Sunday, May 7, 2023

oil prices bounce off 17 month low, SPR at a 39½ year low

US oil prices finished lower for a third consecutive week, after the Fed raised interest rates and Treasury Secretary Yellen warned ​that ​the US was nearing a default on its obligations. …after falling 1.4% to $76.78 a barrel last week as recession fears offset bullish fundamentals, the contract price for the benchmark US light sweet crude for June delivery fell in Asian trading ​Monday, as jitters over the prospect of the US Fed raising interest rates combined with weaker Chinese manufacturing data to erase early gains, then slid from a lower open in New York trading as the U.S. dollar rose amid the expectations that the Fed​ would increase interest rates by another 25 basis points and settled down $1.12 at $75.66 a barrel after a widely watched US manufacturing survey indicated that the sector had contracted for the 5th straight month in April….after moving higher in overnight trading, oil contracts sold off sharply early Tuesday, after Treasury Secretary Janet Yellen said the US government would not be able to meet all payment obligations by early June, and settled $4.00 or more than 5% lower at a five week low of $71.66 a barrel as traders bailed out ahead of meetings at the Fed and the European Central Bank. where rate hikes were expected….oil prices ​moved sideways and posted a high of $71.79 a barrel overnight​, ​after the American Petroleum Institute reported that U.S. commercial crude oil inventories had declined by 4 million barrels vs 1 million expected but extended Tuesday's losses in​to​ the Wednesday session after softer-than-expected macroeconomic data in the US and elsewhere fueled fears of a deeper economic downturn this year, hurting demand for refined fuels, then fell further after official EIA data showed a weekly draw from supplies that was smaller than was expected, and settled $3.06 lower at $68.60 a barrel  and settled $3.06 lower at $68.60 a barrel after the Fed raised interest rates and traders fretted about its economic impact...oil prices rebounded in overseas markets ​on ​Thursday, after first falling over one percent on the Fed rate hike, but sold off sharply at the opening in New York and fell almost $5 to a low of $63.64, the lowest since December 2021, apparently due to the liquidation of a large position of more than 3,000 June futures contracts amidst thin trading conditions ​during the fifth minute of trading, but recovered as the Fed Open Market Committee signaled a pause in the monetary policy cycle, and settled the volatile session 4 cents lower at $68​.​56 a barrel after the European Central Bank decided to slow their pace of interest rate hikes and traders digested the central banks' rate hike signals...oil prices jumped in Asia early Friday, after state-controlled Saudi Aramco cut all official selling prices for Asia by 25 cents for June, then climbed from a pullback from that jump after a survey showed activity in China's services sector remained in a solid growth range in April, then rallied more than 4% in New York trading after U.S. employment data showed that job gains in April exceeded market consensus for the 13th month in a row, while the unemployment rate unexpectedly declined to a 52-year low, defying Fed efforts to slow the red-hot labor market. ​but easing recession fears, and settled $2.78 higher at $71.34 a barrel, but still finished 7.1% lower for the week on concerns that the U.S. banking crisis wou​ld slow the economy and sap fuel demand...

At the same time, US natural gas prices also finished lower, for the first time in four weeks, as the weather settled into a pattern portending overall light national demand while production continued at a record pace…after inching up to $2.410 per mmBTU last week following the expiration of the lower priced May contract, the contract price of US natural gas for June delivery opened 5 cents lower and slid from there the duration of the Monday session, as mild weather forecasts failed to inspire much buying, and settled 9.4 cents lower at $2.318 per mmBTU on record output and forecasts for milder weather next week than had been expected...natural gas prices then started trading 6 cents lower on Tuesday, as weather forecasts remained comfortable in key demand areas and finished the session down 10.4 cents at $2.214 per mmBTU amid light export demand and weaker cash market prices...natural gas prices again opened lower and recorded the day's high in the first hour of trading on Wednesday, as comfortable temperatures in the short-term forecast left the contract directionless, then traded ​in a narrow range throughout the session before settling 4.4 cents lower at $2.170 per mmBTU on record output from production wells and lower LNG exports....natural gas prices opened lower for a 4th straight day on Thursday, as traders awaited the weekly storage publication, then tumbled following the report's release before recovering slightly to settle 6.9 cents lower at $2.101 per mmBTU, on an in-line EIA inventory report that kept supplies at a hefty surplus relative to historic averages, ​while strong production and weak weather-driven demand continued to command traders’ attention...while natural gas prices opened and traded lower early on Friday, they managed to rally to close 3,6 cents higher at $2.137 per mmBTU, as the threshold around the $2 level triggered bargain buying and short covering ahead of the weekend, as ​gas ​prices still finished 11.3% lower for the week...

The EIA's natural gas storage report for the week ending April 28th indicated that the amount of working natural gas held in underground storage in the US rose by 54 billion cubic feet to 2,063 billion cubic feet by the end of the week, which left our natural gas supplies 507 billion cubic feet, or 32.6% above the 1,556 billion cubic feet that were in storage on April 28th of last year, and 341 billion cubic feet, or 22.2% more than the five-year average of 1,722 billion cubic feet of natural gas that were in storage as of the 28th of April over the most recent five years…we​ would note, however, that the oft quoted national average obscures the fact that gas supplies are 48.2% below normal in the West, while 36.2% and 33.6% above normal in the East and Midwest regions of the country at the same time....the 54 billion cubic foot injection into US natural gas working storage for the cited week was close to the 52 billion cubic feet addition to supplies that was expected by industry analysts surveyed by Reuters, but was quite a bit less than the 72 billion cubic feet that were added to natural gas storage during the corresponding week of 2022, as well as much less than the average 78 billion cubic feet addition to natural gas storage that has been typical for the same Spring 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 April 28th indicated that with most supply and demand metrics little changed from the prior week, we again had to pull oil out of our stored commercial crude supplies for the 5th time in 6 weeks, and for the 14th time in the past 35 weeks, but at a somewhat slower rate ​than​ during the prior week... Our imports of crude oil rose by an average of 21,000 barrels per day to 6,396,000 barrels per day, after rising by an average of 81,000 barrels per day the prior week, while our exports of crude oil fell by an average of 82,000 barrels per day to 4,737,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 1,659,000 barrels of oil per day during the week ending April 28th, 103,000 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 13,959,000 barrels per day during the April 28th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,735,000 barrels of crude per day during the week ending April 28th, an average of 98,000 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 469,000 barrels of oil per day were being pulled from 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 April 28th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 1,306,000 barrels per day less than what 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 [+1,306,000] 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 th​e week’s oil supply & demand figures that we have just transcribed.....However, since most oil traders treat these weekly EIA reports as accurate, 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 reliable​ ​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)

This week's 469,000 barrel per day decrease in our overall crude oil inventories came as an average of 183,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while 286,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve at the same time, the fifth straight draw on the SPR this year, ​wherein government owned oil is being sold as part of an earlier budget balancing withdrawal mandated by congress, and as a result the 364,938,000 barrels of oil that still remain in our Strategic Petroleum Reserve is now the lowest since October 14th, 1983, or at a new 39 1/2 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs had already drained those supplies considerably over the past dozen years, even before the Biden administration's big SPR releases of last year. However, those Biden administration releases amounted to about 42% of what was left in the SPR when they took office, and ​that ​left us with what is now less than a 19 day supply of oil at the current consumption rate.

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,315,000 barrels per day last week, which was still 4.8% more than the 6,025,000 barrel per day average that we were importing over the same four-week period last year. 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 1,000 barrels per day higher at 442,000 barrels per day but still added the same 400,000 barrels per day to the rounded national total....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 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 90.7% of their capacity while using those 15,735,000 barrels of crude per day during the week ending April 28th, down from their 91.3% utilization rate during the prior week, but still a normal rate for early Spring... The 15,735,000 barrels per day of oil that were refined this week were 1.7% more than the 15,466,000 barrels of crude that were being processed daily during week ending April 29th of 2022, but 4.3% less than the 16,446,000 barrels that were being refined during the prepandemic week ending April 26th, 2019, when our refinery utilization rate was at 89.2%, also close to normal for this time of year...

With the decrease in the amount of oil being refined this week, the gasoline output from our refineries was also lower, decreasing by 638,000 barrels per day to 9,378,000 barrels per day during the week ending April 28th, after our gasoline output had increased by 541,000 barrels per day during the prior week. This week’s gasoline production was 3.2% less than the 9,689,000 barrels of gasoline that were being produced daily over the same week of last year, and 5.5% less than the gasoline production of 9,927,000 barrels per day during the prepandemic week ending April 19th, 2019. Meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 93,000 barrels per day to 4,576,000 barrels per day, after our distillates output had decreased by 81,000 barrels per day during the prior week. With that decrease, our distillates output was 3.0% less than the 4,719,000 barrels of distillates that were being produced daily during the week ending April 29th of 2022, and 10.8% less than the 5,128,000 barrels of distillates that were being produced daily during the week ending April 26th, 2019...

Even after this week's decrease in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the second  time in eleven weeks, and for the 40th time in 62 weeks, increasing by 1,742,000 barrels to 222,878,000 barrels during the week ending April 28th, after our gasoline inventories had decreased by 2,408,000 barrels during the prior  week. Our gasoline supplies ​rose this week because the amount of gasoline supplied to US users fell by 893,000 barrels per day to 8,618,000 barrels per day, even as our imports of gasoline fell by 224,000 barrels per day to 798,000 barrels per day while our exports of gasoline rose by 93,000 barrels per day to 841,000 barrels per day.  However, after nine gasoline inventory decreases over the past eleven weeks, our gasoline supplies were 2.5% below last April 29th's gasoline inventories of 228,575,000 barrels, and about 6% below the five year average of our gasoline supplies for this time of the year…

Meanwhile, with the decrease in our distillates production, our supplies of distillate fuels decreased for the 7th time in 8 weeks, falling by 1,190,000 barrels to 110,323,000 barrels during the week ending April 28th, after our distillates supplies had decreased by 577,000 barrels during the prior week. Our distillates supplies decreased again this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, increased by 144,000 barrels per day to 3,872,000 barrels per day, while our imports of distillates rose by 51,000 barrels per day to 144,000 barrels per day, and our exports of distillates fell by 98,000 barrels per day to 1,018,000 barrels per day.... Even after 63 inventory withdrawals over the past one hundred and one weeks, our distillate supplies at the end of the week were 5.1% above the 104,942,000 barrels of distillates that we had in storage on April 29th of 2022, but are still about 12% below the five year average of our distillates inventories for this time of the year...

Finally, even with​ 1.3 million barrels ​per day ​of new oil supplies that the EIA could not account for, our commercial supplies of crude oil in storage fell for the 6th time in 19 weeks and for the 25th time in the past year, decreasing by ​1,281,000 barrels over the week, from 460,914,000 barrels on April 21st​ to ​459,633,000 barrels on April 28th, after our commercial crude supplies had decreased by 5,054,000 barrels over the prior week. Even after several large oil supply increases in the weeks following the Christmas refinery freeze offs, our commercial crude oil inventories are now about 2% below the most recent five-year average of commercial oil supplies for this time of year, but still 30.0% above the average of our available crude oil stocks as of the last weekend of April 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. After our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, \then jumped again after February 2021's winter storm Uri froze off US Gulf Coast refining, but then fell in the wake of the Ukraine war, our commercial crude supplies as of this April 28th were 10.6% more than the 415,727,000 barrels of oil we had in commercial storage on April 29th of 2022, but were 5.3% less than the 485,117,000 barrels of oil that we still had in storage in the wake of winter storm Uri on April 30th of 2021, and 13.6% less than the 532,221,000 barrels of oil we had in commercial storage as the pandemic took hold on May 1st of 2020… 

This Week's Rig Count

The number of drilling rigs active in the US decreased for the eighth time in the past twelve weeks during the week ending May 5th, and are now 5.7% below the prepandemic count, despite increasing ninety-nine times over the past 135 weeks... Baker Hughes reported that the total count of rotary rigs drilling in the US fell by 7 rigs to 748 rigs over the past week, which was still 43 more rigs than the 705  rigs that were in use as of the May 6th report of 2022, but was still 1,181 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 fell by 3 to 588 oil rigs during the past week, after the number of rigs targeting oil had been unchanged during the prior week, while there are still 31 more oil rigs active now than were running a year ago, even as they amount to just 36.5% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and while they are still down 13.9% from the prepandemic oil rig count of 683….at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 4 to 157 natural gas rigs, which was still up by 11 natural gas rigs from the 146 natural gas rigs that were drilling during the same week a year ago, even as they are now just 9.8% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….

In addition to those rigs specifically 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 into a formation 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 20 rigs this week, with 19 of those rigs drilling for oil in Louisiana's offshore waters, and one drilling for oil in Texas waters….that Gulf rig count is up by 4 from the 16 Gulf rigs running a year ago, when all 16 Gulf rigs were drilling for oil offshore from Louisiana…in addition to rigs drilling in the Gulf of Mexico, there is also a directional rig still drilling for oil at a depth between 10,000 and 15,000 feet, offshore from the Kenai Peninsula Borough of Alaska...since there was also a rig drilling offshore from Alaska a year ago, the national total of 21 rigs drilling offshore is thus up from the national offshore count of 17 a year ago..

In addition to rigs running offshore, there are still two inland water based deployed this week...one is a vertical rig drilling for natural gas to between 10,000 and 15,000 feet on a lake in Jefferson Parish Louisiana, while the other is a directional rig drilling for oil at a depth greater than 15,000 feet through an inland body of water in Terrebonne Parish, Louisiana...a year ago, there were also two such rigs drilling on inland waters...

The count of active horizontal drilling rigs was down by nine to 676 horizontal rigs this week, which was still 30 more rigs than the 646 horizontal rigs that were in use in the US on May 6th of last year, even as it was only 49.2% of the record 1,374 horizontal rigs that were drilling on November 21st of 2014…at the same time, the vertical rig count was down by 2 to 21 vertical rigs this week, and those were down by 4 from the 25 vertical rigs that were operating during the same week a year ago....on the other hand, the directional rig count was up by 4 to 51 directional rigs this week, and those were up by 17 from the 34 directional rigs that were in use on May 6th 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 May 5th, the second column shows the change in the number of working rigs between last week’s count (April 28th) and this week’s (May 5th) count, the third column shows last week’s April 28th 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 6th of May, 2022...

with this week's drilling pullback obviously centered in Texas and in the Permian basin, 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 four rigs pulled out of Texas Oil District 8, which overlies the core Permian Delaware, while another rig was pulled out of Texas Oil District 7C, which includes the counties over the southern Permian Midland, thus accounting for the drop of 5 oil rigs that had been drilling in the Permian…next, in the Texas oil districts that include portions of the Eagle Ford Shale in Texas, we find that a rig was added in Texas Oil District 1, while two rigs were pulled out of Texas Oil District 2, and two more rigs were pulled out of Texas Oil District 4, which thus accounts for the three rig decrease in the Eagle Ford shale...of those rigs removed from the Eagle Ford, two were targeting natural gas and one was targeting oil, which leaves the Eagle Ford with 58 oil rigs and 6 still targeting natural gas...finally, the last rig pulled from Texas this week came from the panhandle area, or Texas Oil District 10, and thus accounts for the oil rig pulled from the Granite Wash basin...

in other states, Louisiana managed a rig increase even after a Haynesville shale natural gas rig was shut down in the northwest corner of the state, due to the addition of the rig offshore, and another rig in the southern part of the state targeting a basin that Baker Hughes doesn't track, Oklahoma's increase was an oil rig added in the Cana Woodford shale, and California's increase was an oil rig added in a basin that Baker Hughes doesn't track, while the rig pulled out of North had been drilling for oil in the state's Williston basin....lastly, to account for the drop of 4 natural gas rigs, we have the Haynesville shale rig that was pulled out of northern Louisiana, the two gas rigs pulled from the Eagle Ford, and another natural gas rig pulled from a basin that Baker Hughes doesn't track...since where that was isn't evident based on the obvious counts, for it to have happened, an oil rig had to have been added to that basin at the same time the gas rig was removed, thus leaving the state and regional totals unaltered...

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BP contests fines for gross safety violations that led to deaths of two Ohio refinery workers - BP Products North America is contesting the $156,250 in fines it was assessed by the US Occupational Health and Safety Administration (OSHA) for the series of gross safety violations that led to the deaths of two young workers at an Ohio refinery facility last September. Max Morrissey, 34, and Ben Morrissey, 32, were killed in the entirely preventable explosion and fire at the BP Husky refinery in Oregon, Ohio, just outside of Toledo. The fine OSHA announced in March for the deaths of the two young fathers was insulting enough. The $156,250 the federal agency assessed BP for its criminal negligence amounts to an infinitesimal fraction of the $28 billion BP made in profits last year and the $8.2 billion first-quarter profits it announced Tuesday morning. As we commented at the time, “For American capitalism, the life of a worker is very cheap.” But OSHA records obtained by the World Socialist Web Site show that BP has no intention of even paying these derisory fines. On April 4, Gregg Dillard, an attorney from the Houston law firm Baker Botts (appropriately headquartered at One Shell Plaza) provided a Notice of Contest to OSHA, which stated that “BPPNA contests the Citation in its entirety, including all items, alleged violation descriptions, type/classification, proposed penalties and abatement, and abatement dates set forth therein.” The Toledo Blade, which first reported the contested fines in a short article last month, attempted to reach BP and OSHA for comment but received no replies. Requests for comments from Steve Sallman, the director of the United Steelworkers’ Department of Health, Safety and Environment, who was CC’d a copy of BP’s Notice of Contest, have gone unanswered. According to an OSHA press release in mid-March, the two workers were attempting to correct “rising liquid levels in the fuel gas mix drum when a flammable vapor cloud formed, ignited and then triggered an explosion” on September 20, 2022, “causing the deadly burns.” After a six-month investigation, OSHA cited BP for 10 “serious” and one “other-than-serious” violations. Among them were failure to control chemical levels at its Crude 1 processing unit, which “resulted in a release of liquid Naptha exposing employees to flammable vapor, fire, hydrogen sulfide, and explosion hazards.” BP was also cited for failing to “develop and implement written operating procedures that provide clear instructions for emergency shutdown, including the conditions under which emergency shutdown is required, and the assignment of shutdown responsibility to qualified operators to ensure that emergency shutdown is executed in a safe and timely manner.”

Letters: Ohio lawmakers disregard public by allowing fracking in parks - Newark Advocate - Members of the Ohio General Assembly have as much disregard for the quality of public recreation and the environment as they do for the ability of citizens to initiate amendments to Ohio's Constitution. The passage of Amended House Bill 507 in late 2022 mandates the leasing of state parks and public lands for fracking and oil and gas development. Previously, state agencies had discretion over the leasing of the land under their control. Ohio's state parks, forests and other lands are owned by the citizens. They are supported by public tax dollars, yet the public has no say in determining how these valuable resources, which constitute a public trust, are to be used. Additionally, HB 507 contains no provision for required public notice and comment on leasing decisions involving state lands. It is beyond belief that public policy makers would sanction an industrial land use, to wit, oil and gas production, upon land heretofore dedicated to public recreation! As a former public official, I know well the critical importance of public notice. The leasing of state-owned lands to private entities for oil and gas production is a matter significant public interest. Ohio's citizens expect, and deserve, much more from their elected officials! from David A. Lipstreu, Newark

Residents near Lordstown Energy Center in Lordstown, Ohio ask to delay rezoning vote (WKBN) – The Lordstown Energy Center has been using natural gas to generate electricity for five years now. Right next door, the land has been cleared for a second plant, and the company that owns them both wants part of the land to be rezoned from residential to industrial. The decision is up to Lordstown Village Council, which has yet to decide. But at a public meeting Monday evening, people weren’t so much concerned about the zone change as they were about issues at the plant that is operating. Lordstown warns it may fail as investor Foxconn gets jumpy Along state Route 45 in Lordstown, right next to the Lordstown Energy Center, land has been cleared for a second power plant. But among the pipes and heavy equipment, part of the land is zoned as residential. Clean Energy Future, which owns the plant and is building the new one, wants it to be changed to industrial. “I do not have a problem personally with rezoning this one area,” said Lordstown Mayor Arno Hill. Hill was the only speaker who supported the zone change, which is for 34.7 acres, that fronts Route 45, adjacent to where the second plant is being built. Lordstown resident Mark McGrail did not speak against the zone change but against the way the current plant is operating. “The plant that’s operating is a noise nuisance. The switching station they installed is a light nuisance,” McGrail said. McGrail asked village council to delay the rezoning until the nuisance issues are addressed. “There are nights that it howls away,” said Larry Tura, who lives southeast of the plant. Tura wants Clean Energy Future to be held accountable. “You guys need to hold them to 100% of the zoning laws that are on the books today, and that’s barriers and sound and whatever else it takes to make them stay in compliance,” Tura said. Lordstown resident Danielle Watson wondered why this was coming up now. “Why was this not rezoned previously to the groundbreaking ceremony? Because usually, everything’s done before there’s an actual groundbreaking ceremony,” Watson said. Hill said it was a public hearing and council was under no obligation to answer questions. Representatives of Clean Energy Future were in attendance but did not speak. At its regular meeting following the public hearing, Lordstown Village Council moved the zone change through a first reading. It’ll likely make it through three readings before a vote is taken.

Ohio's Natural Gas, Oil Property Taxes Lifting State Coffers - Natural gas and oil operations in eight Ohio counties alone provided $364 million in property taxes between 2010 and 2021, with taxes in 2020 and 2021 reaching record highs. Ohio’s top ranking counties for property tax generation in 2021, the most recent year for data, were Belmont ($17.26 million), Jefferson ($11.19 million) and Monroe ($10.63 million), according to the Ohio Oil and Gas Association (OOGA). “The latest tax numbers again reinforce the positive impact our industry has in the communities where we operate,” said OOGA President Rob Brundrett. “Not only does the industry employ more than 200,000 Ohioans and provide abundant and affordable energy, but we also provide millions of dollars for local governments and infrastructure projects.” In 2021, Ohio’s public utility, industrial and mining sector was the second-largest real property tax generator, contributing more than $4 billion. Residential and agricultural real property taxes provided the state with the most revenue, more than $14 billion, and public utility tangible personal property contributed a little more than $2 billion. The annual report in 2021 by the Ohio Department of Natural Resources’ (DNR) documented that the state produced 2.254 Tcf of natural gas. That made Ohio the sixth largest natural gas producing state after Texas, Pennsylvania, Louisiana, West Virginia and Oklahoma. Down slightly from the 2020 high of $62.17 million, oil and gas operations generated $57.63 million in property taxes in 2021, OOGA reported. Despite generating more tax revenue in 2020, Ohio’s oil and gas exploration and production (E&P) companies drilled fewer wells compared to 2021, dropping to 160 from 207 wells, according to the ODNR. E&Ps also obtained nearly 100 fewer permits in 2020 compared with 2021. In 2020, E&Ps working in the state received 268 permits, compared with 354 in 2021. The all-time high was 1,114 permits in 2014. Nine natural gas rigs were operating on average in Ohio’s Utica Shale during 2020. According to Baker Hughes Co.’s latest count for the week ended Apr. 21, 10 rigs were working in Ohio’s Utica. Moving forward, however, drilling permits could be on the rise. Earlier this year, Ohio Gov. Mike DeWine signed into law House Bill (HB) 507, ensuring state agencies would lease land for E&P activities. Following delays at the DNR’s Oil and Gas Land Management Commission to establish a standard lease form, HB 507 is designed to expedite the leasing process.

Gulfport 1Q Net Income Swings +$1B to Positive, Avg 1.06 Bcfe/d | Marcellus Drilling News -Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), emerged from bankruptcy in May 2021 with a new board and new top management. In January of this year, the company appointed a new CEO, John Reinhart, the former President and CEO of M-U driller Montage Resources Corporation before that company was gobbled up by Southwestern Energy (see Marcellus Veteran John Reinhart Joins Gulfport Energy as CEO). Yesterday Gulfport issued its first quarter 2023 update. The company made $523 million in net income during 1Q23 versus losing $493 million in 1Q22–a swing of over $1 billion! What about the number of wells drilled and production?

25 New Shale Well Permits Issued for PA-OH-WV Apr 17-23 | Marcellus Drilling News - New shale permits issued for Apr. 17-23 in the Marcellus/Utica picked up five from the prior week. There were 25 new permits issued in total last week, up from 20 in the prior week. Last week’s tally included 21 new permits for Pennsylvania, 2 new permits for Ohio, and 2 new permits in West Virginia. Last week the top receiver of new permits was Range Resources with 7 permits issued in Washington County, PA. Greylock Energy was number two with 6 new permits issued in Greene County, PA. Coterra Energy (Cabot O&G), EQT Corp, Greene County (PA),Greylock Energy, Monroe County, Olympus/Huntley & Huntley, Range Resources Corp, Southwestern Energy, Statoil, Susquehanna County, Washington County, Westmoreland County, Wetzel County

18 New Shale Well Permits Issued for PA-OH-WV Apr 24-30 | Marcellus Drilling News - New shale permits issued for Apr. 24-30 in the Marcellus/Utica fell from the prior week. There were 18 new permits issued last week, down from 25 in the prior week. Last week’s tally included 8 new permits for Pennsylvania, 4 new permits for Ohio, and 6 new permits in West Virginia. Last week the top receiver of new permits was Antero Resources, with 6 permits issued in Tyler County, WV. EQT (Rice Drilling) was second-highest, with 4 permits issued in Greene County, PA. Antero Resources, Bradford County, Carroll County, Chesapeake Energy, Columbiana County, Coterra Energy (Cabot O&G), EQT Corp, Greene County (PA), Hilcorp Energy, INR, JKLM Energy, Monroe County, Potter County, Statoil, Susquehanna County, Tyler County

Community Voices: A plastic world - Our landfills and oceans are full of plastic waste. Plastic is in the food cycle, and with our consumption of animal protein, it is now in our bodies. It's a serious world-wide issue. The train derailment in Ohio that released huge amounts of vinyl chloride used to make PVC plastics, and other chemicals, is part of the problem.The advocacy group Beyond Plastics released a report titled “The Real Truth About the United States Plastics Recycling Rate,” which documented a recycling rate of 5 percent to 6 percent for 2021. The group also revealed that while plastic recycling is on the decline, the per capita generation of plastic waste has increased by 263 percent since 1980.The United States produces the most plastic waste per capita worldwide. This is followed by the United Kingdom, South Korea and Germany. By comparison, India and China are 18th and 19th, respectively. The Philippines produces around 33 percent of all oceanic plastic waste worldwide. The failure of plastic recycling contrasts with paper, which is recycled at around 68 percent. The high recycling rates for post-consumer paper and cardboard prove that recycling works to reclaim valuable natural material resources. It is plastic recycling that has always failed as it has never reached 10 percent.In November 2022, Shell Chemical Appalachia LLC, a subsidiary of Shell, commenced operations at its Shell Polymers Monaca site. This facility uses ethane from shale gas to produce polyethylene. Ethane is a byproduct of oil refining and when its molecules are "cracked" produces ethylene. Then three reactors combine ethylene with catalysts to create polyethylene plastic which is turned into pellets. Estimates suggest that an operation this size would use ethane from as many as 1,000 fracking wells.The plant is expected to emit up to 2.25 million tons of climate warming gases annually, equivalent to approximately 430,000 extra cars on the road. It will also emit 159 tons of particulate matter, 522 tons of volatile organic compounds, and more than 40 tons of other hazardous air pollutants. All this is an addition to the pollutants of other plants. The U.S. plastics industry emits green-house gases at the same rate as 116 coal-fired power plants, according to a report from Beyond Plastics.Exposure to these emissions is linked to brain, liver and kidney issues; cardiovascular and respiratory disease; miscarriages and birth defects; and childhood leukemia and cancer. Is this the future we want to leave to our descendants? If this plant is profitable, more like it will follow in the Ohio River Valley, which stretches through parts of Ohio, Indiana, Kentucky, Pennsylvania and West Virginia. Plastics manufacturing is estimated to account for more than a third of the growth in oil demand by 2030 and nearly half by 2050 — ahead of trucks, aviation and shipping, according to the International Energy Agency. Considering the volatility of the world's oil markets, the U.S. needs to save this precious natural resource for more important future uses. The world got along fine before the development of plastic, and we need to significantly reduce our use of it and eliminate polystyrene completely. No more plastics producing plants should be constructed and many plastics plants in existence need to be restructured to something else. Politicians that promote all the various polluting businesses, including plastics manufacturing, need to be re-educated about the evils of plastics or voted out of office — for our children's sake, for subsequent generations, and saving the planet from ruin.

Fracking Chemicals Pose Health Risks for 18 Million Americans --A group of scientists, led by a Northeastern environmental justice lab, analyzed available data on chemicals used in fracking and arrived at some staggering conclusions.Almost 18 million people, or 5.4% of the U.S. population, live within a mile of an oil or gas well. About one-third are non-white and from ethnic backgrounds. And older individuals, young children and people with low incomes are among the most vulnerable. The purpose of the research was to highlight the lack of mandatory disclosure in federal legislation.“We really wanted to draw attention to the fact that the environmental and, therefore, the environmental justice impacts of fracking aren’t being properly assessed because of the lack of monitoring and [existing] exemptions,” says Vivian Underhill, a postdoctoral research fellow in the Wylie Environmental Data Justice Lab at Northeastern and the lead author ofthe study.The study quantified the number of disclosures and the total mass of chemicals reported between 2014 and 2021. The researchers found that chemicals that were reported amounted to 2.82 million pounds, or almost twice as much as the weight of the Washington monument. But the real surprise was that they constitute only 4% of the chemicals reported in proprietary formulas (more than 7.2 billion pounds) that do not specify the composition of the fracking fluid.Another major finding was that in 2021 fracking disclosures with at least one proprietary claim increased to 88%. “The concern is that huge amounts of chemicals are not reported at all, and we don’t have a sense of what’s in [those solutions],” Underhill says. Chemicals used in the fracturing solution serve various purposes—kill bacteria growing underground, reduce friction to make the fluid flow down the well more easily, assist in recovering the fluid after fracturing or even to dissolve the rock itself.“The oil industry, generally, is so profitable. There is a huge economic incentive to experiment with different kinds of combinations of chemicals,” Underhill says.The research identified 28 unique chemicals that would have been regulated under the Safe Drinking Water Act. They used Open-FF, a data project that improves accessibility and reliability of FracFocus data, an official fracking disclosure database. FracFocus, Underhill says, has major data gaps and problems with data accuracy.

MPLX reports boost in total pipeline throughputs in Q1 2023 - (Reuters) -U.S. energy midstream company MPLX LP (i.e. Marathon Petroleum) on Tuesday reported record earnings for the first quarter due to a 6% boost in oil and gas pipeline throughputs and higher pipeline tariff rates. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to MPLX was a record $1,519 million in the quarter, compared with $1,393 million for the first quarter of 2022. Net income rose to $943 million from $825 million. Total crude oil, refined product and natural gas pipeline throughputs were 5.6 million barrels per day (bpd) in the first quarter, and the average tariff rate was 90 cents per barrel for the quarter, an increase of 1% year on year. The company's overall natural gas gathered volumes averaged 6.4 billion cubic feet per day (bcfd), a 21% increase from the first quarter of 2022, it said. Gathered volumes in the Marcellus in Pennsylvania averaged 1.4 bcfd, or a 4% increase. The company also said during the call its long-term outlook for the Marcellus, Permian and Bakken basins was largely unchanged despite recently lower natural gas prices. MPLX is working to expand natural gas long-haul and crude gathering pipelines for the Permian and Bakken basins, it said. It is expanding its Whistler pipeline from 2.0 bcfd to 2.5 bcfd, and the associated ADCC pipeline lateral into the Corpus Christi domestic and export markets. The expansion is on schedule for completion in September, the company said. MPLX is continuing work on its sixth 200 million cubic feet per day (mmcfd) processing plant in the Permian basin, Preakness ll, expected online in the first half of 2024. In the Marcellus, MPLX is progressing Harmon Creek ll, a 200 mmcfd processing plant expected online in the first half of 2024.

New York Budget Proposal Bans Natural Gas Hookups in New Homes, Phases Out Peaker Plants - New York State is poised to ban natural gas hookups in construction of new residential buildings by the end of 2025 after Gov. Kathy Hochul (D) announced an agreement on the state’s 2024 budget.

New York set to ban gas furnaces, stoves in new buildings - — New York will require new buildings to be zero-emissions starting in 2026 and make a state authority a major player in developing renewables as part of this year’s budget, Gov. Kathy Hochul announced late Thursday. The state’s budget will ban fossil fuel combustion in most new buildings under seven stories starting in 2026, with larger buildings covered in 2029. That means no propane heating and no gas furnaces or stoves in most new construction. New York would be the first state to take this step through legislative action; California and Washington have done so through building codes. “We’re going to be the first state in the nation to advance zero-emissions new homes and buildings,” Hochul said Thursday, announcing a conceptual deal on the budget that was due March 31. The measure will help the state achieve its ambitious mandate to slash emissions by 40 percent from 1990 levels by 2030 and 85 percent by 2050 and was recommended in a plan approved in December by state agency heads and outside experts. Exemptions will be included for commercial kitchens, emergency generators and hospitals.

N.Y. bans gas appliances in new buildings, but you can replace a gas furnace in existing home -- New York’s transition to all-electric buildings will take a slower path than envisioned by the state Climate Action Council, because officials for now have dropped plans to prohibit the replacement of worn-out gas furnaces in existing structures. The budget agreement announced Thursday by Gov. Kathleen C. Hochul would require “zero-emission” appliances in new houses and buildings of seven stories or less, beginning in 2026. Taller buildings would fall under the rule in 2029.

Activists drop fracking wastewater suit against Delaware River commission - An environmental group that accused regulators of weakening a ban on the dumping of fracking wastewater in the Delaware River watershed has dropped its federal lawsuit, saying its most pressing concerns have been addressed. Damascus Citizens for Sustainability sued the Delaware River Basin Commission in January, about a month after regulators voted to ban the disposal of drilling wastewater in a vast watershed that includes portions of Pennsylvania, New Jersey, New York and Delaware. The lawsuit said regulators had quietly issued "extra-regulatory exemptions" after the vote that could have paved the way for the road spreading of contaminated fracking wastewater from so-called "conventional" well sites. Conventional wells are traditional vertical wells. Most new natural gas wells are drilled into deeper, "unconventional" rock formations like Pennsylvania’s Marcellus Shale. Energy companies use hydraulic fracturing, or fracking, to stimulate production in both types of wells and must recycle or otherwise properly dispose of the wastewater that results. The basin commission denied Damascus Citizens for Sustainability's legal claims of a loophole, saying the group had misinterpreted regulatory guidance on the new ban. But regulators agreed to clarify policy language to make clear the ban approved in December includes wastewater from all kinds of fracking sites, not just unconventional gas wells.

Equitrans Update on Rager Gas Leak, MVP, OVCX & More | Marcellus Drilling News - Earlier today Equitrans Midstream, the former EQT Midstream (now a standalone company), issued its first quarter 2023 update. The update is actually a series of updates about the company’s vitally important (to the Marcellus/Utica) pipeline and midstream projects. In the update, we learn more about the company’s Rager Mountain Natural Gas Storage Field accident; we learn the latest about the Mountain Valley Pipeline (MVP) project, essentially on hold; and we learn about the Ohio Valley Connector Expansion Project (OCVX), expected to be in-service the first half of 2024.

PHMSA Floats Gas Pipeline Leak Detection, Repair Rule – Law360 - U.S. regulators are proposing a rule to improve the detection and repair of leaks from nearly three million miles of natural gas pipelines and hundreds of underground storage and liquefied natural gas facilities to reduce the emissions of methane, a potent greenhouse gas…

Manchin tries again on permitting overhaul -Senate Energy and Natural Resources Chair Joe Manchin is relaunching his quest to overhaul the nation’s permitting laws Tuesday by reintroducing his proposal that capsized last year. The West Virginia Democrat’s bill, dubbed the “Building American Energy Security Act of 2023,” largely matches the language and provisions of a negotiated measure that failed to advance in the last Congress. Manchin said the base text would serve as a starting point for further Senate negotiations. “There is overwhelming bipartisan recognition that our current permitting processes aren’t working, and equally bipartisan support for addressing it through comprehensive permitting reform legislation,” Manchin said in a statement. “I am confident that we will find a path forward.” The bill’s introduction comes as Congress continues informal talks on overhauling the nation’s permitting laws. While the House passed a partisan bill, H.R. 1, in March that included permitting reforms and some hearings have been held in the Senate, there has been little momentum thus far to advance a serious negotiated agreement. Whether Manchin’s bill gets the ball rolling on that front is up for debate. Among its provisions, the bill would look to speed up the time for environmental reviews by setting a two-year shot clock on agencies to complete their work. It would also enable projects to seek legal enforcement of that timeline should agencies blow through the deadline. The bill would set a 150-day statute of limitations for legal challenges against an issued permit, along with a host of other changes to accelerate the legal review process. Critical to Democratic support, the bill also contains a section dedicated to expanding and bolstering the Federal Energy Regulatory Commission’s ability to site and permit interstate transmission lines. Crucially for Manchin, the legislation would once again authorize the controversial Mountain Valley pipeline, a natural gas effort that runs through his state. Though it is more than 90 percent completed, it has run into multiple legal problems related to environmental reviews. Energy Secretary Jennifer Granholm recently endorsed the project’s authorization, even as progressives have raged against its completion. Manchin’s attempt at permitting overhaul last year ultimately succumbed to pressure from both the left and right. Progressives rebelled against what they saw as an attack on environmental protections in favor of fossil fuel infrastructure. Republicans mostly refused to engage on an effort that was the result of Manchin’s earlier backing of what became the Inflation Reduction Act. The issue came to a head in December as Manchin forced a vote on the bill as an amendment to the annual national Defense policy bill. The amendment failed, although it did attract seven Republican senators.

M-U Drillers Predict NatGas Price Rebound in 2024, Supplies Decrease - Marcellus Drilling News - We are currently in the latest quarterly update season. In fact, we are about done with quarterly updates for the first quarter. Most (if not all) of the publicly traded Marcellus/Utica drillers have turned in their quarterly updates, as well as gas drillers from other plays (like the Haynesville). If you review the statements made by U.S. gas drillers in this latest round of updates, you’ll find the sentiment expressed that although we’re currently in the price basement for natural gas, most drillers don’t think it’s going last long. They think low prices for natgas are short-lived and that a rebound awaits us in 2024.

May Shaping Up to Deliver ‘Gigantic’ Storage Builds as Natural Gas Futures Slide Early - Fading heating demand and the potential for hefty storage injections in the upcoming weeks pressured natural gas futures lower in early trading Monday. The June Nymex contract was off 4.5 cents to $2.365/MMBtu at around 8:40 a.m. ET. Trends were mixed in the weekend weather data, with the American model adding 9 total degree days (TDD) on a combination of cooler and hotter trends but with the European model shedding 2 TDD, according to NatGasWeather.The data continued to show a pattern that would see “national demand dropping to light to very light levels” during the second week of May, NatGasWeather said. During this time frame, temperatures over the northern United States were expected to warm into the “perfect” 60s to 80s, with southern regions predicted to see only locally hotter 90s, for overall light national demand.

US natgas futures drop 4% on record output, milder weather (Reuters) - U.S. natural gas futures fell about 4% on Monday on record output and forecasts for milder weather and less heating demand next week than previously expected. Front-month gas futures for June delivery on the New York Mercantile Exchange fell 9.2 cents, or 3.8%, to settle at $2.318 per million British thermal units (mmBtu). On Friday, the contract rose about 2% to its highest close since March 16. Looking ahead, the premium of the November 2023 contract over October 2023 NGV23-X23 rose to a record 46 cents. The industry uses the October-November spread to bet on winter weather forecasts since October is the last month of the summer cooling season when utilities inject gas into storage. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to a record 101.3 bcfd in April, up from the prior all-time high of 100.5 bcfd in March. Meteorologists projected the weather in the Lower 48 states would turns from colder-than-normal from May 1-5 to near- to warmer-than-normal from May 6-16. With the weather turning seasonally warmer, Refinitiv forecast U.S. gas demand, including exports, would slide from 95.6 bcfd this week to 91.0 bcfd next week. The forecast for next week was lower than Refinitiv's outlook on Friday. Gas flows to the seven big U.S. LNG export plants rose to a record 14.0 billion cubic feet per day (bcfd) in April, up from the previous all-time high of 13.2 bcfd in March, according to Refinitiv. Some analysts have begun to question whether the recent collapse of gas prices in Europe and Asia could force U.S. exporters to cancel LNG cargoes this summer after mostly mild weather over the winter left massive amounts of gas in storage. In 2020, at least 175 LNG shipments were canceled due to oversupply and weak demand. But for now, most analysts say energy security concerns following Russia's invasion of Ukraine in February 2022 should keep global gas prices high enough to sustain record U.S. LNG exports in 2023. Gas was trading at a 21-month low of around $12 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and at a 22-month low of $12 at the Japan Korea Marker (JKM) in Asia. Even though TTF gas prices were down about 49% and JKM down about 61% so far this year, those prices were still high enough to feed demand for U.S. LNG exports. Gas stockpiles in northwest Europe - Belgium, France, Germany and the Netherlands - were currently at about 60% of capacity, keeping the amount of gas in storage about 58% above its five-year (2018-2022) average for the time of year, according to Refinitiv. That is much more gas in storage than in U.S. inventories, which are currently about 22% above their five-year norm again due to mostly mild weather last winter. To ensure Europe has enough gas for the winter heating season, the European Union wants utilities to refill stockpiles to 90% of capacity by Nov. 1.

US natgas futures fall 3% to 3-week low on record output (Reuters) - U.S. natural gas futures fell about 3% to a three-week low on Thursday on record output despite a federal report showing a smaller-than-usual storage build last week when cold weather kept heating demand for the fuel high. That price drop also came despite forecasts for higher demand over the next two weeks than previously expected as gas flows to liquefied natural gas (LNG) export plants increase. The U.S. Energy Information Administration (EIA) said utilities added 54 billion cubic feet (bcf) of gas into storage during the week ended April 28. That was close to the 52-bcf build analysts forecast in a Reuters poll and compared with an increase of 72 bcf in the same week last year and a five-year (2018-2022) average increase of 78 bcf. Last week's increase boosted stockpiles to 2.063 trillion cubic feet (tcf), or 19.8% above the five-year average of 1.722 tcf for time of year. Front-month gas futures for June delivery on the New York Mercantile Exchange fell 6.9 cents, or 3.2%, to settle at $2.101 per million British thermal units (mmBtu), their lowest close since April 13. That also puts the front-month down for a fourth day in a row for the first time since late February. In the spot market, mild weather and weak demand in the U.S. West pressured next-day power and gas prices for Thursday to their lowest levels in years. Next-day gas at the Southern California Border fell to its lowest price since October 2020, while next-day power fell to its lowest price since June 2021 at the SP-15 hubin Southern California and its lowest price since January 2022 at the Palo Verde hub in Arizona. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 101.6 billion cubic feet per day (bcfd) so far in May, up from a record 101.4 bcfd in April. Meteorologists projected the weather would remain mostly warmer than normal from May 4-14, with cooling degree days (CDD) exceeding heating degree days (HDD) for the first time this year. The weather is expected to turn nearly normal from May 15-19. With the weather turning warmer, Refinitiv forecast U.S. gas demand, including exports, would slide from 95.9 bcfd this week to 91.9 bcfd next week. Those forecasts were higher than Refinitiv's outlook on Wednesday. Gas flows to the seven big U.S. LNG export plants have slid to an average of 13.4 bcfd so far in May, down from a record 14.0 bcfd in April. The decline was due mostly to reductions at Cameron LNG in Louisiana. The amount of gas flowing to Cheniere Energy Inc's Sabine Pass in Louisiana, meanwhile, started to increase on Thursday. Last month's record flows were higher than the 13.8 bcfd of gas the seven plants can turn into LNG since the facilities also use some of the fuel to power equipment used to produce LNG.

Natural Gas Futures Find Reprieve, Escape Weeklong Losing Streak; Cash Prices Cascade - Natural gas futures found their footing on Friday, ending a four-day losing streak that was fueled by a litany of bearish fundamentals. The June Nymex gas futures contract gained 3.6 cents day/day and settled at $2.137/MMBtu. July rose 2.4 cents to $2.321. Even with Friday’s bump, the prompt-month contract closed trading on Friday down 11% from the prior week’s finish. NGI’s Spot Gas National Avg. shed 9.5 cents to $1.620 on Friday for weekend through Monday delivery. Analysts had anticipated an eventual break in the downward pressure, citing technical resistance. ICAP Technical Analysis pegged a low threshold around the $2 level that could trigger bargain buying. With other catalysts lacking, that appeared to be the driver of upward price action on Friday. Production held above 100 Bcf/d on Friday – near record levels – and pleasant spring weather that typically fails to generate natural gas demand dominated the Lower 48. Forecasts called for more of the same the rest of this month. National Weather Service data showed comfortable highs from the 60s to 80s permeating most of the country over the next two weeks – save for far southern markets and western deserts that were expected to see early summer-like heat. Long-range outlooks, while less reliable, also maintained expectations for weak weather-driven demand through the end of May and into the start of June.The U.S. Energy Information Administration (EIA) on Thursday printed an injection of 54 Bcf natural gas into storage for the week ended April 28. The build compared bullishly with the five-year average injection of 78 Bcf for that week. Still, it increased stocks to 2,063 Bcf and put inventories well above the year-earlier level of 1,556 Bcf and the five-year average of 1,722 Bcf.Looking ahead, early estimates for the week ending May 5 submitted to Reuters landed at an average increase of 67 Bcf. That compares with a five-year average injection of 87 Bcf. But the benign weather forecast through the rest of May is widely expected to result in plump storage increases in the following weeks that could further widen surpluses.“Repeated gigantic weekly injections beginning in mid-May could keep momentum lower,”

Hundreds of gas plants could escape EPA climate rules --About 1,000 natural gas-fired power plants that provide energy at periods of peak demand could be excluded from the toughest standards under EPA’s upcoming carbon rules. These plants are often located in urban areas, raising concern among some environmental advocates that the agency’s climate rules on power plants could lead to increased pollution in low-income communities. “That’s a big concern with us, with what we think is going to come out in the new rules,” said Shelley Robbins, project director at the nonprofit Clean Energy Group. EPA is expected to propose power plant rules next week that would regulate carbon emissions at existing coal and gas facilities for the first time. The rules are expected to treat so-called peaker plants — which provide backup power to the grid — differently from baseload units, according to four people who have been briefed by EPA. Two outcomes are possible in the rules. The regulations might not cover peaker plants, two of the people said. Or the agency could offer laxer standards than those being planned for baseload units, two other people said. Those are likely to be based on efficiency improvements. EPA spokesperson Khanya Brann said the agency wouldn’t comment because the rule is under review and “subject to change.” But the four people who have discussed the draft rules with EPA and been granted anonymity to speak freely say peaker plants won’t have to abide by the standards being proposed for large gas plants that supply baseload power to the grid. Those plants will have to capture a share of their carbon before it enters the atmosphere — or find another way to make deep emissions cuts. Environmentalists who have worked to shutter peaker plants say that by holding them to less stringent standards EPA could encourage other gas plants to run as peaker units — and increase harmful pollution, like smog and soot. “By not paying attention to those emissions and holding them to the same standard, they are allowed to continue basically business-as-usual,” said Robbins. “And that means they continue — in addition to producing carbon — emitting localized pollutants right in the neighborhoods around them.” While baseload power plants aren’t typically located in densely populated areas, peaker units often are, because that’s where the demand is, Robbins said. These units tend to be less efficient and burn dirtier fuel than baseload plants. And pollution controls like scrubbers are less effective at controlling emissions from plants that ramp up and down instead of running consistently. The Clean Energy Group released a report last year that found that smog and particle pollution from peaker plants disproportionately impacts poor areas and communities of color. Two-thirds of peakers, which the group defines as facilities with 10 megawatts or less that run at 15 percent of their capacity, are sited in communities with more low-income households than the national average. Black and brown communities actually have fewer peakers on average than white communities, but they’re dirtier — responsible for sharply higher rates of nitrogen oxide emissions linked to cardiovascular and respiratory disease, the report found. Experts say a rule that makes it cheaper for baseload gas plants to operate as peaker plants — by not requiring costly retrofits — could incentivize plants to run less. That could make controls for smog and particulate matter less effective.

U.S. April oil exports top forecasts on Chinese demand (Reuters) -U.S. crude oil exports rose more-than-expected last month, building on a record 4.5 million barrels per day in March, as Chinese refiners snapped up cargoes to meet rising fuel demand, according to ship tracking data and analysts. U.S. crude exports rose by 22% last year from 2021 after Russia's invasion of Ukraine led the European Union, Britain, Canada and the U.S to ban imports of Russian oil and changed global flows. More recently, signs of an economic resurgence in China, the world's second-largest oil consumer, have drawn cargoes from Russia and U.S. travel demand after the country rolled back its COVID-19 restrictions also boosted gasoline and jet fuel consumption. "Right now, we're assuming April will average about 4 million barrels per day (bpd), but there is upside risk to that number," said Jenna Delaney, head of North American crude at consultancy Energy Aspects. April's exports "have only been a few hundred thousand barrels per day less than March, which is very surprising," said Rohit Rathod, a market analyst at Vortexa. "It was not expected that exports would remain above 4 million," he said. Favorable prices for U.S. crude compared to global benchmark Brent sent a flurry of cargoes abroad in April, a U.S.-based broker said. U.S. crude traded at an average discount of $6.47 to Brent in February and was nearly $6 less in the first half of March. When the spread is wider than minus $6, foreign buyers have an incentive to buy more oil linked to U.S. crude. April exports to China were set to touch about 850,000 barrels per day, the highest since May 2020, Kpler and Refinitiv Eikon data showed, as exports to Europe and other Asian countries dropped. In March, U.S. exports to China hit their highest level in two and a half years. Record March-April exports overall are unlikely to continue, analysts said. May U.S. exports will fall to about 3.78 million bpd in May, estimates Energy Aspects. On Friday, the WTI-Brent discount narrowed to minus $3.21 a barrel, the smallest spread since June, a level that is likely to dampen U.S. exports in China in May. Plunging Middle Eastern crude prices will sap demand for U.S. grades. Abu Dhabi's Murban crude oil premium to Dubai, for example, declined last week to two-year lows, making it more economic for Asian refiners to process compared to U.S. crudes.

More than 1K gallons of crude oil spills near Orange — Crews have been working to clean up an oil spill that happened in a marsh area near Orange more than five days ago. On Wednesday, April 26, 2023, personnel from the Coast Guard MARINE Safety Unit Port Arthur received a notification from the National Response Center, saying crude oil spilled from a 22-inch transmission pipeline on the Gulf Intracoastal Waterway near mile marker 260, according to a U.S. Coast Guard release. A unified command consisting of the Coast Guard, Louisiana Oil Spill Coordinator’s Office, Louisiana Department of Environmental Quality, and Shell Pipeline Company LP responded. The crude oil spilled into a marsh area about five miles east of Orange. The transmission line, called Zydeco, is owned by Shell, Petty Officer 1st Class Corinne Zilnicki told 12News. Shell personnel estimates 30 barrels, or 1,260 gallons, of crude oil spilled into the marsh area. The pipeline was shut in on April 25, 2023 with no additional visible discharge, according to the release. As of Tuesday, May 2, 2023, crews are still working to clean up the spill. Environmental Safety & Health Consulting Services, an oil spill removal organization hired by Shell, deployed 5,900 feet of containment boom and sorbent boom and are using one drum skimmer and four response vessels to remove the spilled oil. So far, about 19 barrels, or 798 gallons, of oil have been recovered, according to the release. Crews are using low-pressure flushing to remediate the affected shoreline along the bank of the Gulf Intracoastal Waterway. There have been no reports that any wildlife in the area was impacted by the spill. Drone evaluations and on-water assessments will continue to closely monitor the situation, and Shell is preparing to make repairs to the pipeline. While Corinne Zilnicki said no recreational traffic has been affected, restrictions on vessel traffic in the immediate area went into effect Monday at 6 p.m. and will remain in place until further notice. The cause of the spill is under investigation. The Unified Command is working in coordination with area partners to ensure the safety of the public and protect the environment.

Sinkholes are emerging in Texas. Is oil and gas to blame? -The emergence of a new gaping sinkhole in Southeast Texas is dredging up decades-old questions about how much of a role oil and gas production plays in causing the ground to open up. While not as well-documented as the link between oil and gas and earthquakes, the nexus between industry and sinkholes is of concern to some researchers who say drilling activity can help create gaping scars in the earth, posing risks to nearby communities. “Sinkhole formation is very common,” said Zhong Lu, a professor of earth sciences at Southern Methodist University. “Critically, we disturb [the earth] with hydrocarbon activities.” The issue came to the forefront this month when a fourth sinkhole developed in Daisetta, Texas, a small town of 1.48 square miles located between Houston and Beaumont. It occurred on land that used to house an oil field service company — the same piece of property where another sinkhole nearly 500 feet in diameter cracked open in 2008, prompting evacuations and fears the earth could soon swallow up the town’s high school located a quarter-mile away. The two others formed near oil and gas activity decades earlier. While both of the recent sinkholes seem relatively stable for now, and scientists haven’t definitively pinpointed the cause of their formation, the development is stirring debate about the role of oil and gas. “Most evidence attributing blame is circumstantial, but you do have sinkholes around wells,” said Jeff Paine, a senior research scientist with University of Texas at Austin’s Bureau of Economic Geology, who is working to analyze both Daisetta sinkholes. Some studies suggest a link. In areas of the Permian Basin in Texas, Lu and other researchers at SMU found in 2018 oil and gas activity caused the ground surface to rise and fall both due to injecting wastewater into the earth and pulling out crude. In studying a 4,000-square-mile section of the oil patch, they found that the areas around active, inactive and orphaned wells experienced subsidence of between 1 and 4 inches over a matter of months. The study published in Nature reported 40 inches of subsidence in 2 ½ years. Sinkholes have occasionally popped up in and around oil patches for decades, added Lu. He said that’s especially true among older wells, where pipes have degraded, old crews did not know how to best drill to prevent subsurface issues and operators flushed oil reservoirs full of water in efforts to eek more hydrocarbons out of the earth. While it’s difficult to draw a definitive cause for every sinkhole, oil and gas wells can provide a new avenue for fresh water to work its way deep into the ground, interacting with layers of salt and other soluble materials that can break down and cause the ground above it to become weak and ultimately give way, Lu and Paine said. In Daisetta, the land on which the new sinkhole sits has been the center of a slew of lawsuits, with attorneys for the city and local residents claiming that the oil field service company that once called the plot home injected more wastewater into the ground beneath it than its permits allowed, eating away at the salt dome beneath it and causing the earth to cave in. Those lawsuits, filed after the first nearly 500-foot-wide and up-to-75-foot-deep sink hole formed there in 2008, were dismissed by judges citing circumstantial evidence. Neither attorneys for the city of Daisetta nor attorneys representing DeLoach Vacuum Service/DeLoach Oil & Gas Waste Well, the now defunct oil field services company, responded to requests for comment. The Texas Oil & Gas Association also did not respond to request for comment.

U.N. panel on Indigenous issues asks Canada and U.S. to shut down Line 5 pipeline ⋆ Michigan Advance -In a final report issued Friday, an Indigenous-led United Nations panel recommended that Canada and the United States shut down the controversial Line 5 oil pipeline that transports oil through tribal treaty lands and waters in Michigan.“The permanent forum calls on Canada to reexamine its support for Enbridge Line 5 oil pipeline that jeopardizes the Great Lakes,” the report reads, adding that Line 5 “presents a real and credible threat to the treaty-protected fishing rights of Indigenous Peoples in the United States and Canada.”Since 2000, the United Nations Permanent Forum on Indigenous Issues (UNPFII) has served as a high-level advisory body to the U.N.’s Economic and Social Council. It has met every year since 2002.A spokesperson for Enbridge, a Canadian energy company, did not immediately respond to a request for comment.The 70-year-old Line 5 pipeline transports Canadian oil under the tumultuous waters where Lakes Michigan and Huron connect. That area — the environmentally sensitive Straits of Mackinac — is also the nexus of tribal land and waters ceded in the 1836 Treaty of Washington.The Canadian government has been strongly supportive of Enbridge’s pipeline projects in the United States, and hasattempted to intervene numerous times in Michigan Attorney General Dana Nessel’s ongoing legal fight to decommission Line 5.President Joe Biden has not taken a public stance on Line 5, so the position of the federal government on the issue remains unclear while pipeline treaty talks between the two countries continue.In March, dozens of local Democratic party leaders sent a letter to Biden urging his administration’s legal support in Nessel v. Enbridge. In January, Michigan Democratic Party (MDP) Chair Lavora Barnes asked Biden to declare a climate emergency and cancel the presidential permits authorizing Line 5 to cross the United States-Canada border.

TC Energy Eyeing Alberta Natural Gas Egress as CGL, Southeast Gateway Advance - TC Energy Corp. is working to expand natural gas takeaway capacity from the Western Canadian Sedimentary Basin (WCSB) amid record demand for the fuel across North America, management said. CEO François Poirier hosted a conference call last Friday to discuss the Calgary-based pipeline giant’s first quarter earnings. He was joined by Greg Grant, president of Canadian natural gas pipelines. Grant highlighted that TC added 700 MMcf/d of intra-basin capacity in Western Canada during 1Q2023, with another 500 MMcf/d slated to come online during the second quarter. Demand and utilization levels remain strong across all points of egress out of the basin...

Oil Company Gave $200K to Group Accusing Pipeline Opponents of Taking Secret Money DeSmog -A First Nations advocacy group whose leader has accused pipeline protesters of being beholden to hidden financial interests has taken hundreds of thousands of dollars from one of Canada’s top oil and gas producers, newly reviewed corporate documents reveal. Stephen Buffalo, CEO of the Alberta-based Indian Resource Council, is one of the most outspoken Indigenous voices in favor of oil and gas expansion, testifying several times to Canada’s federal government andappearing frequently in mainstream media outlets.On multiple occasions he’s used his platform to attack the credibility of First Nations people and environmentalists who oppose new oil and gas development, alleging they are being controlled by secretive funders and one time asking “who’s really pulling the string here?”But Buffalo’s organization has been quietly receiving contributions from Canadian Natural (CNRL), one of the largest oil and gas producers in Canada. That’s according to recent federal disclosures, which show that CNRL gave $200,000 to the Indian Resource Council between 2020 and 2022. Those disclosures are required under Canada’s Extractive Sector Transparency Measures Act, an anti-corruption law requiring companies to report payments to governments and other entities. Neither CNRL nor the Indian Resource Council responded to detailed questions about the contributions.

Biden’s Willow approval may get a sequel - The Biden administration may back yet another big fossil fuel project in Alaska, thanks in part to a boost from the president’s landmark climate law.Environmentalists are calling the project — which would export liquefied natural gas produced on the state’s North Slope — a “carbon bomb 10 times worse” than the Willow oil drilling effort the Interior Department approved in March. (The administration says that comparison most likely exaggerates the project’s impact.)The Alaska LNG project looked like it was on life support under the Trump administration, but its supporters say key State Department officials are pushing for its approval as allies like Japan clamor for American gas, Ben Lefebvre writes.Should the project get an official green light, the move would further complicate President Joe Biden’s climate legacy.Last year’s climate law included an unprecedented $369 billion in clean energy funding, and Biden has worked to boost international support for countering the Earth’s warming, including recently pledging$1 billion to help developing countries fight climate change. But the administration has also facedcriticism from some green groups for approving oil and gas permits at a rapid clip while OKing Willow, amid warnings from scientists that global carbon emissions need to plunge to avoid the worst impacts of rising temperatures. If completed, Alaska LNG would ship as much as 20 million tons of liquefied natural gas each year. The State Department estimates that would release 1.5 billion tons of carbon dioxide into the atmosphere over the 30 years it is projected to operate — equivalent to burning more than 8 million rail cars of coal.Biden’s ambassador to Japan, Rahm Emanuel, has promoted the project, calling it a way for Japan to become “the energy export hub for the Indo-Pacific” and reduce its coal dependency.The project also hit the congressional lottery. The carbon capture credits included in the climate law means Alaska LNG could make as much as $600 million annually using its planned carbon capture technology. It also became eligible for billions of dollars in federal loan guarantees in the 2021 infrastructure law (thanks to language from Alaska’s Republican senators).Biden’s ambassador to Japan, Rahm Emanuel, has promoted the project, calling it a way for Japan to become “the energy export hub for the Indo-Pacific” and reduce its coal dependency.The project also hit the congressional lottery. The carbon capture credits included in the climate law means Alaska LNG could make as much as $600 million annually using its planned carbon capture technology. It also became eligible for billions of dollars in federal loan guarantees in the 2021 infrastructure law (thanks to language from Alaska’s Republican senators).

TotalEnergies To Buy LNG From ADNOC In $1B Deal - ADNOC Gas Plc, a listed subsidiary of Abu Dhabi National Oil Co, has reached an agreement with France’s TotalEnergies SE to supply the latter with liquefied natural gas (LNG) in a $1B deal, Bloomberg has reported. The deal is one of the latest by a European gas buyer as Europe once again scrambles to fill its gas stores ahead of the next winter season.Last year, Europe managed to fill its gas stores well ahead of winter and has seen storage levels remain above historical levels thanks to mild weather, with higher temperatures curbing gas demand for heating in many countries. The continent is currently going through its second mildest winter on record with the high temperatures attributed to man-made climate change. The unusually mild winter has offered short-term relief to governments that have been struggling with high gas prices afterRussia slashed fuel deliveries to Europe last year. Last month, Putin warned Europe of a fresh gas crisis, with Gazprom, Russia’s state-owned gas supplier, telling Europe there “is no guarantee that nature will make such a gift” in reference to the favorable weather.Although the continent was able to avert a crisis, it paid a heavy price: the cost of replenishing natural gas stocks is estimated at over 50 billion euros ($51 billion), 10 times more than the historical average for filling up tanks. Luckily, gas prices have plunged due to lower demand. Still, at almost €40 a megawatt-hour, they’re still above historical averages with many analysts predicting they will rise again ahead of Europe’s next winter.To get around this conundrum, the European Commission is aiming for EU countries to start buying gas jointly "well before summer", in a bid to help countries refill their storage and avoid a supply crunch next winter, European Commission Vice-President Maros Sefcovic has told Reuters. The EC will require EU countries to ensure their local companies take part in the aggregation of gas demand with volumes equivalent to 15% of the gas needed to fill that country's storage facilities to 90% of capacity. This requirement amounts to ~13.5 billion cubic meters of gas-- a relatively miniscule amount considering the bloc used up 338 bcm in 2021. Sefcovic has urged member states to swiftly engage with market players in their countries to estimate purchase volumes after meeting EU country representatives to coordinate the planned purchases.

South Korea, Japan natural gas surpluses offset heat wave-driven demand in rest of Asia --Muted domestic natural gas demand, stable weather conditions and an uptick in nuclear power generation have curbed appetite for LNG imports in to South Korea and Japan and put pressure on spot LNG prices. Gas importers in the two countries said there were high inventory levels and that traders have requested suppliers to stagger some deliveries of LNG cargoes to manage the surplus. This has offset the impact of heat wave-driven LNG demand in parts of Southeast and South Asia. The net impact of ample supplies in South Korea and Japan has been bearish because of the scale of LNG imports by the two countries, and have kept spot prices below the $12s/MMBtu level. Japan was the single largest LNG importer in 2022 and South Korea the third largest, while China dropped to the second place. The Platts JKM LNG price benchmark for June was assessed at $11.685/MMBtu April 24, according to data from S&P Global Commodity Insights. South Korea gas surplus High inventory levels at South Korea’s largest LNG importer Kogas prompted the company to request for capacity at terminals operated by some of the second-tier gas importers and for some cargo deliveries to be deferred to the third quarter, suppliers said. Kogas is able to manage scheduled LNG deliveries until May or early June, but needs to find alternatives beyond that if downstream demand remains low, they said. LNG importers have elbow room to make minor adjustments to deliveries under long-term contracts to account for seasonality. There is also room for suppliers to accommodate some of these requests because of an unexpected surge in demand from Thailand, Bangladesh and India due to an ongoing heat wave, as well as new consumers like the Philippines and Hong Kong that are importing their first LNG cargoes, market participants said.

India to become Europe’s top supplier of refined oil products after massive purchases of Russian oil - In December last year, the European Union banned almost all seaborne oil imports from Russia, and two months later, the ban was further extended to refined fuels. In December last year, the European Union banned almost all seaborne oil imports from Russia, and two months later, the ban was further extended to refined fuels. However, despite tough EU sanctions, they have not stopped Russian oil from appearing in Europe. The reason is that India and other countries snapped up cheap Russian crude oil, processed it into diesel and other fuels, and then sold it to Europe at a higher price. India is buying record volumes of Russian crude, with the country on track to become Europe's top supplier of refined products this month, data from commodity data provider Kpler showed. Kpler data showed that European imports of refined products from India will soar to more than 360,000 barrels per day, slightly higher than those from Saudi Arabia. Meanwhile, India's crude oil imports from Russia in April will exceed 2 million barrels per day, accounting for nearly 44% of India's total oil imports. Russia was once the EU's largest diesel supplier. Before the Russia-Ukraine conflict broke out, more than half of Russia's seaborne oil exports went to the European Union and the Group of Seven (G7). The EU is now facing a dilemma. On the one hand, Europe needs alternative sources of diesel because it has cut off direct supplies from Russia. But on the other hand, if we continue to acquiesce in the sale of Russian oil to Europe in this way, it will not only boost the demand for Russian oil in countries such as India, but also mean higher costs, which in turn will make European refiners unable to buy cheap Russian oil face greater competition. Viktor Katona, chief crude oil analyst at Kpler, said: “Despite various sanctions, Russian oil is still finding its way back to Europe, with India ramping up fuel exports to the West as a good example. It is inevitable that India imports so much oil from Russia. "

Putin authorizes oil supplies to friendly countries - Chinadaily.com.cn -- Russian President Vladimir Putin has authorized oil and oil product supplies to friendly countries under contracts signed before Feb 1, according to a decree published on Friday.The decree, which takes effect from Friday, amended a previous one Putin signed at the end of last year that banned Russian oil and oil product supplies to foreign entities if their contracts directly or indirectly involved a price cap imposed by Western countries.In December 2022, the European Union placed a price cap of $60 per barrel on Russian seaborne crude oil, which was joined by the Group of Seven and Australia.

Russia’s Seaborne Crude Flows Climb With No Sign of Output Cut - -- Two months into Moscow’s threatened oil output cut, there is no sign of a sustained drop in crude flows out of the country. Russia’s exports jumped back above 4 million barrels a day in the week to April 28, a level it has surpassed only once before since its troops invaded Ukraine in February 2022, according to tanker-tracking data compiled by Bloomberg. Flows were virtually unchanged on a four-week average basis. Seaborne flows still aren’t reflecting a production cut that the energy ministry said was as big as 700,000 barrels a day in March. It doesn’t appear that refinery runs in Russia have dropped much either. Figures show processing rates remained virtually unchanged from the start of the year and, in the first 19 days of April, were 720,000 barrels a day higher than the same full month last year.Moscow has halted publication of crude and condensate production data, perhaps to make it more difficult to assess whether it really has cut output before reductions that are due to be made from this month by several of its OPEC+ partners. In a sign that it’s strapped for cash to fund its war, the Kremlin is turning again to its oil industry, exploring options ranging from cutting fuel subsidies to a windfall tax as it seeks to boost budget revenue. Meanwhile, President Vladimir Putin exempted oil flows under existing contracts to so-called friendly nations from an export ban intended to halt shipments to foreign buyers that adhere to a price cap imposed by the Group of Seven nations. The diversion of crude previously delivered to Poland and Germany through the Druzhba pipeline has boosted seaborne flows during the early part of this year to an average of 3.32 million barrels a day, compared with 2.94 million barrels a day during the equivalent period at the end of 2022. Flows to Germany halted at the end of 2022 and deliveries to Poland were stopped in late February. Poland’s state-controlled oil refiner PKN Orlen SA has terminated its last contract with a Russian supplier in response to the halt in oil shipments via Druzhba. The combined volume of crude on vessels heading to China and India plus smaller flows to Turkey and quantities on ships that haven’t yet shown a final destination rose for a third week to reach a record 3.39 million barrels a day in the latest four-week period. As the ultimate destinations of cargoes loading in late January became apparent, flows to China rose to new post-invasion highs, and remained close to those levels in February. Historical patterns suggest that most of the vessels currently identified as “Unknown Asia” destinations and heading for the Suez Canal will end up in India, while those loaded onto very large crude carriers off the north coast of Morocco or, more recently, in the Atlantic Ocean, will head to China. Ship-to-ship transfer operations into very large crude carriers have shifted to the Atlantic Ocean from the Mediterranean waters off the Spanish north African city of Ceuta, as they did last summer.The Aframax tankers Nurkez and Crius transferred their cargoes into VLCCs in the Atlantic Ocean off the Canary Islands last week. At least 62 cargoes, or 44.7 million barrels, have been transferred between ships in those two locations and off the Greek coast near Kalamata since the start of the year. Russia and India are discussing the creation of joint re-insurance institutes for oil shipments, according to Russian Deputy Prime Minister Denis Manturov, who didn’t rule out that such organizations may appear by the end of the year. Deputy Prime Minister Alexander Novak has said that Russia needs new insurance and reinsurance mechanisms for its oil exports. Crude flows in the week to April 28 jumped by about 680,000 barrels a day from the previous week, to 4.08 million barrels a day. On a four-week average basis, overall seaborne exports were little changed, dropping by 12,000 barrels a day to 3.45 million barrels a day, from their highest in 10 months. Volatile weekly data are affected by the scheduling of tankers and loading delays caused by bad weather. Port maintenance can also disrupt exports for several days at a time. All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. Those are shipments made by KazTransoil JSC that transit Russia for export through the Baltic ports of Ust-Luga and Novorossiysk. The Kazakh barrels are blended with crude of Russian origin to create a uniform export grade. Since Russia’s invasion of Ukraine, Kazakhstan has rebranded its cargoes to distinguish them from those shipped by Russian companies. Transit crude is specifically exempted from European Union sanctions. Asia Four-week average shipments to Russia’s Asian customers, plus those on vessels showing no final destination, edged lower to 3.25 million barrels a day in the period to April 28. That’s down just 30,000 barrels a day from the period to April 21. While the volumes heading to China and India appear to have declined from recent highs, history shows that most of the cargoes on ships without an initial destination eventually end up in one or other of those countries.

Oil spill allegedly from burning tanker pollutes Riau Islands' beach -- An oil spill that allegedly originated from a burning tanker ship in the Malaysian waters has polluted the Kampung Melayu Beach in Batam City, Riau Islands. Raihan, a local resident, stated here on Wednesday that they only found out about the oil spill early in the morning. "The water at the beach was covered in oil," he remarked while saying that the seawater has turned black. The Riau Islands Police suspect the oil waste to have originated from a tanker ship MT Pablo on the China-Singapore route that caught fire off the Malaysian southern coast. "Based on the report we received from the Harbor Masters and Port Authority Office (KSOP), the oil waste allegedly originated from a Gabon-flagged tanker ship MT Pablo sailing from China to Singapore that caught fire in the Malaysian waters two days ago on Monday (May 1)," Riau Islands Police's Special Crime Director Senior Commissioner Nasriadi remarked. In addition, he said, the satellite image from the Batam City Environment Service on April 30 showed three oil spill locations in the eastern Out Port Limit (OPL) covering an area of some 13.70 kilometers. "The (oil) contamination on the Kampung Melayu coastline is probably linked with the spill that occurred in the eastern OPL," he stated. The black oil waste was also found in the anchorage area of Batu Ampar and Tanjung Uncang waters. Nasriadi said, the police have coordinated with the port authority service and the city's environment office to apply temporary countermeasures and trace the origin of the waste. The KSOP has used Absorbent Pad devices to absorb the oil spill, he remarked. Meanwhile, a team from the port authority, the police, and the city's environment office has cleared up the oil spill that contaminated the beach. "Our step is to tackle it first, so it does not spread further. We will then find out where the oil spill came from. This (oil spill) has polluted the area about one to 1.5 kilometers along the coast," Batam Port Authority Head and Harbormaster M. Takwim stated. He elaborated that a 100-meter absorbent boom and 500 absorbent packs were readied to clean up the pollutants. "This (the oil spill) can be an MFO (marine fuel oil) waste or it can be asphalt. We could not confirm it yet," he remarked.

Mindoro oil spill cleanup continues -Two months after the tanker Princess Empress sank, oil spill cleanup in the waters off Oriental Mindoro continues, according to the Philippine Coast Guard (PCG). Marine science technicians tested absorbent pads made from coconut oil and fiber, which were installed in Barangay Navotas in Calapan City on May 1, the PCG reported yesterday. On Tuesday, two tug boats – Titan 1 and Cabilao of Malayan Towage and Salvage Corp. – deployed oil spill booms and a skimmer as well as conducted “manual scooping” in the area where the vessel sank to contain and recover sighted oil sheens off Balingawan Point. The PCG said the tug boats recovered 400 liters of oily water mixtures. The agency said 48.45 kilometers of the 57.77 kilometers of shoreline affected by the oil spill have been cleaned. Up to 5,963 sacks of oil-contaminated debris have been collected in Naujan, Calapan and Pola towns as of Tuesday. The Department of Environment and Natural Resources said damage to coral reefs, seagrasses, mangroves and fisheries was estimated at P7 billion.

Environmentalists slam marine oil, gas exploration plan - ENVIRONMENTALISTS have accused the government of using strong arm tactics to push through a plan to essentially place “primary use” of South African seas for oil and gas seismic surveys, exploration and development in the hands of multinational and smaller local gas and oil companies. Their ire was raised when Forestry, Fisheries and Environment Minister Barbara Creecy gazetted a Draft Offshore Oil and Gas Sector Plan: Input for Marine Spatial Planning for public comment, on March 10. The public were given 60 days to raise concerns, a period which ends on May 10. The decision by the Department of Mineral Resources and Energy (DMRE) on April 17 to grant French oil and gas giant TotalEnergies the go-ahead to drill as many as five exploration wells in a petroleum block between Cape Town and Cape Agulhas has caused them more consternation. Those opposed to the decision had 20 days, from April 20, to state their intent. Currently there are 20 active exploration and seven production rights over various offshore petroleum blocks. If Creecy’s proposed plan is eventually endorsed as law, environmentalists warned it would have a wide range of “catastrophic consequences” for the ecosystems of the country’s seas - the transport, tourism and other sectors that flourish in a healthy ocean. It would be “open season” for oil and gas companies as the majority of the blocks in the country's seas were earmarked for hydrocarbon mining. The affirmation would enable them to dictate terms in the respective blocks, as the draft bill was worded strongly in their favour. “There are nine sectors that have interest in our oceans but the oil and gas sector are predominating,” said Janet Solomon, co-founder of Oceans Not Oil, a rights group opposed to South Africa’s fossil fuel dependence. Shocking for Solomon’s group was some of the language used in Creecy’s plan. “Words like ‘primary use zoning’, ‘enabling environment’, ‘maximise recovery’ and ‘prioritise’. “The language is authoritarian and colonial.” Solomon said private entities would come in and receive priority zoning and every other sector would have to go on bended knee if they wanted a presence on a block. She pointed to the three recent instances where public consultation processes were done haphazardly. The most recent was delivered in the Eastern Cape High Court where oil and gas company Shell intended to conduct a seismic survey off the Wild Coast, but was blocked. However, Gwede Mantashe, the Mineral Resources and Energy Minister, was granted leave to appeal that outcome with the Supreme Court of Appeal. The matter is yet to be set down. Regarding subsistence fishing communities, Solomon said people were not getting the required information from the public document (plan), which was not acceptable, especially since their livelihoods depended on the sea. A feasibility issue for Solomon was the turbulence along local coastlines which could hamper off-shore construction and other work. “One has to look at the map of shipwrecks along our coastline to get an understanding.” Another concern were the gas pipelines that are expected to run along the coastline and into communities across the country, particularly when gas flaring occurs to release pressure. “There are many flaring hazards, especially for the health of communities.” Solomon predicted that rights groups and other concerned parties were likely to team up and challenge the government legally if their concerns were disregarded.

Yemen firm says oil sector must pay up to prevent spill - Global energy firms should help fill a $29-million gap in funding to safely remove oil from an abandoned tanker off Yemen’s coast, the war-ravaged country’s largest private company said Thursday. Hayel Saeed Anam Group (HSA), which in August contributed $1.2 million to a United Nations clean-up campaign, made the appeal hours before a virtual donor conference hosted by Britain and the Netherlands was due to kick off. “The global business community has a stake in ensuring that this devastating crisis is averted — particularly the oil sector,” Nabil Hayel Saeed Anam, the company’s managing director, said in a statement. “The potential disruption to trade routes and supply chains would be extensive, inflicting long-term operational and economic challenges for companies across the world.” To prevent a damaging oil spill in the Red Sea, the UN Development Programme in March took the unprecedented step of purchasing its own supertanker to remove more than a million barrels of oil from the beleaguered FSO Safer. The 47-year-old ship has not been serviced since Yemen’s civil war broke out in 2015 and was left abandoned off the rebel-held port of Hodeida, a critical gateway for shipments into the country heavily dependent on foreign aid. The cost of the UN operation is estimated at $148 million. The first recovery phase will cost $129 million, of which $99.6 has already been pledged, according to the United Nations. The world body estimates the second phase would cost a further $19 million. Thursday’s donor conference aims to secure full funding for both phases, the UN said. The Safer’s 1.1 million barrels contain four times as much oil as that spilled in the 1989 Exxon Valdez disaster off Alaska, one of the world’s worst ecological catastrophes, according to the UN.

Technologies enable China's drilling rigs to go 10,000 meters deep - Energy conglomerate Sinopec has improved technologies to enable its drilling rigs to go extremely deep for oil and gas extraction, making China one of the few nations capable of drilling 10,000-meter-deep wells. China's largest petrochemical products supplier inaugurated the drilling of the deepest oil and gas well in Asia. The well being drilled, located at the edge of the Taklimakan Desert, is expected to register a depth of 9,472 meters, which is 620 meters plus more than the height of Mount Qomolangma. The landmark well is another example of China's advancement in ultra-deep well drilling technology. The drilling rig on the ultra-deep well is a real physical landmark as it weighs nearly 500 tonnes and is the height of a 20-story building. The gigantic machine can lift almost 600 tonnes, or 120 adult elephants.

Number of OPEC+ countries voluntary cut oil production from May - Philippine Canadian Inquirer Nationwide Filipino Newspaper— A number of countries participating in the OPEC+ agreement have voluntarily reduced their oil production beginning from May 1 and until the end of the year and the total oil output downfall is now estimated at 1.66 million barrels per day. The OPEC+ countries at the issue announced on April 2 voluntary reduction in oil output until 2024. Saudi Arabia has decided to reduce oil production by 500,000 barrels per day (bpd) from May until the end of 2023, while the UAE will reduce production by 144,000 bpd, Iraq – by 211,000 bpd, Kuwait – by 128,000 bpd, Oman – by 40,000 bpd, Algeria – by 48,000 bpd, Kazakhstan – by 78,000 bpd and Gabon – by 8,000 bpd. Russia’s Deputy Prime Minister Alexander Novak announced earlier in the year that Russia would extend a voluntary reduction in oil output of 500,000 barrels per day from the average February level until the end of 2023. On April 2, a number of OPEC+ nations announced a voluntary output reduction from May to the end of 2023. Decisions on the issue were confirmed following the meeting of the OPEC+ ministerial monitoring committee held on April 3. The total volume of voluntary oil output reduction was estimated at that time at 1.66 million barrels per day and the decision was made in addition to agreements enforced in November 2022 on reduction in output by 2 million barrels per day within the framework of the OPEC+ deal. (TASS)

OPEC Warns IEA On Further Undermining Oil Industry Investments -The Organisation of the Petroleum Exporting Countries (OPEC) has called on the International Energy Agency (IEA) not to further undermine the oil industry investments. OPEC’s Secretary-General, Haitham Al Ghais, said this in a statement obtained in Abuja on Thursday while responding to the latest comments by the IEA again criticising OPEC and OPEC+. Al Ghais said the finger pointing and misrepresenting OPEC and OPEC+ actions was counterproductive and blaming oil for inflation was erroneous and technically incorrect as there were many other factors causing inflation. Al Ghais reiterated that OPEC and OPEC+ were not targeting oil prices, with the focus being solely on market fundamentals and enabling vital oil industry investments that the world desperately required. “The IEA knows very well that there are a confluence of factors that impact markets. The knock-on effects of COVID-19, monetary policies, stock movements, algorithm trading, commodity trading advisors and SPR releases (coordinated or uncoordinated), geopolitics, among others. “The finger pointing and misrepresenting OPEC and OPEC+ actions is counterproductive and blaming oil for inflation is erroneous and technically incorrect as there are many other factors causing inflation. “Other energy markets have been far more volatile with oil markets less so, mainly due to the stabilising role of OPEC and the OPEC+ group”, he said. He said further said the IEA’s repeated calls to stop investing in oil could lead to future volatility. According to him, it is known that all data-driven outlooks envisage the need for more of this precious commodity to fuel global economic growth and prosperity in the decades to come, especially in the developing world.

Oil prices slide on Fed rate hike expectations, weaker China PMI - Oil prices fell on Monday as jitters over the prospect of the US Federal Reserve raising interest rates combined with weaker Chinese manufacturing data to erase earlier gains. Brent futures for July delivery were down 55 cents, or 0.7 per cent, at $79.78 a barrel at 0009GMT, while US West Texas Intermediate (WTI) crude lost 54 cents, also a 0.7 per cent drop,to trade at $76.23. US consumer spending was flat in March as an increase in outlays on services was offset by a decline in goods, but persistent strength in underlying inflation pressures could see the Federal Reserve raising interest rates again. "A hawkish tone from the Fed could put pressure on energy and metals," ANZ Research said in a client note. US economic growth slowed more than expected in the first quarter. An acceleration in consumer spending was offset by businesses liquidating inventories in anticipation of weaker demand later this year amid higher borrowing costs. Meanwhile China's manufacturing purchasing managers' index (PMI) declined to 49.2 from 51.9 in March, official data showed on Sunday, slipping below the 50-point mark that separates expansion and contraction in activity on a monthly basis. "Investors remain cautious amid mixed economic signals. Brent crude has been tracking broader markets in recent sessions, with a slew of economic data creating more uncertainty about the outlook," ANZ's note said. On Friday, oil prices mostly rose over 2 per cent after energy firms posted positive earnings, and US data showed crude output was declining while fuel demand was growing. US crude production fell in February to 12.5 million barrels per day (bpd), its lowest since December. Fuel demand rose to nearly 20 million bpd, its highest since November, according to the Energy Information Administration (EIA). EIA data last week showed US crude oil and gasoline inventories fell more than expected as demand for the motor fuel picked up ahead of the peak summer driving season.

Oil extends loss into third week on concerns over China recovery - Oil fell to extend two weeks of losses after data from China reignited concerns about a patchy recovery in the world’s biggest crude importer. West Texas Intermediate accelerated losses Monday afternoon in low-volume trading. Futures opened lower this week after data released Sunday showed China’s manufacturing activity unexpectedly contracted. Meanwhile, JPMorgan Chase & Co. won its bid to acquire the bank in an emergency government-led intervention Monday, reigniting concerns over the stability of lenders and the nation’s overall economic health. “The nervous trade continues,” said Dennis Kissler, senior vice president of trading at BOK Financial Securities, on crude paring losses with rising SPX. “While the overall economic picture is looking a bit weaker, the true fundamentals for crude remain positive.” Hedge funds and money managers have turned deeply bearish on crude after prices swung sharply in April — surging to a 15-month high after OPEC and its allies announced an output cut, before giving up those gains amid a deteriorating outlook. With China on holiday through Wednesday, the focus will turn to whether major central banks including the Federal Reserve continue tightening rates. WTI for June delivery fell US$1.12 to settle at $75.66 a barrel in New York. Brent for July settlement declined 23 cents to settle at $79.31 a barrel.

Oil Slips as Traders Position Ahead of FOMC, ECB Meetings -- Oil futures nearest delivery softened in early trading Tuesday as investors positioned ahead of the beginning of a two-day policy meeting by the Federal Open Market Committee that is expected to deliver yet another quarter percentage point rate increase amid stubbornly high inflation and continued strength in the labor market. The rate hike itself is unlikely to move financial markets much, with over 96% of investors anticipating the FOMC to raise the federal funds rate to above 5% on Wednesday, according to CME Fed Watch Tool. However, the language of the FOMC policy statement and the follow-up conference from Fed Chairman Jerome Powell could be a major catalyst. Powell will likely signal interest rates would have to remain at elevated levels for an extended period and push back against market pricing of any rate cuts this year. Assuming the Fed raises rates by 0.25 percentage points this week, the market is currently pricing in a 34.6% chance of another rate hike in June and a 6.8% chance of a rate cut in June. The continued strength of the labor market and slower-than-expected moderation in inflation underscores the case for the Fed to continue raising interest rates to make sure inflation is indeed moving down to its 2% target. On the other hand, recent macroeconomic data showed the economy is clearly slowing at a sharp rate, down to just 1.1% for the first quarter from 2.6% in the final three months of 2022. For context, economists have expected US GDP growth to top 2% at the start of the year. Monday's economic data showed manufacturing sectors in the U.S. and China fell into contraction last month, reflecting depressed activity amid higher borrowing costs and trade tensions. In China, the manufacturing index fell into negative territory for the first time since the post-pandemic reopening late last year, while the expansion of the services sector also slowed. The decline in factory activity was mainly due to "insufficient market demand and the high base effect of a rapid recovery in manufacturing in the first quarter", according to Zhao Qinghe, a senior economist with China's National Bureau of Statistics. However, even the non-manufacturing index of activity in services and construction also softened to 56.4 from 58.2 in March but still showed an expansion. In its first official economic assessment since new leadership took over, Beijing said economic growth had got off to a good start, but also noted there are risks threatening the sustainability of the recovery. "The current economic improvement is mainly owing to recovery-driven growth, but the internal driving force is not strong, and demand is still insufficient," said a statement on Friday wrapping up a meeting of the Politburo. The uneven growth in China doesn't bode well for a bullish view on global oil demand this year that has been supported by expectations for China's post-COVID rebound. The International Energy Agency forecast world oil consumption will climb by 2 million barrels per day (bpd) in 2023 to a record 101.9 million bpd, buoyed by a resurgent China which will account for 90% of that growth. Despite these forecasts, diesel and gasoline markets in Asia have weakened significantly over the past month, with some refiners in the region cutting run rates as margins shrink and China's exports of refined products surge amid weak domestic demand. Near 7:45 a.m. EDT, NYMEX June West Texas Intermediate futures softened to $75.46 barrel (bbl), while the international crude benchmark ICE Brent for July delivery traded little changed near $79.15 bbl. NYMEX June RBOB futures retreated $0.0096 to $2.5408 gallon, and June ULSD futures edged lower to $2.3781 gallon.

The Oil Market Sold Off Sharply on Tuesday on Concerns Over the Economy The oil market sold off sharply on Tuesday on concerns over the economy amid discussions on ways to avoid a debt default and ahead of the Fed’s expected U.S. rate hike on Wednesday. The oil complex and the stocks indexes fell as the cost of insuring against a U.S. debt default reached new highs after the Treasury Secretary, Janet Yellen, said the government would likely be unable to meet all payment obligations by early June. The crude market, which posted a high of $76.11 in overnight trading, sold off sharply, breaching its previous lows and retraced more than 62% of its move from a low of $64.58 to a high of $83.38 as it posted a low of $71.42 ahead of the close. The market shrugged off the news that OPEC’s oil output fell in April as sanctions countries Russia and Iran continue to find outlets for their crude. The June WTI contract settled down $4 at $71.66 and the July Brent contract settled down $3.99 at $75.32. The product markets ended the session sharply lower, with the heating oil market settling down 9.31 cents at $2.2892 and the RB market settling down 11.47 cents at $2.4357. According to Refinitiv tracking, global diesel exports to Europe are expected to increase to 7.37 million tons in April, the highest since January. This week, Refinitiv is tracking 2.41 million tons of seaborne diesel exports to Europe. This is compared with 2.3 million tons scheduled a week ago, which fell to 1.47 million tons following delays, changes to orders and missing Russian barrels and of which 210,000 tons has yet to be fully discharged. Meanwhile, Northwest European gasoline exports so far in April stand at 1.39 million tons, down from 1.79 million tons exported in March. According to a Reuters survey, OPEC’s oil output fell in April due to a halt in some of Iraq's exports and delays to Nigerian shipments, adding to the impact of strong adherence by top producers to a supply cut deal by the wider OPEC+ alliance. OPEC produced 28.62 million bpd in April, down 190,000 bpd from March. Output is down more than 1 million bpd from September. OPEC’s quota bound members complied with 194% of pledged cuts in April, up from 173% in March. The OPEC+ group cut its output by 180,000 bpd in April to 24.22 million bpd, or about 1.2 million bpd below the target. This followed a 930,000 bpd shortfall in March. The largest decline of 200,000 bpd was in Iraq where companies have reduced output in the northern Kurdistan region following a halt to the export pipeline in March. Higher exports from southern Iraq limited the decline. The second largest decline of 100,000 bpd came from Nigeria, where Exxon declared force majeure on liftings at its terminals in the country following a labor dispute. OPEC’s Gulf producers Saudi Arabia, Kuwait and the UAE maintained high compliance with their targets under the OPEC+ deal, keeping output steady at 10.43 million bpd, 2.68 million bpd and 3.04 million bpd, respectively. According to a Bloomberg survey, OPEC’s oil output fell by 310,000 bpd to an average of 28.8 million bpd, the lowest level in almost a year. OPEC’s output fell as Iraq’s exports were reduced by a pipeline suspension and a labor strike cut shipments from Nigeria. Iran’s Oil Minister, Javad Owji, said Iranian oil production has surpassed 3 million bpd.

Oil Slumps 5% to Five-Week Low Amid US Debt Default Fears (Reuters) -Oil prices sank about 5% to a five-week low on Tuesday on concerns about the economy as U.S. politicians discuss ways to avoid a debt default and investors prepare for more rate hikes this week. Brent futures fell $3.99, or 5.0%, to settle at $75.32 a barrel, while West Texas Intermediate crude (WTI) fell $4.00, or 5.3%, to end at $71.66. That was the lowest close for both benchmarks since March 24 and was also their biggest one-day percentage declines since early January. Oil prices and Wall Street's main indexes both fell after U.S. Treasury Secretary Janet Yellen said the government could run out of money within a month. The White House said President Joe Biden would not negotiate over the debt ceiling during his meeting with four top congressional leaders on May 9, but he will discuss starting "a separate budget process." U.S. job openings fell for a third straight month in March and layoffs increased to the highest level in more than two years, suggesting some softening in the labor market that could aid the Federal Reserve's fight against inflation. "The U.S. economy continues to evolve in a manner consistent with a recession commencing later this year," analysts at Barclays said in a note. "The manufacturing sector is contracting, the consumer is struggling, ... There are broadening signs of cracks emerging within the labor market," Barclays said. Later this week, investors will look for market direction from expected interest rate hikes by central banks still fighting inflation. More hikes could slow economic growth and dent energy demand. The U.S. Federal Reserve is expected to increase interest rates by another 25 basis points on Wednesday. The European Central Bank is also expected to raise rates at its regular policy meeting on Thursday. "The ... action of central banks in their mission to tame elevated consumer and producer prices ... all cast a rather long shadow of doubt on prospects going forward," Concerns about diesel demand in recent months, meanwhile, has pressured U.S. heating oil futures to their lowest level since December 2021. "Oil basically has weakening prospects from the world’s two largest economies, China and the U.S., and if the macro backdrop deteriorates momentum selling could easily send prices below the $70 level," Over the weekend, data from China, the world's top crude importer, showed manufacturing activity fell unexpectedly in April. That was the first contraction in the manufacturing purchasing managers' index since December. On the supply side, Iran's oil production surpassed 3 million barrels per day (bpd), its oil minister said. The OPEC member, which has been under U.S. sanctions since 2018, pumped 2.4 million bpd on average in 2021. The market shrugged off news that the Organization of the Petroleum Exporting Countries' output fell in April, as sanctioned countries Russia and Iran continued to find outlets for their crude. Meanwhile, U.S. crude stockpiles were forecast to have drawn down for a third week in a row for the first time since December, falling some 1.1 million barrels last week, according to analysts in a Reuters poll.

WTI Slides Below $70 on US Banking, Recession Fears -- New York Mercantile Exchange oil futures and Brent crude on the Intercontinental Exchange extended lower in pre-inventory trading Wednesday, with West Texas Intermediate sliding below $70 barrel (bbl) for the first time since late March after softer-than-expected macroeconomic data in the United States and elsewhere fueled fears of a deeper economic downturn this year, hurting demand for refined fuels. Oil's move lower comes despite the American Petroleum Institute reporting on Tuesday U.S. commercial crude oil inventories declined by 3.939 million bbl during the week ended April 28, compared with forecasts for a draw of 1.2 million bbl. Stocks at the Cushing, Oklahoma, tank farm -- the New York Mercantile Exchange delivery point for West Texas Intermediate futures -- rose 700,000 bbl. Further details of the report revealed gasoline inventory added 400,000 bbl as of April 28, missing an expected 1.0-million-bbl draw. API reported a decrease of 1.0 million bbl in distillate inventory versus an expected decline of 700,000 bbl. In financial markets, investors are bracing for yet another rate increase announcement from the U.S. Federal Reserve that concludes its two-day policy meeting at 1:30 p.m. EDT. Over 96% of investors anticipate the Fed to raise rates by a quarter percentage point today to a 5% to 5.25% range -- the highest level since 2007. The rate hike itself has been fully priced in by the markets but fears over the health of the U.S. banking sector, along with signs of a sharply slowing economy, have sent markets tumbling this week. Dow Jones Industrial fell as much as 450 points Tuesday and S&P 500 declined 1.3%, while tech-savvy Nasdaq Composite slid 1% on the session. More evidence of a sharply slowing economy can be found in the Job Openings and Labor Turnover Survey released Tuesday that showed employment openings declining to their lowest levels since April 2021 and layoffs jumping sharply in March. Job vacancies totaled 9.59 million for the month, down from 9.97 million in February and below the median estimate of 9.64 million. Quits, which are considered a measure of confidence in the ability to leave one's job and find another, declined by 129,000 to 3.85 million, the lowest level since May 2021. A separate report Tuesday revealed U.S. orders for manufactured goods in March grew 0.9%, falling below expectations of a 1.3% increase. Against this backdrop, investors will be looking for clues on whether the Fed will keep rates steady after the May 3 meeting, or if it will further tighten monetary policy to fight inflation. Fed Chairman Jerome Powell will likely signal during his press conference Wednesday that interest rates would have to remain at elevated levels for an extended period and push back against market pricing of any rate cuts this year. Assuming the Fed raises rates by 0.25 percentage points this week, the market is currently pricing in a 34.6% chance of another rate hike in June and a 6.8% chance of a rate cut in June. Near 9 a.m. EDT, NYMEX June West Texas Intermediate futures dropped back to $69.44 bbl, down $2.30 bbl on the session, while the international crude benchmark ICE Brent for July delivery fell $2.23 to $73.07 bbl. NYMEX June RBOB futures retreated $0.0514 to $2.3854 gallon, and June ULSD futures declined to $2.2366 gallon, down $0.0526 gallon.

Oil Plunges To Most Oversold In Two Years Amid CTA Shorting Frenzy --One of the most popular mainstream explanations behind the recent plunge in oil, is that the price is dumping on expectations of a US - and global - recession (the slow rebound in China isn't helping) which will throttle oil demand and has turned investors even more bearish and caused refining margins to slump. There is just one problem with this "explanation": oil, as a spot commodity, doesn't trade based on discounting the future, but on supply and demand dynamics in the here and now, and unless one claims that the BEA has manipulated a deeply negative real GDP print into the latest +1.1% print (which translates into 5.1% nominal growth), there is no way that oil is currently seeing such a sharp drop in demand.Which leaves financial speculation as the other explanation.In a note from Goldman's commodities desk today, we read that "crude oil is taking the brunt of the 'macro' pain again to start the London session and while people point to the slightly softer ytd fundamentals out of the US / China inventories scanning quite high." The bank then goes on to note that we that "similar to the selloff in the middle of march most of this move is the result of positioning set up. Specifically, the US producer community was quite active following the OPEC 'surprise' cut.. and we are moving through producer strike levels in both WTI and Brent. Add to the mix 1) a top trade on the year has been short crude vol.. and 2) CTAs flipped from max short to nearly max long... and the reversal back down has been swift." And speaking of positioning, the Goldman desk also notes that RSI has been a good indicator of entry points on the previous sell-offs, and "we are getting closer" to where the CTAs get squeeze again: after all, as shown below, the 7-day RSI in oil as now approaching record lows!

WTI Extends Losses After Biden Admin Drains SPR By Most Since December - Oil prices are extending yesterday's ugly losses as faith in the 2023 growth rebound narrative falter. As Bloomberg reports, at the start of the year, leading industry figures from trading giant Trafigura to Goldman were predicting that rebounding Chinese demand and sanctions on Russia would squeeze supplies in the second half - propelling crude to $100 a barrel or higher.Now, traders are growing nervous about the danger of recession in the US and disappointed that China’s recovery isn’t displaying all the vigor they’d anticipated. Russia, despite vowing sharp production cuts in retaliation for sanctions over its attack on Ukraine, is showing only mixed signs of following through.

API: Crude -3.939mm (-3.30mm exp)

DOE:

  • Crude -1.28mm (-3.30mm exp)
  • Cushing +541k
  • Gasoline +1.742mm
  • Distillates -1.19mm

The official data confirmed another weekly draw for crude (but smaller than expected), Cushing stocks rose for the second straight week and Gasoline stocks unexpectedly rose. Distillates drew down for the 5th straight week... The Biden administration drained 2mm barrels from the SPR (the 5th straight week and largest drain since December). The SPR is now at it slowest since October 1983...The start of summer driving season may not deliver its typical boost to gasoline demand, depressing crack spreads. Travel bookings for summer are down through March, a sign that consumers may limit spending on travel and, consequently, gasoline in the summer. Fuel sales for the week of April 22 fell 3% vs. 2022 levels and a hefty 20% from 2019, according to data from OPIS.The so-called 'adjustment factor' was high and positive once again...

Oil falls 4%, extending losses after Fed rate hike (Reuters) -Oil prices fell 4% on Wednesday, extending steep losses from the previous session after the U.S. Federal Reserve raised interest rates and as investors fretted about the economy. Brent futures settled $2.99 lower, or 4%, to $72.33 a barrel, the global benchmark's lowest close since December 2021. Brent hit a session low of $71.70 a barrel, its lowest since March 20. U.S. West Texas Intermediate crude (WTI) fell $3.06, or 4.3%, to $68.60. WTI's session low was $67.95 a barrel, lowest since March 24. A day earlier, both benchmarks fell 5%, their biggest daily percentage declines since early January. On Wednesday afternoon, the Fed raised interest rates by a quarter of a percentage point, pressuring oil prices as traders worried that slower economic growth could hit energy demand. But the Fed also signaled it may pause further increases, giving officials time to assess fallout from recent bank failures, wait for resolution of a political standoff over the U.S. debt ceiling and monitor inflation. Banking sector concerns returned to the spotlight on Monday after U.S. regulators seized First Republic, the third major U.S. institution to fail in two months, with JPMorgan Chase & Co agreeing to take $173 billion of the bank's loans, $30 billion of securities and $92 billion of deposits. "The Fed going into a pause mode should be very supportive for the price of oil," "The big question is whether or not we're going to have more shoes drop in the banking sector." The European Central Bank is also expected to raise rates at its policy meeting on Thursday. Also pressuring oil prices, government data showed U.S. gasoline inventories unexpectedly rose by 1.7 million barrels last week. Analysts polled by Reuters had expected a 1.2 million-barrel drop. "The most notable thing is that gasoline demand gave back all of the increases that we'd seen in previous weeks," U.S. crude inventories fell by 1.3 million barrels in the week, compared with forecasts for a 1.1 million-barrel drop. In China, data over the weekend showed April manufacturing activity fell unexpectedly in the world's largest energy consumer and top buyer of crude oil. Morgan Stanley lowered its forecast for Brent prices to $75 a barrel by year-end. "Downside risk to Russia's supply and upside risk to China's demand have largely played out and prospects for 2H tightness have weakened," the bank said in a note, referring to buoyant exports from Russia despite Western sanctions.

Oil Wobbles After Fed Signals Rate Pause Amid Soft Macros - Oil futures rebounded modestly from 16-month lows hit Wednesday after the Federal Open Market Committee signaled a pause in the current monetary policy cycle after hiking interest rates for the tenth consecutive time as the broader economy flashes signs of a deeper downturn, with the labor market cooling and consumer spending weakening. The Federal Reserve raised interest rates by a quarter percentage point Wednesday, in line with market expectations, to a 5%- 5.25% range but signaled its most aggressive rate-hiking campaign in decades may now be history. In a statement released after a two-day policy meeting, the FOMC replaced the previous guidance that "some additional policy firming (rate hikes) may be appropriate" to "the Committee will closely monitor incoming information, its rate hikes so far and the lags with which they affect the economy and inflation." Inflation and the labor market have shown some signs of cooling in recent weeks but probably not enough for the central bank to declare victory in fighting sticky price pressures. In a report released Wednesday, the Institute of Supply Management said prices paid by service providers increased by 0.1% in April as business activity expanded for the fourth straight month despite higher borrowing costs and tight credit conditions. Combining these developments with the ongoing crisis in U.S. regional banks, demand outlooks for refined fuels in the second half of the year continue to be downgraded. On Wednesday, the U.S. Energy Information Administration released its weekly inventory report, showing gasoline consumption declined by 9.4% to 8.6 million barrels per day (bpd) ahead of the peak summer driving season. As a result, gasoline stocks rose by 1.7 million barrels (bbl) to 222.9 million bbl, compared with forecasts for a 1.2-million-bbl drop. That's a headwind for the market because gasoline was starting to look like the bright spot in the oil complex. Demand for middle distillates climbed by a modest 144,000 bpd from to 3.872 million bpd, still 2.9% against the five-year average. Diesel consumption has remained below 4 million bpd each week so far this year except for two. Distillate stockpiles fell by 1.2 million bbl to 110.3 million bbl, the EIA report showed, compared with expectations for a 1.1-million-barrel drop. In the crude complex, commercial crude oil stockpiles fell for the third straight week through April 28, down by 1.3 million bbl last week to 459.6 million barrels, and are now about 2% below the five-year average, the EIA said. Markets have mostly expected crude stockpiles to fall by 1.2 million bbl from the prior week. The decline came despite a 2-million-barrel transfer of crude oil last week from the nation's Strategic Petroleum Reserve to the commercial side. Similar sales will continue through June, according to the Energy Department, which is conducting the transactions. Oil stored at the Cushing, Oklahoma, hub -- the delivery point for West Texas Intermediate, increased by 541,000 bbl from the previous week to 33.6 million bbl, the EIA said in its weekly report. U.S. crude oil production increased by 100,000 bpd from the previous week to 12.3 million bpd, according to the EIA. The crude draw was realized despite domestic refiners scaling back run rates to 90.7%, processing 98,000 bpd less than the previous week's average. Near 7:30 a.m. EDT, NYMEX June West Texas Intermediate futures traded little changed near $68.52 bbl, while the international crude benchmark ICE Brent for July delivery edged higher to $72.46 bbl. NYMEX June RBOB futures softened $0.0062 to $2.3159 gallon, and June ULSD futures traded little changed near $2.2314 gallon.

The Oil Market on Thursday Traded Higher After Reversing its Previous Losses The oil market on Thursday traded higher after reversing its previous losses in what appeared to be a technical rebound. On the opening, the market sold off sharply by almost $5 to a low of $63.64, the lowest level seen since December 2021. The mini-flash crash may have been caused by a large position liquidation amidst thin trading conditions. Unlike the usual sharp moves right on the opening, the market’s sharp selloff came in the fifth minute, with more than 3,000 June futures contracts trading. However, within the next minute the market had bounced back to $66 and continued to retrace its previous losses. The market seemed to have been supported on the European Central Bank deciding to slow the pace of its interest rate hikes. Also, Russia’s Deputy Prime Minister, Alexander Novak, said that Russia was abiding by its voluntary pledge to cut output by 500,000 bpd from February until the end of the year, although there are little signs of Russia actually cutting its output. The market traded to a high of $69.84 in afternoon trading. The June WTI contract settled down 4 cents at $68.56 and the July Brent contract settled up 17 cents at $72.50. The product markets ended the session slightly higher, with the heating oil market settling up 64 points at $2.2387 and the RB market settling up 38 cents at $2.3259. Bloomberg reported that while crude markets have suffered large losses, with WTI falling over $20 over the last three weeks, on concerns over the wider economy, real oil demand still looks strong enough to force a rebound in prices. China is importing a large number of cargoes as domestic travel rebounds and traders expect the country’s crude purchases to remain high in the next few months. Inventories are tightening around the world and should deplete even faster as Saudi Arabia and its OPEC+ allies implement new supply cuts. According to UBS Group AG, oil consumption continues to appear healthy and may increase further over the coming months. It advised clients to add long positions in Brent. The market’s strength is also reflected in the market’s backwardation, with Brent futures for immediate delivery commanding a premium over later months. According to the IEA, world oil demand remains on track to increase by 2 million bpd this year to 101.9 million bpd. Several analysts believe that should fundamentals deteriorate, Saudi Arabia and other OPEC+ producers are likely to intervene further to support prices. Iraq’s Oil Minister said on Wednesday, that Iraq is in the final stages of talks with Kurdish officials to resume crude oil exports from the semi-autonomous Kurdistan region. He outlined the agreement should be finalized “within a week or two weeks maximum” for the resumption of oil exports. More than 450,000 b/d of Kurdish exports have been suspended since March 25th. Kurdish officials though said the resumption in exports is due to a standoff between Baghdad and Turkey over the use of the pipeline. Bloomberg reported that the state oil company of Abu Dhabi, part of the United Arab Emirates, notified customers that it will reduce shipments of crude oil starting in May, in line with OPEC+’s surprise decision to tighten supplies. Adnoc will cut the volumes by 5% for all of its cargoes being shipped from May. That’s within the lower range of the operational tolerance rule for long-term contracts, under which the company has the ability to supply plus or minus 5% of monthly volumes. It’s the first sign yet that a member of the OPEC+ coalition is moving toward implementing the group’s production cuts of around 1.6 million bpd by July.

Saudi Arabia cuts Asia oil prices as energy market weakens | Energy – Brent crude futures jumped above $87 a barrel after the announcement, but are now back to $73 and down 9% this month, signaling how bearish investors have become. Riyadh: Saudi Arabia lowered oil prices for customers in its main market of Asia after futures slumped, with traders fretting about the health of the global economy. A softening US economy and continued fragility among its banks, as well as weak manufacturing data in China, have triggered a renewed fall in Brent and WTI futures. Refining margins have also sunk. State-controlled Saudi Aramco cut all official selling prices for Asia in June. The company’s key Arab Light grade was reduced to $2.55 a barrel above the regional benchmark, 25 cents less than the price for this month. A Bloomberg survey of refiners and traders from last week forecasted a slightly bigger drop of 45 cents. Aramco sells about 60 per cent of its crude shipments to Asia, most of them under long-term contracts, pricing for which is reviewed each month. China, Japan, South Korea and India are the biggest buyers. The company raised all prices for European customers and left most US grades unchanged. The kingdom is the world’s largest oil exporter and leads the OPEC+ group of producers along with Russia. Several members of the 23-nation alliance, including Riyadh, decided early last month to cut production by more than 1 million barrels a day, saying it was a “precautionary measure” to stabilize the market. Brent crude futures jumped above $87 a barrel after the announcement, but are now back to $73 and down 9 per cent this month, signaling how bearish investors have become. The next OPEC+ meeting is on June 3-4 and the group has decided to make it an in-person gathering rather than a virtual one. That signals the group’s resolve to stabilize oil markets and it may opt for another supply reduction, according to Helima Croft, head of commodity strategy at RBC Capital Markets. The company’s OSP decisions are often followed by other Gulf producers such as Iraq and Kuwait.

Oil Spikes After Strong US Jobs Report Eases Recession Fears - Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange rallied more than 4% on Friday after U.S. non-farm employment data showed job gains in April exceeded market consensus for the 13th month in a row, as the unemployment rate unexpectedly declined to a 52-year low 3.4%, defying efforts by the U.S. Federal Reserve to slow the red-hot labor market. U.S. employers added 253,000 new jobs last month, a slightly higher figure than 178,000 jobs expected by the economists and 165,000 positions opened in March, according to data released this morning by the U.S. Bureau of Labor Statistics. What's more surprising, the unemployment rate fell back to a multi-decade low 3.4%, while average wages unexpectedly accelerated, reflecting fresh inflationary pressures in the face of a slowing economy. Average hourly earnings rose at a significantly faster pace of 0.5% in April, up by 0.2% from the prior month. Fed officials closely monitor compensation metrics as strong pay gains have given Americans the ability to keep spending, exerting upward pressure on prices. Employment growth was once again broad-based, reflecting gains in professional and health care services followed by leisure and hospitality. The latest figures underscore the resilience of the labor market despite growing concerns about high interest rates, inflation and tightening credit conditions that are projected to hit the economy sometime in the second half of the year. That presents a unique set of challenges for the Federal Reserve that has been raising interest rates at the most aggressive clip in decades to slow the labor market and just this week signaled the end to its rate hiking campaign. Fed officials raised federal funds rates for the 10th consecutive time on Wednesday to a 5%- 5.25% target range - the highest level since September 2007. In a statement released after the rate decision, the Federal Reserve replaced previous guidance that "some additional policy firming (rate hikes) may be appropriate" to "the Committee will closely monitor incoming information, its rate hikes so far and the lags with which they affect the economy and inflation." At settlement, NYMEX June West Texas Intermediate futures advanced $2.78 to $71.34 bbl, while the international crude benchmark ICE Brent for July delivery rose to $75.30 bbl, up by $2.80 bbl on the session. NYMEX June RBOB futures firmed 5.31 cents to $2.3790 gallon, and June ULSD futures rose 7.60 cents to $2.3147 gallon.

Oil Prices Jump but Post Third Straight Weekly Fall on Economic Woes (Reuters) -Oil prices rose on Friday but fell for the third straight week after a sharp fall earlier this week ahead of benchmark interest rate rises and on concern that the U.S. banking crisis will slow the economy and sap fuel demand. Brent crude closed $2.80, or 3.9% higher, at $75.30 a barrel. U.S. West Texas Intermediate settled up $2.78, or 4.1%, at $71.34 after four days of declines that sent the contract to lows last seen in late 2021. The Brent benchmark finished the week with a decline of about 5.3%, while WTI plunged 7.1%, even after the rebound on Friday. Both benchmarks were down for three weeks in a row for the first time since November. "Crude is trying to reverse the recent washout in prices triggered by higher interest rates and recession fears mostly in the banking sector," said Dennis Kissler, senior vice president of trading at BOK Financial. For some analysts, fundamentals in the physical market are stronger than the futures market would indicate. "Rather than underlying fundamentals, the selling frenzy over the past week has been driven by worries about demand linked to recession risks and the strain in the U.S. banking sector," "The upshot is that there is a big disconnect between oil balances and oil prices." Commerzbank analysts noted oil demand concerns were overblown and expect a price correction upward in coming weeks. Equities, which often move in tandem with oil prices, also rose. A better-than-expected jobs report helped ease some fears of an imminent economic downturn, spurred in part by renewed banking fears. Investors also broadly expect the Fed to pause rate hikes at its June policy meeting. In China, however, factory activity contracted unexpectedly in April as orders fell and poor domestic demand dragged on the sprawling manufacturing sector. However, expectations of potential supply cuts at the next meeting of the OPEC+ producer group in June have provided some price support, said Kelvin Wong, a senior market analyst at OANDA in Singapore. U.S. oil rig count, an indicator of future output, fell by 3 to 588 this week, data from oil services firm Baker Hughes showed.

Watch- Iran Seizes 2nd Foreign Crude Tanker In Under A Week: Iran has seized a second foreign tanker in under a week, this time in the strategic Strait of Hormuz - a key transit point of much of the world's global oil - in a daring Wednesday naval operation carried out by the Islamic Revolutionary Guard Corps (IRGC).The captured Panamanian-flagged oil tanker has been identified by the US Navy's 5th Fleet as the Niovi. Some dozen IRGC fast boats could be seen swarming the vessel in footage published by the US military.The US Navy described that the Iranian ships "forced the oil tanker to reverse course and head toward Iranian territorial waters off the coast of Bandar Abbas, Iran.""Iran’s actions are contrary to international law and disruptive to regional security and stability,” the 5th Fleet statement said. "Iran’s continued harassment of vessels and interference with navigational rights in regional waters are unwarranted, irresponsible and a present threat to maritime security and the global economy."According to tanker records detailed in the Associated Press, "Shipping registries show the Niovi as managed by Smart Tankers of Piraeus, Greece."

Al-Qaeda in Yemen Slams Saudi-Iran Normalization Deal - According to a report from The New Arab, the leader of the Yemen-based al-Qaeda in the Arabian Peninsula (AQAP) has slammed Saudi Arabia for its normalization deal with Iran.In a video released earlier this week, AQAP head Khalid Batarfi said Riyadh was conceding defeat in Yemen by normalizing with Iran. Batarfi claimed AQAP is the only force left fighting for Sunnis in Yemen against the Houthis, who are Zaydi Shias.The US-backed Saudi-led coalition in Yemen has fought on the same side as AQAP against the Houthis, and weapons sold to the Saudis and the UAE have ended up in the hands of the terror group in Yemen.A report from The Associated Press in 2018 found that the Saudi-UAE coalition hired al-Qaeda members to help fight against the Houthis. The AP report said: “Coalition-backed militias actively recruit al-Qaeda militants, or those who were recently members, because they’re considered exceptional fighters.”Before the Obama administration backed the coalition against the Houthis in March 2015, the US was cooperating with the Houthis against AQAP. In January 2015, The Wall Street Journal reported that the US had “forged ties” with the Houthis as part of a strategy to “maintain its fight against a key branch of al-Qaeda.”AQAP’s complaints about the Saudi-Iran normalization deal come as a peace deal between Riyadh and the Houthis seem near. The warring sides have been engaged in Omani-mediated talks and recently exchanged thousands of prisoners.

US Says Russian Missile Almost Hit US MQ-9 Drone Over Syria - A US MQ-9 Reaper drone was fired at by a Russian SA-22 Pantsir air defense system in Syria back in November, a US official told Air & Space Forces Magazine.The incident was first revealed by one of the Pentagon documents allegedly leaked by Jack Teixeira. The US official disclosed new information about the incident, saying the Russian missile came within 40 feet of the MQ-9 and damaged the drone when the warhead exploded.The details of the incident are not clear. It’s unknown if Russia intentionally fired on the drone or knew if it was a US aircraft. According to the leaked document, the missile was fired from the Qamishili Airfield in northeast Syria, an area where both the US and Russian militaries have a presence.Col. Joe Buccino, a spokesman for US Central Command, told The War Zonethat the US and Russian militaries discussed the incident through deconfliction lines. “After the incident, CENTCOM officials contacted the Russian deconfliction center about the matter,” he said.Buccino added that such incidents in Syria are “not routine.” A US MQ-9 Reaper Drone had another encounter with Russia over the Black Sea in March, which led to the downing of the drone after it was intercepted by Russian aircraft.

Civilian Reported Killed in US Drone Strike in Northwest Syria - -- US Central Command said Wednesday that it launched an airstrike in northwest Syria that killed an al-Qaeda leader but did not name the target or release other details of the strike, and local reports suggest a civilian was killed.“At 11:42 a.m. local time on May 3rd, US Central Command forces conducted a unilateral strike in Northwest Syria targeting a senior Al Qaeda leader,”CENTCOM said in a statement.According to the UK-based Syrian Observatory for Human Rights (SOHR), a drone strike hit a poultry farm in the area and killed one person that hasn’t yet been identified.Local sources later told the SOHR that a 60-year-old sheep herder not affiliated with any military faction was killed, suggesting the strike killed a civilian. CENTCOM said it would provide more information on the strike “as operational details become available.”US drone strikes have a history of harming civilians, and the Pentagon is notorious for undercounting or lying about civilian casualties.



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