natural gas hit $2 for the first time in 29 months; lower 48 oil production at a 33 month high; commercial crude oil inventories at a new 20 month high as oil supplies that cannot be accounted for tops two million barrels per day; DUC backlog at 4.9 months after largest increase since June 2020
US oil prices fell for the fourth week in the last five on rising US oil inventories and on concern over the potential for a monetary policy induced recession…after falling 4.2% to $76.34 a barrel last week on stronger than expected US inflation data and on a massive build of US crude inventories, the contract price for the benchmark US light sweet crude for March delivery rose in overseas markets on our holiday on Monday, buoyed by optimism over Chinese demand, continued production curbs by major producers, and Russia’s plans to rein in supply, and opened higher in New York on the last day of trading for that contract on Tuesday, but turned mixed as traders shifted focus to the economic and interest rate outlook ahead of the Wednesday release of the minutes from the Fed's recent policy meeting, and settled 18 cents lower at 76.16 a barrel as persistent concerns about global economic growth outweighed supply curbs and prompted investors to take profits on the previous day’s gains before trading in that contract expired, while the contract price for the benchmark US crude for April delivery, which would be quoted as the price of oil the next day, settled 19 cents lower at $76.27 a barrel....oil prices moved lower for a third straight trading session early on Wednesday, as concerns about fuel demand were stoked by expectations that minutes due from the Fed would indicate a need to hike interest rates. and then tumbled 3% to settle $2.41 lower at $73.95 a barrel, as traders worried that recent economic data would mean more aggressive interest rate increases by central banks, pressuring economic growth and fuel demand....despite Wednesday evening's American Petroleum Institute report of another major crude inventory build, oil prices increased in Asian trading on Thursday on expectations that Russia would cut its oil exports more than previously announced, and then rallied further in New York trading, buoyed by the EIA's report of a surprise drawdown of U.S. gasoline supplies amid rebounding demand for the fuel, that offset their report of another weekly build in commercial crude oil inventories, and finished trading $1.44 higher at $75.39 a barrel on expectations of steep cuts to Russian production next month, even as a stronger dollar and a sharper-than-expected jump in U.S. crude inventories added to demand concerns...oil prices edged higher in volatile Asian trading on Friday, bolstered by the prospect of lower Russian exports, but pressured by rising inventories in the United States and concerns over global economic activity. and then climbed over 2% in early US trading ahead of the U.S. PCE price index data that would help shape the debate over monetary policy, but pared early gains to close 93 cents higher at $76.32 a barrel after U.S. inflation data offered more evidence of an overheated economy and ongoing inflationary pressures, paving the way for the Fed to continue raising interest rates into restrictive territory....oil prices thus finished just 2 cents lower on the week, ending virtually flat as prices were supported by the prospect of lower Russian exports but pressured by rising inventories in the US and concerns over global economic activity, while the benchmark April contract price, which had closed the prior week at $76.55 a barrel, finished 0.3% lower...
meanwhile, natural gas prices finished higher for just the 2nd time in 11 weeks, as major winter storms impacted California and the northern tier and March forecasts turned colder...after falling 9.5% to a 28 month low of $2.275 per mmBTU last week as gas output increased while forecasts turned warmer, the contract price of US natural gas for March delivery opened 11 cents lower on Tuesday as compellingly bearish weather conditions and forecasts pushed prices lower once again, and slid 20.2 cents or almost 9% to a near 29-month low of $2.073 per mmBTU as springlike weather blanketed much of the Lower 48...after testing the $2 level in after hours trading, natural gas prices got half of Tuesday's drop back on Wednesday, rising 10.1 cents to $2.174 mmBTU, as traders turned their attention to a winter storm traversing the country, and the potential for a restart of LNG exports from the long shuttered Freeport terminal...natural gas prices advanced for a second session on Thursday, as traders looked beyond another light winter storage withdrawal to the prospect of incrementally tighter balances heading into spring, and settled 14.0 cents higher at $2.314 per mmBTU...natural gas prices finished the week on a firm note on Friday, rising 13.7 cents to $2.451 per mmBTU, as a chillier March outlook and the continued ramp of the Freeport export facility supported the market, and thus ended 7.7% higher on the week, as trading in the March contract ended, while the April contract for US natural gas, which would be quoted contact next week, finished 8.3% higher at $2.548 per mmBTU...
The EIA's natural gas storage report for the week ending February 17th indicated that the amount of working natural gas held in underground storage in the US fell by 71 billion cubic feet to 2,195 billion cubic feet by the end of the week, which left our natural gas supplies 395 billion cubic feet, or 21.9% above the 1,800 billion cubic feet that were in storage on February 17th of last year, and 289 billion cubic feet, or 15.2% more than the five-year average of 1,906 billion cubic feet of natural gas that were in storage as of the 17th of February over the most recent five years….the 71 billion cubic foot withdrawal from US natural gas working storage for the cited week was a bit more than was expected by a Reuters survey of analysts, whose average forecast called for a 68 billion cubic feet withdrawal, but it was much less than the 138 billion cubic feet that were pulled out of natural gas storage during the corresponding week of 2022, and not even half of the average 177 billion cubic feet of natural gas that have typically been withdrawn from our natural gas storage during the same winter week over the past 5 years…
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending February 17th indicated that even after a big jump in our oil exports, we still had quite a bit of surplus oil left to add to our stored commercial crude supplies for the 9th consecutive week, and for the 28th time in the past 44 weeks, largely due to an ongoing glut of oil supplies that could not be accounted for... Our imports of crude oil rose by an average of 94,000 barrels per day to average 6,326,000 barrels per day, after falling by an average of 826,000 barrels per day during the prior week, while our exports of crude oil rose by 1,451,000 barrels per day to average 4,597,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 1,729,000 barrels of oil per day during the week ending February 17th, 1,357,000 fewer barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly unchanged at 12,300,000 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 have averaged a total of 14,029,000 barrels per day during the February 17th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 15,010,000 barrels of crude per day during the week ending February 17th, an average of 17,000 fewer barrels per day than the amount of oil that our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that an average of 1,093,000 barrels of oil per day were being added to the supplies of oil stored in the US. So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending February 17th appear to indicate that our total working supply of oil from net imports and from oilfield production was 2,073,000 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 inserted a [+2,073,000] barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there was an omission or error of that magnitude in this week’s oil supply & demand figures that we have just transcribed.... However, since most everyone treats these weekly EIA reports as precise, and since these weekly figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably 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 6,725,000 barrels per day last week, which was still 3.1% more than the 6,523,000 barrel per day average that we were importing over the same four-week period last year. This week's 1,093,000 barrel per day increase in our overall crude oil inventories was all added to our commercially available stocks of crude oil, while the amount of oil in our Strategic Petroleum Reserve remained unchanged.. This week’s crude oil production was reported to be unchanged at 12,300,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at a 33 month high of 11,900,000 barrels per day, while Alaska’s oil production was 8,000 barrels per day lower at 447,000 barrels per day and added 400,000 barrels per day to the the rounded national total, 100,000 barrels per day less than Alaska added last week....US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was still 6.1% below that of our pre-pandemic production peak, but was 26.8% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.
US oil refineries were operating at 85.9% of their capacity while using those 15,010,000 barrels of crude per day during the week ending February 17th, down from their 86.5% utilization rate during the prior week, but still close to normal utilization for mid February, when seasonal maintenance is ongoing. The 15,010.000 barrels per day of oil that were refined this week were 1.5% less than the 15,246,000 barrels of crude that were being processed daily during week ending February 18th of 2022, and 7.2% less than the 16,008,000 barrels that were being refined during the prepandemic week ending February 21st, 2020, when our refinery utilization was 87.9%, close to normal for mid-February ...
Even with the decrease in the amount of oil being refined this week, the gasoline output from our refineries was quite a bit higher, increasing by 339,000 barrels per day to 9,428,000 barrels per day during the week ending February 17th, after our gasoline output had increased by 4,000 barrels per day during the prior week. This week’s gasoline production was also 1.7% more than the 9,270,000 barrels of gasoline that were being produced daily over the same week of last year, while 3.8% less than the gasoline production of 9,797,000 barrels per day during the prepandemic week ending February 21st, 2020. Meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 191,000 barrels per day to 4,700,000 barrels per day, after our distillates output had decreased by 155,000 barrels per day during the prior week. With that increase, our distillates output was a bit more than the 4,693,000 barrels of distillates that were being produced daily during the week ending February 18th of 2022, while still 3.0% less than the 4,846,000 barrels of distillates that were being produced daily during the week ending February 21st 2020...
Even with the increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the third time in fifteen weeks and for the 13th time in 28 weeks, decreasing by 1,856,000 barrels to 240,066,000 barrels during the week ending February 17th, after our gasoline inventories had increased by 2,316,000 barrels during the prior week. Our gasoline supplies fell this week because the amount of gasoline supplied to US users jumped by 636,000 barrels per day to 8,910,000 barrels per day, and because our imports of gasoline fell by 113,000 barrels per day to 476,000 barrels per day, while our exports of gasoline fell by 18,000 barrels per day to 768,000 barrels per day.. Even with 12 recent gasoline inventory increases, our gasoline supplies were still 2.6% below last February 18th's gasoline inventories of 246,479,000 barrels, and still about 5% below the five year average of our gasoline supplies for this time of the year…
With the big increase in our distillates production, our supplies of distillate fuels increased for the 3rd time in 8 weeks, and for the 27th time over the past year, rising by 2,698,000 barrels to 121,935,000 barrels during the week ending February 17th, after our distillates supplies had decreased by 1,285,000 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, decreased by 123,000 barrels per day to 3,771,000 barrels per day, and because our imports of distillates rose by 193,000 barrels per day to 414,000 barrels per day, and becausevour exports of distillates fell by 62,000 barrels per day to 958,000 barrels per day... After a run of fifty-seven inventory withdrawals over the past ninety-four weeks, our distillate supplies at the end of the week were were 1.9% below the 119,678,000 barrels of distillates that we had in storage on February 18th of 2022, and about 12% below the five year average of our distillates inventories for this time of the year...
Finally, with over two million barrels per day of oil new supplies that could not be accounted for, our commercial supplies of crude oil in storage rose for the 16th time in 28 weeks and for the 24th time in the past year, increasing by 7,647,000 barrels over the week, from 471,394,000 barrels on February 10th to 479,041,000 barrels on February 17th, after our commercial crude supplies had increased by 16,283,000 barrels over the prior week. With even larger oil supply increases in the weeks following the Christmas refinery freeze offs, our commercial crude oil inventories were at a new 20 month high, up by 13.9% from December 30th, and now about 9% above the most recent five-year average of commercial oil supplies for this time of year, and also almost 47% above the average of our available crude oil stocks as of the third weekend of February over the 5 years at the beginning of the past decade, with the apparent disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels. And even after our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, and then jumped again after February 2021's winter storm Uri froze off US Gulf Coast refining, our commercial crude supplies as of this February 17th were 15.1% more than the 416,022,000 barrels of oil we had in commercial storage on February 18th of 2022, and 3.5% more than the 463,042,000 barrels of oil that we had in storage during the 2nd Covid surge on February 19th of 2021, and 8.1% more than the 443,335,000 barrels of oil we had in commercial storage on February 21st of 2020…
Lastly, with the SPR at a 39 year low and our supplies of all products made from oil trending near multi-year lows over the recent months, we had been watching the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR for a sense of the big picture on petroleum related supplies.. After the commercial crude and distillate inventory increases we've already noted for this week, the total of our oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, and thus including everything from gasoline and jet fuel to propane/propylene and residual fuel oil, rose by 3,302,000 barrels this week, from 1,629,756,000 barrels on February 10th to 1,633,058,000 barrels on February 17th, after our total inventories had increased 19,209,000 barrels the prior week. Even after seven straight big increases, our total petroleum liquids inventories were still down by 484,585,000 barrels, or by 22.8% from their early pandemic high, but they are now up by 3.5% from their December 30th 18 1/2 year low...So, unless such aggregate supplies should begin to drop again in following weeks, this will be our last check of this metric..
This Week's Rig Count
The number of drilling rigs active in the US decreased for the 15th time over the prior 30 weeks during the week ending February 24th, and was 5.0% below the prepandemic level, even after increasing ninety-five times over the past 126 weeks... Baker Hughes reported that the total count of rotary rigs drilling in the US fell by seven to 753 rigs over the past week, which was still 103 more rigs than the 650 rigs that were in use as of the February 25th report of 2022, but was 1,176 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 market with oil in an attempt to put US shale out of business. .
The number of rigs drilling for oil decreased by 7 to 600 oil rigs during the past week, after the number of rigs targeting oil had decreased by 2 during the prior week, while there are still 78 more oil rigs active now than were running a year ago, even as they amount to just 37.3% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and while they are now down 12.2% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations remained unchanged at 151 natural gas rigs, which was still up by 24 natural gas rigs from the 127 natural gas rigs that were drilling during the same week a year ago, even as they were only 9.4% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….
Other than those rigs targeting oil and natural gas, Baker Hughes reports that two "miscellaneous" rigs continued drilling this week: one of those was a directional rig drilling to between 5,000 and 10,000 feet on the big island of Hawaii, while the other was a directional rig drilling to between 5,000 and 10,000 feet into a formation in Lake county California that Baker Hughes doesn't track….While we haven't seen any details on either of those wells, in the past we've identified various "miscellaneous" rig activity as being for exploration, for carbon dioxide storage, and for utility scale geothermal projects....a year ago, there was just one such "miscellaneous" rigs running...
The offshore rig count in the Gulf of Mexico was unchanged at 17 rigs this week, with 16 of those drilling for oil in Louisiana's offshore waters and one also drilling for oil in Texas waters….that Gulf rig count is still up by 5 from the 12 Gulf rigs running a year ago, when 11 Gulf rigs were drilling for oil offshore from Louisiana and one was deployed for oil offshore from Texas….since there aren't any rigs drilling off our other coasts at this time, the Gulf rig count is equal to the national offshore count..
In addition to rigs running offshore, there are still two water based rigs drilling through inland bodies of water this week; those include a directional rig drilling for oil at a depth greater than 15,000 feet in Terrebonne Parish, Louisiana; and a directional rig drilling for oil to between 5,000 and 10,000 feet, inland in Lafourche Parish, Louisiana ...a year ago, there were also two rigs drilling on inland waters...
The count of active horizontal drilling rigs was down by 7 to 693 horizontal rigs this week, which was still 100 more rigs than the 593 horizontal rigs that were in use in the US on February 25th of last year, but was just over half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014.....at the same time, the vertical rig count was down by two to 16 vertical rigs this week, which was also down by 10 from the 26 vertical rigs that were operating during the same week a year ago…on the other hand-, the directional rig count was up by two to 44 directional rigs this week, and those were also up by 13 from the 31 directional rigs that were in use on February 25th of 2022…
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 February 24th, the second column shows the change in the number of working rigs between last week’s count (February 17th) and this week’s (February 24th) count, the third column shows last week’s February 17th 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 25th of February, 2022...
even though the natural gas rig count was unchanged, there were quite a few changes among them to get us there...for starters, there were three natural gas rigs pulled out of West Virginia's Marcellus shale, while there were three natural gas rigs added to the Marcellus in Pennsylvania at the same time, leaving the Marcellus rig count unchanged...at the same time, there were two natural gas rigs pulled out of the Haynesville shale in Texas, while there were two natural gas rigs added to the Permian basin in Texas at the same time... checking the Rigs by State file at Baker Hughes, we find that there were two rigs added in Texas Oil District 7C, which overlies the southernmost counties in the Permian Midland, and that rig counts in the other Texas Permian districts were unchanged, so it's likely that's where they went, although switching an oil rig for a natural gas rig in another basin would also leave the apparent totals unchanged...meanwhile, since the Texas Permian basin count is up by 2 rigs while the national Permian rig count was up by one, we can conclude that one of the rigs pulled out of New Mexico had been drilling in the far west reaches of the Permian Delaware, in the southeast corner of that state, with the other rig most likely pulled from the San Juan basin in the northwest corner.....
elsewhere in Texas, the rig count was down by one in Texas Oil District 6, which we believe represents the addition of an oil rig and the removal of two Haynesville natural gas rigs in that district, based on recent oil rig activity in that area, which we have not seen in adjacent Louisiana, which was unchanged this week, with all natural gas rigs in the northern part of the state... the rig count was also down by one in Texas Oil District 10, which overlies the Granite Wash basin of the Texas panhandle, accounting for one of the rigs pulled from that basin, with the other Granite Wash apparently pulled from Oklahoma at the same time....meanwhile, Oklahoma saw oil rigs added in the Ardmore Woodford and the Cana Woodford, and an oil rig pulled out of the Arkoma Woodford....however, since the Oklahoma state count is down by two, two rigs must have been removed from an Oklahoma formation or formations not tracked by Baker Hughes at the same time...that is also the case with the two rigs pulled out of California; Baker Hughes does not separately cover any basins in that state...meanwhile, the rig pulled out of Colorado had been drilling in the DJ Niobrara chalk of the Rockies front range in that state, where all rigs target oil...
DUC well report for January
Monday of last week saw the release of the EIA's Drilling Productivity Report for February, which included the EIA's January data on drilled but uncompleted (DUC) oil and gas wells in the 7 most productive shale regions (click tab 3)....that data showed an increase in uncompleted wells nationally for the third time in 31 months and by the most since June 2020, even as both well completions and drilling of new wells decreased in January, despite being well below the average pre-pandemic levels...for the 7 sedimentary regions covered by this report, the total count of DUC wells increased by 42 wells, rising from a revised 4,629 DUC wells in December to 4,671 DUC wells in January, which was still 8.1% fewer DUCs than the 5,084 wells that had been drilled but remained uncompleted as of the end of January of a year ago...this month's DUC increase occurred as 1,005 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during January, down by 5 from the 1,010 wells that were drilled in December, while 963 wells were completed and brought into production by fracking them, down by 12 from the 975 well completions seen in December, but up by 219 from the 744 completions seen in January of last year....at the January completion rate, the 4,671 drilled but uncompleted wells remaining at the end of the month represents a 4.9 month backlog of wells that have been drilled but are not yet fracked, up from the 4.7 month DUC well backlog of a month ago, and now clearly rising from the 7 1/2 year low of 4.4 months of four months ago, despite a completion rate that is now about 15% below 2019's pre-pandemic average...
Both oil basin DUCS and natural gas basin DUCs rose during January, and only one basin saw DUCs decrease....the number of uncompleted wells in the Niobrara chalk of the Rockies' front range increased by 22, rising from 539 at the end of December to 561 DUC wells at the end of January, as 128 wells were drilled into the Niobrara chalk during January, while 106 Niobrara wells were completed....at the same time, the number of uncompleted wells remaining in Oklahoma's Anadarko basin increased by 4, rising from 722 at the end of December to 726 DUC wells at the end of January, as 75 wells were drilled into the Anadarko basin during January, while 71 Anadarko wells were completed.... likewise, DUC wells in the Permian basin of west Texas and New Mexico also increased by 4, from 1,079 DUC wells at the end of December to 1,083 DUCs at the end of January, as 437 new wells were drilled into the Permian basin during January, while 433 already drilled wells in the region were being fracked...in addition, DUC wells in the Bakken of North Dakota were up by 1 to 553 by the end of January, as 80 wells were drilled into the Bakken during January, while 79 of the drilled wells in the Bakken were being fracked.....on the other hand, DUCs in the Eagle Ford shale of south Texas decreased by 4, from 482 DUC wells at the end of December to 478 DUCs at the end of January, as 112 wells were drilled in the Eagle Ford during January, while 116 already drilled Eagle Ford wells were fracked........
among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, increased by 2 wells, from 631 DUCs at the end of December to 633 DUCs at the end of January, as 99 new wells were drilled into the Marcellus and Utica shales during the month, while 97 of the already drilled wells in the region were fracked....at the same time, the uncompleted well inventory in the natural gas producing Haynesville shale of the northern Louisiana-Texas border region rose by 13, from 624 DUCs in December to 637 DUCs by the end of January, as 74 wells were drilled into the Haynesville during January, while 61 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of January, DUCs in the five major oil-producing basins tracked by this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) increased by twently-seven to 3,401 wells, while the uncompleted well count in the major natural gas basins (the Marcellus, the Utica, and the Haynesville) was up by fifteen to 1,270 DUC wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas...
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Activists Slow Roll Federal and State Projects In Ohio - Energy In Depth - The process for building new energy-related infrastructure projects can take years because of the extensive environmental reviews and public comment periods that are required before any permits can be issued. That’s true for oil and gas, renewable projects, pipelines and transmission lines. Whether it’s through litigation after exhaustive National Environmental Policy Act (NEPA) reviews have been conducted or bureaucratic red tape, coordinated efforts to delay the construction of critical projects has led to significant delays and in some cases cancellations at both the federal and state levels. Landowners in Ohio who own mineral rights adjacent to or on federal and state lands have been waiting for over a decade to be able to develop their mineral rights. Recall that in 2011, Ohio’s General Assembly approved fracking under state lands, but development failed to take place. Then in 2017, former Gov. John Kasich passed a bill to establish the Oil and Gas Leasing Commission, an entity created to govern the process of shale gas development under state lands. However, that commission sat empty for years with no appointments made. Even after additional language was added to incentivize the commission, the rules were never promulgated, resulting in a de facto moratorium, and as a result, adjacent private landowners’ rights were held hostage. Ohio’s Statehouse recently passed, and Gov. Mike DeWine signed, H.B. 507, allowing for the safe development of oil and natural gas under the surface of state-owned lands after years of obstruction. H.B 507 finally allows for the safe and responsible drilling on state lands by bypassing the Commission and telling state agencies they “shall” sign leases to allow drilling under state-owned land until the Commission adopts formal rules for leasing. But in a par for the course move by environmental activists, those groups are now trying to slow down this process yet again by proposing more bureaucratic red tape for the Commission that would give activists more opportunities to stonewall projects. From the Ohio Capitol Journal: “He and many others pressed the commission for explicit public notice provisions. They want the commission to post parcels up for lease on their website with links to a map and 60-120 days for public comment. The commission should also lay out the factors they’ll consider in their decision. Additionally, they told commissioners to set up an email notification system to alert subscribers of new parcels.” If history is anything to go by, just look at the Wayne National Forest where an updated forest plan underwent extensive environmental review and public comment in 2017, nearly five years later, rules have yet to be published to allow for development to occur and no lease sales have taken place since May 2018.
Ohio Board of Tax Appeals sides with Nexus pipeline in value dispute -The Ohio Board of Tax Appeals has sided with the owners of the Nexus natural gas transmission line in a dispute over the pipeline's value and the amount of taxes owed to Lorain County. It is a defeat for Lorain County Auditor Craig Snodgrass, who fought Nexus after the companies that own the pipeline struck a deal with the state tax commissioner to lower their property tax bills — despite initial promises by the companies to pay many millions of dollars more to local municipalities, entities and organizations in 13 Ohio affected counties. According to a copy of their decision, BTA members Jasmine Clements and Jeff Caswell ruled 2-0 in favor of Nexus and granted its motion to dismiss Snodgrass' appeal. The board declined to award the Nexus partners any attorney fees it incurred to fight the appeal, as they had requested. Snodgrass said Thursday that he is "frustrated," but still has several weeks to decide what to do next. He said Nexus argued that he doesn't have jurisdiction to appeal the tax commissioner's decision, even though attorneys for both the state and Nexus "repeatedly" agreed that county auditors had the right to appeal — even putting language to that effect in a 2022 settlement agreement. He said he agreed to the proposed tax value of $1.68 billion for the pipeline in 2019 and had no reason to appeal it at that time. The Nexus pipeline "will depreciate in value each and every year forever, that's why it was so important to get the value right the first year," Snodgrass said. Taxpayers are "subsidizing (the pipeline) and the legislators are forcing us to subsidize it. I'm mad. This is why our tax bills are so high: Legislators setting the rules that make it prohibitive for us to do our jobs" as auditors, he said. "Everything is slanted toward big business" in Ohio, Snodgrass said. "Where's the homeowner in all this?" "Nexus continues to support the finality of the settlement agreement which provides additional revenue and certainty to local school districts," Nexus spokeswoman Kristen Henson wrote in an email to The Chronicle-Telegram on Thursday. "Should an appeal of the recent decision be filed by Lorain County, the matter will continue through the formal litigation process," she wrote. "If no appeal is pursued into litigation, the settlement agreement will stand, providing greater certainty for all involved."
Encino Energy Utica Update: 900K+ Acres, Drilling Under Tappan Lake - Marcellus Drilling News - Yesterday morning Harrison County, OH, commissioners got a face-to-face update from Encino Energy’s director of external affairs, Jackie Stewart. You may recall that Encino bought out and took over all of Chesapeake Energy’s existing Ohio assets–both shale and non-shale–in November 2018 for $2 billion (see Encino Takes Over from Chesapeake in Ohio Utica; Big Plans). Among the comments made, Stewart told commissioners, “Our wells are running so much more efficiently than they ever have in the past.” She also told them about work being done to drill a well under Tappan Lake in the Muskingum Watershed Conservancy District.
Encino representatives update Harrison commissioners on activities in the county - The Harrison County Board of Commissioners received an update on work being done in the county along with community investments provided by Encino Energy. Jackie Stewart, director of external affairs for Encino Energy, met with the board Wednesday to introduce herself and Encino’s new community relations representative, Zach Kent, to Commissioners Amy Norris, Dustin Corder — the county’s newest commissioners — and Paul Coffland. Stewart said Encino has expanded its geographic footprint over the last couple of years. “When you look at the fact that we’ve got over 900,000 acres, our core footprint has been and will continue to be in Carroll, Harrison, Jefferson, Columbiana counties … but we’re just doing a little bit more in the northern part of the Utica (shale),” she said, adding that the company now has leases in Tuscarawas and Guernsey counties as well. Stewart said the energy company signed a “historic continuous lease” with the Muskingum Watershed Conservancy District. She said it is in the process of drilling and completing a well pad beneath the surface of Tappan Lake. The revenue provided from the lease will allow MWCD to continue to make improvements, she said, adding that officials signed a memorandum of understanding with MWCD where the company will invest annually to its foundation. Stewart said oil production has doubled year after year. She said Encino has increased production by 90% since taking over in 2018. “Our wells are running so much more efficiently than they ever have in the past,” she said, adding that the company closed out 2022 with the best safety record in company history. Stewart said Encino will be sending out information on its Baseline Water Sampling Program, which was established in 2018. The program lists all the items that it tests for and how the testing is conducted. Also, Stewart spoke about community investments. She said the company has already begun receiving requests from organizations within the county. She said input from commissioners is always welcome if they are aware of any projects in need of additional funding. “Intel’s investment (in a site near Columbus) is slated to be $100 billion over the course of 10 years. The shale industry has invested over $100 billion in the same period of time, and the shale industry has done that with no tax exempts,” she said. “… With us, our economic impact is really significant just because of the fact that all of our steel casing is made in Youngstown — 70% of our vendors are in Ohio.” Stewart said company leaders believe natural gas prices will continue to decrease. She said Encino is producing around 32,000 barrels of oil per day. “Ohio has the opportunity to be in the top 10 oil producing states in the country in a few short years,” she said. Kent spoke of Encino’s Community Partnership Program. Since 2019, the company has contributed $1.46 million in its asset area, impacting 66 different organizations. He said he is hoping to broaden the range of organizations. “The more we are able to help, the better,” he said. In 2022, Kent said the program donated toward a number of projects including the Cadiz K-9 Program, the Harrison County Ag Society for a new horse barn, and the Harrison County Military Support Group. Stewart then asked commissioners what the company could do better. Coffland said it does “a fantastic job” communicating with county officials and has been very supportive. Stewart said Encino is projected to have more than 10 wells in the county this year. She offered to provide commissioners with projections, which could be helpful for the school district that also receives revenue from the wells. “Things are going really well in Ohio,” she added. Commissioners thanked Stewart and Kent for attending the meeting. In other matters, county Engineer Doug Bachman opened bids for a centerline striping project that includes 81.74 miles of roadways in the county. Two bids were received — $148,767.67 from AeroMark Co. of Streetsboro, Ohio, and $153,933 from Oglesby Construction of Norwalk, Ohio. He recommended tabling the bids to allow time for him to review. Commissioners moved their next meeting to 10 a.m. Thursday March 2 instead of the usual meeting day of Wednesday, March 1, due to Norris and Corder attending commissioner training in Columbus.
Commissioners offer stance on pipeline - Marysville Journal-Tribune - After weeks of discussion, a statement on behalf of the Union County Commissioners has been filed in support of Columbia Gas’s planned pipeline connector project but not for it going through preserved farmland. The statement came as a response to the notification that Columbia Gas of Ohio filed an expedited petition with the Ohio Power Siting Board to extend the pipeline...
DT Midstream Update: Millennium, NEXUS, Marcellus/Utica Gathering | Marcellus Drilling News - DT Midstream (DTM), headquartered in Detroit, owns major assets in the Marcellus/Utica region as well as other regions. DTM issued its fourth quarter and full 2022 update yesterday. Among major interstate pipelines that serve the M-U region, DTM is a 50% owner (along with Enbridge) in the NEXUS Pipeline, a 256-mile, 36-inch gas transmission pipeline that flows 1.5 Bcf/d of Utica gas from eastern Ohio to pipeline system interconnects in southeastern Michigan (and from there all the way to the Dawn Hub in Ontario, Canada). In 2022, DTM became the majority owner of the Millennium Pipeline, which stretches 263 miles from Corning, NY, to just outside New York City, delivering Pennsylvania Marcellus and Utica gas to utility and power plant markets across New York State and into New England.
40 New Shale Well Permits Issued for PA-OH-WV Feb 6-12 | Marcellus Drilling News - New shale permits issued for Feb. 5-12 in the Marcellus/Utica increased nicely last week. There were 40 new permits issued in total last week, including 25 new permits for Pennsylvania, 11 new permits for Ohio, and four permits issued in West Virginia. The week before, there were only 26 new permits issued. Last week the top receiver of new permits was Seneca Resources, with six new permits for Tioga County, PA. Coterra Energy received five permits for Susquehanna County, PA. In Ohio, Encino Energy and Ascent Resources both received four new permits–in Carroll and Harrison counties, respectively. Armstrong County, Ascent Resources, Bradford County, Carroll County, Chesapeake Energy, Clay County, CNX Resources, Coterra Energy (Cabot O&G), Encino Energy, EQT Corp, Greene County (PA), Gulfport Energy, Harrison County, Marshall County, Monroe County, Mountain V O&G, Olympus/Huntley & Huntley,Seneca Resources, Snyder Brothers, Southwestern Energy, Susquehanna County, Tioga County (PA), Tug Hill Operating, Washington County, Westmoreland County
35 New Shale Well Permits Issued for PA-OH-WV Feb 13-19 | Marcellus Drilling News -New shale permits issued for Feb. 13-19 in the Marcellus/Utica remained elevated last week. There were 35 new permits issued in total last week (down slightly from 40 the week before), including 27 new permits for Pennsylvania, three new permits for Ohio, and five permits issued in West Virginia. Last week the top receiver of new permits was Coterra Energy, with 13 new permits for Susquehanna County, PA. The number two permittee was Apex Energy with five permits in Westmoreland County, PA. Antero Resources, Apex Energy, Ascent Resources, Clay County, Coterra Energy (Cabot O&G), Doddridge County, Guernsey County, Jay-Bee Oil & Gas,Lycoming County, Marshall County, Mountain V O&G, Pennsylvania General Energy, Range Resources Corp, S.T.L. Resources, Susquehanna County, Tioga County (PA), Tug Hill Operating, Tyler County, Washington County, Westmoreland County
Southwestern to Curb Activity in Response to Weaker Natural Gas Market -= Southwestern Energy Co. said Friday it would drop drilling rigs this year in the Appalachian Basin and Haynesville Shale, joining other natural gas-focused producers that have announced plans to curb activity in response to falling prices. “Given near-term market conditions, we have proactively moderated activity, resulting in slightly lower expected production for 2023, and have the flexibility and optionality in our business to adjust as needed,” said CEO Bill Way. The company said it would spend $2.2-2.5 billion this year, or roughly the same as it spent in 2022, to produce slightly less, as inflation continues to take its toll on the industry. Production is expected to average 4.6 Bcfe/d this year, compared with 4.7 Bcfe/d in 2022. Way said the company, one of the largest natural gas producers in the United States and the Haynesville’s biggest operator, would be focused on driving capital efficiencies and reducing costs across its operations in response to inflation. “The team remains highly focused on offsetting inflationary cost impacts by leveraging our strategic supply chain efforts and delivering further operating and development efficiencies,” COO Clay Carrell added during a call Friday to discuss year-end results. “We are targeting further drilling and completion cycle time improvements as well as ongoing completion design and flow back optimization.” After completing the acquisitions of GEP Haynesville and Indigo Natural Resources LLC in 2021, 2022 marked the first full year of operations in Louisiana. Fourth quarter production was up to 427 Bcfe, compared with 385 Bcfe in the year-ago period. The company produced 679 Bcf overall in the Haynesville last year and 1.1 Tcfe in Appalachia, where it has operated for longer. The company’s operations this year would be split nearly evenly between both regions as they were in 2022. Management expects to bring up to 75 wells online in the Haynesville and up to 73 to sales in Appalachia. Natural gas prices have fallen by double digits since December, dipping below $2/MMBtu this week for the first time in years. Management said the company should average between 10 and 11 rigs this year, down from 13 in 2022. Southwestern joins other major upstream players in gassier basins including Chesapeake Energy Corp., Comstock Resources Inc. and EQT Corp., which have recently laid out plans to drop rigs or be ready to do so if prices stay lower for longer.
Toby Rice: 'We have the ability to add a Saudi Arabia’s worth of clean energy per day to the world stage' EQT Corporation chief executive argues for gas to replace coal and address energy security issues Toby Rice is having a moment.The 40-year-old chief executive of US gas producer EQT Corporation has long been making a case for natural gas that seems appropriate for these energy security-conscious and environmentally aware days.Now the self-described “people’s champion of natural gas” is conscious not to miss an opportunity to spread the word. “If you look back on the last 12 months — what did we learn in 2022? We learned that energy security matters, and that without energy security, you cannot transition,” Rice tells Upstream, hours before he is scheduled to take the stage at an industry gathering in Italy.
Equitrans Says MVP Coming in 2023, but ‘Disappointed’ with Permitting Reform Failures by Congress - Equitrans Midstream Corp.’s (EQM) long-delayed Mountain Valley Pipeline (MVP) may gain some necessary permits within the next few months, “which will allow us then to bring MVP into service in 2023,” said CEO Thomas Karam. EQM is expecting the biological opinion from the U.S. Fish and Wildlife Service by next Tuesday, “and based on the permitting timeline announced by other agencies, we expect to receive all of the required permits and approvals over the next few months. This timing will allow for mobilization of construction crews in the summer of 2023, which will position us to bring MVP into service in 2023,” Karam said during the company’s fourth-quarter and full-year earnings conference call. MVP, a joint venture of EQM subsidiary EQM Midstream Partners LP, NextEra Capital Holdings Inc., Con Edison Transmission Inc., WGL Midstream and RGC Midstream LLC, stands alone in potentially bringing an incremental 2 Bcf/d of takeaway capacity to Appalachia. Total work on the project is nearly 94% complete, but the pipeline has faced staunch opposition that has resulted in multiple delays.As its estimate stands now, however, EQM is expecting the U.S. Army Corps of Engineers to issue permits to cross water bodies in the Jefferson National Forest “in mid-April, and subsequent to that, we expect for it to lift the stop-work order and allow work in the forest…,” Karam said.“However, as we all know, we expect project opponents to yet again challenge these duly issued permits,” Karam added. “Projects like the MVP that comply with every process and receive every approval should prevail, which is why we remain committed to the regular permitting path. That said, we also believe that our country desperately needs federal permitting reform,” the CEO noted. In 2022, EQM’s capital expenditures (capex) on MVP alone totaled $199 million, accounting for more than 35% of the company’s total spend during the year. EQM’s capex in 2022 reached $549 million, including its gathering, transmission and water operations. In the final quarter of the year, capex stood at $138 million. Spending on MVP is expected to further increase this year. EQM reported it expects capex on MVP to total $610-$660 million in 2023 – assuming the pipeline comes in-service this year. If the pipeline is not completed this year, the midstreamer estimates 2023 capex for MVP would range from $125-$200 million. If MVP comes online, total capex for 2023, including spending on MVP, gathering, transmission and the company’s water segment, is estimated between $970 million-$1.1 billion. Should more delays incur, capex across all segments is reduced to between $510-630 million. Speaking to the possibility of further delays, Karam also noted EQM was “disappointed that Congress couldn’t pass a permitting reform bill in December during the lame duck congressional session.“Although there are differences between and within the parties as to potential reform, we believe there remains support from both sides of the aisle to work on a bipartisan solution, and we think there continues to be prospects for legislation in the new Congress.” Most recently, former Sen. Pat Toomey (R-PA) in December introduced legislation that would have limited regulatory and litigation delays as a result of laws including the Federal Water Pollution Control Act, the National Environmental Policy Act of 1973 and the Endangered Species Act of 1973. Earlier last year, Sen. Joe Manchin (D-WV) attempted to include language in a continuing resolution that would have overhauled the permitting system while avoiding a potential government shutdown. Opposition to Manchin’s bill from Republicans and progressive Democrats meant the bill died after failing to receive the filibuster-proof 60 votes needed. Manchin has pushed for permitting reform multiple times, as his home state of West Virginia is where MVP is held up on the 3.5-mile crossing of the Jefferson National Forest. EQM also noted it is continuing its investigation into the cause of natural gas escaping from its Rager Mountain Storage field in Cambria County, PA.The leak allowed more than 1 Bcf to enter the atmosphere in early November.The company discovered the leak on Nov. 6 from a single well, which was flooded on Nov. 19 to stop the flow of natural gas and placed one of two planned plugs. A second plug was set on Nov. 20. “We currently do not have permission to inject gas into the Rager Mountain field, but we are having active, productive discussions with” the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA), “and are hopeful that they’ll authorize us to inject gas during the coming season,” said COO Diana Charletta, who joined Karam on the call. EQM has completed inventory tests on the field, and found that storage was reduced by about 1.29 Bcf. “We continue to evaluate whether and to what extent all of the inventory loss was due to venting or whether some’s due to potential migration,” Charletta said. “The root cause investigation phase is now underway. We have engaged the leading firm with expertise in storage field incidents to conduct an independent investigation…” while working with the Pennsylvania Department of Environmental Protection.
Williams Expanding in Northeast, Gulf Coast and West to Move Natural Gas to U.S. Customers, LNG Clients --With its direction aimed at expanding the natural gas business, including deliveries to export LNG, Williams is looking to repeat the 2022 performance, when it delivered record results from its onshore and deepwater operations.“Despite macroeconomic impacts of inflation, higher interest rates and recession risks, Williams delivered outstanding results that exceeded our financial guidance, even after we raised it twice during the year.”During 2022, Williams continued to execute incremental growth projects on the massive Transcontinental Gas Pipe Line Co. LLC (Transco) system, which moves supply around the country and from the Gulf of Mexico (GOM). In addition, Williams has projects on the table to expand Northeast gathering and processing capacity. The Federal Energy Regulatory Commission in January granted Transco a certificate and key permits for the planned Regional Energy Access Expansion project. The project could open up more gas takeaway from the Appalachian Basin to supply Northeast marketsMoving more gas supply to the Gulf Coast for LNG exports is possibly the executive team’s top ambition, putting the Haynesville Shale in the spotlight. Among other things, Williams netted additional commitments, including from Chevron Corp., for the Louisiana Energy Gateway (LEG) project, which would connect more Haynesville gas to Gulf Coast liquefied natural gas facilities and for petrochemical markets. In the LEG transaction with Chevron, Williams plans to construct a greenfield gathering system that connects to Transco.Separately, Williams also clinched a deal to use existing deepwater infrastructure in the GOM to serve increased gas production from the Chevron-operated Blind Faith platform. To expand the fairway to the Gulf Coast, Williams cut deals to purchase NorTex Midstream Partners LP and Trace Midstream’s Haynesville assets. CEO Armstrong said the purchases were “a key link in our Gulf Coast wellhead-to-water strategy.”
Williams to offer natural gas gathering services to Chevron in US - Natural gas processing and transportation firm Williams and has signed agreements with Chevron USA to support natural gas development in the Haynesville basin, as well as in the deepwater Gulf of Mexico (GoM). Under the deals, Williams will offer natural gas gathering services to the Chevron-owned 26,000-acre field in the Haynesville basin, which covers parts of Texas, Arkansas, and Louisiana. Chevron has agreed to a long-term capacity commitment for Williams’ Louisiana Energy Gateway (LEG) project, which will collect natural gas produced from the Haynesville shale basin. Scheduled to be commissioned in late 2024, the LEG project will have the capacity to transfer 1.8 billion cubic feet per day (bcfd) of gas to various clients in the Gulf Coast markets. Furthermore, Williams will use existing infrastructure to support increased production from Chevron’s Blind Faith platform in the Gulf of Mexico. Production at the Blind Faith platform is planned to be increased by 75,000 barrels of crude oil per day, following the completion of the Ballymore tieback by Chevron. Williams will leverage existing connections to the Blind Faith facility to offer subsea natural gas gathering and crude oil transportation services, and onshore natural gas processing services for the production.
U.S. natgas slides almost 9% to over two-year low on warmer weather outlook - (Reuters) - U.S. natural gas futures dropped almost 9% to a near 29-month low on Tuesday, weighed down by forecasts for milder weather and lower heating demand next week than previously expected. Front-month gas futures NGc1 for March delivery on the New York Mercantile Exchange (NYMEX) fell 20.2 cents, or 8.9%, to settle at $2.073 per million British thermal units, their lowest close since September 2020. Data provider Refinitiv estimated 341 heating degree days (HDDs) over the next two weeks in the lower 48 U.S. states. The normal is 405 HDDs for this time of year. HDDs estimate demand to heat homes and businesses by measuring the number of degrees a day's average temperature is below 65 degrees Fahrenheit (18 degrees Celsius). "What we are seeing here and the expectations are that we're going to get through winter without any supply issues," "from a weather viewpoint, right now production seems to be exceeding demand." Refinitiv said average gas output in the U.S. Lower 48 states fell from 98.3 bcfd in January to 97.4 bcfd so far in February, after extreme cold earlier in February froze oil and gas wells in several producing basins. That compared with a monthly record of 99.8 bcfd in November 2022. Refinitiv forecast U.S. gas demand, including exports, would rise from 118.9 billion cubic feet (bcf) this week to 122.6 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Friday. "Mild weather and strong production growth caused the balances to flip, with inventories recently rising above seasonal norms," analysts at Bank of America said in a note dated Monday. On Tuesday, federal regulators approved the partial restart of Freeport LNG's export plant in Texas, including two liquefaction trains, two tanks, and one loop and dock each. Freeport LNG, the second-biggest U.S. LNG export plant, was on track to pull in about 0.5 bcfd of gas from pipelines for a ninth day in a row on Tuesday, according to Refinitiv. When operating at full power, Freeport LNG can turn about 2.1 bcfd of gas into LNG for export. The first cargo of liquefied natural gas (LNG) headed to Europe from the Freeport facility in the United States on Friday since a fire halted operations in June, will be unloaded at Germany's new Wilhelmshaven terminal, as per Refinitiv Eikon data. Last week, Freeport LNG asked federal regulators for permission to put the first phase of its restart plan into commercial operation. Phase 1 includes the full operation of the plant's three liquefaction trains, which turn gas into LNG, two storage tanks and one LNG loading dock. Energy regulators and analysts, however, have said they do not expect Freeport LNG to return to full commercial operation until mid-March or later.
Natural Gas Futures, Cash Prices Rise Ahead of Brief Winter Storm - Natural gas futures strengthened midweek as the ramp-up of full operations at a key export facility combined with the potential for March cold to support the market. With technical trading likely aiding the rally, the March Nymex gas futures contract settled Wednesday at $2.174/MMBtu, up 10.1 cents on the day. April futures climbed 12.1 cents to $2.298. Spot natural gas prices were higher as well, with stout gains on the East Coast and Rockies. NGI’s Spot Gas National Avg. tacked on 34.5 cents to $3.055. With a month and some change left to go in the official natural gas winter heating season, and only a handful of cold days in the near term, traders continue to look for signs that Old Man Winter has some life left in him. The latest models warmed a bit for the next couple of weeks overall, but the longer-range data continues to indicate colder potential as moving deeper into March. The Climate Prediction Center’s (CPC) outlook for weeks 3 and 4 indicates the highest probability of below-normal temperatures are from the Pacific Coast to New England, along the northern third of the country. The Pacific Northwest through the Central Plains, in particular, are at risk for unusually chilly weather. CPC forecasters said a tilt toward below-normal temperatures is likely over the eastern Great Lakes through parts of New England, though probabilities are lower given that some models showed above-normal temperatures reaching northward. Above-normal temperatures are likely over much of the U.S. Southeast. There are equal chances of above- and below-normal temperatures stretching across the country’s midsection to the Mid-Atlantic, according to the CPC. Though it may be too little too late to spark much renewed gas buying in the near term, the long-awaited return of Freeport LNG is now underway after the facility gained federal approval to restart full operations. The export terminal is set to reach 2 Bcf/d of export capacity in the coming weeks, which, at the very least, could provide a floor for gas prices that briefly dipped below $2.000 on Tuesday. Rystad Energy said although the federal approval “couldn’t have come at a worse time for markets” given the recent price decline, with the March Nymex contract set to expire on Friday “market participants can expect more fireworks as the week draws to a close.” Rystad noted that despite the lower price environment, domestic consumption has done little to improve balances and thus, send prices higher. Power demand has been resilient, according to the consultancy, but weekly storage withdrawals have fallen short of expectations as inventories remain firmly above the five-year average.
Natural Gas Futures Shrug Off Light Withdrawal; Cash Prices Surge Out West and in New England - Natural gas futures advanced for a second straight session Thursday as traders looked beyond another light winter storage withdrawal to the prospect of incrementally tighter balances heading into the spring. Physical natural gas prices, meanwhile, surged in the West and the Northeast on near-term wintry conditions. NGI’s Spot Gas National Average jumped $1.900 to finish at $4.955/MMBtu. The March Nymex futures contract rallied 14.0 cents to settle at $2.314 Thursday, adding to a 10.1-cent rally in the day-earlier period to erase the 20.2-cent sell-off that opened the holiday-shortened work week on Tuesday. While bulls will hope for better days ahead, it was another bearish result in the books from the latest government inventory data Thursday, though the Energy Information Administration’s (EIA) print did land on the higher side of consensus expectations. EIA reported a withdrawal of 71 Bcf natural gas from storage for the week ended Feb. 17. The result was slightly stronger than expectations but more than 100 Bcf shy of the five-year average 177 Bcf draw. Prior to the report, a Reuters poll of 14 analysts showed estimates ranging from 51 Bcf to 100 Bcf, with a median pull of 68 Bcf. A Wall Street Journal survey had the same range and showed an average draw of 69 Bcf. Bloomberg produced a median draw of 59 Bcf. NGI modeled a 70 Bcf pull. Total Lower 48 inventories stood at 2,195 Bcf as of Feb. 17, a 15.2% (plus-289 Bcf) surplus to the five-year average, according to EIA. Of the seven storage report weeks of 2023 so far, six have featured notably lighter-than-average withdrawals, EIA historical data show. NatGasWeather pointed to “a more bullish draw in the West and Midwest” as the driving factor behind the larger-than-expected withdrawal in the latest print. This comes as “the key South Central region came in bearish versus expectations.” It is here “where the situation is most dire, running well higher than any of at least the past five years at this point in the season.” While the latest pull marked another in a string of weak prints this winter relative to the recent past, mid-range forecasts point to a cold March that could help compensate, according to EBW Analytics Group. The Freeport LNG export facility also is ramping back up after a fire last year, and this could add more than 2 Bcf/d of demand for gas by the spring. “As chillier temperatures, extensive coal-to-gas switching near 4.0 Bcf/d, and Freeport’s slow ramp higher collectively add demand for natural gas, storage surpluses are projected to flatten and decline, likely setting the stage for a bounce higher in Nymex futures,”
US natgas up nearly 6% on colder weather forecasts, contract expiry (Reuters) - U.S. natural gas futures gained close to 6% ahead of the expiry of the front-month March contract on Friday on forecasts for colder weather and higher heating demand over the next two weeks than previously expected. On its last day as front-month, gas futures NGc1 for March delivery on the New York Mercantile Exchange (NYMEX) rose 13.7 cents, or 5.9%, to settle at $2.451 per million British thermal units (mmBtu). The contract has risen 7.7% so far this week, after briefly dropping below $2 per mmBtu on Wednesday. "We are seeing support in US gas markets this week from a combination of shifts cooler on weather outlooks, confirmation of 2 (LNG) trains at Freeport restarting and some early announcements that drillers are cutting back on plans for 2023," Data provider Refinitiv estimated 355 heating degree days (HDDs) over the next two weeks, up from 347 HDDs estimated on Thursday. The normal for this time of year is 342 HDDs. HDDs estimate demand to heat homes and businesses by measuring the number of degrees a day's average temperature is below 65 degrees Fahrenheit (18 degrees Celsius). With cold weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 119.0 billion cubic feet per day this week to 121.4 bcfd next week. Refinitiv said average gas output in the U.S. lower 48 states fell from 98.1 bcfd in January to 97.4 bcfd so far in February, due to a cold spell earlier in February which froze oil and gas wells. That compared with a monthly record of 99.8 bcfd in November 2022. On Wednesday, Chesapeake Energy said it would drop three drilling rigs in coming months and would reduce gas output by 4% to 6% this year. The move followed Comstock Resources, which earlier disclosed it would take down two rigs in coming months due to weaker prices. "With the upcoming arrival of March and the roll to the April futures as the prompt contract, the weather factor will be diminishing in importance in forcing the market to rely heavily on a supply-side response to current low pricing," The U.S. Energy Information Administration (EIA) said utilities pulled 71 billion cubic feet (bcf) of gas from storage during the week ended Feb. 17. That was more than the 67-bcf decrease analysts forecast in a Reuters poll. On Tuesday, Freeport LNG got approval from federal regulators to partially restart commercial operations at its Texas plant after an outage caused by a fiery blast last June that lasted more than eight months. The second-biggest U.S. LNG export plant was on track to pull in about 0.75 bcfd of gas from pipelines for the third day in a row on Friday, according to Refinitiv. Freeport LNG, when operating at full power, can turn about 2.1 bcfd of gas into liquefied natural gas for export. However, energy regulators and analysts, have said they do not expect Freeport LNG to return to full commercial operation until mid-March or later.
US energy firms use Ukraine war to lock in long-term gas contracts, report says -US oil and gas companies are pushing to solve the short-term problem of a tight European gas supply, driven by Russia’s invasion of Ukraine, with long-term liquefied natural gas (LNG) contracts, a new report shows.The US fossil fuel industry has locked in 45 long-term contracts and contract expansions since the start of the war, according to research by Friends of the Earth, Public Citizen and BailoutWatch. That’s a major increase from the 14 such contracts signed in 2021.While price volatility for gas in Europe is already easing, most of the new contracts won’t deliver gas until 2026 or later, after which they will lock in purchases for 20 years or more.“LNG terminals are massively expensive, multi-decade investments,” said Lukas Ross, a co-author of the report and program manager for Friends of the Earth. “In order for a bank or other investor to feel comfortable writing a check for something like this, they need market certainty. And the way that certainty is delivered is through long-term contracts. But a short-term supply crunch should not be solved with long-term infrastructure.”And then there’s the climate question. Taken together, the 2022 LNG contracts total 58.1m metric tons of LNG every year – that’s more than half the gas burned for cooking and heating in US homes in 2021. These contracts represent 351m metric tons of carbon dioxide emissions a year, equivalent to the yearly emissions of 94 coal plants or one-third of all US households.“How many of these projects are built – and how many years of extraction and emissions are locked in – is perhaps the most urgent climate policy question in the US today,” Ross said.The US government has fast-tracked the permitting process for several of the proposed LNG terminals, many of which had been stalled for years before the invasion of Ukraine. One terminal that Sempra Energy has been trying to build in Port Arthur, Texas, since 2019, for example, announced in January 2023 that it had secured contracts covering 80% of its output for the next 20 years, smoothing the path to construction.With European demand already drying up and EU leaders hesitant to sign long-term gas deals that conflict with their countries’ climate commitments, some companies are now looking to increase exports to Asian markets instead. “There’s somewhat of a bait and switch going on here,” said Alan Zibel, research director for Public Citizen. “The public have been told that these terminals and these exports are to help Europe, but in reality, the bulk of the contracting volume is still going to Asia.Oil and gas companies that have been trying to build export terminals on the Pacific coast for years to more easily reach customers in Asia have found a home in Mexico. Multiple projects are being built there, most of which will still go through US permitting processes because the gas they will be exporting will flow exclusively from the US.Meanwhile, US ratepayers are experiencing soaring prices at home. “The climate point is, of course, crucial and important, but this is also directly opposed to the interest of US consumers,” Zibel said.
Green groups take aim at Biden's narrative on LNG exports - The war in Ukraine and its fallout triggered immense new commercial interest in U.S. potential to export additional liquefied natural gas, so much so that U.S. suppliers have inked more than four dozen long-term contracts and contract expansions since the war in Ukraine began. There are two prevailing accounts of this war-driven surge worth taking a look at as the war approaches its one-year mark. One story, the one being told by environmental NGO Friends of the Earth and liberal watchdog group Public Citizen in their new LNG report this morning is that the sector has unethically cashed in on the war’s effects to energy markets and that President Joe Biden enabled it by endorsing more exports.Incidentally, that energy companies have leveraged the war to the advantage of their business is an argument Biden has made repeatedly with regard to the oil market, but the similarities end there.Biden has treated gas differently. In the other account of things, one largely shared between the Biden administration and the LNG sector, Europe needs more gas from its friends across the Atlantic, and it needs the additional export authorizations to support more exports.The FOE-Public Citizen joint report itemizes 45 long-term contracts and contract expansions to supply LNG entered into since the war began last February, although a few of the contracts involving Tellurian have been canceled. The count is up from 14 in 2021.All of these contracts involve future supply, and most of the projects involved in these supply and purchase agreements have not yet even reached final investment decisions. European buyers have been a party to a lot of these contracts, although they’ve been outpaced by Asian buyers.The Biden administration jumped at the opportunity to facilitate more LNG shipments from existing export terminals after the war began and authorized new exports, having previewed more LNG supplies as a ready solution in the weeks just before the war began.We observed that Biden’s pledge to get Europe more LNG put him on a collision course with his environmental constituencies, and it certainly has.“LNG exports are a ploy to prolong the era of fossil fuels. If Big Oil’s export agenda remains a blindspot for the Biden administration, then the President’s climate legacy is at risk,” said Lukas Ross of Friends of the Earth, a co-author of the report, which dismisses the expansion of gas infrastructure tied to these long-term contracts as a permanent solution to short-term volatility.
After Explosion, Freeport LNG Rejoins the Gulf Coast Energy Export Boom - Federal regulators have cleared a gas terminal on the Texas coast to restart commercial production of liquified natural gas for export, eight months after an explosion rocked the facility and nearby towns.Subsequent investigations revealed a host of problems with Freeport LNG—which super-cools fracked gas and loads it onto seafaring tankers—from overworked staff to overlooked engineering reports, which contributed to circumstances that led highly-combustible methane to leak from a pipe and catch fire last June.Earlier this month, federal authorities presented findings at a public hearing and said that Freeport LNG had corrected safety issues and repaired damage. On Tuesday, the company announced that it received regulatory approval to get back to business. Michael Smith, a New York billionaire and founder of Freeport LNG, said in a statement that staffing increases and procedural improvements at the terminal would “enhance operational excellence.” Freeport LNG will rejoin the energy export boom already unfolding on the Gulf Coast. It’s one of five working gas terminals in Texas and Louisiana that have cropped up in the last seven years and turned the U.S. from a major gas importer to the world’s top exporter. As gas prices abroad remain significantly higher than prices at home, most of those terminals have expansion plans. New projects slated for the Rio Grande Valley of Texas and Lake Charles, Louisiana, have been met with protest. All of them aim to sell the bounty of Texas’ fracking on international markets. These are high times for global gas traders. The disruption of Russian gas to Europe has raised prices, encouraging developers and fueling the buildout along the Gulf. According to a report released Wednesday by Friends of the Earth, BailoutWatch and Public Citizen, LNG exporters finalized 45 long-term deals in 2022 to sell U.S. gas abroad, up from 14 in 2021 and three in 2020.Lukas Ross, a program manager at Friends of the Earth and an author of the report, said “the industry is shamelessly exploiting the crisis in Europe in order to lock in another generation of infrastructure.”Despite the focus on Europe, he said, Asian buyers accounted for most long-term contracts for U.S. LNG, exported primarily from the Gulf Coast. Freeport LNG lacks long-term contracts because it rents its facility for gas suppliers to execute their own contracts with buyers abroad. Suppliers get the gas—a mixture primarily composed of methane—from Texas shale formations cracked open through hydraulic fracturing. For domestic consumption, it gets to users via pipelines. But for shipment and sales overseas it must be super-cooled and compressed through an energy-intensive process into liquified natural gas. That process happens in compressor trains at export facilities, where the liquid hydrocarbon is then stored in giant tanks at about -260 degrees Fahrenheit before export. According to a review presented this month by the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA), the explosion at Freeport LNG happened when a pressure release valve failed to open, causing a pipe to overheat and burst.
U.S. crude oil exports to be in demand this year as trade flows reshuffle - U.S. crude oil exports that have been boosted by a trade flow reshuffle in the aftermath of Russia’s invasion of Ukraine will remain elevated this year as Europe and Asia search for supplies, company officials and analysts said. Western sanctions on Russia’s crude and oil products have opened the door to rising demand for U.S. crude grades as many European countries have become thirsty for alternative supplies. This year, Russia’s oil is expected to continue flowing to India and China, while heightened volumes of U.S. crude will go to European and Asian customers. “A key change in flow is U.S. crude going to Europe,” Colin Parfitt, Vice President of Midstream for Chevron Corp CVX.N, told Reuters on the sidelines of the Argus Americas Crude Summit. “For this year, I’m pretty confident Europe is short of Russian oil, and we’ll see more U.S. crude there.” Exports of U.S. crude to Europe reached nearly 1.69 million barrels per day (bpd) in December, the highest in at least two years, according to data and analytics firm Kpler. It has since eased to about 1.42 million bpd in February. As U.S. refineries on the Gulf Coast run at high levels, barrels from the prolific Permian Basin will be exported, said Brian Freed, chief executive of oil pipeline and storage operator EPIC Midstream. “Whether they go to Canada, or somewhere else in the United States, or to Europe or Asia, they’re going to end up on the water to clear the basin,” Freed told Reuters. Customers in Asia and India are buying discounted Russian Urals crude after Western nations imposed an unprecedented $60 a barrel price cap on Russian oil in December. About 25% of Indian crude imports are now coming from Russia, said Amit Bilolikar, Deputy General Manager for Bharat Petroleum’s crude trading desk. Bilolikar sees U.S. exports to India increasing, after the United States recently exported an all-time high record volume to Asia. China also is expected to buy more U.S. crude as the country eases coronavirus restrictions, said Matt Smith, Lead Oil Analyst for the Americas at Kpler.
Critics: GOP Push to Boost Oil, Gas Exports Won’t Lower Americans’ Energy Bills - Republicans and industry executives say Biden administration policies are preventing the nation’s oil and gas producers from going full throttle and expanding exports, which they say will lower costs for consumers in the United States and make global energy supplies more secure and cleaner.With Republicans regaining House majority after November’s midterm elections, GOP leadership is charting a 180-degree reversal in energy policy from the one carved by Democrats over the last four years that saw concerns about climate change, environmental protection, and renewable power pushed as “green energy” emphases.House Republicans have introduced a 17-bill “Unleash America’s Energy” package that includes seven proposals that address oil and gas regulation, and push for greater capacity to export them as a way to remedy “artificial” policy restrictions that have increased costs. The bills “will increase American energy production, lower energy costs, strengthen domestic supply chains, and protect America’s energy grid. The various pieces of legislation being considered today will move the nation forward in our effort to enhance and strengthen American energy security,” President and CEO of the Independent Petroleum Association of America (IPAA) Jeff Eshelman told Congressional lawmakers in a Feb. 7 hearing in Washington.Democrats, some economists, and a range of consumer advocates argue that since domestically produced oil and natural gas are both globally traded commodities, world events dictate consumer prices—as they are doing now—and, therefore, proposals to “produce our way to lower costs” are poorly camouflaged attempts by an industry already enjoying record profits to degrade environmental regulations.“Our record natural gas exports have radically upended domestic energy markets, forcing American families to compete with families in Berlin and Beijing for U.S.-produced energy,” Public Citizen Energy Program Director Tyson Slocum said during the Washington hearings, noting with domestic oil and gas sold on global markets, the fuel prices Americans pay are now “directly influenced by global calamities.”Among the proposals are measures that would mandate 30-day federal approval of “cross-border energy infrastructure,” aka, pipelines; remove “public interest” when the U.S. Department of Energy (DOE) weighs natural gas export proposals; repeal the federal Natural Gas Tax; prohibit a president from banning fracking; and require the National Petroleum Council to research U.S. refinery capacity and needs.The two resolutions “express the sense” that there should be “no restrictions” on oil and gas exports, and “disapproval” of Biden’s revocation of the Keystone XL pipeline permit.The 17 bills, which also include proposed reforms of the Clean Air, Toxic Substances, Solid Waste, and Inflation Reduction Acts, were vetted in Feb. 7–9 hearings before the House Natural Resources and Energy & Commerce committees in Washington, and in Feb. 13–16 Texas field hearings. Some could be up for adoption on the House floor by late March.
Biden urged not to approve oil terminals that could create ‘carbon bombs’ Joe Biden’s administration has been urged not to sink its own climate goals by approving an unprecedented ramp-up of oil export infrastructure off the Texascoast that could result in planet-heating emissions equivalent to three years of the US’s entire emissions output.The federal government has already quietly approved the Sea Port oil terminal project, a proposed offshore oil platform located 35 miles off the Texas coast, south of Houston, and will decide whether to allow three other nearby oil terminal proposals. Combined, the four terminals would expand US oil exports by nearly 7m barrels every day, handling the capacity of half of all current national oil exports.Should all of these projects be allowed to proceed and then operate at full capacity for their expected 30-year lifespan, it will result in an incredible 24bn metric tonnes of greenhouse gases once the transported oil is burned, an analysis conducted for the Guardian by Global Energy Monitor has found.These huge “carbon bomb” projects, critics say, fatally undermine Biden’s image as a president who has acted decisively to stem the climate crisis. No new major fossil fuel infrastructure can be built if the world is to avoid dangerous global heating, the International Energy Agency has warned.“The amount of oil going through these projects, and the resulting emissions, are pretty astounding,” said Baird Langenbrunner, an analyst at Global Energy Monitor, who added that the emissions total is likely a worst-case scenario as it is unlikely all four terminals will be built and then operate at full capacity for decades.“But even if the emissions are a bit lower then, we are fast-forwarding ourselves to the date where we have to stop completely emitting,” said Langenbrunner. “Any extra emissions are in direct conflict with climate goals and it’s hypocritical for the Biden administration to allow these things to get built and then say the US wants to decrease its own emissions.”The oil shipped from the planned terminals would be extracted from the vast Permian basin that lies beneath Texas and New Mexico, and fed through a network of pipelines to huge tankers that would convey it from the Gulf of Mexico to buyers overseas. The emissions from the burned oil would not count towards the US’s total carbon pollution, which Biden has vowed to halve this decade, but will still escalate the disastrous climate crisis.The Sea Port oil terminal, a joint venture between Enterprise, Enbridge and Chevron, will be the US’s largest oil export terminal once built, with a capacity of 2m barrels a day. This is around a quarter of all the oil the US currently exports each day and is part of a national boom in oil extraction that will hit record levels this year and next, despite Biden’s climate pledges and Republican claims that the US president has shut down domestic drilling.The project will link 140 miles of land-based and underwater pipelines to an onshore storage facility near the city of Freeport. Two underwater pipelines will run to the deepwater port located offshore, a key requirement for an oil industry that is keen to shift huge amounts of the resource from the Permian basin but has been frustrated by a lack of deep ports on the Texas coast with the capacity for the very largest oil tankers.In November, the maritime administration, an arm of the US Department of Transport, approved the construction of the Sea Port oil terminal, referencing the heightened demand for new oil and gas in Europe following Russia’s invasion of Ukraine. The project “is in the national interest because the project will benefit employment, economic growth, and US energy infrastructure resilience and security”, the agency wrote in its decision. “The port will provide a reliable source of crude oil to US allies in the event of market disruption.”
Highly paid oil rig worker merits overtime, U.S. Supreme Court says -- (Reuters) - An oil rig supervisor who earned more than $200,000 a year working for Houston-based Helix Energy Solutions Group is entitled to overtime pay, the U.S. Supreme Court ruled on Wednesday in a decision with costly implications for the oil and gas industry. The court in a 6-3 decision authored by liberal Justice Elena Kagan decided that because the rig supervisor, Michael Hewitt, was paid a daily rate of $963 and not a salary, an overtime pay exemption in federal wage law for highly paid workers did not apply to him.The justices affirmed a 2021 ruling by the New Orleans-based 5th U.S. Circuit Court of Appeals that Helix must face Hewitt's 2017 lawsuit seeking overtime pay. That lawsuit now goes back to a federal judge in Houston. A 1940 regulation holds that highly compensated workers - currently defined as those earning $107,000 a year or more - would not receive overtime pay if they have supervisory duties and are paid at least $455 per week in the form of a salary.Kagan said the text of the regulation made clear that it did not apply to employees who are paid based on how many days they work and are not guaranteed minimum weekly wages. Helix was backed in the case by oil and gas trade groups including the American Petroleum Institute, which said in briefs to the justices that supervisors in the industry are routinely paid daily rates and work long hours. A ruling favoring Hewitt would require companies to pay overtime premiums and invite a flood of lawsuits from highly paid workers, the groups added.Conservative Justices Clarence Thomas, Amy Coney Barrett and John Roberts joined the court's three liberal members in the ruling.Justice Brett Kavanaugh, in a dissent joined by fellow conservative Justice Samuel Alito, wrote that because Hewitt earned a set daily rate, he knew he would be paid at least that much for any week in which he worked. That coupled with his management duties made him exempt from overtime pay, Kavanaugh said.Conservative Justice Neil Gorsuch in a separate dissent said Helix's appeal should have been dismissed for procedural reasons.
U.S. Crude Production Holds Strong Amid Fresh Signs of Demand Growth - American exploration and production (E&P) companies last week continued to pump oil at a robust pace, maintaining output at the highest level of the pandemic era. E&Ps produced 12.3 million b/d for the week ended Feb. 17, even with the prior week and the high mark of 2023, data from the U.S. Energy Information Administration’s (EIA) latest Weekly Petroleum Status Report showed. It also kept crude production at the highest level since March 2020, when widespread coronavirus outbreaks arrived in the United States.EIA’s latest result, released Thursday, comfortably outpaced the year-earlier level of 11.6 million b/d. E&Ps posted a record 13.1 million b/d of oil output in March 2020, shortly before public officials declared the global pandemic.Total petroleum demand last week, meanwhile, rose 5% week/week. Domestic consumption, which declined 6% the prior week, has seesawed early in 2023 amid a robust job market that is supporting consumer spending on air travel and, conversely, forecasts for a recession tied to elevated inflation and rising interest rates.Total petroleum products supplied over the last four-week period averaged 20.0 million b/d, down 8% from the same period last year. Over the same stretch, motor gasoline demand averaged 8.5 million b/d, down 1%, while distillate fuel product consumption averaged 3.8 million b/d, down 14%. Jet fuel product supplied was up 1% to 1.5 million b/d..
Diamondback to Hold Permian Production Steady, Sees ‘Tight’ Natural Gas Takeaway - Diamondback Energy Inc. has no plans to accelerate oil production growth despite signs of impending tightness in the global market, according to management. “I don’t think the macro conditions are dictating any kind of production growth currently,” CEO Travis Stice told analysts. He cited uncertainty around monetary policy, the pace of oil demand recovery in China, and “Russian barrels that are still finding their way into the market. So it doesn’t appear to me that the macro conditions have fundamentally changed. And…perhaps most importantly, the feedback we get from our shareholders [is] encouraging us to continue to embrace a shareholder return model.” CFO Kaes Van’t Hof echoed Stice’s sentiments. “We continue to invest in high-return projects while not having to change our activity plan on a monthly basis trying to follow the crude price,” Van’t Hof said. “The plan is the plan, and this steady state of activity has produced good results today and no need to change that while it’s working right now.” Midland, TX-based Diamondback operates in both the Midland and Delaware sub-basins of the Permian.
New Mexico senators seek federal funds for abandoned oil wells - Federal funds could go to research to find, and study abandoned oil and gas wells in New Mexico and throughout the U.S., after dollars were previously earmarked for state efforts to clean up the facilities.New Mexico’s Democrat U.S. Sens. Ben Ray Lujan and Martin Heinrich, along with Republicans Sen. Kevin Cramer of North Dakota and Markwayne Mullin of Oklahoma introduced the Abandoned Well Remediation Research and Development Act (AWRRDA) Wednesday, aiming to increase funding for the work.This follows the Lujan-sponsored Revive Economic Growth and Reclaim Orphaned Wells (REGROW) Act which was included in the Infrastructure Investment and Jobs Act passed in 2021 to provide funds to states remediating orphaned wells.Wells are deemed “orphaned” when operators find them financially unviable and abandon them.Typically, states require bonding when a well is abandoned but that funding can be inadequate as a well can cost up to $50,000 to remediate and thousands more to repair the land. In New Mexico, there were an estimated 1,700 such wells, with the REGROW Act funds quadrupling the rate of the State’s remediation efforts from about 50 wells a year to 200, according to the Oil Conservation Division.There were an estimated about 2 million abandoned oil and gas wells across the U.S. Lujan said more work was needed to find additional abandoned wells, study their environmental impacts and develop new strategies to plug them more effectively.The wells when left orphaned are usually also unmonitored, meaning they can leak air and water pollution into the environment.The AWRRDA would earmark $30 million in federal funds in Fiscal Year 2023, along with $31.25 million in FY 2024, $32.5 million in FY 2025, $33.75 million in FY 2026 and $35 million in FY 2027.“There are more than 2 million abandoned oil and gas wells across America that pose tremendous health, safety, and environmental risks to the surrounding communities,” Lujan said. Heinrich pointed to abandoned wells emitting methane, a greenhouse gas and key component of extracted natural gas that can be released into the environment through leaks at oil and gas facilities, including pipelines, throughout the industry and fossil fuel supply chain.
Pay and Plug: Federal Funds Spur Cleanup of Lost Oil Wells - A century after oil barons scoured Texas for prime plots from which to extract black gold, another boom is underway: the plugging of thousands of abandoned oil wells. It’s an oil rush in reverse, spurred by the promise of federal money.In 2021, President Biden signed the Bipartisan Infrastructure Law, which released $4.7 billion to states and federal agencies for plugging fallow oil and gas projects known as “orphan wells” if they lacked an owner.“There has never been federal money made available to plug these wells,” said Adam Peltz, a lawyer with the Environmental Defense Fund, an advocacy group.Each leaky well could pose a grave environmental danger to surrounding areas in the form of a methane plume or groundwater contamination. Yet closing a single orphan well can cost tens of thousands of dollars.One federal agency that is beginning to resolve this problem is the National Park Service, which has started using the funding to build a four-member team of orphan-well detectives. Its mandate is to track down the dirtiest orphan wells on more than 84 million acres of federal lands the agency oversees and plug them — which had previously been a pipe dream.In January, the service’s inaugural project began: to plug 10 wells spread throughout a labyrinth of bayou canals in Jean Lafitte National Historical Park and Preserve in southern Louisiana.The work is expensive. Forrest Smith, a petroleum and environmental engineer at the agency, estimates that each well in this park will cost about $100,000 to close. With $9.8 million in funding for current projects — pulled from the billions allocated broadly to state governments and federal agencies — and millions more on the way, his team is eyeing several dozen more wells across the country for closure. It’s the first dent in a list of about 2,000 wells on the federal lands under the stewardship of the park service.The grand tally of U.S. wells that have been abandoned or that do not have an owner is propagating like an algae bloom. In 2018, the Interstate Oil and Gas Compact Commission recorded just over60,000 orphan wells nationwide. By 2021, that number hadsurpassed 130,000.And that’s probably nowhere near the true total. Between the patchwork of databases, the inconsistent quality of records and the varying definitions for categorizing wells, even ballpark numbers are difficult to establish. The interstate commission estimates there may be 800,000 undocumented orphan wells. “There’s still this huge uncertainty,” said Mary Kang, a professor at McGill University who monitors the efforts to assess to quantify orphan wells.
Douglas County landfill takes remnants of Keystone pipeline oil spill - (news video) Thousands of tons of crude oil impacted soil and solids from the Keystone spill in Kansas are now making their way to the Omaha area.
Settlement reached after tanker spill in Colorado - The Colorado Natural Resources Trustees announced that they resolved a natural resource damage claim under the Federal Oil Pollution Act through a $245 thousand settlement with MTY Trucking. On April 27, 2021, a tanker truck rolled over on Highway 36 near Lyons. It spilled approximately 2,000 gallons of gas into North St. Vrain Creek. The state conducted a damage assessment which found injuries to aquatic life and habitat downstream of the crash site. More than 800 trout died as a result of the spill, according to Colorado Parks and Wildlife. “This accident damaged the local habitat and harmed an already vulnerable river ecosystem still recovering from the 2013 flood,” said Attorney General Phil Weiser, who serves as chairman of the Colorado Natural Resources Trustees. “With this result, we are holding accountable the responsible party, and we are in a position to remediate the damage.” Insurers for MTY Trucking paid the state’s natural resources damage claim. They made a separate $18 thousand payment to the Federal Government resolving a similar claim.
Bakken Natural Gas Price Hits Lowest Level Since 2020 Amid Regional Supply Glut - Bakken Shale benchmark natural gas prices have hit their lowest point in more than two years, the result of an oversupplied Midwestern market, according to the state’s Department of Mineral Resources (DMR). The price of natural gas delivered to TC Energy Corp.’s Northern Border pipeline at Watford City, ND, fell to $1.91/Mcf as of Thursday (Feb. 16). This price is the lowest seen since December 2020, DMR’s Lynn Helms, oil and gas division director, told reporters during a press briefing. The oil-to-gas price ratio for North Dakota producers currently stands at about 40-to-one, Helms noted. Since natural gas in North Dakota is mainly produced as a byproduct of oil, shutting in gas production means missing out on the much higher oil revenues. Meanwhile, the pressure to reduce flaring means any gas that is extracted must be captured and sent somewhere. Bakken gas has traded at a discount to other regions of the country, namely those with access to premium markets such as the West Coast and Gulf Coast. For example, Devon Energy Corp. said its average realized gas price during the fourth quarter in the Williston Basin was 44 cents/Mcf, versus $5.57/Mcf in the Powder River Basin (PRB). The PRB has emerged as a crucial swing supplier to West Coast markets amid pipeline constraints out of the Permian Basin. Midstream firms are pursuing projects to expand pipeline capacity from the Bakken to the Cheyenne hub in Wyoming in an effort to access higher prices. In the meantime, Williston producers can capture value from the high natural gas liquids (NGL) content of Bakken production, said North Dakota Pipeline Authority director Justin Kringstad, who joined Helms at the press conference. “We…have some of the richest natural gas in the world here in the Bakken,” Kringstad said. He explained that Bakken NGLs are shipped to markets including the Midcontinent, Gulf Coast and Canada. On the dry gas side, however, “certainly we’re largely tied to pricing on Northern Border as it heads down into the Ventura market, the Chicago market, largely influencing that North Dakota price for that component of that gas value chain.” NGI’s Northern Border Ventura price for delivery during Feb. 18-21 averaged $2.115/MMBtu. N Oil production averaged 956,288 b/d, down from 1.1 million b/d in November, according to preliminary data. Natural gas output fell to 2.64 Bcf/d from 3.03 Bcf/d. Permitting showed an uptick, however, with 94 wells permitted in December versus 86 in November. January’s permit count was 79. Helms called the permitting numbers “healthy,” and noted that the state’s drilling rig count remained “solidly in the mid 40s” as of Thursday. Similarly, there were 18 active hydraulic fracturing crews in the state as of Thursday, versus 19 around the same time last month.
Energy agency chief: "No excuse" for high methane emissions (AP) — The International Energy Agency on Tuesday accused fossil fuel industries of doing too little to curb methane emissions and undermining global climate goals to limit warming. Economic uncertainty, high energy prices and concerns over the security of supply — which should have led to emissions cuts in 2022 — were ineffective as methane emissions remained “stubbornly high,” it said. “Methane cuts are among the cheapest options to limit near-term global warming,” said IEA’s executive director Fatih Birol. “There is just no excuse.” The IEA’s annual Methane Gas Tracker report found that 75% of methane emissions from the oil and gas sector can be reduced with cheap and readily available technologies. Methane, which makes up natural gas, can escape into the air from oil and gas infrastructure. Fossil fuel companies may also flare or burn off excess gas which can release methane into the atmosphere. The report slammed oil and gas majors’ refusal to pay up the some $100 billion needed for technologies to spearhead the emissions cuts, which is less than 3% of the industry’s profits in 2022. Energy giants like Shell, BP, ExxonMobil and others reported record profits last year as Russia’s war in Ukraine drove up oil and natural gas prices, spurring calls for the companies to do more to contain climate-changing emissions and help households and businesses that saw their utility bills explode.
Fracking Wastewater Causes Lasting Harm to Key Freshwater Species - Extracting fossil fuels from underground reservoirs requires so much water a Chevron scientist once referred to its operations in California’s Kern River Oilfield “as a water company that skims oil.”Fracking operations use roughly 1.5 million to 16 million gallons per well to release oil and gas from shale, according to the U.S. Geological Survey. All that water returns to the surface as wastewater called flowback and produced water, or FPW, contaminated by a complex jumble of hazardous substances in fluids injected to enhance production, salts, metals and other harmful elements once sequestered deep underground, along with their toxic breakdown products. No single U.S. agency collects oil spill data. But a 2017 study of four states found that up to 16 percent of fracked wells reported a spill each year between 2005 and 2014, totalling more than 6,600 spills. In Alberta, an estimated 2,500-plus spills of flowback and produced water occurred from 2005 to 2012, Tamzin Blewett, an ecotoxicologist at the University of Alberta and her colleagues reported in a 2020 review. More than 113 of those spills entered freshwater lakes and streams.Concerns that spills could damage sensitive ecosystems skyrocketed with the rapid expansion of fracking across the United States and Canada almost two decades ago, as technological advances allowed energy companies to exploit previously inaccessible shale oil and gas reserves. Those concerns are well founded, new research shows. Exposing animals that play a critical role in freshwater food webs to diluted samples of flowback and produced water from fracked wells causes lasting harm, scientists reported earlier this month in the peer-reviewed journal Environmental Science & Technology. The researchers investigated FPW’s effects on Daphnia magna, small crustaceans commonly called water fleas, that are the go-to lab organism for studying toxicity in aquatic ecosystems. They obtained the wastewater from a fracked well in the Montney formation, a vast reservoir of unconventional gas and oil that spans the border of British Columbia and Alberta in western Canada. It’s well known that flowback and produced water harms many different aquatic species. Less clear is whether keystone species like water fleas, the primary link between plants and fish and other animals higher in the food chain, can bounce back after a transient exposure, as might occur during a spill. The scientists exposed water fleas to two different dilutions of fracked wastewater for 48 hours, simulating what the animals might encounter downstream of a spill, using untainted water as a control. They transferred the fleas to clean water for the remaining 19 days of the experiment, tracking their ability to grow, mature and reproduce.The water fleas did not fare well. Close to 70 percent died in the more concentrated wastewater and half died in the less concentrated sample, with most of the deaths occurring after just five days. Those that survived took longer to mature and produced up to fivefold fewer offspring.Blewett’s group had exposed the animals to fracking wastewater for 21 days in a previous study. With the new study, she said, “We saw that it didn’t matter if you were exposed for 21 days or 48 hours. Even a small, short-term exposure can have long-lasting effects.”
Coast Guard responds to fuel spill from partially sunk fishing vessel in Fraser River --The Canadian Coast Guard has activated a pollution response after a partially submerged 65 foot fishing boat leaking oil and fuel was found off the north end of Deas Island in the Fraser River near Richmond on Sunday. The boat could be seen listing to its port side several metres off the north end of Deas Island, near the Massey Tunnel. Fisheries and Oceans Canada told Global News a ‘limited amount’ of oil and fuel has been discharged into the water. Local agencies have also been made aware of the incident. A Canadian Coast Guard Environmental Response Team has been activated and Western Canada Marine Response Corporation has deployed containment boom. Meantime, a local marine contractor has been hired to refloat the vessel and tow it to a facility and remove it.
Three Fires At Pemex Facilities In One Day - Mexico's state-owned oil company Pemex saw three fires in one day at three separate facilities that it operates in Mexico and the United States. Pemex reported on Thursday a fire at the storage facility Tuzandepetl in the state of Veracruz. The fire started in the drilling equipment for reasons that are yet unknown, the Mexican company said. Five workers are unaccounted for after the incident, while three others are being treated for their injuries in hospital, Pemex said, adding that the fire was extinguished. Later on Thursday, the company said that there was a fire at the Minatitlán refinery in the same state, Veracruz. The fire was contained and later extinguished, but five workers were injured, Pemex said. The refinery hasn't stopped operations and there hasn't been damage to refinery equipment, according to the company. The cause of this fire is assumed to be the spilling of product on a hot surface, Pemex added. The third fire in one day at a Pemex facility occurred in the Pemex-run refinery in Deer Park, Texas. A fire incident was reported at one of the units of the Deer Park refinery on Thursday, according to a community alert quoted by Reuters. The fire incident was being handled within the refinery, and the alert was later updated to all-clear, according to Reuters. Pemex facilities have often suffered incidents in recent years. Last November, 19 people – including Pemex workers and civil protection personnel – were injured after a leaking pipeline exploded in Veracruz.Two months prior to this incident, a gas pipeline run by Pemex exploded in the Mexican state of Tabasco in September, causing a fire and leading to the evacuation of all workers at the Paredón Hydrocarbon Separation Station. In another major explosion involving Pemex's assets, a fire broke out at a Pemex oil platform in the Bay of Campeche in the southern Gulf of Mexico in August 2021. The fire, which occurred during maintenance, killed five workers and injured another six. The outage as a result of the fire reduced Pemex's production by some 444,000 bpd.
U.S. To Receive 3 Million Barrels Of Venezuelan Crude Oil In February - The United States is on track to receive nearly 3 million barrels of crude oil from Venezuela this month, according to shipping documents seen by Reuters. Chevron is on track to ship 100,000 barrels of Venezuelan crude oil per day into the United States as part of a license it received from the U.S. Treasury Department that gives it a limited pass to move sanctioned oil, after a three-year ban. Since obtaining its license, Chevron has exported Venezuelan crude oil for use in its Pascagoula, Mississippi, refinery, and has sold some to Phillips 66 and Valero Energy, shipping documents show—both in the United States. Under Chevron’s limited authorization, profits from the sale of oil and petroleum products would go to paying down PDVSA’s debt to Chevron and not boosting state-run PDVSA’s profits. Venezuela’s heavy crude oil is prized by U.S. refiners, who, until recently, looked to Russia’s heavy crude to replace it. In December, it was reported that several refiners were hitting up Chevron to get their hands on the rare Venezuelan crude oil. While Chevron is the only oil company with approval from the U.S. to import crude oil from Venezuela, other oil and gas companies are looking for a similar authorization—including foreign oil and gas companies who are demanding fair treatment.
EU gas demand fell more than target -- The European Union managed to beat its target for cutting gas demand this winter, according to new data from Eurostat. Eurostat data shows that the European Union’s winter demand fell by 19 percent compared to the five-year average, beating the 15 percent goal it set for itself to help it survive the winter. The largest drop was in Finland, which cut its usage by nearly 60 percent. Lithuania saw the second biggest decrease with a nearly 50 percent reduction, with Sweden coming in third. Spain saw one of the smaller decreases in gas consumption, the data showed. Eurostat didn’t differentiate between demand loss due to the mild-weathered winter and high prices. Consumption began to see some of the larger dips beginning in August, which saw a 14% reduction in consumption. September saw an even bigger decrease, and the trend of increasingly lower consumption continued into January. January is typically a high gas demand month brought on by colder temperatures. Still, the EU consumed 1,534 PJ in January, a slight dip from December. For comparison, Eurostat data shows January 2022 consumption at 1,938 PJ.
The IEA Warns Of A Potential Natural Gas Shortage Next Winter - Tight production capacity for liquefied natural gas could lead to shortages next winter, the head of the International Energy Agency, Fatih Birol, has warned.As gas demand from China begins to recover, competition for LNG supply will increase, creating the risk of shortages, Birol told Reuters on the sidelines of the Munich Security Conference.The head of the IEA praised European governments for making “many correct decisions” last year to secure supply, including the construction of more LNG import terminals. He noted, however, that the mild winter had been a stroke of luck for Europe, combined with the demand drop in China amid last year’s lockdowns. "For this winter it is right to say that we are off the hook. If there are no last minute surprises, we should get through...maybe with some bruises here and there," Birol told Reuters. "But the question is...what happens next winter?"The official noted that some 23 billion cubic meters of natural gas are expected to be added to the global LNG supply this year, which would be equal to some 16.8 million tons. Yet even a moderate recovery in China’s economic activity would absorb 80 percent of that additional supply.Birol then went on to say that this meant Europe may end up short of gas for next winter, saying "Even though we have enough LNG import terminals, there may not be enough gas to import and therefore it will not be easy this coming winter for Europe," adding that "It is not right to be relaxed, it is not right now to celebrate".Europe is about to end winter 2022/23 with record high levels of gas in storage, which theoretically means it would need to buy less for the next heating season. Still, last year’s refill purchases featured a solid amount of Russian gas that will not be available this year and will need to be replaced.
EU Gas Price Cap: An Exercise in Futility --Last week, the European Union saw a cap on natural gas prices come into effect in hopes of curbing the risk of a repeat of last year’s eye-watering gas price jump to more than $350 per megawatt-hour. That spike in prices, which occurred in the summer after the Nord Stream pipeline—the biggest conduit of Russian gas to Europe—was blown out of commission saw businesses shut down and people gather to protest shy-high electricity bills. And the EU really doesn’t want this to happen again. The agreement for the price cap was no easy feat. It was fraught with problems from the start. Some EU members—the richer ones such as Germany and the Netherlands—opposed the very idea of capping the price of a commodity that sells on a free, unregulated market. Others, such as Spain, Italy, and the Eastern European states, defended the cap as a means of keeping gas relatively affordable. The initial proposal of the European Commission was to cap gas prices at 275 euro per MWh, or $287 if this price remains unchanged for two weeks on the spot market. Also, the price of gas in Europe had to be at least 58 euro above the average LNG price on the spot market for 10 consecutive days within those same two weeks to make matters even more complicated and unlikely to happen. Because of the level of this original price cap, the length of time it had to be in place in order to trigger the cap mechanism, and the LNG-related requirement, that first idea ended up being rejected on the grounds that it is effectively pointless. The Commission came up with a revised one that set the cap at 180 euro per MWh, equal to around $197. The cap would be triggered if prices remained at that level for three consecutive days and if that price was also 35 euro higher than the brand new EU benchmark for LNG prices. While officially approved, the cap mechanism remains largely pointless. Right now, natural gas is trading at around 50 euro, or around $53, per MWh on the EU spot market. The chances of this changing so radically that the cap needs to be triggered are, for now, remote. Gas in storage is at much higher levels than usual at this time of the year, so European buyers will not need to worry about refill season too soon. According to the Wall Street Journal‘s Carol Ryan, a late cold snap could potentially empty these storage sites and push gas prices closer to the cap. But, the report notes, traders’ behavior will likely start changing before the TTF benchmark hits 180 euro per MWh. And the first thing they do will be to move their activity from the transparent and strictly regulated stock exchange to the murkier landscape of over-the-counter trades. This was one major concern that traders and ICE were quick to express during the discussions on the level and conditions for the cap. Trader associations and even the European Central Bank said the cap could destabilize the EU financial system. ICE said it could be forced to move out of the EU. “If agreed, the market correction mechanism will be imposed on customers and the market infrastructure with no time for resilient testing and thorough risk management,” ICE told Reuters in December.
On eve of war anniversary, EU fails to finalize Russia sanctions deal – The EU has failed to sign off on a much-anticipated round of sanctions against Russia, leaving the bloc struggling to finalize a deal in time to mark the first anniversary on Friday of Vladimir Putin's invasion of Ukraine. Talks will now run into Ukraine's official commemorations of its first year at war, casting into doubt European Commission President Ursula von der Leyen’s recent promise to President Volodymyr Zelenskyy in Kyiv to deliver a 10th round of sanctions by then. Diplomats said agreement had been reached on nearly all of the package, but Poland was objecting to proposed restrictions on imports of synthetic rubber that it claims aren't strong enough. While acknowledging holding up the package, Warsaw denied being the problem. "We are not blocking sanctions," a Polish official said on condition of anonymity. "We just want to have sanctions that make sense." The Commission was continuing talks with some EU countries on Thursday evening in search of a compromise, according to two of the diplomats. Another meeting of ambassadors from the 27 EU member countries will be held on Friday morning, four diplomats said, to try and secure a deal. Poland's objection related to proposed restrictions on imports of synthetic rubber from Russia. Sanctions hawks had called for a complete ban, but in an effort to appease other countries that rely on those imports the Commission suggested setting a quota limit at 560,000 metric tons, an EU diplomat said. That’s even higher than current imports, the Polish official said. While several EU diplomats said Poland had been the most outspoken opponent of this quota, others have also expressed their discontent over derogations for certain companies. One EU diplomat said that the proposed quota "makes the sanction meaningless.” Trade data show that imports from Russia haven't exceeded that quota in the last decade.
Norway’s Oil Production Dropped In January - Oil production in Norway, the biggest oil producer in Western Europe, slipped in January compared to December and was 3% below official forecasts, the Norwegian Petroleum Directorate said on Tuesday. Last month, Norway pumped 1.754 million barrels per day (bpd) of crude oil, 200,000 bpd of natural gas liquids (NGL), and 25,000 bpd of condensate. Total oil production in January was 3.0% lower than the NPD’s forecast, while crude oil output was 1.2% below forecasts and 1% lower than in December 2022. Norway’s natural gas production also fell in January, by 1% from December, but was 3.9% higher than the directorate’s forecast. Despite the lower production, Norway and the operators on its shelf expect to maintain the current high volumes of natural gas production for at least another five years as operators have pledged $29 billion (300 billion Norwegian crowns) to develop new fields and extend the lifetimes of producing fields, the Norwegian Petroleum Directorate said last month. “These are remarkable investments for the future. This will help ensure that Norway can continue to be a reliable supplier of energy to Europe”, said NPD Director General Torgeir Stordal. “Only rarely have we seen so much oil and gas produced on the Norwegian shelf as was the case last year – and only rarely have we seen such significant investment decisions,” the NPD said in its yearly overview of the production and investment activity on the Norwegian Continental Shelf. In January, Norway’s petroleum and energy ministry also said it was offering up to 92 new blocks for hydrocarbon exploration in the new round of licensing in mature areas. The announcement for the licensing round will take place in the third quarter of this year, with the award of blocks expected to be announced in January 2024. In the most recent licensing round, APA 2022, the ministry awarded earlier in January 47 new production licenses in the predefined areas to a wide variety of companies.
Russia’s Weekly Oil Exports Jump To Highest Level In Over A Month Russian crude oil exports by sea surged by 26% to 3.6 million barrels per day (bpd) in the week ending February 17, the highest level in more than a month, according to shipment tracking data compiled by Bloomberg.. All export terminals on the Russian Baltic, Black Sea, Arctic, and Pacific coasts saw a rise in crude oil shipments last week. The four-week average rate of exports was also higher and rebounded to 3.34 million bpd, according to the data monitored by Bloomberg. Of those, as much as 3.19 million bpd was headed to China and India, while historical data observed by Bloomberg suggests that the cargoes with destination labels of “unknown” usually arrive in India. The weekly exports are not so reliable in identifying sustainable patterns; the four-week average could be more accurate, and it points to a rise in Russia’s seaborne crude oil exports. Overall Russian oil exports, including crude and products, rose to 8.2 million barrels per day (bpd) in January, just ahead of the EU embargo and G7 price cap on refined products, which took effect on February 5, the International Energy Agency (IEA) said in its monthly report last week. Crude oil exports increased by almost 300,000 bpd in January compared to December, despite a further 450,000 bpd decline in shipments to the EU, the agency said. announced cut of 500,000 bpd in production for March could be a sign that Moscow may be struggling to place all of its barrels, or “an attempt to shore up oil prices,” the international agency said. This year, Russia plans to sell more than 80% of its crude oil exports to “friendly” countries, Russia’s Deputy Prime Minister Alexander Novak said last week. China and India are Russia’s biggest crude oil customers now. Those two major Asian importers—the world’s largest and third-largest crude importers—haven’t joined the Price Cap coalition and are thought to be buying cheap Russian crude at deep discounts to international benchmarks.
Russian 500,000 b/d crude production cut plan currently just covers March - Russian Deputy Prime Minister Alexander Novak said Feb. 21 the government's decision to cut crude production by 500,000 b/d currently only covers March but may be extended, the Tass news agency reported. "We will watch how the situation on the market develops, and based on this, market decisions will be taken. For now, the decision is only for March," he said. Novak added that the production cut, announced Feb. 10, will be spread proportionally across Russian producers. Russia is cutting output after an EU ban on most seaborne imports of Russian crude and a $60/b price cap came into force Dec. 5. From Feb. 5 this was followed by a similar ban on oil product imports and price caps of $100/b for imports of Russian products that typically trade at a premium to crude, such as diesel, gasoline and kerosene, and $45/b on products like fuel oil that generally trade at a discount to crude. To date, the restrictions have not had a major impact on Russian crude oil production volumes. Russian output fell 10,000 b/d on the month to 9.85 million b/d in January, according to the latest Platts survey by S&P Global Commodity Insights. That compares with 10.11 million b/d in February 2022. Analysts expect the sanctions to have a significant impact on Russian production from March. S&P Global Commodity Insights expects a drop in Russian oil production of 500,000 b/d from December to March. This is due to expected run cuts, as a result of problems re-routing clean products into atypical markets on an insufficient supply of ships.
India's Russian oil imports surge to a record 1.4 mn barrels per day in Jan -- India's Russian oil imports climbed to a record 1.4 million barrels per day (bpd) in January, up 9.2% from December, with Moscow still the top monthly oil seller to New Delhi, followed by Iraq and Saudi Arabia, data from trade sources showed. Last month Russian oil accounted for about 27% of the 5 million bpd of crude imported by India, the world's third-biggest oil importer and consumer, the data showed. India's oil imports typically rise in December and January as state-run refiners avoid maintenance shutdowns in the first quarter to meet their annual production targets fixed by the government. Refiners in India, which rarely used to buy Russian oil because of costly logistics, have emerged as Russia's key oil client, snapping up discounted crude shunned by Western nations since the invasion of Ukraine last February. Last month India's imports of Russian Sokol crude oil were the highest so far at 100,900 bpd, as output from the Sakhalin 1 field resumed under a new Russian operator, the data showed. In January, India's imports of oil from Canada rose to 314,000 bpd as Reliance Industries boosted purchases of long-haul crude, the data showed. Canada emerged as the fifth-largest supplier to India in January after the United Arab Emirates, the data showed. India's Iraqi oil imports in January rose to a seven-month high of 983,000 bpd, up 11% from December, the data showed. During April-January, the first ten months of this fiscal year, Iraq continued to be the largest oil supplier to India, while Russia became the second-biggest supplier, replacing Saudi Arabia which is now in third place, the data showed. Higher purchases of Russian oil dragged down Indian imports from the Middle East to an all time low of 48% and member nations of Organization of Petroleum Exporting Countries (OPEC) declined to the lowest ever, the data showed.
Derailed train spills oil into Karnaphuli River -- Oil spilled after a train derailed in Chattogram has started spreading in the Mahesh Khal, which leads to the Karnaphuli River, raising concerns about its impact on the environment. Oil spilled after a train derailed in Chattogram has started spreading in the Mahesh Khal, which leads to the Karnaphuli River, raising concerns about its impact on the environment. Two teams from the Department of Environment are gathering samples from either side of the closed sluice gate on the Mahesh Khal canal. They also reported seeing oil floating on the surface of the water as well. Three wagons bearing diesel fuel traveling through the Chattogram Goods Port Yard (CGPY) area in the city’s Halishahar area derailed late on Wednesday, reports bdnews24.com. Oil spilled from two of these wagons, rail officials said but failed to mention how much oil had been spilled as of Thursday afternoon. As of 1 pm, rail workers were still attempting to lift the third wagon back onto the tracks with two already recovered. Several rail lines run through the CGPY area. A drainage runs right next to the place where the wagons came off the tracks as the oil poured into it and flowed into the Mahesh Khal canal 30 yards away. About 20-30 people of different ages were removing oil from the water using foam, buckets, and bottles, gathering the oil into drums by the side of the road. The oil is also being sold to stores that sell fuel oil. Each of the wagons was carrying 30,000 litres of oil. “Not all of the oil in the wagons spilled,” said Abdur Rahman, manager of the railway’s Eastern Division. “As we were moving the carriages onto the track, we noticed that a little had spilled out. “A bit of this oil mixed with the water as the canal and drain are right next to it.” Asked why the train had derailed, CGPOI Master Abduk Malek said a probe was underway. “The sluice gate from the Mahesh Khal to Karnaphuli has been closed since yesterday (Wednesday) night,” said Md Monir, an inspector for the department of environment. “We have taken multiple samples from the canal near the gate.” “There is a significant presence of oil in the canal. But the river water was also found in the samples taken from the other side of the gate. We will know the extent of the oil spill when we test the samples. The oil on the river water is visible in small amounts to the naked eye.” Md Abdul Mannan, a local councillor, said “A lot of oil has spilled into the canal. If it is not removed using special tools, it may pollute the water.” “Even if the water does not reach the river, it may enter it at a later time, which could damage the environment. The way people are collecting oil in the location could give rise to health problems as well.” “The oil has spread in the Mahesh Khal,” said Prof Mohammad Idris Ali, an environmentalist. “During high and low tide it will enter the Karnaphuli River. From there it will travel to the ocean coast.” “If the sluice gate is closed, it will limit the spread somewhat. But there is no reason to believe that the oil can be skimmed off the water entirely.”/p>
40,000 litres of oil spills into canal as freight train derails in Chittagong - A freight train carrying diesel derailed in Chittagong's Halishahar area and around 40,000 litres spilled from three wagons into a nearby canal. The derailment happened around 6pm when the train was entering Chittagong Goods Port Yard (CGPY) depot after loading diesel from depots of Padma, Megha and Jamuna in Patenga area. Malek, a master at CGPY, said the train was supposed to go to Dhaka from Chittagong but it derailed after loading. “Efforts are on to recover the derailed train,” he said. A three-member probe committee was formed to investigate the incident, Tarek Imran, an official at Eastern Railway Transport department, said. According to the railway security department, every wagon can contain 38,000 to 40,000 litres of oil. Three wagons overturned within 15 to 20 minutes after they were loaded with oil when it was entering the depot. Experts said oil spilled from the wagons into the water bodies will pose a serious threat to the aquatic ecosystem.
China set for record crude oil imports in 2023: analysts - China is expected to import a record amount of crude oil in 2023 due to increased demand for fuel as people travel more following the dismantling of COVID-19 controls and as a result of new refineries coming onstream, analysts said. The prospect of strong demand from the world's biggest importer will be another bullish factor for an oil market already supported by the OPEC+ producer group's output cuts and western sanctions on Russian exports. China's crude imports may rise between 500,000 and 1 million barrels per day (bpd) this year to as high as 11.8 million bpd, reversing previous two years' decline to exceed 2020's record of 10.8 million bpd, according to analysts from four industry consultancies - Wood Mackenzie, FGE, Energy Aspects and S&P Global Commodity Insight. Their estimates are in line with the latest forecast by the International Energy Agency. Since the removal of COVID controls in December, China's demand for gasoline and jet fuel has risen. Sun Jianan, an analyst at Energy Aspects, reckoned gasoline and jet fuel would account for around 50% and 30% of total growth in demand for liquid fuels, respectively. Jet fuel consumption, according to Sun, would reach 90% of pre-COVID levels by end-2023. Demand for diesel - a key industrial and transportation fuel - and petrochemical feedstock naphtha, may grow more slowly as it will take longer for the recovery in China's manufacturing and property sectors to materialize, said FGE analyst Mia Geng and Energy Aspects' Sun. "Economic stimulus, along with infrastructure expansion in 2023 will set the stage for robust diesel consumption recovery," Wang Zhuwei, an analyst at S&P Global Commodity Insight, said. With domestic consumption rising and lucrative export markets to supply, the four consultancies saw Chinese refineries raising crude throughput by between 850,000 to 1.2 million bpd over 2022 levels, for an increase of between 6% to 9%. Last year, China's refineries posted their first annual decline in throughput since 2001.
Environmentalists accuse Beetaloo Basin pro-fracking website of astroturfing --A new website that says it represents Northern Territorians who support fracking in the Beetaloo Basin appears shrouded in mystery with no details about who is behind it.Environmentalists have concerns that the site, which calls itself the Beetaloo Economic Alliance, could be an example of astroturfing, a term that describes where a fake grassroots campaign is used to obscure marketing or PR.Hannah Ekin, a spokesperson for the Central Australian Frack Free Alliance (Caffa), said it had “all the markers” of an astroturfing campaign.The site was discovered as Caffa announced it was taking the NT government to the supreme court over an alleged failure to consider the environmental impacts of the fracking project by resources company Tamboran in the Beetaloo Basin.The website presents pictures of men in hard hats with the claim: “Your opportunity is under attack! The only question is, are you going to allow it?” and has a “take action” button that links to a template to send MPs an email in support of the Tamboran project.There is no contact information and only two working links. One to a piece by the Australian endorsing the project and another to a clip from the ABC titled: “Industry says gas from the Beetaloo Basin could solve Australia’s energy crisis.”There is a Facebook page with no followers and a Twitter account with three followers and 54 following. It has been posted to 10 times since its inception in early December 2022. The message function is barred.Mudburra elder Ray Dimakarri Dixon, an anti-fracking campaigner in the region, is furious at the unauthorised use of his image to promote the purported “grassroots” campaign.Near the bottom of the webpage is a picture of Dixon with the slogan: “No impact on air quality. A three year study by the CSIRO published earlier this year found fracking had no impact on air quality.”Dixon said he was stunned by seeing his image used to promote fracking.“They didn’t contact me,” Dixon said. “I am shocked about it.
Beetaloo Economic Alliance website uses 'astroturfing' strategies, anti-fracking group claims - Ray Dimakarri Dixon has been a long-time critic of fracking in the Northern Territory's Beetaloo basin. So it was with surprise that the Mudburra elder learned his image was being used without permission on a website advocating the development of the gas-rich region. "I was shocked. It's horrible, terrible stuff," Mr Dixon said in a press release issued by the Central Australian Frack Free Alliance (CAAFA) "It makes me feel that people might be looking at it and thinking that I support fracking," Mr Dixon said. "But I've been standing up for my country, and water, and the environment." The website of the "Beetaloo Economic Alliance" describes the basin's vast shale gas reserves, about 500 kilometres south-east of Darwin, as a "once in a generation opportunity". A screenshot of a web page with photos of men in hard hats on it. But it warns that the opportunity is "under attack" and encourages people to write to local federal Labor MP Marion Scrymgour to counter anti-fracking campaigns. "Let's not allow a few well-meaning, albeit misguided voices [to] take this opportunity away from us," it says. The website provides no information about what the Beetaloo Economic Alliance is. It also has no contact details, and an online search shows it was registered in November last year by an undisclosed applicant. However, the website features a photo of Mr Dixon alongside a headline which states: "No impact on air or water quality". Mr Dixon said he was appalled. "You can't just go and put a website up with a person's image without talking to them," he said. "They've got no respect for traditional owners of this land."
Anti-fracking petition with 10,000 names presented at Parliament House | Queensland Country Life --Activists are increasing their pressure on the Palaszczuk government to ban new gas developments in the Lake Eyre Basin, presenting a petition containing around 10,000 signatures at Parliament House on Wednesday.
Oman’s oil output rises 4% in January, but exports decline – Oman’s daily average production of crude oil continued to remain above 1mn barrels per day (bpd) in January, up by nearly four per cent in comparison to daily average output recorded in the same period of last year. Daily average oil output during January 2023 increased to 1.065mn bpd compared with 1.028mn bpd in the same period of 2022, the data released by National Centre for Statistics and Information (NCSI) showed on Monday. The sultanate’s total oil production in January 2023 grew by 3.6 per cent to 33.023mn barrels compared to 31.869mn barrels in the same period of last year. Of the total production, crude output rose by 3.5 per cent year-on-year to 25.978mn barrels during January, while condensates output increased 4.1 per cent to 7.045mn barrels during the first month of 2023. The sultanate’s total oil production for the full year 2022 had increased by nearly 10 per cent to 388.4mn barrels compared to 354.5mn barrels recorded in 2021. Oman’s oil exports declined by 6.9 per cent in January this year to 26.046mn barrels compared with 27.978mn barrels recorded in the corresponding period of 2022. In contrast, total oil exports for the full year 2022 had increased by 10.6 per cent to 319.5mn barrels in comparison with 288.9mn barrels in 2021, the NCSI data showed. Exports to China, the biggest buyer of Oman’s crude, accounted for 83 per cent of the sultanate’s total oil exports in January 2023. However, total exports to China decreased by 13.7 per cent to 21.639mn barrels during January this year compared to 25.061mn barrels in the same month of 2022.
Oil production now 1.6 million barrels daily – The Nigerian National Petroleum Company Limited, on Monday, said Nigeria’s oil production had increased to 1.6 million barrels per day, a few millions short of the 1.8 million barrels per day quota allocated to Nigeria by the Organisation of Petroleum Exporting Countries. NNPCL’s Group Chief Executive, Mele Kyari, revealed this at a meeting of industry stakeholders, called to discuss the challenges of crude oil theft and losses affecting the oil and gas sector. He also stated that the rectangular security approach, comprising NNPCL and partners, regulators, government security agencies and host communities, boosted by the adoption of technology, ensured the recovery of production from what it was in July 2022 to the current 1.67 million barrels per day. Kyari, who was represented by the Head, Upstream Investment, NNPCL, Bala Wunti, at the event, which was chaired by the Vice President, Prof. Yemi Osinbajo, said the implementation of the Detect, Deter, Destroy and Recover had paid off. Other strategies that were deployed include the establishment of the Central Command and Control Centre for effective monitoring and coordination, the launch of the Whistle-Blowers Portal and the Crude Oil Validation Portal, as well as the deployment of surveillance tools in the fight against oil theft and vandalism. He said a key element of the collaboration had been the onboarding of the private security contractors from the host communities, which were hitherto isolated. According to Kyari, the security contractors’ in-depth knowledge of the terrain and modus operandi of the criminals had led to massive discoveries of illegal connections and interception of vessels ferrying stolen crude oil.
UAE’s Crescent Petroleum signs agreements to develop Iraqi oil and gas fields -- Sharjah energy company Crescent Petroleum has signed three 20-year agreements to develop oil and gas fields in Iraq, as the country seeks international collaboration to boost its energy supply. Crescent Petroleum plans to initially produce 250 million standard cubic feet per day of natural gas from two oil and gas blocks in the country’s northern Diyala province, the company said on Tuesday. A third exploration block, located in Iraq’s main oil-producing hub Basra, will be explored and developed to add further supplies, Crescent Petroleum said. “Our new planned investments and operations will create thousands of new jobs and support the local and national economy,” said Abdulla Al Qadi, executive director of exploration and production at Crescent Petroleum. “Gas and oil supplies from these operations will help improve services and local economic development for the people of Iraq.” Gas from the Diyala operations is expected to start supplying nearby power plants within 18 months, the company said. Crescent Petroleum will build a processing plant on site, as well as pipelines and infrastructure to supply gas, it said. Iraq, Opec’s second-largest producer, depends on oil revenue to meet 90 per cent of government expenditure. The country exports about 3.3 million barrels of oil per day, while production in the semi-autonomous Kurdish region amounts to more than 450,000 bpd.
Saudi crude exports rise in December from a five-month low - Saudi Arabia’s crude oil exports rose in December after falling to a five-month low the previous month, data from the Joint Organisations Data Initiative (JODI) showed on Monday. The kingdom’s crude exports rose about 2.2 per cent to 7.44 million barrels per day (bpd) in December from 7.28 million bpd in November. However, the world’s largest oil exporter’s crude production fell slightly from 10.47 million bpd in November to 10.44 million bpd. Saudi’s domestic crude refinery throughput fell 40,000bpd to 2.62 million bpd in December, while direct crude burn rose 48,000bpd to 477,000bpd. Earlier this month, Saudi Arabia raised prices for its flagship crude for Asian buyers for the first time in six months amid an expectation of oil demand recovery, especially from China. Saudi Arabia emerged as top crude oil supplier to China again in 2022 and is expected to remain so after President Xi Jinping’s visit to Riyadh in December. Monthly export figures are provided by Riyadh and other Opec members to JODI, which publishes them on its website. While the Organisation of the Petroleum Exporting Countries (Opec) raised its 2023 global oil demand growth forecast this week, its monthly report showed crude oil output declined in Saudi Arabia, Iraq and Iran as part of the organisation’s deal. Global oil demand climbed by 1.3 million barrels a day in December to a record high, driven by gains in Indonesia, Japan and Korea, the International Energy Forum said, citing data JODI data. Meanwhile, Russia plans to cut oil production by 500,000bpd, equating to about five per cent of its output, in March after the West imposed price caps on Russian oil and oil products.
Saudi Arabia’s Oil Revenues Hit $326 Billion In 2022 --Saudi Arabia received as much as $326 billion in oil revenues for 2022, its biggest oil sales haul in the era of Crown Prince Mohammed bin Salman, although monthly revenues have been lower in recent months after oil prices slid to around $80 per barrel at the end of last year.Saudi Arabia recorded its highest-ever oil revenues back in 2012.The rise in oil prices last year, especially the spike in the first half to over $100 a barrel after the Russian invasion of Ukraine, raised the revenues for the world’s largest crude oil exporter. The value of oil exports accounted for more than 70% of all Saudi exports last year.In December 2022, oil exports increased by 11.1% year over year to $22.8 billion (85.5 billion Saudi riyals), but fell compared to November, according to datareleased by Saudi Arabia’s General Authority for Statistics on Tuesday. The share of oil exports in total exports increased from 71.9% in December 2021 to 79.0% in December 2022, the authority said.China, Japan, and India were Saudi Arabia’s main trading partners for exports in December 2022, due to the oil sales.While many economies floundered in 2022 due to inflationary pressures and soaring energy prices, Saudi Arabia’s economy grew by 8.7% last year, thanks to its oil industry and exports.According to flash estimates, real GDP in the fourth quarter of 2022 grew by 5.4% compared to the same period of 2021, and the real GDP during the year 2022 rose by 8.7% compared to 2021, the General Authority for Statistics said last month. Saudi economic growth was the highest among the G20 group of countries.Thanks to rising oil income, Saudi Arabia also booked its first annual budget surplus in nearly a decade. Analysts believe that the Kingdom needs oil prices at $75-80 per barrel to balance its budget.
Iran raises its oil prices for Asia amid China optimism - Iran has raised the official selling price (OSP) of its Iranian Light crude oil grade for Asian buyers, a report says. An industry source with knowledge of the matter told Reuters on Wednesday that Iran had set its crude oil price $2 a barrel above the Oman/Dubai average for March, 20 cents higher from the previous month. The raise comes as optimism over Chinese demand. Analysts expect China's oil imports to hit a record high in 2023 to meet increased demand for transportation fuel and as new refineries come on stream. The mark is also watching the fallout from Russia’s plans to cut oil production by 500,000 barrels per day (bpd), equating to about 5% of its output, in March after the West imposed price caps on Russian oil and oil products. Russia is part of the OPEC+ producer group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies, which agreed in October to cut oil production targets by 2 million bpd until the end of 2023. A Feb. 19 note by Goldman Sachs analysts said future oil supply shortages are likely to drive prices toward $100 a barrel by the end of the year. On Monday, oil prices rose over 1%, with Brent crude settling up $1.07 at $84.07 a barrel. US West Texas Intermediate crude (WTI) for March rose 85 cents at $77.19. China is the biggest importer of Iranian crude, supported by a fleet of as many as 180 elderly tankers.
Oil Rises on China Demand Optimism and Supply Concerns —Oil prices rose on Monday, buoyed by optimism over Chinese demand, continued production curbs by major producers, and Russia’s plans to rein in supply. Brent crude rose 59 cents, or 0.7 percent, to $83.59 a barrel by 1020 GMT. U.S. West Texas Intermediate (WTI) crude for March, which expires on Tuesday, was up 58 cents, or 0.8 percent, at $76.92 while the more active April contract gained 0.7 percent to $77.06. The benchmarks settled $2 down on Friday for a decline of about 4 percent over the week after the United States reported higher crude and gasoline inventories. The OPEC+ producer group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia agreed in October to cut oil production targets by 2 million barrels per day (bpd) until the end of 2023. Separately Russia plans to cut oil production by 500,000 bpd, equating to about 5 percent of its output, in March after the West imposed price caps on Russian oil and oil products. Analysts, meanwhile, expect China’s oil imports to hit a record high in 2023 to meet increased demand for transportation fuel and as new refineries come onstream. “We continue to see a reopening of China and a rebound in China and global jet demand driving upside risk to prices,” said Baden Moore, head of commodities research at National Australia Bank. China and India have become major buyers of Russian crude since the European Union embargo. At the same time, future oil supply shortages are likely to drive prices toward $100 a barrel by the end of the year, Goldman Sachs analysts said in a Feb. 19 note. Prices will move higher “as the market pivots back to deficit with underinvestment, shale constraint,s and OPEC discipline ensuring supply does not meet demand,” they wrote.
Oil eases in rangebound market as Fed and China demand face off - Oil edged lower as investors weighed the prospect for further U.S. monetary tightening against signs of improving demand from China following the end of COVID Zero. Brent futures retreated below US$84 a barrel after closing 1.3 per cent higher on Monday. Prices have bounced within a relatively tight range this year, and a measure of volatility remains near the lowest level in 13 months. Embedded Image Market watchers continue to weigh concerns that more Federal Reserve interest-rate hikes will sap demand, against expectations that China's reopening will drive an increase in commodity buying. The world's largest importer has been buying more oil from Russia and snapping up ships for cargoes from the U.S. as it ramps up imports. Indian refiners have also boosted processing, lifting rates in January to the highest in five years on the back of rising domestic demand. The country has also been a key consumer of Russian crude, taking advantage of discounted cargoes. The next key event that investors are awaiting is Wednesday's release of minutes from the Fed's last meeting. That, and U.S. personal spending data on Friday, may provide further clues of the path for rates. “Any hawkish takeaway from the upcoming Fed minutes may be a catalyst for further downward pressure for oil,” said Yeap Jun Rong, a market strategist at IG Asia Pte Ltd. Prices have attempted to climb on the improving supply-and-demand outlook that's coinciding with China's recovery, he added. Brent for April settlement lost 0.4 per cent to US$83.77 a barrel as of 10:22 a.m. in London. WTI for March delivery, which expires Tuesday, rose 0.5 per cent from Friday's close to US$76.75 a barrel. There was no settlement Monday due to the US holiday and transactions will be booked Tuesday. The April contract gained 0.9 per cent to US$77.25 a barrel.
Oil falls more than 1% as growth fears offset China demand hopes (Reuters) - Brent crude oil slipped more than 1% in a volatile session on Tuesday as persistent concerns about global economic growth outweighed supply curbs and prompted investors to take profits on the previous day’s gains. The focus in the wider financial market is firmly on the release on Wednesday of the minutes of the U.S. Federal Reserve’s latest meeting, after recent data raised the risk of interest rates remaining higher for longer. Global benchmark Brent crude settled $1.02, or 1.2%, lower at $83.05 a barrel. U.S. West Texas Intermediate crude (WTI) for March, which expired on Tuesday, fell 18 cents, or 0.2%, to $76.16 a barrel. The second-month contract slipped 19 cents, or 0.2%, at $76.27. The price moves today “seem to be more technical in nature,” said Phil Flynn, analyst at Price Futures Group. “We seem to be fading off on the same, old concerns that the dollar is going to be strong and about the interest rate situation.” A stronger greenback makes dollar-denominated oil more expensive for holders of other currencies. Earlier in the session, the market rallied, with Brent briefly turning positive, after better-than-expected business activity surveys in Europe and Britain pointed to a less gloomy European economic outlook than previously feared. On Monday, oil prices rose by more than 1% on optimism over Chinese demand that analysts expect to rebound this year after COVID-19 restrictions were scrapped. The WTI contract did not settle on Monday because of a public holiday in the United States, which has also delayed by a day both industry and official weekly U.S. oil inventory reports, respectively to Wednesday and Thursday. U.S. crude stockpiles have grown weekly for about two months, and were forecast in a Reuters poll to have risen 1.2 million barrels last week. However, signs of tighter supply lent prices some support. Russia plans to cut crude oil production by 500,000 barrels per day, or about 5% of its output, in March after the West imposed price caps on Russian oil and oil products over the invasion of Ukraine. The cut, announced this month, will apply only to March output for now, Deputy Prime Minister Alexander Novak said on Tuesday, according to news agency reports. Russia is part of the OPEC+ group which agreed in October to cut oil production targets by 2 million bpd until the end of 2023. Separately in the natural gas market, U.S. regulators approved the partial restart of Freeport LNG’s Texas facility, the second-biggest U.S. liquefied natural gas export plant, which was shut after a fire in June.
Oil futures end lower as uncertainty blurs the demand outlook Oil futures ended with a loss on Tuesday as investors continued to monitor the outlook for demand amid uncertainty over the global economic outlook. Ample U.S. supplies, meanwhile, contributed to a session decline of nearly 9% for natural-gas futures. West Texas Intermediate crude for March delivery edged down by 18 cents, or 0.2%, to end at $76.16 a barrel on the New York Mercantile Exchange on the contract’s expiration day. The new front month April WTI crude contract, which is most actively traded, fell 19 cents, or nearly 0.3%, settle at $76.36 a barrel. WTI futures didn’t settle Monday due to the Presidents Day holiday in the U.S. April Brent crude the global benchmark, lost $1.02, or 1.2%, at $83.05 a barrel on ICE Futures Europe after rising 1.3% on Monday. Back on Nymex, March gasoline rose 0.3% to $2.4156 a gallon, while March heating oil gained 2.9% to $2.7919 a gallon. March natural gas fell 8.9% to settle at $2.073 per million British thermal units, for a fourth straight session decline. Prices marked another finish at their lowest since September 2020. Crude remains lower for the month, with pressure tied to worries that aggressive tightening by major central banks, including the Federal Reserve, could cause a significant economic slowdown later in the year. The rise in both the U.S. dollar and short-duration Treasury yields stoked concerns about the Fed Reserve crushing the economy with “too-aggressive policy decisions this year,” analysts at Sevens Report Research wrote in Tuesday’s newsletter. “From a demand standpoint, recessions are clearly not a positive situation for consumption of refined products,” which is why U.S. oil prices fell 4% last week, they said. On the supply side, Russia previously announced a plan to cut production by 500,000 barrels a day in March. But oil has struggled to gain ground in part due to Russian crude exports that have remained robust, analysts have said. Citing Bloomberg data, analysts at Commerzbank said Russian crude oil exports surged by 26% to 3.6 million barrels per day last week, with shipments from all Russian export terminals on the Baltic Sea and Black Sea, as well as in the Far East, reaching multiweek highs. “Even if the marked upswing week-on-week was attributable to the previous week’s low level, the four-week average also shows an upward trend. 3.2 million barrels per day went to China, India, Turkey and other unknown destinations — this is the highest figure since the data series began at the start of 2022,” they wrote. “China’s increased oil demand is thus being met to a large extent by higher supply from Russia. This may explain why the oil price has not been able so far to profit from the demand growth in China,” they said. Natural-gas futures, meanwhile, are back to where they started in the third quarter of 2020, “after a spate of mild weather caused Henry Hub prices to slide below $2.30,” analysts at BofA Securities wrote in a research note dated Monday. Nine months ago, ahead of a fire that shut the Freeport LNG shipping facility, natural gas was trading above $9 per million Btus, U.S. inventories were 300 billion cubic feet under seasonal five-year average levels and “there was concern about inventories running dangerously low,” said the BofA Securities analysts. “Since then, mild weather and strong production growth caused the balances to flip, with inventories recently rising to more than 180 [billion cubic feet] above seasonal norms, a dynamic that has also played out in Europe,” they said.
Oil Falls on Fuel Demand Woes Ahead of US Fed Comments —Oil prices fell for a third trading session on Wednesday as concerns about fuel demand were stoked by expectations that minutes due from the U.S. Federal Reserve will indicate a need to hike interest rates. Brent crude futures for April delivery fell $1.13, or 1.36 percent, to $81.92 a barrel by 1025 GMT. West Texas Intermediate (WTI) crude futures for April dropped by $1.18, or 1.55 percent, to $75.18 a barrel. The U.S. Fed will release the minutes of its latest meeting on Wednesday, which will give traders a glimpse of how high officials are projecting interest rates will go after recent data showed stronger-than-expected U.S. employment and consumer prices. Higher interest rates tend to lift the dollar, making dollar-denominated oil more expensive for holders of other currencies and reducing demand. Other economic reports from the U.S., the world’s biggest oil consumer, showed some troubling signs however. Sales of existing homes fell in January to their lowest since October 2010. A preliminary Reuters analyst poll on Tuesday also showed a rise in U.S. crude inventories, exacerbating the demand worries. The economic outlook across Europe, however, continues to show resilience, UBS said in a note. This followed business surveys released on Tuesday which showed surprisingly strong growth. Expectations of tighter global supplies and rising demand from China also cushioned overall price weakness. Analysts expect China’s oil imports to hit a record high in 2023 to meet increased demand for transportation fuel and as new refineries come on stream. In a note on Wednesday, Daniel Hynes, senior commodity strategist at ANZ Bank pointed to state-owned PetroChina and Unipec booking 10 supertankers to import oil from the U.S. next month, equal to about 20 million barrels of crude, as signs of rising Chinese demand. China is the world’s largest oil importer. Morgan Stanley has raised its estimate for oil demand growth this year to 1.9 million bpd from 1.4 million bpd previously, but lowered its Brent price forecast for July-December.
The Crude Oil Market on Wednesday Continued on its Downward Trend -The crude oil market on Wednesday continued on its downward trend as concern over fuel demand were prompted by expectations that the minutes of the U.S. Federal Reserve’s last policy meeting would indicate a need for higher interest rates. The crude market posted a high of $76.55 in overnight trading before it breached its previous low of $75.90 and sold off to $74.95. The market retraced some of its overnight losses before it fell sharply lower ahead of the release of the Fed minutes. The oil market later extended its losses to over $2.30 as it breached its support at $74.30, its downward channel line, and sold off to $73.85 ahead of the close. The April WTI contract settled down $2.41 at $73.95 and continued to trade lower, posting a low of $73.80 during the post-settlement period. The market saw the largest one-day decline in nearly three weeks. Meanwhile, the April Brent contract settled down $2.45 at $80.60. The product markets ended the session lower, with the heating oil market settling down 7.71 cents at $2.7148 and the RB market settling down 7.8 cents at $2.3376. Morgan Stanley has raised its global oil demand growth estimate for this year by about 36%, citing growing momentum in China's reopening and a recovery in aviation, but flagged higher supply from Russia as an offsetting factor. The bank said global oil consumption is now expected to increase by about 1.9 million bpd compared with its previous 1.4 million bpd forecast. It stated that supply from Russia has been stronger than expected, leading to a slightly smaller than previously assumed deficit in the second half of the year, cutting Brent oil price forecast for that period to $90-100/barrel from a previous estimate of $100-110/barrel.The Caspian Pipeline Consortium said it had suspended some oil flows to its Black Sea terminal. It said the intake of oil from the Tengiz oilfield had been halted and pumping to the sea terminal had also been stopped. Oil continued to be received via two pumping stations, Atyrau in Kazakhstan and Komsomolsky in Russia, but at reduced volumes. IIR Energy said U.S. oil refiners are expected shut in about 1,741,000 bpd of capacity in the week ending February 24th, increasing available refining capacity by 10,000 bpd. Offline capacity is expected to fall to 1,444,000 bpd in the week ending March 3rd.According to the minutes from the January 31st-February 1st meeting, a majority of Federal Reserve officials agreed at the meeting to slow the pace of increases in the U.S. central bank’s benchmark overnight interest rate to a quarter of a percentage point, but also agreed the risks of high inflation remained a “key factor” shaping monetary policy and warranted continued rate increases until it was controlled. It said “participants generally noted that upside risks to the inflation outlook remained a key factor shaping the policy outlook,” and that interest rates would need to move higher and stay elevated “until inflation is clearly on a path to 2%.” The minutes showed the Fed navigating towards a possible endpoint to its current rate increases, at once slowing the pace in order to more cautiously approach a possible stopping point while also leaving open just how high rates will ultimately rise in the event inflation does not slow.
WTI Slides After Crude Stocks Rise For 9th Straight Week To Highest Since June 2021 - Oil prices are on the rise this morning - after 6 straight days lower - with WTI testing up to $76 despite API reporting another major crude inventory build. All eyes are once again on the official inventory and supply/demand data that has been 'odd' in recent weeks. API:
- Crude +9.895mm
- Cushing +481k
- Gasoline +894k
- Distillates +1.374mm
DOE
- Crude +7.647mm (+3.8mm exp)
- Cushing +700k
- Gasoline -1.856mm
- Distillates +2.698mm
US Crude stocks rose for the 9th straight week (and Cushing stocks rose for the 8th straight week). Gasoline inventories drew-down for the first time in 7 weeks while Distillates built... We do note however that there have been some wild swings in the 'adjustment' factor (fudge) in recent weeks... Total crude stockpiles are at their highest since June 2021... Since the start of the year, total crude stockpiles have risen by 57.6 million barrels, after taking account of the SPR withdrawals in the first weeks of 2023.Cushing stocks rose back above 40mm barrels for the first time since June 2021 US Crude production rose to new cycle highs at 12.3mm b/d, despite the rig count rolling over... WTI was trading around $75.50 ahead of the official print and slipped lower on yet another build... Bloomberg Intelligence Senior Oil & Gas Analyst Fernando Valle: “Hopes that returning China demand would support a recovery are fading, as consumption catalysts are having less of an impact than expected. We remain optimistic about long-term oil fundamentals due to the lack of investment in new supply and a view that growth in US shale oil will disappoint over the next few years.”
Oil prices rise amid fears over Russian supply cuts - Oil prices increased on Thursday on expectations that Russia will cut its oil exports more than previously announced. International benchmark Brent crude traded at $80.79 per barrel at 9.35 a.m. local time (0635 GMT), up 0.24% from the closing price of $80.60 a barrel in the previous trading session. At the same time, American benchmark West Texas Intermediate (WTI) traded at $74.14 per barrel, a 0.26% rise after the previous session closed at $73.95 a barrel. A bigger output cut by major oil producers will put pressure on global supply. Russia is expected to cut oil production by 500,000 barrels per day in March, but reports indicate that the country may cut supply even further. The country is reducing its supply in response to Western sanctions against Russian oil exports. The EU ban on Russian seaborne oil products, as well as a price cap of $100 per barrel on premium Russian oil products such as diesel, and a price cap of $45 per barrel on discounted products such as fuel oil, went into effect on Feb. 5. Russian Deputy Prime Minister Aleksandr Novak warned at the beginning of the month that Western countries' price caps on Russian oil and petroleum products could cause supply problems on the market. The OPEC+ group also plans to reduce its oil production targets by 2 million barrels a day until the end of 2023, further limiting available oil supply globally. Meanwhile, preliminary US oil inventory data from the American Petroleum Institute showed an increase of 9.8 million barrels, against expectations of a 1.2 million-barrel rise. A build in inventory data points to lower demand in the country, limiting overall oil price increases.
WTI, RBOB Futures Gain 2% After EIA Reports Gasoline Draw - While the ULSD contract softened Thursday, oil futures traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled the session with sharp gains, buoyed by a surprise drawdown in U.S. gasoline stockpiles and rebounding demand for the transportation fuel that offset another weekly build in commercial crude oil inventories. Further supporting the oil complex, stocks on Wall Street are on the verge of snapping the longest losing streak of the year, trading higher late afternoon after weekly unemployment claims filings were fewer than expected at 192,000 during the week ended Feb. 18. Jobless claims have remained below 200,000 for six consecutive weeks, signaling the labor market is holding onto its post-pandemic gains despite signs of slowdown in some sectors of the economy. Minutes from the Federal Open Market Committee's Feb. 1 meeting revealed central bank officials are concerned that the tight labor market could trigger a reacceleration of inflation later this year. At least two Fed officials publicly voiced their support for a larger rate increase at the Fed's last meeting in February that concluded with a 25-basis point hike in the federal funds rate. April West Texas Intermediate futures advanced $1.44 to $75.39 per barrel (bbl), with the international crude benchmark Brent contract rallying $1.61 to a $82.21-per-bbl settlement. NYMEX RBOB March added $0.0419 to $2.3795 a gallon, and nearby-month NYMEX ULSD futures softened $0.0067 to $2.7081 gallon. Thursday's inventory report from the U.S. Energy Information Administration was once again bearish with some supportive elements for the gasoline complex, with gasoline stocks unexpectedly drawn down 1.9 million bbl to 240.1 million bbl. Gasoline demand rebounded 636,000 barrels per day (bpd) to the highest level since the holiday week ended Dec. 22 at 8.91 million bpd. Greater gasoline demand offset the ninth consecutive weekly build in commercial crude oil inventories through Feb. 17, building by 7.6 million bbl last week to 479 million bbl, about 9% above the five-year average. The larger-than-expected build occurred as domestic refiners again reduced run rates, down 0.6% last week to 85.9% utilization. Also bearish was an unexpected 2.7 million bbl build in distillate stocks to 121.9 million bbl last week, with inventory now about 12% below the five-year average from 15% during the previous week. The unexpected build in middle distillate stocks offered further evidence of a demand slowdown in the goods-producing sector of the economy that slid into recession almost eight months ago and remained in contraction at the start of the year.
Oil Pares Gains After Hot Inflation Data Spikes US Dollar -- New York Mercantile Exchange oil futures settled Friday's session mostly higher, although all petroleum contracts pared gains after U.S. inflation data offered more evidence of an overheated economy and ongoing inflationary pressures in the services sector, paving the way for the Federal Reserve to continue raising interest rates into restrictive territory. Personal Consumption Expenditures Index, Fed's preferred inflation measure, increased 5.4% from a year ago in January, up from 5% at the end of 2022 and well above the Fed's 2% target. On a monthly basis, inflation accelerated to 0.6% from December's 0.1% reading, with consumer spending climbing 1.8% after a negative 0.1% print in December. "The ongoing imbalance between the supply and demand for labor, combined with the large share of labor costs in the services sector, suggests that high inflation may come down only slowly," Fed Governor Philip Jefferson told a conference in New York on Friday. Friday's inflation data follows several strong labor market indicators as well as faster-than-expected retail sales and producer price inflation, reinforcing the view that the Federal Reserve would have more work to do to slow down an overheated economy. Markets see rising odds for the central bank to raise the federal funds rates by 50 basis points at their March 22 meeting and to reach a terminal rate of 5.25% to 5.5% as soon as June. Fed officials lifted their benchmark interest rate by 25 basis points at the start of February, bringing the target to a range of 4.5% to 4.75%. That was a step down from their 50-basis point increase at their December meeting, which followed four consecutive jumbo-sized 75-basis point hikes. In response to the data, U.S. dollar index spiked 0.6% against a basket of foreign currencies to settle at 105.158, initially pressuring front-month West Texas Intermediate futures in early trading. WTI futures reversed higher late morning and settled up $0.93 at $76.32 per barrel (bbl). International crude benchmark Brent for April delivery rallied $0.95 to $83.16 per bbl. NYMEX RBOB March declined $0.0208 to $2.3587 per gallon, and nearby-month NYMEX ULSD futures advanced $0.0881 for a $2.7962-per-gallon settlement. Potentially supporting the oil complex are signs that Russia is preparing to cut oil exports from its Western ports beginning next month as it reroutes petroleum flows toward Asia. Unconfirmed reports suggest Moscow will reduce oil exports by as much as 25% from the ports of Primorsk and Ust-Luga on the Baltic Sea and Novorossiysk on the Black Sea that mostly handle oil cargos bound to the European Union. Russia doesn't plan to cut oil exports from its Pacific ports, according to unidentified sources. Since the start of its Ukrainian offensive on Feb. 24, 2022, Moscow has sought out new buyers for oil sales outside of Europe, with Asia and the Middle East the leading new customers. Bloomberg data shows Russian oil exports to India -- the world's third-largest oil importer, jumped to 1.25 million barrels per day (bpd) at the start of the year from a modest 250,000 bpd before last February's invasion of Ukraine. The rerouting has come at a price of steep discounts for Russian barrels that are selling well below global benchmarks such as Brent, West Texas Intermediate and Oman/Dubai. Traders and shipping companies have found a multitude of ways to ensure Russian oil can flow on the global market, with so-called "ship switching" proliferating in international waters outside of Greece and Spain. Once the cargos are switched, the receiving tankers then ferry the oil thousands of miles to buyers in Asia and Middle East.
Oil Flat on Week as U.S. Inventories Rise but Russia Cuts Supply (Reuters) -Oil edged higher in volatile trade on Friday, and was flat on the week, with prices supported by the prospect of lower Russian exports but pressured by rising inventories in the United States and concerns over global economic activity. Brent crude futures settled at $83.16 a barrel, up 95 cents, or 1.2%. West Texas Intermediate U.S. crude futures (WTI) settled at $76.32 a barrel, rising 93 cents, or 1.2%. Earlier, both fell by more than $1 a barrel. The benchmarks were little changed on the week. Lower trading volumes contributed to volatility, with Brent trading at 58% and WTI trading at 90% of the previous session's levels. On the anniversary of Russia's invasion of Ukraine, benchmark Brent crude was about 15% lower than a year earlier. It hit a 14-year high of nearly $128 a barrel on Mar. 8, 2022. Both benchmarks rose about 2% in the previous session on Russia's plans to cut oil exports from its western ports by up to 25% in March, which exceeded its announced production cuts of 500,000 barrels per day. But the market appeared to be well supplied with U.S. inventories at their highest since May 2021, according to data from the U.S. Energy Information Administration. [EIA/S] An indicator of future supply, U.S. oil rigs fell seven to 600 this week, while the total count was still up 103 rigs, or 15.8%, over this time last year, energy services firm Baker Hughes Co said. Indications that Russian crude and refined products are accumulating on tankers floating at sea also hinted at increasing supplies. JP Morgan said in a note that it thinks short-term prices are more likely to drift lower toward the $70s than rise "as global growth headwinds strengthen and excess ‘dark’ inventory exacerbated by a flooding of Russian oil is worked off". The bank also said it expects the Organization of the Petroleum Exporting Countries (OPEC) to cut production to limit oil price declines. Minutes of the latest U.S. Federal Reserve meeting indicated that a majority of officials remained hawkish on inflation and tight labour market conditions, signalling further monetary tightening. The prospect of further interest rate hikes supported the dollar index, which was set for a fourth straight week of gains. The index is now up about 2.5% for the month. [FRX/] "While... curtailed Russian supply are certainly formidable bullish considerations, price action across the complex this month has sent off a powerful message that rising US interest rates that were further reinforced by Fed minutes, will be a major impediment to sustainable oil price strength," said Jim Ritterbusch of consultancy Ritterbusch and associates.. A firm dollar makes commodities priced in the greenback more expensive for holders of other currencies.
Oil bulls turn red week to neutral by clinging onto Russia cuts story - -- Oil bulls turned a losing week into a neutral one by leveraging upon an unverified report about deep production cuts planned by Russia to send crude prices up a second day in a row, despite U.S. inflation data suggesting the Federal Reserve could turn aggressive again on rate hikes. The Fed’s preferred inflation indicator — the Personal Consumption Expenditures, or PCE, Index — grew 5.4% in the year to January, beating forecasts for the month as well as its previous growth in December, the Commerce Department reported on Friday. That was a day after the Energy Information Administration, or EIA, said that U.S. crude stockpiles rose for a ninth straight week, adding a cumulative 60 million barrels to inventories since the end of last year. Those long oil, however, ignored both the inflation and inventory data, remaining wide-eyed over a Reuters report that Russia will cut crude exports from its western ports by up to 25% in March. For context, the cut was way above the 5% reduction in output announced by Deputy Prime Minister Alexander Novak two weeks ago. If true, it would be significant. But more than 24 hours after it appeared, the report remained unproven, with no comment or verification from a single official in Moscow. Yet, oil bulls managed to turn around an initial market slump on Friday by hedging on the so-called production cuts story to buy every price dip triggered by the heady inflation in the PCE data. The dollar hit a seven-week high against a basket of major currencies while the yields on the 2-year U.S. note hit their highest since 2007 amid a near reach of the 4% level for the benchmark 10-Year note. All these were on the back of expectations that the Fed will resort to more hawkish monetary action amid the “hotter inflation in the U.S.,” economist Greg Michalowski said in a post on the ForexLive forum. U.S. consumer sentiment, meanwhile, hit a 13-month high in February, according to a survey by the University of Michigan that showed Americans more optimistic about spending at a time the Fed actually needs them to show restraint. New York-traded West Texas Intermediate, or WTI, crude for April delivery settled up 93 cents, or 1.2%, at $76.32 per barrel. Earlier in the session, WTI fell as much as $1.28. But after the turnaround, the U.S. crude benchmark finished the week down just 2 cents, practically flat. Brent for April delivery settled up 95 cents, or 1.2%, at $83.16. Brent fell as much as $1.12 earlier in the session. For the week, the global crude benchmark finished up 13 cents, or nearly flat too. Without volatile food and energy prices, the so-called core PCE Index was up 4.7% during the 12 months to January versus a forecast 4.3% and a previous growth of 4.4% in the year to December. “The PCE report shows that the Fed needs to do a little more,” Loretta Mester, Fed president for the region of Cleveland, said in comments carried by Bloomberg. “It is gratifying that inflation declined from [its] peak, but more is needed.” President Joe Biden, in a statement released by the White House, concurred. “Today’s report shows we have made progress on inflation, but we have more work to do.” The Consumer Price Index, a broader gauge of inflation, stood at a four-decade high of 9.1% for the year to June. It has moderated since to an annualized growth of 6.4% in January. The Fed’s target for inflation is just 2% per year.
Iran building 2,000 MW nuclear power plant in defiance of sanctions: Nuclear chief - Iran's nuclear chief says a nuclear power plant in the southwestern province of Khuzestan aims to generate 2,000 megawatts of electricity, defying decades of sanctions that have targeted the country's peaceful nuclear program. Head of the Atomic Energy Organization of Iran (AEOI) Mohammad Eslami said on Friday that the Karun nuclear power plant in Darkhovein District in the Shadegan County of the southwestern province of Khuzestan will produce 300 megawatts of electricity in the preliminary phase. He said the AEOI will simultaneously follow other phases with the purpose of making utmost use of the capacity made in Darkhovein District. "Enemies tried to break our will through sanctions and did not cooperate with us regarding the construction of nuclear power plant even after many years," the Iranian nuclear chief said. However, he said, the organization developed the project by relying on domestic capabilities. In December, Eslami inaugurated the construction operation of Karun, saying the government is moving towards the production of low-cost energy and fuel and the development of nuclear power plants is on the agenda of the AEOI. According to reports, the power plant is of a pressurized water reactor (PWR) type and, with the capacity of producing 300 megawatts of electricity, it is to be built on a land of approximately 50 hectares in the vicinity of the Karun River.
Iran Reportedly On Cusp Of Making Nukes Having Enriched Uranium To 84% Purity -Inspectors from the UN atomic agency discovered uranium enriched to 84% purity in Iran last week, a level just below that needed for nuclear weapons, Bloomberg reported Sunday, citing two unnamed senior diplomats. Until now, Iran had been known to have enriched uranium to 60%, while a purity of 90% is needed to produce nuclear weapons. The IAEA said in a tweet that it was “aware of recent media reports relating to uranium enrichment levels in Iran.” Director-General Rafael Grossi noted that the agency was in talks with Iran regarding the results of recent inspections, the tweet added. The IAEA is aware of recent media reports relating to uranium enrichment levels in Iran. Director General @rafaelmgrossi states that the IAEA is discussing with Iran the results of recent Agency verification activities and will inform the IAEA Board of Governors as appropriate. pic.twitter.com/4Aqdq01Xr5 The International Atomic Energy Agency is trying to clarify how Iran accumulated the uranium enriched to 84% purity — the highest level found by inspectors in the country to date. Iran had previously told the IAEA that its centrifuges were configured to enrich uranium to a 60% level of purity. The IAEA has been preparing its quarterly Iran safeguards report ahead of a March 6 Board of Governors meeting in Vienna, where the Persian Gulf nation’s nuclear work will figure prominently on the agenda.
Israel, Saudi Arabia Hold Talks on Increasing Military Ties - Israel’s new government under Benjamin Netanyahu has stepped up US-backed talks with Saudi Arabia on forging stronger military and intelligence ties, Bloomberg reported on Friday.The talks are part of an effort to forge a NATO-style anti-Iran alliance in the region between Israel and Washington’s Gulf Arab allies. While Saudi Arabia has not normalized with Israel, the two countries have quietly increased cooperation, including by participating in their first public joint military exercises in 2022.The Bloomberg report said that Israeli and Saudi officials held talks ahead of a meeting of the US-Gulf Cooperation Council Working Group that took place on February 16. More talks were expected to happen at the Munich Security Conference, which was held over the weekend.Israel has increased cooperation with the US’s Gulf allies since normalizing with the UAE and Bahrain in 2020 under the Abraham Accords. Since then, the US has brought Israel under the umbrella of US Central Command (CENTCOM), the US command responsible for the Middle East.Including Israel in CENTCOM operations facilitates more Israeli-Arab cooperation. Israel previously fell under US European Command since it didn’t have relations with most US allies in the region. The US and Israel want a future anti-Iran alliance in the Middle East to focus on integrated air defense systems.Saudi officials have insisted that a normalization deal with Israel would hinge on the creation of a Palestinian state, which is highly unlikely as the Netanyahu government is vowing to expand settlements in the West Bank. But it’s possible Riyadh could eventually be convinced by the US to open up with Israel if Washington offers more military assistance and arms sales.
Israeli Rampage leaves 11 Dead, over 100 Injured in Occupied Nablus, but Kamala Harris only Condemns Russian Occupation of Ukraine as War Crime– A daytime Israeli military raid on Wednesday on an apartment in the Palestinian city of Nablus in the Palestinian West Bankspiraled out of control, with the Israeli troops killing 11 persons and woundingover one hundred civilians with gunshots. Some of the injured are in critical condition. The Israelis say that they were after three young men, two members of the “Lion’s Den” resistance group, and the other a member of “Islamic Jihad.” The three were accused of having carried out attacks against Jewish squatters on Palestinian land. The troops killed all three, apparently by blowing up a building in which they were making a last stand.The raid on the 3 guerrillas was not in itself illegal. However, the toll of death and injuries the Israeli forces inflicted on non-combatants is.In addition, video shows Israeli security forces shooting down an unarmed man as he was running away.If the suspect was not firing at them but simply fleeing, shooting him down is a war crime. You can’t kill people who are not a credible and immediate threat to you. When Hadas Gold of CNN reported on this killing, she said that the Israeli military said it would review the footage to see what happened before the troops shot the man in the back as he was fleeing on foot. But you see that is just mumbo jumbo. It is irrelevant what happened before. You can’t just murder a suspect who is running away.One video shows an Israeli military vehicle plowing into a crowd. Running over people like that is an al-Qaeda and ISIL tactic.Then there is the embarrassing detail that 11 people were killed, not just the three suspects. The other 8 are mere collateral damage of the raid. Then there are over a hundred wounded, some critically.See, that’s also a war crime. In order to get at a handful of suspects, you can’t recklessly endanger the lives of innocent civilians.
Deadliest Israeli Attack On Damascus In Years As Country Reels From Earthquake -Syria’s Foreign Ministry condemned Tel Aviv after Israeli airstrikes struck Damascus in the early morning of Sunday, killing at least five people and critically wounding 15 others (some reports say as many as 15 were killed). According to state-run news agency SANA, the ministry urged “international action” to prevent further attacks on Syrian soil. "Syria expects the United Nations Secretariat and Security Council to condemn Israeli aggression and crimes, take the necessary measures to deter them, hold them accountable, punish their perpetrators, and ensure they do not recur." The ministry further remarked that this attack comes in the context of recurring Israeli attacks against civilian targets and coincides with the recent attack by ISIS in Homs, which left at least 53 dead. Local reports indicate that the Syrian air defenses incepted most of the missiles, adding that the air strikes also hit locations in Damascus’ countryside, including on the outskirts of Shahba and in the north of al-Suwayda in southwestern Syria. Photos and videos of the bombardment have surfaced on social media, showing severe damage to residential areas and revealing the deceased of the attack, such as Syrian national and pharmacist Lilian Aoudi. Among those who died during the attack include a doctor and an engineer. "The strike on Sunday is the deadliest Israeli attack in the Syrian capital," the UK-based Syrian Observatory for Human Rights (SOHR) said. The Israeli air strike assault comes as Syria continues to reel from a devastating earthquake that left close to 6,000 dead and leveled large swathes of the country’s northwest region.
In Syria, the West's Humanitarian Claims Crumble to Dust - US President Joe Biden’s administration relented last Thursday and finally lifted sanctions on Syria. The change of policy came after four days of relentless and shocking footage from the disaster zone in southern Turkey and northern Syria caused by a 7.8 magnitude earthquake. It seems as if Washington felt it could no longer sustain its embargowhen tens of thousands of bodies were being exhumed from the rubble and millions more were struggling with cold, hunger and injuries.The US could not afford to look like the odd man out faced with a global wave of concern for the devastated populations of Syria and Turkey. under the new exemption, the Syrian government will be able to receive earthquake relief for six months before the embargo locks back in.But no one should be fooled by this apparent change of heart. In the immediate aftermath of the earthquake, the State Department’s first reaction was to double down on its policy. Spokesman Ned Price dismissed the possibility of lifting sanctions, arguing it would be “counterproductive … to reach out to a government that has brutalized its people over the course of a dozen years now.” The truth is that the sanctions regime imposed by the US and its allies in Europe, Canada and Australia was a criminal policy long before the earthquake struck. The brief and belated exemption – under international pressure – does not fundamentally alter that picture. Sanctions are a form of collective punishment on the wider population. The West has been punishing Syrians for living under a government they did not elect but one the US is determined to bring down at all costs. The West’s embargo was imposed in parallel to a civil war, which rapidly transformed into a western proxy war, that ravaged most of the country. The US and its allies fueled and inflamed the war, sponsoring rebel groups, including jihadists, that ultimately failed to oust the government of Bashar al-Assad. Many of those extremist groups flooded in from neighboring countries, where they had been sucked into the vacuum left in the wake of the West’s earlier “humanitarian” regime-overthrow operations. To avoid the fighting, many millions of Syrians were forced to flee their homes, resulting in endemic poverty and malnutrition. Even as the fighting abated, Syria’s economy continued to sink – not only because of western sanctions, but because the US and others had seized Syria’s oil fields and its best agricultural lands. The supposed logic of the West’s decade-long policy to immiserate Syria, fashioned to a template Washington regularly rolls out against official enemies, was simple. Desperate Syrians would be incentivized to rise upagainst their leaders in the hope of better things. But the project visibly failed – just as it has done so often before in official enemy states such as Cuba and Iran. Nonetheless, the program of suffering continued to be enforced in the name of humanitarianism. When Syria was hit by a 7.8 magnitude earthquake last week, Washington’s insistence that the sanctions remain in place shifted the policy from the simply inhumane to the positively ghoulish. That in itself gives the lie to any pretense that, in their fight to topple the Assad government, the US and Europe ever really cared about the Syrian people. It also offers a revealing counterpoint to Ukraine’s treatment. Apparently, no price is to be spared to save the “European-looking” Ukrainians fromRussia’s invasion, even if it risks a nuclear confrontation. But darker-skinned Syrians will be abandoned to their fate as soon as crumbling masonry is no longer on our TV screens. When did this kind of racist discrimination qualify as humanitarianism?Punishing Syria isn’t an ethical foreign policy. It is rationalized by viewing the world and its peoples through one lens only: how they can serve the naked interests of western and, primarily, US power. As ever, the West is playing its colonial Great Game – power intrigues to line up its geostrategic chess pieces in the most advantageous arrangement possible. And those interests include global military dominance and control over key financial resources like oil.
How the World Bank and IMF Destroyed Yemen - In May 2014, the IMF and the government of Yemen were in talks about a $560 million loan requested by Yemen to bolster a quickly diminishing SWF. To secure the deal, president Hadi agreed to cut fuel subsidies by 20 to 40% in a phased wave of governmental cuts scheduled to start in October 2014. The SwF financed fuel subsidies and was created in 1996 by the World Bank to assist the poorest communities in Yemen. Yemen was in a desperate situation with the people’s growing dismay with the Hadi administration leading him to seek financial relief from the IMF because he was all tapped out at the World Bank. The World Bank’s 2010 Project Appraisal Document shows an acute awareness of the social unrest that would ensue if fuel subsidies were drastically cut, never-mind if fuel subsidies completely stopped. The IMF pressured the Yemen government to make cuts to the fuel subsidies earlier than planned, leading to unrest in the streets of Yemen. In July 2014, the Yemen government increased gasoline prices by 60% and diesel by 95% to appease the IMF, which asked Yemen to cut the fuel subsidy program and raise fuel prices to offset the country’s growing debt that has been blooming since Yemen’s Revolution of Dignity in 2011. The decision to raise fuel prices led to hundreds of thousands of protesters flooding the streets of Saana. Fuel prices spiked dramatically, causing bread transport to rise by 20% overnight. Rural Yemeni farmers, who account for 60% of the population, could not afford the fuel to run their equipment leading to widespread unemployment and barren markets. Yemen’s civil workers are the country’s backbone and consist of everyone from construction workers and engineers to doctors and teachers, who had their paychecks stopped in January 2014. The principal difference between the Yemen Revolution of Dignity in 2011 and the protests that gripped the country in 2014 is that the people protesting in 2014 weren’t just the youth, poor, or marginalized populations in Yemen that shook Saana in the Revolution of Dignity. The protest in 2014 was Yemen’s working class, tribal community, students, and poor people who organized protests in every province of Yemen. The fuel subsidy cuts were supposed to be supported by social programs targeted at people reliant on these subsidies. By 2014, the Yemen government had made zero cuts to the fuel subsidy program and failed to set up the programs the World Bank called safety net programs. On January 1st, 2014, payments on loans granted by the World Bank to Yemen were due, and the country needed help to pay the loan fees. The SwF required more money to disperse to 5 million Yemenis now enrolled in the program. To complicate the issue, the World Bank, European Commission, and United Nations Development Program, which created and funded the SwF, failed to help Yemen set up the social programs that were supposed to be a safety net for the most vulnerable populations across Yemen. The SwF went from covering 100,000 Yemenis in 1996 to over 1 million in 2000. According to Yemen Poverty Assessment Report 2007 (PDF) conducted by the United Nations Development Program, 77% of the fuel subsidies went to families above the poverty line, and only 13% went to chronically low-income families. The World Bank secured loans for the SwF from the United Kingdom’s Department for International Development, America’s Institute for Defense Analyses, and the United Nations Development Program to name a few international shapeshifters. Reforms to the SwF aimed at targeting people in chronic poverty also drew the attention of the World Food Program, which started to work closely with the SWF’s food assistance programs in 2009. The World Bank’s 2010 Project Appraisal Document details how the Yemeni government was supposed to make cuts gradually from 2010 to 2014.As Yemen began to lose control in late 2014, the Houthis were closing in on capturing Aden when Hadi and members of the internationally recognized government escaped to Saudi Arabia. Quickly after Hadi arrived in Riyadh, the GCC pushed resolutions through the United Nations Security Council to blockade Yemen and authorize the GCC to wage war on the Houthis and AQAP. The resolution explicitly states that securing the maritime passageways around Yemen is vital to international commerce, and the UN Security Council fears that an unstable Yemen threatens the security of the Arabian Peninsula.
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