biggest drop in gasoline supplies in 18 months; DUC well backlog at 4.9 months

US oil prices rose last week as oil traders refocused on supply and demand fundamentals after the prior week's panic sell-off…after falling 13% to a 15 month low of $66.74 a barrel last week in the wake of the second and third biggest bank failures in US history, the contract price for the benchmark US light sweet crude for April delivery fell over $3 in Asian trading on Monday, on fears that turmoil in the global banking sector would spark a recession that would sap fuel demand, and traded off 1% in early New York trading as a deal in which UBS, Switzerland’s largest bank, agreed to buy Credit Suisse in an attempt to rescue the country’s second biggest bank, failed to ease banking concerns, but rallied late in the session to settle the session 90 cents higher at $67.64 a barrel, supported by a sharp retreat in the U.S. dollar as traders positioned ahead of the two-day Fed policy meeting, when officials were expected to deliver another round of interest rate increases amid still high inflation....oil prices headed higher at the open on the last day of trading for April oil on Tuesday, with increasing demand and disruptions in supply pushing prices higher, then advanced more than 1.5% after Russia announced it would extend its unilateral 500,000 bpd production cut, and finished trading $1.69 or 2.5% higher at $69.33 a barrel, while the more actively traded contract for US oil for May delivery settled $1.85 higher at $69.67 a barrel, as measures to stabilize the banking sector and pledges from major central banks to boost liquidity calmed the fears about the financial system that had been roiling markets...now quoting the price of the May oil contract, oil prices rallied early Wednesday after the EIA reported huge drawdowns of fuel products, and continued on their upward trend despite an unexpected build in crude stocks as the dollar fell to a six-week low ahead of the Fed’s decision on interest rates in the afternoon, and settled $1.23 higher at $70.90 a barrel as the U.S. dollar declined sharply after Fed raised the federal funds rate 25 basis points while acknowledging turmoil in the banking sector could slow the already fragile economy...oil prices started rising for a 4th day on Thursday after Goldman Sachs analysts said they expected higher oil prices 12 months from now, pointing to a forecast demand increase in China to more than 16 million barrels daily over the period, but sold off sharply ahead of the close after U.S. Energy Secretary Jennifer Granholm said that refilling the country’s SPR would be difficult this year and might take several years, and settled 94 cents lower at $69.96 a barrel as fading confidence in the financial system reignited fears that another crisis might be looming...oil prices then plunged by 4% early on Friday as the U.S. dollar rallied and banking stocks in Europe crashed in a sign of renewed pressure on the sector, but recovered to trade modestly higher by midday on the expectation of returning Chinese demand and amid a growing consensus that fears of a banking crisis were overblown, before turning lower again and settling with a 70 cent loss on the day at $69.26 a barrel, paring its weekly gains as fresh signs of stress in the banking sector caused investors to move away from riskier assets ahead of the weekend....oil prices still ended 3.8% higher on the week, while the contract for US oil for May delivery, which ended last week at $66.93 a barrel, finished 3.5% higher...

natural gas prices, on the other hand, finished lower as expectations of coming spring weather more than offset slightly cooler near term forecasts...after falling 3.8% to $2.338 per mmBTU in the widespread market rout following the failed bank takeovers last week, the contract price of US natural gas for April delivery opened higher but quickly traded lower on Monday​ morning,​ on expectations that weather driven demand would weaken by the end of the month, and tumbled 11.5 cents or 5% to settle at $2.223 per mmBTU as intensifying stress in the global financial system overwhelmed the bulls seizing upon favorable near-term weather, steady export demand and expectations ​of a seasonally robust inventory withdrawal...but Monday's action was reversed on Tuesday, as natural gas prices opened lower but quickly moved higher as bulls jumped in on the news of gas production cuts and gas settled with a 12.5 ​cent ​gain at $2.348 per mmBTU on short covering after prices hit their lowest in a month...but natural gas prices fell from the open on Wednesday on rising output and declining demand and settled 17.7 cents lower at $2.171 per mmBTU, succumbing to spring weather expectations and stout production levels...natural gas prices crept higher early Thursday and rose to an intraday high of $2.261 soon after Thursday's storage report, which was in line with industry expectations, but faded thereafter to settle 1.7 cents lower at $2.154 per mmBTU on afternoon forecasts for less cold weather and lower heating demand over the next two weeks than ​was ​previously expected...natural gas prices then ​traded  ​up on Friday, boosted by colder forecasts and expectations for back-to-back bullish storage draws relative to historic norms, and settled 6.2 cents higher at $2.226 per mmBTU, but still finshed 5.2% lower for the week...

The EIA's natural gas storage report for the week ending March 17th indicated that the amount of working natural gas held in underground storage in the US fell by 72 billion cubic feet to 1,900 billion cubic feet by the end of the week, which left our natural gas supplies 504 billion cubic feet, or 36.1% above the 1,396 billion cubic feet that were in storage on March 17th of last year, and 351 billion cubic feet, or 22.7% more than the five-year average of 1,549 billion cubic feet of natural gas that were in storage as of the 17th of March over the most recent five years….the 72 billion cubic foot withdrawal from US natural gas working storage for the cited week was a bit less than was expected by analysts surveyed by Reuters, whose average forecast called for a 75 billion cubic feet withdrawal, but it was more than the 55 billion cubic feet that were pulled out of natural gas storage during the corresponding week of 2022, and also much more than the average 45 billion cubic feet of natural gas that have typically been withdrawn from our natural gas storage during the same late 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 March 17th showed that the key oil supply and demand metrics were little changed from the prior week, and hence we again had surplus oil to add to our stored commercial crude supplies for the 12th time in 13 weeks, and for the 19th time in the past 29 weeks, ​on the continued support of 2 million barrels per day of ​new ​oil supplies that the EIA could not account for... Our imports of crude oil fell by an average of 45,000 barrels per day to average 6,172,000 barrels per day, after falling by an average of 55,000 barrels per day during the prior week, while our exports of crude oil fell by 95,000 barrels per day to 4,932,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 1,240,000 barrels of oil per day during the week ending March 17th, 50,000 more 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 100,000 barrels per day higher 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 13,540,000 barrels per day during the March 17th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,376,000 barrels of crude per day during the week ending March 17th, an average of 21,000 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 160,000 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 March 17th appear to indicate that our total working supply of oil from net imports and from oilfield production was 1,996,000 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 [+1,996,000] 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, with most everyone treating 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)….(NB: there is also a more recent twitter thread from an EIA administrator addressing these errors, and what they hope to do about it)

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,217,000 barrels per day last week, which was 0.4% less than the 6,242,000 barrel per day average that we were importing over the same four-week period last year. This week's 160,000 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 100,000 barrels per day higher 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 11,900,000 barrels per day, while Alaska’s oil production was 3,000 barrels per day lower at 441,000 barrels per day and added 400,000 barrels per day to the the rounded national total, same as 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 88.6% of their capacity while using those 15,376,000 barrels of crude per day during the week ending March 17th up from their 88.2% utilization rate during the prior week, as US refineries are now ramping up after completing their seasonal maintenance... The 15,376,000 barrels per day of oil that were refined this week were still 3.2% less than the 15,878,000 barrels of crude that were being processed daily during week ending March 18th of 2022, and 5.1% less than the 16,198,000 barrels that were being refined during the prepandemic week ending March 15th, 2019, when our refinery utilization was 88.9%, also close to normal for mid March ...

With last week's big increase in the amount of oil being refined, the gasoline output from our refineries was finally higher, increasing by 392,000 barrels per day to 9,503,000 barrels per day during the week ending March 17th, after our gasoline output had decreased by 446,000 barrels per day during the prior week. This week’s gasoline production was still 3.1% less than the 9,804,000 barrels of gasoline that were being produced daily over the same week of last year, and 4.3% less than the gasoline production of 9,925,000 barrels per day during the prepandemic week ending March 15th, 2019.   Meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 75,000 barrels per day to 4,503,000 barrels per day, after our distillates output had decreased by 97,000 barrels per day during the prior week. Even with this weeks increase, our distillates output was 9.6% less than the 4,979,000 barrels of distillates that were being produced daily during the week ending March 18th of 2022, and 8.5% less than the 4,923,000 barrels of distillates that were being produced daily during the week ending March 15th, 2019...

Even with the big increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the fifth consecutive week and by the most since September 3rd 2021, decreasing by 6,399,000 barrels to 229,598,000 barrels during the week ending March 17th, after our gasoline inventories had decreased by 2,061,000 barrels during the prior week. Our gasoline supplies fell by more this week because the amount of gasoline supplied to US users rose by 366,000 barrels per day to 8,960,000 barrels per day, while our exports of gasoline rose by 1,000 barrels per day to 892,000 barrels per day, and while our imports of gasoline rose by 21,000 barrels per day to 471,000 barrels per day.. Following five straight gasoline inventory decreases, our gasoline supplies were 3.5% below last March 18th's gasoline inventories of 238,043,000 barrels, and about 4% below the five year average of our gasoline supplies for this time of the year…

Likewise, even with the increase in our distillates production, our supplies of distillate fuels decreased for the 7th time in 12 weeks, and by the most since October 7th, falling by 3,313,000 barrels to 119,715,000 barrels during the week ending March 17th, after our distillates supplies had decreased by 2,537,000 barrels during the prior week. Our distillates supplies decreased by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, increased by 238,000 barrels per day to 3,974,000 barrels per day, and as our exports of distillates rose by 16,000 barrels per day to 1,225,000 barrels per day, while our imports of distillates rose by 67,000 barrels per day to 222,000 barrels per day.. Even after fifty-eight inventory withdrawals over the past ninety-six weeks, our distillate supplies at the end of the week were 3.8% above the 112,135,000 barrels of distillates that we had in storage on March 18th of 2022, but still about 9% below the five year average of our distillates inventories for this time of the year...

Finally, with nearly two million barrels per day of new oil supplies that could not be accounted for, our commercial supplies of crude oil in storage rose for the 19th time in 29 weeks and for the 30th time in the past year, increasing by 1,117,000 barrels over the week, from 480,063,000 barrels on March 10th to 481,180,000 barrels on March 17th, after our commercial crude supplies had increased by 1,550,000 barrels over the prior week. With several large oil supply increases in the weeks following the Christmas refinery freeze offs, our commercial crude oil inventories are now about 8% above the most recent five-year average of commercial oil supplies for this time of year, and also about 46% above the average of our available crude oil stocks as of the third weekend of March 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 March 17th were 16.4% more than the 413,399,000 barrels of oil we had in commercial storage on March 18th of 2022, but 4.3% less than the 502,711,000 barrels of oil that we had in storage in the wake of winter storm Uri on March 19th of 2021, while 5.7% more than the 455,360,000 barrels of oil we had in commercial storage on March 20th of 2020…

This Week's Rig Count

The number of drilling rigs active in the US increased for the second time in six weeks during the week ending March 24th, but were 4.4% below the prepandemic count, despite increasing ninety-seven times over the past 129 weeks... Baker Hughes reported that the total count of rotary rigs drilling in the US rose by 4 to 758 rigs over the past week, which was also 88 more rigs than the 670 rigs that were in use as of the March 25th report of 2022, but was 1,171 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 increased by 4 to 593 oil rigs during the past week, after the number of rigs targeting oil had decreased by 1 during the prior week, and there are still 62 more oil rigs active now than were running a year ago, even as they amount to just 36.9% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and while they are still down 13.2% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations was unchanged at 162 natural gas rigs, which was still up by 25 natural gas rigs from the 137 natural gas rigs that were drilling during the same week a year ago, even as they were still only 10.1% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….

In addition to those rigs targeting oil and natural gas, Baker Hughes continues to show that three rigs they've labeled as "miscellaneous" are still drilling this week: those include a directional rig drilling to between 5,000 and 10,000 feet on the big island of Hawaii, 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, and a directional rig drilling to between 5,000 and 10,000 feet into a formation in Pershing county Nevada, also unnamed by Baker Hughes.  While we haven't seen any details on any of those wells, in the past we've identified various "miscellaneous" rig activity as being for exploration rather than production, for carbon dioxide storage, and for utility scale geothermal projects....a year ago, there were two such "miscellaneous" rigs running...

The offshore rig count in the Gulf of Mexico was up by one to 17 rigs this week, with 16 of those rigs drilling for oil in Louisiana's offshore waters, and one drilling for oil in Texas waters….that Gulf rig count is also up by 3 from the 14 Gulf rigs running a year ago, when 13 Gulf rigs were drilling for oil offshore from Louisiana and one was deployed for oil offshore from Texas…in addition to rigs drilling in the Gulf of Mexico, there is also a directional rig drilling for oil at a depth between 10,000 and 15,000 feet, offshore from the Kenai Peninsula Borough of Alaska...hence, we now have a total of 18 rigs drilling offshore, up from the national offshore count of 14 a year ago..

In addition to rigs running offshore, there is also a water based directional rig drilling for oil at a depth greater than 15,000 feet through an inland body of water in Terrebonne Parish, Louisiana this week...a year ago, there were three rigs drilling on inland waters...

The count of active horizontal drilling rigs was unchanged at 692 horizontal rigs this week, which was still 82 more rigs than the 610 horizontal rigs that were in use in the US on March 25th of last year, even as it was just over half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014.....meanwhile, the vertical rig count was up by one to 16 vertical rigs this week, while those were still down by 9 from the 25 vertical rigs that were operating during the same week a year ago…at the same time, the directional rig count was up by 3 to 50 directional rigs this week, and those were also up by 15 from the 35 directional rigs that were in use on March 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 March 24th, the second column shows the change in the number of working rigs between last week’s count (March 17th) and this week’s (March 24th) count, the third column shows last week’s March 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 18th of March, 2022...

we'll start by checking the Rigs by State file at Baker Hughes for the changes in the Texas Permian...there we find that there were two rigs added in Texas Oil District 8A, which overlies the northern part of the Permian Midland, but that a rig was pulled out of Texas Oil District 7C, which includes a couple counties in the easternmost Permian Midland...since the Texas Permian rig count was thus up by one rig while the national Permian count was up by 3, we can figure that the 2 rigs added in New Mexico were set up to drill in the western Permian Delaware, in the southeast corner of that state....oddly enough, those were the only changes Texas this week, after the state saw 19 rig additions and 14 rig removals last week..

in other states, Oklahoma saw oil rig removals from the Granite Wash basin near the Texas panhandle and from the Mississippian shale along the Kansas border, while a natural gas rig was added in the Cana Woodford in the first natural gas drilling in that basin since September 2019...in Colorado, meanwhile, there was an oil rig added in the DJ Niobrara chalk of the Rockies front range, while in Louisiana, there was an oil rig added in the state's offshore waters...there were also a few changes that aren't evident in the tables above; a natural gas rig was pulled out of a basin that Baker Hughes doesn't track, while there was an oil rig added in a basin that Baker Hughes doesn't track; since there is no imbalance in the changes elsewhere, it's likely those offset each other in the same basin...

DUC well report for February

Monday of last week saw the release of the EIA's Drilling Productivity Report for March, which included the EIA's February 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 consecutive month, following 29 consecutive decreases, as both well completions and drilling of new wells decreased in February, 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 21 wells, rising from a revised 4,752 DUC wells in December to 4,773 DUC wells in February, which was still 6.5% fewer DUCs than the 5,105 wells that had been drilled but remained uncompleted as of the end of February of a year ago...this month's DUC increase occurred as 992 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during February, down by 15 from the 1,007 wells that were drilled in January, while 971 wells were completed and brought into production by fracking them, down by 1 from the 972 well completions seen in January, but up by 195 from the 776 completions seen in February of last year....at the February completion rate, the 4,773 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, statistically unchanged from the DUC well backlog of a month ago, but up 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 February, and only  one basin saw DUCs decrease....the number of uncompleted wells in the Niobrara chalk of the Rockies' front range increased by 10, rising from 641 at the end of January to 651 DUC wells at the end of February, as 115 wells were drilled into the Niobrara chalk during February, while 105 Niobrara wells were completed....at the same time, the number of uncompleted wells remaining in Oklahoma's Anadarko basin increased by 4, rising from 732 at the end of January to 736 DUC wells at the end of February, as 75 wells were drilled into the Anadarko basin during February, while 71 Anadarko wells were completed.... meanwhile, DUC wells in the Permian basin of west Texas and New Mexico increased by 2, from 1,042 DUC wells at the end of January to 1,044 DUCs at the end of February, as 435 new wells were drilled into the Permian basin during February, 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 580 by the end of February, as 80 wells were drilled into the Bakken during February, 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 8, from 434, DUC wells at the end of January to 426 DUCs at the end of February, as 114 wells were drilled in the Eagle Ford during February, while 122 of the 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 one well, from 662 DUCs at the end of January to 663 DUCs at the end of February, as 98 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 11, from 662 DUCs in January to 673 DUCs by the end of February, as 75 wells were drilled into the Haynesville during February, while just 64 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of February, DUCs in the five major oil-producing basins tracked by this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) increased by nine to 3,437 DUC wells, while the uncompleted well count in the major natural gas basins (the Marcellus, the Utica, and the Haynesville) was up by twelve to 1,336 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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Drilling in state parks: Republicans hope it can fuel a tax cut, but environmentalists fear the worst - cleveland.com – Ohio Senate President Matt Huffman is looking to oil and gas production on public lands, including state parks and state forests, to help replace lost state revenue that would result from income tax cuts that the legislature is eyeing.Huffman, a Lima Republican, said at the Ohio Oil and Gas Association’s annual conference March 9 that production leases on state lands could be a “great revenue generator,” according to Gongwer News Service, which covers the Statehouse and sent a reporter to the conference.But it’s unclear how much of a dent new drilling leases would put in the billion-dollar hole that would be left by the most recent tax-cut proposal before state lawmakers.Republicans who control the legislature have discussed eliminating Ohio’s income taxes, and a bill in the Ohio House would flatten the tax by most drastically cutting rates of wealthy taxpayers and modestly cutting middle-income tax rates. A spokesman for Huffman said Wednesday that the Senate is considering its own tax-cut proposals for the state’s two-year operating budget.Already, though, the Ohio Department of Natural Resources is accepting lease applications for oil and gas drilling in state-owned oil and gas reserves. The Plain Dealer / cleveland.com has requested from ODNR all the leases that have been submitted.Oil and gas development on state property is expected to soon begin after over a decade of debate on the issue among Republicans, Democrats, environmentalists and the oil and gas industry. Lawmakers passed a bill in the waning hours of the two-year legislative session last year that paved the way for drilling on public lands.“If the state can responsibly add to the revenue of the state and we can lower the tax burden, that makes Ohio a much more competitive state,” Huffman told the oilmen on March 9. “And so we should do this in earnest. We should do it responsibly. Kick it into a gear where it actually makes sense and, you know, it can be a great benefit to us.” But environmental groups have objected to drilling on state property, saying the noise, traffic and air pollution will interfere with the solace Ohioans seek when they camp, hike, kayak and participate in other recreation in state parks and forests. It’s not realistic to depend on oil and gas as a replacement revenue for reduced income taxes, said Nathan Johnson, the Ohio Environmental Council’s public lands director. The amount of money the state could earn from oil and gas are uncertain, according to the nonpartisan Legislative Service Commission, when weighing the fiscal impacts of an oil-and-gas bill last year. The industry also doesn’t yet have any estimates about how much it will drill in coming years, as leasing is still in the early stages.Royalties, or the portion that the state would receive from a lease, is one-eighth of the oil and gas produced, Ohio law states. This is a common rate, though some states demand royalties as high as 25%. Oil and gas companies expect to tap mostly subsurface minerals owned by the state. They set up on private property, then access the state minerals underground through vertical and horizontal drilling, said Mike Chadsey, director of public relations for the Ohio Oil and Gas Association. State law prohibits companies from using state-owned surface land for oil and gas development “unless the state agency, in its sole discretion, chooses to negotiate and execute a written surface use agreement.”

How hazardous is Ohio Senate President Matt Huffman’s plan to drill under state parks? Today in Ohio - cleveland.com (podcast transcript)) - Ohio Senate President Matt Huffman is looking to oil and gas production under state parks and forest to help offset possible income tax cuts. We’re talking about possible environmental issues on Today in Ohio. Listen online here. Editor Chris Quinn hosts our daily half-hour news podcast, with impact editor Leila Atassi, editorial board member Lisa Garvin and content director Laura Johnston.Here’s what we’re asking about today: Are environmentalist’s fears misplaced about Ohio Senate President Matt Huffman’s plan for oil and gas drilling on state lands?

• [00:00:00] Chris: First day of spring, and we’re still digging out from one of our biggest snowstorms, interesting weather all winter long. It’s today in Ohio. The news podcast discussion from cleveland.com and the plane dealer. I’m Chris Quinn, here with Lisa Garbin, Laura Johnston and Leila Tassi for another rip snorting conversation.Let’s go. Our environmentalist fears misplaced about Ohio Senate President Matt Huffman’s, plan for oil. Gas drilling on state lands, or I read this story and I’m trying to figure out, is this devastating to the state lands and state parks? Is the reaction people are having more strong than is warranted? What’s going on…
• [00:00:42] Laura: here? Well, the folks who want to be able to do this and remember the green energy bill that we’ve. Talked about at length on this podcast. The NA natural gas is green energy. That included the ability to drill on state parks, and they’d always had that. And it’s drilling under the state parks.
• To be clear, [00:01:00] they, they say that the machinery will not be on the actual park. It’s not like they’ll be an oil rig next to your campsite, but they would be accessing the oil and gas reserves underneath it. And what that bill did was it changed from shall. To ca basically can so that no longer did the OD n r have to go through a long process to say, okay, maybe you can, maybe you can’t, uh, drill, but you are allowed to. Now I think it’s from May to shell, that’s the verb change. And so they say, this is, this is perfectly fine. It’ll be perfectly safe, no problem, but hey, let’s use this to offset the tax cuts we wanna give to the wealthiest Ohioans. And that’s where the issue, well, I mean, I think separately we can talk about the environmental impact and what that’s gonna be like because we don’t actually know, and I think. It’s worth sounding alarm about some of our most pristine, natural spaces in this entire state. But do we wanna start drilling underneath state parks just so we can give rich people a big a, a [00:02:00] big tax cut? It just seems like Ohio’s priorities are so messed up here. It’s like trying to solve a labor shortage on the backs of 14 year
• [00:02:07] Chris: olds. All right. Let, let, let, there’s three things going on here and I, let’s take ‘em individually. One, the story shows how you’re never going to solve a budget issue with this, that, I mean, there are multiple people in the story and saying that’s a ridiculous, ridiculous idea. So Matt Huffman saying he’s gonna solve a budget problem with this, that’s bogus.Two. The, let’s put aside that Ohio is terrible at green energy. It is the, that they haven’t repealed HB six completely, the corrupt, filthy law because it did away with important green energy standards. And yes, you’re right. The governor has signed the bill saying, NA natural gas is green energy, which is.In the extreme, and they’re all trying to stand by it, and we’ll forever be talking about it. It makes Ohio look like chumps [00:03:00] on the issue of drilling on the parks and state lands. I guess I wasn’t aware before that they would never actually have the equipment on the state lands that it would come from private lands and drill down at an angle into the parks.Given all of the. Controversy we had about oil in the past couple of years. Is it a terrible thing to try and extract whatever the the value is from under those parks if you don’t in any way damage the parks, but
• [00:03:32] Laura: how? I don’t know that you can say that. I don’t think you can promise we’re not damaging the parks because you don’t know the long-term consequences.All the fracking, we’ve, I mean, we’ve been talking about fracking now for 15 years, and the fact is we don’t know what they put underground. To do the fracking when they’re injecting all of that liquid into the earth to try to get the minerals out. They don’t, it’s trade secret. They don’t have to tell you.We don’t know the long-term implications of the water and I, I just think it’s really [00:04:00] risky just to say, we’ll make some money on it.

Snodgrass is right to appeal valuation of Nexus pipeline | Editorial - Morning Journal - Lorain County Auditor Craig Snodgrass made the right move March 13 appealing to the Ohio Supreme Court to challenge the most recent and final decision of the Ohio Board of Tax Appeals regarding the valuation of the Nexus pipeline system. After lengthy consideration and input from multiple stakeholders in Lorain County and throughout Ohio, Snodgrass decided to appeal.Nexus Gas Transmission is an approximately 256-mile, 36-inch pipeline running through 12 Ohio counties and into a portion of Michigan.Snodgrass is well within his right to appeal.And he has a supporter in Lorain County Commissioner Michelle Hung, who does not see a down side to taking the appeal to the Supreme Court to rule on this matter.The value was $1.6 billion and the tax commissioner has settled on a value of $950 million, leaving a shortfall to Lorain County of approximately $4 million per year, every year.Obviously, that’s not sitting well with Snodgrass and Hung, especially because the ruling would not be a one-time loss.The higher the value of the gas line, the more money schools and other government agencies receive in funding from tax money collected in those areas where the gas line operates.Hung believes that with the shortfall, area schools and children will suffer the effects of less money.And she has a point that residents don’t have high-priced lobbyists working for them, and the people look to their elected officials to make sure this is a good deal for the schools and children’s future.Hung doesn’t want school districts going to voters to support a levy because corporate businesses aren’t paying their fair share.The two sides, however, had worked out a settlement agreement valuing the pipeline at $950 million for tax year 2019, $946 million in tax year 2020; $934 million in tax year 2021 and the estimated value of $901 million for 2022.Snodgrass firmly believes that under the Board of Tax Appeals decision, his office was wrongfully deprived of a statutory right-of-appeal and the ability to challenge the “true value” of the Nexus pipeline system for not only tax year 2019, but in 2020, 2021 and every year thereafter.Snodgrass feels it’s an obligation to file the appeal, because if not, the Board of Tax Appeals’ ruling would cost Lorain County, and its political subdivision, approximately $15.7 million for tax years 2019-2022, and significant more in personal property tax revenue thereafter.Snodgrass also noted he not only is filing the appeal on behalf of Lorain County residents, but for other county auditors across the state.

Living Near Fracking Tied to Increase in Hospitalizations in Seniors -- Older adults living near fracking sites could have a high risk for poor cardiovascular outcomes, according to a study published in the March issue of The Lancet Planetary Health. see Abstract/Full TextKevin S. Trickey, from the University of Chicago, and colleagues assessed the effects of unconventional natural gas development (UNGD) on population health in local communities. The analysis included Medicare claims (2002 to 2015) in Pennsylvania ZIP codes with fracking and neighboring New York communities without fracking.The researchers found that Pennsylvania ZIP codes that started UNGD in 2008 to 2010 were associated with more hospitalizations for cardiovascular diseases in 2012 to 2015 than would be expected in the absence of UNGD. In 2015, there were an additional 11.8, 21.6, and 20.4 hospitalizations for acute myocardial infarction, heart failure, and ischemic heart disease, respectively, per 1,000 Medicare beneficiaries. Even as UNGD growth slowed, hospitalizations increased and persisted in sensitivity analyses."Although we can't point to one specific part of fracking operations as the culprit, folks living near fracking sites could be affected by exposure to things like air or water pollution that often come with fracking activity," Trickey said in a statement. "Our study connects nearby fracking activity to real, serious human health outcomes, suggesting it's not just a matter of economics or environmental sustainability -- but that policymakers and residents alike should start prioritizing the health of citizens, whether drilling new wells or plugging old ones."

New York nears deal to ban gas stoves in new homes - — New York state lawmakers are poised to enact the nation’s first legislative ban on gas and fossil fuel appliances in most new buildings, including single-family homes.Despite outcry from Republicans nationwide about states and the federal government looking to ban gas stoves, New York appears set to move forward with the proposal in the state budget due March 31.The reason a deal looks imminent is because Gov. Kathy Hochul and fellow Democrats in both chambers of the state Legislature have endorsed proposals to prohibit fossil fuel furnaces, water heaters, clothes dryers and gas stoves in most new construction.New York would be the first to take this step through legislative action; California and Washington have done so through building codes. An agreement has not been finalized to ensure passage, but the new restrictions are included in all three plans being discussed in Albany.Supporters see the potential law as a national model that they hope can spur similar action by other states and the federal government to limit fossil fuel use in buildings, which are a major source of greenhouse gas emissions contributing to climate change.“All eyes are on us and a lot of other states are looking to what New York does,” said Pat McClellan, policy director at the New York League of Conservation Voters. “If we prove it can be done and we have the political will to do this, it’s going to open the floodgates for other states to take action.”Republicans across the nation have stoked anger about proposals targeting gas stoves after a federal official said the Consumer Product Safety Commission should consider a ban. In Florida, Republican Gov. Ron DeSantis urged lawmakers to approve a tax exemption for gas stoves and declared federal officials aren’t “taking our gas stoves away from us.”

Republicans Introduce Bills To Prevent Biden Administration From Banning Gas Stoves - Two House Energy and Commerce Committee Republicans announced on March 20 they are introducing legislation to prevent the Biden administration from banning gas stoves.The legislation was introduced by Reps. Kelly Armstrong (R-N.D.) and Debbie Lesko, (R-Ariz.) in response to the Biden administration’s two-pronged push to ban gas stoves, and might go to the House floor for a vote later this year.Lesko introduced H.R. 1640, also known as the Save Our Gas Stoves Act, while Armstrong introduced H.R. 1615, the Gas Stove Protection and Freedom Act. Both bills are currently in committee. The pieces of legislation would prohibit the Consumer Product Safety Commission (CPSC) from using federal funding to implement any regulation that would classify gas stoves as a prohibited dangerous product under current law.The bills also prohibit the CPSC from enforcing any consumer product safety standards that would prohibit the use of gas stoves or impose regulations that would raise gas stove prices. In a press release announcing the legislation, Armstrong emphasized his frustration with the administration’s attempts to ban the stoves.“Inflation is hurting everyone. We have a crisis at our Southern Border. North Dakotans are worried about being able to provide for their families. What is the Biden administration focused on? Controlling the kind of stove Americans use,” Armstrong said.

Fossil Fuel Executives See a ‘Golden Age’ for Gas, If They Can Brand It as ‘Clean’ - Natural gas has long been subject to a war of words. Once it was a “bridge fuel” that would straddle the gap from fossil energy to renewable sources. More recently, climate activists have sought to highlight that gas pollutes, too, by stripping “natural” from its name and calling it fossil- or methane gas. The industry is pushing back, and gas executives displayed their latest linguistic counteroffensive at an industry conference this month in Houston. “It’s time for us to stop tiptoeing about the value of natural gas,” said Octávio Simões, chief executive of Tellurian, which is struggling to finance its multi-billion dollar plan to export liquified natural gas, or LNG. “It’s time for us to say it is an incredible fuel, and we’re not afraid to burn it in our kitchens,” he added, drawing cheers from the otherwise subdued crowd. Gas’s fortunes have fallen over the last decade as emerging science revealed that its production and transport releases large volumes of methane, the fuel’s primary component and a potent greenhouse gas. Some estimates indicate these leaks have wiped away much or even most of the gains the United States appeared to make in cutting climate pollution by replacing coal with gas as a fuel for power plants. When burned, gas releases about half as much carbon dioxide as coal, but methane traps about 85 times more heat than CO2 over a 20-year period. Other science has shown that gas stoves emit harmful chemicals that can collect in people’s homes.“We lost the narrative on the value of natural gas,” Simões said.Toby Rice, who leads EQT, the country’s largest gas producer, was sitting next to Simões and has been at the forefront of an effort to win back that narrative. During the panel, Rice called his company’s product the “cleanest energy in the world,” despite the fact that gas emits 20 percent of global carbon dioxide emissions.Fossil fuel executives were broadcasting the same message as Rice and Simões throughout the conference, CERAWeek by S&P Global, one of the energy industry’s largest annual gatherings.

U.S. Natural Gas Demand Outpaced Supply in 2022, Says FERC - U.S. LNG exports rose by 8.6% year/year to average 10.6 Bcf/d in 2022, with demand growth driven by European markets seeking a substitute for Russian supply, according to FERC. Coincidentally, the figure for net exports of natural gas overall – including liquefied natural gas and pipeline exports – also was 10.6 Bcf/d, up slightly from 10.5 Bcf/d in 2021, the Federal Energy Regulatory Commission said in its 2022 State of the Market report. “Tight LNG supplies contributed to increasing international prices, which reached record levels, incentivizing U.S. LNG exports,” researchers said. “The approval and expansion of multiple LNG export facilities in 2022 increased LNG liquefaction capacity to serve the growing international LNG demand to higher-priced regions.” Domestically, natural gas prices increased in 2022 versus 2021 at nearly all major hubs, the FERC team noted. The Henry Hub national benchmark averaged $6.38/MMbtu for the year, up from $3.82 in 2021. “This was the highest average spot price at Henry Hub since 2008, and the largest absolute year-over-year average price increase since 2005,” researchers said. FERC researchers explained that “natural gas demand growth outpaced gains in natural gas production,” boosting prices. “In 2022, natural gas demand was driven by increased domestic natural gas consumption and LNG exports. Although production did not keep pace with demand, it continued the growth trend seen in the last decade.” Production highs were especially noticeable in the Permian Basin and Haynesville Shale, they added. This was due to pipeline infrastructure expansions in both regions. By contrast, the Marcellus and Utica shales in Appalachia each saw year/year production declines, a trend “likely in part disincentivized by limited takeaway capacity additions.” More than 40% of incremental pipeline capacity additions over the last five years have occurred in the South Central region. The region accounted for 58% of capacity additions in 2022, researchers said. Natural gas storage inventories, meanwhile, trended downward for the year as a whole, although they have since returned to levels above the five-year historical average.

Chilly Winter, Hot Summer Fuel All-Time U.S. Natural Gas Demand in 2022 - Strong peaks in the winter and summer drove U.S. natural gas consumption to an all-time high last year, averaging 88.5 Bcf/d, according to the Energy Information Administration (EIA). The federal agency said natural gas consumption peaked last year in January and July. EIA noted that natural gas peaks twice a year in the United States, driven by the residential and commercial sectors during the winter and the electric power sector during the summer. In winter, the most natural gas is consumed in January or February when demand for space heating peaks. In summer, the most natural gas is consumed typically in July or August to meet air-conditioning demand. In January 2022, the combined residential and commercial sectors consumed 9% more natural gas than in January 2021, according to EIA. Notably, the electric power sector consumed 10% more year/year, and even reached a record in January 2022 that pushed overall natural gas consumption to a monthly record high in records dating back to 1949. Strong demand continued in the summer, with last year’s being the third-warmest on record in the Lower 48, according to EIA. This led to strong demand for air conditioning and resulted in new daily records for electricity generation in July. “As a result, more natural gas was consumed in the electric power sector, pushing consumption in July to be the highest for the summer,” EIA analysts Katy Fleury and Kristen Tsai. Overall, the pace of the increase in natural gas demand at 5% year/year (4.5 Bcf/d) was the second-fastest annual growth since 2013, EIA said. What’s more, natural gas consumption in the United States set monthly records in nine of 12 months in 2022.

Cold Snap, Bullish Storage Expectations Fail to Send Natural Gas Futures Higher; Spot Prices Steady - Natural gas futures probed higher early Monday, with bulls seizing upon favorable near-term weather, steady export demand and market expectations for a seasonally robust inventory withdrawal. But intensifying stress in the global financial system ultimately curbed the momentum and left futures in the red as markets closed.The April Nymex gas futures contract settled at $2.223/MMBtu, down 11.5 cents day/day. May also fell 11.5 cents to close at $2.331.NGI’s Spot Gas National Avg. slipped 2.0 cents to $2.530 ahead of a break from cold weather.Monday futures trading extended losses from Friday. The prompt month lost 4% last week.NatGasWeather said American and European weather models heading into Monday trading agreed on the timing of swings in national demand the next two weeks, “starting with strong demand to open the week after frosty weather systems swept across” the country over the weekend. This, the firm said, supported prices early Monday.Both models also showed another chilly weather system racing across the northern United States March 27-29 for “a modest bump in national demand” before more spring-like temperatures arrive.

US natgas prices bounce off 1-month low to end 5% higher on short covering (Reuters) - U.S. natural gas futures rebounded more than 5% on Tuesday on short covering after prices hit their lowest in a month. Front-month gas futures for April delivery settled 12.5 cents higher, or up 5.6%, at $2.348 per million British thermal units (mmBtu) after hitting a fresh low since Feb. 23 earlier. Traders' attempt to push towards $2.00 mmBtu resulted in short covering because there were not enough bearish factors to justify that slide, said Robert DiDona of Energy Ventures Analysis, adding that demand was "relatively stable." "We'll find some bid side interest here in short-term given the weather outlook ... and what should be better LNG demand in the upcoming weeks." Oil prices rose, settling up more than 2% and extending a recovery from a 15-month low hit the previous day, as the rescue of Credit Suisse allayed concerns of a banking crisis that would hurt economic growth and cut fuel demand. Analysts said gas production declined earlier this year due in part to a price slump of 40% in January and 35% in December that persuaded several energy firms to reduce the number of rigs they were using to drill for gas. In addition, extreme cold in early February and late December cut gas output by freezing some oil and gas wells in several producing basins. Overall milder winter weather this year, however, has prompted utilities to leave more gas in storage than usual. Gas stockpiles were about 24% above their five-year average (2018-2022) during the week ended March 10 and were expected to end about 16% above normal during the colder-than-normal week ended March 17, according to federal data and analysts' estimates. "We still see significant price support further down the curve with Europe likely to be a strong buyer later in the summer amidst some tank topping ahead of the winter as Russian supply availability will be negligible in relation to past years," analysts at energy consulting firm Ritterbusch and Associates said in a note. "So, by and large, we still see some near-term price softening but will be looking to approach the long side by week's end depending upon the market's response to the EIA storage."

US natgas futures drop 8% as output rises, demand declines (Reuters) - U.S. natural gas futures fell about 8% on Wednesday, erasing the prior session's 6% gain, as output continues to rise while demand declines with the coming of seasonally milder, spring-like weather. That price decline came even as the amount of gas flowing to liquefied natural gas (LNG) export plants was on track to hit a record high this week after Freeport LNG's plant in Texas exited an eight-month outage in February. Prices also dropped despite forecasts for cooler weather and higher heating demand next week than previously expected. Traders, however, noted that slightly colder weather in late March has much less of an impact on heating demand as colder weather in late January. Temperatures in the U.S. Lower 48 states will average around 49.2 degrees Fahrenheit (9.6 Celsius) over the next two weeks versus a 30-year average of 50.6 degrees F for this time of the year, according to data provider Refinitiv. Front-month gas futures for April delivery fell 17.7 cents, or 7.5%, to settle at $2.171 per million British thermal units (mmBtu), their lowest since hitting a 29-month closing low of $2.073 on Feb. 21. The gas market has been extremely volatile in recent weeks as traders bet on the latest weather forecasts - Wednesday's decline was only the biggest percentage drop since early March. Freeport LNG's export plant was on track to pull in about 1.2 billion cubic feet per day (bcfd) of gas on Wednesday, down from 1.5 bcfd on Tuesday, according to Refinitiv data. Freeport LNG said on March 8 that it anticipated feedgas flows would rise and fall as the plant returns to full production over the "next few weeks." Total gas flows to all seven of the big U.S. LNG export plants rose to an average of 13.1 bcfd so far in March from 12.8 bcfd in February. That would top the monthly record of 12.9 bcfd in March 2022, before the Freeport LNG facility shut. The seven big U.S. LNG export plants, including Freeport LNG, can turn about 13.8 bcfd of gas into LNG. Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.6 bcfd so far in March from 98.2 bcfd in February. That compares with a monthly record of 99.9 bcfd in November 2022. Analysts said production declined earlier this year due in part to gas price declines of 40% in January and 35% in December that persuaded several energy firms to reduce the number of rigs they were using to drill for gas. In addition, extreme cold in early February and late December cut gas output by freezing some oil and gas wells in several producing basins. Meteorologists projected the weather in the Lower 48 states would remain mostly colder-than-normal through April 6 after a couple of warmer-than-normal days on March 22-23. Refinitiv forecast U.S. gas demand, including exports, would slide from 115.0 bcfd this week to 109.1 bcfd next week. The forecast for next week was higher than Refinitiv's outlook on Tuesday.

Seasonally Steep Storage Pull Not Enough to Bolster Natural Gas Futures, Cash Prices - Natural gas futures flipped positive early Thursday after a government inventory report proved bullish relative to recent years. However, it ultimately was not enough to ease festering supply/demand imbalance concerns. The April Nymex gas futures contract lost 1.7 cents day/day and settled at $2.154/MMBtu. May fell 2.4 cents to $2.283. A day earlier, both shed more than 17 cents. NGI’s Spot Gas National Avg. on Tuesday fell 19.5 cents to $2.105. Cash prices have declined throughout the week. The U.S. Energy Information Administration (EIA) on Thursday reported a withdrawal of 72 Bcf natural gas from storage for the week ended March 17. Prior to the report, polls showed draw expectations in the 70s Bcf. NGI modeled a 76 Bcf withdrawal. The East and Midwest regions led with withdrawals of 36 Bcf and 29 Bcf, respectively, according to EIA. The South Central posted a pull of 6 Bcf. Mountain region stocks declined by 3 Bcf, while Pacific inventories were flat. From a price perspective, the net result compared bullishly with a pull of 55 Bcf a year earlier and a five-year average decline of 45 Bcf. The decrease lowered inventories to 1,900 Bcf and reflected above-average demand for the covered period – the final week of winter – when a cold snap enveloped several regions of the Lower 48. Winter weather extended into the start of the current week, and the next EIA print could again prove relatively steep. Early estimates for the week ending March 24 submitted to Reuters ranged from pulls of 38 Bcf to 76 Bcf, with an average decrease of 55 Bcf. The projections compare with an increase of 15 Bcf a year earlier and a five-year average decline of 17 Bcf. Still, stocks remained well above the year-earlier level of 1,396 Bcf and the five-year average of 1,549 Bcf. This followed a weeks-long stretch of relatively mild winter that spanned most of January through early March. Production also has hovered around 100 Bcf/d – close to record levels – and it held just shy of the century mark in estimates on Thursday.

Natural Gas Futures, Spot Prices Find Path Forward as Forecasts Tilt Colder - Natural gas futures forged ahead Friday, boosted by colder forecasts and expectations for back-to-back bullish storage prints relative to historic norms. The April Nymex gas futures contract settled at $2.216/MMBtu, up 6.2 cents day/day. May rose 7.8 cents to $2.361. NGI’s Spot Gas National Avg. gained 18.0 cents to $2.285. NatGasWeather said weather data, while inconsistent through most of the past week, flipped back colder heading into trading Friday. The European weather model added several heating degree days for the next two weeks. This, the firm said, advertised a cooler-than-normal pattern heading into April and provided a bump for futures. That noted, price movement was modest as cool temperatures in late March and early April rarely translate into robust demand. At the same time, high temperatures across the South are projected to range from the 60s to the 80s – shoulder season conditions that tend to minimize both heating and cooling demand. Friday’s prompt month close was notably below the previous week’s finish at $2.338. EBW Analytics Group’s Eli Rubin, senior analyst, said bulls also have in their favor Freeport LNG’s gradual return to full service. The liquefied natural gas export facility, knocked out of commission last year after a fire, recently drew 1 Bcf/d of gas from domestic supplies, adding to demand. However, the plant’s efforts to build back to capacity of nearly 2.4 Bcf/d have been slowed by complications. “Demand expectations have been parried by news concerning damage to one train at Freeport LNG during the long-awaited startup,” Rubin said Friday.

Lower 48 Oil and Natural Gas Permitting Rises, but Not Everywhere - Nearly 3,000 permits were issued in February to explore for U.S. oil and gas, a slight increase from January but down nearly 9% from a year ago, according to state and federal data. Evercore ISI, which tracks oil and gas permitting data, said 2,929 permits gained approval in February, up by 211 or 8% from January and 51.7% more than in February 2021. However, permitting fell from February 2022 by 8.8%.“Major losses were reported in the Powder River Basin,” analysts said, down by 68 from January or 26% month/month (m/m). Permitting also declined in smaller plays, off by 18% m/m or by 68. Permitting rose, though, in the Marcellus Shale, up by 199 or 151%, as well as in the Permian Basin, up by 70 from January or 6% higher m/m. Also seeing permitting gains from January were the Denver-Julesburg/Niobrara, up by 62 permits, and the Eagle Ford Shale, up by 46.The Permian held a 41% share of all issued permits, followed by the Eagle Ford with 11%, small basins at 8% and the Marcellus with a 7% share. When permits are issued, it usually takes three to six months to begin development onshore. By state, Texas led the way in permitting, up by 9% m/m or 112 to reach 1,385. Pennsylvania followed with 148 permits, up by 90 or 155% m/m. Colorado recorded 153 permits in February, which was 74 more than in January or 94% higher. Louisiana saw permits reach 102 in February, up by 41 or 67% higher m/m.“These gains offset major declines in issued permits in California to only 12,” said Evercore analysts. That was a 162 decline from January, or down by 93% m/m. Wyoming also saw a sharp decline to 229 permits issued, off by 71 or 24% lower m/m.During January, upstream oil and natural gas employment in Texas rose by 13.7% year/year to a total of 198,100 jobs, according to the Texas Independent Producers and Royalty Owners Association (TIPRO). The figure was up by 1,700 jobs from December 2022, the group said, citing data from the U.S. Bureau of Labor Statistics.Demand for workers remains strong, TIPRO said. It cited 12,478 active unique job postings in the Texas oil and gas industry in January. These included 5,313 new job postings added during the month by companies.

U.S. Natural Gas Production, LNG Exports Expected to Grow Through 2050, EIA Forecasts - U.S. natural gas production and LNG exports are likely to grow between now and 2050 with domestic gas consumption dropping only slightly, according to the Energy Information Administration (EIA).All of the scenarios modeled in EIA’s latest Annual Energy Outlook (AEO) released last Thursday show the United States remaining a net exporter of natural gas and petroleum products through mid-century, driven by rising international demand.On the homefront, meanwhile, “Despite the shift toward renewable sources and batteries in electricity generation, domestic natural gas consumption remains relatively stable – ending recent growth in most cases,” researchers said. “Natural gas production, however, in some cases continues to grow in response to international demand for liquefied natural gas, supported by associated natural gas produced along with crude oil.”The AEO Reference Case shows annual LNG exports totaling 9.98 Tcf by 2050, up from 3.96 Tcf recorded in 2022.“With growth in more market based-LNG, the strength of the relationship between international natural gas prices and oil prices has eroded,” researchers said. “However, we expect that future oil prices will still affect additional LNG export capacity and overall export levels. “When the Brent price is high relative to the U.S. Henry Hub price, like in the High Oil Price case, building more LNG export capacity and exporting LNG are more economical than when the Brent price is lower relative to Henry Hub.”Lower 48 onshore and offshore dry gas production, meanwhile, totals 41.68 Tcf in 2050 in the Reference Case, up from 36.1 Tcf in 2022.Lower 48 natural gas consumption by the residential, commercial, industrial, transport and power generation segments totals 26.2 Tcf by 2050 in the Reference Case, versus 28.8 Tcf in 2022.

TC Eyes Haynesville Natural Gas as North America Growth Driver - As TC Energy Corp. plans to continue investing billions to expand North American natural gas pipeline capacity through the decade, CEO Francois Poirier said political momentum for permitting reform and an appreciation for infrastructure could pave the way for expansions and greenfield projects to boost LNG exports. On the sidelines of the CERAWeek by S&P Global Conference in Houston, Poirier told NGI that the Calgary-based midstream giant expects to see regulatory support for more infrastructure. Currently, around 75-80% of TC’s investments are connected to natural gas businesses. While other energy executives and some regulators at the conference emphasized a need for permitting reforms and more dialogue on the importance of natural gas projects, Poirier said he believed attitudes already were changing, particularly after the invasion of Ukraine. The volatility in Europe helped strike a “balance” between the focus on sustainability and energy security, he added. “It’s no accident, in my view, that in the United States, both parties are voicing support for reforming the permitting process,” Poirier said. “There is debate around the right way to do that, of course, but both sides acknowledge that it needs to improve because I think it’s a recognition of the understanding that the infrastructure is part of that supply chain of getting natural gas around the world.” Poirier said while some projects have faced increased opposition, some operators have finished substantial projects by working with stakeholders and regulators. Last year, TC placed $6 billion worth of infrastructure online and plans to launch a similar amount of infrastructure this year. Through the decade, Poirier said TC aims to boost North American takeaway capacity from a current level of 14 Bcf/d to 21 Bcf/d, a 50% increase. TC expects to hike capital expenditures by roughly 30% year/year this year, mostly focused on gas pipeline expansions. At the center of those expansions is the Gulf Coast, where Poirier said a combination of mostly brownfield expansions and some strategic newbuilds could help TC grow its U.S. market share by 5% to 35% at the end of the decade. Last year, TC sanctioned the Gillis Access Project, a 1.5 Bcf/d greenfield system in Louisiana to move more gas from the Haynesville Shale to the coast. Gillis is the “beginning of a header system,” the CEO said, to unlock growth, along with upgrades on the ANR system, as liquefied natural gas demand continues to expand. “When we look at our system, it’s possible that if we wanted to exceed that 35% market share in the United States and the growth in capacity transpires in the way I described, we would have to be looking at…certainly segments of greenfield projects,” Poirier said. “The key is looking at where expansions need to take place.” While some reforms may help pave the way for projects in the Gulf Coast, Poirier said, there are still limits to creating more infrastructure on the West Coast. For years, project developers and western producers have advocated for LNG exports from the western United States to help support regional production and forge a swift trade route to Asian markets. Instead, the route for more North American gas to Asian markets will likely have to come from developing projects in Canada and Mexico. “I think both Canada and Mexico have recognized an opportunity on the West Coast of the continent that the United States probably can’t capture,” Poirier said. TC is targeting mechanical completion of its Coastal GasLink project in Western Canada by the end of the year, which would link the Shell plc-led LNG Canada and possibly other facilities to feed gas from the Montney Shale. The company reported in February that crews working on the roughly 416-mile, 2.1 Bcf/d pipeline were progressing on schedule, but warned of inflationary impacts further ballooning the cost of completion.

Sempra Launches Port Arthur LNG Project -- Sempra today announced that its 70%-owned subsidiary, Sempra Infrastructure Partners reached a positive final investment decision (FID) for the development, construction and operation of the Port Arthur LNG Phase 1 project in Jefferson County, Texas. Sempra Infrastructure closed its joint venture with an affiliate of ConocoPhillips (NYSE: COP), as well as announced an agreement to sell an indirect, non-controlling interest in the project to an infrastructure fund managed by KKR. Additionally, Sempra Infrastructure announced the closing of the project's $6.8 billion non-recourse debt financing and the issuance of the final notice to proceed under the project's engineering, procurement and construction agreement. "With strong customers, top-tier equity sponsors in ConocoPhillips and KKR and a world class contractor in Bechtel, this project has the potential to become one of America's most significant energy infrastructure investments over time, while creating jobs and spurring continued economic growth across Texas and the Gulf Coast region." "Sempra's selection of Port Arthur as the location for a new natural gas liquefication and export terminal is a strategic decision that will cement Texas' position as the energy capital of the world," said Texas Gov. Greg Abbott. "With a highly skilled workforce and business-friendly climate, and as a national leader in LNG exports, Texas is the prime location to expand LNG operations to unleash the United States' full economic potential in such a critical industry. Expanding LNG is imperative to American energy security, and the State of Texas looks forward to working alongside Sempra to advance this mission and bring more jobs and greater opportunities to hardworking Texans."

Sempra will build $13B LNG facility in Port Arthur - Sempra said Monday that it will move ahead with construction of a $13 billion liquefied natural gas facility in East Texas, becoming the second company to reach a final investment decision on a Gulf Coast LNG facility in as many weeks. Sempra Infrastructure, a subsidiary of the San Diego-based energy conglomerate, also said it closed its joint venture with Houston-based ConocoPhillips, which agreed to buy more than a third of the Port Arthur LNG project's annual production and a 30 percent stake in the development. KKR, which owns 20 percent of Sempra Infrastructure, also agreed to buy a non-controlling interest in the project, the companies said. Port Arthur LNG picked up speed in the race to build export terminals late last year, announcing a wave of deals with buyers of the super-cooled gas. It aims to launch the 13.5-million-metric-ton facility in 2027. The Monday announcement follows one last week from Venture Global, which said it would begin to construct its $21 billion phase 2 at its Plaquemines facility in Louisiana. "With strong customers, top-tier equity sponsors in ConocoPhillips and KKR and a world class contractor in Bechtel, this project has the potential to become one of America's most significant energy infrastructure investments over time, while creating jobs and spurring continued economic growth across Texas and the Gulf Coast region," Sempra CEO Jeffrey W. Martin said in a statement. LNG from the Gulf Coast has played a key role in replacing natural gas in Western Europe, which sought new suppliers after Russia invaded Ukraine.

Spurred by Permian, ExxonMobil Ramps U.S. Refinery Expansion Near Houston - The largest U.S. refinery expansion in more than a decade has ramped up southeast of Houston at ExxonMobil’s Beaumont refining complex. The $2 billion project, considered one of the largest in the world, bumped up capacity for transportation fuels by 250,000 b/d, to total 630,000 b/d-plus. The last big refinery expansion was in 2012. “ExxonMobil maintained its commitment to the Beaumont expansion even through the lows of the pandemic, knowing consumer demand would return and new capacity would be critical in the post-pandemic economic recovery,” said President Karen McKee of ExxonMobil Product Solutions. “The new crude unit enables us to produce even more transportation fuels at a time when demand is surging. This expansion is the equivalent of a medium-sized refinery and is a key part of our plans to provide society with reliable, affordable energy products.” The refinery is connected to pipelines from ExxonMobil’s Permian Basin operations. Permian crude is processed at the Beaumont refinery, where the company manufactures finished products, including diesel, gasoline and jet fuel. With the completion of the Wink-to-Webster crude line, which moves Permian oil to markets near Houston, as well as Beaumont pipelines, the new crude unit is positioned to further capitalize on segregated crude from the Permian Delaware sub-basin, where most of ExxonMobil’s production is underway. As Permian oil output grew, construction on the Beaumont expansion began in 2019, involving 1,700 contractors. More than 50 full-time employees work at the expanded operations. ExxonMobil’s integrated operations in Beaumont also include chemical, lubricants and polyethylene production. More than 2,000 people work for ExxonMobil in the Beaumont area, with operations accounting for around one in every seven jobs in the region. Meanwhile, Calgary-based affiliate Imperial Oil Ltd. in January agreed to invest about $560 million to construct what could be the largest renewable diesel facility in Canada. The project at Imperial’s Strathcona refinery is expected to produce 20,000 b/d of renewable diesel, primarily from locally sourced feedstocks.

U.S. Oil Production Returns to 2023 Peak Level; Demand Rises Despite Fresh Worries --Domestic crude production climbed back to the high mark of the pandemic era as U.S. consumption of petroleum products increased and mounting Chinese demand fueled global growth expectations.American exploration and production (E&P) firms boosted output by 100,000 b/d to 12.3 million b/d for the week ended March 17, according to the U.S. Energy Information Administration’s (EIA) Weekly Petroleum Status Report on Wednesday.The print matched the 2023 peak and the production pinnacle since the onset of coronavirus outbreaks in early 2020. E&Ps posted a record 13.1 million b/d of output in March of that year, just prior to public health officials declaring the global pandemic. The latest EIA result also far exceeded the year-earlier level of 11.6 million b/d.Demand, meanwhile, increased 5% week/week, driven by gains in consumption of gasoline and distillate fuels. Crude exports, however, declined modestly, allowing inventories for the March 17 period, excluding those in the Strategic Petroleum Reserve, to increase by 1.1 million bbl from the previous week. At 481.2 million bbl, stocks were 8% above the five-year average at the close of last week.While the latest week of data pointed to a spring pickup in domestic demand, consumption has proven relatively light so far this year. This developed alongside a slowing economy and forecasts for a potential recession in 2023.Such concerns were amplified over the past two weeks by the failures of Silicon Valley Bank in California and Signature Bank in New York – meltdowns that exposed weaknesses in the banking system. Following failures, other banks tend to pull back on lending. In turn, businesses and consumers, unable to get credit, slow their investments and spending. Against such a backdrop, the economy historically has stalled, as analysts at RBC Capital Markets noted.However, while recession risk is elevated, they do not see reason for panic in the financial system – in the United States or globally. That’s because the analysts view the recent failures as isolated, the result of overconcentration in the technology sector in Silicon Valley Bank’s case and cryptocurrency in Signature’s.

U.S. Energy Secretary Jennifer Granholm said that refilling the country’s SPR would be difficult this year and may take several years - The oil market was in the midst of four day winning streak early in the session but sold off sharply ahead of the close under the weight of some bearish news. U.S. Energy Secretary Jennifer Granholm said that refilling the country’s SPR would be difficult this year and may take several years. Her comments pressured the market on concerns about a potential oversupply, with the Energy Department planning to proceed with an additional release of 26 million barrel as part of its congressional mandate. Early in the session, the market was supported by Goldman Sachs stating that Chinese demand continued to increase across the commodity complex, with oil demand surpassing 16 million bpd. The market was also well supported in light of strong jobs data and a weaker dollar that fed fuel demand hopes. The oil market breached a downward trending resistance line at $70.60 and rallied to a high of $71.67 by mid-day, as the dollar index traded at its lowest level since February 3rd. However, the market sold off and posted a low of $69.18 ahead of the close. The May WTI contract settled down 94 cents at $69.96 and the May Brent contract settled down 78 cents at $75.91. The product market were mixed, with the heating oil market settling down 5.56 cents at $2.6847 and the RB market settling up 1.27 cents at $2.6059. U.S. Energy Secretary, Jennifer Granholm, told lawmakers that it could take years for the United States to refill the Strategic Petroleum Reserve, after sales directed by President Joe Biden last year pushed the stockpile to the lowest level since the early 1980s. Biden administration officials have said they want to refill the reserve, after last year's historic sale of 180 million barrels, when the oil price consistently is around $70/barrel. Oil from that sale sold about $94 per barrel. Last month, the Energy Department said it is moving forward with a sale of 26 million barrels from the SPR that was mandated by Congress in earlier years to help fund the federal budget. The Energy Secretary said that sale, in which oil will be delivered from April 1st to June 20th, and maintenance at the reserve at two sites will make it difficult to buy back oil this year. She said it could take years to get the reserve back to the level it was before the 180 million barrel sale.Goldman Sachs reiterated its bullish view on commodities as a banking crisis has yet to spill over into physical markets. Goldman said it was confident in its commodity 'supercycle thesis’, with supply constraints becoming pronounced later this year, prompting another rise in prices, adding it favored metals over oil near term. The bank said that Chinese demand continued to increase across the commodity complex, with oil demand surpassing 16 million bpd. It forecast Brent crude prices will reach $97/barrel in the second quarter of 2024. It said the recent pullback in oil was due to financial risks rather than fundamental supply-demand factors and oil was currently "oversold".Russia’s Deputy Prime Minister, Alexander Novak, said a previously announced cut of 500,000 bpd in oil production would be from an output level of 10.2 million bpd in February. He said that would mean Russia is aiming to produce 9.7 million bpd between March and June, when the production cut will be in force. He also said that Russia had not received any proposals from members of the OPEC+ group to change the terms of an existing production cut agreement. Russia’s 500,000 bpd voluntary cuts are on top of the OPEC+ deal and were announced last month following the imposition of new Western sanctions on Russia’s oil exports.

EPA Officials Visit Texas’ Barnett Shale, Ground Zero of the Fracking Boom - —The Barnett Shale, rich in natural gas, lies inconveniently beneath sprawling suburbs of the Dallas-Fort Worth Metroplex. The fracking boom began here almost 20 years ago, leaving in its wake a mixture of wells and compressors in close proximity to residential neighborhoods and strip malls. When officials from the EPA followed community members and representatives of the nonprofit Liveable Arlington on a tour of the area Thursday, the visit was the first for the federal environmental regulators based nearby in Dallas. “What I did learn is how close the facilities are to the daycare center, schools and houses. They’re so close it was striking,” said Earthea Nance, administrator of EPA region six, from a liquor store parking lot between a high school and a gas compressor facility in Arlington. “We’ll pay more attention to what’s happening here.”Only Los Angeles County in California has more residents living near oil and gas wells than Tarrant County, according to the Oil and Gas Threat Map from Earthworks and FrackTracker, with about 1 million county residents located within a half mile of active oil and gas wells, compressors and processors. The EPA officials saw drill sites adjacent to day cares centers, and others surrounded by apartment complexes. A large gas compressor station fumed across the street from a high school, and another stood beside a popular fishing spot. “What’s happened here is a real tragedy. It’s happened in a complete regulatory vacuum,” said Ranjana Bhandari, founder of Liveable Arlington, who hosted the tour. “There are minimal rules, there is no monitoring at all, enforcement is practically nonexistent. If there are severe emissions that make people sick there are no real remedies.”Bhandari, a former college professor of economics, moved to Arlington in 1993 following job opportunities for her husband, a particle physicist. About a decade later, new technology unlocked a wealth of hydrocarbons trapped inside porous subterranean shale formations, and the Barnett Shale of North Texas was the first pierced by horizontal drills as a new age of oil and gas production began. “None of us understood when it began how big their footprint would be,” Bhandari said. “For the longest time I thought somebody would come save us.”

Texas Natural Gas Big Part of Mexico Nearshoring Appeal — The big investment news in Mexico is Elon Musk’s intention to build a ~$5 billion Tesla plant in the thriving northern city of Monterrey. Mexico President López Obrador brought the issue to national attention when he expressed his objections to Musk’s choice of Monterrey, due to what he said was water scarcity. But Musk was adamant, and spoke personally with López Obrador over the matter. Unlike locations in the south of the country, Monterrey and the State of Nuevo León in general is the area of Mexico with the best conditions for access to reliable and efficient energy. Natural gas flows in abundance from Texas. It arrives cheaply, continuously and through many pipelines. Nueva Era, Kinder Morgan, and Sistrangas with injection points in Reynosa, Argüelles and Cd. Camargo all flow to this industrial area. There are also numerous power generation plants that ensure the stability of the regional power grid. With an energy market interconnected with the United States, the proximity and accessibility of natural gas supply are critical elements that provide comparative economic advantages over other areas in Mexico. The above is true with or without the impulse of nearshoring – the practice of transferring a business operation to a nearby country. But the business world in Mexico has high expectations about the country’s economic future under the assumption that this global relocation of production processes will benefit investment in Mexico. The proximity to the U.S. market is a unique geographical circumstance. But it is not enough to make the manufacturing of goods viable and profitable. In particular, the relationship between nearshoring and energy security is decisive for investment growth. A reliable supply of gas and electricity with diversified suppliers favors stable and predictable energy prices. Competitiveness and the existence of hedging mechanisms is crucial for companies to reduce their general operating expenses. One worry is price interference. Price controls affect the sustainability of the energy infrastructure, which in turn will lead to deficiencies in the operation and eventually interruptions in the delivery of energy. Power and gas flow without variations is an essential condition for industries that require high energy consumption. Electronic component manufacturing, data centers and logistics control cannot tolerate minimal interruptions. An unstable power supply is an operational risk that can lead to financial losses and damage the reputation of companies. Not having gas storage that mitigates or corrects the effects on gas delivery in aberrational cases such as the winter storm Uri 2021 will undoubtedly be an aspect to be evaluated by those who plan to move their operations from Asia to North America.

Despite Rules, New Mexico Oil and Gas Producers Keep Polluting - New Mexico has increased its oil production tenfold since 2010 and was the first major oil-producing state to surpass its pre-pandemic output levels — dramatically so. And the evidence is everywhere. At night, strings of drilling rigs light the plains east of Highway 285 between Carlsbad and Loving. In the middle of the day, driving Highway 128 across the rolling, tan, treeless plain between Loving and Jal, the sun glints on drilling rigs every couple of miles. Those rigs continue in all directions down dirt side roads, and orange flares burn off natural gas at new wells and compressor stations. The industry had a record-crushing year in New Mexico in 2022. COVID-19 triggered a steep production decline in 2020, when oil and gas prices dropped so much that the state encouraged producers to shut in wells, keeping money in the ground. But state oil production at the end of 2022 was 36% higher than its pre-pandemic peak, and natural gas production was 32% higher. That extra production coupled with high oil and gas prices have bumped New Mexico’s state budget to $9.57 billion — another record. Natural gas is measured in thousands of cubic feet (Mcf), and in 2022 oil and gas producers reported losing 21.6 million Mcf of the stuff. It’s a fraction of the total taken out of the ground, but with an approximate market value of $138 million, it’s not inconsequential. Plus, the state lost around $27 million in tax and royalty revenue while the lost gas contributes to New Mexico’s climate crisis — which the state does pay for. But the true loss is likely steeper than the state’s official numbers reflect.A Capital & Main review of data from the New Mexico Oil Conservation Division shows dozens of companies venting and flaring natural gas from wells across the state — nearly 39,000 times between February 2022 and February of this year — despite recent rules banning the practice except for emergencies. All of this data is self-reported by the companies as part of the state’s groundbreaking Methane Waste Rule, which has two overarching goals: to end routine venting and flaring of natural gas, and to keep at least 98% of the climate-damaging fuel in pipelines and out of the air.

In Utah, pipeline protests could now come with five years in prison - In Utah, protests that hinder the functioning of fossil fuel infrastructure could now lead to at least five years in prison. The new rules make Utah the 19th state in the country to pass legislation with stiffer penalties for protesting at so-called critical infrastructure sites, which include oil and gas facilities, power plants, and railroads. The new laws proliferated in the aftermath of the Standing Rock protests against the Dakota Access Pipeline in 2017.Utah’s legislature passed two separate bills containing stricter penalties for tampering with or damaging critical infrastructure earlier this month. House Bill 370 makes intentionally “inhibiting or impeding the operation of a critical infrastructure facility” a first degree felony, which is punishable by five years to life in prison. A separate bill allows law enforcement to charge a person who “interferes with or interrupts critical infrastructure” with a third degree felony, punishable by up to five years in prison. Both bills were signed into law by the governor last week. Of the two bills, First Amendment and criminal justice advocates are particularly concerned about HB 370 due to its breadth, the severity of penalties, and its potential to curb environmental protests. The bill contains a long list of facilities that are considered critical infrastructure including grain mills, trucking terminals, and transmission facilities used by federally licensed radio or television stations. It applies both to facilities that are operational and those under construction. Since the bill doesn’t define activities that may be considered “inhibiting or impeding” operations at a facility, environmental protesters may inadvertently find themselves in the crosshairs of the legislation, according to environmental and civil liberties advocates. Protesters engaging in direct action often chain themselves to equipment, block roadways, or otherwise disrupt operations at fossil fuel construction sites. Under the new legislation, such activities could result in a first degree felony charge.“This bill could be used to prohibit pipeline protests like we saw with the Dakota [Access] Pipeline project,” said Mark Moffat, an attorney with the Utah Association of Criminal Defense Lawyers, referring to the 2017 protests at Standing Rock in North Dakota. “It elevates what would be basically a form of vandalism or criminal mischief under the laws of the state of Utah to a first-degree felony.”A first-degree felony is typically reserved for violent crimes like murder and sexual assault. Moffat said that the state’s sentencing guidelines are indeterminate, which means the amount of time someone spends in prison is at the discretion of the Board of Pardons.“When you increase these to first degree felonies, you increase the likelihood of incarceration,” said Moffat. “In my experience, those people are going to go to prison as opposed to receiving a term of probation,” he said. Similar bills are pending in at least five other states, including Georgia, Illinois, Minnesota, Idaho, and North Carolina. These bills include various misdemeanor and felony charges for trespassing, disrupting, or otherwise interfering with operations at critical infrastructure facilities.

North Dakota Senate advances tax breaks for fracking (AP) - The North Dakota Senate passed a bill Monday that would give tax incentives to oil companies for “restimulating” old oil wells in the state through hydraulic fracturing, also known as fracking. Fracking involves injecting high-pressure water deep underground to extract oil or gas from rock. Environmental groups have long opposed the practice, saying it can pollute groundwater and contributes to climate change. Supporters said the North Dakota bill would benefit mineral owners and the state, whereas opponents said oil companies can afford to restimulate wells without a tax break. Restimulation refers to the process of converting an existing oil well — which has produced oil for a while but has experienced a decline in oil production — into an updated oil well with “modern completion treatment” to enhance oil production, according to Marathon Oil Company representative Zac Weis, who testified in support of the bill this month. The process involves treating an old oil well with fluid under pressure to create fractures in the ground and increase oil production, according to the bill. Republican Sen. Dale Patten, of Watford City, said the bill would reduce the oil extraction tax to 2% for a restimulated well’s first 75,000 barrels of production, or for the first 18 months of production — whichever comes first. Then, the tax would go back to the full 5%. “Restimulations increase the ultimate recoverable barrels of oil, meaning more economic value to the state, the mineral owners and the operators,” Patten said in support of the bill. “It reduces environmental impacts for continued use of existing infrastructure, like well site locations and natural gas pipelines.”

8th Circuit delivers climate blow to Big Oil - Oil and gas companies on Thursday lost what may have been their best shot at creating disagreement between federal appeals courts — a key consideration for Supreme Court review — on a jurisdictional issue that has the potential to quash a broad set of climate challenges launched by local governments that want industry to pay up for the impacts of a warming planet. The finding from the 8th U.S. Circuit Court of Appeals that Minnesota’s case belongs before state, rather than federal, judges is the sixth such ruling from courts across the country in nearly two dozen climate liability lawsuits. Exxon Mobil Corp., Chevron Corp. and other companies have attempted to remove the cases to federal court, where industry lawyers believe they are more likely to prevail. “Our sister circuits rejected [industry’s arguments] in each case,” Judge Jonathan Kobes wrote. “Today, we join them.” The three-judge panel wrote that Minnesota’s suit rests solely on state law, including claims of common law fraud and violations of various consumer protection statutes. The judges wrote that “there is no substitute federal cause of action.” Oil companies could be on the hook for hundreds of billions of dollars if they lose the climate liability cases. The 8th Circuit noted that allowing Minnesota to recover damages for injuries caused by climate change “may have the practical effect of impacting the energy companies’ ability to produce and sell fossil fuels, thereby affecting any federal interest that relies in part on the availability and affordability of energy.” But the court quoted a similar ruling from the 10th U.S. Circuit Court of Appeals to say that those types of arguments would be raised once the case is heard on the merits, not during a dispute about the proper venue for the lawsuit. The 8th Circuit also rejected the energy companies’ argument that the activity causing injury in the case is not the production of fossil fuels, “but rather the alleged ‘misinformation campaign’ carried out via false advertising and misrepresentations in Minnesota.” The decision by the three judges — all Trump appointees — comes as a blow to the fossil fuel industry, which had hoped the court would rule in its favor, creating a “circuit split,” or disagreement between appellate courts, that could help the oil industry attract the attention of the Supreme Court in its bid to dismiss the climate litigation.

Black, Latinx Californians face highest exposure to oil and gas wells | Berkeley News -More than 1 million Californians live near active oil or gas wells, potentially exposing them to drilling-related pollution that can contribute to asthma, preterm births and a variety of other health problems.A new study appearing today in the journal GeoHealth finds that these Californians are disproportionately Black, Latinx or low-income, and Black Californians are more likely to live near the most intensive oil and gas operations.“When we look across the state of California over the past 15 years, Black, Latinx and low-income people consistently were more likely to live near oil and gas wells,” said study first author David González, a President’s Postdoctoral Fellow at the University of California, Berkeley. “Black people, in particular, were more likely to be in places that had the most intensive oil and gas production, which can lead to more exposure to harmful chemicals.”The study also found that while oil and gas production in California has declined over the past 15 years, the rate of decrease has been slower near racially marginalized communities. Earlier work led by González found that disparities in exposure to oil and gas wells can be traced back to the 1930s in Los Angeles and linked to the historical policy of redlining.“What’s emerging is that oil and gas wells have been disproportionately impacting racially marginalized and low-income communities in California for generations,” González said. “We found that redlining was strongly associated with the disproportionate siting of oil and gas wells in historically racially marginalized communities, and we’re still seeing disproportionate siting and production of oil and gas infrastructure in many of these same neighborhoods today.”Oil and gas production is a complex process that can release an array of hazardous pollutants: Drilling rigs and other heavy machinery emit diesel exhaust, active wells can release toxic volatile organic compounds, and in some cases, the chemicals that are used to extract oil from underground reservoirs can seep into the water supply, endangering those who rely on groundwater for drinking. Operating heavy drilling machinery in residential areas can also create other stressors, like light and sound pollution.Mounting evidence suggests that these pollutants pose a variety of health risks to those who live close to wells — that distance usually is defined as living within 1 kilometer (km), or a little over half a mile.The California climate measures signed into law last September by Gov. Gavin Newsom contained provisions that would ban new drilling within approximately 1 km of homes, schools, hospitals and parks and provide protections for those living near existing wells. But in early February, oil companies succeeded in putting the law on hold until voters decide its fate in a November 2024 ballot referendum.

Chubb Mandates Natural Gas, Oil Clients Reduce Methane Emissions to Obtain Insurance - Chubb Ltd., the world’s largest publicly traded property and casualty insurer, has updated underwriting criteria for natural gas and extraction projects to require clients to reduce methane emissions. The Swiss-based insurer, which collaborated with stakeholders on the criteria, has most of its business in the United States. “The methane-related underwriting criteria that Chubb has adopted – the first of their kind in our industry – are focused on the balance between the need to transition to a low-carbon economy and society’s need for energy security,” CEO Evan G. Greenberg said. “As a company, we are accelerating and expanding our climate-related initiatives without committing to sweeping net-zero pledges for which, in our judgment, there is not a viable path to achieve.” Greenberg said Chubb “will continue to pursue in earnest a responsible, realistic and science-based approach.” The new criteria “encourages” producers to adopt technologies to reduce greenhouse gas emissions. “We know that many of our clients in the industry are already committed to limiting methane emissions, and we will work to expand those commitments.” Many major natural gas and oil producers have made commitments to reducing methane emissions, including BP plc, Chevron Corp., ExxonMobil and Shell plc. U.S. natural gas pipeline infrastructure companies, including Williams, are also aiming to reduce emissions.

‘Climate homicide’: Could Big Oil be sued for disaster deaths? - Oil majors are facing civil lawsuits in courts from Hoboken to Honolulu that could cost the industry hundreds of billions of dollars for its role in producing planet-warming emissions.But can petroleum producers be held criminally responsible for climate-related deaths that occurred after companies allegedly deceived the public about the dangers of burning fossil fuels? A new academic paper says they can, and authors of the research say the novel legal theory — known as “climate homicide” — is already stirring interest from prosecutors.“We have some indication they’re at least listening and curious,” said David Arkush, director of Public Citizen’s climate program and a fellow at the Roosevelt Institute. “To someone who knows the criminal law, there’s a moment of ‘What!?’ and then, ‘It’s OK. It’s not crazy.’“The paper, “Climate Homicide: Prosecuting Big Oil for Climate Death” — written by Arkush and Donald Braman, an associate professor at George Washington University Law School — will be published next spring in the Harvard Environmental Law Review.“We concluded there aren’t really any legal or factual barriers to prosecution,” Arkush said.He added: “The real potential barriers are political, cultural. Does this strike people as just too out there? Do the fossil fuel companies have too much power, culturally, politically, economically? Those are the real barriers.”

U.S. oil exports to Europe hit record in March on steep discounts (Reuters) -U.S. crude exports to Europe have hit a record 2.1 million barrels per day on average so far this month, spurred by wide discounts to the global benchmark and weaker oil demand by U.S. refineries. Record exports to Europe and China this month reflect the rise of United States in crude oil trade and solidifies its role supplying Europe following Russia's invasion of Ukraine. A holiday freeze knocked out operations at a dozen U.S. refineries, increasing scheduled plant maintenance and reducing crude oil demand that widened U.S. crude's discount to benchmark Brent. The refining slowdown weighed on U.S. West Texas Intermediate oil prices, while Brent was supported by declining availability of Russian barrels as well as complications with Norway's Johan Sverdrup flows, Kpler analyst Matt Smith said. The spread between West Texas Intermediate and Brent widened to more than $7 at the end of January, the steepest discount so far this year, prompting a flurry of deals as a wider spread makes U.S. oil cheaper for foreign buyers. Volumes of crude oil to Europe, loaded on very large crude carriers (VLCC) that typically carry about 2 million barrels, this month look set to reach a record high, according to Kpler data. Advantage Virtue, a VLCC chartered by BP BP.L and loaded at Corpus Christi, Texas, on March 11, was headed to Britain and set to discharge at the end of this month, according to Refinitiv Eikon data. Front Alta, another VLCC chartered by Occidental Petroleum, was headed to Rotterdam, according to Refinitiv and Kpler ship tracking. Occidental declined to comment. BP declined to comment on exports, but pointed to its energy outlook forecastingU.S. oil production growth over the rest of this decade before declining and OPEC competing to increase its market share. Export demand has aided prices for some top U.S. crude grades. The average price for WTI Midland, pegged at the top U.S. shale basin, has gained nearly 50% so far this year compared to the previous quarter, while WTI at East Houston has gained about 30%.

This could be Big Oil's last surge - President Joe Biden can't quit fossil fuels even though he knows he needs to. Biden, who's made fighting the climate crisis a priority, broke a key campaign promise this month by authorizing one of the largest-ever oil-drilling projects on federal land in an untouched area of Alaska known as North Slope. Biden's move reflects the fix the world is in after Russia's war in Ukraine sparked global energy shortages that sent oil and gas prices soaring last year. Western oil giants cashed in with a record $221 billion in combined profits, raising what experts told Insider are a pair of trillion-dollar questions: How swift will the transition to clean energy be and when will the era of Big Oil come to a close? It may come sooner than today's massive fossil-fuel profits suggest, half a dozen analysts said. The industry's long-term trajectory is downward, even if there are more boom-and-bust cycles along the way. They caution that the pace of the energy transition still remains uncertain given that today the world runs on 80% fossil fuels and only 20% renewable energy. In general, however, oil and gas companies aren't plowing profits into undeveloped drilling sites the way ConocoPhillips is with the so-called Willow project in Alaska, analysts said. In many cases, companies are using the money to try to increase production in existing fields, while also buying back their stock to boost share prices. Oil demand could peak in the early 2030s in part because of the rise of renewables and electric vehicles, while natural gas' horizon is thought to be closer to 2045 because heavy industry doesn't have cleaner fuels to turn to at the scale needed. "In the grand scheme of the oil industry, Willow isn't that large a project," said Andrew Logan, the senior director of oil and gas at Ceres, a sustainability nonprofit that works with investors. Willow is expected to max out at 180,000 barrels of oil a day, or about 1.5% of US production, and generate at least 239 million metric tons of greenhouse-gas emissions over 30 years — equivalent to the annual greenhouse-gas emissions of 64 coal plants. A White House official previously told Insider the government's options to block the project were limited because of leases granted to ConocoPhillips by prior administrations. The official added that ConocoPhillips will give up 68,000 acres of existing leases and drilling was limited to three of five proposed sites.

Oil industry activity likely triggered large Alberta earthquake, finds study -- A new study by Stanford University researchers has found that one of the most powerful earthquakes ever recorded in Alberta, Canada, was likely caused by oil and gas activity. On November 30, 2022, a 5.6-magnitude earthquake shook the remote Peace River region in northwestern Alberta, a part of Canada's oil sands region. Although people felt shaking more than 400 miles away, residents and businesses have not reported injuries or damage. Energy regulators for the region described the earthquake as a natural tectonic event. A rigorous new analysis by Stanford geophysicists suggests, however, that oil industry activity—specifically, disposal of wastewater deep underground—most likely triggered the tremor. Three slightly smaller earthquakes struck the same area again on March 16, less than a mile from last year's big quake. Researchers have long linked earthquakes to fracking and wastewater disposal in other parts of Alberta and British Columbia, provinces that straddle the Canadian Rocky Mountains. The new study, published March 23 in Geophysical Research Letters, is the first to link such a large earthquake to human activities this far away from the mountain range, in a region where industry centers on exploiting oil sands rather than fracking for natural gas. The results have safety implications for ongoing and future energy-related operations, such as the underground storage of carbon dioxide to help mitigate climate change. "Earthquakes of similar magnitude to the Peace River event could be damaging, even deadly, if they happened in more populated areas," said study lead author Ryan Schultz, who recently completed his Ph.D. in geophysics at the Stanford Doerr School of Sustainability. "It is important that we understand the mechanics involved and how to avoid inducing more of these events." "The Peace River earthquake caught our interest because it occurred in an unusual place," said co-author William Ellsworth, a research professor of geophysics and co-director of the Stanford Center for Induced and Triggered Seismicity. "Multiple lines of compelling evidence point to this quake as being man-made." Over recent decades, scientists have documented hundreds of earthquakes induced by oil and gas operations worldwide, especially in the United States. To assess the origins of the Peace River earthquake, the Stanford team and colleagues employed a well-proven approach that considers seismic events' details and context, including location, depth, timing, regional history of background earthquakes, and records of industrial activity. Operations in the Peace River area center on extracting a thick, black, sticky form of oil known as bitumen. To mobilize the tar-like substance for easier pumping up to the surface, workers inject huge amounts of hot water or solvents underground, where it can mix with heavy metals, hydrocarbons, and harmful chemicals. The most economical way to dispose of this wastewater is by re-injecting it underground. Since bitumen recovery operations began in the Peace River study area in the 1980s, about 40,000 Olympic swimming pools (100 million cubic meters) of wastewater have been injected underground. The researchers compared publicly available information about wastewater disposal activities in Peace River to ground deformation measured by satellite and regional seismic monitors. "The Alberta government deserves credit for its transparency for providing public access to production and disposal data," said Ellsworth. Overall, the results tied frequent, minor earthquakes to wastewater disposal from bitumen recovery going back almost a decade, strongly implicating the big November 2022 temblor as well. A key piece of evidence came via satellite observations, which showed a dramatic 3.4-centimeter uplift in the ground at the time of the November quake. This elevation change proved consistent with seismic movement along a previously undocumented fault line—a fracture between giant blocks of rock deep underground where most earthquakes occur. According to the study, the high volume of disposed wastewater had increased water pressure on the fault, weakened it, and made it prone to slip.

Oil spill on Kitimat River under investigation - The District of Kitimat responded to an oil spill on the Kitimat River across the street from the Chevron card lock last week. The District said it started around noon on the morning of Thursday, March 16. Other sources said it started earlier around 10:15. It is unclear if the leak has been fully contained as of press time (Sunday evening), but the DOK said drinking water had not been contaminated. It is performing an investigation into who is responsible for the oil spill. Cameron Orr, business and communications manager for the District of Kitimat said “public works have been flushing the storm drain and they’re still figuring out where specifically the petroleum product might have come from. We don’t have an exact source, we just know it’s coming out of a storm drain.” Provincial partners, such as the Ministry of Environment and Northern Health Services were alerted, as well as downstream industrial users. No formal notice to residents was sent out. District workers were also examining storm drains for oil leaking upriver, in Service Centre, across the street from the Northern Sentinel office. It is unknown if the leaks were connected or just how widespread the spill was.

Clashes in Ecuador drive state-controlled company to declare force majeure at trio of Amazon fields -- Ecuador state-owned oil company Petroecuador has declared force majeure at a trio of onshore fields in the Orellana province in the Amazon region amid conflicts with local communities. The company, which is also dealing with the aftermath of Saturday’s 6.8-magnitude earthquake at its oil and gas operations in the southern part of the country, said it will request the support of the armed forces in order to protect its strategic facilities and safeguard workersAccording to Petroecuador, the decision to implement force majeure at blocks 16-67, 43-ITT and 61 comes after months of conflicts with indigenous communities that are preventing the normal development of hydrocarbons activities and “drastically affecting production.”

Europe makes moderate progress reducing gas demand: Kemp (Reuters) - Europe has experienced a mild winter, but the region also managed to cut its temperature-adjusted gas consumption in response to high prices, public information campaigns and industrial closures. The European Union’s seven-largest consumers (Germany, Italy, France, Netherlands, Spain, Belgium and Poland) cut total consumption by 22% in the three months from October to December compared with a year earlier. Milder temperatures accounted for most of this reduction, with the number of heating degree days in each country down by an average of around 16% between October and December compared with 2021. But there was also a moderate cut in underlying temperature-adjusted consumption, attributable to a combination of customer response to high prices, public information campaigns to cut demand, and industry shutdowns. October was unusually warm across the region and none of the major consuming countries made significant progress in reducing underlying demand. But as temperatures turned colder in November and December, there was more headway in cutting underlying consumption. Germany, the region’s largest consumer, was slightly colder in December 2022 than in December 2021, with the number of heating degree days up by 5%. But consumption per degree day was cut by 19% ensuring total consumption was still down by 14% compared with a year earlier. At the other extreme, Italy, the region’s second-largest consumer, was mild in December, with 18% fewer degree days. But the country also managed to reduce its consumption per degree day by 8% ensuring total consumption fell by 24%. Every country reduced its temperature-adjusted use in December, with cuts ranging from 19% in Germany and Spain, to 17% in Belgium and the Netherlands, 13% in Poland, 11% in France, and 8% in Italy. The pressure to adjust has fallen most heavily on energy-intensive industries, including chemicals, fertiliser, steel, ceramics, glass, smelters and greenhouse horticulture. In many of these industries, consumption has fallen sharply through short-time working and plant closures, which resulted in significant gas conservation. But with the burden falling so heavily on industry, the implication is that savings by power generators and households have been relatively modest after allowing for the warm winter.

What the dramatic drop in European demand for natural gas showed us --When Russian natural gas supplies to Europe dropped dramatically in the wake of the Ukraine-Russia conflict, Europeans and their governments wondered how they could remain warm through the coming winter. After all, Russian natural gas constituted 40 percent of the European Union's total supply. The only near-term solutions were to cut natural gas consumption and import more liquefied natural gas (LNG). But with a limited ability to accept LNG, cuts in consumption seemed inevitable.While some industrial facilities temporarily closed due to high gas prices and some companies said they were relocating gas-intensive production outside Europe, much of the reduction in natural gas consumption was due to the mild winter weather and the reduction in use by households. (Some of reduction was due to fuel switching as electric utilities substituted coal for natural gas though the numbers have yet to be compiled.) As a result, prices of natural gas in Europe (using Dutch TTF Gas Futures as a proxy) fell by 80 percent from the end of September until now. Europe avoided the worst.Last year Europe as a whole decreased its natural gas consumption by 13 percent, a hefty decline. Its use over the recent winter declined by 19 percent from the 5-year average.There are certainly challenges ahead. The price of natural gas remains elevated, at over €40 per megawatt-hour. Two years ago the price stood just under €19 and in the decade prior to the outbreak of the pandemic never traded above €29. What the Europeans have shown is that it is possible in very short timespans to cut energy consumption dramatically without creating catastrophic conditions. There were certainly hardships for those with lower incomes, but European society did not come to a halt. That suggests there was still a lot of energy being wasted before the reductions and that intelligent planning might cut a lot more. All of this is doubly meaningful to Americans because residents of the European Union use HALF as much energy per capita as Americans and yet still found room to cut. That implies that there is considerable energy waste in the United States that might be avoided without sacrificing everyday comforts if we only had the will to do something about it.

EU Looks To Extend Natural Gas Consumption Cuts For Another Year -The European Commission on Monday proposed extending the emergency measure which targets a 15% reduction in the bloc’s natural gas consumption by another 12 months to the end of the 2023/2024 winter heating season.The existing regulation to have natural gas demand cut by 15% expires at the end of this month.Today’s proposal from the European Commission for another year of gas savings will be discussed by energy ministers at the Transport, Telecommunications and Energy Council (TTE) Council on March 28. EU Commissioner for Energy Kadri Simson already signaled to Ministers in February that a proposal along these lines was to be expected.Despite the coming end to this winter’s heating season and the historically high levels of gas in storage across Europe, global natural gas markets are expected to remain tight in the months ahead, with a number of possible risks and challenges, including weather, global LNG demand, and macroeconomic conditions, the European Commission said today.“Commission analysis finds that, in order to fully compensate for the permanent decrease in Russian gas, a continuation of the gas demand reduction is needed to complement the additional LNG and pipeline gas sourced from other countries, and new renewable capacity installed since early 2022,” it added.The European Union managed to beat its target for cutting gas demand this winter, Eurostat data showed last month. According to the data, the EU’s winter demand has so far dropped by 19.3% compared to the five-year average, beating the 15% goal it set for itself to help it survive the winter without gas shortages. “Our joint efforts on #gasdemandreduction have been key to get through winter safely. But global gas markets are expected to remain tight & we must stay vigilant. Continued demand reduction will ensure our preparedness & allow us to reach more easily the 90% gas storage target,” EU Commissioner Simson said on Twitter, commenting on the proposal for extending the target for reduction of gas demand.

Seymour Hersh: CIA Planted Nord Stream Cover-Up Story in the Media -- Investigative journalist Seymour Hersh published an article on Substack on Wednesday that said the CIA was instructed to come up with a cover story for the Nord Stream bombings that was fed to The New York Times and the German newspaper Die Zeit.The cover-up story was created to shift blame from the US after Hersh’sbombshell report published on February 8 that said President Biden ordered the attack on the Nord Stream natural gas pipelines, which connect Russia to Germany. “It was a total fabrication by American intelligence that was passed along to the Germans, and aimed at discrediting your story,” Hersh was told by a source within the American intelligence community.Hersh said that the CIA was ordered to come up with a cover story after President Biden met with German Chancellor Olaf Scholz in Washington on March 3. Scholz’s visit was very brief and did not include the routine joint press briefing that usually follows a meeting between the president and another world leader. Hersh was told that his report detailing how the US took out Nord Stream was discussed by Biden and Scholz.Hersh writes: “I was told by someone with access to diplomatic intelligence that there was a discussion of the pipeline exposé and, as a result, certain elements in the Central Intelligence Agency were asked to prepare a cover story in collaboration with German intelligence that would provide the American and German press with an alternative version for the destruction of Nord Stream 2.”The result of the CIA’s work was published in The New York Times and Die Zeit on March 7. The New York Times report was very vague and said US officials are now claiming the Nord Stream bombings might have been carried out by a “pro-Ukrainian group.” The Die Zeit report claimed German investigators believe it was carried out by six people using a yacht rented in Poland that was owned by two Ukrainians. Other Western media outlets published similar articles reinforcing the cover story in the following days.Hersh said the information The New York Times received “originated with a group of CIA experts in deception and propaganda whose mission was to feed the newspaper a cover story—and to protect a president who made an unwise decision and is now lying about it.”The cover story offers a radically different narrative than what Hersh’s February 8 report alleges. Using anonymous sourcing, Hersh reported that the Nord Stream pipelines were destroyed by explosives planted by US Navy divers in June 2022 under the cover of NATO drills in the Baltic Sea. The operation was done in coordination with Norway, and a Norwegian spy plane detonated the explosives by dropping a sonar buoy on September 26, 2022.

China Backs Russia's Draft UN Resolution On Nord Stream Probe - China is backing Russian efforts to get to the bottom of the Nord Stream pipeline sabotage attacks, with state-run Xinhua on Wednesday announcing the foreign ministry's support for a UN Security Council (UNSC) draft resolution.Russia has gotten more vocal about alleging that Washington was behind it, following the publication of legendary journalist Seymour Hersh's report which detailed a CIA and US Navy covert op in coordination with Norway's intelligence services. Citing a foreign ministry spokesperson, Xinhua reported "Wang made the remarks at a regular press briefing in response to a media query on Russia's draft resolution at the UNSC in February calling for an international independent investigation commission on the gas pipeline incident.""Russia is said to have started the silence procedure on the draft, but the United States and some other Western members of the UNSC broke silence and objected to such a commission."Moscow and Beijing have taken Washington's resistance to its resolution as a sign of guilt, while also suggesting Western allies are obfuscating: Wang said China has also noticed the attitude of some Western members of the UNSC and hopes they will truly abandon geopolitical selfish interest, earnestly fulfill the obligations and responsibilities of UNSC members, and constructively participate in the consultations of the draft to make positive efforts for an early consensus on the resolution.

French workers extend strike at three LNG import terminals -Regasification operations at three liquefied natural gas terminals owned and operated by gas giant Engie’s subsidiary Elengy are no nearer restarting after trade unions voted to continue their stoppage for another seven days. A strike at Elengy’s three LNG terminals was extended to 28 March on Monday, a spokesperson for the operator told Upstream. The terminals at Fos-Cavaou, Fos-Tonkin, and Montoir-de-Bretagne have a total import capacity of 16.8 million tonnes per annum. The workers, members of France's powerful CGT union are among thousands of workers staging industrial action against the French government's plan to lift the state pension age to 64. The Fkuxys-operated Dunkirk LNG terminal, with an import capacity of 12.4 million tpa, is the only available facility to offload LNG cargoes at present and send nominations to the gas grid after strike action ended on 16 March. “Fluxys is not currently aware of any new strike action being announced but is continuing to monitor the situation closely,” the spokesperson said. On Monday, the French government narrowly survived a vote of no-confidence called after President Emmanuel Macron invoked a special constitutional power to enact pension bill without a vote in parliament. The vote, tabled by centrist MPs, had 278 votes in favour, falling short of the 287 votes needed. Had it been successful, Macron would have had to name a new government or call new elections. The French government took steps to draft in staff on Tuesday to ensure the functioning of ExxonMobil’s Fos-sur-Mer refinery, Reuters reported. There have not yet been any moves to introduce similar steps at Elengy’s three LNG terminals.

Four Out Of Six French Refineries To Stop Operations As Strikes Escalate ... Four out of France’s six refineries will shut down by Monday, March 20, as strikes escalate after French President Emmanuel Macron pushed through with a controversial pension reform without a vote in Parliament, refinery workers toldArgus on Friday. Earlier this week, Macron pushed to pass the reform without a vote in Parliament under a parliamentary clause known as 49:3. The pension reform proposes to raise the retirement age in France by two years to 64.Macron’s move without a parliamentary vote sparked even more protests and street blockades in Paris and other cities in the country.The strikes in France against the reform began in February and escalated this month, with workers in many sectors, including refinery workers, joining the industrial action.The strikes have disrupted power supply, refining operations, and fuel deliveries for nearly two weeks. Now most of France’s refineries are expected be closed down by March 20, also because of a lack of crude deliveries due to strikes among port workers which prevent the discharging of crude cargoes.Two refineries run by supermajor TotalEnergies, the 219,000 bpd Donges and the 246,900 bpd Gonfreville refineries, as well as ExxonMobil’s 207,100 bpd Port Jerome facility and the 210,000 bpd Lavera refinery of Petroineos are all expected to be shut down by Monday, workers tell Argus. ExxonMobil’s refinery is stopping operations because it lacks the crude needed to keep the facility running. Apart from refining operations, the strikes have disrupted LNG imports into France as LNG import terminals have been shut down.France has four LNG receiving terminals, Dunkirk, Montoir, Fos Cavaou, and Fos Tonkin. As the strikes entered their second week, at least seven LNG cargoes heading to France have changed course and are now headed to import terminals in the Netherlands, the UK, and Spain since the strikes started.

Rising Chinese Crude Demand Sends Supertanker Rates Soaring Shipping rates for supertankers have recently shot up above $100,000 a day as the market for very large crude carriers (VLCC) tightens and Chinese oil demand rises. Chinese refiners are chartering more supertankers to bring crude later this year as the economy reopens. At the same time, the sanctions on Russia have tightened demand for all kinds of crude-carrying vessels as the voyage to Russia’s main customers now, China and India, is much longer than a week-long trip from a Russian Baltic port to northwest Europe. In the tighter tanker market, day rates are rising and are expected to stay elevated for at least another two years, according to analysts and shipowners. Chinese demand is set to drive global oil consumption this year, and Chinese refiners are booking tankers to carry crude on long-haul trips from the United States, further tightening the VLCC market and pushing rates higher. As U.S. oil prices are at a discount to the Middle Eastern benchmark, more U.S. crude is set to arrive in China at the end of the second quarter of this year, banks, brokers, and shipowners say. “Tankers are traveling longer distances and ship availability is very tight. I think rates will stay strong for the next two years,” Lars Barstad, chief executive at Frontline, which owns and operates 22 supertankers and nearly 50 smaller vessels Suezmax and Aframax, told The Wall Street Journal. Tanker rates are also pushed higher by the lower availability of vessels as more ships are involved in the Russian oil trade and – due to the sanctions – have become unavailable to other shippers. The number of newly built tankers and orders for new builds is at a decades-low, further constraining vessel availability. “Despite improving fundamentals and strong tanker markets in the second half of 2022, new ordering of tanker tonnage in dwt terms was the lowest reported in 27 years. There is a marginal number of available berths being discussed for late 2025 delivery, predominantly in China, but to compensate for the growing numbers of vessels reaching 20 years of age over the next years, one needs to look to 2026,” Frontline said last month in its 2022 results report and outlook for the coming years. “This continues to be the fundamental reason one may remain positive for tankers for the years to come.” Teekay Tankers, which is not participating in the movement of Russian cargoes, said last month that “the transfer of ships into the so-called shadow fleet effectively removes them from mainstream trades and reduces effective vessel supply.” Teekay Tankers expects the global tanker fleet to grow by around 1.5% this year, with virtually no growth in 2024, the company’s CEO Kevin Mackay said.

Russia Overtakes Saudi Arabia To Become China's Top Oil Supplier --Russia was the single largest crude oil supplier to China in January and February, overtaking Saudi Arabia which was the number-one supplier of oil to China last year, according to Chinese customs data cited by Reuters. As China accelerated the buying of cheap Russian crude oil at discounts to international benchmarks, Chinese imports of crude from Russia jumped by 23.8% year over year to 1.94 million barrels per day (bpd) in January and February 2023, per the data reported by China’s General Administration of Customs. China reports trade and economic data for January and February together to remove distortions around the fluctuating week-long Lunar New Year holiday.In the first two months of this year, Russia beat Saudi Arabia to the top spot of Chinese crude oil suppliers as imports of Saudi crude fell by 4.7% to the equivalent of 1.72 million bpd, compared to 1.81 million bpd for the same period of 2022. For the full-year 2022, Saudi Arabia was China’s top crude oil supplier – ahead of Russia – with shipments averaging 1.75 million bpd.In recent months, China has been buying increased volumes of Russian crude as Moscow pivoted its sales to Asian markets following the Western embargoes and price caps on its crude oil and refined petroleum products.The independent refiners in China, often referred to as the teapots, are importing a large portion of the Russian volumes, taking advantage of the deep discounts at which Russia sells its oil to customers. Despite a sluggish start to 2023, China’s energy commodity imports are expected to rise later this year, while oil demand is set to rebound and lead global oil consumption to a record high, forecasters say.China’s reopening is set to add momentum to global economic growth, OPEC said in its Monthly Oil Market Report (MOMR) this week, as it revised up its forecast for Chinese oil demand growth. The International Energy Agency (IEA) said in its report last week that “Building stocks today will ease tensions as the market swings into deficit during the second half of the year when China is expected to drive world oil demand to record levels.”

How China benefits from Western sanctions on Russia's energy exports (Reuters) - Chinese President Xi Jinping arrived in Russia on Monday in his first overseas trip since securing a third term as president. The visit comes just over a year after Russia launched what it calls a "special military operation" in Ukraine, triggering sanctions by the European Union on purchases of Russian seaborne crude and coal, and a price cap agreed by the Group of Seven on Russian crude oil in December. The EU also halted piped gas imports from Russia, distorting the global LNG market. China, the world's top energy consumer, has not agreed to any of the moves. With Moscow under pressure to sell surplus volumes no longer going to the EU, China has saved billions of dollars on purchases of cheaper Russian oil and coal and made returns trading excess supplies. Xi has said China wants a closer energy partnership with Russia that would maintain international energy security and supply chains. Below are details on how much China has gained so far. China's crude imports from Russia jumped 8% in 2022 from a year earlier to 86.25 million tonnes (1.7 million barrels per day), according to Chinese customs data, even as the country's overall imports slipped 0.9% last year due to a slowdown in its economy. That gave Russia a 17% share of the Chinese oil market, up from 15% the year before, though it remained a close second to top supplier Saudi Arabia, which supplied 87.5 million tonnes. It also brought large savings. Based on an estimated $10 a barrel discount for both ESPO and Urals crude on delivered basis, Chinese refiners saved about $5.5 billion over the April 2022 to January 2023 period, according to Reuters' calculations. Independent refiners in the eastern province of Shandong were the biggest beneficiaries. State refiners also gained from the cheaper oil, while others made profits from trading the barrels, traders said. China's seaborne crude imports from Russia are set to hit an all-time high of about 1.4 million bpd in March, according to Vortexa and Kpler. China has also increased coal imports from Russia even as it cut back overall imports of the fuel because of more domestic production. Russian coal arrivals surged 20% in 2022 from a year earlier to 68.06 million tonnes, with coking coal imports doubling to reach 21 million tonnes, showed customs data, as China bought discounted coal while Europe shunned Russian cargoes and later banned them on Aug. 11. Without bottlenecks in Russian rail capacity that are hampering transport of coal eastwards, imports could have been even higher.

Offshore oil is about to surge - Oil executives love to talk about the energy transition. But for all the platitudes about technologies such as hydrogen and carbon capture, most are doubling down on what they know best. Oil. Spending on new offshore oil projects over the next two years is projected to soar to levels not seen in a decade. In Saudi Arabia, the state-owned oil giant is embarking on a series of massive offshore expansion projects designed to boost the kingdom’s crude production. The United Kingdom and Norway are pumping more money into the North Sea in hopes of lifting out more oil. Exxon Mobil Corp., America’s oil giant, is plowing money into projects in waters off Guyana and Brazil. The offshore revival represents a shift after a decade of focus on onshore shale plays and amounts to a vote of confidence in oil’s long-term future. The move is notable as it follows several years of mounting talk of diversifying oil companies’ business models. Europe’s oil giants have announced net-zero emission targets and have begun investing in everything from renewables to electric vehicle charging. Even America’s oil titans, which have long maintained that crude will be needed for decades to come, have begun pouring money in areas such as hydrogen and carbon capture. Yet oil remains their bread and butter. “People who hoped the oil companies would stop investing in oil are likely to be disappointed,” said Kevin Book, managing director at ClearView Energy Partners. In some ways, the offshore renaissance is a sign of the emerging energy transition. The world is still likely to consume large amounts of oil for decades to come, even if energy transition efforts gain steam and global crude demand begins to decline. That means investment in new or expanded fields is needed to offset declining production from existing wells. The result is something of a race, with oil companies seeking to identify fields that can produce at low oil prices and outlast competitors in a shrinking market. “Whatever transition brings to the oil industry, there is going to be a place for cleaner, cheaper barrels,” Book said. Rystad Energy, a consulting firm, reckons that offshore spending will eclipse $100 billion in 2023 and 2024. That would mark the first time offshore oil investment eclipses the $100 billion mark in consecutive years since 2012 and 2013, the firm said. Offshore spending will account for 68 percent of spending on newly sanctioned projects over the next two years, compared with 40 percent from 2015 and 2018.

Oil spill has reached Verde Island, Batangas, PCG says --The oil spill from a submerged motor tanker in Oriental Mindoro has now creeped into the waters of Verde Island in Batangas, the Philippine Coast Guard (PCG) said on Monday. PCG-Batangas station commander Captain Victorino Acosta confirmed this in an interview on Super Radyo dzBB, when asked if the oil spill from MT Princess Empress which sank on February 28 is already visible on Verde Island. “Opo. Sa ngayon, confirmed [Yes. Right now, it’s confirmed],” he said. “Doon sa bandang 4.4 nautical miles, nagko-combat na kaagad tayo. Oil sheens pa lang doon pero may mga nagla-landfall na dito. Kapag nakita mo, nagiging kulay itim na,” he added. (We are already combating it at around 4.4 nautical miles. There are oil sheens, but some are making a landfall which are black in color.) Acosta said the PCG is still assessing the length of the oil spill on Verde Isand’s shoreline. They are also monitoring the situation in other coastal areas of Batangas, such as San Juan, Tingloy, Lobo, and Calatagan. Acosta, however, assured that the province has already been preparing for such and has put in place improvised oil spill booms and other equipment. There is also no announcement yet of a fishing ban in Batangas and ro-ro travel is not affected, according to him. University of the Philippines Marine Science Institute (UP-MSI) associate professor Dr. Irene Rodriguez said on Sunday that the oil spill may reach Batangas and Puerto Galera as the Northeast Monsoon or Amihan has slowed down and is going towards the north along the Verde Island passage. MT Princess Empress sank on February 28 off Naujan while carrying 900,000 liters of industrial fuel.

Marina sets release of P33 million for oil spill cleanup - — The Maritime Industry Authority (Marina) plans to release P33 million from its oil pollution management fund (OPMF) this week to finance the oil spill cleanup in Oriental Mindoro after an oil tanker capsized in the area. Sharon Aledo, legal services director of Marina, told reporters on Monday they were just awaiting the signatures of the OPMF committee members for the disbursement. The fund was requested by the Philippine Coast Guard (PCG), which is leading the cleanup, via a letter request to Marina on March 10. The money will be spent on equipment and other supplies, such as personal protective equipment, needed for the operation, Aledo shared. As of end-February, the OPMF stood at P70 million, Aledo said. The OPMF is a revolving fund established by the Oil Pollution Compensation Act of 2007. The fund is comprised of “contributions of owners and operators of tankers and barges hauling oil and for petroleum products in Philippine waterways and coastwise shipping routes.” The MT Princess Empress was carrying 800,000 liters of industrial oil when it sank off the coast of Naujan, Oriental Mindoro, on Feb. 28. The PCG recently reported that it had recovered 6,804 liters of oily water mixture and 65 sacks of oil-contaminated materials during its offshore operations from March 1 to March 17.

Philippines finds sunken fuel tanker three weeks after spill (Reuters): A leaking fuel tanker that sank off the central Philippines three weeks ago has been found using an underwater robot from Japan, a provincial governor said on Tuesday, as authorities sought more foreign help to address the oil spill. The discovery of MT Princess Empress, which was carrying about 800,000 litres (211,338 gallons) of industrial fuel oil when it capsized on Feb. 28 and eventually sank, was deemed crucial in stopping the spill, which reached shorelines in three provinces. Plugging the leaks and extracting any remaining oil from the tanker was urgent, Oriental Mindoro Governor Humerlito Dolor said in a media briefing. With the help of a remotely-operated vehicle that arrived on Monday from Japan, Dolor shared the first photos of the Philippine-flagged vessel from its exact location. The robot will also help determine the tanker's condition, he said. About 36,000 hectares (88,958 acres) of coral reef, mangroves and sea-grass could be affected by the oil slick, according to Filipino marine scientists. Japan has also sent a team of coast guard personnel to help in the cleanup, according to the Philippines' disaster agency, while five US coast guard personnel have arrived to help with the spill response, the US embassy said. The US National Oceanic and Atmospheric Administration will work closely with the Philippines to conduct rapid environmental assessments of affected areas and assess needs for ecosystem restoration, the embassy said.

Coast Guard collects 7,000 liters of oily water mixture from spill-affected areas The Philippine Coast Guard (PCG) collected some 7,000 liters of oily water mixture as part of operations to address the oil spill in Oriental Mindoro. The PCG also collected nearly 2,000 sacks of oil-contaminated materials and 22 drums of oil debris and trash from 13 barangays, as reported on GMA News Live on Sunday evening. The collected oily mixture and debris is part of the oil spill clean-up effort from the sinking of the MT Prince Empress, which was carrying 900,000 liters of industrial fuel oil when it sank in heavy seas on February 28. The PCG earlier said the motor tanker sank 400 meters into the ocean, which was too deep for divers to reach. The Bureau of Fishers and Aquatic Resources (BFAR) last week said the oil spill could cause a lower fish output, but not to the extent of a nationwide shortage.

BFAR: P5 million lost daily due to Mindoro oil spill fishing ban The country is losing P5 million per day as fisherfolk continue to suffer from the fishing ban imposed in several areas affected by the oil spill from the sunken motor tanker off Oriental Mindoro, the Bureau of Fisheries and Aquatic Resources (BFAR) said Monday. BFAR chief information officer Nazario Briguera said that 19,000 fishermen in nine municipalities in Oriental Mindoro were affected by the oil slick from the sunken MT Princess Empress, which was carrying 900,000 liters of industrial fuel. “With the 19,000 affected fisherfolk…tinitignan po namin na estimate is P5 million ang nawawala araw-araw dahil sa hindi pagkakaron ng hanap-buhay ng mga mangingisda habang nakasara ang pangisdaan kung saan sila naghahanap-buhay,” he said in a public briefing. (With the 19,000 affected fisherfolk, we estimate that P5 million is lost every day as fishermen lose their livelihood due to the fishing ban.) Fishing in oil spill affected areas in Oriental Mindoro was prohibited due to possible water toxification.

Japanese ROV to be used at Mindoro oil spill arrives in the Philippines The remotely operated vehicle (ROV) to be used to check the condition and contain the oil leak from the sunken MT Princess Empress arrived in the Philippines from Japan on Monday. According to Cedric Castillo’s report on “24 Oras", the ROV contracted by RDC Rield Marine Services — the operating company of the sunken motor tanker off Najuan, Oriental Mindoro— was in Batangas province. It was set to check on the condition of the motor tanker but still needs to undergo customs and documentary processes before it would be allowed to be deployed. “Wala sa usapan ‘yung i-aangat ang barko. Ang parang pinag-uusapan doon initially kung may butas, i-patch muna at i-siphon yung langis. Kaya dapat sa lalong madaling panahon, lahat ng paraan magawa,” Philippine Coast Guard (PCG) Spokesperson Rear Admiral Armand Balilo said. (We never discussed raising the ship. We only talked about patching the hole and siphoning the oil. We need to take all actions as soon as possible.) MT Princess Empress sank on February 28 while carrying 900,000 liters of industrial fuel. The latest report from the PCG said the oil reached Verde Island in Batangas City, which is considered to be the world’s center of biodiversity. Earlier in the day, the US Coast Guard personnel sent to augment the manpower for the oil leak containment effort also arrived in the country. They are expected to deploy their own ROV units. The Philippines is also reaching out to South Korea for the deployment of their coast guard personnel to Oriental Mindoro, the report said. Meanwhile, the Maritime Industry Authority (MARINA) disowned the certificate of public convenience (CPC) presented by the ship owner, calling it “inauthentic”. "It’s inauthentic, so to speak. We never issued an amended CPC and at the same time, I never signed one."

U.S. Experts Arrive in Oriental Mindoro to Assist in Oil Spill Response > U.S. Indo-Pacific Command > 2015 – At the request of the Philippine government, eight experts from the United States government arrived in Pola, Oriental Mindoro today to support the oil spill response operations of the Philippine Coast Guard (PCG). Five members from the U.S. Coast Guard’s (USCG) National Strike Force will provide subject matter expertise and assess the affected areas to determine the most effective method and equipment to contain and clean up the oil spill from the sunken tanker MT Princess Empress. A U.S. expert team composed of personnel from the USCG and NOAA are providing technical support to assess the damage caused by the oil spill off the coast of Oriental Mindoro. Through funding from the U.S. Agency for International Development (USAID), two members of the U.S. National Oceanic and Atmospheric Administration (NOAA) will work closely with the Philippines Department of Environment and Natural Resources to conduct rapid environmental assessments of affected areas, identify priority areas at risk of environmental damage, and assess needs for ecosystem restoration. NOAA has already provided the PCG with satellite imagery to boost assessment efforts. It also provided the University of the Philippines-Marine Sciences Institute with support for scientific modeling to estimate the trajectory of the spill. Lastly, a member of U.S. Navy Supervisor of Salvage and Diving will evaluate the technical parameters required to support the possible deployment of a remotely operated vehicle. Prior to their deployment to Pola, the American experts received a briefing on March 20 in Manila from the PCG and the Japan Disaster Relief Expert Team about oil-spill mitigation actions taken so far. “When vessels are in deep water, as in this case, cleaning up the remaining oil becomes a complicated issue. Through our incident management professionals’ wealth of experience and strong expertise in oil spill response, we will assist the PCG in developing safe and efficient methods to contain and recover the oil and minimize damage to the environment,” said Commander Stacey Crecy, commanding officer of the USCG Pacific Strike Team.

Oil spill fear after fatal accident on Chevron FSO offshore Thailand = Government agencies are on alert for a potential oil spill from the floating storage and offloading (FSO) vessel deployed on US supermajor Chevron’s Benchamas field offshore Thailand following an onboard accident that left one worker dead. One crew member was killed after seawater entered the hull of the Benchamas 2 FSO when a seal malfunctioned during maintenance work. Chevron confirmed that a contractor working aboard the vessel had died. There were 29 crew members onboard the FSO at the time of the incident and non-essential workers have since been demobilised. “The safety of all personnel and the protection of the environment remain our top priorities. We have engaged and notified the relevant authorities and are working with all stakeholders,” Chevron reportedly said in a statement. Upstream has approached Chevron for independent verification and comment. The kingdom’s government has tasked the Royal Thai Navy and Department of Transport to help prevent a possible significant oil spill from the FSO, which is deployed on the Benchamas field in the Gulf of Thailand. Royal Thai Navy spokesman Admiral Prokgrong Monthatphalin said that multiple agencies were working to recover the body of the dead crewman, fix the leak and avert an oil spill. “The vessel’s condition is safe and weather conditions are not interfering with the rescue operations. However, there is no electricity in the engine room… it is affecting assessment of the situation,” Prokgrong was quoted in a statement by the Bangkok Post. The FSO, which for more than four years has been operating on Chevron’s Benchamas field on Block B8/32 in the Gulf of Thailand about 130 miles offshore Chon Buri province — home of Thailand’s largest naval base — had some 400,000 barrels of oil on board at the time of the incident.

Australia's largest undeveloped gas field to be reinstated in the LNG race - Development of the Browse gas fields offshore Western Australia is back in focus again as the Woodside-led project owners prepare for the front-end engineering and design phase, buoyed by strong demand forecasts in the global liquefied natural gas market. Browse is the largest undeveloped gas and condensate resource in Australia with a contingent resource of 14 trillion cubic feet of gas and nearly 390 million barrels of condensate. Development momentum is bouncing back after the project was suspended in early 2020 as the Covid outbreak began.

Traditional Owners suspected they wouldn't benefit from fracking. A secret govt report has confirmed it Samuel Janama Sandy has long taken issue with mining. Not only does the Djingili Elder and Native Title holder lament the impact the industry has on his traditional lands; he also questions the supposed benefits to Indigenous communities that fossil fuel companies often use to promote their projects. "The NT government, the gas companies and the Northern Land Council get the big share and our communities are left without jobs or support to grow stronger," he said. "We are getting a peanut, while the white man is packing up his pocket with cash. We should own land, buy businesses, but we got nothing." With the release of a hidden government report, his suspicions have proven correct. Written by the National Indigenous Australians Agency (NIAA), the report revealed the scarce economic benefit of fracking for Beetaloo Basin Traditional Owners. Never released by the Morrison government, the report was obtained by the Nurrdalinji Aboriginal Corporation under Freedom of Information laws and released publicly on Tuesday. The findings of the report contradict claims by the gas industry that jobs and economic benefits from fracking will flow to communities. Mr Sandy, who is Deputy Chairman of Nurrdalinji Aboriginal Corporation, Samuel Janama Sandy, lives in a housing commission flat in Katherine and doesn't have access to a car. The report's findings aren't news to him, having no personal evidence of the benefits "they say will come from fracking". He says community want sustainable jobs that will preserve their lands for future generations. "Our people want jobs on Country, but not jobs that involve drilling into our Country," he said. “We don’t want fracking, at any cost. The gas should be kept in the ground. "Everything will be changed if they start production pretty soon like they say. We won’t be able to go out on Country with our children and grandchildren. It will all be damaged."

Kuwait Oil Company declares ‘state of emergency’ after oil spill - The Kuwait Oil Company declared a “state of emergency” on Monday following an oil spill on land, but said no injuries or disruption to production had been reported. The emergency followed an “oil leak in the west of the country”, the state-owned company said in a statement, as video posted by Kuwaiti media showed a gushing pipe surrounded by a large slick of oil. “No injuries have occurred as a result of the leak and production has not been affected,” company spokesman Qusai al-Amer was quoted as saying, adding that no toxic fumes have been reported. The leak “occurred on land but not in a residential area”, he later told AFP. Teams have been dispatched to determine the source of the leak and contain the incident, Al-Amer said, declining to give the spill’s exact location.

Kuwait oil firm declares ‘state of emergency’ after leak - The Kuwait Oil Company declared a “state of emergency” on Monday following an oil spill on land, in an incident decried by environmental activists as a “recurring problem” in the energy-rich Gulf state. The emergency followed an “oil leak in the west of the country”, the state-owned company said in a statement, as video posted by Kuwaiti media showed a gushing pipe surrounded by a large slick of oil. “No injuries have occurred as a result of the leak and production has not been affected,” company spokesman Qusai Al-Amer was quoted as saying, adding that no toxic fumes had been reported. The leak “occurred on land but not in a residential area”, he later told AFP. Teams have been dispatched to determine the source of the leak and contain the incident, Al-Amer said, declining to give the spill’s exact location. Kuwait’s Al Rai newspaper released a video on Twitter showing a pipe spewing large amounts of oil onto barren land. AFP could not independently verify the footage. Kuwait is a major oil-producing country where nearly 90 per cent of government revenue comes from oil. A key member of the Organization of Petroleum Exporting Countries (Opec), the nation is currently producing about 2.7 million barrels per day. Kuwaiti environmental activist Khalid Al-Hajire said the extent of damage from Monday’s oil leak was largely unclear, but decried non-compliance with environmental protocol. “The oil pollution we constantly see in the air, land and sea proves that the oil industry is not sufficiently serious when it comes to protecting the environment,” said Al-Hajire, the chairman of the Green Line Environmental Group, a non-governmental organisation.

Oil Prices Head Lower As Credit Suisse Shares Plunge By 60% - The selloff in oil continues on Monday, with Brent falling to the $72 a barrel mark and U.S. crude down to the $65 per barrel handle, as traders are cutting long positions amid the banking sector turmoil of the past week.The market rout saw Credit Suisse’s stock plummet by 60% on Monday in Europe after the announced takeover by UBS.As of 8:26 a.m. ET on Monday, the U.S. oil benchmark WTI Crude was down by 1.15% at $65.95, and Brent Crude, the international benchmark, was falling by 1.08% at $72.09.During the weekend, UBS said it plans to buy troubled Credit Suisse for $3 billion in an attempt to stop the contagion of spreading to the global banking system.“The combination is expected to create a business with more than USD 5 trillion in total invested assets and sustainable value opportunities,” UBS said on Sunday.On Monday, shares in UBS were down by 5% in Europe, while Credit Suisse’s stockcollapsed by 60%.Amid the market turmoil, investors and speculators are fleeing riskier assets such as crude oil futures.European stocks in general rebounded on Monday, although bank stocks hit the lowest level in three months. The Dow Jones Industrial Average futures wavered on Monday ahead of the U.S. markets opening as traders try to assess the risks of more contagion to the banking system.The markets are also on edge about the Fed’s next meeting, which is on Tuesday and Wednesday, and analysts expect the high volatility in all markets – including the oil market – to continue, at least this week.Brent Crude trades lower, below $75 per barrel, with short sellers in control, Ole Hansen, Head of Commodity Strategy at Saxo Bank, said on Monday.“This is no longer a supply/demand focused market and additional risk off could see it target $65,” Hansen added.

Oil rebounds after Brent oil prices slipped under $72 per barrel amid banking turmoil -- Oil prices rebounded and rose over 1% on Monday after diving to their lowest levels in 15 months amid turmoil in the banking sector.The Brent contract with May delivery last rose 73 cents, or 1%%, to $73.70 a barrel, after earlier hitting $71.64 per barrel at 11:00 London time.The front-month April WTI Nymex gained 73 cents, or 1.09%, to $67.47 a barrel.Oil prices have come under pressure from a crisis in the Western banking sector, which has seen the downfall of tech startup-focused Silicon Valley Bank and the takeover of embattled Credit Suisse by Swiss rival UBS in the span of two weeks. Two sources within the influential OPEC+ alliance signaled to CNBC at the end of last week that banking uncertainty was feeding into fears of another financial collapse to the tune of the 2008 crisis.OPEC+ delegates could only comment on condition of anonymity, as they are not allowed to publicly discuss the topic.One of the sources noted that the drop was likely temporary and not underpinned by supply-demand fundamentals surrounding the physical commodity, but stressed the need to monitor the potential effect on central bank interest rate decisions and inflation. The European Central Bank pressed ahead with a further rate hike of 50 basis points on March 16, while the U.S. Federal Reserve is due to reach its own rate decision this week.Over the past year, OPEC+ has championed stability in the oil price landscape to encourage long-term investment in spare capacity and avoid supply shortages. An OPEC+ ministerial technical committee is next set to adjourn on April 3.In a note dated March 15, UBS analysts indicated that the wider financial market turbulence was unlikely to affect crude oil production rates, but flagged that "during periods of elevated volatility, investors tend to pull out of risky assets like oil and invest in safer corners of the market."It added that the options market is now intensifying the decline in oil prices through delta-hedging plays. Citing "banking stress, recession fears, and an exodus of investor flows," analysts at Goldman Sachs on March 18 cut their oil price outlook, now expecting Brent prices to hit $94 per barrel in the upcoming 12 months and $97 per barrel over the second half of 2024 — compared with previous projections at $100 per barrel for both periods."Our adjustment also reflects somewhat softer fundamentals, namely higher-than-expected near-term inventories, moderately lower demand, and modestly higher non-OPEC supply," Goldman Sachs said.Questions linger over the potential demand boost from a reopening China — the world's largest importer of crude oil, whose buying was reined in for much of last year by Covid-19 restrictions.Paris-based watchdog the International Energy Agency nevertheless said in the March issue of its monthly Oil Market Report that it expects world oil demand growth to "accelerate sharply over the course of 2023," seeing "rebounding air traffic and the release of pent-up Chinese demand dominate the recovery."The supply picture has stayed muddied by Russia, whose oil flows have been choked by Western sanctions implemented against its seaborne crude and oil products in December and February, respectively. Moscow announced a unilateral 500,000 barrels per day cut in its crude output in March, announced by Deputy Prime Minister Alexander Novak on Feb. 10. It remains to be seen whether Russia's declines will be long term or are the product of technical difficulties to sustain field production rates following the winter cold, one OPEC+ delegate told CNBC last week. According to the state Saudi Press Agency, Saudi energy minister Prince Abdulaziz bin Salman received Novak in Riyadh on March 16, with both countries reaffirming their commitment to the OPEC+ policy of removing a combined 2 million barrels per day of production from the markets until the end of 2023, agreed in October.

The oil market on Monday saw a late day rally and ended higher - The oil market on Monday saw a late day rally and ended higher, recouping some of last week’s sharp losses. Early in the session, the market continued on its downward trend on concerns of risks in the global banking sector. The market traded lower to a low of $64.12 as a deal in which UBS, Switzerland’s largest bank, agreed to buy Credit Suisse in an attempt to rescue the country’s second biggest bank, failed to ease banking concerns. Also, the U.S. Federal Reserve, European Central Bank and other major central banks pledged to enhance market liquidity and support other banks. The oil market later retraced some of its earlier losses and remained in negative territory for most of the session before a day rally pushed the market to a high of $67.70 ahead of the close. The market rebounded as the stock market posted gains amid the possibility that the Federal Reserve will pause rate hikes at its meeting on Wednesday. The April WTI contract settled up 90 cents at $67.64, while the May Brent contract settled up 82 cents at $73.79. The product markets ended the session in positive territory, with the heating oil market settling up 94 points at $2.6871 and the RB market settling up 3.45 cents at $2.5360.IIR Energy reported that U.S. oil refiners are expected to shut in about 1,172,000 bpd of capacity in the week ending March 24th, increasing available refining capacity by 285,000 bpd. Offline capacity is expected to fall to 1,021,000 bpd in the week ending March 31st.Goldman Sachs Equity Research’s Natasha Tiwana said oil prices should take some time to recover after falling on concerns over the banking sector and fears of a recession. Goldman Sachs forecasts Brent at $94/barrel for the 12 months ahead and at $97/barrel in the second half of 2024 compared with previous expectations of $100/barrel, also on the back of higher than expected inventories and lower demand.The head of the Petroleum Association of Japan, Shunichi Kito, said oil prices could stay under selling pressure for the time being amid risk-off sentiment among investors in light of banking sector turmoil. However, he stated that the losses will likely be capped due to an expected shortfall in global supply in the latter half of this year.On Monday, Kuwait Oil Co. declared a state of emergency due to an oil leak in the west of the country. The company said production was not affected because of the oil leak and there were no injuries reported. Libya’s Oil Minister, Mohamed Oun, said that approval of the No Oil Producing and Exporting Cartels Act by the U.S. Congress will lead to instability in the international oil market. He said “OPEC+ is trying to achieve the stability of the market via determining the supply quantities not the prices.” Independent energy trading company Vitol said Monday it still looks for the reopening of the Chinese economy and growth in the aviation sector to drive global oil demand higher by 2 million b/d this year. But the company cautioned the global energy markets remain vulnerable to both economic and geopolitical risks. The CEO of the company expects global oil demand will continue to grow annually until around 2030 despite the continued market penetration of electric cars and alternative fuels.

ICE Brent Tops $75 after Russia Extends Crude Output Cut -- West Texas Intermediate futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange advanced more than 1.5% on Tuesday after Russia announced it would extend a unilateral 500,000 bpd production cut, first announced in February, through the end of June, potentially signaling a sustained production drop due to Western sanctions on its crude and oil products. Although analysts are skeptical whether Russia indeed reduced oil production last month, it cannot be ruled out that EU import bans and a G7 price cap have taken a bite out of the country's crude output. Moscow first announced a 500,000-bpd production cut on Feb. 10 after Deputy Prime Minister Alexander Novak warned there was a real risk the country would have to lower oil production this year due to the EU import bans and G7 price cap on its oil products. At the time, Novak said the cut would only last until the end of March. Today, Novak added that, "In accordance with the current market situation, the decision to voluntarily reduce production by the amount of 500,000 bpd will be valid until June 2023 inclusive." WTI and Brent prices have lost more than $10 bbl over the past week, spurred in part by fears that the collapse of two midsized U.S. banks would spread to other banks and trigger a financial crisis. But the sentiment recovered somewhat as those concerns eased after the rescue of Credit Suisse AG, which was sold to its long-time rival UBS Group for around $3.25 billion and shares of U.S. regional banks stabilized. Tuesday's higher settlements also come ahead of the release of the highly anticipated rate decision from the Federal Open Market Committee that concludes its two-day policy meeting on Wednesday. As of this morning, 83.4% of investors expect the Federal Reserve to lift interest rates by 25 basis points to just above 4.75% at the conclusion of Wednesday's meeting, according to CME's Fed Watch Tool. That compares to just 16.6% of investors who believe the central bank will pause rate increases. At settlement, West Texas Intermediate for April delivery advanced $1.69 bbl to expire at $69.33 bbl, and WTI for May delivery settled at $69.67 bbl. The international crude benchmark Brent contract for May delivery gained $1.53 to $75.32 bbl. NYMEX RBOB April futures settled at $2.5389 gallon and the front-month ULSD contract firmed $0.0031 to $2.6902 gallon.

Oil rises 2% in retreat from 15-months low as banking fears subside - Oil prices rose more than two per cent on Tuesday, extending a retreat from a 15-month low hit the previous day, as the rescue of Credit Suisse allayed concerns of a banking crisis that would hurt economic growth and cut fuel demand. Measures to stabilise the banking sector, including a UBS takeover of Credit Suisse and pledges from major central banks to boost liquidity, have calmed fears about the financial system that roiled markets last week. Brent crude settled up $1.53, or 2.1 per cent, at $75.32 a barrel, while US West Texas Intermediate (WTI) closed up $1.69, or 2.5 per cent to $69.33. On Monday, both benchmarks ended about one per cent higher after falling to their lowest since December 2021, with WTI sinking below $65 at one point. Last week, they shed more than 10 per cent as the banking crisis deepened. "A 'risk back on' sentiment seems to be coming back to crude, as the latest selloff may very well have been exaggerated liquidation," The US Federal Reserve started its monetary policy meeting on Tuesday. Markets expect a rate hike of 25 basis points, down from previous expectations of a 50 bps increase. Some top central bank watchers have said the Fed could pause further rate hikes or delay releasing new economic projections. Wall Street indexes also closed sharply higher on Tuesday as fears over liquidity in the banking sector abated and market participants eyed the Fed. Meanwhile, US crude oil inventories rose by about 3.3 million barrels last week, according to market sources citing American Petroleum Institute figures. That compared with Reuters estimates for a draw of 1.6 million barrels. A meeting of ministers from OPEC+, which includes members of the Organization of Petroleum Exporting Countries plus Russia and other allies, is scheduled for April 3. OPEC+ sources told Reuters the drop in prices reflects banking fears rather than supply and demand. Hedge fund manager Pierre Andurand agreed the latest price drop was speculative and not based on fundamentals. He predicted oil will hit $140 a barrel by year-end. The CEO of energy trader Gunvor, Torbjorn Tornqvist, said he expected oil prices to move higher toward year end as rising Chinese demand tightens the market further. Money managers cut their net long US crude futures and options positions in the week to March 14, the US Commodity Futures Trading Commission (CFTC) said.

Crude Oil Inventories Build Again, But Products Draw - Crude oil inventories in the United States rose this week, with a 3.262 million barrel build, the American Petroleum Institute (API) data showed on Tuesday, compared to estimates of a 1.448 million barrel draw. The total number of barrels of crude oil gained so far this year is now more than 59 million barrels. This week, SPR inventory held steady for the tenth week in a row at 371.6 million barrels—the lowest amount of crude oil in the SPR since December 1983. U.S. crude oil production stayed at 12.2 million bpd for week ending March 10. U.S. production is now 900,000 bpd lower than the peak production seen in March 2020, but 600,000 bpd higher than this time last year. Oil prices traded up on Tuesday in the run-up to the data release after sustaining significant losses in the days week prior due to the panic surrounding the collapse of Silicon Valley Bank. By 2:37 p.m. EST, WTI was trading up $1.83 (+2.63%) on the day to $69.48 per barrel, a loss of more than $2 per barrel on the week. Brent crude was trading up $1.58 (+2.14%) on the day at $75.37 $77.88—down roughly $2.50 per barrel from this same time last week. WTI was trading at $69.50 shortly after the data release. While crude oil saw a build, it was the only build this week for the second week in a row, with product inventories falling again. Gasoline inventories fell by 1.09 million barrels after last week’s data showed the fuel inventories fell by a sizeable 4.587 million barrels. Distillates fell by 1.84 million barrels after decreasing by 2.886 million bpd in the week prior. GasBuddy data showed that gasoline demand was up 7% this past Sunday and Monday compared to the relative four-week averages, and the highest levels since September 25, 2022. Inventories at Cushing, Oklahoma, decreased by 760,000 barrels—on top of the 946,000 barrel decline that the API reported last week.

WTI Rallies After Huge Product Drawdowns, Crude Stocks Near 2-Year HighOil prices are lower ahead of the official inventory and supply data, after spiking back above $70 (WTI) this morning, as investors wait anxiously to see whether Powell folds this afternoon. "The weakness seen overnight is mostly due to market jitters ahead of tonight's Fed rate decision with the market pricing in an 80% change of a 25-basis point hike," Saxo Bank noted. The near-term outlook remains clouded, however, due to to weak demand that’s driving a surplus in physical markets. Global demand headwinds are offsetting support from China’s reopening, OPEC’s quota reduction and US production struggles. In the short-term, an unexpected crude build (confirming API's print) could send prices even lower... API

• Crude +3.262mm (-1.448mm exp)
• Cushing -760k
• Gasoline -1.09mm
• Distillates -1.84mm

DOE

• Crude +1.117mm (-1.448mm exp)
• Cushing -1.063mm
• Gasoline -6.399mm - biggest draw since Sept 2021
• Distillates -3.313mm - biggest draw since Oct 2022

After API reported a surprise crude build, the official data confirmed the build (but a smaller one) but it was the sizable product draws that got the most attention... Graphs Source: Bloomberg With another massive 'adjustment factor' in the data... Soft diesel demand figures have done little to bolster confidence in the economy in the wake of the banking crisis. Seasonal consumption remained at the lowest level since 2016, with the gap widening from the five-year average. Total US crude stocks (ex SPR) rose to their highest since May 2021... US crude production rebounded modestly last week, despite a sliding US rig count... WTI was hovering at around $69.25 ahead of the official print and rallied back above $70 on the big draws...

Oil Futures Rally After Fed Lifts Rates, Product Draws Reported -- New York Mercantile Exchange oil futures nearest delivery rallied in afternoon trade Wednesday as the U.S. dollar declined sharply after Federal Open Market Committee raised the federal funds rate 25 basis points while at the same time acknowledging turmoil in the banking sector could slow the already fragile economy. The 25-basis point hike moves the federal funds rate to a 4.75% to 5% target range, which was widely expected. In a statement, the Fed's policymaking committee said it "will closely monitor incoming information and assess the implications for monetary policy." Additionally, the central bank removed the phrase "ongoing increases" from its statement, suggesting the central bank might be pivoting away from further rate increases. "Financial conditions seem to have tightened," Fed Chair Jerome Powell in his news conference following the rate decision. "We'll be looking to see how serious this is, and does it look like it's going to be sustained. And if it is, it could easily have a significant macroeconomic effect, and we would factor that into our policy decisions." The Fed's rate hike comes amid uncertainty over the health of the global banking sector. Earlier this month, Silicon Valley Bank collapsed, and Signature Bank was shut by the Treasury Department, while UBS acquired rival Credit Suisse -- a move forced by Swiss regulators to shore up the country's banking industry. Also on Wednesday, U.S. Energy Information Administration released an inventory report showing gasoline inventory declined for the fifth week through March 17, down 6.4 million bbl to a 229.6 million bbl 10-week low. The steep draw was well above the 1.09 million bbl decline reported late Tuesday by the American Petroleum Institute, with last week's draw realized as implied gasoline demand increased 366,000 bpd to 8.96 million bpd -- the second-highest weekly domestic consumption rate in 2023. Over the four-week period ended March 17, implied gasoline demand averaged 8.807 million bpd, near the comparable period in 2022 when the four-week consumption rate was 8.821 million bpd. So far in 2023, gasoline demand trails the year-ago pace by 114,000 bpd or 1.3% at 8.486 million bpd. Gasoline stocks have been drawn down 12.324 million bbl or 5.1% since Feb. 10 when they reached a 241.922 million bbl 11-month high, EIA data shows. The steep draw is realized following the heaviest refinery maintenance season in five years, with planned turnarounds taking about 1.5 million bpd of refining capacity offline at its peak in February. The U.S. refinery run rate continued to ramp higher in mid-March, climbing 0.4% to a 12-week high utilization rate at 88.6%, although down 2.5% against a year ago. Over the four weeks ended March 17, the refinery run rate averaged 87.2% compared with 89.6% during the corresponding four weeks in 2022. Distillate fuel inventory also widened a stock deficit against the five-year average last week following a 3.3 million bbl weekly draw that was more than an API-reported 1.84-million-bbl decline. The draw pressed distillate stocks to a 116.4 million bbl eight-week low, widening a deficit against the five-year average by 3.3 million bbl to just over 12 million bbl, although inventory is 4.3 million bbl above a year ago amid heavy drawdowns on sharp demand in early 2022. Commercial crude inventory in the United States increased 1.1 million bbl to a 22-month high at 481.18 million bbl, widening a surplus against the five-year average by 3.288 At settlement, NYMEX West Texas Intermediate futures rallied $1.23 to $70.90 bbl, and the international benchmark Brent gained to $76.69 bbl, up $1.37. NYMEX RBOB rallied $0.0543 to $2.5932 gallon and ULSD futures for April delivery advanced $0.0501 to $2.7403 gallon.

Oil up 3rd day in row on large fuel drawdown, dollar drop ahead of Fed -- Oil prices overcame a weak start to settle up for a third straight day on Wednesday, helped by the U.S. government’s report of a larger-than-expected drawdown from fuel stockpiles and the dollar’s continued tumble ahead of the Federal Reserve’s latest decision on interest rates. New York-traded West Texas Intermediate, or WTI, crude settled up $1.23, or 1.8%, at $70.90 per barrel. With the latest rise, the U.S. crude benchmark has gained more than 5% since the start of the week, returning to the key $70 perch and overwriting about half of last week’s near 10% plunge that accounted for oil’s worst week since the height of the coronavirus pandemic in April 2020. Just on Monday, WTI sank to $64.12, its lowest since December 2021. London-traded Brent crude finished up $1.37, or 1.8%, at $76.69 per barrel, adding to its about 3% gain over the past two sessions. The global crude benchmark plumbed a 15-month low of $70.12 on Monday, after finishing last week down 13% The Dollar Index fell to a more than one-week low of 102.627 against a basket of currencies, sliding for a ninth time in 10 sessions and losing 2.7% in the process. That naturally boosted demand for commodities denominated in the greenback, including crude. Oil’s rebound was also accelerated Wednesday by data showing larger-than-expected fuel demand for last week amid fair weather that appeared to encourage more driving. Gasoline inventories saw a drawdown of 6.399 million barrels during the week ended March 17, more than triple the drop of 2.061M barrels of gasoline noted in the prior week to March 10, the U.S. Energy Information Information, or EIA, said in its Weekly Petroleum Status Report. Automotive fuel gasoline is the No. 1 U.S. fuel product. Analysts tracked by Investing.com media had expected the EIA to report a gasoline stockpile drop of 1.677M barrels on the average for last week. With distillate stockpiles, the EIA reported a 3.313M barrel draw, against expectations for a drop of 1.5M and versus the prior week’s deficit of 2.537M. Distillates, which are refined into heating oil, diesel for trucks, buses, trains and ships and fuel for jets, are often the strongest demand component of the U.S. petroleum complex. The larger-than-expected drawdown in fuels came on the back of benign weather in the United States last week as the end of an unusually warm winter ushered in even higher spring temperatures that encouraged more Americans to drive. Despite the higher fuel consumption, crude oil balances in storage rose for a second week in a row, the EIA report showed, suggesting slower-than-expected refinery processing of crude. Refineries operated at 88.6% of their operable capacity last week, the EIA said, versus the 90% and above norm for this time of year. Crude stockpiles rose by 1.117M barrels during the week ended March 17. In the previous week to March 10, there was a build of 1.55M barrels. Except for one week, crude inventories have risen over the past 13 weeks, resulting in a net build of more than 60M barrels since the start of this year.

Oil prices slide after Fed hikes interest rates for the ninth time in a row - Oil prices are dipping again this morning, after the Federal Reserve hiked interest rates a further 25 basis points today. This follows three sessions of gains – with investors fears of contagion across the banking sector easing, after the collapse of Silicon Valley Bank and the merger of UBS and Credit Suisse. Interest rates are now at 4.75-5.00 per cent, the highest level since 2007 – following a ninth rise in interest rates in a row. Fed Chair Jerome Powell has also warned that banking industry stress could trigger a credit crunch with “significant” implications for the world’s largest economy – which US central bank officials expect will slow even more this year than previously thought. This has seen oil prices – which settled at their highest levels since last week yesterday night – begin to tumble again. Brent Crude is down 0.42 per cent, trading ay $76.37 per barrel while WTI Crude is down 0.56 per cent at $70.50 per barrel Oil has benefitted from the US dollar dropping to a six-week low, alongside bullish expectations of demand recovery in China – the world’s top oil importer. This could support prices even through economic turbulence across the banking sector – with Goldman Sachs forecasting that oil demand topping 16m barrels per day. OPEC and IEA both expect demand to outstrip supply in the second half of 2023, with China driving a surge in oil consumption. Meanwhile, US crude oil stockpiles rose unexpectedly last week to their highest level in nearly two years – the latest data from the Energy Information Administration showed. Crude inventories rose in the week to March 17 by 1.1m barrels to 481.2m barrels, the highest since May 2021. Analysts in a poll from news agency Reuters expected a 1.6m barrel drop.

Goldman Sachs Expects Oil Prices To Climb Higher In June - Goldman Sachs expects higher oil prices 12 months from now, analysts from the investment bank said in a note, pointing out a forecast demand increase in China to more than 16 million barrels daily over the period.The bank is quite bullish on all commodities: earlier this week, its head of commodities, Jeffrey Currie, said that the outflow of capital from the energy industry will result in shortages that will manifest later this year."Historically, when you have this kind of scarring event, it takes months to get capital back ... We will still get a deficit by June and it will drive oil prices higher," Currie said at the Financial Times Commodities Global Summit, as quoted by Reuters.Currie is not the only bullish industry observer. Also this week, hedge fund manager Pierre Andurand said oil will rebound and rise to $140 per barrel by the end of the year, noting that the current slump was speculative and came from the banking sector.A lot of the bullishness around oil prices has to do with China. Chinese energy commodity imports were underwhelming in the first two months of 2023, but they are expected to pick up later this year with potentially record-high crude oil purchases, even though Beijing has set its lowest annual economic growth target in decades.Average oil imports over the first two months of the year were lower than last year’s but only modestly, by 1.3%. Oil imports during January and February tend to be weaker in China because of the Lunar New Year holidays, anyway.Yet pretty much every analyst expects Chinese demand for oil to grow in the coming months with a view to that growth rate of 5% set by the government. Besides, there is some new refining capacity coming online this year, which should guarantee stronger demand and lend a hand to prices.

Oil Extends Losses Amid Weak Eurozone Manufacturing Data -- New York Mercantile Exchange oil futures and Brent crude on the Intercontinental Exchange fell again in early morning trade Friday, pressuring the international benchmark below $75 barrel (bbl) in reaction to weaker-than-expected manufacturing data out of the European Union, showing business activity across the industrial sector eased to the lowest level in four months, driven by the loss of new orders and consumer demand. Manufacturing output in the Eurozone stagnated for the second straight month in March, with factory output falling into contraction territory to 49.9 from 50.1 in late February. The reading of 50 separates growth from contraction. Services sectors, on the other hand, powered higher to a 10-month high 55.6, lifting overall economic activity across the Eurozone. "Growth is very unbalanced, driven almost entirely by the service sector with manufacturing largely stalled and struggling to sustain production in the face of falling demand." said Chief Business Economist at S&P Global Market Intelligence Chris Williamson. Looking deeper into the data, manufacturing activity in Germany -- the bloc's largest economy -- eroded to the lowest level since May 2020 when the economy was largely shut by the COVID lockdown. Turning to prices, March's flash data for Germany and France showed the rate of inflation in goods and services still running well above its historical series average but eased further from the highs in 2022 to a near two-year low. This could be good news for the European Central Bank that has been trying to slow the rate of inflation across the euro area for over a year now. The ECB raised its key benchmark lending rate by another 50 basis points on March 16 in an attempt to backstop further price increases despite the turmoil in the banking sector. Domestically, the Federal Open Market Committee lifted the overnight bank borrowing rate by 0.25 percentage points this week to a 4.75% to 5% target range, matching market expectations, while signaling the central bank might raise rates one more time should inflation prove sticky. "We really don't see enough progress on core services inflation which excludes housing. The strength of recent readings indicates inflation pressures continue to run high," said Fed Chairman Jerome Powell in his news conference following the rate decision. Softer growth expectations are yet to be reflected in labor market conditions. Unemployment claims fell again last week to 191,000, remaining below the pre-pandemic average of 200,000 for every week this year except for three. This could be supportive for gasoline demand in the U.S. that typically tracks the labor market. So far in 2023, gasoline demand trails the year-ago pace by 114,000 bpd or 1.3% at 8.486 million bpd. Near 7:30 a.m. EDT, NYMEX West Texas Intermediate futures fell $2.73 to $67.19 bbl, and the international benchmark Brent contract declined to $73.08 bbl, down $2.88 bbl. NYMEX RBOB fell $0.0700 to $2.5432 gallon and ULSD futures for April delivery retreated $0.0356 to $2.6491 gallon.

Oil Prices Crash 4% As European Banking Stocks Slump Oil prices plunged by 4% early on Friday as the U.S. dollar rallied and banking stocks in Europe crashed in a sign of renewed pressure on the sector. As of 8:08 a.m. EDT on Friday, WTI Crude was down by 3.99% at $67.27, and Brent Crude traded down 3.65% on the day at $73.20.On Thursday, Brent settled at above $75 and WTI at over $70 per barrel. On Friday morning, oil prices had nearly wiped out the gains of this week accumulated on Wednesday and Thursday. On Friday, oil prices slumped again as the U.S. dollar was rallying, thus making crude more expensive for buyers holding other currencies.In addition, the banking sector in Europe was under intense selloff, with shares in Deutsche Bank and UBS crashing amid concerns about the cost of funding and contagion of the banking sector turmoil.Concerns about Deutsche Bank intensified on Friday and sent the Dow Jones stock futures down by over 300 points. “European banks are under pressure as funding costs soar,” said Peter Garnry, Head of Equity Strategy at Saxo Bank.Commodities led by crude oil saw renewed selling ahead of the weekend with European banks being under pressure, Saxo Bank’s Head of Commodity Strategy, Ole Hansen, commented.Oil, as a riskier asset, again came under pressure from the financial market turmoil due to concerns about the global banking sector.Adding to the bearish sentiment in oil, the United States signaled it is unlikely to fill the Strategic Petroleum Reserve (SPR) this year, which weighs on demand for crude.On Thursday, U.S. Energy Secretary Jennifer Granholm said it would take years to replenish the nation’s Strategic Petroleum Reserve. When the Biden Administration sold off 221 million barrels of crude oil from the SPR last year, the idea was to buy oil to replace what was withdrawn. In October of last year, the Administration announced that it would repurchase crude oil for the reserve when prices were at or below about $67-$72 per barrel. The move would be dual purpose in that not only would it replenish the nation’s depleted reserves, but it would boost demand when prices were low instead of sending them into orbit at a time or regular prices.

Oil Falls Friday but Posts Weekly Gain | Rigzone - Oil rose this week as US government promises to protect bank depositors and a lack of surprises from the Federal Reserve calmed investors.Crude settled above $69 a barrel on Friday, recovering about a quarter of the nearly $10 it lost the previous week. The commodity remains volatile, and as long as banking concerns remain at the forefront of markets, crude fundamentals may have a limited effect on its price movements, analysts said.“Crude found support this week after several weeks of unabated pressure,” said Rebecca Babin, senior energy trader at CIBC Private Wealth. “Fear around a recession and skittish trading keep many investors in wait-and-see mode.”Investors also found bullish signals this week, with US exports of crude and refined products surging to a record 12 million barrels a day, suggesting a rosier demand outlook. Meanwhile, Russia extended its 500,000-barrel-a-day crude output cut through June. Still, crude paired its weekly gains on Friday as fresh signs of stress in the banking sector caused investors to move away from riskier assets ahead of the weekend. WTI for May delivery fell 70 cents to settle at $69.26 a barrel in New York. Brent for May settlement fell 92 cents to settle at $74.99 a barrel. Crude remains on course for its steepest first-quarter drop since 2020, when the pandemic wiped out demand. A potential US recession, robust Russian oil flows in the face of Western sanctions and strikes at refineries in France have all proved bearish forces.

Iran’s President Welcomes Invite From Saudi King After Normalization Deal -Iranian President Ebrahim Raisi has welcomed an invitation from Saudi King Salman to visit Riyadh following a China-brokered normalization deal between the two countries.Mohammad Jamshidi, the Iranian president’s deputy chief of staff for political affairs, wrote on Twitter that Salman wrote a letter to Raisi welcoming the normalization agreement and “invited him to make an official visit to Riyadh and called for the strengthening economic and regional cooperation.”“The president welcomed this invitation and emphasized Iran’s readiness to enhance cooperation,” he said.Iran and Saudi Arabia agreed to reopen embassies and establish full diplomatic relations for the first time since 2016 within two months of signing the agreement. Iranian and Saudi officials have signaled that they intend to take other steps to solidify ties, including Saudi investments in Iran.The Iran-Saudi deal has the potential to significantly ease regional tensions. The UN envoy for Yemen has said there is renewed momentumtoward ending the war in Yemen in the wake of the Iran-Saudi rapprochement. Saudi Arabia and Yemen’s Houthis have been engaged in Omani-mediated peace talks.According to some media reports, Iran agreed to stop arming the Houthisas part of the deal with Saudi Arabia, although Tehran has always denied accusations that they send weapons to the group. Iran is a political ally of the Houthis and likely provides some material support, but not nearly as much as the US has provided the Saudi-led coalition in Yemen.

Warring Sides in Yemen Agree on Prisoner Swap to Release Over 800 Detainees - The Houthis and the Saudi-backed Yemeni government have agreed on a major prisoner swap that will release over 800 detainees after the two sides held 10 days of talks in Geneva, Switzerland.The Houthis said they agreed to release 181 prisoners, including 15 Saudis and three Sudanese. In exchange, the Saudi-backed government will release 706 people. The deal was brokered by the UN and the International Committee of the Red Cross.The prisoner swap comes as the Saudis and the Houthis are engaged in separate negotiations that are being mediated by Oman to bring an end to the war in Yemen. Hans Grundberg, the UN special envoy for Yemen, said the prisoner exchange deal was another sign that things are “moving in the right direction” when it comes to ending the war.Grundberg has also welcomed the surprise deal between Saudi Arabia and Iran to normalize relations that was brokered by China. After the agreement was announced, Grundberg said there was more momentumgoing toward a Yemen peace deal. The Saudis and Houthis agreed to a ceasefire at the end of March 2022 that lasted until October 2022. Since the truce expired, there have still been no recorded Saudi airstrikes in Yemen or any Houthi attacks inside Saudi Arabia. The blockade that has been enforced by the US-backed Saudi-led coalition since 2015 has also been eased but not fully lifted.

Report: Saudi Arabia Agrees to Establish Ties With Syria -- Saudi Arabia and Syria have agreed to establish ties and reopen their embassies after over a decade of not having formal diplomatic relations,Reuters reported on Thursday.Unnamed sources told Reuters that contacts between Riyadh and Damascus gained momentum following the surprise Saudi-Iran normalization deal that was brokered by China. Tehran is a major ally of the Syrian government of President Bashar al-Assad.Saudi Arabia severed diplomatic relations with Syria in 2011 and threw its support behind the failed US-backed regime change effort. As it’s become clear that Assad isn’t going anywhere, more regional countries have been normalizing with his government, an effort led by the UAE, which reopened its embassy in Syria in 2018.One source told Reuters that Syria and Saudi Arabia are “preparing to reopen embassies after Eid al-Fitr,” a Muslim holiday that will be celebrated on April 21 and April 22.The US is against any normalization steps between Syria and regional countries as it occupies about one-third of Syrian territory and maintains crippling economic sanctions on the country. The Biden administration has even come out against countries upgrading ties with Assad as part of an effort to help Syria recover from a devastating earthquake that hit on February 6 and killed thousands of Syrians.

Israeli Airstrikes Hit Syria’s Aleppo Airport for Second Time This Month -- Israeli airstrikes hit Syria’s Aleppo airport early Wednesday for the second time this month as the region is still recovering from a devastating earthquake that hit Syria and Turkey on February 6.“At about 03:55 am on Wednesday, the Israeli enemy launched an aerial act of aggression with a number of missiles from the direction of the Mediterranean Sea, west of Latakia, targeting the vicinity of Aleppo International Airport,” a Syrian military source told the Syrian news agencySANA.The source did not report any casualties but said “material damage” had been done. Bassem Mansour, head of Syria’s civil aviation, said the strike put the airport out of service and added that “the airport will resume work within a short period.”The city of Aleppo was seriously damaged by the earthquake and has been receiving flights carrying vital aid through the airport. The Israeli strikes that hit the airport earlier this month also put it out of service, forcing Syria to reroute aid flights to Damascus and Latakia.Israel has been bombing Syria for years and began targeting the country’s airports more frequently starting in 2022. Israel rarely comments on individual airstrikes but claims its operations in Syria target Iran’s military presence and arms shipments, but they often kill Syrians and damage civilian infrastructure.

US Launches Airstrikes in Syria After Drone Attack Kills US Contractor -The Pentagon announced on Thursday night that it launched airstrikes in Syria after a drone attack killed a US contractor and wounded five US troops near Hasakah in northeast Syria.Secretary of Defense Lloyd Austin said that at the direction of President Biden, he authorized “US Central Command forces to conduct precision airstrikes tonight in eastern Syria against facilities used by groups affiliated with Iran’s Islamic Revolutionary Guards Corps (IRGC).”The groups the US targeted were likely Shia militias that operate in Syria. The Pentagon claimed that US intelligence determined the drone was of “Iranian origin,” but at this point, there’s no indication that Tehran was involved in the attack on the US base.The Pentagon said that “two of the wounded service members were treated on site, while three additional service members and the US contractor were medically evacuated to Coalition medical facilities in Iraq.” The US has about 900 troops stationed in eastern Syria, and US bases in the country frequently come under attack. President Biden has previously launched airstrikes against Shia militias in the country.

U.S. air defenses not fully working ahead of strike that killed American in Syria: reports - The main air defense system at a military base housing U.S. troops and personnel in Northeast Syria was not fully working Thursday when a drone attack killed one American contractor at the facility, multiple outlets reported Friday. The New York Times first reported that the electronic counter-defense system was not fully functional at the coalition base known as RLZ. One U.S. official told the outlet the Avenger missile defense system at the base may have been experiencing a maintenance problem at the time of the attack. Pentagon press secretary Brig. Gen. Patrick Ryder told reporters Friday that “there was a complete sight picture in terms of radar,” but declined to offer further details, citing operational security. He added that U.S. Central Command (CENTCOM) “will conduct a review to assess what happened.” The U.S. military launched retaliatory attacks roughly 13 hours after a drone “of Iranian origin” crashed into the base near Hasakah, killing the contractor and injuring five U.S. service members and another contractor, Ryder said. Two Air Force F-15E fighter jets struck two facilities in eastern Syria affiliated with Iran’s Islamic Revolutionary Guard Corps (IRGC), with initial assessments that the facilities were destroyed. Asked how the drone was able to crash into the base even with the radar working, Ryder shifted blame to Iranian-backed militias in the area. “This is a dangerous part of the world. The work that we do is inherently dangerous, that’s why you have the military in these types of places conducting these types of operations,” Ryder said. “CENTCOM will do an assessment in terms of the attack. But the fact is that these IRGC-backed groups conducted this attack and unfortunately, we had an American killed.” He also would not say if there was an effort to shoot down the drone, only noting that “we take a variety of measures to safeguard our people.”

Second US base hit in Syria following retaliatory strikes - Rockets hit another U.S. base in Syria on Friday following a U.S. strike on facilities controlled by Iranian-backed militia groups. The rocket attacks fired at the Green Village base, located in the Al-Omar gas field of northeastern Syria, caused no casualties, according to Maj. John Moore, a spokesperson for U.S. Central Command (CENTCOM). Washington launched retaliatory strikes on Thursday night against Iranian-backed fighters after a drone strike killed a U.S. contractor and injured five American service members along with another contractor earlier that day. The drone strike was carried out by groups affiliated with Iran’s Islamic Revolutionary Guard Corps, according to the Pentagon, at a coalition base near Hasakah in northeast Syria around 1:38 p.m. local time on Thursday. After carrying out the retaliatory strikes in response to the drone attack, CENTCOM’s commander, Gen. Michael Kurilla, said the U.S. will “always take all necessary measures to defend our people and will always respond at a time and place of our choosing.” “We are postured for scalable options in the face of any additional Iranian attacks,” Kurilla said in a statement. “The thoughts and prayers of US Central Command are with the family of our contractor killed and with our wounded servicemembers and contractor. “Our troops remain in Syria to ensure the enduring defeat of ISIS, which benefits the security and stability of not only Syria, but the entire region,” he continued.

Biden warns Iran after U.S. forces clash with proxy groups in Syria - A burst of deadly violence between U.S. forces and suspected Iranian proxies in Syria has reignited long-smoldering tensions between Washington and Tehran, as President Biden warned Iran on Friday that violent attacks on American troops would be met with retribution. “The United States does not — emphasize does not — seek conflict with Iran,” said Biden, speaking in Ottawa alongside Canadian Prime Minister Justin Trudeau, after U.S. warplanes carried out retaliatory airstrikes for the death of an American contractor. “But be prepared for us to act forcefully to protect our people. That’s exactly what happened last night.”Defense Department spokesman Brig. Gen. Patrick Ryder told reporters at the Pentagon that the operation, conducted overnight at Biden’s direction, was intended “to send a very clear message that we will take the protection of our personnel seriously, and that we will respond quickly and decisively if they are threatened.”The violence that erupted in Syria in recent days highlights the risk for escalation at a moment when Washington and Tehran remain sharply at odds over issues including Iran’s nuclear program, the country’s support for militants across the Middle East and, since last year, its provision of military technology to Russia for its war in Ukraine.The president’s remarks underscored his attempt to avoid further violence while also containing attacks by proxy forces that have long posed a threat to Americans in Iraq, Lebanon and beyond.The bloodshed began Thursday when a self-detonating drone struck a U.S. facility in northeast Syria, where hundreds of American troops remain stationed in a counterterrorism mission begun years ago to dismantle the Islamic State. Beyond the contractor’s death, five U.S. troops and a second contractor were wounded in the attack, which Biden administration officials promptly linked to militias trained and armed by Tehran.American F-15 fighter jets carried out two airstrikes in response, Ryder said. The jets targeted facilities associated with the Islamic Revolutionary Guard Corps, an elite Iranian force that, via its network of proxies, has targeted U.S. troops in Syria on and off.Hours later, Ryder said, 10 rockets were launched at Green Village, a U.S. military position about 100 miles south of Thursday’s assault. The Pentagon also linked those attacks to militias backed by Iran but said there were no injuries to U.S. or coalition personnel nor any damage to U.S. equipment.The incidents occur as Saudi Arabia, a central American partner in the Middle East, begins what could mark a dramatic rapprochement with Iran. The tentative agreement to resume diplomatic relations after years of antagonism, under a deal brokered this month by China, underscores Beijing’s expanding clout across the Middle East as America focuses on what officials view as larger threats from Russia and China.

China, Russia, Iran Hold Joint Military Drills in Gulf of Oman – WSJ - China, Russia and Iran launched joint military exercises on Wednesday in the Gulf of Oman in the latest sign of Beijing’s efforts to expand its influence in the Middle East. China’s Defense Ministry said the five-day exercise would deepen cooperation between the three nations, posing a growing challenge to U.S. interests in the region.