Sunday, October 3, 2021

US natural gas hits highest price since 2008, closes at 7 1/2 year weekly high; European and Asian prices 5 times higher

Oil prices rose for a sixth consecutive week as rising global demand amid tight supplies more than offset higher US inventories....after rising 3.0% to $73.98 a barrel last week as U.S. crude inventories fell to a 35 month low and as global oil supplies tightened, the contract price for US light sweet crude for November delivery opened higher on Monday on continuing signs that global oil inventories were falling sharply, and rose nearly 2% to close $1.47 higher at $75.45 a barrel, as parts of the globe, especially China and India, were seeing demand pick up with the easing of pandemic conditions...oil prices moved higher early Tuesday, with Brent crude, the International oil benchmark, topping $80 per barrel for the first time since October 2018, as the global natural gas shortage stoked demand for oil as a substitute, before reversing those early gains and dropping to a 16 cent loss at $75.29 a barrel, weighed down by a rallying U.S. Dollar and a selloff in U.S. equity markets, triggered by default warnings from Treasury Secretary Janet Yellen...oil prices then extended their Tuesday losses in overnight trading after the American Petroleum Institute reported across-the-board builds in U.S. crude and petroleum product supplies and opened 91 cents lower on Wednesday, as a stronger U.S. dollar and concerns over a possible government default added further headwinds, before settling with a 46 cent, or a 0.6% loss at $74.83 a barrel, even as OPEC confirmed plans to maintain a deliberate approach to adding supply to the market. after the EIA confirmed the first increase in US supplies in eight weeks...but oil prices steadied on Thursday after a report that China was prepared to buy more oil and other energy supplies to meet growing demand offset the price pressure from the unexpected rise in U.S. crude inventories, and settled 20 cents higher after a volatile session at $75.03 a barrel, thus contributing to a sixth straight quarterly climb for U.S. benchmark prices...oil traded lower early Friday, after European manufacturing surveys indicated a sharp deceleration of growth in September, and as global equity markets extended their decline due to rattled supply chains and rising consumer prices, but rallied to close 85 cents higher at $75.88 a barrel amid reports OPEC+, due to meet on Monday, had discussed how to increase output faster in the coming months, and on word that the White House had spoken with Saudi Arabia about oil prices, and thus finished the week 2.6% higher, while posting a sixth straight weekly gain, the longest streak of weekly advances since early July....

Meanwhile, natural gas prices finished higher for the seventh straight week, as shortages in Europe and Asia drove prices to record levels...after inching up 0.7% to $5.140 per mmBTU last week as domestic and global supply problems outweighed the impact of bearish weather patterns, the contract price of natural gas for October delivery opened 1% higher on Monday and jumped 14% to $5.851 per mmBTU, before settling with an 11% gain on the day at $5.706 per mmBTU, as gas prices at or near record highs of around $26 per mmBTU in Europe and $28 in Asia kept demand for U.S. LNG exports strong...the rally continued into Tuesday, with October gas trading as high as $6.280 per mmBTU before settling with a 13.5 cent gain at a 7 1/2 year closing high of $5.841, as only the limited capacity of US LNG exports prevented US gas prices from following global prices to the moon, while the contract price of natural gas for November delivery, which was to take over as the prompt month on Wednesday, gained 14.9 cents to $5.880 per mmBTU...with markets now tracking the November contract, natural gas prices gave back half the week's gains and tumbled 7% to $5.477 per mmBTU on Wednesday, the biggest one-day drop since January, on expectations that mild weather forecasts for the coming weeks would allow utilities to boost U.S. stockpiles to near-normal levels ahead of the winter heating season....but prices bounced back 39.0 cents or 7% to a new 7 year high of $5.867 per mmBTU on Thursday, despite a larger than normal injection of gas into storage, as fears that Europe would not have enough gas in storage for the winter heating season boosted global prices to record levels...but ​US ​gas prices came tumbling down again on Friday, and settled off 24.8 cents at $5.619 per mmBTU, as U.S. traders gave more weight to bearish domestic fundamentals than escalating fears of a global supply shortage this winter, but still finished the week 8.1% higher, the largest one week net and percentage gain since the week ending Aug. 27, and ​capping ​the largest six week gain since the week ending Feb. 21, 2014...

The seven year high for natural gas prices that we've cited has been widely reported by the media, but this week's brief foray into prices above $6 appears to break this decade's record high to test those of the last, as the following graph will show us...

natural gas prices October 2 2021

The above graph is a screenshot of the interactive natural gas price chart from, which i have set to show front month natural gas prices monthly over the past 20 years, which means you're seeing the range of natural gas prices over that time as they were quoted daily by the media...this same chart can be reset to show prices of front month or individual monthly natural gas contracts over time periods ranging from 1 day to 30 years, as the menu bar on the top indicates, and also to show natural gas prices by the minute, hour, day, week or month for each...each bar in the graph above represents the range of natural gas prices for a single month, with months when prices rose indicated in green, and months when prices fell indicated in red, with the small barely visible sticks above or below each monthly bar representing the extent of the price change above or below the opening and closing price for the month in question....likewise, the bars across the bottom show trading volume for the months in question, again with up months indicated by green bars and down months indicated in's clear that natural prices have risen well above the highs of the winter 2013 to 2014 period, so i've endeavored to position my cursor on the month when prices last hit the $6.280 per mmBTU level we saw ​on Tuesday of ​this week...that turned out to be December 2008, which you can see by the readout of that month which has been generated in small red print at the upper left of the graph, and which shows that the natural gas contract for January 2009 (NGF09) opened that month priced at $6.550 per mmBTU, and closed that month priced at $5.622 per mmBTU....although ​gas ​prices briefly touched $6.240 per mmBTU in January 2009, they hadn't been above $6 since until this week..

NB: note that since the above is a monthly price graph, Friday's 24.6 cent ​price ​drop​,​ on October 1st​,​ gets a monthly bar of its own, which is why the last bar shown points down, despite a weekly close that was at a 7 1/2 year high...

The EIA's natural gas storage report for the week ending September 24th indicated that the amount of working natural gas held in underground storage in the US rose by 88 billion cubic feet to 3,170 billion cubic feet by the end of the week, which left our gas supplies 575 billion cubic feet, or 15.4% below the 3,745 billion cubic feet that were in storage on September 24th of last year, and 213 billion cubic feet, or 6.3% below the five-year average of 3,383 billion cubic feet of natural gas that have been in storage as of the 24th of September in recent years...the 88 billion cubic foot increase in US natural gas in working storage this week was close to the forecast for a 87 billion cubic foot addition expected by a survey of analysts by S&P Global Platts, but ​well ​​more than the average addition of 72 billion cubic feet of natural gas that have typically been injected into natural gas storage during the same week over the past 5 years, and also more than the 74 billion cubic feet that were added to natural gas storage during the corresponding week of 2020… 

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending September 24th indicated that after another sizable increase in our oilfield production and a big jump in oil that could not be unaccounted for, we managed to add oil to our stored commercial crude supplies for the first time in eight weeks and for the twelvth time in the past forty-five weeks….our imports of crude oil rose by an average of 87,000 barrels per day to an average of 6,552,000 barrels per day, after rising by an average of 704,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 211,000 barrels per day to an average of 3,020,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,532,000 barrels of per day during the week ending September 24th, 124,000 fewer barrels per day than the net of our imports minus our exports during the prior week…over the same period, the production of crude oil from US wells was reportedly 500,000 barrels per day higher at 11,100,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to total an average of 14,632,000 barrels per day during the cited reporting week…

meanwhile, US oil refineries reported they were processing an average of 15,415,000 barrels of crude per day during the week ending September 24th, 67,000 more barrels per day than the amount of oil they processed during the prior week, while over the same period the EIA’s surveys indicated that a net of 528,000 barrels of oil per day were being added to the supplies of oil stored in the US….so based on that reported & estimated data, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports and from oilfield production was 1,310,000 barrels per day less than what was added to storage plus our oil refineries reported they used during the week…to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+1,310,000) 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 they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been a error or omission of that magnitude in this week’s oil supply & demand figures that we have just transcribed...moreover, since last week’s unaccounted for oil was at (+422,000) barrels per day, that means there was an 888,000 barrel per day balance sheet difference in the crude oil fudge figure from a week ago, thus rendering the week over week supply and demand changes indicated by this report useless….however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we’ll continue to report them as they’re published, just as they’re watched & believed to be reasonably accurate by most everyone in the industry….(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 6,147,000 barrels per day last week, which was 18.7% more than the 5,180,000 barrel per day average that we were importing over the same four-week period last year…the 528,000 barrel per day net increase in our crude inventories came as 654,000 barrels per day were added to our commercially available stocks of crude oil, which was partly offset by a 126,000 barrels per day withdrawal of oil that had been stored in our Strategic Petroleum Reserve, part of an emergency loan of oil to Exxon in the wake of hurricane Ida….this week’s crude oil production was reported to be 500,000 barrels per day higher at 11.100,000 barrels per day because the EIA"s rounded estimate of the output from wells in the lower 48 states was 500,000 barrels per day higher at 10,700,000 barrels per day, while a 9,000 barrel per day increase in Alaska’s oil production to 438,000 barrels per day had no impact on the reported rounded national production total….US crude oil production had hit a pre-pandemic record high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 15.3% below that of our pre-pandemic production peak, but 31.7% above the interim low of 8,428,000 barrels per day that US oil production had fallen to during the last week of June of 2016…

meanwhile, US oil refineries were operating at 88.1% of their capacity while using those 15,415,000 barrels of crude per day during the week ending September 24th, up from 87.5% of capacity the prior week, and near normal utilization for early autumn refinery operations…while the 15,415,000 barrels per day of oil that were refined this week were 12.8% more barrels than the 13,670,000 barrels of crude that were being processed daily during the pandemic impacted week ending September 25th of last year, they were 3.8% below the 16,017,000 barrels of crude that were being processed daily during the week ending September 27th, 2019, when US refineries were operating at what was then a below normal 86.4% of capacity​ in the wake of tropical storm Imelda​…

with this week’s increase in the amount of oil being refined, the gasoline output from our refineries was also higher, increasing by 246,000 barrels per day to 9,889,000 barrels per day during the week ending September 24th, after our gasoline output had increased by 372,000 barrels per day over the prior week.…while this week’s gasoline production was 11.2% higher than the 8,892,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 1.9% lower than the gasoline production of 10,081,000 barrels per day during the week ending September 27th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 194,000 barrels per day to 4,648,000 barrels per day, after our distillates output had increased by 298,000 barrels per day over the prior week…after this week’s increase, our distillates output was 6.7% more than the 4,358,000 barrels of distillates that were being produced daily during the week ending September 25th, 2020, while still 3.4% below the 4,813,000 barrels of distillates that were being produced daily during the week ending September 27th, 2019..

with a second big increase in our gasoline production, our supply of gasoline in storage at the end of the week increased for the eleventh time in twenty-five weeks, and for the 19th time in forty-four weeks, rising by 193,000 barrels to 221,809,000 barrels during the week ending September 24th, after our gasoline inventories had increased by 3,474,000 barrels over the prior week...our gasoline supplies increased by less this week because the amount of gasoline supplied to US users rose by 503,000 barrels per day to 9,399,000 barrels per day and because our imports of gasoline fell by 93,000 barrels per day to 989,000 barrels per day while our exports of gasoline rose by 104,000 barrels per day to 621,000 barrels per day…even after this week’s inventory increase, our gasoline supplies were 2.8% lower than last September 25th's gasoline inventories of 228,182,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year…

meanwhile, with the increase in our distillates production, our supplies of distillate fuels increased for the sixteenth time in twenty-four weeks and for the 20th time in 40 weeks, rising by 2,554,000 barrels to 131,897,000 barrels during the week ending September 24th, after our distillates supplies had decreased by 2,554,000 barrels during the prior week….our distillates supplies rose this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 451,000 barrels per day to 3,973,000 barrels per day, while our imports of distillates rose by 116,000 barrels per day to 300,000 barrels per day, and even though our exports of distillates rose by 341,000 barrels per day to 920,000 barrels per day…but after sixteen inventory decreases over the past twenty-five weeks, our distillate supplies at the end of the week were still 24.9% below the 172,758,000 barrels of distillates that we had in storage on September 25th, 2020, and about 12% below the five year average of distillates stocks for this time of the year…

meanwhile, with the recovery in our oil production from hurricane Ida finally catching up to the recovery in our oil refining, our commercial supplies of crude oil in storage rose for the fifth time in the past nineteen weeks and for the 17th time in the past year, increasing by 4,578,000 barrels over the week, from 413,964,000 barrels on September 17th to 418,542,000 barrels on September 24th, after our commercial crude supplies had decreased by 3,481,000 barrels the prior week…after this week’s increase, our commercial crude oil inventories were about 7% below the most recent five-year average of crude oil supplies for this time of year, but were still about 27% above the average of our crude oil stocks after the third week of September over the 5 years at the beginning of the past decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped to record highs during the Covid lockdowns of last spring and remained elevated for most of the year after that, our commercial crude oil supplies as of this September 24th were 15.0% less than the 492,426,000 barrels  of oil we had in commercial storage on September 25th of 2020, and are now 1.0% less than the 422,642,000 barrels of oil that we had in storage on September 27th of 2019, but still 3.6% more than the 403,964,000 barrels of oil we had in commercial storage on September 21st of 2018…

finally, with our inventory of crude oil and and our supplies of all products made from oil near multi year lows, we'll continue to check the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR....we find that total inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, rose by 10,049,000 barrels this week, from ​a six and a half year low of ​1,841,627,000 barrels on September 17th, to 1,851,676,000 barrels on September 24th...  

This Week's Rig Count

The number of drilling rigs active in the US increased for 46th time out of the past 54 weeks during the week ending October 1st, but they were still 33.5% below the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US increased by seven to 528 rigs this past week, which was also 262 more rigs the pandemic hit 266 rigs that were in use as of the October 2nd report of 2020, but was still 1,401 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global oil market in an attempt to put US shale out of business….

The number of rigs drilling for oil was up by 7 to 421 oil rigs this week, after they had risen by 10 oil rigs the prior week, and there are now 239 more oil rigs active now than were running a year ago, while they still amount to just 26.2% the 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 was unchanged at 99 natural gas rigs, which was still up by 25 natural gas rigs from the 74 natural gas rigs that were drilling during the same week a year ago, but still only 6.2% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….in addition to oil and gas rigs, a horizontal rig that Baker Hughes classifies as "miscellaneous' continues to drill in Kern county California, while a year ago there were three such "miscellaneous' rigs reported to be active...

The Gulf of Mexico rig count was up by three rigs to eleven rigs this week, which is still short of the 14 rigs deployed in the Gulf the week before Hurricane Ida approached, with ten of this week's Gulf rigs deployed in Louisiana waters and another drilling for oil in Alaminos Canyon, offshore from Texas...but the Gulf rig count is also still down by 3 rigs from a year ago, when 12 Gulf rigs were drilling for oil offshore from Louisiana and two were deployed for oil in Texas waters….however, there are still 2 rigs drilling for natural gas off the shore of the Kenai peninsula in Alaska this week, and hence this week's total national offshore rig count of 13 rigs is down by just one rig from the 14 offshore rigs running a year ago, when there was no drilling off Alaska or off our other coasts...

In addition to those rigs offshore, we continue to have two water based rigs drilling inland; one is a directional rig targeting oil at a depth of over 15,000 feet​,​ drilling from an inland body of water in Plaquemines Parish, Louisiana, near the mouth of the Mississipp, and the other is drilling for oil in the Galveston Bay area, so the inland waters rig count of two is up from one from a year ago..

The count of active horizontal drilling rigs was up by 3 to 474 horizontal rigs this week, which was more than double the 229 horizontal rigs that were in use in the US on October 2nd of last year, but was just over a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014….at the same time, the vertical rig count was up by 2 to a 19 month high of 32 vertical rigs this week, and those were also up by 16 from the 16 vertical rigs that were operating during the same week a year ago… addition, the directional rig count was up by 2 to 22 directional rigs this week, and those are now up by 1 from the 21 directional rigs that were in use on October 2nd of 2020….

The details on this week’s changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes…the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins…in both tables, the first column shows the active rig count as of October 1st, the second column shows the change in the number of working rigs between last week’s count (September 24th) and this week’s (October 1st) count, the third column shows last week’s September 24th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 2nd of October, 2020...

October 1 2021 rig count summary

this week's rig changes appear to be fairly straightforward; the three rigs that were added in Louisiana's offshore waters account for this week's increase in th​at state; other rigs in the state remained in place....checking the Rigs by State file at Baker Hughes for changes in the Texas Permian basin, we find that one rig was pulled out of Texas Oil District 8, which is the core Permian Delaware, while two rigs were added in Texas Oil District 7C, which includes the southern counties of the Permian Midland, thus netting out to a one rig increase in the Texas Permian, and covering all of this week's changes in the state​ of Texas​....since the Permian basin count was up by 3 rigs nationally, that means that the two rigs that were added in New Mexico had to have been deployed in the far west reaches of the Permian Delaware to account for the national increase in that basin...the only other rig addition​ ​nationally this week was in Oklahoma, and that appears to have been ​an oil rig ​deployed in a basin that Baker Hughes doesn't track...


Pa. Dems running for Senate shun talk of fracking ban - Proposals to ban fracking have grown more popular in recent years among Democrats, but the party’s leading Senate candidates in Pennsylvania are pushing back. Both candidates, Lt. Gov. John Fetterman and Rep. Conor Lamb, say they would defend hydraulic fracturing, or fracking, for oil and natural gas. Fetterman argues that a ban would turn off voters. Lamb agrees, and says he backed then-candidate Joe Biden for the Democratic presidential nomination due, in part, to his refusal to endorse a total fracking ban. It’s one area of agreement between two candidates with sharp differences in a number of policy fields. Fetterman has positioned himself as a progressive, and Lamb has fashioned himself as a centrist. Fetterman initially backed Sen. Bernie Sanders (I-Vt.), who introduced a bill last year to ban fracking nationwide, in the 2020 presidential election (E&E News PM, Jan. 30, 2020). The two are now seeking to flip outgoing Republican Sen. Pat Toomey’s seat. Meanwhile, the leading candidate seeking to keep the seat in the GOP column, Sean Parnell, an Army veteran and former President Trump’s choice to be the nominee, also opposes fracking bans. “There really is no strong pro-environment major candidate in the race,” said Jeff Brauer, a political science professor at Keystone College, “which, of course, in turn, most likely means that the next Pennsylvania U.S. senator will be pro-fracking to some degree.”

PA Groups Urge State to Increase Oil, Gas Well Bond Amounts - Some environmental groups are formally requesting that Pennsylvania’s Environmental Quality Board raise the bond amounts companies pay to drill oil and gas wellsThe Sierra Club, the Clean Air Council and four other groups have sent two petitions, asking the board to adopt full-cost bonding, both for conventional and unconventional oil and gas wells. Drillers currently pay only a fraction of the bond amount needed to clean up and plug abandoned wells, which leak methane and raise environmental concerns.Ankit Jain, associate attorney with the Sierra Club’s environmental law program, said this increase is a critical way to hold companies accountable for the impacts they leave on communities nearby.“We want the amount of money that you’ll get back from plugging the well to be the same amount of money as it would actually cost to plug the well itself,” he said. “So now, you have every incentive to plug the well, because you just get that money back anyways. And it’s not left unattended to pollute the environment and eventually, for taxpayers to spend money cleaning up.”The groups are asking the board to raise the bond amount to $38,000 per conventional well, and $83,000 per fracked well. Pennsylvania has more than 6,000 so-called “orphan” gas wells, with hundreds of thousands yet to be found, according to the state Department of Environmental Protection.About 5% to 8% of all methane emissions in Pennsylvania are caused by abandoned oil and gas wells, according to a study by Stanford and Princeton universities. Alex Bomstein, a senior litigation attorney for the Clean Air Council, said this pollution risk can have major consequences for residents living around well sites. “So it’s a huge and essentially unquantified problem that we’re all experiencing the consequences of, in terms of the results of exposure to toxins,” he said, “often without people realizing that part of the reason they’re sick is because of the pollution from these abandoned wells.”The state Department of Environmental Protection is required to respond to the petitions within 30 days about whether they meet the legal requirements for the board to consider them.

Company planning a second shale wastewater injection well in Plum - Pittsburgh Post-Gazette - With Allegheny County’s first oil and gas waste injection well less than a year old, the Delmont-based company behind it has already filed for a permit for another one in Plum.Penneco Environmental Solutions has asked federal regulators to convert another oil and gas well on the same property into an injection well to store the briny brew that comes out of oil and gas wells.The operating well, called Sedat 3A, was converted in the same way. The well pad that holds it has three other old oil wells on it.One of those is now being used as a monitoring well — to spot potential issues with the injection well. The remaining two are destined for the same dynamic. One, if permitted, will receive oil and gas wastewater, and the other will transmit hydrological information.Penneco’s new well permit filing is likely to elicit a new round of opposition from residents and environmental groups, which tried to stop the company from siting its first injection well in the area — asking that this industrial activity not be permitted so close to population centers and waterways. Penneco’s Chief Operating Officer Ben Wallace is expecting the pushback.“I don’t expect people to say, ‘Thank you for putting an injection well in our backyard,’” Mr. Wallace said. “It’s an industrial necessity. It’s got to go somewhere.“I get that people are going to be opposed, but that’s the right of citizens.” He said Penneco plans to bring its new well proposal to Plum before the end of the year.Penneco began injecting brine into the Sedat 3A well in late February, Mr. Wallace said. That was around the same time as Pittsburgh Mayor Bill Peduto and the chief executive of the Pittsburgh Water and Sewer Authority asked Gov. Tom Wolf to “revise or repeal” Penneco’s permit, citing concerns that it was 10 miles upstream from PWSA’s intake pipes for its treatment plant on the Allegheny River.But it wasn’t until Labor Day that the company went around the clock, launching a 24-hour operation. Mr. Wallace said the well is currently accepting wastewater from 28 different drillers and that it fields, on average, about 24 trucks daily — each capable of holding 100 barrels of waste.

Governor Wolf has an oil and gas problem. -One need look no further than the fifth iteration of Pennsylvania’s Climate Action Plan released last week to find proof of Governor Wolf’s dangerous relationship with the oil and gas industry. This year, the UN IPCC has come out sounding the alarm that extreme weather impacts from the climate crisis are here, they’re widespread, and that governments must prioritize action to cut methane pollution to avoid climate catastrophe in our lifetimes.This year, the International Energy Agency, an institution meant to help industrialized nations meet their energy needs, made waves when it recommended that no further expansion of fossil fuels be allowed if the world wants to meet climate goals.Yet, Governor Wolf has again released a “Climate Action Plan” that falls short of what science says we must do and doesn’t even attempt to address oil and gas production harms in Pennsylvania. Why doesn’t Gov Wolf prioritize cutting oil & gas pollution? It cannot be denied: Pennsylvania is the second largest producer of methane gas in the country and a major contributor of climate pollution.The oil and gas industry is a key contributor to Pennsylvania’s greenhouse gas (GHG) emissions, and one of the reasons the state ranks among the top GHG contributors in the country. Yet Wolf’s plan does little to hold the industry accountable.The 2021 Climate Action Plan does not attempt to curb oil and natural gas production emissions beyond reducing fugitive methane emissions through improved leak detection and repair programs. It does not even pretend to address the continued expansion of natural gas development and production in Pennsylvania. The result is that easy wins for our climate have been left on the table. There are tens of thousands of these wells across the state, and they are undoubtedly contributing to the climate crisis — yet their emissions go unchecked. Advocates in Pennsylvania have long argued for the need to address this gaping loophole in Pennsylvania’s oil and gas rules. If basic requirements to address leaking methane are off the table, how can the Wolf administration truly say it is taking action in response to the climate crisis? Likewise, Pennsylvania’s GHG emissions data relies on DEP data that undercounts oil and gas emissions. Many emission sources are not even tracked (for example, Pennsylvania’s hundreds of thousands of orphan and abandoned wells). Starting with this flawed data as a baseline, the Wolf administration’s goal is to reduce GHG emissions by 80% from 2005 to 2050. This goal flies in the face of IPCC recommendations. Accurately tracking oil and gas emissions – and incorporating IPCC recommendations – are critical first steps for any climate action plan.

Company says planned natural gas pipeline from northeastern Pa. to New Jersey won’t go forward - Construction of a nearly 120-mile-long proposed natural gas pipeline from northeastern Pennsylvania to central New Jersey will not go forward, the group behind the project said Monday. PennEast Pipeline Company, which won a recent legal battle against New Jersey at the Supreme Court, nonetheless said the state has failed to provide certain permits and is putting the project on ice. “PennEast partners, following extensive evaluation and discussion, recently determined further development of the Project no longer is supported. Accordingly, PennEast has ceased all further development of the Project,” spokesperson Pat Kornick said in an email. The decision is the latest swing in a long-running effort to extract natural gas from the Marcellus Shale region of Pennsylvania. It’s also a major win for environmental groups who opposed the project, arguing it would cut a scar across the landscape, threaten wildlife and contribute the use of fossil fuels. New Jersey Democratic Gov. Phil Murphy, facing reelection this year, said Monday he was gratified that the project wasn’t going forward. He’s long opposed the project. “This one was bad. It would have wrecked our state and as long as I’m here that’s not gonna happen,” Mr. Murphy said. Pipeline opponents held a remote video conference to take a victory lap of sorts. The pipeline company’s decision was emotional for some. “It’s relief,” said Terese Buchanan, a resident along the proposed route and long-time opponent. Jacqueline Evans, whose property in Hunterdon County, New Jersey, stands along the proposed pathway, described a draining process of opposing the pipeline. She said she found surveyors on her land without permission and watched as her children struggled with worry over what would happen to wildlife and the land. “All of a sudden a place that is supposed to feel safe to you feels threatened,” she said. “The stress has been unbelievable,” she said. It’s unclear whether PennEast will pursue the project again if circumstances change. Groups backing the project lamented its apparent demise, saying it would have provided affordable energy to residents. “If we cannot get that gas to where it is needed because of regulatory and legal challenges by those who are content to impose higher energy bills on working families, we are effectively abandoning this strategic American asset,” said Amy Andryszak, president and chief executive officer of the Interstate Natural Gas Association of America, which backed the pipeline.

PennEast cancels pipeline project; cites lack of permits from N.J. - In an astounding turnaround after years of battling New Jersey over permits to build a natural gas pipeline from Northeast Pennsylvania to Mercer County, PennEast has canceled its 116-mile project. The move comes just three months after the U.S. Supreme Court sided with PennEast over the state of New Jersey, which had attempted to block the pipeline company from seizing state-controlled land for the project. The Federal Energy Regulatory Commission, or FERC, had granted the company eminent domain to seize land from uncooperative landowners, including the state of New Jersey. PennEast spokeswoman Pat Kornick issued a statement Monday morning, citing the continued lack of support from the Garden State in acquiring environmental permits. “Although PennEast received a Certificate of Public Convenience and Necessity from FERC to construct the proposed pipeline and obtained some required permits, PennEast has not received certain permits, including a water quality certification and other wetlands permits under Section 401 of the Clean Water Act for the New Jersey portion of the Project; therefore, the PennEast partners, following extensive evaluation and discussion, recently determined further development of the Project no longer is supported,” the statement read. “Accordingly, PennEast has ceased all further development of the Project.” The pipeline would have shipped Marcellus Shale gas from Luzerne County across the Delaware River to Mercer County to provide what the company said was much-needed, affordable natural gas to residents. Opponents said it would harm acres of forest, wetlands, and waterways; pose a danger from potential explosions; and represented an outmoded fossil fuel infrastructure project at a time when climate change was increasingly tied to extreme weather events.The pipeline would have crossed dozens of waterways and wetlands, as well as the main stem of the Delaware River. The line would have also connected with Adelphia Gateway and Columbia Gas transmission pipelines in Northampton County. New Jersey had withheld from the project the necessary permits to cross waterways. The state says it spent about $1 billion to acquire and control the parcels for open space and to preserve the land for recreation, conservation, and agriculture, and that it should not be used to ship natural gas. Acting Attorney General Andrew Bruck called the decision a “tremendous victory” for New Jersey.

PennEast becomes the latest to scuttle a natural gas pipeline project - PennEast Pipeline said on Monday it would stop developing a proposed pipeline from Pennsylvania to New Jersey, the latest in a series of natural gas lines to run aground due to legal and regulatory challenges. The project was one of several proposed in recent years to draw gas from the fast-growing Appalachian region, only to run into local or environmental opposition to more fossil-fuel infrastructure. Gas prices have surged worldwide due to rising demand and lack of supply. In the United States, there is plenty of product available for heating and power generation. But with the cancellation of PennEast and other pipelines, the industry is becoming more concerned that additional production from the Marcellus/Utica shale in Pennsylvania, Ohio and West Virginia will become trapped in the basin. Much of the growth in U.S. gas production over the past decade that turned the country from a gas importer into one of the world’s biggest exporters has come from the Appalachian region. The United States exports about 10% of the gas it produces as liquefied natural gas (LNG). “The Marcellus/Utica was the growth engine of natural gas production for many years and that has slowed considerably the past two years,” PennEast was canceled, the company said, because it had not yet received all of its required permits, including a water quality certification in New Jersey. It was one of the last major pipeline projects in the works set to pull gas from the Marcellus/Utica formation, the biggest U.S. gas shale basin. “The PennEast partners, following extensive evaluation and discussion, recently determined further development of the project no longer is supported,” PennEast said in an email, noting it “has ceased all further development of the project.” U.S. natural gas prices are at a seven-year high, boosted by overseas demand for U.S. LNG exports. In other markets, gas prices are trading at record levels due to low storage in Europe and insatiable demand in Asia. [NGA/] Other East Coast gas pipes held up by regulators and legal battles include Williams Cos Inc’s Northeast Supply Enhancement from Pennsylvania to New Jersey and New York, and Dominion Energy Inc’s Atlantic Coast from West Virginia to Virginia and North Carolina. The latter was canceled in 2020. PennEast decided to stop development even though the U.S. Supreme Court in June ruled in its favor in a lawsuit allowing the line to seize state-owned or controlled land in New Jersey. As recently as August, PennEast said it still hoped to finish the first phase of the $1.2 billion pipe in Pennsylvania in 2022. The 120-mile (193-km) pipe was designed to deliver 1.1 billion cubic feet per day of gas from the Marcellus shale to customers in Pennsylvania and New Jersey. One billion cubic feet is enough gas for about five million U.S. homes for a day.

Cancer-causing wastes still exist along the Texas Eastern pipeline 30 years after settlement - It’s been more than 30 years since the public first learned that the former Texas Eastern Transmission Corp. buried industrial fluids containing the carcinogen polychlorinated biphenyls, or PCBs, in pits along the natural gas line, including in Shermans Dale.The sites could represent thousands of tons of contaminated soil. The PCBs still have not been fully cleaned up and there isn’t an estimate for when that will be completed.“We have undertaken PCB remediation efforts at (the Shermans Dale) facility in accordance with applicable regulations and are committed to continuing efforts supporting the health and safety of the communities in which we live and work,” said Max Bergeron, a regional spokesperson for Enbridge, the Calgary-based owner of the Texas Eastern gas pipeline. This was the initial response in June to questions from the newspaper.According to the state Department of Environmental Protection (DEP), Enbridge is supposed to conduct PCB cleanups as it makes updates to its facilities, such as the work that was done over the past couple years at the Shermans Dale compressor station in Carroll Twp. Companies that owned the Texas Eastern pipeline in the past were supposed to do the same but did not completely remove all the PCB-contaminated soil.“Previously, PCB impacted soil was removed from other areas of the facility,” said John Repetz, a DEP spokesman, about Shermans Dale. “Some impacted soil remained because the facility is an active pump station and the soil could not be accessed at that time.” For example, soil underneath pipes, buildings or compressors was inaccessible, the DEP and company said. All total, 19 Texas Eastern sites across Pennsylvania still have confirmed PCB waste sites, according to DEP. Ten of the sites are in the south-central region including the Perulack site in Juniata County, Shermans Dale in Perry, and Grantville in Dauphin County.

New Hampshire gas law handcuffs local government on climate-friendly construction - New Hampshire is the latest state to adopt a law that prohibits any type of restriction on new natural gas hookups, a fossil fuel industry-driven legislative effort that now extends across 20 states. The law (SB 86) is unlikely to have any immediate impact in New Hampshire, as no towns were actually considering such restrictions. But environmental groups predict that, over time, these laws will make it harder and more expensive for states and cities across the country to meet their climate targets, while also helping to lock in new emissions for decades.“These laws make it impossible for cities and towns to do one of the cheapest and easiest actions that they could do to fight climate change — cut carbon out of new buildings,” said Alejandra Mejia Cunningham, a building decarbonization advocate for the Natural Resources Defense Council. “They’re sending towns back to the drawing table and forcing them into other options that are more expensive and won’t really get them to their 2050 climate goals.”A dire alert from the United Nations last month warned that the latest Intergovernmental Panel on Climate Change report shows the world needs to phase out fossil fuels immediately to avert catastrophic climate change. That includes natural gas, which emits fewer carbon emissions than coal when burned but enough tothreaten Paris agreement targets with continued use.But pro-gas groups are pushing back on electrification efforts, framing the issue as a matter of consumer choice. In New Hampshire, after Republican Gov. Chris Sununu signed the ban prohibition into law late last month, he immediately drew praise from the Consumer Energy Alliance, an advocacy group whose members include the American Gas Association and the American Public Gas Association. “This bill protects our consumers, families, seniors and businesses from irresponsible prohibitions on the use of reliable, safe and clean fuels like natural gas in homes or communities,” the alliance said in a press release. The law prohibits all counties, cities, towns, village districts and local land use boards from adopting any rule that prohibits or restricts anyone from “installing a safe and commercially available heating or other energy system of their choice.”

TGP, Southwestern Aiming to Deliver Certified Appalachian Natural Gas to Northeast Markets -Tennessee Gas Pipeline (TGP) and Southwestern Energy Co. have clinched an agreement to move certified natural gas supply to the Northeast beginning in November.Kinder Morgan Inc. subsidiary TGP, through its existing system, would transport Southwestern’s Appalachia supply that is certified as responsibly sourced gas (RSG). Certified gas is produced and transported by companies whose operations are independently verified as meeting certain environmental, social and governance (ESG) standards, including the reduction of methane emissions.The agreement is “focused on providing this lower-carbon fuel to the northeastern United States,” said Kinder’s Tom Martin, president of Natural Gas Pipelines. “This is one of several RSG initiatives currently underway at Kinder Morgan and aligns with our commitment to minimize methane emissions associated with the production, transportation, storage and distribution of natural gas.”TGP, an 11,760-mile system, transports gas from the Northeast to end-use demand markets including New York City and Boston. It also moves supply to the Gulf Coast and into Mexico. In June, Kinder expanded its Northeast gas deliveries by snapping up Stagecoach Gas Services LLC, which also moves Appalachian gas to the Northeast. Southwestern, meanwhile, in June became the first U.S. exploration and production company to announce that it would certify that all of its Appalachian gas is responsibly produced. The independent produces around 3 Bcf/d across more than 789,000 net acres in Ohio, Pennsylvania and West Virginia. “Southwestern believes responsibly sourced gas is foundational to a low carbon future,” said CEO Bill Way. “This innovative agreement with Kinder Morgan to deliver responsibly sourced energy to customers in the Northeast is evidence of our commitment to help bring about that future.”

At DEQ public hearings, opponents decry pipeline and supporters say it’s vital to economic growth - As they have many times before, opponents of building a natural gas pipeline through Southwest Virginia decried its heavy environmental footprint. And once again, supporters said the Mountain Valley Pipeline is vital to economic growth. Their comments were made Monday and Tuesday night during public hearings held by the Department of Environmental Quality and the State Water Control Board, which are considering a stream-crossing permit for the deeply divisive project. Although much of the 303-mile pipeline is nearing completion, Mountain Valley has encountered repeated regulatory and legal challenges over how the buried pipe will cross nearly 1,000 streams and wetlands in its path. Before the project can be finished, the water board must issue a water quality certification, which would then be followed by a final approval from the U.S. Army Corps of Engineers. The board is expected to make a decision in December. Of the 53 people who spoke Monday night in Rocky Mount, 35 were in favor of finishing the long-delayed project. The first 20 speakers at Tuesday’s hearing at Radford University, which continued past press time, were evenly split on the issue. Del. Charles Poindexter, R-Rocky Mount, said a current lack of natural gas has long been a stumbling block in attracting new industries to Franklin County. “I can’t overstate the importance of the pipeline’s completion for the county’s economic success,” he said. By tapping the pipeline as it runs though the Summit View Business Park, Roanoke Gas Co. would be able to meet demand in Franklin County, it says. Paul Schneider, director of energy planning and procurement for Roanoke Gas, said the company has added about 2,500 customers since 2015 and expects 600 more over the next year. Two existing pipelines that currently supply natural gas have no more capacity, the company says. “Roanoke Gas needed MVP in 2015 and we need it even more today,” Schneider said. Opponents point to the pipeline’s troubled environmental record since work began in 2018. State regulators have cited Mountain Valley with more than 300 violations of erosion and sediment control regulations. When it rains heavily, muddy water often flows off construction sites and into streams. “Commerce is not your job,” Joshua Vana of ARTivism, a group that coordinates resistance between artists and environmental justice activists, told the water board. “Your job is to represent citizens and protect water quality.” Many say it is not too late to stop the pipeline. “This is not a done deal,” Del. Chris Hurst, D-Blacksburg, said Tuesday in urging the board not to allow the bureaucratic momentum Mountain Valley has gained with other permits to influence its decision.

Mountain Valley Pipeline water permit arguments tread familiar ground - For three hours Tuesday night, a crowd of Southwest Virginia residents, pipeline workers and environmental activists batted back and forth the same arguments the State Water Control Board has been hearing for the past four years as the Mountain Valley Pipeline project has ground forward, stalled, ground forward again and stalled again. “We keep treading water and saying the same things over and over again,” said pipeline supporter Oludare Ogunde, a nonprofit founder and organizer for the Laborers’ International Union of North America in Richmond. “If I were on the board, I’d be getting pretty tired of this,” said nonprofit director and pipeline opponent Joshua Vana of Albemarle later in the evening. “I would have been tired of this probably the first time around back in 2017.” The hearing in Radford, which followed a Monday night session in Rocky Mount, was convened to gather public comment on Mountain Valley’s most recent attempt to obtain a key state water permit to complete the 303-mile pipeline intended to carry natural gas from West Virginia into Virginia. Under the federal Clean Water Act, projects like pipelines that discharge pollutants, including sediment, into waters of the United States must obtain federal and state permits that guarantee the project will not significantly degrade water quality. Mountain Valley initially received that approval in the form of the U.S. Army Corps of Engineers’ Nationwide Permit 12, a general permit that authorized all of the pipeline’s stream crossings, as well as through a certification from Virginia’s State Water Control Board issued in December 2017. In 2018, however, Mountain Valley lost the federal stream-crossing approval and the entire Nationwide 12 permit program came under legal challenge. This January, the developers changed direction, deciding to instead seek a new Army Corps approval and a Virginia Water Protection Permit — a course it described as “the most efficient and effective path to project completion” in filings with the Federal Energy Regulatory Commission. The federal permit hit a snag this July when the U.S. Environmental Protection Agency assessed a draft version andrecommended that the Army Corps not issue it due to “a number of substantial concerns.”

Graf: Public good does not equate to destruction of the Earth and First Amendment - Mountain Valley Pipeline has decided to go after its critics in using the legal system to find out who anonymous activists are who have fought the pipeline through social media and out in the trenches. The pipeline company acquired the right to take land from private property owners through a process called eminent domain, which essentially means that the government owns all the land and if they want to use “your property” for public good, they get to take it. This concept goes back to the days of the king of England who owned everything and allowed the use of his property to his various buddies, the lords of the land. The king has been replaced by the federal government, which can seize land if the intended use of the space serves a greater public purpose than its current use. The Supreme Court has defined public use consistent with economic gain, even the economic gain of the private party who gets to use the seized land. Under eminent domain, once the king, now the federal government, gives the use of the land to the new lords, e.g. the mega-corporations. MVP’s alleged public purpose in using eminent domain to seize multiple parcels of private property in Virginia is based on its claim that pipeline gas will benefit the public. But that claim is debatable given that to this day there isn’t even a market for the gas the pipeline will carry. We are doing just fine without any additional fossil fuel use. And the destruction of Virginia’s hills, valleys and waters that the pipeline construction has rendered is appalling. All of this for the end of result of increasing the public’s dependence upon fossil fuels which only the criminally naive believe have no connection to the extreme climate changes from hurricanes to wildfires that we see every day on both sides of the country. Thus the public good and public purpose of the pipeline is beyond debatable. It is an atrocity that is geared to destroy our climate, life on the planet and the ability to function as a civilization. All of this is driven by greed masking itself as public good Now this greed machine of mass destruction has decided to punish its critics by using the legal system in an attempt to search and destroy those critics. The classic definition of fascism is when large corporations or big money work in conjunction with a central government to control, silence and stifle criticism. A classic example of big corporations using their power to silence critics is the SLAPP suit: Strategic Lawsuit Against Public Participation. In the past, mega companies have sued individuals who have criticized them using mostly frivolous lawsuits to intimidate their critics. Many states have passed laws that prevent these suits from happening giving those who oppose mega-greed legal tools to defend themselves.

3 takeaways from yesterday's FERC hearing - Federal Energy Regulatory Commission Chair Richard Glick defended the need for tighter scrutiny of natural gas projects yesterday during his first appearance before the Senate Energy and Natural Resources Committee since taking the helm at the agency in January.Lawmakers questioned all four sitting FERC members — two Democrats and two Republicans — in an oversight hearing that touched on issues including environmental reviews and House Democrats’ sweeping clean electricity plan. It also showcased political divisions at FERC, which oversees the bulk power system and large natural gas pipelines, among other energy projects.“FERC’s regulatory actions have a significant impact on the lives of millions of people,” Glick, a Democrat, told lawmakers in his opening remarks. “As a result, it is important that our decisionmaking processes include robust input from diverse perspectives.”Glick has pushed for updating FERC’s approach to reviewing gas pipelines, including accounting for proposals’ greenhouse gas emissions.Republican Commissioner James Danly raised concerns with several recent FERC orders that he said go against agency precedent.“I am concerned that a number of recent commission actions have created such profound uncertainty throughout the natural gas pipeline industry that it is becoming increasingly difficult for the companies that build and operate natural gas pipelines to secure financing or rationally allocate capital,” Danly told lawmakers in his opening remarks.Danly and his fellow Republican Commissioner Mark Christie also sounded alarm about how the Clean Electricity Performance Program under consideration in the House could affect grid reliability and electricity bills (Energywire, Sept. 28). Proponents of the plan, including President Biden, say it would create clean energy jobs and reduce the country’s greenhouse gas emissions by incentivizing utilities to add more renewable resources.Biden has nominated Willie Phillips, Democratic chair of the Public Service Commission of the District of Columbia, to join the agency as its fifth commissioner. If confirmed by the Senate, Phillips would shift the political balance of power at FERC, which has been under Republican control or in a partisan split for the past four years.“We hope we can get you another nominee as quickly as possible,” Sen. Joe Manchin (D-W.Va.), chair of the ENR Committee, said yesterday. Here are three takeaways from the hearing:

CenterPoint Energy Plans $1.2B Infrastructure Improvements - CenterPoint Energy, Inc.’s Indiana-based natural gas business, CenterPoint Energy Indiana North, has filed a request with the Indiana Utility Regulatory Commission (IURC) to continue its natural gas infrastructure improvements during the next five years to comply with federal pipeline safety rules and to ensure the company’s 625,000 natural gas customers in north central, central and southeastern Indiana continue to receive safe, reliable gas service for decades to come.Previous policy set by the Indiana Legislature allows utilities to recover federal-mandated costs as well as submit their forward-looking capital investment plans to the IURC for consideration. In 2013, the company filed an initial seven-year gas system modernization plan with the IURC to recover planned capital expenditures through 2020. The natural gas system improvements are a continuation of efforts over the last seven years to upgrade and maintain portions of CenterPoint Energy’s 13,000-mile network of distribution mains and transmission pipelines through its pipeline replacement and transmission line integrity management programs. The work will primarily consist of replacing 341 miles of bare steel and cast-iron distribution mains with new mains, most of which will be plastic, as well as inspecting and upgrading transmission pipelines. Together, these efforts will call for an estimated $1.2 billion in investments.

Cheniere Cleared to Introduce Feed Gas at Sabine Pass Expansion - Cheniere Energy Inc. has received permission from federal regulators to introduce feed gas to the sixth train at its Sabine Pass liquefied natural gas (LNG) terminal in Louisiana, raising the likelihood that U.S. exports will increase further by year’s end. The Federal Energy Regulatory Commission granted Cheniere’s Sept. 15 request to introduce feed gas for commissioning of the 5 million metric tons/year (mmty) expansion. Cheniere, the largest exporter of U.S. liquefied natural gas, said last month that the train was 90% complete and expected to enter commercial service next year. Chief Commercial Officer Anatol Feygin told news media at the Gastech conference in Dubai on Tuesday there’s a strong likelihood that Train 6 could begin producing LNG by the end of the year. Venture Global Inc.’s Tom Earl, chief commercial officer, also reportedly said at Gastech that the 10 mmty Calcasieu Pass LNG export terminal in Louisiana was also nearly complete and could start production in the coming months. Venture Global issued a tender earlier this year to supply 12 cargoes from Calcasieu Pass as soon as October in an indication that the terminal could start exporting commissioning cargoes by the end of the year. The TransCameron pipeline that would feed Calcasieu Pass has also been cleared by federal regulators to enter service. It is already receiving limited amounts of gas as Calcasieu Pass nears commissioning. EBW Analytics Group said Friday that LNG feed gas demand could soon top 12.5 Bcf/d as Train 6 ramps up and flows at Sabine Pass, Freeport and Cameron LNG continue to increase following Tropical Storm Nicholas last week. Feed gas demand could hit 14 Bcf/d by the end of the year if Calcasieu starts up, EBW said, surpassing the record of roughly 11 Bcf/d, and accounting for well above 10% of all U.S. natural gas demand.

Natural Gas Futures Top $6 Mark Early as Contract Expiration Seen Driving Volatility -- Continued volatility attributed to front-month expiration saw natural gas futures rocket over the $6/MMBtu mark in early trading Tuesday. Coming off a 56.6-cent gain in the previous session, the October Nymex contract was up an additional 30.4 cents to $6.010 at around 8:45 a.m. ET. After a massive move higher Monday coinciding with options expiration, and with the final settlement of the October contract Tuesday, analysts at EBW Analytics Group cautioned that “further sizable moves are possible, particularly later in the day.” The “proximate cause” for the recent rally is end-of-month positioning, the analysts said, but the prospect of additional liquefied natural gas demand amid “rumors that Sabine Pass Train 6 was firing up yesterday likely added more fuel to the amped-up rally.” A pullback in prices “appears increasingly possible” as November transitions to the front month, according to the EBW analysts. “From a fundamental perspective, Nymex natural gas futures are approaching our probability-weighted scenario analysis fair value of $6.00-6.50,” the analysts said. “The high volatility roller coaster, however, is likely to continue. If Sabine Pass feed gas demand ramps up to new highs — signaling Train 6 starting up — or the forecast for the back half of October trends colder, natural gas could rapidly take another leg higher.” Trends in the weather data overnight resulted in only slight changes to the outlook, with the major models still advertising a bearish pattern for the United States overall through mid-October, according to NatGasWeather. “We continue to look to the last 10 days of October for the first real threat of widespread freezing temperatures across the northern U.S.,” the firm said. NatGasWeather pointed to tightness in overseas markets in Europe and Asia as a driver of the spiking prices domestically. “Now that bulls have emphatically regained control and pushed prices to highs of the past decade, we look to see if prices hold $6,” the firm said. “We expect how high U.S. prices go will be dictated by whether Europe prices continue to rise, which is possible due to the potential for moderate to major issues there this winter.” Meanwhile, Wood Mackenzie’s daily pipe production estimates showed a roughly 1.6 Bcf/d day/day decline in Lower 48 output as of early Tuesday, down to around 91 Bcf/d from 92.7 Bcf/d on Monday. Wood Mackenzie analyst Laura Munder said declines were observed in the Haynesville Shale (about 340 MMcf/d), Texas (about 585 MMcf/d) and the Northeast (about 620 MMcf/d). November Nymex crude oil futures were up 63 cents to $76.08/bbl at around 8:45 a.m. ET.

U.S. natgas jumps 11% to 7-year high on soaring global gas prices - (Reuters) - U.S. natural gas futures soared 11% to a seven-year high on Monday as record global gas prices kept demand for U.S. liquefied natural gas (LNG) exports strong. "Spectacular prices around the world are feeding into the sentiment here," "gas as a commodity is getting repriced" and "now that we've hit these price heights, it will be easy to do it again." On its second to last day as the front-month, gas futures for October delivery rose 56.6 cents, or 11.0%, to settle at $5.706 per million British thermal units (mmBtu), their highest close since February 2014. That was also the contract's biggest daily percentage increase since the February freeze in Texas left millions without power and heat for days. November futures, which will soon be the front-month, were up 58 cents to $5.78 per mmBtu. With U.S. gas prices now at seven-year highs, traders noted some speculators cut their long positions too early. Last week, U.S. speculators cut their net long positions on the New York Mercantile and Intercontinental Exchanges for a second week in row to their lowest since May in anticipation U.S. prices could drop later this week if U.S. utilities keep adding more gas to storage than usual, With gas prices at or near record highs of around $26 per mmBtu in Europe and $28 in Asia versus just around $6 in the United States, traders said buyers around the world would keep purchasing all the LNG the United States could produce. The United States exports about 10% of the gas it produces as LNG. Despite reductions at several U.S. LNG export plants this month, the amount of gas flowing to the plants slipped modestly to an average of 10.4 billion cubic feet per day (bcfd) so far in September from 10.5 bcfd in August, according to data provider Refinitiv. That small LNG feedgas decline came amid a three-week maintenance outage at Berkshire Hathaway Energy's Cove Point facility in Maryland, a brief shutdown at Freeport LNG's plant in Texas during Tropical Storm Nicholas and a brief reduction last week at Cameron LNG's plant in Louisiana. But, no matter how high global prices rise, the United States only has the capacity to turn about 10.5 bcfd of gas into LNG. Global markets will likely have to wait until later this year to get more from the United States when the sixth liquefaction train at Cheniere Energy Inc's Sabine Pass and Venture Global LNG's Calcasieu Pass in Louisiana start producing LNG in test mode.

Cash Prices, Natural Gas Futures Soar Again, Extend Rally - Following a 56.6-cent gain to start the week, the October Nymex contract on Tuesday rose another 13.5 cents day/day and settled at $5.841/MMBtu before rolling off the board. November, which takes over as the prompt month on Wednesday, gained 14.9 cents to $5.880. NGI’s Spot Gas National Avg. spiked 32.0 cents to $5.415 on Tuesday. A day earlier, cash prices soared 50.0 cents. NatGasWeather said Tuesday the major forecasting models still advertised a bearish pattern for the United States overall through mid-October – typical for this time of year. “We continue to look to the last 10 days of October for the first real threat of widespread freezing temperatures across the northern U.S.,” the firm said. That noted, NatGasWeather pointed to supply/demand tightness in Europe and Asia – as well as customary buying ahead of expiry — as a key driver of soaring domestic prices. “We expect how high U.S. prices go will be dictated by whether Europe prices continue to rise, which is possible due to the potential for moderate to major issues there this winter,” the firm said. Utilities in Europe and parts of Asia have for much of 2021 warned of lean supplies ahead of winter, when heating needs emerge in full force and gas demand typically spikes. This has fueled steady and elevated calls for U.S. exports of liquefied natural gas (LNG) levels, supporting prices. As winter draws closer, overseas energy challenges are fueling prices surges globally. U.S. LNG feed gas volumes have held near record levels around 11 Bcf most of this year, interrupted only by storms and maintenance work. The energy crunch abroad began with robust draws from storage during large stretches of freezing conditions in Europe and northern Asia last winter. This was followed by a hot summer, unplanned supply disruptions and a pullback in production amid coronavirus outbreaks. Combined, Rystad Energy analysts say, these factors could threaten economic recoveries from the depths of the pandemic if consumers and businesses cannot afford gas to power homes and businesses. In years past, power companies and industrial users would switch from gas to coal, but coal supplies are waning as countries around the world transition to cleaner forms of energy. The Rystad team expects more gas-to-oil switching, though oil prices also are surging amid rising demand and output that remains light relative to pre-pandemic levels. This, the analysts said, is raising concern about a broader energy crisis. Brent crude, the international benchmark, is up more than 50% this year and has briefly topped $80/bbl this week. A big chunk of that increase developed this month alone.

Natural gas drops 7%, sharpest decline since January following big run-up on supply concerns - Natural gas futures dipped as much as 8% on Wednesday, pulling back from a more than seven-year high above $6 per million British thermal units hit during the prior session. The contract for November delivery fell to a low of $5.42 on Wednesday, before recovering some of those losses to settle 6.85% lower at $5.47 in the worst daily performance since January. Natural gas prices have shot up this month amid an energy crunch in Europe that's sent power prices to all-time highs. Natural gas futures are up 26% for September, and prices have more than doubled since the beginning of the year. Despite Wednesday's downturn, some believe it's a temporary halt in an otherwise upward trajectory. "Natural gas fundamentals all point to higher prices: robust Chinese demand, shut-in offshore US production, and low supplies from Russia," strategists at Oanda said. "The natural gas market has a supply problem and it doesn't look like that will change anytime soon."

Natgas Drops 7% On Warmer Forecasts, Largest One-Day Decline Since January - U.S. natural gas futures plunged more than 7% Wednesday from a seven-year-high on warmer weather forecasts for the next few weeks, which indicates lower demand for powerplant and heating fuel, according to Bloomberg. Above-normal temperatures for the East Coast while below-normal temperatures for the West Coast are expected to last through Oct. 13. Shown below is the U.S. Lower 48 mean temperature positively diverging from the 30-year norm. "October is supposed to be warmer than normal. If that's the case, natgas is going to find some stability," said Phil Flynn, senior market analyst, Price Futures Group. Heating degree days (HDD), the measure of demand for energy needed to heat a building when the average temperature is below 65F, began to slightly increase from 1 HDD to nearly 3 HDD from Sept. 15-30 but has since negatively diverged the 30-year trend and estimated to do so through Oct. 13. Natgas futures have been on a tear, reaching seven-year highs above the $6 handle on shortage fears in Europe. Futures have plunged almost 12.5% in the last two trading sessions, with today's 7% drop the largest daily slump since Jan. 19. The largest decline since Jan. 19. BloombergNEF estimates that "even mild weather in coming months" will keep U.S. stockpiles below historical averages because of increasing demand and will put a bid under prices. "There's a 64% chance that inventories will finish below the five-year average level at the end of winter 2021-22," BNEF noted in its latest U.S. Gas Monthly report.

US natural gas storage fields post largest weekly injection since June: EIA | S&P Global Platts --US working gas inventories added the largest weekly injection since early June with greater builds possible in the weeks ahead, but it appears to be too little, too late to alleviate winter supply concerns as prices strengthen. Register Now Storage fields injected 88 Bcf for the week ended Sept. 24, the US Energy Information Administration reported Sept. 30. It proved just above the 87 Bcf build expected by a survey of analysts by S&P Global Platts. The build was more than the five-year average of 72 Bcf and last year's 74 Bcf injection in the corresponding week as working gas inventories increased to 3.170 Tcf. US storage volumes now stand 575 Bcf, or 15.4%, less than the year-ago level of 3.745 Tcf and 213 Bcf, or 6.3%, less than the five-year average of 3.383 Tcf. The injection proved more than the 76 Bcf build reported the week prior and ranked as the fourth largest weekly injection of the season according to EIA data. The NYMEX Henry Hub November contract, now the prompt month, jumped 32 cents to $5.80/MMBtu in trading following the release of the EIA's storage report. The remaining winter strip, December through March, added 31 cents to $5.81/MMBtu. The 2022 summer strip tacked on 7 cents to $3.87. Even with a relatively mild weather forecast for the next 14 days in the US, the concerns around supply being able to meet both domestic heating demand as well as elevated export demand this winter are continuing to pressure Henry Hub prices to the upside. Driving the upward movement is a combination of factors including rebounding LNG feedgas demand, lagging production, the ongoing storage deficit and the lingering risk around winter reliability, according to S&P Global Platts Analytics. Also contributing to the rally are skyrocketing energy prices in Europe and Asia. Even with well over $5/MMBtu prices domestically, they sit at a significant discount to the plus $25/MMBtu prices for JKM and TTF. The comparatively cheap gas in the US places LNG export cargoes in very high demand this winter and is forecast to keep US LNG export facilities fully utilized at 12.2 Bcf/d, according to Platts Analytics Platts Analytics supply and demand model currently forecasts a 92 Bcf build for the week ending Oct. 1. This would measure 11 Bcf more than the five-year average. The week after points to an 89 Bcf injection, shaving 10 Bcf off the storage deficit. Based on historical averages, US fields should post net injections through the week ending Nov. 5 as stocks peak entering the heating season.

U.S. natgas futures jump to 7-year high on Europe supply fears --U.S. natural gas futures jumped over 7% to a fresh seven-year high as worries that Europe will not have enough gas in storage for the winter heating season boosted global prices to record levels and kept demand for U.S. liquefied natural gas exports strong. U.S. prices rose despite weeks of mild weather in the United States that has allowed utilities to inject more gas into stockpiles than usual for this time of year. The U.S. Energy Information Administration said utilities added a bigger-than-usual 88 billion cubic feet of gas into storage during the week ended Sept. 24. That was a little over the 87-bcf build analysts forecast in a Reuters poll and compares with an increase of 74 bcf in the same week last year and a five-year (2016-2020) average increase of 72 bcf. [EIA/GAS] Last week’s injection boosted stockpiles to 3.170 trillion cubic feet, or 6.3% below the five-year average of 3.383 tcf for this time of year. Looking ahead, analysts expect U.S. inventories to reach about 3.5 tcf at the start of the winter heating season in November, which they said would be a comfortable level even though it falls short of the 3.7 tcf five-year average for that time of year. That is nowhere near as dire as in Europe where analysts say gas storage is over 20% below normal in some countries. “The contrast between short-term ample U.S. balances and long-term bullish supply/usage elsewhere around the globe … is creating much of the recent extreme volatility,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois. Front-month gas futures for November delivery rose 39.0 cents, or 7.1%, to settle at $5.867 per million British thermal units (mmBtu), their highest close since February 2014. Earlier this week, gas prices closed up 11% to their highest since February 2014 on Monday and dropped 6% on Wednesday. Traders said price swings were amplified by speculative trading around the expiration of the October future on Tuesday. For the month, the front-month was up about 34%, its highest since August 2020. That puts the contract on track to rise for a sixth month in a row for the first time since hitting a record seven months in June 2008. During those six months, the contract has soared 89%. With gas prices at or near record highs of around $32 per mmBtu in Europe and $30 in Asia versus just about $6 in the United States, traders said buyers around the world would keep purchasing all the LNG the United States could produce.

Bearish U.S. Backdrop Prompts Big Sell-Off for Natural Gas Futures; Cash Mixed -- In another show of extreme volatility, natural gas futures came tumbling down on Friday as U.S. traders gave more weight to bearish fundamentals on the home front rather than escalating fears of a global supply shortage this winter. The November Nymex gas futures contract capped the week at $5.619, off 24.8 cents day/day. December plunged 22.8 cents to $5.763. Spot gas prices also declined in much of the country ahead of what was expected to be a mild weekend. Led by steep decreases on the East Coast, NGI’s Spot Gas National Avg. dropped 20.0 cents to $5.050. Despite Friday’s pullback, natural gas prices have proven resilient. In the latest show of buoyancy, Nymex futures — still well above $5.00 through the winter — rallied in the face of yet more unsupportive storage data. The Energy Information Administration (EIA) on Thursday reported that inventories for the week ending Sept. 24 had risen by 88 Bcf, easily eclipsing both year-ago and five-year average injections and therefore tightening up the deficit. Tudor, Pickering, Holt & Co. (TPH) analysts said the EIA figure indicates that balances were around 2 Bcf/d looser week/week, primarily as a result of lower power burns. The decline in power generation demand was somewhat offset by higher residential/commercial demand, though. Despite the trend lower in power generation demand, gas’ share of the total generation and thermal generation stacks remain a theme, with coal continuing to lose share through September, according to TPH. Weekly data suggests coal production has risen in the past two weeks, “but with an enticing global market, we suspect the export picture to remain a key factor amidst a total global energy market.” Indeed, the dire supply picture overseas has been the main catalyst for U.S. gas prices in recent weeks, with no signs of slowing down. Energy Aspects expect spreads between Asian and European prices to widen even more in the coming weeks as winter arrives. The spreads have recovered in the past week, according to the firm, rising by $1.11 week/week compared to the Sept. 20 curve on average through winter. “Spreads on the curve now peak at $3.17 in December, in line with our forecast,” Energy Aspects analysts said. This strengthening relative to the Title Transfer Facility (TTF), which jumped by another $4.63 over the period, “confirms Asia’s willingness to pay for LNG imports this winter despite record-high prices, along with limited gas-to-oil switching potential overall in the region.” For all the fast and furious gains that U.S. gas prices have accumulated in recent weeks, there are still several factors that point to some additional downside ahead. The most influential one is weather, with seemingly every turn of the weather models coming in a tad bit warmer than the last. NatGasWeather said it’s likely the weather data has gotten “too bearish” and could add numerous total degree days in time. Until then, long-range models show “near-perfect temperatures over vast stretches of the U.S.” the next couple of weeks. Daytime highs in the 60s to 80s are forecast to rule most of the country besides some cooler weather in the Northwest and hotter conditions over interior California and Southwest deserts. “Looking out further, we continue to expect the first opportunity for more impressive cold shots into the U.S. won’t be until the last 10 days of October, potentially not until November if the latest longer-range weather models are to be believed,” NatGasWeather said. This sets up a string of what’s likely to be three storage injections near or over 100 Bcf, according to the firm. This would improve deficits toward 150 Bcf. “Clearly, U.S. supplies are in better shape than many were expecting just a month ago, leading to many end-of-season estimates increasing towards 3.65 Tcf.”

Front Month Nymex Natural Gas Rose 8.06% This Week to Settle at $5.6190 — Data Talk - Front Month Nymex Natural Gas for Nov. delivery gained 41.90 cents per million British thermal units, or 8.06% to $5.6190 per million British thermal units this week

  • --Largest one week net and percentage gain since the week ending Aug. 27, 2021
  • --Up for six consecutive weeks
  • --Up $1.768 or 45.91% over the last six weeks
  • --Largest six week gain since the week ending Feb. 21, 2014
  • --Largest six week percentage gain since the week ending Oct. 30, 2020
  • --Today it is down 24.80 cents or 4.23%
  • --Down two of the past three sessions
  • --Today's settlement value is the fourth highest this year
  • --Off 4.23% from its 52-week high of $5.867 hit Thursday, Sept. 30, 2021
  • --Up 143.77% from its 52-week low of $2.305 hit Monday, Dec. 28, 2020
  • --Rose 130.48% from 52 weeks ago
  • --Off 4.23% from its 2021 settlement high of $5.867 hit Thursday, Sept. 30, 2021
  • --Up 129.72% from its 2021 settlement low of $2.446 hit Friday, Jan. 22, 2021
  • --Off 63.46% from its record high of $15.378 hit Tuesday, Dec. 13, 2005
  • --Year-to-date it is up $3.08 or 121.31%

All prices are calculated based on the settlement price of the current front month contract.

Natural Gas Makes Up Larger Share Of U.S. Oil Producers' Revenues - Thanks to higher natural gas prices, U.S. oil producers are generating a larger share of their revenues from natural gas.The share of natural gas in revenues jumped to 14 percent in the first quarter of 2021—the highest since at least 2018, the Energy Information Administration (EIA) says.Excluding the integrated majors, a total of 54 listed producers primarily engaged in crude oil production have seen their revenues from natural gas at a double-digit share of total revenues so far this year, as benchmark U.S. natural gas prices jumped during the Texas Freeze and rallied at the end of the summer on the back of record U.S. liquefied natural gas (LNG) exports and flattish overall gas production in America.As per EIA estimates, the share of natural gas in the revenues of the 54 U.S. oil producers stood at 10 percent in the second quarter of 2021.Considering the current rally in natural gas prices around the world, including in the U.S., with Henry Hub prices at over $5 per million British thermal units (MMBtu) since mid-September, revenues from gas for the U.S. oil producers are expected to remain at high levels throughout the rest of the year, the EIA said.The administration's analysis does not include the integrated oil majors or companies that produce natural gas as their primary business, so these trends cannot be considered as reflecting behavior in the industry as a whole, the EIA noted.The benchmark U.S. natural gas price has doubled over the past year, and prices have rallied despite the fact that the biggest gas-producing basin, Appalachia, saw in the first half of 2021 its highest average output since natural gas production in the Marcellus and Utica shale formations started in 2008. Overall American dry natural gas production is rising. But it's not increasing so quickly as to offset surging U.S. gas exports via pipelines and LNG cargoes, which have been setting all-time high records this year. Scorching summer heatwaves and low natural gas inventories have also driven natural gas prices higher over the past few months.

WattBridge Breaks Ground on Peak-Power Facility To Support Nearly 200,000 Homes in Brazoria County, Texas - WattBridge Energy, LLC announced that the 288-MW Mark One project—the company's fourth peak-power installation for ERCOT and the Greater Houston area in just 18 months—has started construction in Brazoria County. Anticipated to be online by November 2022, the plant will support renewable energy development and deliver reliable power during peak-demand times, including severe heat waves and winter weather. WattBridge Breaks Ground on Peak-Power Facility To Support Nearly 200,000 Homes in Brazoria County, Texas. The New 288-MW Plant Increases WattBridge Support for the ERCOT Grid and the Greater-Houston Area to 1,536 MW. The Mark One project will be powered by six LM6000 gas-turbine packages, and when completed, increases WattBridge peak-power capabilities in the Greater-Houston area to 1,536 MW with another 2,016 MW in advanced development. As one of the most prolific owner/operators of LM6000 aeroderivative engines in the world, WattBridge peak-power plants support the Houston grid during critical times, including uninterrupted power generation throughout 2021 Winter Storm Uri. "Facilities like Mark One serve as the bridge between a hydrocarbon-dominant past and a fully renewable future," saysJeff Canon, PROENERGY CEO. "In addition to serving as a critical energy resource during peak-demand events, WattBridge facilities are key enablers for wind and solar-generation growth by filling gaps in energy supply with reliable, reduced-emission power generation."

Texas regulator's plan would spare natural gas producers from costly winter prep -- After this year’s deadly winter storm, state lawmakers spent weeks hearing complaints that power outages had cut off production at natural gas facilities, a key supplier to the Texas electricity grid.So many were furious to learn Tuesday that the regulatory agency now tasked with preventing those outages, the Texas Railroad Commission, is considering a loophole for gas producers to opt out of receiving emergency power. Without electricity, they won’t have to invest in preparing their facilities to operate in freezing conditions.“I’m very disappointed,” said Sen. Robert Nichols, a Jacksonville Republican and close ally of the oil and gas industry. “It’s not that hard to come up with the rule on something that’s that critical,” he said. “’Please don’t turn my electricity off, because we’re pumping gas to the power plant.’”Remarks at a Senate committee hearing on preparations for the looming winter revealed just how little progress has been made on one of the biggest obstacles from the February blackouts, which left more than 200 dead and led to billions of dollars in property damage. Natural gas fuels most of the state’s power grid, yet when temperatures dropped, production fell and gas-fired power plants were unable to secure supply.

Report Alleges Conflicts Of Interest Among Texas Oil And Gas Regulators -Texas oil and gas regulators make big bucks from the industries they oversee and fail to recuse themselves when arbitrating conflicts or determining penalties for companies they’ve invested in, according to a new report. And it all may be perfectly legal. The report says conflicts of interest create a condition of “regulatory capture” at the Railroad Commission of Texas, the agency that regulates fossil fuel extraction and pipelines in the state. The report was written by money-in-politics watchdog group Texans For Public Justice, and Commission Shift, a group pushing for reform of the agency. The notion that Railroad commissioners are cozy with oil, gas and pipeline companies will not surprise many who closely follow commission business. Commissioners themselves, elected statewide by the Texas voters, speak openly and proudly about their close ties to industry and their desire to promote and protect it. But the details outlined in the report suggest commissioners may have financial as well as political motivations for taking the actions they take while in office. “We think it's time to get money out of decisions that are made at the state agency,” Virginia Palacios, executive director of Commission Shift, said. “Oklahoma has a pretty simple, clear-cut rule that their oil and gas commissioners can't have any interest in the businesses that they're making decisions about.” The report looks specifically at the record of Railroad Commission Chair Christi Craddick. Two further reports will review the financial holdings of the two other commissioners. Texas Railroad Commissioner Christi Craddick bows her head during a prayer at the opening of the 86th Texas Legislative Session in 2019. Among other things it found that Craddick "cast a deciding vote" in favor of a pipeline company that she owned thousands of dollars of stock in and received $22,500 in campaign contributions from the company. It also says she failed to recuse herself from ruling in a dispute between two companies despite owning shares in both. Palacios said she thinks Craddick’s failure to recuse in these instances may have broken the agency’s own rules. Andrew Wheat, a research director for Texans For Public Justice, is unsure. “The fact is that the vast majority of this — if not all of it — is legal and the reason is that we have extremely lax laws and rules in Texas governing conflicts of interests,” he said. Craddick and her office did not return a request for comment before deadline.

US oil, gas rig count jumps 9 to 640 on week; Eagle Ford shows biggest change | S&P Global Platts -- The US oil and gas rig count rose by nine to 640 in the week ending Sept. 29, Enverus said, with the biggest change in the Eagle Ford Shale of South Texas. Oil rigs were up four to 501, the highest since early April 2020, and natural gas-oriented rigs were up five to 139. The Eagle Ford gained five rigs for a total 55 for the week ended Sept. 29, also pushing the count there to the highest since early April 2020. The Eagle Ford, originally an unconventional natural gas play for horizontal drilling before oil became the top target, is a large basin with current oil production of 1.17 million b/d and natural gas production of 4.5 Bcf/d. The play has not grown much in recent years. Output did reach 1.7 million in March 2015 but fell in the wake of volatile oil prices and increasing operational shifts by upstream players to the Permian Basin of West Texas/New Mexico. But if rig counts were to remain at current levels in the next few years, S&P Global Platts Analytics estimates Eagle Ford oil production could rise slightly to 1.29 million b/d of oil, and gas output would be sizably larger at 5.5 Bcf/d by 2025. Rig counts have grown to levels not seen since very early in the pandemic, when upstream operators began dropping rigs swiftly as they slashed spending to sought to conserve capital as low oil demand caused a crude price crash. Outside the Eagle Ford, rig counts recently reached March or April 2020 levels in several plays including the Permian Basin and the SCOOP-STACK in Oklahoma. Land rigs in September surpassed the 500 mark for the Baker Hughes rig count, which uses a different counting methodology than Enverus, a level also not seen since April 2020. In other US basins for the week ended Sept. 29, the Permian rose by three rigs to 266, and the DJ Basin mostly of Colorado gained a rig, making 14. Shedding one rig each were the Haynesville Shale, leaving 52, and the Marcellus Shale, leaving 34. The SCOOP-STACK lost two rigs for a total 33. The Bakken Shale, largely in North Dakota, and the Utica Shale, mostly in Ohio, were both unchanged, leaving 27 and 10 rigs, respectively. The week ended Sept. 29 marked the close of the month and of the third quarter. The Q3 rig count was up 9% from 588 at the end of Q2 and nearly double the exit rate of 326 rigs in a pandemic-hit Q3 2020. Horizontal activity, essentially a proxy for shale activity, closed out Q3 averaging 472 rigs, up about 9% from Q2 2021 and about double that of the 235-horizontal rig average in domestic fields during Q3 2020. The 9% quarter-on-quarter increase in Q3 compares to 13% horizontal count growth in Q2, which averaged 432 rigs, and 27% in Q1, which averaged 381 rigs. Platts Analytics said it expects rig counts to continue ticking up through 2022.

Record operating costs are slowing the U.S. shale drilling revival -America’s oil producers are boosting output at a slower place as record costs hammer the shale patch, according to a survey of industry executives. Out of 47 responding companies that supply producers with everything from software to workers, just one reported lower input costs in the third quarter, according to a report released Wednesday by the Federal Reserve Bank of Dallas. Hiring has become a big headache for oilfield service companies trying to meet increased demand from explorers. Of those reporting difficulties in attracting workers, 70% blamed it on a lack of qualified applicants. Wages are up 20%, and companies are poaching employees from competitors, according to an unidentified survey respondent. “Labor is causing major problems,” the person said. “We are finding it difficult to increase prices to match our increase in costs.” The outlook comes as a global energy crunch sends prices for oil, natural gas and power soaring, roiling everything from manufacturing to food production. U.S. drillers are keeping output in check as they respond to investor pressure to pay down debt and return cash to shareholders, adding to the inflationary pressure. Of all the labor shortages that are wreaking havoc on the U.S. economy -- from cashiers to chefs -- few are as thorny or potentially as permanent as the one that has a grip on the oil sector. Thousands of roughnecks and engineers are wary of returning to jobs like the ones they lost when the pandemic sent the price of crude oil crashing last year. Meanwhile, supply-chain snarls mean it’s “taking longer for companies to receive inputs,” the Dallas Fed said. The index for supplier delivery time rose to the highest since the survey’s inception in 2016. For most of this year, oilfield service companies have mostly been able to pass along input costs to their clients in the form of higher service prices, but that’s also generally kept them from booking extra profits, Citigroup Inc. has said. Inflation could reach 12% or more by the end of this year for the sector in North America, analysts including Scott Gruber wrote in a June investor note. One respondent to the Dallas Fed survey pinned the blame for inflation on closely held shale explorers that aren’t beholden to investor demands for discipline. Private producers are running the most drilling rigs in almost two years. “Increased activities by private E&P firms is leading to cost inflation,” the respondent said. “Continued oilfield services consolidation may contribute to it further.”

Rise in New Mexico Earthquakes Likely Triggered by Oil Industry --New Mexico’s oil and gas regulators and scientists are on alert after a dramatic increase in earthquake activity in southern New Mexico — an increase likely triggered by oil and gas industry injection wells in the Permian Basin.Since 2018 the number of small quakes of magnitude 1 or greater in the basin has risen from about 40 to nearly 500 in 2020, and over that period quakes of magnitude of 2 or greater rose from none to 158, according to data from the New Mexico Bureau of Geology and Mineral Resources.There were 146 quakes through June so far this year. Those numbers are just in New Mexico — they are even higher over the border in the Texas portion of the basin.Texas had several larger events in the past year that were felt in New Mexico. And in July, a 4.0 temblor in New Mexico shook the southeast corner of the state, “which is something that we pay attention to, for sure,” says Litherland. “It indicates that there is a risk in that area that we need to understand.” Earthquakes can damage property if large enough. And there is some very important property in the area. The nation’s main nuclear weapons waste storage site, the Waste Isolation Pilot Plant (WIPP), lies a half mile underground in a salt formation in the middle of the New Mexican portion of the basin, a little north of most of the quake activity. WIPP is the 10,000-year repository for highly toxic radioactive waste created by the nuclear weapons industry — things like tools, clothing and soil contaminated with plutonium. It is operated by private contractors for the U.S. Department of Energy (DOE). In 2014, a radioactive leak attributed to bad kitty litter contaminated several workers and shut the facility for nearly three years. And in 2016, ceiling collapses led to the closure of part of the underground facility. That’s not the only nuclear facility in the area. Another private company, URENCO, operates the country’s only commercial nuclear fuel enrichment plant 40 miles due east of WIPP, near Eunice, New Mexico, on the Texas state line. And just over the border from that, the U.S. Nuclear Regulatory Commission just approved a high-level waste facility next to a decade-old low-level waste facility, something Texas Gov. Greg Abbott doesn’t like. And more of the nation’s commercial nuclear waste could be headed to this region as well. Holtec International, with support from the Nuclear Regulatory Commission, wants to build a nuclear waste storage facility for up to 100,000 tons of spent nuclear fuel rods 12 miles north of WIPP, a plan opposed by New Mexico Gov. Michelle Lujan Grisham and others in state government. All of these nuclear sites are surrounded by brine injection wells, the likely cause of the increased seismicity in the basin.

An “attack on American cities” is freezing climate action in its tracks - When Regina Romero took office as the Democratic mayor of Tucson, Arizona, in 2019, she wanted her city to take action on climate change. Local building codes might have been a logical place to start: In the US, some 70 million buildings rely on fossil fuels that warm the planet, such as oil and gas, for heating and cooking. They generate a hefty 13 percent of national greenhouse gas emissions. While many answers to climate change require national and even international action, cities often have the unilateral power to craft local rules like building codes. But before the city of Tucson could even look at possible building reforms, the Republican-led state legislature took away its power to do so — by passing a state law that natural gas utilities are “not subject to further regulation by a municipality.”Supporters of the Republican bill were trying to beat climate advocates to the punch and “preempt” restrictions on fossil fuels. “We wanted to get ahead of what we viewed as an economically damaging trend, and stop it before it could gain a foothold here,” says Garrick Taylor, a spokesperson for the Arizona Chamber of Commerce and Industry, one of the lobbying groups that supported the bill.With those few lines of text, Arizona blocked a path for cleaning up a significant source of Tucson’s climate pollution — even as nations around the world are racing to transition to cleaner energy and slow disastrous climate change.The Arizona law “made it more difficult for local governments to act on climate change,” Mayor Romero said in a statement to Vox. The law is “limiting the pool of potential policy solutions we can enact ... tying the hands of local officials in Arizona, inhibiting progress and innovation in our cities and towns,” she added.Arizona was the first of many US states where “localities are cut off at the knees, because they’re in states where lawmakers are hostile” to these kinds of climate regulations, says Sheila Foster, a Georgetown University professor who specializes in urban environmental law. Interest groups for the natural gas industry, worried about losing energy customers, have now promoted bills in half the country to strip cities of basic powers to set greener building codes and help phase out fossil-fuel pollution. These “preemption” laws have swept through 20 state legislatures; three more states have bills pending this year.

Biden admin revokes Trump-era fossil fuel royalty regs - The Interior Department will ax Trump-era regulations this week that would have eliminated millions in federal revenues each year from coal and oil extraction.The Trump administration finalized the soon-to-be withdrawn valuation rule in January, after a failed attempt to repeal Obama-era reforms to how the federal government determines royalties payments on federal minerals.The Obama rule had eliminated controversial practices in the coal industry like “arms-length” sales of coal to subsidiaries at a discount, which depress royalty costs. It had also tightened oversight of the oil and gas sector’s royalty dues.But the Biden administration is withdrawing the Trump changes, a potential benefit of $64.6 million a year, according to the Office of Natural Resource Revenue press release earlier this year (Greenwire, June, 10).In its justification for withdrawing the 2020 rule, the ONRR today listed several “defects,” including a “lack of reasoned explanations for many of the amendments."The official withdrawal of the 2020 rule publishes Thursday in the Federal Register. But uncertainty around permanent valuation regulations persists in some areas.Just last month, a federal judge in the U.S. District Court for the District of Wyoming ruled against some of the coal provisions in the Obama-era regulations (Energywire, Sept. 9). The judge left the 2016 valuation regulations surrounding oil and gas intact.Litigation has plagued the valuation rules. Lawsuits from industry allies were voluntarily dropped when the Trump administration repealed the 2016 regulations but then revived after a California judge ruled against the repeal. That court ruling led to the Trump administration writing the 2020 valuation rule that is being withdrawn by the Biden administration this week.

Major Colorado-run natural gas pipeline aims to be first carbon-neutral gas transport - A major Colorado-run pipeline carrying natural gas from the Rockies across the Midwest aims to offer the first carbon-neutral energy transport through a deal struck with a Denver emissions monitoring startup. Leawood, Kansas-based Tallgrass Energy signed a multi-year emissions verification deal with Project Canary covering the 1,679-mile Rockies Express Pipeline, the companies announced Tuesday. The agreement includes having Project Canary monitor in real time all the Rockies Express Pipeline’s 22 compressor stations for methane emissions, which the companies say is a first for an interstate natural gas pipeline. The long-term goal of the agreement is to quickly detect leaks and fix them and verify the Rockies Express’ natural gas transport is carbon neutral, which means it doesn’t add to the greenhouse gases collecting in the atmosphere, causing climate change. “This first-of-its kind engagement underscores the critical importance of natural gas transmission systems in the energy transition,” said Matt Sheehy, Tallgrass’ president, in a statement. “Customers want assurances that natural gas is produced responsibly and being transported via low emissions pipeline systems.” The monitoring systems will start being set up later this year and are expected to be operating in mid-2022, the companies said. The Rockies Express is one of the nation’s major natural gas pipelines, connecting natural gas fields in the Rocky Mountain region and Appalachia to major population centers in the eastern U.S. The two-way, pressurized pipeline can carry as much as 4.4 billion cubic feet per day of natural gas. It starts near the town of Meeker, in western Colorado, and crosses Wyoming and five other states to reach eastern Ohio. The pipeline started operation in 2011. Tallgrass owns 75% of the Rockies Express and operates it. Phillips 66 (NYSE: PSX) owns the remaining 25%. The company says it intends to offer natural gas producers in Appalachia dedicated carbon-neutral transport to Midwestern markets. Methane, the active ingredient in natural gas, is considered an especially potent greenhouse gas, one that’s shorter-lived in the atmosphere than carbon dioxide, and as a result is seen as a particularly valuable type of emissions to eliminate in the effort to ward off the worst effects of climate change. Project Canary, launched in 2019, sells continuous emissions monitoring and related services to oil and gas producers and infrastructure companies. Chris Romer, Project Canary CEO, has argued that, as climate change concerns increasingly pressure natural gas sales, companies that are able to verify they’re minimizing emissions of methane should be able fetch a premium price from natural gas buyers compared to companies that don’t verify their emissions. “Actual real-time detection of fugitive methane emissions across the natural gas supply chain is the only way for the industry to truly know and improve what’s happening within their operations and help mitigate climate change,” he said in a project announcement with Tallgrass.

Tallgrass Energy Enters Agreement with Project Canary to Create the Nation’s First Certified Interstate Natural Gas Transmission System - A multi-year partnership announced today between Tallgrass Energy and Project Canary would make Tallgrass’ Rockies Express Pipeline (REX) the first interstate natural gas transmission pipeline in the United States to receive a comprehensive and independent environmental assessment and certification from Project Canary. The certification standards will be focused on environmental stewardship, operational excellence and real-time emissions detection and monitoring. Agreement highlights:

  • REX will seek operational and emissions certification through independent third-party Project Canary
  • REX will be the first pipeline to implement real-time emissions detection and monitoring across all of its compressor stations
  • REX will be the first pipeline to differentiate carbon neutral transportation capacity for its customers across its large footprint, enabling the continued evolution of certified carbon neutral gas services across the nation
  • The long-term objectives of the partnership will enable the midstream sector to certify carbon neutral gas transportation capacity and enable tip-to-tip certification and tracking of gas molecules, including responsibly sourced and renewable natural gas to markets seeking to meet new low carbon goals
  • The engagement will enable the creation of a standardized certification process for pipeline transmission and storage segments
  • Colorado School of Mines will partner with Project Canary to review and validate data

REX is one of the country’s largest natural gas header systems, with a total capacity of more than 4.4 bcf/d. As a bidirectional pipeline, REX allows access to Midwestern markets from key producing basins in the Rockies and Appalachia. To validate the agreement’s environmental stewardship and operational excellence criteria, Project Canary will install real-time monitoring devices to measure and quantify emissions across REX’s 22 compressor station sites, spanning more than 1,700 miles. As a result, REX will dedicate specific capacity to moving certified responsibly sourced gas from Appalachian producers to markets in the Midwest.

Tallgrass will monitor and measure emissions on the U.S. interstate natgas pipeline in Tall grass -- Tallgrass Energy Partners will begin monitoring emissions, including methane and other greenhouse gases, on its Rockies Express Pipeline, DENVER, Sept 28. On the company's Rocky Express Line, it'll be the first United States company to measure and certify the environmental impact of operations on an interstate natural gas pipeline. Natural gas producers, transporters, and utilities are embracing carbon-reduction measures and third-party ratings to show investors and consumers they are serious about reducing greenhouse gas emissions, owing to concerns over their environmental impacts. This year, Tallgrass and the carbon-measurement firm Project Canary plan to begin installing monitoring devices at compressor stations along the 1,700-mile pipeline to assess the environmental impact of its operations, according to Tall grass and Project Kanary. The devices will assist in real-time measurement of fugitive methane emissions, among other things. "Buyers want assurances that natural gas is produced and transported in the most environmentally responsible manner possible," said Matt Sheehy, president of Tallgrass. Producers and utilities have been getting a boost in natural gas certification over the previous year. Project Canary ranks EQT Corp (EQTA.N) and LNG-project developer NextDecade among its clients. MiQ, another firm that uses measurements to help manage carbon emissions, has signed Exxon Mobil (XOM.N) and Chesapeake Energy Corp (CHK.O) to use its techniques. "This has been a missing link," said Project Canary CEO Chris Romer, of pipeline operators' role in emissions reduction. It is conducting talks with more than a dozen other pipelines that are looking to monitor and verify the emissions footprint of their operations, according to him. Between northwestern Colorado and eastern Ohio, The Rockies Express Pipeline transports gas up to 4.4 billion cubic feet per day. Tallgrass owns a 75 percent stake in the line, with Phillips 65 (PSX.N) holding the remaining share.

Line 3 pipeline: What it is and why people in Burlington are protesting - Burlington community members showed up in droves on Sep. 24 to protest Line 3, a proposed $7.5 billion crude oil pipeline in Canada and the U.S. Midwest. The company behind the pipeline, Enbridge, calls the new project a "replacement" for the currently-existing Line 3 pipeline built in the 1960s. Activists including Minnesotans for Pipeline Cleanup say thatthis aging pipeline is corroding and cracking, contaminating the surrounding soil and water. If completed, the new pipeline would produce a carbon equivalent of50 coal-fired power plants, as reported by the nonprofit MN350, and cost $440 billion in "climate impacts" over 60 years, as calculated by the Minnesota Department of Commerce."This is just as serious as Standing Rock was," said Beverly Little Thunder, a Lakota elder from North Dakota who traveled to Burlington for the recent protest. "It's gonna take a whole state standing up and saying, 'This is wrong, no, you have to stop this.'"The new pipeline would cut through over 200 bodies of water, 389 acres of wild rice, and lands that Ojibwe people were guaranteed rights to "make a modest living from" by the Treaty of 1855, according to the organization Stop Line 3. These rights include hunting, fishing, harvesting wild rice, and preserving sacred sites, which Stop Line 3 activists say are all threatened by the proposed Enbridge pipeline.Another Enbridge pipeline ruptured in 2010, spilling 843,000 gallonsof oil into the Kalamazoo River, as recorded by the EPA. Until earlier this month, Enbridge indirectly owned percentages of Vermont Gas and Green Mountain Power. Vermont activists point tothis past connection, as well as the investment in the pipeline by banks with branches in Burlington, as reasons for why local community members should care about this national issue.

Controversial Line 3 done; oil set to flow Friday, Enbridge says - Oil will begin flowing through the controversial new Line 3 pipeline across northern Minnesota on Friday after Enbridge announced that work on the controversial project is "substantially complete." The $3 billion-plus pipeline is a replacement for the 50-year-old Line 3, which is corroding and operating at half capacity. Construction of the $3 billion-plus Minnesota portion of the pipeline — one of the largest projects in the state in recent history — began last December after a six-year battle before state regulators. "From day one, this project has been about modernizing our system and improving safety and reliability for the benefit of communities, the environment and our customers," Enbridge CEO Al Monaco said Wednesday in a news release. "Line 3 was developed and executed with the most state-of-the-art approach to design, construction and environmental management." The pipeline also restores full flow of oil to 760,000 barrels a day, boosting earnings for the Calgary, Alberta-based Enbridge. Hundreds have been arrested along the pipeline route as regular protests occurred during the construction. Environmental groups and Ojibwe tribes fought the pipeline before the Minnesota Public Utilities Commission and in multiple lawsuits, arguing it would open a new region of Minnesota lakes, rivers and wetlands to degradation from oil spills, as well as exacerbate climate change. "This is not the outcome we hoped for, but the fight to stop Line 3 has always been a fight for climate justice and a future free from fossil fuels, and that fight will not stop just because Enbridge has succeeded in building this pipeline," Margaret Levin, director of the Sierra Club North Star Chapter, said in a statement. The pipeline runs partly on a new route, veering off from Enbridge's current corridor that contains six oil pipelines running across Minnesota to the company's terminal in Superior, Wis., at the Clearbrook station. The Public Utilities Commission (PUC) approved the new Line 3 in early 2020, saying it was needed for safety reasons and to meet regional oil demand. The Minnesota Department of Commerce, acting for consumers, argued that a new Line 3 was not needed because fossil fuel demand is expected to fall over the coming years, although Enbridge has said all along its forecasts show it is needed.

Company to Pay $15M in Fines in North Dakota Oil Spill Case - The company responsible for the largest oil field spill in North Dakota pleaded guilty to criminal charges after reaching an agreement with the federal government to pay $15 million in fines.Summit Midstream Partners entered the pleas in federal court. Summit was charged for negligently discharging oil and for failing to immediately report the spill, which occurred north of Williston over a period of five months in 2014 and 2015.A pipeline leaked 700,000 barrels, or 29 million gallons, of produced water, which is highly saturated saltwater that comes up in wells along with oil and gas. Produced water can contain oil, the Bismarck Tribune reported.Some of the wastewater reached Blacktail Creek, which eventually flows into the Missouri River.The U.S. Department of Justice said the $15 million will go toward the federal Oil Spill Liability Trust Fund, which can be used to clean up oil spills.Summit also has agreed to take steps to prevent future spills by implementing better training, installation, operating and testing requirements. The company said it has spent $75 million on those improvements and spill cleanup.Summit has also reached a separate agreement with the federal and state government in a civil case related to the spill. It’s expected to pay $20 million to resolve the matter. That amount would be split evenly between the federal and state governments.A federal judge must sign off on the civil settlement.

TC Energy abandons eminent domain claims -Bold Nebraska and allied landowners with the Nebraska Easement Action Team rejoiced on Monday at the news that TC Energy (formerly TransCanada) has finally agreed to terminate easements still being sought via eminent domain proceedings in Nebraska county courts for its now-terminated Keystone XL pipeline project.Bold Nebraska provided some comments from landowners.“We are so happy that most of the landowners stuck together. It’s been a long, drawn-out affair, but we are so happy that it is finally over. In the future, we all need to be proactive and aware, so something so wrong doesn’t ever get this far again. Protecting land and water should be everyone’s duty,” said Richard and Maureen Johnson, landowners on the canceled Keystone XL route in Madison County.“It is harvest time here in Holt County, and while harvesting the corn and beans is great, this year we’re also reaping a decades-long fight against the condemnation of our land. While we are celebrating these harvests, we know the work continues, because ultimately we have to reform our eminent domain laws,” said Jeanne Crumly, landowner in Holt County.“A decades-long fight against the Keystone XL pipeline has now ended for these landowners with property rights being restored. Not a single statewide elected official, including Gov. Ricketts — who went on a tour touting property rights — stood with landowners. Land justice happened only because of the hard work of citizens, grassroots organizing, and a legal team who believed the land was worth protecting,” said Jane Kleeb, Bold Nebraska founder.Nebraska county courts entered into the formal record on Sept. 27, orders stating, “Keystone is directed to record a termination of easement with the Register of Deeds.”

Higher levels of organic pollutants found in homes located near natural gas wells, study finds --A University of Toronto study has found that those living close to natural gas wells are exposed to higher levels of certain organic pollutants in their homes. The study looked at levels of volatile organic compounds (VOCs) found in the air and drinking water in homes of pregnant women living in a region of northeastern British Columbia. "There's very little research about indoor air quality in regions with a lot of unconventional natural gas exploitation," says Élyse Caron-Beaudoin, an assistant professor in the department of health and society at U of T Scarborough and lead author of the study. For the study, 85 pregnant women from the Peace River region were recruited and passive air samplers were placed in their homes. Water samples were also taken from their kitchen taps. Researchers found that 40 out of the 47 VOCs tested for were detected in air samples, while three out of 40 VOCs tested for were detected in water samples. VOCs are organic chemicals, some of which have negative short- and long-term health effects. They are released by a variety of products and industrial processes. The researchers also looked at how many natural gas wells were located near homes as well as the distances. They found that the amount and proximity of natural gas wells to a home were linked to higher levels of certain VOCs. They also accounted for other factors related to exposure levels, including whether a home had an attached garage, the tap water source and whether the study participant smokes or is exposed to second-hand smoke. They also included each participant's Indigenous status. A previous pilot study done in the same region of B.C. by Caron-Beaudoin found higher levels of VOC metabolites in the urine samples of pregnant Indigenous women compared to pregnant non-Indigenous women. In the current study, the levels of VOCs associated with the amount and proximity of natural gas wells were similarly higher in the homes of Indigenous participants. While the researchers are unsure why higher levels were found in the homes of Indigenous participants, they point to research that shows ethnicity, Indigeneity and socioeconomic status all being linked to heightened health risks from industrial activities. The study, published in the journal Science of the Total Environment, also compared levels to the Canadian average. For a few of the VOCs—in particular acetone and chloroform in air samples, and trihalomethanes (THMs) in water samples—some participants recorded levels that placed them in the top 95th percentile in Canada.

LNG Demand in Latin America Continues Pulling Spot Cargoes Off the Market - Latin American liquefied natural gas (LNG) demand has had a record year in 2021 and it is not letting up, tightening a global gas market that has sent prices spiking around the world. Imports of LNG into Latin America for the first eight months of the year added up to 10.44 million tons, according to market research firm Kpler. Imports were 120% higher than in the comparable period last year, and up 36% compared with the January-August period in 2019. LNG imports into Latin America to date in September, at 1.02 million tons, are already double the entire month of September 2020, according to Kpler. Brazil, which is heavily dependent on hydroelectric power for its electricity, is facing a record drought and is leaning on LNG to keep the lights on. To date in September, Brazilian LNG imports have totaled 654,000 tons, versus zero cargoes in September 2020. “The country is continuing to struggle with the effects of the drought which is weighing on hydropower generation,” Kpler analyst Laura Page told NGI. She added that the country could see some relief in the coming weeks as peak rainfall season sets in. Brazil is still expected to continue importing higher levels of LNG through next year, which could also be aided by new import terminals that are under construction, Page said. Argentina and Chile LNG imports have also been robust, in particular during the colder May-September months, according to Kpler data. “LNG imports into Latin America continue to reach strong levels,” Kpler analyst Charles Costerousse told NGI. He said the region saw “record demand” during the summer months in North America, “led by very strong buying behavior from Brazil and especially Argentina.” Argentina brought on a second LNG import option in May following lower than expected domestic gas production and rising demand. Latin American LNG imports have continued to be hot so far this September, with the 1 million ton mark already eclipsed for the fifth consecutive month. Kpler is forecasting that in September, Latin America LNG imports should total around 1.5-1.6 million tons. “This continues to pull some of the much-needed ex-U.S. cargoes away from Europe, as 89% of September volumes into Latin America were sourced from the United States,” Costerousse said. Qatar and Equatorial Guinea supplied the rest, at 6% and 5% respectively.

The World’s Fastest Growing Shale Play Keeps On Breaking Records --Argentina’s Vaca Muerta shale play, having registered strong growth in oil and gas production and well activity levels in recent months, has emerged as the world’s fastest growing major shale basin, a Rystad Energy report shows. A record number of wells were completed and put on production (POP), propelling the play’s oil and gas output to new highs in July and August, and charting a course for even more growth by year-end. This surge from Vaca Muerta is poised to lift Argentina’s country-wide oil production to the highest level in years, with the play’s competitiveness also rising against US basins.Although complete data for September is not yet available, there is no doubt that the third quarter of 2021 will set a new record for the number of horizontal wells put on production in Vaca Muerta, with Rystad Energy estimating that the POP count will reach around 73 oil and gas wells. The previous record was in the fourth quarter of 2018, when the count reached 59 wells.The Vaca Muerta oil zone will probably see more than 50 wells put on production between July and September, while gas well POP activity will likely remain in the range of 20 to 25 wells for the quarter. While that means another record for oil wells alone, the gas well count has been higher in the past. This surge of activity caused oil production from the basin to rise beyond 160,000 barrels per day (bpd) for the first time ever in July, reaching an average of 162,000 bpd for the month, followed by an equally strong August that saw production at 161,000 bpd. For context, Vaca Muerta’s oil output had never exceeded 120,000 bpd until December 2020. Rystad Energy expects production to increase by as much as another 25% over the next three months, to close the year at nearly 200,000 bpd.

6-Month Sentence for Lawyer Who Took on Chevron Denounced as 'International Outrage'--Environmental justice advocates and other progressives on Friday condemned a federal judge's decision Friday to sentence human rights lawyer Steven Donziger to six months in prison — following more than two years of house arrest related to a lawsuit he filed decades ago against oil giant Chevron.The sentence, delivered by U.S. District Judge Loretta Preska in New York City, represents "an international outrage," tweeted journalist Emma Vigeland following its announcement.Donziger's sentence came a day after the United Nations Working Group on Arbitrary Detention said it was "appalled" by the U.S. legal system's treatment of the former environmental lawyer and demanded the U.S. government "remedy the situation of Mr. Steven Donziger without delay and bring it in conformity with the relevant international norms" by immediately releasing him.Donziger represented a group of farmers and Indigenous people in the Lago Agrio region of Ecuador in the 1990s in a lawsuit against Texaco—since acquired by Chevron—in which the company was accused of contaminating soil and water with its "deliberate dumping of billions of gallons of cancer-causing waste into the Amazon."An Ecuadorian court awarded the plaintiffs a $9.5 billion judgment in 2011—a decision upheld by multiple courts in Ecuador—only to have a U.S. judge reject the ruling, accusing Donziger of bribery and evidence tampering. Chevron also countersued Donziger in 2011.In 2019, U.S. District Judge Lewis A. Kaplan of the Southern District of New York—a former corporate lawyer with investments in Chevron—held Donziger in contempt of court after he refused to disclose privileged information about his clients to the fossil fuel industry. Kaplan placed Donziger under house arrest, where he has remained under strict court monitoring for 787 days.In addition to Kaplan's own connections to Chevron, the judge appointed private attorneys to prosecute the case, including one who had worked for a firm that represented the oil giant.Preska, who found Donziger guilty of the contempt charges in July, is a leader of the right-wing Federalist Society, which counts Chevron among its financial backers.

Panic buying of fuel in UK sparks fears doctors, teachers will be unable to get to work - There are calls for Britain's key workers to be given priority access to fuel, as the panic buying of gasoline across the country continues.It is estimated that the U.K. currently has a shortage of around 100,000 heavy goods vehicle (HGV) drivers, which has disrupted deliveries and constrained the supply of goods and fuel.In recent days, motorists have been sitting in long queues outside gas stations, often to find that no gasoline is available.The Petrol Retailers Association (PRA) estimated on Monday that up to 90% of stations in the country were dry.On Tuesday, Transport Secretary Grant Shapps said the situation was beginning to stabilize."A lot of petrol is now being transferred into people's cars and there are now the first very tentative signs of stabilization in the forecourt storage which won't be reflected in the queues as yet, but it's the first time we've seen more petrol in the petrol stations itself," he told Sky News.However, queues and gas station closures were still rife on Tuesday.There are concerns that essential workers – such as those in the health and social care sectors — could soon be unable to travel to work. Dr. Chaand Nagpaul, chair of the British Medical Association, urged the U.K. government to give healthcare workers priority access to fuel.He stressed that emergency and essential workers rely on fuel both to travel to work and for the work itself. "Everyone will have their own reasons for needing to fill up, but as pumps run dry there is a real risk that NHS [National Health Service] staff won't be able to do their jobs, and provide vital services and care to people who urgently need it," he said in a statement Monday.Doctor-led campaign group EveryDoctor also called for steps to be taken to ensure key workers could access fuel. "It is time for the government to share responsibility for our patients' well-being by prioritizing fuel for key workers,"

Petrol Shortage: BP Blames Panic Buying for Limited Fuel Supplies at UK Stations – - BP Plc, the second-largest fuel retailer in the U.K., said it has run out of the main grades at almost a third of its stations in the country following days of panic buying. “With the intense demand seen over the past two days, we estimate that around 30% of sites in this network do not currently have either of the main grades of fuel,” BP said in a statement Sunday. The London-based company said most of its 1,200 sites in the U.K. remain supplied 0and open.

Here's why Brits are panic buying gasoline— British drivers have been panic buying gasoline in recent days, leading to lengthy lines, gas station closures and concerns that doctors and teachers won't be able to get to work. Government ministers have continuously insisted that there is no shortage of fuel in the U.K., but lines to get to gas pumps have been rife since the end of last week.The surge in demand has led to the price of a liter of unleaded gas going up by a penny since Friday, according to motoring organization the RAC. Meanwhile, U.K. retailer Halfords said the sale of jerry cans — which many motorists use to store gasoline — increased by 1,656% over the weekend.Oil giant BP and Exxon Mobil's Esso confirmed Friday that they had temporarily closed a handful of their U.K. gas stations due to an industry-wide driver shortage which had impacted their supply chains. The problem become more widespread this week following days of consumers stockpiling gas. By Monday, some gas station operators had reported that 90% of their sites were dry, according to the U.K.'s Petrol Retailers Association.On Tuesday, Transport Secretary Grant Shapps told Sky News that the market was seeing "the first very tentative signs of stabilization in forecourt storage," although he acknowledged this would not yet be reflected in the lengthy lines for gas.According to the British government, the U.K. has a strong supply of gasoline. The country's environment minister, George Eustice, told the BBC Monday that the only reason gas stations were running out of fuel was because of people who were buying gas when they didn't need it. But it's the logistical challenge of getting that supply to consumers that has created the problem. The U.K. has an estimated shortage of 100,000 truck drivers, meaning deliveries of gasoline and other goods are facing severe disruptions. The government has taken some steps to help stabilize the supply chain — including putting the army on standby to help deliver fuel — but unease over the situation is still present among consumers. In fact, most of the blame for the chaos lies with "anxiety, anxiety, anxiety," according to Cathrine Jansson-Boyd, associate professor in consumer psychology at the U.K.'s Anglia Ruskin University."Panic buying is usually fueled by some level of uncertainty," she told CNBC in a phone call Tuesday. "We've had a lot of studies during [the pandemic] that show people have been very anxious — people aren't conscious of this, of course, but they have been very anxious. And that means that the underpinnings are already in place for people to start having higher levels of concern that surface."Jansson-Boyd added that the "fear of missing out effect" kicks in when people see reports and images of others lining up for gasoline.

Boris Johnson prepares to call in army as panic buying drains UK petrol pumps - Boris Johnson is preparing to draft in hundreds of soldiers to tackle the UK’s fuel crisis as at least half of petrol stations outside the motorway network have run out of fuel after Britons engaged in panic buying. The prime minister will meet senior ministers and officials on Monday to examine the latest data following the disruption to fuel supplies caused by a scarcity of tanker drivers. One senior government insider said: “The situation in England is very bad.” Johnson will consider using the army to drive tankers around the country, under contingency planning known as Operation Escalin. Brian Madderson, chair of the Petrol Retailers Association, a trade body, said a survey of members on Sunday indicated 50 to 85 per cent of all independent service stations had now run dry, excluding motorway forecourts and some supermarket sites that had been given priority by oil companies. Madderson told the BBC Radio 4 Today programme on Monday morning that supplies in Northern Ireland were still steady and that the problem was confined to the mainland, with concentrated urban areas suffering the most. He said that there had been training going on “in the background” for military personnel to drive tankers but cautioned that they might not possess all the skills, such as loading, needed to do the job. The government announced on Sunday evening that it would temporarily exempt the energy industry — including producers, suppliers, hauliers and retailers — from the 1998 competition act, allowing companies to share information and prioritise deliveries to areas of greatest need. Officials are receiving updates up to four times a day. But there was some hope in government that the panic buying had calmed by Saturday. Those with knowledge of the situation said that the best-case scenario was that disruption would clear within five days. “There is a crisis in data; we are trying to get a better picture on when the panic will pass,” one insider said. Madderson said what had been a “manageable issue” of localised shortages at a small number of retail sites last week had quickly spiralled after media reports of supply problems had set off panic buying by motorists, with some members stating demand had surged “500 per cent above the normal level” on Saturday, quickly draining forecourt fuel tanks. The UK has about 8,000 petrol stations, the majority run by independent retailers, some of whom operate franchises using the big oil companies’ brands. Madderson told the Financial Times that while the short-term issue was “panic buying”, the root cause was “a government that’s been dragging its feet over the issue of the number of haulage drivers on the ground”. Ministers bowed to business pressure on Saturday and announced they would issue temporary visas to 5,000 foreign heavy goods vehicle drivers to help tackle major labour shortages in the logistics industry. The government move came after panic buying followed BP saying last week that as many as 100 service stations had been disrupted and several forecourts closed because of a shortage of tanker drivers. Grant Shapps, transport secretary, on Sunday urged people to be “sensible” and said there was plenty of fuel at Britain’s six refineries and 47 storage facilities. “The most important thing is that actually people carry on as they normally would and fill up their cars when they normally would, then you won’t have queues and you won’t have shortages at the pump either,”

Europe's crippling energy crisis presages trouble for the rest of the world --Natural gas prices have soared by almost 500% in 2021 and with another winter just around the corner gas is trading at near-record values. While European countries attempt to outbid one another for supplies from major exporters it's inevitable that utilities will turn back to coal to provide heat for its residents and power for its dying economy, but this will not be enough. The effects of Europe's catastrophic policymaking are about to escalate to another level. "Nations are more reliant than ever on natural gas to heat homes and power industries amid efforts to quit coal and increase the use of cleaner energy sources. But there isn’t enough gas to fuel the post-pandemic recovery and refill depleted stocks before the cold months," Bloomberg's Stephen Stapczynski noted.1 With natural gas inventories in Europe at historically low levels for this time of year, the crunch will get a lot worse when temperatures drop. The spike in prices has already forced some fertilizer producers in Europe to reduce output, with more expected to follow, threatening to increase costs for farmers and potentially adding to global food inflation, Stapczynski said. While governments are now hoping that nature will come to their aid with mild winter, making the effects of their catastrophic decisions less severe, that scenario is almost impossible to happen. It's much more likely we'll see another brutally cold winter across the hemisphere, with lots of snow and extremely cold periods in regions where we least expect them. "The next three to four months may lead to unexpected consequences for all industries with a particular hit being taken by those that are energy-intensive," said Slava Kiryushin, global head of energy at DWF, an international provider of legal and business services.2 "If the winter is actually cold, my concern is we will not have enough gas for use for heating in parts of Europe," Amos Hochstein, the U.S. State Department’s senior adviser for energy security, told Bloomberg. For some countries, 'it won’t only be a recessionary value, it will affect the ability to actually provide gas for heating. It touches everybody’s lives.' Keep in mind that summers are already shorter and winters longer, putting an additional strain on energy suppliers. It's utterly embarrassing for the policymakers, but the situation brings back coal to the European table. However, coal alone will not solve the crisis as exports of the commodity from Australia, South Africa, and Colombia remain hampered by the COVID measures and supply chain challenges, compounding the effect of low Russian supply.2 "The crisis in Europe presages trouble for the rest of the planet as the continent’s energy shortage has governments warning of blackouts and factories being forced to shut," Stapczynski said, adding that the power crisis could exacerbate shutdowns if authorities divert gas to light and heat households. "This winter, the world is likely to learn how much the global economy depends on natural gas,"

Energy crunch: Natural gas prices in Europe hit record 100 euros - Energy prices are rising from the U.S. to Europe and Asia as the economy recovers from the global pandemic and people return to the offices. Europe is struggling to secure enough gas and coal ahead of the winter, with rising prices forcing some of industrial giants from fertilizer producers CF Industries to Yara International ASA and chemicals giant BASF SE to shut plants or curtail output. Governments are struggling to respond to the crunch, with an increasing number taking steps to try to shield voters from the worst effects of rising prices. France will block any new increase in regulated gas tariffs and cut taxes on electricity, Prime Minister Jean Castex said on TF1 on Thursday. “The volatile trading already shows that no one really knows how high gas can go, but we’re definitely in for a wild ride,” said Niek van Kouteren, a senior trader at PZEM, a Dutch energy company. “The question will be: where there will be demand destruction? If you then see governments stepping in and subsidizing gas prices, like France announced yesterday, there is no incentive at all to lower your demand.” Dutch gas futures surged to 100 euros a megawatt-hour, before retreating 0.7% to 97 euros by 1:05 p.m. in Amsterdam. Prices were swinging between gains and losses as traders weighed the potential for demand curbs as more factories shut or reduce production. 

Global gas wars: the fun has just begun! - Spot price for natural gas in Europe has just breached the psychologically important level of $1000 per thousand cubic meters, or a buck a cube. This has already had some significant results all across Europe. In the UK, fertilizer plants can’t operate at such prices and have shut down. This will in due course cause food price inflation later on, but the immediate effect is to deprive consumers of packed meat and beer because of a shortage of dry ice that is a byproduct of fertilizer production. Meanwhile, all the way on the other side of what remains of the European Union, in the Baltic statelets electricity prices are now 10 times higher than just across the border in Russia. Of course, they are welcome to buy cheap and plentiful electricity from Russia, but that has to come in via Belarus and Lithuania and the Lithuanians have strategically wrecked relations with Belarus by harboring the fugitive Tikhanovskaya the cutlet queen who is a sort of Belarussian Juan Guaidó. On the other side of Belarus lies the Ukraine, where things are even more fun. Back in spring of 2019 the Ukraine declined Russia’s gracious offer to sell it gas $240-260 per thousand cubes (a quarter of the current spot price) and instead opted to buy it on the spot market. The result is that the Ukraine needs 13 billion cubes of gas in storage to get through the heating season but has less than 5. But it can always buy what it needs on the spot market, right? Wrong! The Ukraine is broke and has zero budgeted for this purpose. Luckily, it can still buy cheap electricity from Russia—at least until Ukrainian nationalists decide to blow up the transmission lines to Russia like they did with the ones to Russian Crimea a while back, causing energy shortages there and forcing the Russians to construct an energy bridge to it from the mainland in a process that took close to a year. But things are much better in the United States which, after all, is a proud exporter of natural gas thanks to what is left of its fracking industry. Wrong again! The Industrial Energy Consumers of America (IECA), a chemical and food industry lobbying group, has just demanded that the US Department of Energy place limits on LNG exports. Otherwise, they say, very high natural gas prices will render numerous US enterprises noncompetitive and force them to shut down. Prices have already gone up by 41% over the past year. But that’s not enough to stimulate production: natural gas production in the US is falling together with the drilling rig count and the amount of gas in storage is currently 7.4% below the previous five year average. Attempting to put limits on LNG exports will cause loud screams from energy industry lobbyists, who have plenty of clout on Capitol Hill, and result in protracted political battles in an already sharply divided and disagreeable US Congress.

Beyond Petroleum: The First Supermajor To Turn Its Back On Oil - While international policymakers and regulatory bodies have already been applying some degree of pressure on the energy industry to decarbonize for years now, the push for cleaning up the global energy sector’s act has been supercharged by the most recent report from the Intergovernmental Panel on Climate Change (IPCC) and the United Nations (UN). The landmark 6th Assessment Report announced in no uncertain terms that we have reached a point of no return for the climate, having irreversibly altered weather patterns and unequivocally warmed the Earth due to human activity. However, there is still a small window of time to mitigate further damage and change the planet’s trajectory toward catastrophic climate change. This will require decarbonization at a massive scale and on an incredibly short timeline. The UN, not mincing words, has called it a “code red for humanity.”That being said, it’s simply not feasible for the global economy to quit fossil fuels cold turkey. It’s going to take time, investment, infrastructure, and enormous effort to complete the clean energy transition, and in the meantime, the world still needs hundreds of billions of barrels of oil. This dynamic has made it hard to convince oil supermajors to set aside fossil fuels -- their stalwart cash cow -- when there is still so much money to be made before oil goes quietly into that goodnight, especially when brand new mass-scale clean energy enterprises probably won’t turn a profit for years.Despite the bumps in the road, however, it’s clear which way the tide is turning. Fossil fuels aren’t irrelevant yet, but they have no place in the future if this planet is to have one. Already, some oil execs and fossil fuel industry defectors have decided to abandon ship and are positioning themselves at the helm of the clean energy revolution, bringing their oilfield know-how and innovative expertise with them. And now, at long last, some oil companies are reading the writing on the wall and deciding to bet big on renewables in order to establish a place at the front of the pack for the new energy era. One of the most notable cases is that of BP, which is changing course and liquidating huge portions of its fossil fuel holdings in a historic shift in strategy. BP’s bold new Chief Executive Bernard Looney is trying to make sure that BP can beat its peers in a race toward clean energy dominance. “He aims to slash BP's output by 40%, or about 1 million barrels per day, an amount equal to the UK's entire daily output in 2019,” Reuters recently reported. This makes BP the very first major oil company CEO to announce intentional cuts in future oil production. “At the same time,” the report continued, “BP would boost its capacity to generate electricity from renewable sources to 50 gigawatts, a 20-fold increase and equivalent to the power produced by 50 U.S. nuclear plants.”

Brian Sullivan: Five key takeaways from OPEC’s 2045 oil outlook - The Organization of the Petroleum Exporting Countries rolled out an opus — its "World Oil Outlook 2045." Clocking in at a Texas-sized 340 pages, it's not the easiest of reads, but helpfully the good folks in Vienna tossed us a 30-page Executive Summary as well as an interactive edition.Whatever OPEC says about oil, oil demand, the future of cars and everything else fossil fuel-related is going to be discounted, if not openly mocked, given that the organization is one of petroleum-exporting countries. It's not the renewables-exporting countries, although OREC has a certain ring. Still, the group and its researchers did a great job of putting together a lot of data, information and projections in Tuesday's report. During my trips to OPEC headquarters in Austria, I've gotten to know some of the women and men who put this together. They aren't oil roughnecks, but studious academic types working in a well-stocked library. They are more pragmatic than one might think for an advocacy organization. There's a ton of stuff to discuss and debate in the 2045 Outlook, but here are the five things that stuck out most to me.

  • 1. Oil is far from dead. A projection that oil and fossil fuels will live on — put out by an oil and fossil fuel organization — is the least surprising thing you'll see all year. But feigned shock aside, OPEC's global population growth projections are hard to ignore when it comes to a global energy mix in years and decades ahead. Their base case is that global oil demand will rise until 2045. And before you bash them, keep in mind there are plenty of Wall Street firms with projections that aren't that far off.
  • 2. It's not 'U.S.' It's the world. We can scoff at that projection all we want as we tweet from our new iPhones in a comfortable home, but OPEC reminds us that it is a big world out there. It's getting bigger and growing in places that are not known as the United States or Western Europe. The growth will come from countries where electricity may still be substandard and a car — any car — is a valuable asset.
  • 3. A renewables boom — sort of…The good news on the renewables side? Demand for "other renewables," including wind and solar, is expected to jump. Yet even with this scenario, OPEC sees this as just over 10% of the global fuel source in 25 years. Coal keeps dropping, oil slumps a little and natural gas grows. Oh, and nuclear continues to get no love.
  • 4. Oil demand will be hit by electric vehicles, but maybe not as much as you think.. But to OPEC's first point about where the growth will come from, you need to consider the world. Maybe as many as a billion people do not have access to reliable electricity (or clean drinking water for that matter). For hundreds of millions of families having a car — any car — is a life changer. And many of those cars will be low cost, internal combustion powered. At least that's what OPEC projects.
  • 5. Texas (and maybe New Mexico) take off again. If you're bullish on American oil production or oil producers, this one's for you. OPEC sees a "return to growth" for fracking in the U.S. Though production gains have been muted for some time now, OPEC says we should start to see that change next year. By the way, New Mexico is now the No. 2 oil-producing state in the U.S., overtaking North Dakota, according to The Bismarck Tribune.

The Energy Crisis Is Sending Oil, Gas, And Coal Prices Soaring -- Just ahead of the winter season, Europe’s natural gas crunch created a snowball effect in global energy markets. What started as very low gas inventories in Europe during the summer is now spilling over into oil, natural gas, and coal prices all over the world, with no quick fix or signs of a major short-term correction in sight. Brent Crude prices topped $79 per barrel early on Monday - the highest level in three years. Prices are now headed for $80 - a level which some analysts had forecast in the summer, but which not many market participants believed would happen because of the Delta variant depressing prices and demand in some parts of the world in July and August. However, as the winter heating season in the northern hemisphere approaches, gas and power prices in Europe are surging, driving up coal demand and prices in Europe and globally as more coal is used in the power sector. At the same time, economies are rebounding from last year’s COVID-inflicted slump, with energy-intensive industries growing. But as demand rises, supply stays muted due to underinvestment in new energy supply in the past 18 months, the OPEC+ cuts, and weather-related outages such as Hurricane Ida at the end of August, which constrained U.S. Gulf of Mexico oil and gas supply throughout September. Because the supply of oil, gas, and coal is struggling to catch up with recovering demand, energy prices are rallying around the world. Consumers and industries in Europe have already started to feel the pinch from record gas and power prices. Industries across Europe are scaling back operations due to record natural gas and power prices, threatening to deal a blow to the post-COVID recovery. Utilities are firing up more coal-powered electricity generation, pushing demand for coal higher, despite the record carbon prices in Europe and the European Union’s pledges to be a net-zero bloc by 2050. European coal prices have hit a 13-year high as coal supply to Europe remains constrained and utilities fire up more coal power plants amid surging natural gas prices.The rally in natural gas prices is also spurring on global demand for coal. China and India are replenishing low stocks of coal, driving coal prices in Asia to records. Goldman Sachs has recently nearly doubled its price projection for coal prices in Asia, expecting the benchmark Newcastle thermal coal to average $190 a ton in the fourth quarter, up from a previous forecast of $100 per ton, due to sky-high gas prices ahead of the winter heating season.In China, a power supply crunch may be looming amid soaring coal and gas prices and electricity demand. Chinese authorities are ordering some factories in the heavy industries to curtail operations or shut down to avoid a power supply crisis, Bloomberg reports. The gas and coal price spikes globally are set to raise demand for crude oil in the winter as a substitute fuel, analysts and OPEC itself say. A gas-to-oil switch and continued recovery in global oil demand have analysts and major oil trading houses predicting that oil will hit $80 and even $90 this winter - and potentially$100 a barrel at the end of 2022.

Oil prices extend gains, WTI passes $75 on global supply crunch ---Brent closed at the highest in nearly three years amid signs the crude market is rapidly tightening from a global energy crunch. The global benchmark crude surged 1.8% on Monday, but met some resistance as it neared the key, psychological $80-a-barrel level. Its U.S. counterpart rose 2% to close above $75 a barrel for the first time since July. Both benchmarks are set to continue climbing as supply struggles to catch up with fast-rising demand, according to Trafigura Group’s co-head of oil trading Ben Luckock. His remarks came as Goldman Sachs Group Inc. said Brent could hit $90 by year-end as the market is in a bigger deficit than many realize. Brent failed to break $80 because some speculators were taking profits, said Bob Yawger, director of the futures division at Mizuho Securities. “We should look for the market to reload and give the $80 level another shot in coming days.” Crude is rallying on signs that inventories globally are falling sharply, with demand heating up ahead of winter and OPEC+ only slowly adding barrels back to the market. As traders eye the prospect of large market deficits, Trafigura said longer-dated oil prices remain cheap at around $70 a barrel. So-called timespreads, which gauge market strength, have rallied sharply in recent weeks in another sign that traders are positive about the outlook. “Observable inventory draws are the largest on record,” Goldman Sachs analysts including Damien Courvalin wrote in a note to clients. “This deficit will not be reversed in coming months, in our view, as its scale will overwhelm both the willingness and ability of OPEC+ to ramp up.” West Texas Intermediate for November delivery advanced $1.47 to settle at $75.45 a barrel in New York. Brent for November settlement climbed $1.44 to settle at $79.53 a barrel. WTI’s front-month contract traded at the biggest premium to its second-month in nearly two months. Meanwhile, OPEC+ is scheduled to meet on Oct. 4. to review its output policy. Internal documents from the group have already highlighted the risk of the natural gas crisis ramping up demand. World oil consumption could be boosted by an additional 370,000 barrels a day -- roughly 6% of expected growth -- if gas prices stay high for an extended period, according to the group.

Oil gains for fifth day amid supply constraints - Oil prices rose for a fifth straight day on Monday with Brent heading for $80 amid supply concerns as parts of the world sees demand pick up with the easing of pandemic conditions. Brent crude climbed 1.84%, or $1.44, to settle at $79.53 per barrel, having risen for a third consecutive week through Friday. U.S. Oil settled $1.47, or 2%, higher at $75.45 per barrel, its highest since July, after rising for a fifth straight week last week. "Supply tightness continues to draw on inventories across all regions," ANZ Research said in a note. Rising gas prices as also helping drive oil higher as the liquid becomes relatively cheaper for power generation, ANZ analysts said in the note. Caught short by the demand rebound, members of the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, have had difficulty raising output as under-investment or maintenance delays persist from the pandemic. China's first public sale of state oil reserves has barely acted to cap gains as PetroChina and Hengli Petrochemical bought four cargoes totaling about 4.43 million barrels. India's oil imports hit a three-month peak in August, rebounding from nearly one-year lows reached in July, as refiners in the second-biggest importer of crude stocked up in anticipation of higher demand.

Oil prices soar above $80 for the first time in 3 years as the natural gas shortage stokes demand --Brent crude, the benchmark global oil price, rose above $80 a barrel for the first time in three years on Tuesday, as supply shortages and a natural gas crunch rocked energy markets.The benchmark price rose as much as 1.7% to $80.75 a barrel before paring its gains slightly, according to Bloomberg prices. WTI crude, the US benchmark, rose as high as $76.67 a barrel.Brent crude has risen around 55% this year as economies have reopened and demand has bounced back rapidly, while the OPEC group of crude-exporting countries have kept prices buoyant by limiting supply.Oil-price rises have picked up speed over the last few weeks, however. One reason is that Hurricane Ida shut down much of the US's production capacity, limiting supply from a major market.Another key reason, analysts said, is the ongoing energy crunch that has sent natural gas prices soaring in Europe. Investors are now betting that users will start buying oil as an alternative to natural gas, which has become prohibitively expensive for many industries.Goldman Sachs said this week it now expects Brent crude to hit $90 a barrel by the end of the year, compared to a forecast of $80 a barrel previously.The bank said that the impact of Hurricane Ida that shuttered production capacity in the Gulf of Mexico and much of the shale basin has more than offset a recent increase in oil production from OPEC and its allies, known as OPEC+.And it said: "Winter demand risks are further now squarely skewed to the upside as the global gas shortage will increase oil fired power generation."

Brent oil jumps to nearly 3-year high above $80, up more than 50% for 2021 International oil benchmark Brent crude jumped during early trading on Tuesday morning, topping $80 per barrel for the first time since October 2018 before reversing those gains and dipping into negative territory. The breather comes after five straight positive sessions for oil, with the rally supported by demand rebounding as supply remains tight. West Texas Intermediate crude futures, the U.S. oil benchmark, hit a more than two-month high of $76.67 per barrel before also pulling back. The contract finished the day at $75.29 per barrel, for a loss of 0.21%. Both WTI and Brent are coming off five straight weeks of gains, and each is up more than 50% for 2021. "A persistent supply deficit is leading to an ever tighter oil market, with OECD inventories likely to end the year at the lowest level of demand cover in decades," analysts at Barclays wrote Tuesday in a note to clients. The firm hiked its 2022 targets for WTI and Brent to $74 and $77 per barrel, respectively. Brent declined 0.55% to settle at $79.09 per barrel. Goldman Sachs envisions the contract hitting $90 by the end of the year as demand continues to recover. The firm hiked its target on Sunday to $90 after previously forecasting Brent at $80 by the end of the year. In April 2020 as the pandemic sapped worldwide demand for petroleum products, briefly sending WTI plunging into negative territory, producers implemented historic output cuts. OPEC and its allies removed nearly 10 million barrels per day from the market, and while the group has slowly opened the taps, the members are still holding back production. A similar story played out in the U.S. Wells were shut-in and producers have been slow to kick up output. Instead, they've focused on shoring up balance sheets, paying down debt and returning money to shareholders. Demand has since recovered amid the widescale rollout of the vaccine, all while supply remains constrained. This is especially true after years of under-investment in the sector. Oil is also getting a boost amid the eye-popping rally in natural gas prices, which could prompt utilities to switch from gas to oil. Natural gas futures jumped more than 9% at one point on Tuesday to $6.26 per million British thermal units, the highest level in at least 7.5 years. The contract is now up more than 40% for September with inventory below historical levels heading into the winter. "Global natural gas markets are very tight now, with inventories much below normal in both Europe and U.S.," said Ed Morse, global head of commodities at Citi. "Thus, prices should continue to stay at current elevated levels globally in the upcoming winter, with the potential for further price spikes triggered by much colder-than-normal weather, unless winter weather turns out to be mild." The energy sector is by far the best S&P 500 group for September, up more than 10%. The second-best sector is financials, which is up just 1%.

$80 oil is sending the market toward demand destruction, Morgan Stanley says - The current energy market picture is looking good for oil bulls. International benchmark Brent crude passed the long-anticipated threshold of $80 per barrel on Tuesday, though it's since slipped back down to trade at $78.47 as of Wednesday at 10:30 a.m. in London. West Texas Intermediate was trading at $74.73 per barrel around the same time. With winter ahead and a gas crunch in Europe, the demand picture appears promising. But demand destruction could be right around the corner as prices climb higher, some experts are warning. "Oil prices have disconnected from the marginal cost of supply. Instead, they are travelling to the level where demand destruction kicks in, which we estimate at ~$80/bbl." That's what Morgan Stanley wrote in June, and in a note Tuesday, the bank wrote: "This remains our thesis." It added, however, that "the price at which demand destruction kicks in can be fiendishly difficult to estimate. We leave our price forecast unchanged for now but recognise that, on current trends, upside to our bull case scenario to $85/bbl clearly exists." Morgan Stanley foresees global oil supply getting tighter, citing an average of 3 million barrels of crude per day of inventory draws in the last month, compared to 1.9 million barrels per day drawn in the preceding months of this year. "These draws are high and suggest the market is more undersupplied than generally perceived," the bank's analysts Martijn Rats and Amy Sergeant said. Furthermore, flights and transport have picked up, with Flightradar data on commercial flights "closing the gap to pre-covid levels," they said. Still, not all the signs are bullish. The World Bank said Tuesday that the Delta variant is slowing economic growth in the East Asia and Pacific region, and growth forecasts have been downgraded for most of the region's countries. And China faces a potential slowdown with its Evergrande crisis and a growing power shortage that's hitting factories, homes and supply chains. "China's economic troubles are casting a dark shadow on the demand side of the oil coin and hence the price outlook," warned Stephen Brennock, a senior analyst at London-based PVM Oil Associates. Higher energy prices will also fuel even higher inflation, which poses a significant threat to demand. "Rising oil prices have been one of the biggest drivers of inflation," Brennock said in a note Tuesday. "And a worsening inflationary situation will act as a drag on the fragile economic recovery and oil consumption. This brings us neatly onto the issue of demand destruction."

Oil prices may hit $100 this winter, spurring economic crisis, warns Bank of America --The global energy crunch could help propel oil prices above $100 a barrel for the first time since 2014 and spur a global economic crisis, according to Bank of America. Natural gas prices have already surged to almost double that level in oil equivalent terms, and BofA says a spike in demand for diesel could push crude into similar territory. With monetary and fiscal policy stretched to the limit and energy costs rising as a share of economic output, higher oil prices could in turn create a macro crisis, the bank said Friday in a note. The boost to crude would be driven by three factors: gas-to-oil switching as a result of high gas prices, a jump in crude consumption over a cold winter and higher aviation demand as the U.S. reopens its borders. “If all these factors come together, oil prices could spike and lead to a second round of inflationary pressures around the world,” analysts including Francisco Blanch wrote in the note. “Put differently, we may just be one storm away from the next macro hurricane.” Diesel prices could climb above $120 a barrel, the bank said, with stockpiles falling as refiners prioritized the production of gasoline in recent months. Other oil-based fuels used in heating are already seeing an uplift, with U.S. propane prices at their highest since 2014. As well as the cooler weather, BofA also said that underinvestment in commodities due to poor returns is also set to fuel higher oil prices in the longer-term. “A multiyear run up in crude oil prices is now in the cards,” the bank said.

Oil Futures Ease Ahead of API Stock Data - Weighed down by a rallying U.S. Dollar Index and a selloff in U.S. equity markets triggered by default warnings from Treasury Secretary Janet Yellen, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange turned lower Tuesday. Traders were positioning ahead of weekly inventory data released Tuesday afternoon by the American Petroleum Institute that is expected to show a second consecutive build in domestic gasoline stockpiles.In prepared remarks before the U.S. Senate Banking Committee, Yellen warned on Tuesday that Congress must raise the debt ceiling by Oct. 18 to avert the first default in U.S. history."The full faith and credit of the United States would be impaired, and our country would likely face a financial crisis and economic recession," said Yellen. Late Monday, Senate Republicans blocked a bill to fund the federal government until Dec. 3 and raise the debt ceiling. Yellen cautioned that even flirting with a default could rattle financial markets.The Dow Jones Industrial dropped more than 600 points at its low point on Tuesday before paring losses somewhat to a little more than 550 points or 1.6% late afternoon. U.S. Dollar Index, meanwhile, rallied 0.43% against a basket of foreign currencies to settle at a 93.780 11-month high, while weighing on the front-month West Texas Intermediate futures contract.At settlement, NYMEX November WTI futures slipped $0.16 to $75.29 barrel (bbl) after trading as high as $76.67 earlier in the session. ICE November Brent retreated from a 35-month spot high $80.75 bbl to settle a tad above $79 bbl. NYMEX October ULSD futures declined 0.70 cent to $2.2890 gallon from a fresh 35-month spot high of $2.3320 gallon, and front-month RBOB futures fell 2.18 cents or 1% to $2.2019 gallon. Tuesday afternoon, oil traders awaited the release of weekly inventory data from the API, with U.S. crude oil inventories seen falling by 2.5 million bbl in the week ended Sept. 24. .Earlier in the session, oil futures were up sharply on the news of deepening fuel shortages in the European Union and China where record runs in gas prices and depleted inventories stocked concerns over global energy crunch. Dutch TTF (Title Transfer Facility) and UK NBP (National Balancing Point) natural gas prices both hit all-time settlement highs on Monday.

WTI Extends Losses After Surprise Crude Build - - Oil prices pumped'n'dumped today with WTI above $76.50 intraday before falling back (and Brent near 3-year highs above $80 before fading) as a shortfall in global energy supplies is spilling into crude markets.“It got ugly in the equity space and the interest rate environment got stronger this morning too,” “Those two facts conspired to tank the market here.”The latest gains for oil prices have come as part of a broader rally in energy markets, with depleted natural gas inventories and resurgent economic activity sparking fierce competition in Europe and Asia for natural gas to feed their power markets."Oil's move is really to do with the global energy crunch coming out of the gas power market," said Norbert Rücker, head of economics at Swiss private bank Julius Baer."This is now spilling over into the oil market because of the expectation that this energy scarcity means we're going to use oil for spillover demand." In some power plants, oil can be used to generate electricity when gas prices surge.Losses in U.S. Gulf of Mexico production following the impact of Hurricane Ida are also supportive of higher prices in the short-term. API:

  • Crude +4.127mm (-2.5mm exp)
  • Cushing +359k
  • Gasoline +3.555mm
  • Distillates +2.483mm

Analysts expected an 8th straight week of crude inventory draws, but were surprised when API reported a 4.127mm build. In fact, the entire complex saw inventories rise...

Oil Futures Slip After Bearish API Stock Data, USD Gains -- Nearby delivery month oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange fell in pre-inventory trade Wednesday, with West Texas Intermediate November contract sliding below $75 per barrel (bbl) after preliminary data from the American Petroleum Institute showed across-the-board builds in U.S. crude and petroleum product supplies last week, while a stronger U.S. Dollar Index and concerns over a possible government default on $28.5 trillion in debt added further headwinds. API late Tuesday afternoon reported nationwide crude oil and distillate stocks unexpectedly increased in the week ended Sept. 24, while also detailing a larger-than-expected build in gasoline inventories. API reported commercial crude oil supplies rose 4.127 million bbl in the week profiled, missing calls for a 2.5 million bbl draw. Data show stocks at the Cushing, Oklahoma, hub added 359,000 million bbl. Gasoline stockpiles rose 3.555 million bbl in the week ended Sept. 24, nearly four times estimates for a build of 900,000 bbl. API data show distillate inventories rose 2.483 million bbl compared with an expected 1.3 million bbl draw. In early trading, NYMEX November WTI futures slid $0.55 to $74.74 bbl, come under additional pressure as the U.S. Dollar Index rallied to a fresh nearly 11-month high at 94 overnight. ICE November Brent retreated from Tuesday's $80.75 bbl 35-month high on the spot continuous chart to trade near $78.50, down about $0.60 ahead of expiration Thursday afternoon, with the December contract trading at a roughly $0.65 discount in the backwardated market. NYMEX October ULSD futures edged down 0.55 cents to near $2.2835 gallon ahead of expiration Thursday, with the November contract at a roughly 20-cent discount. October RBOB futures moved about 0.85 cents lower to $2.1885 gallon, with November delivery trading at a 4.95-cent discount in the seasonally backwardated market ahead of the October contract's expiration Thursday afternoon. In financial markets, concerns surrounding a looming government shutdown later this week, as well as failure to raise the nation's $28.4 trillion debt ceiling, continue to limit the market's upside. Equities on Wall Street nosedived Tuesday after Treasury Secretary Janet Yellen told a U.S. Senate Banking Committee that lawmakers must raise the debt ceiling by Oct. 18 to avert the first default in U.S. history.

WTI Dips After Surprise Crude Build, Production Rebounds From Ida - Oil prices see-sawed overnight, with WTI sliding back to a $73 handle after API's reported across the board inventory builds, but found support and has rallied back to almost unchanged ahead of this morning's official data."The oil rally is taking a bit of a there is a perception that the market has gone up too fast and the fact that we saw builds in the American Petroleum Institute (API) supply report," Traders are anxious for the official data to prove API right... or wrong. DOE

  • Crude +4.578mm (-2.5mm exp)
  • Cushing +131k
  • Gasoline +193k
  • Distillates +384k

The official EIA data confirmed API's, with a 4.578mm crude build, ending a 7-week streak of draws. Also confirming the API data, inventories rose for products and at Cushing... Despite over 500k bb/d in output increase last week, recovery from Hurricane Ida continues to lag as US crude production remains Down 400k bb/d...

Oil Slides On Stronger Dollar And Stockpile Increase | Rigzone --Oil slid as the dollar surged and after a U.S. government report showed crude stockpiles rose for the first time in eight weeks. Futures in New York ended the session 0.6% lower after a choppy trading session on Wednesday. A more-than 4 million-barrel increase in U.S. crude stockpiles tugged futures lower, while a stronger dollar made exports of the commodity less attractive. “This dollar strength has reached a level that can’t be ignored,” said John Kilduff, a partner at Again Capital LLC. Oil’s advance earlier this week -- and Brent’s surge above $80 a barrel -- reflected signs of a tighter global market amid stronger demand and rising natural gas prices. Higher energy costs this month have stoked speculation that the Organization of Petroleum Exporting Countries and its allies may ease supply cuts more quickly. The White House said Tuesday it’s continuing to talk to OPEC and other international partners about the importance of competitive markets and doing more to support the recovery. Meanwhile, world oil supply is expected to be 1.2 million barrels a day below demand in October, and 900,000 barrels a day in November, according to a OPEC secretariat document being reviewed by the group’s Joint Technical Committee. Prices: West Texas Intermediate crude futures for November delivery fell 46 cents to settle at $74.83 a barrel in New York. Brent for November settlement dropped 45 cents to end the session at $78.64 a barrel. In addition to the crude stockpile rise in the U.S. last week, gasoline inventories rose for a second week and distillate inventories climbed for the first time since late August, Energy Information Administration data show. Yet, U.S. crude exports jumped above 3 million barrels a day, signaling stronger global demand.

Oil prices end lower as U.S. crude supplies mark first increase in 8 weeks - Oil futures ended lower Wednesday in volatile trading, as official government data showed that U.S. crude inventories climbed for the first time in eight weeks and an index for the U.S. dollar strengthened to highest level in about a year. The ICE U.S. Dollar Index was up 0.6% at 94.329, the highest in roughly a year. U.S. oil production has climbed, but it's "still not coming back fast enough to alleviate tight supply concerns," On Wednesday, November West Texas Intermediate crude fell 46 cents, or 0.6%, to settle at $74.83 a barrel on the New York Mercantile Exchange, following a modest loss of 0.2% on Tuesday. November Brent crude , the global benchmark, declined by 45 cents, or 0.6%, to $78.64 a barrel on the ICE Futures Europe exchange, ahead of its expiration at the end of Thursday's trading session. The most active December Brent contract fell 26 cents, or 0.3%, to $78.09. Prices for both WTI and Brent crude settled Monday at highs not seen for a front-month contract since October 2018. The EIA reported on Wednesday that U.S. crude inventories rose by 4.6 million barrels for the week ended Sept. 24. That defied expectations for an average decline of 4.5 million barrels expected by analysts polled by S&P Global Platts. The American Petroleum Institute on Tuesday reported a 4.1 million-barrel increase, according to sources. The weekly increase for crude inventories reported by the EIA followed seven consecutive weeks of declines. The numbers show that the impact from storms in the Gulf of Mexico a few weeks ago, which disrupted energy production in the region, are abating, The EIA also reported weekly inventory increases of 200,000 barrels for gasoline supplies and 400,000 barrels for distillates. The S&P Global Platts survey had forecast a supply increase of 700,000 barrels for gasoline and an inventory decline of 2.2 million barrels for distillates. However, API had reported larger inventory increases of nearly 3.6 million barrels for gasoline and 2.5 million barrels for distillates. "There is a growing concern that products such as gasoline and distillates are still too far below normal to make us feel comfortable," Crude stocks at the Cushing, Okla., storage hub, meanwhile, edged up by 200,000 barrels for the week, and total U.S. petroleum production also rose by 500,000 barrels to 11.1 million barrels per day, the EIA said. Still, at 418.5 million barrels, U.S. crude oil inventories are about 7% below the five year average for this time of year, according to the EIA. Among the petroleum products, October gasoline rose 1.2% at $2.229 a gallon and October heating oil climbed by 0.8% to $2.308 a gallon. The October contracts expire at the end of Thursday's session. November natural gas settled at $5.477 per million British thermal units, down 6.9%, after settling Tuesday at the highest since February 2014 with supplies in the U.S. tight ahead of the winter heating season.

Oil Steadies After Report China Ready to Buy More (Reuters) -Oil futures were little changed on Thursday as reports China was prepared to buy more oil and other energy supplies to meet growing demand offset price pressure from an unexpected rise in U.S. crude inventories and a strong dollar. Brent futures for November delivery fell 12 cents, or 0.2%, to settle at $78.52 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 20 cents, or 0.3%, to settle at $75.03. Earlier in the day prices at both benchmarks dropped over $1 a barrel. "The expiration of NYMEX products and Brent crude ... spiked volatility," Brent futures for December, which will soon be the front-month, were up 0.3% to $78.31 a barrel. New York Harbor Ultra Low Sulfur Diesel (ULSD) futures, meanwhile, closed at their highest since October 2018 for a second day in a row. China Premier Li Keqiang said the world's biggest crude importer and No.2 consumer will ensure its energy, power supply and will keep economic operations within a reasonable range. "If China is happily paying any price for energy, this could intensify the energy crunch in Europe," British petrol stations are still seeing unprecedented demand with more than a quarter of pumps still dry as the fuel crisis cut road traffic volumes to the lowest level since the COVID-19 lockdowns ended two months ago. A possible dampener on oil prices has been the power crisis and housing market concerns in China, which have hit sentiment because any fallout for the world's second-biggest economy is likely to affect oil demand, analysts have said. China's factory activity unexpectedly shrank in September due to wider curbs on electricity use and elevated input prices. Last week's rise in U.S. inventories came as production in the Gulf Coast returned close to levels reached before Hurricane Ida struck about a month ago. In another bearish development, the U.S. dollar hit a new one-year earlier in the day, making oil more expensive for holders of other currencies. [USD/] But expectations of a continued crude supply deficit helped support prices. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, are next week expected to hold to a pact to add 400,000 barrels per day to their output for November. "Rystad Energy expects the group to take a wait-and-see approach, not least because the group has yet to demonstrate its ability to ramp up oil supply quickly,"

Oil futures finish higher, with U.S. prices up a sixth quarter in a row - WTI oil futures rise for the session, on bets for higher demand from China Oil futures finished higher Thursday, contributing to a sixth straight quarterly climb for U.S. benchmark prices, as traders bet on higher crude demand after a report said China told state-owned energy companies to build their reserves to meet power needs for the winter. China told top state-owned energy companies to secure winter supplies at all costs, with the order coming directly from Vice Premier Han Zheng during a meeting earlier this week with officials from Beijing's state-owned assets regulator and economic planning agency, Bloomberg reported U.S. benchmark crude oil prices had been pressured by a bounce back in domestic production to more than 11 million barrels a day last week, he said. Forecasts for a warmer October than typical in the past also took the heat off the tight supply situation, he said. Now, "China is realizing that this energy crisis could impact all parts of the economy because of coal shortages," China has suffered from power blackouts due, in part, to high prices and shortages of coal and natural gas. "They have to use alternative sources of energy to keep the lights on," "Forced switching of energy sources from coal is going to require more oil" and, because of the coal and natural-gas shortage, demand for oil will increase. "The U.S. may be a beneficiary as they are a discount to the rest of the global market," November West Texas Intermediate crude rose 20 cents, or 0.3%, to settle at $75.03 a barrel on the New York Mercantile Exchange after trading as low as $73.14. Global benchmark November Brent crude , however, lost 12 cents, or nearly 0.2%, at $78.52 a barrel on the ICE Futures Europe exchange. The contract expired at the end of Thursday's session. The most-active December Brent contract tacked on 22 cents, or 0.3%, to $78.31 a barrel. For the month, WTI gained 9.5%, while Brent saw a rise of 7.6%, based on the front-month contracts, according to Dow Jones Market Data. For the quarter, WTI climbed of 2.1%, up a sixth consecutive quarter, while Brent marked a 4.5% advance. Oil prices had been trading lower before the Bloomberg report, as Energy Information Administration data Wednesday revealed a weekly rise of 4.6 million barrels in U.S. crude inventories after seven consecutive weeks of declines on the back of storm disruptions in the Gulf of Mexico. Despite the supply build, "the overall trend of massive draws over the past weeks has still left U.S. storage levels low enough that there is still an overarching bullish sentiment when it comes to U.S. onshore crude stockpiles," Also on Nymex, October gasoline rose 1.1% to $2.254 a gallon, but front-month prices were down 1.3% for the month, and logged an increase of 0.4% for the quarter. October heating oil added 1.5% to $2.342 a gallon, ending 9.9% higher for the month, up 10% for the quarter. The October contracts expired at the end of the session.

Oil Futures Slide on Weaker Global Manufacturing Activity -- In early trade Friday, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange were mostly lower, with the crude contracts declining after European manufacturing data recorded a sharp deceleration of growth in September, falling by the largest margin since the lockdown of April 2020, and global equity markets extended their September decline into beginning of the fourth quarter with focus on rattled supply chains and rising consumer prices. Overnight economic data out of eurozone confirmed investor fears over a sharp slowdown in global manufacturing output hammered by supply constraints and softening demand from industrialized economies. The final reading on eurozone manufacturing purchasing manager's index for September fell to the lowest reading since February at 58.6 -- a notable step down from 61.4 seen in August. Germany and France, the bloc's two largest economies, led the declines, with industrial indexes in both countries falling to eight-month lows. Commenting on the data released Friday morning, Chris Williamson, Chief Business Economist at IHS said, "Supply issues continue to wreak havoc across large swathes of European manufacturing, with delays and shortages being reported at rates not witnessed in almost a quarter of a century and showing no signs of any imminent improvement." More evidence of strained supply chains could be found in China's manufacturing data released earlier this week, showing leading industrial indexes in the world's second largest economy fell into contraction for the first time since the beginning of the pandemic in February 2020. Coupled with global supply constraints, widespread power outages in China's industrial provinces prompted Beijing to call on its top energy companies to secure fuel supply this winter at any costs. early trade, NYMEX November West Texas Intermediate futures fell below $75 per barrel (bbl) to trade near $74.50 bbl, and ICE December Brent contract fell to $77.90 bbl. NYMEX November ULSD futures edged nearly 1 cent lower to near $2.3290 gallon, with front-month RBOB futures gaining 0.45 cents to 2.1985 gallon.

Oil settles near three-year high ahead of OPEC+ meeting - (Reuters) -Oil settled above $78 a barrel on Friday, just shy of a three-year high reached earlier this week, on expectations that OPEC ministers will maintain a steady pace in raising supply. The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, meets on Monday. The group is slowly unwinding record output cuts made last year, although sources say it is considering doing more to boost production. Brent crude rose 97 cents, or 1.2%, to settle at $79.28 in its fourth weekly rise. U.S. West Texas Intermediate (WTI) rose 85 cents to settle at $75.88 in a sixth week of gains. Brent has risen over 50% this year and reached a three-year high of $80.75 on Tuesday. OPEC+ is facing pressure from consumers such as the United States and India to produce more to help reduce prices as demand has recovered faster than anticipated in some parts of the world. "If OPEC+ sticks to the script and only delivers the planned 400,000 bpd increase in November, energy markets will shortly be seeing $90 oil prices," said Edward Moya, senior market analyst at OANDA, adding that any increase smaller than 600,000 barrels should boost prices. Oil is also finding support as a surge in natural gas prices globally prompts power producers to move away from gas. Generators in Pakistan, Bangladesh and the Middle East have started switching fuels. "The most likely reason for stable oil prices is that investors believe the supply-demand gap will widen as the power crisis worsens," said Naeem Aslam, analyst at Avatrade. U.S. energy firms this week added oil and natural gas rigs for a fourth week in a row as more storm-hit offshore units resumed service in the Gulf of Mexico. Rigs rose by 7 to 528 in the week to Oct. 1, the highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.

Oil Completes Sixth Straight Week Of Gains | Rigzone - Oil rose in tandem with equity markets while traders turned their attention to an upcoming OPEC+ meeting that may yield supply increases. Futures in New York rose 1.1% on Friday. U.S. benchmark crude posted a sixth straight weekly gain, the longest streak of weekly advances since early July. Buzz continued around whether on Monday OPEC will decide to increase output after reviving its production by 360,000 barrels a day in September, according to a Bloomberg Survey. Last month’s output is lower than the threshold that markets are expecting OPEC to increase their production to, and a lot of countries in OPEC do not have the capability to increase production by very much, according to Bob Yawger, director of the futures division at Mizuho Securities USA. But that hasn’t stopped markets from pricing in the possibility that OPEC will go “above and beyond” in output. Investors are also focusing on demand after China ordered its state-owned companies to secure energy supplies for winter at all costs as the country struggles with a deepening power crisis.The order from Beijing is the latest sign that rising energy prices are becoming a political issues, after the White House Thursday said crude’s rally was a concern. “Oil is being supported by the prospect of demand outstripping supply over the coming months,” said Fiona Cincotta, senior financial markets analyst at City Index. “The expectations of future demand are strong.” West Texas Intermediate crude for November delivery rose 85 cents to settle at $75.88 a barrel; futures rose 2.6% this week. Brent for December settlement rose 97 cents to settle at $79.28 a barrel. JP Morgan Chase & Co. also warned that worsening natural gas crises in Asia and Europe will spur so many power generators to switch to petroleum-based fuels that Brent crude will reach $84 a barrel by the end of the year. It is likely to add more upward pressure to already elevated coal and liquefied natural gas prices, as well as oil products including fuel oil, diesel and propane, which can be used for electricity generation or to power small generators. That’s bolstering the scrutiny on OPEC+’s next move when it meets Monday.

Environment Ministry limits tankers allowed into Eilat under UAE pipeline deal - The Times of Israel - The Environmental Protection Ministry is holding up implementation of a controversial oil deal between the state-owned Europe Asia Pipeline Company (EAPC) and an Israel-United Arab Emirates consortium by limiting the number of Gulf tankers that can dock annually in Eilat to a maximum of six, while the company is seeking a greenlight for 30.According to a letter sent last week from the ministry’s marine protection unit director Rani Amir to the pipeline company, the decision — which also limits the amount of oil that can be brought in yearly to two million tons — was based on deficiencies in a second environmental risk survey provided by the EAPC. as well as a lack of adequate preparation for possible oil spills.In July, Amir rejected the EAPC’s first environmental risk survey, saying that, at best, it failed to meet the instructions given by the ministry in January 2021, but that it more likely reflected “negligence and perhaps even disregard for our instructions.”In last week’s letter, Amir said that there were still “significant gaps” between the ministry’s January instructions and the updated risk survey submitted by the EAPC earlier this month. Of the many pieces of information that were missing, one related to data on mishaps and pollution events at sea or on land that had occurred on the company’s watch during the years of its activity in Eilat. Just last year, for example, the company and others were convicted of harming protected nature in the Red Sea after damaging more than 2,600 corals off the Eilat coast.

Afghanistan's female judges say they are on the run after the Taliban freed the male rapists and murderers they put behind bars - Female judges in Afghanistan say they are being threatened by men they convicted for rape and murder, who were freed from prison by the Taliban.The BBC spoke to six female former judges who had dealt with cases like murder, torture, rape, and violence against women. The BBC said they were just six of the 220 female judges across Afghanistan who were now in hiding.According to the BBC, every one of them had received death threats and had to change their phone numbers.All of them were also in hiding, changing their location every few days, the BBC reported. They all said the Taliban had visited their former homes as well, the report said.One of the judges, identified as Masooma, sentenced a man to 20 years in prison for murdering his wife. "After the case was over, the criminal approached me and said: 'When I get out of prison, I will do to you what I did to my wife,'" she told the BBC. She said that, since the Taliban takeover, "he has called me many times and said he has taken all of my information from the court offices.""He told me: 'I will find you and have my revenge.'"Another woman named Sanaa, who was a judge for more than 30 years, told the BBC she had received "more than 20 threatening phone calls from former inmates who have now been released."She said that a male relative who returned to her family home was met by a Taliban member looking for her, and that the fighter beat him so badly that he had to go to the hospital.Taliban spokesman Bilal Karimi told the BBC: "Female judges should live like any other family without fear. No-one should threaten them. Our special military units are obliged to investigate such complaints and act if there is a violation."

Is The Price Of Oil All That Matters To Central Banks -DB's Jim Reid has published a remarkable observation in his "chart of the day" note, one which suggests that at least for the ECB, the price of oil - with its widespread social, financial and economic implications - may be all that matters.As Reid writes, "the financial world is trying to work out what the implications are for the energy price shocks we are seeing and whether central banks should tighten policy as a result or keep policy loose to reflect possible demand destruction that it might eventually bring." In response, ECB President Lagarde yesterday warned that the “key challenge is to ensure that we do not overreact to transitory supply shocks that have no bearing on the medium-term."It appears that she was actually addressing her own ECB, referring to the missteps made by her central bank when responding to oil price shocks. Because for all of Lagarde's rhetoric, this is not how the ECB has traditionally respond to big energy moves. On the contrary.As the chart below shows, ever since the ECB came into being they’ve tended to consistently tighten into rising oil prices (green on the graph) and loosen when they notably fall (red). The exception was in March/June this year when they loosened further by increasing the pace of the PEPP. And since the ECB works in concert with the Fed, once can extend this observation and correctly argue that all central banks respond to the price of one commodity.What is remarkable about this chart is that while central banks claim they only care about core inflation instead of headline, it appears ECB’s monetary policy has been closely linked to the ebb and flow of commodities in general, and particularly oil prices, over the last 20 plus years.

China Power Crunch Is Next Economic Shock After Evergrande – Bloomberg - China may be diving head first into a power supply shock that could hit Asia’s largest economy hard just as the Evergrande crisis sends shockwaves through its financial system. The crackdown on power consumption is being driven by rising demand for electricity and surging coal and gas prices as well as strict targets from Beijing to cut emissions. It’s coming first to the country’s mammoth manufacturing industries: from aluminum smelters to textiles producers and soybean processing plants, factories are being ordered to curb activity or -- in some instances -- shut altogether.

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