of political events," the Paris-based IEA said Tuesday.  "Even so, headline benchmark crude oil prices have hardly changed on news of the sanctions. This is because, in terms of crude oil quantity, markets may be able to adjust after initial logistical dislocations," the group added.  International benchmark Brent crude traded at around $62.90 Tuesday morning, up 0.8 percent, while U.S.West Texas Intermediate (WTI) stood at $53.46, more than 0.6 percent higher.  Supply issues in OPEC-member Venezuela and OPEC-led production cuts from the start of the year have bolstered crude futures in recent weeks. The IEA said oil prices had not increased "alarmingly" since U.S. sanctions were imposed on Venezuela because the market is still working off the surpluses built up in the second half of 2018 — when global supply was estimated to have exceeded demand by 1.3 million barrels per day (b/d).

Oil Market Tightens On OPEC Cuts - Oil prices jumped during early trading on Tuesday on news that OPEC had sharply cut output in January.  . OPEC production declined by 797,000 bpd in January from a month earlier, averaging just 30.81 mb/d. Saudi Arabia, the UAE and Kuwait chipped in most of the reductions. Still, Russia only lowered output by 90,000 bpd, far short of the 230,000 bpd promised as part of the December deal. Saudi Arabia said it would continue to cut output, with plans to lower production to as low as 9.8 mb/d in March, or roughly half a million barrels per day lower than it had promised. Oil prices jumped on the news.  India’s two leading refiners will continue to buy crude oil from Venezuela but will stop selling it refined products because of U.S. sanctions, according to Argus Media. Notably, PDVSA’s head Manuel Quevedo showed up at a conference in New Delhi. India could remain one of the few large buyers of oil from the increasingly isolated regime of Nicolas Maduro. Quevedo said PDVSA planned on doubling exports to India to 300,000 bpd. John Bolton issued a veiled threat to India to not work with Maduro’s regime, saying on twitter that “Nations and firms that support Maduro’s theft of Venezuelan resources will not be forgotten.” The U.S. government is trying to keep Citgo, the U.S.-based subsidiary of PDVSA, alive and intact so that it can be handed over to Juan Guaidó and a new Venezuelan government. However, creditors are swarming the company to lay claim to pieces of the company as the Maduro regime falls apart. “Citgo is the big prize,” Francisco Monaldi, a fellow in Latin American Energy Policy at Rice University’s Baker Institute for Public Policy, told the Houston Chronicle. “I previously said there’s going to be a sharkfest of payments to creditors, but now there seems to be a bigger actor stopping the sharks, which is the U.S. government.”  PDVSA is pressing its joint venture partners to declare whether or not they will continue operations in the country following U.S. sanctions. Chevron pledged to remain in Venezuela. Chevron received a waiver from the U.S. government to continue working in the country until July 27. Chevron is trying to walk a fine line, pledging to remain in Venezuela while also hedging its bets, hinting about working with the U.S. government and a potential change in Venezuela’s government. “It’s a fluid environment,” Chevron’s CEO Mike Wirth said. “Our strong intent is to stay on the ground in Venezuela and be part of building a better future for the people of Venezuela,” Wirth told Bloomberg. “We’ve got a very close coordination under way with multiple agencies within the U.S. government.”

Oil up 1 pct on Saudi and OPEC cuts but outlook picture clouded (Reuters) - Oil prices gained about 1 percent on Tuesday, supported by OPEC-led production cuts and U.S. sanctions against Iran and Venezuela, though remain wary of surging U.S. output and the outcome of U.S.-China trade talks. Brent crude futures were up 61 cents at $62.12 a barrel and U.S. West Texas Intermediate (WTI) crude oil futures rose 54 cents to $52.95 a barrel by 0950 GMT. The continuing closure of parts of the Keystone pipeline that brings Canadian oil into the United States also helped to prop up WTI, traders said, after a partial shutdown at a Phillips 66 crude distillation unit led to initial sell-offs on Monday. Analysts said markets are tightening because of voluntary production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, as well as U.S. sanctions on OPEC members Venezuela and Iran. Saudi Arabia, the world's top exporter and de facto leader of OPEC, said on Tuesday that it would reduce oil production to nearly 9.8 million barrels per day (bpd) in March, about half a million bpd more than it originally pledged. Also at the radar are hopes expressed by U.S. and Chinese officials that a new round of talks, which began in Beijing on Monday, would bring them closer to easing their months-long trade war. Beijing and Washington are trying to hammer out a deal before a March 1 deadline, without which U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent. However, climbing U.S. oil production, fighting near Libya's main oilfield, sanctions on Venezuela and suspense over whether the U.S. will to grant more waivers to import Iranian oil leave markets unsure about the broader supply picture.

Oil up nearly 3 percent on Saudi and OPEC cuts - (Reuters) - Oil prices gained nearly 3percent on Tuesday, supported by OPEC-led production cuts, which Saudi Arabia said it would surpass by more than half a million barrels per day (bpd), and by U.S. sanctions against Iran and Venezuela. Brent crude futures LCOc1 were up $1.65, or 2.7 percent,at $63.16 a barrel by 1445 GMT. U.S. West Texas Intermediate(WTI) crude oil futures CLc1 also gained 2.7 percent, rising by $1.40 to $53.81. Markets are tightening because of voluntary production cuts from Jan. 1, led by the Organization of the Petroleum Exporting Countries and allies including Russia, aimed at forestalling a global overhang. Saudi Arabia, the world's top oil exporter and de fact leader of OPEC, said it would reduce crude production to about9.8 million bpd in March, over half a million bpd more than it had originally pledged. Energy Minister Khalid al-Falih announced the move in an interview with the Financial Times published on Tuesday as the kingdom seeks to drive up oil prices to help to fund an economic transformation plan. However, rising U.S. oil production, fighting near Libya's main oilfield, sanctions on Venezuela and suspense over whether Washington will grant more waivers to import Iranian oil haveleft markets unsure about broader supply. OPEC cut its forecast for 2019 world oil demand on Tuesday,citing slowing economies and expectations of faster supply growth from rivals, underlining the challenge it faces inpreventing a glut. Also on the radar are hopes expressed by U.S. and Chinese officials that a new round of talks, which began in Beijing onMonday, would bring them closer to easing their months-longtrade war. 

WTI Extends Gains After Surprise Crude Inventory Draw - Oil prices rebounded from a two-week low Tuesday as Saudi Arabia pledged to deepen production cuts and U.S. President Donald Trump said he could extend a deadline for new tariffs on China. However, after tagging $54, WTI slid back lower to hover around $53 ahead of tonight's API inventory data. An inventory build will lead market to believe "unwinding of inventories isn’t happening as quickly as they would like despite lower imports of Saudi crude into U.S. and recent sub-par growth of shale production," said Bart Melek, head of global commodity strategy at TD Securities in Toronto. API:

• Crude -998k (+2.4mm exp)
• Cushing -502k (+1.4mm exp)
• Gasoline +746k (+1.2mm exp)
• Distillates -2.48mm (-1.7mm exp)

Expectations were for further inventory builds in crude and Cushing but both saw surprise draws (crude -998k vs +2.4mm exp) and distillates also saw a notably bigger than expected draw. WTI rebounded from its late-day drift lower... “OPEC’s overall production being down has refocused the market’s expectations around tightened supply," said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Connecticut. “Whether or not we have enough strength to make a return to recent heights of $55 remains the question." WTI drifted lower to $53 ahead of API then kneejerked higher on the surprise draw...

Oil price risks shift to upside: Kemp (Reuters) - Oil traders no longer expect the market to be over-supplied this year, amid optimism a full-blown U.S.-China trade war will be averted, and oil production growth will slow thanks to OPEC cuts and sanctions on Venezuela. Front-month Brent futures prices have jumped to almost $65 per barrel, up from just $50 in late December, and the highest for nearly three months (https://tmsnrt.rs/2V4bGD1 ). Brent’s six-month calendar spread has swung into a backwardation of almost 70 cents per barrel, from a contango of more than $1.50 late last year, the strongest for almost four months. Crude prices and spreads are being propelled higher by an almost perfect storm of increasing economic optimism (or at least reducing pessimism), OPEC cuts and unplanned supply disruptions. In recent days, senior policymakers from both the United States and China have signalled trade negotiations are making good progress, as fear of recession makes both sides more eager for a deal. More importantly, the U.S. president has indicated the deadline for the next round of tariff increases could be extended based on recent progress even if not all issues have been resolved by March 1. Oil consumption growth is likely to slow this year from the very rapid rates reported between 2014 and 2017 but if tariff increases can be avoided oil use should continue increasing at a moderate pace. Meanwhile, Saudi Arabia and its closest allies in OPEC have also acted early and aggressively to reduce production which should help eliminate the incipient surplus in the market. Saudi Arabia’s oil minister has said the kingdom’s production will fall to just 9.8 million barrels per day in March from 11.1 million in November (“Saudi Arabia goes on hunt for global oil and gas”, Financial Times, Feb. 12). Saudi Arabia’s willingness to act as swing producer has more than offset the limited cuts made by other members of the organisation and its allies led by Russia. The kingdom has demonstrated its commitment to eliminating the market surplus and pushing prices higher, even if it means tolerating poor compliance by other members of the OPEC+ group. At the same time, Iran’s exports remain crimped by U.S. sanctions imposed in November, with the expectation they will be lowered further from May, when sanctions waivers are likely to become less generous. And U.S. sanctions on Venezuela’s state-owned oil company PDVSA have reduced the country’s crude exports and tightened the global oil market even further. 

Oil rises 1 percent on deepening OPEC supply cuts, sanctions on Venezuela - Oil prices rose on Wednesday, after top exporter Saudi Arabia said it would cut crude exports and deliver an even deeper cut to its production. Meanwhile U.S. futures gained on a reported decline in domestic oil inventories, though gains were capped by expectations that rising supply will swamp demand growth this year. Brent crude futures rose 84 cents, or 1.4 percent, to $63.26 a barrel around 9:20 a.m. ET (1420 GMT). U.S. crude oil futures gained 57 cents, or 1.1 percent, to trade at $53.67 a barrel. "It is a well-known fact that the world economy is losing momentum amid a plethora of downside risks including lingering US-China trade tensions and geopolitical uncertainty." OPEC said on Tuesday that it had cut its output by almost 800,000 bpd in January to 30.81 million bpd. Most of that reduction has been thanks to Saudi Arabia. Energy minister Khalid al-Falih on Tuesday told the Financial Times production would fall below 10 million bpd in March, more than half a million bpd below the target it agreed to as part of a global deal to limit supply. U.S. restrictions on Venezuela's energy sector have crippled exports and threaten to remove some 330,000 bpd in supply from the market this year, according to Goldman Sachs. The oil price has risen by 20 percent so far this year, yet most of that increase materialized in early January, before the imposition of U.S. sanctions on Venezuela's energy sector. The global oil market remains well supplied and output would still likely outstrip demand this year, despite OPEC's efforts and U.S. sanctions on Iran and Venezuela, the International Energy Agency said in its monthly market report on Wednesday. "Oil prices have not increased alarmingly because the market is still working off the surpluses built up in the second half of 2018," the IEA said. "In quantity terms, in 2019, the U.S. alone will grow its crude oil production by more than Venezuela's current output. In quality terms, it is more complicated. Quality matters."

WTI Holds Gains Despite Bigger Than Expected Crude Build - WTI has extended gains, pushing back above $54, following last night's surprise crude draw reported by API and Saudi Arabia pledged to deepen production cuts.The world’s biggest crude exporter will continue to curb output more than required by a December deal among top producers, Energy Minister Khalid Al-Falih told the Financial Times Wednesday. “Oil is rallying further as investors were given confirmation that the Saudis will curtail output, and they see a lower chance of the trade tensions escalating at the moment,” said Kim Kwangrae, a commodities analyst at Samsung Futures Inc. in Seoul.“Expectations of lower American crude stockpiles added to the optimism.”  DOE:

• Crude +3.63mm (+2.4mm exp)
• Cushing -1.02mm (+1.4mm exp)
• Gasoline +408k (+1.2mm exp)
• Distillates +1.19mm (-1.7mm exp)

DOE data refuted API's surprise crude draw with a bigger-than-expected build of 3.63mm barrels (2.4mm exp). Gasoline and Distillates also saw builds...  The large Cushing draw may be attributable to the shutting of the Keystone pipeline after a likely oil spill near St. Louis.  Production remains near record highs but the rollover in rig counts could signal a reduction in production looms...

WTI Oil Rises Despite Crude Inventories Surge - Crude oil prices gained on Wednesday, despite data showing that oil supplies in the U.S. registered a larger-than-expected inventory build. Crude oil for March delivery on the New York Mercantile Exchange rose 2.17% to trade at $54.27 a barrel by 10:32 AM ET (15:32 GMT), compared with $54.23 ahead of the report. The U.S. Energy Information Administration said in its weekly report that inventories rose by 3.633 million barrels in the week ended Feb. 8. Analysts had expected a crude-stock build of 2.668 million barrels, according to Investing.com, though the American Petroleum Institute late Tuesday reported a draw of 0.998 million. The data follows a prediction that the global oil market will be able absorb crude supply from suppliers outside of OPEC, according to the International Energy Agency. The Paris-based agency left its demand growth forecast for 2019 unchanged from its last report in January at 1.4 million barrels per day (bpd), while raising its estimate of growth in crude supply from outside OPEC to 1.8 million bpd in 2019, from 1.6 million bpd previously. OPEC has pledged to cut production by 800,000 bpd this year as part of an agreement with Russia and other non-OPEC producers. Supplies at Cushing, Okla., the key delivery point for Nymex crude, decreased by 1.02 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 450.8 million barrels as of last week, according to press release, which the EIA considered to be “about 6% above the five-year average for this time of year.” But the report also showed that gasoline inventories increased by 408,000 barrels, compared to expectations for a rise of 826,000 million barrels, while distillate stockpiles rose by 1.19 million barrels, compared to forecasts for a decline of 1.14 million.

Goldman sees oil rising toward $70, says demand forecasts are too gloomy - Oil prices have struggled to rally above $64 a barrel since last quarter's sharp pullback, but Goldman Sachs believes crude futures could break out in the coming months. The investment bank forecasts international benchmark Brent crude will peak at $67.50 a barrel in the second quarter. Goldman's outlook is based on its view that forecasts for demand growth have grown too gloomy and OPEC has adopted a "shock and awe" approach to pulling back supply. "Our constructive outlook for oil prices in 1H19 is predicated on both large supply cuts as well as resilient oil demand growth," Goldman analysts said in a research note released on Tuesday evening. Goldman believes the world's appetite for oil will grow by 1.4 million barrels per day in 2019. That's in line with the International Energy Agency's outlook, but above the consensus on Wall Street and OPEC's view that demand will grow by just 1.24 million bpd. The bank thinks forecasters are underestimating oil demand from emerging markets in particular. Last year, developing countries drew down stockpiles of oil to weather a period when oil prices, the U.S. dollar and interest rates were rising — a triple threat that sent the cost of crude soaring in nations from Argentina to India. Goldman sees that trend of destocking reversing. The bank also thinks a recent, rapid decline in emerging market demand for power fuel will ease. However, Goldman notes that recent economic data have fallen short of its expectations, so it could be another few months before the bank can determine whether its demand outlook hits the mark. On the supply side, Goldman believes OPEC and its oil market allies have addressed flaws baked into their last deal to cut output, which ran between 2017 and mid-2018. In Goldman's view, the new deal that kicked in last month delivers a big reduction at the outset — OPEC took nearly 800,000 bpd off the market in January — while making clear that the producers plan to ramp up output in the future, dissuading U.S. shale drillers from turning on the taps.

Oil Rises After Early Slide on Weak U.S. Data - - Oil bears may have to wait for more dire news on the U.S. economy or crude oversupply as a puzzling surge in market optimism is offsetting all the bad news. Futures of New York-traded West Texas Intermediate crude and London's Brent oil rose more than 1% for a third day in a row after briefly falling Thursday on weak U.S. retail sales data. Saudi jawboning about production cuts and optimism over U.S.-China trade talks helped gains in the two prior sessions. WTI settled the latest session up 51 cents, or 1%, at $54.33 per barrel. Brent, the global oil benchmark, rose $1.03, or 1.6%, to $64.64 per barrel by 2:44 PM ET (19:44 GMT). It also edged toward a test of the key $65 resistance, hitting an intraday high of $64.81. Both WTI and Brent are up more than 19% year to date. The London benchmark is also trading at its highest premium to its U.S. rival since 2017, at a gap of more than $10. "Overall, it appears to me that the 'lows have changed' " said Scott Shelton, energy futures broker at ICAP (LON:NXGN) in Durham, N.C., adding that while there was no real event driving the market "prices are just strong". "Asian crude is driving this market," said Shelton, who notes that backwardation in Brent -- where front-month prices were positively higher to the second month -- was steepening amid strengthening in global refining margins. "I would also think the downward momentum of prices ending is adding some additional support for (hedge fund) buying." U.S. retail sales tumbled 1.2% in December, the first time in 10 months, the Commerce Department reported. Economists had forecast a gain of 0.1% for the period. Producer price inflation also came out weaker than expected, while initial jobless claims were also higher than expected last week. Shares on Wall Street tumbled, offsetting some of Thursday's gains in oil, on anticipation that the slowdown could continue this year as American consumers worry over domestic tensions, the global economy and unresolved U.S.-China trade issues. Oil had rallied earlier on a Bloomberg report that President Donald Trump was considering a 60-day extension to the March 1 deadline requiring China to reach a trade deal with the U.S. or risk having tariffs on $200 billion worth of goods raised to 25% from 10%.

Oil prices rise on Beijing-Washington trade hopes, upbeat China data - Oil rose for a third day on Thursday, with Brent crude reaching its highest so far this year, as financial markets drew support from investor optimism that the United States and China could resolve their trade dispute. Crude futures briefly gave up their gains as the oil market followed U.S. stocks lower after data showed the biggest drop in retail sales in a decade. Brent crude futures were up 60 cents, or nearly 1 percent, at $64.21 a barrel around 11:25 a.m. ET (1625 GMT), down from a session high of $64.81, their highest intraday level in nearly three months. U.S. crude futures rose 12 cents to $54.02 a barrel, after earlier topping out at $54.68, about $1 shy of its 2019 high.The price of crude has risen 20 percent this year, driven primarily by the prospect of a decline in oil supply from OPEC and other top exporters such as Russia. "This rally that we're seeing over the last two to three days is completely justified when you put the predicted OPEC production cuts into your global oil supply and demand equation," Tamas Varga of PVM Oil Associates said. OPEC and allies such as Russia and Oman have agreed to cut crude output by a joint 1.2 million barrels per day, 800,000 bpd of which will come from OPEC. Thanks to healthy oil demand growth and lower OPEC+ production ... we see the market tightening further over the coming months," UBS analyst Giovanni Staunovo said. "As such, we continue to expect Brent oil prices will move up to $70-80 a barrel over three to six months."

Oil prices hit 2019 highs amid OPEC-led supply cuts - Brent crude oil prices hit 2019 highs above $65 per barrel on Friday, spurred by U.S. sanctions against Venezuela and Iran as well as OPEC-led supply cuts. Brent rose as high as $65.10, pushing past the $65 mark for the first time this year, before edging back to $64.97 a barrel by 0450 GMT. That was still 0.6 percent above the last close. The international benchmark for oil prices is at a near 3-month high and set for a 4.6 percent gain for the week. U.S. West Texas Intermediate (WTI) crude futures were at $54.70 per barrel, up 29 cents, or 0.6 percent, from their last settlement. The Organization of the Petroleum Exporting Countries (OPEC) and some non-affiliated suppliers including Russia are withholding supply in order to tighten the market and prop up prices. The producer group known as OPEC+ has agreed to cut crude output by a joint 1.2 million barrels per day (bpd). Top exporter Saudi Arabia said it would cut even more in March than the deal called for. Russia has cut its oil production by 80,000-90,000 barrels per day from its level in October, Moscow's reference level for its cuts, the country's energy minister said. "Brent should average $70 per barrel in 2019, helped by voluntary (Saudi, Kuwait, UAE) and involuntary (Venezuela, Iran) declines in OPEC supply," Bank of America Merrill Lynch said in a note. It also expects "a 2.5 million barrels per day drop in OPEC supply from 4Q18 into 4Q19." Commodity investment firm Goehring & Rozencwajg (G&R) said that oil production from non-OPEC producers like Brazil, Mexico or the North Sea was also struggling, further tightening the market. "The North Sea, Mexico and Brazil all disappointed and we expect this to continue going forward," G&R said in a note published on Thursday. Trade data in Refinitiv showed that combined crude oil shipments out of the North Sea, Mexico and Brazil were at 4.2 million bpd in January, down from 4.4 million bpd in December.Standing against these declines is soaring U.S. crude production, which rose by more than 2 million bpd last year, to 11.9 million bpd, making America the world's biggest oil producer.

World’s Largest Offshore Oil Field Partially Shut Down - The Safaniyah oil field in Saudi Arabia—the world’s largest—is producing at a reduced capacity after a ship’s anchor cut a main power cable, Reuters reports citing a knowledgeable source. An earlier report from MarketWatch quoted information from Energy Intelligence suggesting production at the filed had completely stopped, sparking worry about global heavy oil supply.The worry was justified: with Venezuela sliding more deeply into chaos and with new U.S. sanctions reducing the flow of Venezuelan heavy crude to refineries, another heavy crude-producing field outage is exactly what the market does not need.Safaniyah has a production capacity of over 1 million barrels of heavy crude: reason enough for the market to get excited or worried, or both. However, now that there is more information about the possible cause of the outage and its extent, this excitement or worry might calm down. With or without a field outage, however, Saudi Arabia has once again played the star role in helping oil prices recoup some of the losses suffered late last year. The Kingdom has been reducing its production by more barrels than it was obliged to, leading an almost 800,000-bpd OPEC-wide production decline last month. Saudi Arabia plans to reduce its crude oil production further, to 9.8 million bpd in March, Energy Minister Khalid al-Falih said in an interview for the Financial Times. This compares with more than 11 million bpd produced in November. Exports, Al-Falih said, will also fall substantially over this month and next, to an average of 6.9 million bpd from 8.2 million bpd in November.

A Big Week For Oil Bulls - Oil posted sizable gains this week, with ongoing outages in Venezuela tightening the market. Also, one of the largest bearish factors for oil – the U.S.-China trade war – showed some signs of easing.   OPEC cut production by 800,000 bpd in January, going a long way to erasing the supply surplus. However, the group also cut the demand estimate for its crude by 240,000 bpd from the last forecast due to a slowing economy. The group is still producing a bit more than what they think is needed. Saudi Arabia already indicated that it would shoulder an additional 0.5 mb/d reduction by March.   The IEA said in its latest Oil Market Report that the dwindling supplies of medium and heavy barrels, at a time when light sweet oil is surging from U.S. shale, has disrupted both the crude and product markets. Medium and heavy losses from Iran, Venezuela, Mexico and limited midstream capacity restraining growth in Canada has all combined to put a premium on those barrels. As a result, refiners could face some challenges this year as they search for the right type of crude for their facilities. The EIA revised up its forecast for U.S. oil production in its latest Short Term Energy Outlook. The agency expects the U.S. to average 12.4 mb/d this year, a huge 300,000-bpd jump from last month’s estimate. Even better, the U.S. could average 13.2 mb/d in 2020, revised up from 12.9 mb/d from the previous report.   Saudi Aramco partially shut its Safaniyah offshore oil field after a power cable was cut by a ship’s anchor, according to Reuters. The shutdown occurred about two weeks ago. The Safaniyah field is the largest offshore oil field in the world, with a capacity exceeding 1 mb/d. Energy Intelligence says about 300,000 bpd was impacted. A week of trade talks in Beijing between the U.S. and China ended with both sides indicating that significant progress was made. The talks will continue next week in Washington. It seems unlikely that a comprehensive agreement will be secured before the March 1 deadline, but the WSJ reports that they could agree to a memorandum of understanding outlining a framework trade deal, allowing talks to continue beyond the deadline. President Trump also indicated he would be willing to punt on tariffs if the two sides were making progress.

US crude rises 2.2% to 3-month high, settling at $55.59, boosted by OPEC output cuts - Brent crude oil climbed above $66 a barrel to its highest this year as OPEC-led supply cuts and this week's announcement of a higher than expected cut by Saudi Arabia encouraged investors. The international oil benchmark ended Friday's session $1.68 higher at $66.25 a barrel, up 2.6 percent on the day. Brent set a fresh three-month closing high going back to Nov. 19 on Friday and rose 6.7 percent on the week. U.S. West Texas Intermediate crude futures rose $1.18, or 2.2 percent, to $55.58 per barrel, also the best settlement since Nov. 19. WTI ended the week with a 5.4-percent gain. OPEC, along with allies led by Russia, made voluntary production cuts beginning last month aimed at tightening the market. Top exporter and de facto OPEC leader Saudi Arabia said on Tuesday it would cut over half a million barrels per day (bpd) more in March than the deal called for, sending prices surging. The cuts come alongside involuntary production curbs as a result of U.S. sanctions on Venezuelan and Iranian crude, along with curtailed Libyan output because of civil unrest. Prices were also buoyed by the partial closure of Saudi Arabia's Safaniya, its largest offshore oilfield with a production capacity of more than 1 million bpd. The shutdown occurred about two weeks ago, a source said, and it was not immediately clear when the field would return to full capacity. "The market may be reconnecting with its fundamentals, specifically the several major supply chokeholds that have stacked up in recent months over and above the voluntary OPEC output restraints," Bank of American Merrill Lynch said in a note that it expects a drop of 2.5 million bpd in OPEC supply in the fourth quarter of 2019 from a year earlier. However, the global supply picture remains uncertain.

IMF: Saudi Arabia Needs $80-85 Oil Price To Balance 2019 Budget -- OPEC’s biggest producer Saudi Arabia would need oil prices at US$80-85 per barrel in order to balance its 2019 budget, Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), has told Reuters.   Saudi Arabia’s officials, including Energy Minister Khalid al-Falih, don’t discuss publicly ‘targeted oil prices’ or a desired level of oil prices that would be comfortable to the Kingdom’s finances, but analysts and the IMF have estimates what oil price level would be enough to cover Saudi Arabia’s budget spending.  For this year, “if you take the (2019) budget as presented with everything remaining equal, a breakeven point would be around $80-$85 dollars,” the IMF’s Azour told Reuters.The oil price slump in the fourth quarter of 2018 has certainly affected the public finances of the biggest oil exporting nations, including OPEC’s biggest, Saudi Arabia.  Although Azour doesn’t see the price slump affecting the Kingdom’s ability to finance itself, he expects that those lower prices would weigh on the fiscal position of Saudi Arabia.For this year, the Kingdom announced its highest-ever budget, of around US$295 billion (1.1 trillion Saudi riyals). This breaks the previous record set in 2018, with budget spending at US$261 billion and it might spark concerns about the economy’s sustainability as the increase for 2019 includes a hefty bill for cost-of-living allowances introduced last year. Last month, the IMF slashed its forecast for Saudi Arabia’s economic growth this year to 1.8 percent, down by 0.6 percentage point from the previous economic outlook in October, due to lower oil prices and lower oil production growth.The IMF sees growth in Saudi Arabia for 2019 at 1.8 percent, compared to 2.4 percent expected last October, while it lifted its 2020 economic growth forecast by 0.2 percentage point from October to 2.1 percent.

Saudi Aramco will expand into international oil and gas exploration: FT --Saudi state energy giant Aramco aims to expand into international oil and gas exploration in the coming years, a move that will see the company compete more directly with the likes of Exxon Mobil and Royal Dutch Shell. Aramco has historically stuck to producing Saudi Arabia's vast, low-cost oil reserves, the world's second largest. But Saudi Energy Minister Khalid al-Falih now confirms in an interview with the Financial Times that the company will also look overseas for oil and natural gas prospects. "We are no longer going to be inward-looking and focused only on monetizing the kingdom's resources," Falih told the FT. "Going forward the world is going to be Saudi Aramco's playground." Aramco will prioritize building a global natural gas business as it pushes into overseas exploration and production, Falih said. Oil majors like Exxon and Shell are already shoring up their gas operations as the world's appetite for the fossil fuel grows, particularly in Asia. The company has considered making investments in liquefied natural gas projects in the Russian Arctic and the U.S., according to recent news reports. Falih says Aramco is also considering opportunities in Australia, which recently topped Qatar as the world's top exporter of LNG, a form of natural gas chilled to liquid form for transport by sea. Aramco has already invested in overseas refineries and petrochemicals plants. Its Motiva facility in Port Arthur, Texas, is the largest refinery in the United States. At home, Aramco is in the process of purchasing a 70 percent stake in Saudi petrochemicals company Sabic from the kingdom's sovereign wealth fund. The deal, expected to raise $70 billion for the Public Investment Fund, will partially underwrite Crown Prince Mohammed bin Salman's efforts to diversify the Saudi economy. Aramco also plans to list shares of the company on an international stock market in 2021 to shore up the fund, following a long delayed initial public offering.

The Saudis “Don’t Know” Where Jamal Khashoggi’s Body Is  — Saudi authorities do not know where murdered journalist Jamal Khashoggi’s body is, despite having in custody the Saudi team that killed him, a high-ranking foreign affairs official in the kingdom said in an interview broadcast on Sunday. The dissident journalist was dismembered after his murder in the Saudi consulate in Istanbul, but his remains have yet to be found, AFP said.Saudi Minister of State for Foreign Affairs, Adel al-Jubeir said the murder was carried out by Saudi officials “acting outside their scope of authority” and that 11 people have been charged with the crime.Still, asked where Khashoggi’s body is, he told CBS’s “Face the Nation,” “We don’t know.”#Saudi minister Abdel al Jubeir says he can’t comment on reports by anonymous sources, repeats that #MBS didn’t order #Khoshoggi killing https://t.co/fGFh0PyNhd— Barbara Plett Usher (@BBCBarbaraPlett) February 8, 2019Jubeir said the public prosecutor responsible for the case had sought evidence from Turkey but had received no response. Questioned why those in custody couldn’t tell them where the body was, Jubeir responded: “We are still investigating.”

Google, Apple Condemned For Continuing To Carry Saudi Wife-Tracking App - Apple and Google - which have had zero compunction about removing "inappropriate content" that promotes "hate speech, graphic violence, bullying and harassment" have come under heavy criticism by human rights activists and lawmakers for carrying an app that allows Saudi men to track the whereabouts of their wives and daughters.   Created by the National Information Center, the app - Absher, contains a database of women in Saudi Arabia and the means to prohibit them from travel - or catch them leaving without permission. Of note, more than 1,000 women flee Saudi Arabia each year according to Mansour al-Askar of the Imam Muhammad ibn Saud University in a May 2017 statement to The Economist . According to Human RIghts Watch, Saudi women require permission from a male guardian - usually their father or husband, to leave the country.  "It's really designed with the men in mind," said senior Human Rights Watch researcher, Rothna Begum. "Of course, it's incredibly demeaning, insulting and humiliating for the women and downright abusive in many cases, because you're allowing men absolute control over women's movements." Begum told CNN that Google and Apple "should be considering the way that the app is being used and in practice," and has suggested that the Silicon Valley companies ask the Saudi government to remove the guardianship functionality from the app.  "Apple and Google could have more oversight over any government services apps anyway," said Begum. "They should be looking to see whether or not these government apps are facilitating human rights abuses or encouraging discrimination in the country as well."Amnesty International has also called on the Silicon Valley tech titans to "assess the risk of human rights abuses on women which is facilitated by the App and mitigate the harm that the App has on women." "The use of the Absher app to curtail the movement of women once again highlights the disturbing system of discrimination against women under the guardianship system and the need for genuine human rights reforms in the country, rather than just social and economic reforms," said Amnesty International in a statement emailed to CNN.

EU adds Saudi Arabia to ‘dirty money’ blacklist - The European Commission has added seven countries including Saudi Arabia, Panama, and Nigeria to a blacklist of nations that pose a threat because of lax controls on terror financing and money laundering. The new countries targeted by the commission on Wednesday join another 16 already on this register, bringing the total up to 23. The commission said it added jurisdictions with "strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks". Will EU stop arms sales to Saudi in wake of Khashoggi killing?The move is part of a crackdown against money laundering after several scandals hit European Union banks in recent months. But it has triggered criticism from several EU states worried about their economic relations with the listed states, notably Saudi Arabia. "We have established the strongest anti-money laundering standards in the world, but we have to make sure that dirty money from other countries does not find its way to our financial system," Vera Jourova, European Commissioner for Justice said in a statement. "Dirty money is the lifeblood of organised crime and terrorism," she added, urging countries on the list to "swiftly remedy their deficiencies". The 28 EU states now have one month, which can be extended to two, to endorse the list. They could reject it by qualified majority. 

Iran is turning its 'people into paupers' instead of providing food, Saudi prince says -- Iran is funding militias throughout the Middle East while turning its own people into paupers, Saudi Arabian Prince Turki Al-Faisal told CNBC Tuesday. "I've described Iran in the past, and I think the description still fits, the leadership in Iran has developed into a paper tiger with steel claws," he told CNBC Tuesday. "The 'steel claws' are the militias that they have established throughout the Middle East, whether it's Hezbollah (in Lebanon) or the Houthis (in Yemen) or the al-Abbas (a Shia militant group in Syria) or the various militias operating in Iraq and Syria whose main purpose is to further Iran's influence and its domination of the areas in the Middle East," he said, speaking to CNBC's Hadley Gamble at the Milken Institute summit in Abu Dhabi. Iran and Saudi Arabia are rival religious and political powers in the Middle East. Relations between the Sunni-majority Saudi Arabia and Shia-dominated Iran have hit rock-bottom in recent years with civil wars in Yemen, Syria and Iraq seen as proxy battlegrounds between the two countries. Iranian support for the militant group Hezbollah in Lebanon and even, sporadically, to the Taliban in Afghanistan, in the form of weaponry and military training, has also made Iran a pariah on the global stage. A sluggish economy, made worse by re-imposed U.S. sanctions, and rising food prices have also fueled civil unrest and demonstrations against the government. Iranian President Hassan Rouhani said last month that Iran was facing its toughest economic situation "in 40 years." The International Monetary Fund has predicted the country's growth contracted by 1.5 percent in 2018 and will slump by 3.6 percent in 2019. Al-Faisal likened Iran to a "paper tiger" because he said poverty and protest were rising in the country with a "dysfunctional" government. He said he didn't know whether there would be regime change in Iran but hoped U.S. sanctions would change the leadership's conduct.

Iran to the Iraqis: do not attack US forces unless they refuse to withdraw following a parliamentary decision US president Donald Trump’s statement of his intention to remain in Iraq in order to “be looking a little bit at Iran because Iran is a real problem” has created a political storm in Mesopotamia among local politicians and groups now determined to put an end to the US presence in the country. Many are upset by Trump’s statement, saying that the “US forces are departing from their initial mission to fight terrorism, the reason for which they are allowed to stay in Iraq”. Iraqi President Barham Saleh commented that the US administration did not ask Iraq’s permission for US troops stationed in the country to “watch Iran”. US forces have been deployed in Iraq in large numbers since 2014 when ISIS occupied a third of the country. The US establishment under president Obama refrained from rushing to support the Iraqi government, leaving room for Iran to act rapidly and send weapons and military advisors to Baghdad and Erbil. The intentionally slow US reaction pushed the Grand Ayatollah Sayyed Ali Sistani to call for the mobilisation of the population, a call that led to the creation of the Popular Mobilisation Forces (PMF), called Hashd al-Shaabi, who managed to stop ISIS’s advance. Moreover, in response to Iraq’s request, a joint military operational room was formed in Baghdad’s “Green Zone” where Russian, Iranian, Iraqi and Syrian high-ranking officers are still present, coordinating military attacks and sharing electronic and other intelligence information about ISIS whereabouts and the movements of its militants, sleeping cells and leaders. The US also offered to conduct intelligence operations and air strikes against ISIS. Nevertheless, during the period that the ISIS threat diminished the number of the US forces has more than doubled, from 5,200to 11,000, according to sources within the Iraqi government; some Iraqi sources claim the real numbers are much larger, with as many as 34,000 US servicemen spread over 31 bases and locations, along with Iraqi forces. There are no military bases for US forces only.

Europe Is Determined to Save the Iran Deal -  It has been more than 300 years since Iran and France launched official diplomatic ties. The initial contact between the two nations dates back to the late 16th and early 17th centuries, when the kingdom of Persia tried to secure support from European nations against a powerful neighbor: the Ottoman Empire. France was a popular destination for Iranian kings wishing to spend their time abroad, and Iran was a strategically important country at the crossroads of the Silk Road with unlimited access to the Persian Gulf. This made Iran-France relations particularly close. The two countries maintained cordial ties until the Islamic Revolution of 1979, which changed the political landscape of the Middle East and caused a shift in Iranian foreign policy. Iran-France relations suffered enormously as a result of the anti-Western tone of the revolution, and ties were cut for 11 months following the Gordji Affair. This refers to the case of Wahid Gordji, a translator at the Iranian Embassy in Paris, who was suspected by French intelligence of being behind the 1985-86 bomb attacks in the French capital. There were other reasons for the decline in Iran-France relations. The most controversial surrounded the Iranian nuclear program, which started in the early 2000s and lasted until the Joint Comprehensive Plan of Action (JCPOA) was agreed in 2015. The JCPOA, or the Iran nuclear deal, was signed by the Iranians and leading world powers, including the US, Britain, France, China, Russia, Germany and the European Union. During the talks, France was accused by the Iranian government of taking a hardline approach. In this edition of The Interview, Fair Observer talks to François Nicoullaud, the former French ambassador to Iran, about the ups and downs of Iran-France relations and the new US sanctions. The transcript has been edited for clarity.

IS resists ‘final push’ by US-backed force in eastern Syria - US-backed fighters in Syria say they are meeting fierce resistance in the last enclave held by Islamic State (IS) militants near the Iraqi border. A battle has been going on for hours, with US-led coalition air strikes and artillery fire pounding IS positions. Up to 600 jihadists are thought to be defending their last stronghold, a small pocket in Syria's eastern province of Deir al-Zour. Two years ago IS controlled large areas of Syria and Iraq. On Saturday, after a pause of more than a week to allow some 20,000 civilians to leave the area, SDF spokesman Mustafa Bali said the group was launching the "final battle to crush IS". Some civilians are believed to be still in the area. An SDF field commander told AFP news agency on Sunday morning: "There are heavy clashes at the moment. We have launched an assault and the fighters are advancing." Monitors the Syrian Observatory for Human Rights said the SDF were advancing across farmland, and there were heavy clashes and landmines going off. Backed by air strikes, the SDF have driven out IS from towns and villages in north-eastern Syria in recent months.The battle for the tiny sliver of land still held by IS next to the Iraqi border has been raging for many hours. Air strikes and artillery fire have pummelled the IS position, which measures only about a mile across. The SDF believes it will shortly achieve a decisive victory. IS does still hold another scrap of territory in Syria - and it continues to carry out dozens of attacks - many targeting the SDF. Even as it seems likely to lose every last fragment of its once-vaunted and self-declared caliphate, IS can continue to operate and pose a potent threat in both Syria and Iraq from remote areas where its fighters find refuge, as well as through militants gone to ground in towns and cities.

Seven Children Among 16 Killed by US-Led Airstrikes in Syria  — According to the Syrian Observatory for Human Rights, US airstrikes killed at least 16 civilians, including seven children, eight women, and an elderly man, in far eastern Syria. The civilians were fleeing an ISIS-held village that US-backed forces are attacking. This is the latest in a growing number of civilian deaths in US strikes, coming amid the latest in a series of ‘final offensives’ by the Kurdish forces against the “last” ISIS villages in Syria. These constant offensives have led to a stream of displaced civilians out of these areas. The civilians killed in these latest strikes were reportedly fleeing toward the Iraqi border. US officials did not address the report yet, and it is rare for civilian deaths to officially end up on the Pentagon’s tally. It is worth wondering, however, if the strike was deliberately intended to prevent civilians crossing into neighboring Iraq, or just attacking any groups of people scrambling out of the village.

US asks Europe, others, to repatriate ISIL fighters held in Syria - The United States has called on European nations and other countries to repatriate and prosecute their citizens who travelled to Syria to join the Islamic State of Iraq and the Levant (ISIL, also known as ISIS). The Kurdish-led Syrian Democratic Forces (SDF) say they have arrested more than 3,200 ISIL fighters in territory they control in northeastern Syria, with more than 900 believed to be foreign fighters. In addition to the hundreds of men, the SDF also says it is holding more than 4,000 family members, including elderly people and young children. "The United States calls upon other nations to repatriate and prosecute their citizens detained by the SDF and commends the continued efforts of the SDF to return these foreign terrorist fighters to their countries of origin," State Department Spokesman Robert Palladino said in a statement on Monday. The announcement comes just two days before foreign ministers of US allies are set to meet in Washington for talks on the anti-ISIL coalition, with questions on how to move forward without the military backing of the US. The question of what to do with the foreign fighters in custody has grown increasingly thorny since US President Donald Trump's surprise announcement in December that he intends to withdraw all American forces from Syria. Very few countries have expressed readiness to repatriate their citizens, posing a dilemma for the Kurdish-led forces, particularly lading up to the US withdrawal.

US Leaders Call on Allies to Send Troops to Syria as it Withdrawals – Senior United States lawmakers and military officials have urged the country’s allies to send hundreds of troops into Syria, as the US plans its withdrawal from the war-torn country, a top US official said.Speaking on a panel at the Munich Security Conference on Friday, US Senator Lindsey Graham said the US would consider keeping some troops in Syria if Washington’s allies agreed to deploy their own forces to help create a buffer zone near the Turkish border with Syria.Graham said he discussed the plan ahead of the conference with US General Joseph Votel and President Donald Trump, who announced in December that the US planned to pull about 2,000 American troops out of Syria.Votel, who is the top general leading US efforts to fight the Islamic State (IS) group, has been vocal in his opposition to the withdrawal of US forces.“The post-caliphate strategy should be different than the fight to destroy the caliphate,” said Graham, before calling on international officials in the room to send their own troops. “I’m hoping that President Trump will be coming to some of you and asking for your help and you will say yes. And in return, the capability that we have that is unique to the United States will still be in the fight in Syria,” he said.Graham also said the US would try to gain support for this plan at the conference. Acting US Defence Secretary Patrick Shanahan did not secure any solid pledges of support, however, as he met with 13 defence ministers from countries that make up the anti-IS coalition on the sidelines of the conference, AFP reported.

Russia, Turkey, Iran Hail US Pullout Of Syria At Sochi, But US War Drums Beat At Warsaw - President Vladimir Putin reasserted the Russian position that northern Syria must return to Damascus' control during the opening day of the Sochi summit between the three leaders of Russia, Turkey and Iran. This just as the US-led Middle East summit is underway in Warsaw, Poland where the US and Israel have urged the world to "confront Iran" in places like Syria, Yemen, and Lebanon. The Sochi meeting is tackling the ramifications of US withdrawal, with tense relations between Russia and Turkey given Putin also urged steps to "completely destroy" jihadists in Idlib, and as the Russian Foreign Ministry ruled out any Turkish-led initiative without first getting a green light from the Assad government. But the Russia-Syria-Iran position is set to clash with Turkish President Erdogan's vision. The February 14th meeting in Sochi between the three Presidents (Russia, Turkey and Iran) is not expected to find solutions agreeable to all parties about the two main problem areas left in Syria: northeast Syria (Manbij to Qamishli/al-Hasaka), currently occupied by US forces, and Idlib city and its rural areas occupied by jihadist groups friendly to Turkey. There are fundamentally different points of view. At the top of the agenda, the gathering is expected to have further discussions on a possible US withdrawal in the coming weeks — the month of April seems plausible — as announced by officials in Washington.All parties are agreed, however, that US withdrawal is a priority and will be a relief to the Levant. Therefore, any step that help to reach this objective smoothly should be taken. Nevertheless, the main differences are triggered by the Russian desire and intention to conclude a “temporary deal” with Turkey over North-east Syria’s status after the US withdrawal. These differences are related to the price Syria should pay to see US forces out of the country. Sources among decision makers in Damascus said “Russia is trying to find an excuse for Turkey to move into north-east Syria, within a 'buffer zone' of 12,000 sq km out of the 42,000 sq km that represent the zone east of the Euphrates under US occupation, reviving the 1998 Adana agreement between Ankara and Damascus”.  A Syrian source reports, “The Russian President is trying to open the road for Turkey to regain a direct relationship with Syria on a higher level. Russia believes the temporary presence of Turkey is acceptable as long as the unity of Syria is non-negotiable. But we in Damascus believe that if Turkey moves in, it will be difficult to dislodge its forces ever again”.

BBC Producer's Syria Bombshell- Douma Gas Attack Footage Was Staged - Now approaching nearly a year after the April 7, 2018 alleged chemical attack in Douma, Syria — which the White House used as a pretext to bomb Syrian government facilities and bases throughout Damascus — a BBC reporter who investigated the incident on the ground has issued public statements saying the "Assad sarin attack" on Douma was indeed "staged".  Riam Dalati is a well-known BBC Syria producer who has long reported from the region. He shocked his nearly 20,000 twitter followers on Wednesday, which includes other mainstream journalists from major outlets, by stating that after a "six month investigation" he has concluded, "I can prove without a doubt that the Douma Hospital scene was staged."  The "hospital scene" is a reference to part of the horrid footage played over and over again on international networks showing children in a Douma hospital being hosed off and treated by doctors and White Helmets personnel as victims of the alleged chemical attack. The BBC's Dalati stated on Wednesday: "After almost 6 months of investigations, I can prove without a doubt that the Douma Hospital scene was staged. No fatalities occurred in the hospital." He noted he had interviewed a number of White Helmets and opposition activists while reaching that conclusion. He continued in a follow-up tweet: Russia and at least one NATO country knew about what happened in the hospital. Documents were sent. However, no one knew what really happened at the flats apart from activists manipulating the scene there. This is why Russia focused solely on discrediting the hospital scene.

Netanyahu’s War Talk -- While attending the Warsaw conference that is ostensibly committed to promoting “peace and stability” in the Middle East, Israeli Prime Minister Netanyahu let loose with this statement:  “What is important about this meeting – and this meeting is not in secret, because there are many of those – is that this is an open meeting with representatives of leading Arab countries, that are sitting down together with Israel in order to advance the common interest of war with Iran.” Netanyahu said. The prime minister’s official Twitter account used the exact same wording:What is important about this meeting. and it is not in secret, because there are many of those – is that this is an open meeting with representatives of leading Arab countries, that are sitting down together with Israel in order to advance the common interest of war with Iran.— PM of Israel (@IsraeliPM) February 13, 2019 This isn’t a case of Netanyahu’s words being taken out of context or misinterpreted. The prime minister’s own official account used this wording because this is the message that Netanyahu wanted to convey. It should come as no surprise that someone who has railed against Iran throughout his career would use language like this. The prime minister has talked up the idea of bombing Iran for years, and his government has obviously been attacking Iranian targets inside Syria for quite a while. Netanyahu said this in the context of talking about attacking Iranian forces in Syria and forcing them out of the country:“What we are doing is pushing and driving Iran from Syria. We are committed to doing this,” he said. Netanyahu seems to be trying to create the illusion of broader regional support for possible escalation against Iran in Syria and Lebanon. He may be interested in war with Iran, but most Arab states don’t actually have any interest in war with Iran if they are the ones that have to fight it.

Israel fights boycott movement as pro-Palestinian campaign gains global support— Gil Sima doesn’t support Israel's occupation of the West Bank.  But that hasn't stopped filmmakers from dropping out of his Tel Aviv International LGBT Film Festival to protest the country's policies toward Palestinians.  Like many other entertainment and cultural events here, the film festival has been targeted by the Boycott, Divestment, and Sanctions campaign.  Founded in 2005, BDS calls for “recognizing the fundamental rights of the Arab-Palestinian citizens of Israel to full equality." It also advocates for the return of millions of Palestinians to the homes their ancestors left or were forced from when Israel was established in 1948. Israeli officials allege the BDS movement is anti-Semitic and seeks to destroy the country. Prime Minister Benjamin Netanyahu's government has spent at least $15 million on combating BDS since 2015.  The campaign is reverberating in the United States, where the Senate passed a bill Tuesday that would allow states to punish businesses that take part in Israel boycotts.  But despite vigorous efforts to quash BDS, the pressure from those who support it is mounting.  Measures calling for boycotts of Israel, many of which are modeled on the anti-apartheid struggle in South Africa, including divesting from companies that sell to Israel’s army, are roiling college campuses.  During the summer, more than a dozen performers backed out of Israel's Meteor Festival after headliner Lana Del Rey canceled.  Scientists, academics and even fruit fans have backed BDS: Grape exports to Europe from the Jordan Valley in the West Bank have fallen by 80 percent since 2007 because of boycotts, according to the head of the regional council there.

US Airstrikes Hit Decade High In Afghanistan - While Trump professes antipathy for US conflicts abroad, the US military in Afghanistan last year was busy dropping the most bombs in at least a decade, reported Military.com. American fighter jets, strategic and stealth bombers, attack aircraft and helicopters, and drones dropped an unprecedented 7,362 bombs in 2018, according to the latest US Air Force Central Command airpower statistics report published last week. For more clarity on just how many bombs were dropped in 2018, the second-highest year on record was 2011, when the US dropped 5,411 bombs during the height of the Operation Enduring Freedom – Afghanistan (2001–14), according to available government figures dating back to 2009."Throughout the last year, the air component has supported multiple ongoing campaigns, deterred aggression, maintained security, and defended our networks," said Lt. Gen. Joseph Guastella, Combined Forces Air Component Commander, in a news release."We've orchestrated coalition airpower to destroy the [Islamic State] caliphate, support Iraq, and enabled significant progress in Afghanistan," Guastella said. The "Combined Forces Air Component Command 2015-2018 Airpower Statistics" spreadsheet, found within the report, shows a tremendous increase in the "number of weapons released," starting in the September 2018 through the end of the year. The unclassified data also shows aircraft operating under the Combined Forces Air Component Command flew 8,196 sorties in 2018, more than double the amount of amount of sorties in 2017. During the record year of Afghanistan bombardments, President Trump in December instructed the Pentagon to remove troops from Syria and dramatically reduce their numbers in Afghanistan. The increased bombing runs could be explained by the Trump administration trying to finish the job, which one of his campaign promises was to end the wars in the Middle East.

China’s treatment of Uighurs an ’embarrassment for humanity’: Turkey -- Turkey on Saturday condemned China's treatment of its Muslim ethnic Uighur people as "a great embarrassment for humanity," adding to rights groups' recent criticism over mass detentions of the Turkic-speaking minority. "The systematic assimilation policy of Chinese authorities towards Uighur Turks is a great embarrassment for humanity," Turkish foreign ministry spokesman Hami Aksoy said in a statement. The northwest Xinjiang region of China, where most Uighurs live, has been under heavy police surveillance in recent years, after violent inter-ethnic tensions. Nearly one million Uighurs and other Turkic language-speaking minorities in China have reportedly been held in re-education camps, according to a UN panel of experts. Beijing says the "vocational education centres" help people steer clear of terrorism and allow them to be reintegrated into society. But critics say China is seeking to assimilate Xinjiang's minority population and suppress religious and cultural practices that conflict with Communist ideology and the dominant Han culture. "It is no longer a secret that more than one million Uighur Turks, -- who are exposed to arbitrary arrests -- are subjected to torture and political brainwashing in concentration centres and prisons," Aksoy said in the Turkish foreign ministry statement. "Uighurs who are not detained in the camps are also under great pressure," he added. Turkey called on the international community and UN Secretary General Antonio Guterres "to take effective steps to end the human tragedy in Xinjiang region."

Harsh Turkish Condemnation Of Xinjiang Cracks Muslim Wall Of Silence -- In perhaps the most significant condemnation to date of China’s brutal crackdown on Turkic Muslims in its north-western province of Xinjiang, Turkey’s foreign ministry demanded this weekend that Chinese authorities respect human rights of the Uighurs and close what it termed “concentration camps” in which up to one million people are believed to be imprisoned. Calling the crackdown an “embarrassment to humanity,” Turkish Foreign Ministry spokesman Hami Aksoy said the death of detained Uighur poet and musician Abdurehim Heyit had prompted the ministry to issue its statement.  Turkish media asserted that Mr. Heyit, who was serving an eight-year prison sentence, had been tortured to death. Mr. Aksoy said Turkey was calling on other countries and United Nations Secretary-General Antonio Guterres to take steps to end the “humanitarian tragedy” in Xinjiang.The Chinese embassy in Ankara rejected the statement as a “violation of the facts,” insisting that China was fighting seperatism, extremism and terrorism, not seeking to “eliminate” the Uighurs’ ethnic, religious or cultural identity.Mr. Aksoy’s statement contrastèd starkly with President Recep Tayyip Erdogan’s declaration six months earlier that China was Turkey’s economic partner of the future. At the time, Turkey had just secured a US$3.6 billion loan for its energy and telecommunications sector from the Industrial and Commercial Bank of China (ICBC).The Turkish statement constitutes the first major crack in the Muslim wall of silence that has enabled the Chinese crackdown, the most frontal assault on Islam in recent memory. The statement’s significance goes beyond developments in Xinjiang.

Is The Brother Of Trump's Education Secretary Helping Build Concentration Camps For Chinese Muslims? - As China's mass incarceration of members of its Uighur Muslim minority in its far-flung Xinjiang province has elicited condemnation from editorial boards of US newspapers to, more recently, the leader of one of the world's largest Muslim nations, one of America's most famous private security contractors - and, incidentally, brother to President Trump's secretary of education, has found himself caught up in the burgeoning controversy.Five years after gaining the favor of the chairman of one of China's largest conglomerates, Blackwater founder Erik Prince, who became chairman of Hong Kong-based Frontier Services Group (which, instead of offering private mercenary armies for hire, claims to provide training and support services) back in 2013, has been steadily stepping back from the firm he helped build as he cedes more and more control to forces in the mainland. And now, FSG has become caught up in a controversy surrounding China's detention of more than one million Uighur's in "re-education camps", thanks to reports of a contract awarded to FSG to build a "training facility" in Xinjiang that critics feared would be used as a detention center.But according to a Bloomberg report published on Sunday, Prince denied the company's involvement in the facility, and insisted that his decision to step down as chairman of FSG in December was a strategic move intended to help the company win contracts for mega-projects on the mainland. Now FSG has drawn international attention for a signing ceremony to build a training center in far western China, where the Chinese government has detained as many as a million Uighur Muslims in political camps. The statement, made in Chinese, was subsequently removed from the firm’s website. Prince distanced himself from the region in a statement to Bloomberg."Erik Prince has no plans, desire nor interest to engage in any activity whatsoever either personally, through FSG or any other vehicle in Xinjiang Province now or at any time in the future," an FSG spokesman added.Unlike Blackwater, which became infamous after killing 14 Iraqi civilians in a Baghdad square, FSG focuses on logistics and security, rather than paramilitary operations.Nonetheless, FSG’s controversial business with the Chinese government has thrust Prince back into the spotlight. Critics accuse FSG of potentially helping the Beijing government engage in mass repression of ethnic Uighurs and other Muslims in western Xinjiang and, in the process, advancing the geopolitical agenda of a strategic U.S. competitor.