oil prices at a 14 week high; the Energy Information Administration could not account for a record 2,415,000 barrels per day of domestic oil supplies this week
US oil prices finished higher for a fifth straight week on tightening global supplies and on indications that the US would avoid a recession, despite higher interest rates.....after rising 2.3% to $77.07 a barrel last week after China reacted to weak economic data with a promise of fiscal stimulus, and on growing evidence of coming supply shortages, the contract price for the benchmark US light sweet crude for September delivery slipped in early Asian trading on Monday in anticipation of further interest rate hikes by the US Fed and the European Central Bank, but reversed and moved higher by midday in London as tightening supply and hopes for Chinese stimulus underpinned international prices at well above $80 a barrel, and continued to trend higher in New York, supported by Saudi oil output cuts and expectations for further stimulus in China, and settled $1.67 higher at a three-month high of $78.74 per barrel on tightening supply, rising U.S. gasoline demand, hopes for Chinese stimulus measures, and on technical buying after prices broke above a key resistance level...oil prices held steady in early overseas trading on Tuesday, hovering near three-month highs, as signs of tighter supplies and pledges by Chinese authorities to shore up the world’s second-biggest economy lifted sentiment, while weaker Western economic data weighed on it, then continued to rally to a new a three-month high ahead of the release of the weekly petroleum stocks reports, which were expected to show draws from both crude and product stocks and settled 89 cents higher at $79.63 a barrel as traders in financial markets pared back their bets on a U.S. recession this year....but oil prices fell overnight and opened lower Wednesday, after the American Petroleum Institute reported an unexpected increase in oil supplies, and were down 1% in early trading ahead of a Fed meeting where a rate hike was expected, and settled 85 cents lower at $78.78 a barrel after the weekly EIA data showed U.S. crude inventories fell less than expected and the Federal Reserve raised interest rates by a quarter of a percentage point......but oil prices rebounded early on Thursday morning and approached $80, as traders brushed aside the Fed’s latest rate hike and refocused their attention on signs of supply tightness. supported by optimism for global growth and hopes that central banks are nearing the end of their monetary tightening campaigns. and settled $1.31 higher at $80.09 a barrel, after second quarter US GDP growth came in at a surprisingly high 2.4% versus market expectations for just 1.8%...oil prices fell in early Asian trade on Friday as demand concerns weighed against strong economic data and opened lower in New York, but mounted a rally on a weaker US dollar, unplanned refinery outages in the U.S. Gulf Coast, and receding concerns over recession and settled 49 cents higher at a fourteen week high of $80.58 a barrel as traders remained optimistic that healthy demand and supply cuts would keep prices buoyant, and thus finished with a 4.6% gain on the week...
Natural gas prices, on the other hand, finished lower for the third time in four weeks, as the current extreme heat was expected to moderate over the next two weeks ... after rising 6.9% to $2.713 per mmBTU last week on a bullish storage report as the record setting heat dome in the Southwest was forecast to expand northeastward, the contract price of US natural gas for August delivery opened Monday's trading a penny higher and jumped to the intraday high of $2.742 within minutes of the open, as summer heat stretched over much of the country, but began a staggered descent before recovering to settle 2.8 cents lower at $2.685 per mmBTU on rising output and forecasts for less demand next week than had been expected....natural gas traded lower again early Tuesday, but spiked on a bullish shift to short-term forecasts at midday and settled 4.5 cents higher at $2.730 per mmBTU on a drop in daily output and forecasts for the weather to remain hotter than normal through early August...natural gas prices opened 3 cents lower on Wednesday and traded near or below that level for most of the session, as natural gas traders squared their positions ahead of Thursday’s contract expiration, and settled 6.5 cents lower at $2.665 per mmBTU on forecasts for less hot weather over the next two weeks than traders had expected...the expiring August gas contract opened nine cents lower on Thursday and tumbled throughout the day to settle 17.3 cents lower at $2.492 per mmBTU on forecasts for less hot weather over the first two weeks of August than had been expected, while the contract price of September natural gas settled 9.8 cents lower at $2.595 per mmBTU hampered by strong production and fresh inventory data that confirmed supplies in storage remained robust even amid peak summer demand...now quoting the September gas contract, prices moved higher Friday fueled by strong near-term weather demand, and setttled with a 4.3 cent gain on the day at $2.638 per mmBTU, on weather projected to remain hotter than normal through at least mid-August...Natural gas prices thus finished 2.8% lower on the week, while the September gas contract, which had finished the prior week priced at $2.707 per mmBTU, finished 2.5% lower...
The EIA's natural gas storage report for the week ending July 21st indicated that the amount of working natural gas held in underground storage in the US had increased by 16 billion cubic feet to 2,987 billion cubic feet by the end of the week, which left our natural gas supplies 573 billion cubic feet, or 23.7% above the 2,414 billion cubic feet that were in storage on July 21st of last year, and 345 billion cubic feet, or 13.1% more than the five-year average of 2,642 billion cubic feet of natural gas that were in working storage as of the 21st of July over the most recent five years… however, natural gas supplies are still 13.1% below normal for this date in the region defining the Pacific states, while 18.2% above normal in the South Central region of the country at the same time....the 16 billion cubic foot injection into US natural gas working storage for the cited week was less than the 19 billion cubic feet addition to supplies that was expected by industry analysts surveyed by Reuters, and less than the 18 billion cubic feet that were added to natural gas storage during the corresponding week of 2022, and also less than the average 31 billion cubic feet addition to natural gas storage that has been typical for the same July 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 July 21st showed that after a big drop in our oil imports and a big jump in our oil exports, we had to pull oil out of our stored commercial crude supplies for the 12th time in eighteen weeks, but for just the 13th time in the past 31 weeks, but by less than last week due to the appearance of a record amount of crude oil supplies that the EIA could not account for.....Our imports of crude oil fell by an average of 807,000 barrels per day to 6,367,000 barrels per day, after rising by an average of 1,294,000 barrels per day the prior week, while our exports of crude oil rose by an average of 777,000 barrels per day to average 4,591,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 1,776,000 barrels of oil per day during the week ending July 21st, 1,584,000 fewer barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly 100,000 barrels per day lower at at 12,200,000 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 13,976,000 barrels per day during the July 21st reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,478,000 barrels of crude per day during the week ending July 21st, an average of 107,000 fewer barrels per day than the amount of oil that our refineries were processing during the prior week, while over the same period the EIA’s surveys indicated that an average of 86,000 barrels of oil per day were being pulled out of 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 July 21st appear to indicate that our total working supply of oil from storage, from net imports and from oilfield production was 2,415,000 barrels per day less than what our oil refineries reported they used during the week. To account for that obvious disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a [ +2,415,000 ] 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 error of that magnitude in the week’s oil supply & demand figures that we have just transcribed....Moreover, since last week’s “unaccounted for crude oil” figure was at [+823,000] barrels per day, that means there was a 1,592,000 barrel per day difference between this week's oil balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, and therefore useless...However, since most oil traders respond to these weekly EIA reports as if they were accurate, and since these weekly figures therefore 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 had hoped to do about it)
This week's 86,000 barrel per day decrease in our overall crude oil inventories came as an average of 86,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while the amount of oil in our Strategic Petroleum Reserve was unchanged....however the 346,758,000 barrels of oil that still remain in our Strategic Petroleum Reserve are the lowest since August 19th, 1983, or at a 39 1/2 year low, as repeated tapping of our emergency oil 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 18 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 6,615,000 barrels per day last week, which was still 1.0% more than the 6,550,000 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 lower at at 12,200,000 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 lower at 11,800,000 barrels per day, while Alaska’s oil production was 1,000 barrels per day higher at 407,000 barrels per day, but still added the same 400,000 barrels per day to the rounded national total as it did last week...US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 6.9% below that of our pre-pandemic production peak, but was 25.8% 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 93.4% of their capacity while using those 16,478,000 barrels of crude per day during the week ending July 21st, down from their 94.3% utilization rate during the prior week, but a utilization rate that's within the normal range for mid-July... The 16,478,000 barrels per day of oil that were refined this week were 2.8% more than the 16,027,000 barrels of crude that were being processed daily during week ending July 22nd of 2022, but 3.3% less than the 17,034,000 barrels that were being refined during the prepandemic week ending July 19th, 2019, when our refinery utilization rate was at 93.1%, also within the normal range 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 34,000 barrels per day to 9,488,000 barrels per day during the week ending July 21st, after our refineries' gasoline output had decreased by 584,000 barrels per day during the prior week. This week’s gasoline production was 1.8% less than the 9,658,000 barrels of gasoline that were being produced daily over the same week of last year, and 6.0% less than the gasoline production of 10,089,000 barrels per day during the prepandemic week ending July 19th, 2019. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 251,000 barrels per day to 5,032,000 barrels per day, after our distillates output had decreased by 54,000 barrels per day during the prior week. With that decrease, our distillates output was 4.6% less than the 5,009,000 barrels of distillates that were being produced daily during the week ending July 22nd of 2022, and was 8.4% less than the 5,219,000 barrels of distillates that were being produced daily during the week ending July 19th, 2019...
With this week's decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the seventeenth time in twenty-three weeks, decreasing by 786,000 barrels to 217,600,000 barrels during the week ending July 21st, after our gasoline inventories had decreased by 1,066,000 barrels during the prior week. Our gasoline supplies fell again this week because the amount of gasoline supplied to US users rose by 84,000 barrels per day to 8,939,000 barrels per day, wwhile our imports of gasoline rose by 37,000 barrels per day to 754000 barrels per day and our exports of gasoline fell by 78,000 barrels per day to 995,000 barrels per day.. After seventeen gasoline inventory decreases over the past twenty-three weeks, our gasoline supplies were 3.3% below last July 22nd’s gasoline inventories of 225,131,000 barrels, and still about 7% below the five year average of our gasoline supplies for this time of the year…
Meanwhile, with this week's decrease in our distillates production, our supplies of distillate fuels decreased for the eleventh time in twenty weeks, falling by 245,000 barrels to 117,949,000 barrels during the week ending July 21st, after our distillates supplies had increased by just 13,000 barrels during the prior week. Our distillates supplies fell this week as the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 49,000 barrels per day to 3,718,000 barrels per day, and even as our exports of distillates fell by 166,000 barrels per day to 1,258,000 barrels per day while our imports of distillates rose by 97,000 barrels per day to 160,000 barrels per day.....With 34 inventory increases over the past sixty-two weeks, our distillates supplies at the end of the week were 5.6% above the 111,724,000 barrels of distillates that we had in storage on July 22nd of 2022, but are still about 14% below the five year average of our distillates inventories for this time of the year...
Finally, with the big increase in our oil exports, our commercial supplies of crude oil in storage fell for the 13th time in 30 weeks and for the 24th time in the past year, decreasing by 600,000 barrels over the week, from 457,420,000 barrels on July 14th to 456,820,000 barrels on July 21st, after our commercial crude supplies had decreased by 708,000 barrels over the prior week. With those modest decreases, our commercial crude oil inventories are now about 2% above the most recent five-year average of commercial oil supplies for this time of year, and remain about 32% above the average of our available crude oil stocks as of the third week of July 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, only to jump again following the Christmas 2022 refinery freeze offs, our commercial crude supplies as of this July 21st were 8.2% more than the 422,086,000 barrels of oil we had in commercial storage on July 22nd of 2022, and were 4.9% more than the 435,598,000 barrels of oil that we still had in storage on July 23rd of 2021, but were 13.1% less than the 525,969,000 barrels of oil we had in commercial storage on July 24th of 2020, after early pandemic precautions had left a lot of oil unused…
This Week's Rig Count
The number of drilling rigs active in the US decreased for the twelfth time in thirteen weeks during the week ending July 28th, and are now 16.3% below the prepandemic rig count, despite increasing ninety-six times during the 123 weeks of the post pandemic recovery... Baker Hughes reported that the total count of rotary rigs drilling in the US fell by 5 rigs to 664 rigs over the past week, which was 103 fewer rigs than the 767 rigs that were in use as of the July 29th report of 2022, and was also 1,265 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 was down by one to 529 oil rigs during the past week, after the number of rigs targeting oil had decreased by seven rigs during the prior week, leaving 76 fewer oil rigs active now than were running a year ago, as they now amount to just 32.9% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, while they are now down 22.5% from the prepandemic oil rig count of 683….at the same time, the number of drilling rigs targeting natural gas bearing formations fell by 3 to 128 natural gas rigs, which left natural gas rigs down by 29 from the 157 natural gas rigs that were drilling during the same week of 2022, as they now amount to less than 8.0% 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 reports that seven rigs they've labeled as "miscellaneous" continued drilling this week, down from 8 such "miscellaneous" rigs last week...legacy miscellaneous rigs operating this week included a vertical rig targeting the Marcellus at between 10,000 and 15,000 feet in Monongalia county West Virginia; a directional rig drilling to between 10,000 and 15,000 feet into a formation in Beaver county Utah, a vertical rig drilling to between 5,000 and 10,000 feet also in Beaver county Utah, 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 vertical rig drilling to more than 15,000 feet into a formation in Lincoln county Wyoming, also into a formation unnamed by Baker Hughes. .the miscellaneous rig shut down this week was a directional rig that had been drilling to between 5,000 and 10,000 feet into a formation in Pershing county Nevada, while the directional rig drilling to more than 15,000 feet into Keathley Canyon, offshore from Louisiana was relabeled as an oil rig this week...at the same time, a miscellaneous horizontal rig began drilling to more than 15,000 feet into the Williston basin in Dunn county, North Dakota, this week... We've recently learned that the deeper Beaver county Utah well is for a utility scale geothermal project, and we suspect that's also the case with shallower Beaver county well and the drilling in Hawaii...in the past we've also identified various "miscellaneous" rig activity as being for exploration rather than production and for carbon dioxide storage...
The offshore rig count in the Gulf of Mexico was up by one to 19 rigs this week, and included 17 rigs drilling for oil in Louisiana's offshore waters, and two drilling for oil in Texas waters....the Gulf rig count is now up by 4 from the 15 Gulf rigs running a year ago, when all 15 Gulf rigs were drilling for oil offshore from Louisiana…while there are no rigs drilling off our other shores this week, there were two rigs drilling offshore from Alaska during the same week a year ago, so the national total of 19 rigs drilling offshore is thus up by 2 rigs from the national offshore count of 17 a year ago..
In addition to rigs drilling offshore, there are now five inland water based deployed this week, all in Louisiana...the new inland water rig is a directional rig drilling for oil at a depth of between 10,000 and 15,000 feet in Lafourche Parish; legacy inland waters rigs include a directional rig drilling for oil at a depth of between 10,000 and 15,000 feet through an inland body of water in Saint Mary Parish; a directional rig drilling for oil at a depth of between 10,000 and 15,000 feet in Vermilion Parish, a directional rig drilling for oil at a depth of less than 5,000 feet on inland waters in Lafourche Parish, and a directional rig drilling for oil at over 15,000 feet through an inland body of water in Terrebonne Parish Louisiana....a year ago, there were also four such rigs drilling on inland waters...
The count of active horizontal drilling rigs was down by 8 to 592 horizontal rigs this week, which was also 105 fewer rigs than the 697 horizontal rigs that were in use in the US on July 29th of last year, and only 43.1% of the record 1,374 horizontal rigs that were drilling on November 21st of 2014…on the other hand, the directional rig count was up by two to 53 directional rigs this week, while those were up by 15 from the 38 directional rigs that were operating during the same week a year ago.....at the same time, the vertical rig count was up by one to 19 vertical rigs this week, but those were down by 13 from the 32 vertical rigs that were in use on July 29th 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 July 28th, the second column shows the change in the number of working rigs between last week’s count (July 21st) and this week’s (July 28th) count, the third column shows last week’s July 21st 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 29th of July, 2022...
Louisiana picked up two rigs with the addition of the inland water rig in Lafourche Parish and the oil rig offshore; while the state's land rig count was unchanged at 29, with 27 of those in the Haynesville shale region in the northwest corner of the state... checking the Rigs by State file at Baker Hughes for the changes in Texas Permian, where all of the week's activity involved oil rigs, we find that there were three rigs pulled out of Texas Oil District 7C, which overlies the southern Permian Midland, that another rig was pulled out of Texas Oil District 7B, which includes a county or two over the far eastern Permian Midland, while at the same time 6 rigs were added in Texas Oil District 8, which overlies the core Permian Delaware...combined, those suggest an increase of two rigs in the Texas Permian, while the national Permian count was up by 1, which means that at least one of the two rigs removed from New Mexico had be drilling in the far west Permian Delaware, in the southeast corner of that state...it's also possible both were, if one of the Texas rig removals had not been targeting the Permian..
elsewhere in Texas, there were two rigs pulled out of Texas Oil District 1, which accounts for the drop of two oil rigs in the Eagle Ford shale; while another oil rig was pulled out of Texas Oil District 5, which accounts for the last oil rig that had been working the Barnett shale...there was also a rig added in the panhandle in Texas Oil District 10, but since the Granite Wash rig count is unchanged, it's likely that rig was targeting a basin not tracked by Baker Hughes
in other states, it appears that the rigs pulled out of Oklahoma and Colorado had been targeting basins not tracked by Baker Hughes, unless we had a switch such that a Niobrara rig was pulled from Colorado and added in Wyoming, in which case Wyoming would have shed another rig...meanwhile, natural gas rigs were pulled out of Pennsylvania's Marcellus and from Ohio's Utica, and from one other basin not tracked by Baker Hughes....
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Opinion: State should not allow fracking in Salt Fork State Park The Daily Jeffersonian -- The Ohio Oil and Gas Commission, empowered by state law, appears set to allow fracking in Ohio’s state parks. Salt Fork is the first and primary target for fracking companies. Environmentalists will tell you about the obvious threats to Guernsey County’s drinking water, air and ecosystem. However, you don’t have to believe in climate change or anti-frack science to oppose the plans to frack Salt Fork. This is about more than the environment. This is about eastern Ohio standing its ground and protecting its precious resources. Fracking has financially changed the lives of a few in eastern Ohio and Guernsey County. I don’t think one cent of financial gain is worth the devastation to the environment. The beauty of this movement is that you do not have to agree with me about the environment to fight with me and Save Ohio Parks (saveohioparks.org). Save Ohio Parks fundamentally believes fracking publicly-owned lands is wrong. Whether you are concerned about the environment or just want to have a nearby natural oasis untouched by human development, it doesn’t matter to Save Ohio Parks. You can join the fight. You can show the rest of the state eastern Ohio is tired of being treated as a money extraction tool for the rest of the state. The state legislature blessed fracking on public lands knowing that almost 100% of the fracking would take place east of Interstate 77. Most of the supporters in Columbus (and Oklahoma and Texas) will never have to see the rigs and truck traffic. What they knew was tax dollars would come back to for the big cities and wealthy counties to distribute to themselves. State leaders have made it clear they do not wish to invest in the future of eastern Ohio. The state was integral in pushing to have the Intel microchip plant placed in central Ohio. The state has created a plan to build out a vast network of EV charging stations. The state seems to know where the future of energy is headed: electrification. Despite this, the state has created a plan to continue oil and gas extraction in eastern Ohio without offering any plan for transitioning eastern Ohio into the future economy. If this sounds familiar, it should. It’s the playbook that left rural Appalachian communities devalued, deforested, and economically devastated when the world transitioned away from coal. If eastern Ohio wants to prevent a repeat of history, now is the time to act. Now is the time for eastern Ohio to demand it be included in the plan for the future and not left behind again. Now is the time for eastern Ohio to demand that its beautiful natural resources - - our state parks, forests, wildlife areas, and public lands - - remain natural oases for the people to enjoy, untouched by an unregulated industry that leaves a trail of clear-cutting, toxic chemicals, and more plastic in its wake.
Columbia Gas of Ohio to start work on new natural gas pipeline on W. 130th Street — Columbia Gas of Ohio is beginning work on a new natural gas pipeline on West 130th Street that will affect residents of Brunswick, Hinckley Township and North Royalton. Columbia Gas of Ohio Public Affairs Manager Ben Cutler gave an update on the project to Brunswick City Council on Monday. The new system will be constructed between Marland Drive and Boston Road on West 130th Street. He said there will be above-ground infrastructure on Marland Drive and Crestview Drive in Hinckley Township only. This week there will be small maintenance of traffic impacts, and next week the installation phase of the project is intended to begin, Cutler said. It will last approximately four months, and crews will be working 10 hours a day for six days a week. There will be rolling work zones in 500-foot increments, he said. In these sections, one lane of West 130th Street will be closed, and there will be flaggers. Rather than start at the northern or southern section of the project, construction will begin at Crestview Elementary School, which is a part of the Brunswick Schools district. Cutler said the goal is to get as much work done in that area before school starts again on Aug. 23, and then learn and work around the school’s peak times and bus schedule. “If we can clear even 1,000 feet or 2,000 feet in front of the school, that opens up parent pickup and drop-off," he said. Columbia Gas will pave both sides of the road within the project’s bounds, Cutler said. The plan is to do so before the asphalt plants close in the winter, but if that is not possible, the road can be temporarily restored and maintained throughout the winter and paved in the spring. Columbia Gas is building a new system because the upstream supplier is taking the current line in the area out of service, he said. In February, the use of the line will be changed, so a new system is intended to be in place before then to continue service to residents on cold winter days.
Biosurfactant Selected for Utica Shale Completion Program After Outperforming Top Surfactants in Third-Party Testing -- Marietta-Ohio based Utica Resource Operating LLC has selected Locus Bio-Energy® (Locus BE) to supply a novel, biosurfactant-based solution for a multi-well completion program. The selection for Ohio’s Utica shale play of the Appalachian basin was made based on a combination of cost and performance. Results from Utica’s third-party qualification testing on 10 surfactants showed that Locus BE’s SUSTAIN® line of multifunctional, sustainable biosurfactant-based hydraulic fracturing surfactants outperformed other established competitive surfactants at test loadings of both 1 and 0.5 gallon per 1,000 gallons of fluid (gpt). Testing began with Locus BE’s technology team in The Woodlands, Texas, conducting an initial surfactant assessment. Representative crude oil and produced water samples supplied by Utica Resource were used to identify the best performing product from the SUSTAIN line of biosurfactant-based solutions. Utica Resource Operating invited Locus to submit samples of SUSTAIN SF101 to participate in a larger surfactant third-party lab performance evaluation. The results were used to guide their selection process for the completion program. SUSTAIN SF101 was one of 10 surfactants submitted for independent, third-party testing. Its performance was tested versus surfactants provided by established surfactant suppliers in the industry, including incumbent chemistries Utica Resource has used historically. SUSTAIN SF101 was the top performer at a loading of 0.5 gpt of fluid. The performance metrics used for selection demonstrated the ability to mobilize more oil.
Study finds radioactive materials in Pa. waterways near treatment plants - A new study found higher levels of radioactive materials in rivers and streams near municipal wastewater treatment plants that handled runoff from landfills that accept fracking waste from Pennsylvania. Over 30 landfills in the state accept fracking waste like drill cuttings. The authors of the study followed what happens to the liquid waste from rainwater that trickles through these landfills. That liquid waste, called leachate, often goes to municipal wastewater facilities.Sediment in waterways downstream of those facilities was higher in radium, a radioactive material found in the Marcellus shale, than sediment upstream of the plants. “There were increases of two to four times the background level of radium in the sediment,” said Dan Bain, associate professor of geology and environmental science at the University of Pittsburgh and one of the study’s co-authors.The study appeared in the journal “Ecological Indicators.” While landfills must test leachate for radium and other markers of oil and gas waste, wastewater treatment plants don’t. He said the state should make the treatment plants test for markers of oil and gas waste, including radioactivity, but also salts and heavy metals associated with drilling wastes, to ensure they aren’t just passing pollutants into the environment. “We need to have a safeguard so we can say, okay, you need to do something else with that leachate,” he said. “It’s not acceptable to discharge it to waterways.” Fracking a well in the Marcellus or Utica shale creates thousands of tons of drill cuttings — basically, dirt and rocks excavated to build the well. Those cuttings are high in naturally occurring radioactive materials. A 2011 analysis by federal scientists found liquid waste from Marcellus wells had concentrations of radium roughly 40 times what the federal Nuclear Regulatory Commission classifies as “hazardous” or “radioactive” waste.But a loophole in federal law means oil and gas waste is not considered hazardous and can be disposed of at a variety of landfills, though some states have tighter requirements.Study co-author John Stolz, director of the Center for Environmental Research and Education at Duquesne University, said this waste could accrue over time in landfills, causing problems down the road.“They are turning these sanitary landfills into toxic waste dumps that are going to need remediation in the future because of the build-up of this material,” Stolz said. The paper also found large data gaps in oil and gas waste reports in Pennsylvania and surrounding states. The researchers could not find reports for more than 800,000 tons of fracking waste sent to landfills in Pennsylvania, New York, and Ohio. “Reporting of [oil and gas] waste receipt in landfill reports was inconsistent and incomplete,” the study found. This could make it difficult to assess environmental impacts, Stolz said. “It’s a problem because you really need to know how much of this stuff is being taken,” Stolz said. “If there’s more and more of this waste…it’s going to be around for a long time.”
Mariner East pipeline fined for environmental violations | StateImpact Pennsylvania – NPR -Sunoco Pipeline will pay $660,000 for environmental violations that occurred between 2018 and 2021, according to Pennsylvania’s Department of Environmental Protection.The penalties stem from water contamination across the state caused by the company’s Mariner East pipeline construction project. The pipeline carries volatile natural gas liquids from Ohio and western Pennsylvania to Delaware County.The project has been met with pushback from residents, and has faced multiple legal challenges.Last year, Energy Transfer, the parent company of Sunoco, was held criminally responsible for dozens of charges related to Mariner East and the 2018 explosion of the Revolution pipeline near Pittsburgh. Energy Transfer pleaded no contest to the charges, which covered damage to drinking water, wetlands, and waterways across the state during five years of construction.At the time, the project had received more than 120 violations. DEP documents did not specify how many violations were covered by the $660,000 consent agreement.“Under Governor Shapiro’s leadership, we will continue to hold companies accountable for their actions and protect Pennsylvanians’ constitutional right to clean air and water,” said Department of Environmental Protection Secretary Richard Negrin in a statement.Energy Transfer did not immediately respond to a request for comment.DEP said Sunoco will pay two separate civil penalties for numerous violations of the Clean Streams Law and the Dam Safety and Encroachments Act.One penalty will resolve civil penalty liability for various violations across the state, including discharging grout and drilling fluids into waterways, which impacted private wells, and constructing an impoundment and swales without a permit.Another penalty will resolve violations for releasing sediment into wetlands, Valley Creek, and Ship Road Run in West Whiteland Township, Chester County. That area is also where sinkholes have appeared as work on the line occurred there.Sunoco also placed concrete into wetlands and waterways, failed to obtain specific permits, and didn’t take the appropriate measures to prevent pollution, DEP said.Pipeline opponent Ginny Kerslake of Chester County said she believes the fines are insignificant. Since construction began, Energy Transfer has paid over $20 million in fines and assessments.“This is just another example of pay to pollute on this project,” she said.Kerslake and others spoke out against the contamination in West Whiteland Township, alleging DEP failed to take action against the company.“These violations were allowed to continue by the DEP over and over again,” Kerslake said. “If we had not been there documenting all of this and pushing the DEP, none of these notices would have been issued.”
$5M from Shell to be used to monitor air in wake of violations - The Pennsylvania Department of Environmental Protection just announced finalized guidelines for what the office says is one of its largest environmental mitigation funds ever — $5 million. The funds come from a settlement with Shell Chemical Appalachia, LLC over air quality volitions at its Beaver County ethane cracker. In May, Shell agreed to pay $10 million for polluting the air around its cracker plant, which processes natural gas to make the base components of plastics. Half of that settlement was used to create the new mitigation fund.A recently released document outlines DEP guidelines for how the money will be handled and spent. The fund is meant for nonprofit-driven projects designed to improve the environment, health, or quality-of-life in Beaver County. The protocol says at least one project should improve air-quality testing near the plant. Another must focus on community education, so people in the region can come up with ways to improve the lives of those who live near the plant.“The Consent Order and Agreement includes a strong recommendation to fund a project that provides additional and independent air monitoring,” said DEP Secretary Rich Negrin in a press release. “We’re encouraged by the community feedback we received supporting that and the steering committee incorporated it in the final protocol.”The DEP put together a 17-member steering committee earlier this month to develop the rules. Committee members include representatives from Shell, DEP and members of local community groups like RiverWise and Beaver County Marcellus Awareness Community. That group must now create an implementation plan.
The White House is pushing to reduce methane emissions from oil and gas wells - Pittsburgh Post-Gazette - — The White House on Wednesday began a new effort to crack down on methane emissions, a major contributor to climate change. The first-ever White House Methane Summit came at a time of severe heat across much of the U.S., including in Pittsburgh, where temperatures are expected to approach or exceed 90 degrees until the weekend. President Joe Biden established a new methane task force to work with state and local officials to detect leaks and reduce emissions. The White House said billions of dollars of natural gas are lost to leaks every year.In Pennsylvania, methane accounts for 12% of all greenhouse gas emissions. It is 84 times more potent than carbon dioxide at trapping heat in the atmosphere over a 20 year period, which scientists say is a critical time to prevent irreparable shifts in the global climate.Methane emissions have risen in Pennsylvania since companies began drilling for natural gas in the Marcellus Shale and Utica Shale, albeit at a much slower rate than production itself, according to the latest state greenhouse gas inventory, which includes data from 2005 through 2019.The amount of methane estimated to come from oil and gas production, transmission and distribution rose from 8.75 million tons of carbon dioxide-equivalent to 12.32 million tons during that period. The industry is the biggest contributor to methane emissions in the state, with coal mining a close second at 11.91 million tons of carbon dioxide-equivalent equivalent in 2019.The American Petroleum Institute, the trade group for the oil and gas industry, said the industry already was reducing emissions.“Tackling a challenge of this scale requires not just will and words, but action,” the group said in a statement. “We are disappointed that the industries driving the most reductions in methane emissions, including the natural gas and oil industry, were not included. API’s members are investing in advanced technology to detect and mitigate emissions.”The federal task force will use new technologies to identify leaks and has $4.7 billion set aside from the bipartisan infrastructure law to address the problem, including plugging abandoned wells. To date, about 3,000 such wells have been plugged, the White House said.Pennsylvania is one of the states eligible for federal funding to help plug wells and was set to receive $104 million from Washington last year. In first applying for federal help, the state reported 26,908 documented so-called orphan wells and estimated it would cost $1.8 billion to fix the problem.The state had estimated there are several hundred thousand in total, but it doesn’t know where most are located or how much methane they might be leaking into the atmosphere.
31 New Shale Well Permits Issued for PA-OH-WV Jul 17-23 | Marcellus Drilling News --New shale permits issued for Jul 17-23 in the Marcellus/Utica saw a nice increase. There were 31 new permits issued last week, up from the 23 issued the previous week. Last week’s permit tally included 13 new permits in Pennsylvania, 8 new permits in Ohio, and 10 new permits in West Virginia. The top permittee for the week was Coterra Energy, receiving 8 permits in Susquehanna County, PA. Coming in at a close second was Antero Resources, with 6 permits in Ritchie County, WV. ALLEGHENY COUNTY | ANTERO RESOURCES | ASCENT RESOURCES | COLUMBIANA COUNTY | COTERRA ENERGY (CABOT O&G) | ENCINO ENERGY | ENERGY COMPANIES |GUERNSEY COUNTY | INFLECTION ENERGY | LYCOMING COUNTY | OHIO COUNTY | RANGE RESOURCES CORP | RITCHIE COUNTY | SENECA RESOURCES | SOUTHWESTERN ENERGY | SUSQUEHANNA COUNTY | TIOGA COUNTY (PA)
U.S. Supreme Court lifts stays on Mountain Valley Pipeline - Virginia Mercury -- Work on the Mountain Valley Pipeline project is allowed to continue after U.S. Supreme Court Chief Justice John Roberts on Thursday lifted two stays, or pauses, imposed by a lower court in response to challenges from environmental groups. The lifting of the stays was issued while the Richmond-based U.S. 4th Circuit Court of Appeals was hearing oral arguments on whether provisions of the federal Fiscal Responsibility Act ordering the pipeline’s completion were constitutional.Mountain Valley Pipeline, which got initial approval from the Federal Energy Regulatory Commission in 2017, has been embroiled for years in legal challenges from environmental groups like the Sierra Club, Wilderness Society and Appalachian Voices over issues including impacts to endangered species and waterways.The over 300-mile project is intended to deliver natural gas from the Marcellus and Utica shale fields through West Virginia to southern Virginia. The legal challenges have stymied completion of the project, which the company says is 94% done. Environmental groups dispute that figure.The U.S. 4th Circuit Court of Appeals has consistently overturned permits issued to Mountain Valley Pipeline by the federal government over threats to wildlife and erosion and sediment harms.But in June, Congress passed the Fiscal Responsibility Act with a provision, introduced by West Virginia Sen. Joe Manchin, that directed federal agencies to approve the pipeline’s permits within 21 days. The law also stripped jurisdictional authority from the U.S. 4th Circuit Court of Appeals and transferred any legal challenges to the D.C. Circuit. Following passage of the FRA, Mountain Valley filed a motion to dismiss the legal challenges pending in the 4th Circuit, citing the authority given in the federal law. Numerous environmental groups then challenged the motion to dismiss, arguing the provision in the Fiscal Responsibility Act was unconstitutional because its stripping of authority from the courts breached the principle of the separation of powers of government.On Thursday, MVP attorney Donald B. Verrilli, Jr. argued before a three-judge panel on the 4th Circuit that precedent set in Klein v. United Statesallowed Congress to alter a court’s jurisdictional authority if there is a substantive change in the law. Verrilli argued that the Fiscal Responsibility Act provision granting Mountain Valley the permits irrespective of current law was such a substantive change.“It said it is approved,” Verrilli said.But the environmental groups argued that Klein found that Congress cannot dictate the winner of court cases.“There has to be a line, and, respectfully, that line has been crossed,” said Kym Meyer, litigation director at the Southern Environmental Law Center.
Supreme Court reinstates major gas pipeline in blow to environmental groups -The Supreme Court struck down a lower court ruling from earlier this month that blocked construction of the 303-mile Mountain Valley Pipeline (MVP) from proceeding.In a short, unsigned order issued Thursday morning, the Supreme Court vacated the July 10 stay orders from the U.S. 4th Circuit Court of Appeals, in which the lower court sided with plaintiffs — environmental groups Wilderness Society and Appalachian Voices, which had sued to stop the pipeline construction. The 4th Circuit ruling was opposed by the Biden administration, bipartisan lawmakers and the fossil fuel industry."Whatever benefit respondents or the court of appeals might believe would be gained by having the agencies again reconsider the challenged actions, Congress has determined that further reconsideration is unwarranted and has prioritized MVP’s 'timely' completion over interests addressed by any other federal statutes," the Department of Justice wrote in an amicus brief to the Supreme Court last week. "That judgment is for Congress alone," the brief continued.The Department of Justice brief was one of numerous briefs filed in the case. Opponents of the 4th Circuit ruling pointed to the Fiscal Responsibility Act, the recent bipartisan debt limit bill President Biden signed in early June, which green-lit all permits for the MVP project.The debt limit bill also shifted judicial review jurisdiction from the 4th Circuit, which has a lengthy track record of siding with environmental groups, to the U.S. District of Columbia Circuit Court of Appeals. Days after the lower court ruling, on July 14, the pipeline's developer asked the Supreme Court to vacate the stay. The high court gave plaintiffs until Tuesday to file a response."The Fourth Circuit judges are not supreme rulers and lawful orders issued by the legislative and executive branches must be followed," GOP Chief Deputy Whip Guy Reschenthaler, R-Pa., told Fox News Digital on July 19. "Congress was well within its power to restart the Mountain Valley Pipeline construction and usher in a new era of energy independence for the region." "Instead of halting the pipeline, I urge the Supreme Court to plug up the ludicrous activism seeping out of the lower court so American families can enjoy lower energy costs, substantial land royalties, and most importantly – law and order in America," he added.
Supreme Court clears the way for pipeline construction favored by Manchin -- The Supreme Court on Thursday cleared the way to complete a controversial Mid-Atlantic natural gas pipeline, agreeing that Congress greenlighted the project as part of a behind-the-scenes deal to raise the nation’s debt ceiling. The justices lifted a lower court’s halt on the remaining construction of the Mountain Valley Pipeline, which will stretch 300 miles through rugged mountains in West Virginia and Virginia. Environmentalists claim the pipeline threatens lands, water resources and endangered species along the way, and have found some success blocking final approval at the U.S. Court of Appeals for the 4th Circuit in Richmond. The Supreme Court did not detail its reasoning or completely dismiss the challenges. But it indicated “that determination is without prejudice to further consideration in light of subsequent developments,” meaning it might do so in the future. Jamie Williams, President of the Wilderness Society, said in a statement that the group “will continue to argue that Congress’ greenlight of this dangerous pipeline was unconstitutional, and will exhaust every effort to stop it.” Much of the pipeline is already built, but legal challenges have put construction on hold since 2021. During the tense negotiations in the spring to keep the nation from defaulting on its debts, House Republicans and Democratic Sen. Joe Manchin III of West Virginia wrangled a deal with the Biden administration to cut the courts out of the process. Manchin said in a statement that the pipeline could move toward completion. “I am relieved that the highest court in the land has upheld the law Congress passed and the President signed,” he said. The bill at issue acted in three ways. It ratified and approved “all federal authorizations” for the project. It expressly stripped courts of jurisdiction to review “any action” by a federal agency granting authorization for the construction and operation of the pipeline. And it said that any claim about the constitutionality of the law could be heard only by the U.S. Court of Appeals for the D.C. Circuit. Nonetheless, a 4th Circuit panel on July 10 issued a stay on construction, which runs through the Jefferson National Forest in southwest Virginia. The panel of judges did not provide their reasoning, but environmentalists had argued that the action by Congress improperly cut out the judiciary and violated separation of powers.
The Supreme Court approves controversial fossil fuel pipeline construction — with Biden's support -- The Supreme Court on Thursday ruled in favor of allowing construction of a gas pipeline that will further exacerbate climate change, which is largely caused by the greenhouse gases emitted by burning fossil fuels. Even though the Mountain Valley Pipeline is staunchly opposed by climate activists, the Supreme Court, without elaboration, granted an emergency request to begin construction from the pipeline's backers with the support of Congress — and President Joe Biden himself.Biden's support of the Mountain Valley Pipeline is seemingly at odds with his larger climate change policy. Among other things,Biden has committed the United States to reducing greenhouse gas emissions by 50% to 52% below its 2005 levels by 2035, and then altogether by 2050. He has also advocated accelerating the development of green technology, and his Inflation Reduction Act spends more than $391 billion to reduce carbon emissions. Yet that latter piece of legislation helps explain Biden's support for the Mountain Valley Pipeline; the key vote was cast by Sen. Joe Manchin of West Virginia, a Democrat who advocated for the pipeline. Because it will run from West Virginia's Marcellus and Utica shale areas to Virginia, the 300-mile gas pipeline is expected to create jobs and stimulate industry in Manchin's home state. It will also destroy national forest land and waterways in the process."The Supreme Court has spoken and this decision to let construction of the Mountain Valley Pipeline move forward again is the correct one," Manchin's office said in a statement. "I am relieved that the highest court in the land has upheld the law Congress passed and the President signed."
MVP Southgate Extension Request Gets Mixed Reception at FERC - Southward Extension of Project Tied up with Mainline Litigation - Mountain Valley Pipeline elicited written protests for asking FERC for a three-year extension to build the Southgate extension of the pipeline.
TC Energy's Columbia Gas Pipeline Explodes Near Virginia's Interstate 81 — A gas line explosion occurred near Strasburg, Virginia, in rural western Virginia, not far from Interstate 81. The incident took place on Tuesday morning and was promptly responded to by local officials, according to The Associated Press. According to TC Energy, operators of the Columbia Gas Transmission Pipeline were notified of a fire after a pressure drop was detected along the pipeline around 8:40 a.m. As a precautionary measure, the section of the pipeline near Strasburg was immediately isolated. Eyewitnesses reported seeing the explosion in a field off Interstate 81 shortly after 8 a.m. The Shenandoah County Sheriff's Office confirmed the location of the incident as near Battlefield Road and Copp Road. There were no reported injuries resulting from the explosion, and no structures were threatened. The interstate had to be briefly closed, but emergency services managed to contain the fire effectively. The gas line explosion comes just one day after the company's announcement of a significant sale to Global Infrastructure Partners (GIP). TC Energy had agreed to divest a 40% interest in both its Columbia Gas Transmission and Columbia Gulf Transmission pipelines for a staggering C$5.2 billion ($3.95 billion) as part of its asset reduction strategy to alleviate debt and fund various projects. The Columbia Gas Transmission and Columbia Gulf Transmission pipelines have been vital in delivering a substantial portion of daily U.S. natural gas demand, including a significant portion of the country's LNG export supply. Nevertheless, as TC Energy navigates this challenging situation, it must ensure the safety and reliability of its pipelines, especially as it continues to play a crucial role in the nation's energy infrastructure. Following the incident, TC Energy has been cooperating with local authorities to conduct a thorough investigation into the cause of the gas line explosion. Strasburg, where the incident occurred, is situated approximately 80 miles (129 kilometers) west of Washington, D.C. As more information becomes available, updates on the investigation will likely be released to the public.
TC Energy to Spin Off Oil Pipeline Business, Focus on Natural Gas (Reuters) — North American pipeline company TC Energy, which has been seeking to sell assets and cut debt, said on Thursday it would spin off its oil pipeline business and focus on transporting natural gas, saying the businesses would be more valuable apart. TC said it expected to complete the spinoff in the second half of 2024. Calgary, Alberta-based TC previously disclosed plans to sell assets this year to reduce debt and fund its other projects such as the Coastal GasLink pipeline in British Columbia, which is grappling with major cost overruns. On Monday it said it would divest a 40% interest in its Columbia Gas Transmission and Columbia Gulf Transmission pipelines for C$5.2 billion ($3.95 billion) to Global Infrastructure Partners (GIP). TC's liquids business is best known for its Keystone pipeline, an oil conduit from Alberta to U.S. refineries that leaked in Kansas late last year. TC CEO Francois Poirier said in a statement the split would generate greater shareholder value by allowing each company to focus on its own growth and operations, while stabilizing TC's balance sheet. The company decided on the spinoff after a two-year review. Along with natural gas, TC's business will include its interests in power generation and energy storage, along with projects related to the energy transition such as carbon transportation and hydrogen. Bevin Wirzba, currently executive vice-president of TC's Canadian natural gas and liquids pipelines, will be CEO of the liquids company. TC also reported adjusted second-quarter profit of C$1 billion ($756.32 million) or 96 Canadian cents per share, compared to C$1 billion or C$1 per share a year earlier.
TC Energy Sells 40% Stake in Columbia Gas Transmission Pipelines to GIP for $4 Billion (Reuters) — Canada's TC Energy, best known for its Keystone oil pipeline, will divest a 40% interest in its Columbia Gas Transmission and Columbia Gulf Transmission pipelines for C$5.2 billion ($3.95 billion) to Global Infrastructure Partners (GIP). The Calgary, Alberta-based company has said it aimed to sell assets this year to reduce debt and fund other projects such as the Coastal GasLink pipeline in British Columbia, which is grappling with major cost overruns. TC was on course to deliver on its target to divest C$5 billion of assets by the end of the year, CEO François Poirier said in April. Columbia Gas and Columbia Gulf will be held in a new joint venture partnership and TC will remain the operator under the deal, which is expected to close in the fourth quarter. TC and GIP will jointly invest in annual maintenance and modernization of the transmission systems, the company said, with GIP funding 40% share of gross capital expenditures, which are expected to average more than C$1.3 billion annually over the next three years. The pipelines span more than 15,000 miles and deliver a substantial portion of daily U.S. natural gas demand, including about 20% of U.S. LNG export supply, according to TC Energy. GIP currently manages $100 billion in assets, as per its website. Last month, the firm partnered with TotalEnergies and NextDecade to become a majority investor in Phase 1 of Rio Grande LNG Project.
LG&E revising suspended permit for Bullitt County gas pipeline - Last year federal officials suspended Louisville Gas & Electric’s permit to build the pipeline through Bullitt County because utility contractors failed to complete a cave survey along the proposed path, even though it’s critical habitat for endangered bats.More than a year later, officials say LG&E and Kentucky Utilities are still revising a biological assessment that explores the pipeline’s potential impacts to threatened and endangered species.“We anticipate that will be submitted soon. Timing for construction has not yet been determined,” said LG&E spokesperson Natasha Collins in an email.Earlier this year, a Bullitt County judge ruled LG&E can seize conservation lands in Bernheim Arboretum and Research Forest to build a natural gas pipeline, but construction can’t move forward without a permit.LG&E officials say the pipeline is necessary to expand natural gas capacity and reliability in northern Bullitt County. Opponents say the utility has repeatedly failed to address the full extent of the pipeline’s environmental impacts.The nearly 12-mile-long gas pipeline through Bullitt County would remove about 40 acres of forest including roost trees for the endangered northern long-eared bat and the Indiana bat. It would also cross at least six major waterways and impact wetlands, sinkholes and habitat for other threatened and endangered species, according to an LG&E stormwater pollution prevention plan.LG&E’s revised assessment will survey the pipeline’s path for critical habitat for endangered species including the Kentucky glade cress, several freshwater mussel species and the Indiana bat and the northern long-eared bat, according to the U.S. Fish and Wildlife Service.The utility will then submit their findings to the U.S. Fish and Wildlife Service, which will prepare a biological opinion on the project. The final decision will be made by the U.S. Army Corps of Engineers. They could choose to reinstate, modify, or revoke the suspended Nationwide Permit 12, which is a national permit necessary to build any new oil and gas pipelines.
Enterprise Starts Up Poseidon Gas Plant in Midland Basin Enterprise Products Partners L.P. has started operation at its Poseidon cryogenic natural gas processing plant in Glasscock County, Texas, the company said in a news release. The new plant, which is Enterprise’s sixth in the Midland Basin, has a nameplate capacity of 300 million cubic feet per day (MMcfd) and can extract more than 40,000 barrels per day (bpd) of natural gas liquids (NGLs), the company said. Enterprise said it can now process 1.3 billion cubic feet per day (Bcfd) of natural gas and extract more than 185,000 bpd of NGLs in the Midland Basin with the addition of the Poseidon plant, which is supported by long-term acreage dedication agreements. “For the foreseeable future, the Permian Basin is expected to drive domestic production of crude oil, natural gas, and NGLs, and the expansion of our midstream network will support producers as they meet growing demand in the U.S. and internationally. The Poseidon gas plant is among $3.8 billion of major growth projects expected to begin service and generate new sources of cash flow by the end of 2023.” Meanwhile, Enterprise is currently constructing its Leonidas cryogenic natural gas processing plant in the Midland Basin, located in Midland County, Texas. The Leonidas plant, scheduled to begin service in the first quarter of 2024, will add another 300 MMcfd of processing capacity and more than 40,000 bpd of NGL extraction capacity, the company said. The two Midland plants represent an expansion of the assets Enterprise purchased as part of the company’s acquisition of Navitas Midstream Partners LLC in February 2022, according to the news release. Enterprise said it is also expanding its Mentone cryogenic natural gas processing facility in Loving County, Texas. The second plant is scheduled for completion in the fourth quarter of 2023, and the third plant is expected to begin service during the first quarter of 2024. These projects will increase nameplate natural gas processing capacity at Mentone by 600 MMcfd and allow the company to extract an incremental 80,000 bps of NGLs, Enterprise said. When completed, these projects in the Midland and Delaware basins will give Enterprise the capability to process 3.8 Bcfd of natural gas and extract more than 520,000 bpd of NGLs throughout the Permian Basin, Enterprise said.
US natgas prices up 2% on drop in output, hot weather forecasts (Reuters) - U.S. natural gas futures climbed about 2% on Tuesday on a drop in daily output and forecasts for the weather to remain hotter than normal through early August, especially in Texas. That price increase occurred despite forecasts for less demand over the next two weeks than previously expected. Power demand in Texas hit a record high on July 18 and will likely break that record later this week and next as homes and businesses keep their air conditioners cranked up to escape a lingering heatwave, said the Electric Reliability Council of Texas (ERCOT), the state's power grid operator. Extreme heat boosts the amount of gas burned to produce power for cooling, especially in Texas, which gets most of its electricity from gas-fired plants. In 2022, about 49% of the state's power came from gas-fired plants, with most of the rest coming from wind (22%), coal (16%), nuclear (8%) and solar (4%), federal energy data showed. Front-month gas futures for August delivery on the New York Mercantile Exchange rose 4.5 cents, or 1.7%, to settle at $2.730 per million British thermal units (mmBtu). Data provider Refinitiv said average gas output in the U.S. Lower 48 states had risen to 101.5 billion cubic feet per day (bcfd) so far in July, from 101.0 bcfd in June. That compares with a monthly record of 101.8 bcfd in May. On a daily basis, however, output was on track to drop by 3.0 bcfd to a preliminary four-month low of 98.9 bcfd on Tuesday due mostly to declines in Texas, Pennsylvania and Colorado. Analysts have noted that preliminary data is often revised later in the day. Meteorologists forecast the weather in the Lower 48 states will remain hotter than normal through at least Aug. 9. With hotter weather coming, Refinitiv forecast U.S. gas demand, including exports, would rise from 105.8 bcfd this week to 107.0 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Monday. Gas flows to the seven big U.S. LNG export plants have risen to an average of 12.8 bcfd so far in July from 11.6 bcfd in June. That is still well below the monthly record of 14.0 bcfd in April due to ongoing maintenance at several facilities, including Freeport LNG in Texas and Cheniere Energy's Sabine Pass in Louisiana. Gas was trading around $10 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $11 at the Japan Korea Marker (JKM) in Asia. That puts global gas prices down about 60% so far this year after hitting record highs in 2022 due to mild winter temperatures that left northern hemisphere storage at above-normal levels. U.S. gas futures are down about 40% so far this year.
US natgas prices drop 7% to five -week low on less hot forecasts (Reuters) - U.S. natural gas futures dropped about 7% on Thursday to a five-week low on forecasts for less demand and less hot weather over the next two weeks than previously expected. That price drop came despite a slightly smaller-than-expected storage build last week when hotter-than-normal weather boosted the amount of gas power generators burned to produce power to keep air conditioners humming. In the spot market, meanwhile, power and gas prices in some markets rose to their highest in months as homes and businesses continued to crank up their air conditioners to escape a lingering heat wave blanketing much of the country this week. That extreme heat is boosting power demand to near-record levels and stressing electric grids across the country. The U.S. Supreme Court on Thursday removed an obstacle to completing the long-delayed Mountain Valley Pipeline, dealing a blow to environmental groups opposed to the West Virginia-to-Virginia pipeline led by U.S. energy company Equitrans Midstream. Mountain Valley is key to unlocking more gas from Appalachia in Pennsylvania, West Virginia and Ohio, the nation's biggest shale gas basin. The U.S. Energy Information Administration (EIA) said utilities added 16 billion cubic feet (bcf) of gas into storage during the week ended July 21. That is a slightly less than the 19-bcf build analysts forecast in a Reuters poll and compares with an increase of 18 bcf in the same week last year and a five-year (2018-2022) average increase of 31 bcf. On its last day as the front-month, gas futures for August delivery on the New York Mercantile Exchange fell 17.3 cents, or 6.5%, to settle at $2.492 per million British thermal units (mmBtu), their lowest close since June 20. Futures for September, which will soon be the front-month, were down about 8 cents to $2.61 per mmBtu. In the spot market, next-day power prices for Thursday soared to their highest since December 2022 at the Palo Verde hub in Arizona and their highest since February 2023 at the PJM Western Hub , which covers an area from northwestern Pennsylvania to Washington, D.C. Next-day gas for Thursday at the Southern California Border nearly doubled to $12.55 per mmBtu, their highest since March 2023. Data provider Refinitiv forecast U.S. gas demand, including exports, would rise from 104.7 bcfd this week to 105.7 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Wednesday. Gas flows to the seven big U.S. LNG export plants rose to an average of 12.7 bcfd so far in July from 11.6 bcfd in June. That is still well below the monthly record of 14.0 bcfd in April due to ongoing maintenance at several facilities. On a daily basis, however, LNG feedgas fell to a preliminary two-week low of 12.2 bcfd due to recent reductions at Cheniere Energy's Sabine Pass in Louisiana and the shutdown of the Columbia pipeline to Berkshire Hathaway Energy's Cove Point in Maryland. The amount of gas flowing to Cove Point was on track to reach 0.6 bcfd on Thursday, the same as Wednesday, after dropping to 0.5 bcfd on Tuesday due to the Columbia pipe fire.
‘Vicious cycle’: Heat waves ramp up global burning of fossil fuels - There’s a big winner in the record heat waves baking the United States, China and other countries — fossil fuels. The United States is setting records for natural gas consumption this week at the power plants that keep the nation’s air conditioners humming, according to estimates from S&P Global Commodity Insights. In China, power plants are burning more coal to keep up with electricity needs, helping to feed a record pace in demand this year for the world’s largest source of carbon dioxide, the International Energy Agency said Thursday. That demand is feeding what the Paris energy watchdog calls a “vicious cycle” that further boosts world temperatures. As heat waves multiply and intensify, it creates more demand for fossil fuels, which add to the greenhouse-gas emissions that intensify extreme heat around the world. The world’s power grids are still too reliant on gas and coal, complicating efforts by the Biden administration and other governments to phase down their use. Despite climate commitments, governments face immediate imperatives to prevent power blackouts and skyrocketing energy prices to cool buildings and protect people from life-threatening conditions. “The projection for how much energy you need is higher and higher because the cooling needs to go up,” The problem could grow as the world’s poor add cooling systems. The IEA last week said that only a tenth of the 2.8 billion people who live in the hottest parts of the world already have air conditioning, a huge potential driver for new energy demand and greenhouse gas emissions that are already surging in the developing world. Last year, nearly a fifth of the global increase in carbon dioxide emissions came from increased energy demand during extreme weather, the IEA said in March. Its report on global carbon dioxide concluded that summer heat waves were the primary reason that the United States and China, the world’s two largest emitters, did not reduce their emissions for the year. In the United States, gas consumption was the culprit, rising to cool buildings as electricity demand peaked, the IEA said. The World Meteorological Organization declared July to be the hottest month on record, and last year’s trends are reemerging, amplified. The hottest weather of the summer is hitting parts of the United States, with more than 180 million people under heat alerts from the Northeast to the Desert Southwest on Friday. That widespread swelter led U.S. gas demand at power plants Wednesday to break a record set just a year ago — and then break it again Thursday, climbing 3.6 percent in one day to more than 52 billion cubic feet, according to S&P Global Commodity Insights. Its preliminary estimate shows that Friday’s usage is likely to be the second-highest ever.
Big Oil’s Big Bet On Petrochemicals Is A Flop -- A couple of days ago, we reported that Big Oil companies Exxon Mobil and Chevron were set to post huge profit declines mainly due to weaker oil and gas prices compared to a year ago. Analysts expect Exxon to post Q2 2023 earnings per share (EPS) of $2.04, a huge 50.4% drop from EPS of $4.14 in the second quarter of 2022. The company’s earnings dropped to about $7.8 billion from $17.85 in the year-ago quarter in large part due to lower natural gas prices and weaker oil refining margins. Its revenue is expected to decline 31.8% year-over-year from $115.68 billion to $78.85 billion.Chevron is not expected to do much better, with the company telling investors earlier this week that it expects its 2Q earnings to drop by nearly 50% from the year-ago quarter. In the company’s preliminary 2Q results released Monday, Chevron said it expects to report a profit of $6 billion for the quarter, good for a 48.3% year-over-year decline although ahead of Wall Street expectations per a Bloomberg survey of $5.5 billion.Well, it appears that low oil and gas prices are just some of the problems Big Oil has to contend with. It’s now emerging that their pivotal petrochemicals businesses will not save them, either. Sluggish consumer demand as well as a deluge of new factories coming online over the past few years means petrochemical margins face a protracted downturn. The situation is so dire that Cologne-based Lanxness AG has called it a “Lehman 2” moment for the chemicals industry.“It’s been a pretty dramatic downturn. With chemicals oversupplied right now, large oil companies will find other areas to invest in,” Joseph Chang, a New York-based analyst at ICIS, has told Bloomberg. Over the past decade, Big Oil has relied on petrochemicals as a growth engine, acting as a hedge when oil and gas prices drop and a long-term growth driver in the transition to clean energy. Several Wall Street analysts have predicted that oil demand will actually grow over the coming decades primarily driven by petrochemicals demand growth.
US oilfield service providers expect rig count recovery later this year on high prices (Reuters) - Oilfield service providers on Thursday signaled a recovery in rig count, an indicator of future production, later this year, citing an uptick in oil and gas prices. U.S. shale producers slashed drilling and well completions in the second quarter, cutting demand for equipment and services. However, with U.S. crude prices climbing back to $80 per barrel, service companies are betting on a recovery in demand. "Uncertainty around the macro outlook for crude oil and natural gas prices maintained an underlying sense of apprehension in the U.S. drilling market during the quarter," said Helmerich & Payne's chief executive, John Lindsay. "Recently however, some of this uncertainty has receded, and we are starting to see signs of optimism on the horizon," he added. Lindsay said he expects rig count activity to hit a bottom in the quarter ending September, and a recovery in the following quarter. Rival Patterson-UTI Energy also forecast a rise in rig count and fracking activity later this and next. "We believe the industry rig count is near a bottom," said Andy Hendricks, CEO of Patterson-UTI Energy, adding that the company expects additional rig releases in the next few weeks before drilling activity recovers later in the year.
U.S. Shale Challenges OPEC With Record Production In 2023 Last year, oil prices hit multi-decade highs shortly after Russia invaded Ukraine, prompting the Biden administration to urge U.S. producers and OPEC to ramp up production at a faster clip so as to rein in spiraling oil prices. However, Saudi Arabia and its allies responded by doing the exact opposite, cutting production when oil prices started plummeting. Predictably, the United States and Europe were irked by the cartel’s defiance, with President Joe Biden’s administration accusing Saudi Arabia of colluding with Russia and supporting its war in Ukraine.Well, President Biden can at least thank his lucky stars that the U.S. Shale Patch paid heed to his clarion call: the Energy Information Administration (EIA) has forecast total U.S. output will hit 12.61M bbl/day in the current year, eclipsing the previous record of 12.32M bbl/day set in 2019's and easily beating last year's 11.89M bbl/day. U.S. crude oil output is up 9% Y/Y blunting OPEC’s efforts to keep supplies low in a bid to goose prices.There is little doubt the U.S. Shale Patch is largely responsible for keeping oil markets well supplied and oil prices low: Rystad Energy has estimated that whereas OPEC and its allies have announced cuts amounting to ~6% of 2022's production, non-OPEC supply has made up for two-thirds of those cuts, with the U.S. accounting for half of that.Energy experts have generally been bearish about U.S. crude supply with many arguing it has already peaked, “The projection suggests the pace of US shale growth, one of the few sources of major new supply in recent year, is slowing despite oil prices hovering at around $90 a barrel, about double most domestic producers’ breakeven costs. If the trend continues, it would deprive the global market of additional barrels to help make up for OPEC+ production cuts and disruption to Russian supplies amid its invasion of Ukraine,” Bloomberg said, Bloomberg cited comments by ConocoPhillips CEO Ryan Lance that rising costs as well as limited supplies of labor and equipment were some of the problems that were hamstringing efforts by U.S. shale producers to quickly ramp up production. However, Bloomberg also noted that the biggest factor behind the slowdown is a change of the playbook by the majority of U.S. shale companies from focussing on growth and expansion to more capital discipline and returning more cash to shareholders.
US to spend $1.55 bln for oil and gas sector to cut methane emissions (Reuters) - The U.S. government will provide up to $1.55 billion in funding to monitor and reduce methane emissions from the oil and gas sector, two agencies said on Monday. The funding will be accompanied by technical assistance for companies to rein in emissions of the planet-warming greenhouse gas from leaks and daily operations, the U.S. Environmental Protection Agency said. "The amount of methane emitted from oil and gas operations is enough to fuel millions of homes a year, and is a major driver of the climate crisis," said Joe Goffman at EPA's Office of Air and Radiation. States will get as much as $350 million through the U.S. Department of Energy's National Energy Technology Laboratory to help companies voluntarily identify and permanently reduce methane emissions from low-producing wells. The EPA and the DOE said they will also invite bids from tribal governments, companies, and communities for the deployment of technologies and implementation of best practices in the oil and gas sector. The funding comes from the Inflation Reduction Act as part of a set of Biden administration rules that tackle power plant and vehicle emissions as well as other potent greenhouse gases. The overall impact is expected to reduce the equivalent of 15 billion metric tons of greenhouse gas emissions between 2022 and 2055, EPA Administrator Michael Regan has said.
New public-land drilling rules would overhaul the Western oil industry — High Country News –The last time the federal government raised the amount that oil and gas companies have to pay to drill on public land was in 1960 — the same year that four unknown, floppy-haired Brits formed a band called The Beatles. Other aspects of the Department of the Interior’s oil and gas leasing regime are more than a century old. Yesterday, the Biden administration proposed what would be a substantial overhaul of this system, a broad new set of rules that would dramatically increase the operators’ financial obligations, boost the royalties that companies pay and tighten permissive leasing regulations. Many Western environmental advocates and public officials praised the proposal as the much-needed and long-overdue restructuring of a system that has always favored industry. “Big Oil has been operating with an unfair advantage on our public lands for far too long,” Arizona Democrat Raúl M. Grijalva, ranking member of House Natural Resources Committee said, in a statement. The proposed rules would codify reforms that were laid out in the Inflation Reduction Act, signed by President Biden last year. Reforming onshore federal bonding requirements has long been a priority for environmental groups, especially in the Western U.S., where a great deal of oil and gas production takes place on public land managed by the Bureau of Land Management. If implemented, it would mean a substantial windfall for states like New Mexico, Alaska and Colorado. The proposal kicks off several months of public comment, during which advocates on all sides will weigh in and changes to the rules can be made. Here’s what you need to know as this process gets underway.
Nevada’s Oil Speculation Rush Fades as Interest Drops, Fees Rise -- This week’s federal oil and gas lease sale of just four parcels of land in Nevada shows that an Obama and Trump-era rush by drillers to lease land in a state with little oil has ended for now, even as it has inspired anti-speculation legislation in Congress.No land in Nevada has been nominated for oil and gas leasing since 2022, the most recent federal data show, and just 4,700 acres are up for bid on Tuesday when the Interior Department’s Bureau of Land Management holds the first oil and gas lease sale in Nevada in more than a year.Nevada, which has no major oil fields and little proven production potential, was the Wild West for oil and gas leasing through the Obama and Trump administrations. It was a rush that was the basis for legislation now before Congress that would bar the Interior Department from leasing lands with little or no proven oil and gas potential.Speculators say $5 per-acre leasing nomination fees imposed by the Inflation Reduction Act have ended leasing speculation for now.Before the climate law was passed last year, anyone could nominate federal land to be included in an oil and gas sale—anonymously and for free. The law also ended noncompetitive oil and gas leasing, the practice of offering drillers the rights to land that received no bids in a competitive lease sale. “You’re not going to spend $5 per-acre to nominate acreage. It doesn’t guarantee you anything. Who’s going to do that?” said Bill Ehni, a Carson City, Nev., geologist who was one of the last people to nominate Nevada federal lands for leasing, BLM records show. Between 2009 and 2018, speculators nominated the equivalent of more land than the federal government owns in Nevada—58 million acres. About 3.7 million acres were actually leased, but the land bureau only permitted 41 wells for drilling. By comparison, in oil-rich Wyoming during the same period, 3.9 million acres were leased and 12,212 oil and gas wells were permitted to drill, BLM data show.All those land nominations with so few resulting leased acres strained the BLM’s resources and staff as they spent time processing excessive land nominations, with little public benefit, the Government Accountability Office said in a 2021 report. The last parcels nominated for leasing in Nevada were submitted to the BLM in May 2022, according to the bureau’s National Fluids Lease Sale System data. Bureau officials did not respond to multiple requests for comment and confirmation that its data are current and correct. “Bulk” leasing nominations in Nevada from a few people were getting out of hand, and the new fees imposed by the climate law will prevent people from nominating excessive acreage because “it just gets too costly too quickly,” said Kathleen Sgamma, president of the Western Energy Alliance, which represents oil and gas companies operating on federal land.But members of Nevada’s congressional delegation say the climate law’s restrictions alone aren’t enough to halt speculative leasing once and for all.BLM oil and gas leasing regulations proposed July 20, if finalized, would require the agency to focus leasing in areas with proven oil and gas potential, avoiding areas that don’t. But legislation is needed to ensure a future administration doesn’t reverse those regulations, Sen. Catherine Cortez Masto (D-Nev.) said in a statement.Cortez Masto introduced the End Speculative Oil and Gas Leasing Act of 2023 (S. 1622) in May, which would codify some of the proposed new regulations and require the land bureau to analyze the oil and gas production potential for federal land before including it in a lease sale.A companion bill in the House (H.R. 3377) is sponsored by Rep. Susie Lee (D-Nev.). The legislation is now in committee and has uncertain prospects in that chamber.Speculative leasing wastes BLM staff time and allows “millions of acres of iconic landscapes and resources to go neglected and unprotected while idle leases are left to gather dust,” Lee said in an email.Speculators and the oil industry say the legislation will prohibit companies from discovering new oil fields.“
Department of Ecology cleaning diesel fuel leak into Minnie Creek — The Washington Department of Ecology (DOE) is working on cleaning the Minnie Creek River after a diesel fuel leak was reported. DOE told KREM that on Wednesday, July 19, the Cheney Fire Department (CFD) called them to report a spill in Minnie Creek River. At first, DOE thought it was a solvent of some kind but they later confirmed it was red dye diesel coming from a nearby Chevron station's vaulted tank. They discovered the diesel had gone through some piping, leaked into a culvert and into Minnie Creek. DOE has hired a contractor to help clean the spill. They have set up booms to help soak up the diesel and are doing water and soil testing. Thus far, DOE says 30,000 gallons of an oil and water mixture have been removed from the creek and 1,500 gallons of the oil-water mixture were removed from the vault. WDOE doesn't know how long the diesel has been leaking and if the diesel has reached the groundwater. They are still investigating. KREM 2 reached out to the Chevron gas station in Cheney and they sent the following statement: "We understand the Washington Department of Ecology responded to a fuel spill in Cheney, WA, and traced the source of this leak to an independently owned and operated, Chevron-branded station. Responders from the Department of Ecology, other emergency services and the station’s owner/operator have started cleanup and remediation efforts at the site," a Chevron spokesperson said in the statement. This is a developing story and will be updated as we receive more information.
Orange County to sue Chevron for Huntington Beach oil spill - The Orange County Board of Supervisors voted to file a lawsuit against Chevron for the costs of cleaning up an oil spill off the coast of Huntington Beach last October. The oil company owned the abandoned pipeline where the leak originated, according to O.C. Supervisor Katrina Foley. “While we were making some repairs to the flood channel, we hit the pipe, and it’s an abandoned pipeline that had oil in it, and it leaked,” Foley told KNX News’ Emily Valdez. Now Chevron could be on the hook to repay the cost of the cleanup, which the county estimates at $1.8 million. “Hopefully they will take responsibility and they will take care of the clean-up cost and take on the accountability for basically abandoning a pipeline a long time ago and not properly disposing of the oil that was in the pipeline,” Foley said. After the spill, the ruptured portion of the abandoned pipeline was removed, and there have been no further oil leaks.
Oil spill contained at Nanaimo Harbour, recovery work to begin - The Western Canada Marine Response Corporation was tasked to an oil spill in the Nanaimo Harbour on Wednesday morning. Michael Lowry, senior manager of communications for the organization says three vessels from the Nanaimo base responded, and two additional vessels from the Sidney and Vancouver bases were brought in as a precaution. “Most of the oil was confined on the deck of the M/V Maipo River and what did spill from the vessel was contained within log booms surrounding the vessel,” Lowry said in an email statement. “Initial reports indicate very little oil is outside of the containment zone. No exact numbers yet on volume.” On Thursday, crews began recovery of waste but there is no timeline for how long the work will take to complete. The Canadian Coast Guard says the spill occurred during a fuel transfer.
Court tosses EPA permit order for troubled St. Croix refinery - A federal appeals court said Tuesday that EPA went too far when it subjected an oil refinery in the U.S. Virgin Islands to a costly, multiyear permitting process in order to restart operations.The ruling issued Tuesday by the 3rd U.S. Circuit Court of Appeals deals a blow to the Biden administration’s efforts to ease the burden of low-income areas and communities of color that are disproportionately affected by pollution. After a temporary restart of the St. Croix refinery in 2021, an oily mist descended on the majority-Black community near the facility.Last year, EPA reversed course on prior determinations for the facility and notified the operator, Port Hamilton Refining and Transportation LLLP, that a lengthy and expensive prevention of significant deterioration permit would be required before the site could be reopened.Port Hamilton sued, arguing that EPA’s action went beyond the bounds of the agency’s power under the Clean Air Act.“We agree that EPA has exceeded its statutory authority,” wrote Senior Judge D. Brooks Smith, who was appointed during the George W. Bush administration.Judge L. Felipe Restrepo, a Biden appointee, and Senior Judge Theodore McKee, a Clinton appointee, joined Smith’s decision.EPA said it is reviewing the court’s decision and determining next steps.“EPA remains committed to ensuring that the refinery complies with environmental laws that protect public health,” said spokesperson Shayla Powell. “EPA will continue its efforts to prevent environmental harms in this community and disproportionate burdens to its residents.”The ruling came almost exactly two months after the panel heard oral arguments in the suit. It marks a direct setback for EPA Administrator Michael Regan, who had announced the permit order last November in a conference call with reporters.“We made this decision to ensure compliance with the Clean Air Act and to protect a community that has long lived in the shadow of harmful pollution,” Regan said. Another senior EPA official estimated that the accompanying cost of new controls on pollutants like hydrogen sulfide could amount to several hundred million dollars, or far more than the $62 million that Port Hamilton spent to buy the plant in early 2022 following a bankruptcy sale.
Mexico's Pemex says oil spill in Gulf of Mexico fixed by July 10 (Reuters) - The chief executive of Mexico's state oil company Petroleos Mexicanos (Pemex) on Wednesday said an oil pipelineleak in the Gulf of Mexico earlier this month was fixed by July 10. In a press conference at Pemex's headquarters, CEO Octavio Romero said the company never tried to cover up the leak, and disputed some media reports, which he called "inaccurate." Pemex on July 18 refuted reports by environmental groups of an oil leak covering 400 square kilometers (154 square miles), and Romero said on Wednesday that the leak's magnitude was much smaller than reported. Romero said Pemex alerted authorities of the leak on July 5, two days after first detecting it. Heavily indebted Pemex has suffered a number of accidents in recent years at its installations in the Gulf of Mexico, where the vast majority of its oil production occurs.
Mexico Backs State Oil Giant Pemex With $4 Billion Capital Injection --Mexico’s state-owned oil giant Pemex, the world’s most indebted oil company, has received a capital injection of $4.16 billion (70 billion Mexican pesos) from the finance ministry, sources with knowledge of the matter toldBloomberg on Friday.The Mexican government and President Andrés Manuel López Obrador are looking to support the company and help it pay off its huge debt, which was more than $107 billion as at the end of March 2023. Earlier this week, Pemex’s chief executive Octavio Romero said that it would be cheaper if the government refinanced the debt than Petroleos Mexicanos, as Pemex is officially known, going to the market to do it itself. “Pemex’s debt is the country’s debt, they go together. It doesn’t make any sense that Pemex would give away money to big financial companies, to big banks,” Romero said at a news conference earlier this week, as carried by Bloomberg.“The president of the republic has determined that now the bond issuances or refinancings be done by the Finance Ministry according to the financial costs of the sovereign, and this will save the country a lot of money.”Due to its huge debts and poor environmental and safety record, Pemex has come under increased scrutiny by credit rating agencies in recent weeks.Two weeks ago, Fitch Ratings downgraded Pemexsquarely into junk territory after several accidents and “weak operating performance”. Fitch slammed the company's safety record, which it said would prevent Pemex from securing financing from banks and investors. Last week, Moody’s changed the outlook on Pemex to ‘negative’ from ‘stable’, to reflect the rating agency’s view that “absent fundamental changes in PEMEX's business strategy the company is likely to face increased credit risks, given the inability of the company to increase capital investments and improve its financial and operating performance as a result of liquidity constrains.”
Oil spill offshore near the coast of Ecuador spreads to land - According to International news, an offshore oil spill near the coast of Ecuador has spread to land. On 19th July, it reached a popular beach and appeared in nearby waters. The spill is located close the city of Esmeraldas, about 200 miles north of the capital Quito, near Ecuador’s border with Colombia. State oil company Petroecuador, which runs the Balao maritime terminal where the spill originated, said that it had deployed workers to handle the spill, but did not reveal how much crude was unleashed into the ocean. A military helicopter survey of the affected area showed blackened waves stretching along the shoreline and depositing a viscous substance on the beach, according to a video that was posted on Twitter. In addition, Petroecuador said in its update that its export and fuel supply activities were not affected by the spill.
Europe’s Fuel Export Market Shrinks After Nigeria Scraps Subsidies - European refiners will lose a portion of a key export market for gasoline after Nigerian consumption slumped following the removal of the fuel subsidies in the African country.At the end of May, Nigeria implemented a major reform in the domestic fuel retail market after Nigeria’s new President Bola Tinubu removed the fuel subsidies the government was paying for years. The subsidy was a huge cost to the federal government, which last year paid as much as $10 billion for the difference between fuel imported at market prices and sold at discounts to Nigerians. The removal of the subsidy led to a 28% slump in average daily gasoline consumption in Nigeria in June, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said in figures released to Reuters earlier this month.The end of the government subsidies also decimated the black markets for gasoline in countries neighboring Nigeria such as Cameroon, Benin, and Togo. These markets thrived when cheap subsidized fuel was smuggled from Nigeria into neighboring countries.But the end of the subsidies now signals lower demand for smuggled fuel in Nigeria’s neighbors, further reducing demand for fuel imports into Nigeria.With more than a quarter of the Nigerian gasoline market wiped out, European refiners would lose part of their key export market. West Africa and North America have traditionally been the main destinations of European gasoline exports.The slump in Nigeria’s domestic fuel consumption is set to squeeze refining margins for the European refiners, analysts have told Reuters.The lower Nigerian demand is set to further pressure European refiners who have seen increased competition from refiners and new refining capacity in Asia and the Middle East in recent years. The winners, if any, from the lower Nigerian gasoline demand would be the recently started-up refineries in the Middle East, analysts told Reuters.
Asia Snapping Up U.S. Crude Oil In Near Record Amounts -- Asia has scheduled near-record volumes of U.S. crude oil to be shipped next month, according to trade sources who spoke to Reuters. Between 1.5 million and 1.9 million bpd of U.S. crude—most of which is WTI Midland—will make their way to Asia in August, just shy of the 2.2 million bpd record loadings of Asia-bound crude oil that the U.S. saw in April. WTI continues to be an attractive grade for Asia’s refiners, who see it as a bargain compared to the Middle East benchmark Dubai. The spread between the two grades stood at $5.40 per barrel as of Thursday. That’s down from $6.08 per barrel in June, but higher than the $3.93 Asian refiners saved in May. The influx of U.S. crude oil to Asia also follows two increases in Saudi Arabia’s crude oil official selling prices (OSP). “China requested less term supply from Saudi in recent months and is seizing crude from everywhere to fill in the supply gap,” a Singapore-based trader told Reuters. Consultancy Energy Aspects expects that the influx of U.S. crude oil into Asia will increase in the third quarter as well. “We forecast U.S. exports to Asia will increase quarter-on-quarter in Q3 23, with China and even Japan purchasing Midland cargoes in size,” Energy Aspects told Reuters. U.S. crude oil inventories fell by around 700,000 barrels last week, partly on higher crude oil exports. The news of Asia’s increase in U.S. crude oil purchases comes just a day after the U.S. Senate easily passed an amendment to the annual defense bill that would ban crude oil exports to China from the Strategic Petroleum Reserve (SPR). The amendment garnered widespread bipartisan support.
Indian Oil signs long term LNG import deals - Indian Oil Corp (IOC), has signed long-term LNG import deals with United Arab Emirates’ Abu Dhabi Gas Liquefaction Co Ltd (ADNOC LNG), and France’s TotalEnergies. Reuters: Indian Oil signs long term LNG import deals The two deals were signed during Prime Minister Narendra Modi's Visit to France and UAE last week. Supplies under the two deals would commence from 2026, the Indian company said in two separate statements. ADNOC LNG would supply up to 1.2 million tpy of LNG to IOC for 14 years, the Indian company said, adding India's trade treaty with UAE enable it to import LNG without paying a 2.5% import tax. This is the first time that an Indian company has signed a long term LNG import deal with ADNOC. TotalEnergies would supply 0.8 million tpy LNG to IOC under the 10 year deal, it said. TotalEnergies would supply LNG to IOC from its global portfolio. India companies are spending billions of dollars to boost their gas infrastructure and are scouting for long term LNG imports deals as the nation wants to raise the share of gas in its energy mix to 15% by 2030 from 6.2% currently.
Worries for Nigerians as Brent Nears $84 Per Barrel -- The price of Brent crude rose by 82 cents or 0.99 per cent on Wednesday to $83.74 per barrel after the market calmed on data which showed that crude inventories in the United States fell less than expected and the Federal Reserve raised interest rates by a quarter of a percentage point. Also, the US West Texas Intermediate (WTI) crude increased by 85 cents or 1.1 per cent during the midweek session to quote at $79.66 per barrel. The rise in the price of Brent, which Nigeria prices its headline crude against, raises worry for Nigerians as it will likely indicate another increase in the pump price of Premium Motor Spirit (PMS), otherwise known as petrol, after President Bola Tinubu removed the subsidy in May. Since then, prices have been left to the mercy of market forces, as the federal government planned to save the trillions paid on making fuel cheaper for consumers to boost the struggling economy. The market had initially fallen when the US central bank raised interest rates by 25 basis points on Wednesday. The US Federal Reserve Chairman, Mr Jerome Powell, said the economy still needed to slow, indicating that will be further hikes to meet its 2 per cent inflation target. The hike, the Fed’s 11th in its last 12 meetings, set the benchmark overnight interest rate in the 5.25 per cent -5.50 per cent range, a level which has not been consistently exceeded since 2001. Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand. The Energy Information Administration reported an estimated draw of 600,000 barrels in U.S. oil inventories for the week to July 21. This compared with a modest inventory decline of 700,000 barrels for the previous week that kept inventories slightly above the five-year seasonal average. Earlier this week, the American Petroleum Institute (API) reported an estimated build in crude oil inventories. Oil prices, however, remained relatively strong, stimulated by tighter supply and measures taken by Beijing to strengthen economic growth in China. After months of traders watching economic indicators and bracing up for a global recession, now the concern is trickling in about the security of sufficient oil supply, analysts note. This is buoyed by signs of tighter supplies, largely linked to output cuts by Saudi Arabia and Russia, as well as Chinese authorities’ pledges to shore up the world’s second-biggest economy. However, Reuters reported that although Saudi Arabia will roll over its August output cuts to September, Russia is expected to significantly increase oil loadings in September, bringing to an end to recent export cuts.
UN begins extracting oil from tanker, mitigating risk of environmental catastrophe --The United Nations announced Tuesday morning that it began operations to remove oil from a deteriorating supertanker, the first step toward preventing a natural disaster from unfolding in the Red Sea. “In the absence of anyone else willing or able to perform this task, the United Nations stepped up and assumed the risk to conduct this very delicate operation,” U.N. Secretary–General António Guterres said about the project in a press statement. FSO Safer, the 47-year-old tanker, has been a burden on the U.N.’s shoulders since 2015, when Yemen halted maintenance on the vessel due to an outbreak of a civil war in the country. As a result, FSO Safer has been abandoned and stranded off the coast of Yemen for more than 8 years. Despite numerous reports over the years warning that the tanker’s structural integrity is failing, Yemen’s rebel group, the Houthis, continued to block foreign attempts to access and inspect the ship. The U.N.’s project to prevent a colossal oil spill by extracting the tanker’s 48 million gallons of oil was initially launched in 2019, but they also faced pushback from the Houthis when trying to access FSO Safer. President Biden’s foreign policy regarding Yemen also complicated the matter. Shortly after being inaugurated, Biden stopped U.S. aid to Saudi Arabia’s offensive against the Houthis, which was the strategy of the two previous administrations. This change, along with removing the Houthis’ designation as a foreign terrorist organization, signaled a shift toward diplomacy within U.S.’s approach to the country’s conflict. But Biden’s policy switch-up did not have any immediate effect on the effort to stop the oil spill, which is projected to be four times the size of the Exxon Valdez leak. On February 24th 2021, 20 days after the policy change, the Houthis made a new list of requests that delayed the U.N.’s mission. After a drawn out process, the U.N. was finally able to begin offloading oil from FSO Safer with the help of a $10 million donation from the U.S. The U.N. anticipates the operation will last 19 days.
United Nations starts removal of oil from decaying tanker in Red Sea – The UN-led project to prevent a massive oil spill from the FSO Safer supertanker off Yemen’s Red Sea coast began today with the removal of more than 1 million barrels of oil from the decaying vessel. The Safer has been at risk of breaking up or exploding for years. A major spill from the vessel would result in an environmental and humanitarian catastrophe. The oil aboard the Safer is being pumped into the replacement vessel Yemen (formerly Nautica) in a ship-to-ship transfer that is expected to take 19 days to complete. After its arrival at the site on 30 May, the leading marine salvage company SMIT, a subsidiary of Boskalis, has stabilized the 47-year-old Safer. The UN Development Programme (UNDP), which contracted SMIT, is implementing the operation to remove the oil. UN Secretary-General António Guterres said: “In the absence of anyone else willing or able to perform this task, the United Nations stepped up and assumed the risk to conduct this very delicate operation. The ship-to-ship transfer of oil which has started today is the critical next step in avoiding an environmental and humanitarian catastrophe on a colossal scale.” UNDP Administrator Achim Steiner said: “With every gallon of oil now being pumped off the Safer the threat of a potential spill that has loomed over the people of Yemen and indeed the countries and economies depending on the shared Red Sea ecosystem, recedes. The challenges on this project have been huge but the response by so many who have made this rescue operation possible has been equally huge. And it is a reminder of what the United Nations can achieve through its convening power and its capacity to coordinate a complex operation.” Speaking from aboard the salvage vessel Ndeavor, the UN Resident and Humanitarian Coordinator for Yemen, David Gressly, said: “The transfer of the oil to the Yemen will prevent the worst-case scenario of a catastrophic spill in the Red Sea, but it is not the end of the operation. The installation of a CALM buoy to which the replacement vessel will be safely tethered is the next crucial step. I thank donors, private companies and the general public for providing the funds that have brought us to this milestone.”
Russian ESPO Oil Price Surges On Strong Chinese Demand --Strong demand in China has sent the price of Russia’s ESPO crude blend surging to the highest in eight months as ESPO discounts to Brent are at their narrowest since the EU embargo on Russian oil imports came into effect in December, multiple trade sources have told Reuters.The EPSO crude going to China in September is trading at discounts of just $2-$2.50 per barrel to ICE Brent on delivered-ex-ship (DES) basis, according to the sources. This compares with discounts of around $4 per barrel for August. “August prices were already very expensive, but we were shocked to see that offers for September cargoes started at $2 discount,” one trade source told Reuters.Strong demand for cheaper Russian crude from China’s independent refiners, competition from Indian refiners, and the OPEC+ supply cuts, including from Russia, have all combined in recent weeks to lift the price of the ESPO crude.Early this month, the price of Russian ESPO crudejumped to the highest in seven months as Chinese buyers rushed to buy it ahead of a 500,000-bpd cut in exports Russia has pledged for August.ESPO has been trading consistently above the G7 price cap of $60 per barrel because it is the preferred Russian blend of Chinese refiners. The ESPO blend is lighter and sweeter than the flagship Russian blend Urals, which has normally traded at a more significant discount to Brent crude. Despite the recent jump in ESPO prices, the Russian crude grade remains the cheaper option for Chinese refiners because similar grades from West Africa and Brazil are trading at premiums over Brent for deliveries in September and October. If the OPEC+ group further reduces supply, the ESPO price could jump again and narrow the discount to around $1 per barrel, an oil trader told Reuters.
Oil markets to face ‘serious problems’ as demand from China and India ramps up, says IEF -- Oil prices are set to rise in the second half of the year as supply struggles to meet demand, according to the Secretary General of the International Energy Forum. Oil demand bounced back to pre-Covid levels quickly, “but supply is having a tougher time in catching up,” said Joseph McMonigle, secretary general of the International Energy Forum, adding that the only factor moderating prices right now is the fear of a looming recession. “So, for the second half of this year, we’re going to have serious problems with supply keeping up, and as a result, you’re going to see prices respond to that,” McMonigle told CNBC on the sidelines of a meeting of energy ministers from the group of the 20 leading industrial economies (G20) in Goa, India, on Saturday. McMonigle attributes the push in oil prices to increasing demand from China — the world’s largest importer of crude oil — and India. “India and China combined will make up 2 million barrels a day of demand pick-up in the second half of this year,” the Secretary General said. China and India's oil demand will rise by 2 million barrels per day in the second half of 2023: Asked if oil prices could once again spike to $100 a barrel, he noted that prices are already at $80 per barrel and could potentially go higher from here. “We’re going to see much more steep decreases in inventory, which will be a signal to the market that demand is definitely picking up. So you’re going to see prices respond to that,” McMonigle said. However, McMonigle is confident that the Organization of the Petroleum Exporting Countries and its allies — collectively known as OPEC+ — will take action and increase supply, if the world eventually succumbs to a “big supply-demand imbalance.” “They’re being very careful on demand. They want to see evidence that demand is picking up, and will be responsive to changes in the market.” Brent crude futures with September expiry last settled at $81.07 per barrel on the Friday close, while West Texas Intermediate crude with September delivery ended the trading day at $76.83.
Oil markets are still volatile, U.S. energy chief says, calling for more supplies - Volatility is still weighing on oil markets, U.S. Energy Secretary Jennifer Granholm said Saturday, reiterating calls for additional supplies. Asked to comment on the state of oil markets, she told CNBC’s Sri Jegarajah that “there’s no doubt that there is a volatile environment” — a situation that the White House is monitoring. “There is a lot of emotion in these markets and so we have deep concern about trajectories of where things are headed,” the energy secretary added. Granholm called for additional output to help curtail prices. “We want to see more supply … It gets dangerous when the prices are so high,” she said. “I think the prudent course is to ensure that transportation is affordable for people, and that of course means making sure that supply is stable.” Some members of the Organization of the Petroleum Exporting Countries and their allies — collectively known as OPEC+ — are voluntarily cutting production by a combined 1.66 million barrels per day until the end of 2024. In addition to that, coalition heavyweights Saudi Arabia and Russia have announced further voluntary declines in July and August comprising 1 million barrels per day in output and 500,000 barrels per day of exports, respectively. High crude oil prices continue to be a challenge for the Biden administration, and lowering costs remains a priority. “We want prices to come down. The president is really focused on the impacts on real people who need to get to work and cannot afford that premium,” Granholm highlighted. The U.S. has historically vocally championed lower prices at the pump, in a bid to ease the strain on consumer households and curb inflation. Washington has repeatedly entreated OPEC+ producers to support this effort by lifting their output — culminating in a brief war of wards with Saudi Arabia in October last year. The U.S. is now facing lower inflation, with the consumer price index showing a 3% year-on-year increase in June. Renewables Granholm also discussed the importance of transitioning to renewable energy — a key topic in this year’s energy summit. “China and the United States are the biggest emitters in the world … Their citizens are feeling the impacts of these extreme weather events,” Granholm said, adding that the U.S. is keen to “find an oasis” by cooperating with China on deploying clean energy. “We have to do everything, everywhere, all at once. Deploy, deploy, deploy clean energy. Because if we don’t, our planet is on fire, and we must address it.”
Oil prices ease ahead of Fed, ECB rate hikes - Oil prices eased on Monday as traders awaited more rate hike cues from U.S. and European central banks, with tightening supply and hopes for Chinese stimulus underpinning Brent at $80 a barrel. Brent crude futures dipped 31 cents, or 0.4%, to $80.76 a barrel by 0644 GMT. U.S. West Texas Intermediate (WTI) crude was at $76.74 a barrel, down 33 cents, or 0.4%. The benchmarks rose 1.5% and 2.2% respectively last week, their fourth straight of week of gains, as supply is expected to tighten following OPEC+ cuts. Fighting also escalated last week in Ukraine after Russia withdrew from a U.N.-brokered safe sea corridor agreement for grains exports. "While another Fed rate hike this week may drive some short-term price volatility, we expect tightening market conditions on OPEC's supply cuts and increasing market speculation of further stimulus in China to continue to push prices higher through 3Q23," analysts from National Australian Bank said in a note. Investors have priced in quarter-point hikes from the Federal Reserve and European Central Bank this week so the focus will be on what Fed Chair Jerome Powell and ECB President Christine Lagarde say about future rate hikes. Rising interest rates have dampened investments and strengthened the greenback, making dollar-denominated commodities more expensive for holders of other currencies. "Another bearish piece of news worth considering is the UAE's view that the existing OPEC+ cuts are adequate to balance the market," said Mukesh Sahdev, head of downstream and oil trading at Rystad Energy.
Oil prices rise as tight supply counters expected rate hikes - Markets - Oil prices rose on Monday as tightening supply and hopes for Chinese stimulus underpinned Brent at well above $80 a barrel, even as traders expected more rate hikes from U.S. and European central banks. Brent crude futures were up 45 cents, or 0.6%, at $81.52 a barrel by 1228 GMT. U.S. West Texas Intermediate (WTI) crude was at $77.55 a barrel, also up 48 cents, or 0.6%. The benchmarks rose 1.5% and 2.2% respectively last week, their fourth straight of week of gains, as supply is expected to tighten following OPEC+ cuts. Fighting also escalated last week in Ukraine after Russia withdrew from a U.N.-brokered safe sea corridor agreement for grain exports. Oil’s rise has reflected “tightening conditions as Saudi oil output cuts impact the market… even as summer demand has been somewhat stronger for gasoline and jet fuel”, Citi Research said in a note. The bank said it sees some upside for oil over the summer and forecast an average price in the third quarter of $83 a barrel. “While another Fed rate hike this week may drive some short-term price volatility, we expect tightening market conditions on OPEC’s supply cuts and increasing market speculation of further stimulus in China to continue to push prices higher through 3Q23,” analysts from National Australian Bank said in a note. Investors have priced in quarter-point hikes from the Federal Reserve and European Central Bank this week, so the focus will be on what Fed Chair Jerome Powell and ECB President Christine Lagarde say about future rate increases. Rising interest rates have dampened investments and strengthened the greenback, making dollar-denominated commodities more expensive for holders of other currencies. In China, the state planner on Monday unveiled measures to spur private investment in some infrastructure sectors, and said it will also strengthen financing support for private projects. Market participants expect Beijing to implement targeted stimulus measures to support its flagging economy, likely boosting oil demand in the world’s No. 2 consumer.
Saudi Oil Output Cuts Impacting the Market and the Expectations that Further Stimulus in China Will Continue to Support Prices -- The oil market continued to trend higher on Monday as it remained well supported by Saudi oil output cuts impacting the market and the expectations that further stimulus in China will continue to support prices. On Monday, China’s state planner announced measures to prompt private investment in some infrastructure sectors. The oil market posted a low of $76.44 in overnight trading before it breached its previous high and extended its gains to over $2.20 as it posted a high of $79.28 early in the afternoon. The market erased some of its gains ahead of the close, with the September WTI contract settling up $1.67 at $78.74. The September Brent contract settled up $1.67 at $82.74. The product markets settled in positive territory, with the heating oil market settling up 2.48 cents at $2.7705 and the RB market settling up 9.33 cents at $2.8951. Citi Research said its short-term momentum model is pointing to higher price levels heading into late July for most commodities. Citi sees some upside for crude this summer, with its 0-3 month target of $88/barrel and an average of $83/barrel for the third quarter. Citi later expects downside for crude in the fourth quarter, with Brent crude averaging $78/barrel and a 2024 average of $73/barrel. Three trading sources said oil loadings from Russia’s Black Sea ports remained stable over the weekend despite increasing tensions in the area. Black Sea Novorossiisk port and nearby CPC terminal in Yuzhnaya Ozereyevka are two main oil export outlets located in the south of Russian loading about 2 million bpd. Loadings from Black Sea ports continued over the weekend in line with the schedule. Russia and Ukraine said late last week that all ships crossing the areas in the Black Sea may be considered targets after the grain deal expiry. Russia’s Energy Ministry said it is considering limiting the number of companies allowed to export oil products in a bid to cut illegal exports of fuel intended for the domestic market. The Kommersant newspaper reported earlier that Russia was looking at creating a list of approved refiners to combat so-called "grey exports" of subsidized domestic fuel. IIR Energy reported that U.S. oil refiners are expected to shut in about 155,000 bpd of capacity in week ending July 28th, increasing available refining capacity by 356,000 bpd. Offline capacity is expected to increase to 164,000 bpd in the week ending August 4th. Exxon Mobil Corp reported flaring at its 619,024 bpd Beaumont, Texas facility. Chevron Corp reported unplanned flaring at its 269,000 bpd El Segundo, California refinery. U.S. business activity slowed to a five-month low in July, dragged down by decelerating service-sector growth. S&P Global said its flash U.S. Composite PMI index fell to a reading of 52 in July from 53.2 in June. July's reading showed the sixth straight month of growth but was restrained by softening conditions in the service sector.
WTI Breaks Through Technical Resistance on OPEC-Plus Cuts - Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange advanced more than 2.5% on Monday, with West Texas Intermediate settling above a key resistance level as traders look to production cuts from the OPEC+ coalition and potential for China's stimulus to boost demand fundamentals in Asian markets. WTI August futures on Monday broke through the 200-day moving average for the first time since August last year to settle at $78.74 per barrel (bbl), potentially opening the next leg of the rally in the oil complex. International benchmark Brent for September delivery added $1.67 per bbl on the session to settle at a three-month high $82.74 per bbl. In refined fuels, RBOB August futures on NYMEX advanced 0.0933 cent to $2.8951 a gallon, and ULSD futures moved up 0.0248 cent to $2.7705 a gallon. A combination of lower supplies available from OPEC+'s largest producers, namely Saudi Arabia and Russia, along with chatter over China's stimulus may have pushed oil prices above the key resistance level, drastically improving the technical picture for the complex. Monday's move higher in the oil complex came despite growing skepticism over China's plans to invigorate their recovery after the Politburo unveiled vague measures to stimulate the economy. These steps include boosting domestic consumption of cars and electronics, addressing debt risks for the local governments and easing property policies. The measures are short on details, however, and it's unclear whether they will lead to broader stimulus investors are hoping for. China's post-pandemic recovery has been so far disappointing, plagued by inadequate domestic demand and a slump in manufacturing activity. Last week, several investment banks revised lower their forecasts for China's gross domestic product through the end of the year. Despite weak domestic demand, China is still the world's largest oil importer, bringing in around 12.67 million barrels per day in June -- the second highest on record as refiners were seen building up inventories. Should China reinvigorate its lopsided recovery in the second half of the year, the high pace of oil imports could be supported by actual demand rather than restocking. Capping gains for the oil complex is exceptionally weak macroeconomic data released overnight from the Eurozone, showing a sharper downturn in industrial output and a sustained slowdown in the services sector. The German manufacturing sector, in particular, has been hit hard, with the Purchasing Managers Index falling below the 40-point mark for the first time since COVID-19 lockdowns in April 2020. Meanwhile, business expectations across Germany toward future activity also turned negative for the first time this year, which is now being reflected in a weakening labor market. Manufacturers across Germany are beginning to react to the drop in business activity by trimming the workforce for the first time since the end of COVID lockdowns.
Oil prices steady near 3-month highs -Oil prices were steady on Tuesday, hovering near three-month highs as signs of tighter supplies and pledges by Chinese authorities to shore up the world’s second-biggest economy lifted sentiment, while weaker Western economic data weighed. Brent futures were unchanged at $82.74 a barrel by 1207 GMT, while U.S. West Texas Intermediate (WTI) crude was up 1 cent, or 0.01%, at $78.75. The crude benchmarks have already chalked up four weekly gains in a row, with supplies expected to tighten due to output cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allies. Earlier-loading Brent contracts are selling above later loadings, a price structure known as backwardation indicating traders see tight supply, with the six-month spread near a two-and-a-half month high. “On the supply side, whilst remote for now, risks are growing following Russia’s escalation and bombing of Ukrainian port infrastructure along the Danube River,” ING said in a note saying attacks on grains assets could spill into energy markets. “The market is starting to become a little nervous over a potential supply disruption.” In China, the world’s second-biggest oil consumer, leaders pledged to step up economic policy support. In the euro zone, business activity shrank more than expected in July, a survey showed. In the United States, business activity slowed to a five-month low in July, a closely watched survey showed, but falling input prices and slower hiring indicate the Federal Reserve could be making progress on its bid to reduce inflation. Markets anticipate 25-basis-point rate hikes from both the Fed and the European Central Bank this week. U.S. industry data on inventories is expected at around 2030 GMT. Four analysts polled by Reuters estimated on average that crude inventories fell by about 2 million barrels in the week to July 21. Sending a bearish signal, a 110,000 barrel-per-day unit at the huge U.S. refinery in Baton Rouge will be shut for up to four weeks, sources said.
NYMEX WTI Near $80 as Traders Pare Bets on US Recession – West Texas Intermediate futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange resumed their rally in the afternoon session Tuesday propelled by market expectations for U.S. Energy Information Administration data to show commercial crude-oil inventories declined again last week as investors in financial markets pare back bets on U.S. recession this year. The consensus of analysts and traders surveyed by the Wall Street Journal showed commercial crude-oil inventories in the U.S. decreased by 2.2 million bbl from the previous week. Meanwhile, gasoline inventories are also seen decreasing by 1.7 million bbl from the previous week, while stocks of distillates are expected to fall by 600,000 bbl. Refinery runs are forecasted to rise by 0.1% from the previous week to 94.4%. Forecasts for across-the-board draws from U.S. petroleum inventories come as investors aggressively pare back bets on U.S. recession this year, with the labor market largely seen holding on to post-pandemic gains. The consumer confidence index, released this morning from the Conference Board, revealed Americans feel more optimistic about the economy than at any point since July 2021, reflecting improvement in both current conditions and expectations. Against this backdrop, the Federal Open Market Committee is set to raise interest rates again when it wraps-up policy meeting on Wednesday at 2 PM ET, followed by the press-conference held by the Chairman Jerome Powell 30 minutes later. Markets remain largely unconvinced that the Federal Reserve will follow through with further rate increases in the final months of the year after delivering a 25-basis point hike on Wednesday. Elsewhere, economic data released showed growth in the Eurozone and China has mostly weakened at the start of the third quarter, stymied by a manufacturing recession and weak labor market. At settlement, WTI August futures on the NYMEX added $0.89 bbl to $79.63 bbl and international benchmark Brent for September delivery advanced to $83.64 bbl, up by $0.90 bbl on a session. Moving in the opposite direction, RBOB August futures on NYMEX fell 0.0418 cts to $2.8533 a gallon and ULSD futures gained to $2.7776 a gallon, up 0.0071cts a gallon in afternoon trading.
Oil Prices Drop As Market Awaits Fed’s Interest Rate Decision Oil prices fell by 1% early on Wednesday ahead of the Fed meeting later today, which is expected to raise the key interest rate again in what could be the end of the aggressive money-tightening policies.As of 7:40 a.m. EDT on Wednesday, WTI Crude was down 1.04% to below $79 per barrel – at $78.79 – after hitting $79 and a three-month high earlier this week. The international benchmark, Brent Crude, was trading down by 1.03% at $82.77, off the three-month high of above $83 per barrel reached on Tuesday.At the July 26 meeting, the Fed is largely expected to raise interest rates, analysts concur. But many believe this could be the end of the money-tightening cycle. The oil market will be closely watching the Fed decision—and most of all, the comments by Fed Chair Jerome Powell accompanying the decision—for clues about the economy and the path to lowering inflation.Aggressive interest rate hikes in recent months have had the oil market concerned about a recession that would weigh on oil demand. However, the latest inflation print in the U.S. from two weeks ago showed cooling consumer prices in June, which made more analysts optimistic that the rate-hike cycle could be close to its end.Last week, Goldman Sachs cut its probability that a U.S. recession will start in the next 12 months further, from 25% to 20%, due to the fact that the recent economic data have reinforced the bank’s confidence that “bringing inflation down to an acceptable level will not require a recession,” wrote Jan Hatzius, head of Goldman Sachs Research and the firm’s chief economist.Commenting on today’s Fed meeting, ING strategistssaid,“Expectations are that the Federal Reserve will hike rates by 25bp, which could very well be the last hike in this cycle. However, any signal from the Fed that they have more to do will likely put some downward pressure on risk assets, including oil.”
Oil Softens on Smaller Crude Draw, Anemic Gasoline Demand -- Oil futures softened in post-inventory trade Wednesday after the U.S. Energy Information Administration reported total crude and petroleum product supplies decreased by a smaller-than-expected margin during the week ended July 21, as refiners scaled back run rates and demand for gasoline remained largely anemic despite being midway through the peak summer season. Further details of the report revealed U.S. commercial crude oil inventories decreased by 600,000 barrels (bbl) last week compared to expectations for a 2.2-million-bbl drawdown. At 456.8 million bbl, commercial stockpiles remained about 1% above the five-year average. The smaller-than-expected decline in oil stockpiles came as refiners decreased crude throughput by 107,000 barrels per day (bpd) in the reviewed week to 16.5 million bpd, bringing the national run rate to 93.4% of capacity. Earlier in the week, analysts expected run rates would rise 0.1% during the week. Oil stored at the Cushing, Oklahoma, hub, the delivery point for West Texas Intermediate, fell for the second consecutive week through July 21, down 2.6 million bbl to 35.7 million bbl, according to EIA data. In the gasoline complex, commercial inventories also declined by a smaller-than-anticipated margin, down 786,000 bbl in the reviewed week to 217.6 million bpd, missing calls for a 1.7-million-bbl decrease. Demand for gasoline failed to improve for the second straight week, averaging 8.939 million bpd after an 8% drop at the start of the month. Gasoline supplied to the U.S. market, a measure of demand, continued to trail the pre-pandemic level seen in 2019, averaging nearly 700,000 bpd or 7.3% below the comparable 2019 consumption rate during the first three weeks of July. On a four-week average basis through July 21, gasoline demand stood at 9 million bpd, up 2.6% against the comparable four weeks in 2022 while 5.2% below the same period in 2019. For distillate fuels, commercial inventories declined by 245,000 bbl to 117.9 million bbl compared with expectations for stockpiles to fall by 600,000 bbl. Demand for middle of the barrel fuels, however, added only 49,000 bpd in the reviewed week to 3.718 million bpd, bringing the four-week average to 3.5 million bpd, down 6.8% against a year ago. Jet fuel supplied to the domestic market was up 0.5% compared with the same four-week period last year. Total products supplied over the last four-week period averaged 20.5 million bpd, up 2.2% from the same period last year. Near 11:30 a.m. EDT, NYMEX WTI futures for September delivery slipped $0.30 to trade at $79.33 bbl. NYMEX RBOB August futures advanced $0.0644 to $2.9177 gallon and ULSD August futures gained $0.0568 to $2.8368 gallon.
A Mostly Bearish Oil Inventory Report and the Expected 25 Basis Point Interest Rate Increase Announced by the Federal Reserve - The crude oil market retraced some of its previous gains on Wednesday and posted an inside trading day following a mostly neutral to bearish oil inventory report and the expected 25 basis point interest rate increase announced by the Federal Reserve in the afternoon. The oil market traded to a low of $78.61 early in the morning as it continued to retrace some of Tuesday’s gains before it bounced off that level ahead of the release of the EIA’s weekly petroleum stocks report. It traded to a high of $79.77 following the EIA report, which showed draws across the board. However, the draws were smaller than expected, which pressured the market once again as it traded back towards its low in afternoon trading. The market remained rangebound following the expected Fed announcement. The September WTI contract settled down 85 cents at $78.78, its first loss in five sessions. The September Brent contract settled down 72 cents at $82.92. Meanwhile, the product markets ended the session in positive territory, with the heating oil market settling up 6.53 cents at $2.8429 and the RB market settling up 5.39 cents at $2.9072. The EIA reported that U.S. crude oil, gasoline and distillate inventories fell in the week ending July 21st, as net imports fell. Crude oil inventories fell by 600,000 barrels to 456.8 million barrels, less than expectations of a 2 million barrel draw. Crude stocks at Cushing, Oklahoma fell by 2.6 million barrels on the week. The EIA reported that net U.S. crude imports fell by 1.58 million bpd. The Association of American Railroads reported that its weekly railcar loadings on major U.S. railroads in the week ending July 26th fell by 1.3% on the year to 222,454. The number of railcar loadings transporting petroleum and petroleum products increased by 1.4% on the year to 9,151.Three industry sources said Russia will significantly increase its oil loadings in September, bringing an end to its steep export cuts in June-August, as peak refinery maintenance will free up more crude for sale outside the country. According to Reuters calculations, Russian refineries are expected to cut runs by some 195,000 bpd or 800,000 tons in September from August amid seasonal maintenance meaning that volume can be diverted to export markets. Industry sources stated that Russian oil exports from western ports in August are set to fall by 100,000-200,000 bpd on the month, but in September may recover to levels not seen since last May.IIR Energy said U.S. oil refiners are expected to shut in about 155,000 bpd of capacity in the week ending July 28th, increasing available refining capacity by 356,000 bpd. Offline capacity is expected to increase to 158,000 bpd in the week ending August 4th.Valero Energy Corp’s 180,000 bpd Memphis, Tennessee refinery was shut on Tuesday night by a power outage. Sources stated that no damage was found as of Wednesday morning from the power outage and shutdown of all units at the refinery. A full restart is expected to take several days. Chevron Corp’s 269,000 bpd El Segundo, California refinery reported unplanned flaring. The refinery experienced an operational issue at one of its process units. It said the temporary operational issue does not impact its ability to supply petroleum products to its customers.
The Market Continued to Trend Higher Remaining Supported by Supply Tightness and Optimism for Global - The oil market continued its upward trend on Thursday, breaching the $80.00 level and peaking at a level not seen since April 19th after it posted an inside trading day on Wednesday. The market quickly posted a low of $78.87 on the opening before it continued to trend higher remaining supported by supply tightness and optimism for global growth. The market is trading higher on hopes that central banks, such as the Fed are nearing the end of their monetary tightening campaigns. The oil market rallied to a high of $80.60 in afternoon trading. The September WTI contract erased some of its gains ahead of the close and settled up $1.31 at $80.09, while the September Brent contract settled up $1.32 at $84.24. The product markets settled in positive territory, with the heating oil market settling up 7.4 cents at $2.9169 and the RB market settling up 4.33 cents at $2.9505. Russia’s Energy Minister, Nkolai Shulginov, said the country’s 2023 oil output is forecast at 515 million tons, with the final figure dependent on further quota decisions to be taken by the OPEC+ grouping. Russia’s output in 2022 stood at 535 million tons, a 2% year-on-year increase.Russia's offline primary oil refining capacity has been revised down by 4.1% for July from a previous plan to 2.458 million tons. The idle refining capacity is also below June's levels by about 37.3%. For August, Russia's offline primary oil refining capacity is seen increasing from July by 46.5% to 3.601 million tons. An increase in idle oil refining capacity usually incentivizes exports, hampering Russia's plans to reduce its overseas oil supplies by 500,000 bpd next month.Colonial Pipeline Co is allocating space for Cycle 44 shipments on Line 20, which carries distillates from Atlanta, Georgia to Nashville, Tennessee.PJK/Insights Global reported that gasoline stocks held in the Amsterdam-Rotterdam-Antwerp independent storage hub in the week ending July 27th fell by 3.57% on the week but increased by 0.37% on the year to 1.351 million tons, while gasoil stocks increased by 3.22% on the week and by 39.01% on the year to 2.049 million tons and its fuel oil stocks increased by 4.67% on the week and by 17.6% on the year to 1.323 million tons. Its naphtha stocks increased by 16.88% on the week but fell by 30.41% on the year to 270,000 tons and its jet kero stocks increased by 1.41% on the week but fell by 12.29% on the year to 721,000 tons.The U.S. economy grew faster than expected in the second quarter as labor market resilience underpinned consumer spending, while businesses increased investment in equipment, potentially keeping a recession at bay. The U.S. Commerce Department said GDP increased at a 2.4% annualized rate last quarter. The economy grew at a 2.0% pace in the January-March quarter.
Oil: U.S. crude back to $80 on back of bustling economy - There less chance of a U.S. recession happening as the days go by — unless, of course, the oil price spike pushes the central bank to a new round of aggressive rate hikes that will slow the economy. U.S. crude finally got back to above $80 a barrel on Thursday, reprising highs from April, after gross domestic product growth for the second quarter came in at a surprisingly high 2.4% versus market expectations for just 1.8%. The advance estimate by the Commerce Department, the first of three for each quarter, was further proof that the world’s largest economy would likely dodge a recession despite many analysts on Wall Street being certain for months that a major slowdown was inevitable. The Fed itself was no longer forecasting a recession, given the robust pace of recent growth, Chairman Jerome Powell said Wednesday after the central bank returned to the path of monetary tightening with a quarter point rate hike after a pause in June. The second quarter estimate for U.S. GDP — along with lower weekly employment claims and positive durable goods data — was just the deal needed by oil longs trying to get U.S. crude to make the leap this week to $80 territory after it had stayed above $75 since Friday. The now near two-month rally in oil has its roots in production cut rhetoric that the Saudis and others in the Organization of the Petroleum Exporting Countries have drummed up since June. On top of cuts pledged by OPEC+, which groups 23 nations altogether, the Saudis have committed to cut an additional million barrels per day. Despite talk of extreme tightness in global oil markets from all those supply reductions, U.S. stockpiles saw smaller than expected draws last week for a second week in a row. But oil bulls appeared unfazed by the U.S. inventory data, saying the cuts will eventually show in upcoming weekly numbers. At Thursday’s close, the front-month contract for New York-based West Texas Intermediate, or WTI, settled at $80.09 per barrel, up $1.31, or 1.7%, on the day after peaking earlier at $80.61, its highest since April 19. If the U.S. crude benchmark keeps to its momentum — and there’s little to suggest why it wouldn’t — it would finish up for a fifth straight week that has already delivered a gain of 13% into the pocket of oil bulls for all July. The front-month for London-based Brent crude settled at $84.24 per barrel, up $1.32, or 1.6%, on the day after a three-month high at $84.51. Like WTI, Brent was headed for a fifth weekly gain that already put the global crude benchmark up 12% for this month. The only immediate downside to oil came in the form of the higher Dollar Index, which continued its rebound for a second straight week from the 15-month lows hit earlier in July. Longs plowed into the dollar — whose rise is always a negative to commodities priced in the currency — after the European Central Bank signaled that its rate hike on Thursday might be its last for the year ahead of a pause likely to begin in September. The ECB’s stance hammered the euro and pushed the dollar up instead, especially after the Fed suggested a day earlier that it would keep rates restrictive for as long as needed to bring U.S. inflation, now hovering at 3%, back to its long-term target of 2%. But some say the oil rally could bring its own antidote to the market if inflation spiked as a result, forcing the Fed and ECB to pile on more rate hikes that would eventually hurt demand across the board — including in oil.
Oil prices slip on demand concerns, remain on track for weekly gain -Oil prices slipped in Asian trade on Friday but were on track for a fifth straight week of gains following strong economic data in the US, and on speculation over Chinese stimulus measures and OPEC+ output cuts. Brent crude LCOc1 fell 42 cents, or 0.5%, to $83.82 a barrel by 0404 GMT, but was on track for a weekly 3.5% increase. US West Texas Intermediate (WTI) crude CLc1 fell 34 cents, or 0.4%, to $79.75 a barrel, but were heading for a 3.6% weekly increase. Oil rose in the previous session as strong earnings reports and data showing the US economy grew faster than expected in the second quarter eased fears of a global slowdown. US second quarter gross domestic product grew at 2.4%, beating the 1.8% consensus, the Commerce Department said Thursday, supporting Federal Reserve Chairman Jerome Powell's view that the economy can achieve a so-called "soft landing." The prospect of further Chinese stimulus measures, particularly in the embattled property sector, has also provided some support to prices, following a meeting of the Politburo - a top decision making body - on Tuesday. Markets are also looking to the next market monitoring committee meeting of the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, on 4 Aug for announcements on the continuation of voluntary output cuts. "We continue to see upside to oil prices through 3Q23, and expect pricing sustained above US$90/bbl (Brent) would likely be required to see a loosening in OPEC or Saudi Arabia's voluntary crude supply cuts," said Baden Moore, head of commodity and carbon strategy at National Australia Bank. But recent interest rate increases from global central banks seeking to tame stubborn inflation raised questions about long term demand. On Wednesday, the US Federal Reserve implemented another 25 basis point interest rate hike as widely expected, and the European Central Bank followed suit on Thursday. Earlier this week oil fell after data showed US crude inventories fell less than expected. "We are still not seeing much translation to increased product demand especially within the distillates that have been providing much of the upside lead of the past month,"
NYMEX WTI Oil Futures Top $80 on Weaker US Dollar as Recession Fears Ease - New York Mercantile Exchange oil futures and Brent crude traded on the Intercontinental Exchange strengthened on Friday, with both crude benchmarks notching their fifth consecutive weekly gain on a combination of a retreating U.S. dollar, unplanned refinery outages in the U.S. Gulf Coast amid extreme heat, and receding concerns over recession offset by largely supportive macroeconomic data. Friday's economic data further bolstered the case for the U.S. economy to achieve a "soft landing," a scenario where inflation falls as monetary policy tightens without inducing recession. The personal consumption expenditures index, the preferred inflation measure by the Federal Reserve, increased 0.2% in June from the prior month and 3% from a year earlier, the Commerce Department said Friday morning. That marked the smallest annual gain since March 2021. Food prices decreased 0.1%, services rose 0.3%, while the cost of energy jumped 0.6%. Data released Friday also showed labor costs in the second quarter rose at their slowest pace in two years as wage growth cooled. Surprisingly, an improving inflation environment comes at a time when the U.S. economy has picked up pace from the first quarter, with gross domestic product expanding at annualized rate of 2.4% from April to June, beating expectations for a 1.8% growth rate. Against this backdrop, the Federal Open Market Committee raised borrowing costs for an 11th time since 2022 by 0.25% on Wednesday to the highest level in 22 years at a 5.25% to 5.5% target range. Fed Chairman Jerome Powell during a news conference Wednesday afternoon following the rate announcement reiterated that the central bank would continue its data-dependent approach when deciding on its next policy move. Investors, however, project an 80% chance that the central bank will hold the federal funds rate unchanged during their Sept. 20 meeting, and only 29% of investors see a chance for another rate increase in November. In financial markets, U.S. dollar index pulled back 0.14% against a basket of foreign currencies to settle the session at 101.399, lending upside support for West Texas Intermediate futures, with the front-month contract settling $0.49 higher at $80.58 per barrel (bbl). U.S. dollar and WTI have an inverse relationship, in which a cheaper greenback typically makes the U.S. crude benchmark more attractive for overseas buyers. International benchmark Brent for September delivery added $0.75 per bbl for a $84.99 settlement -- the highest settlement price since mid-April. In refined fuels, NYMEX RBOB August contract added $0.0053 to $2.9558, parring an advance to a $2.9936-per-gallon nine-month high. August ULSD futures advanced $0.0417 to $2.9586 per gallon, the highest settlement on the spot continuous chart since Feb. 1. Underpinning RBOB and ULSD futures gains are unplanned disruptions at several refiners in Texas and Louisiana that have suffered from an extreme heat wave in recent weeks. Currently, a gasoline-making unit at ExxonMobil's 522,500 bpd Baton Rouge refinery in Louisiana, is shut for three to four weeks of unplanned repairs after tripping offline on July 20. PADD 3 refinery runs fell 1.5% to 93.3% of regional capacity during the week ended July 21, according to the Energy Information Administration, which compares with a 97.2% run rate averaged in July 2022. Domestic gasoline supplies currently stand at 7% below the five-year average and are likely to continue a destocking pattern amid refinery unit outages.
Oil posts fifth week of gains on signals of tighter supply (Reuters) - Oil prices rose on Friday and notched a fifth straight week of gains as investors were optimistic that healthy demand and supply cuts will keep prices buoyant. Risk appetite in wider financial markets has been fueled by growing expectations that central banks such as the U.S. Federal Reserve and European Central Bank are nearing the end of policy tightening campaigns, boosting the outlook for global growth and energy demand. Bolstered by supply cuts from the OPEC+ alliance announced earlier this month, both oil benchmarks gained nearly 5% for the week - a fifth straight week of gains. The benchmarks are on track to gain over 13% for the month. Brent crude settled 75 cents higher to $84.99 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 49 cents to $80.58 a barrel. Both benchmarks fell by as much as $1 briefly earlier in the session, as investors took profits after WTI rose above $80 per barrel, Price Futures Group analyst Phil Flynn said. Bullish demand expectations were boosted on Thursday after U.S. second quarter gross domestic product grew at a forecast-beating 2.4%, supporting Federal Reserve Chairman Jerome Powell's view that the economy can achieve a so-called "soft landing." Investors are warming up to the idea of peak rates getting ever closer, while it is looking increasingly probable that the United States will avoid recession. Fresh data released on Friday showed some of the euro zone's top economies displayed unexpected resilience in the second quarter even as a raft of indicators pointed to renewed weakness ahead, as manufacturing ails and services slow. Meanwhile, policymakers in China have pledged to step up stimulus measures to invigorate the post-COVID recovery after the world's second-largest economy grew at a frail pace in the second quarter. In an interview on Friday, Exxon Mobil (XOM.N) chief Darren Woods said he expected record oil demand this year and next. On the supply side, U.S. oil rigs fell by one to 529 this week, their lowest since March 2022, energy services firm Baker Hughes (BKR.O) said on Friday. The data is an indication of future supply. Evidence of tightening is mounting, given declining U.S. inventories and Saudi Arabia's voluntary cut of 1 million barrels per day, Commerzbank analysts said, highlighting this month could have seen OPEC oil production plunge to its lowest level since the autumn of 2021. Saudi Arabia is expected to extend the voluntary oil output cut for another month to include September, five analysts said, to provide additional support for the oil market.
Iranian Oil Is Stuck off Coast of Texas, but U.S. Firms Won’t Touch It —U.S. federal prosecutors can’t auction off 800,000 barrels of seized Iranian oil sitting in a Greek tanker off the coast of Texas because U.S. companies are reluctant to unload it, according to people familiar with the matter. Prosecutors commandeered the Suez Rajan tanker carrying the oil earlier this year after charging its Greek owner with sanctions evasion, and directing the ship into the muddy-green waters 65 miles off Galveston’s coast. The U.S. Coast Guard cleared the tanker for unloading, but the companies that manage those transfers—known as lightering—say they are too worried about Iranian reprisal to handle the captured oil.“Companies with any exposure whatsoever in the Persian Gulf are literally afraid to do it,” said a Houston-based energy executive involved in the matter, citing worries “that the Iranians would take retribution against them.”The executive said that several of the companies contacted about unloading the oil declined.Another executive at a shipping company involved in lightering in the Gulf of Mexico also flagged concerns over retaliation. “I don’t know if anybody’s going to touch it,” the executive said. The impasse over the seized oil illustrates the difficulties the U.S. government faces when it comes to enforcing sanctions against Iran, which has ramped up attacks against Western shipping interests. Tehran uses those tactics to deter the West from interdicting Iranian exports, according to analysts and former U.S. officials. The question of how to deal with the Iranian oil comes amid quiet efforts by top U.S. diplomats to restart negotiations with Tehran over a nuclear accord that former President Donald Trump had pulled out of in 2018. President Biden took office pledging to revive the international pact that imposed limits on Iran’s nuclear programs, but those efforts had stalled last year.“That vessel’s emblematic of a much bigger drama that’s playing out about how we deal with Iranian threats,” said a former U.S. official. Tehran’s military forces have hijacked several Western tankers traveling through the shipping channel off the nation’s southern shores in recent months in what analysts say is retaliation for Western oil seizures. The Defense Department said earlier this month that Iran’s navy attempted to hijack two more tankers but were turned away by the Navy ships protecting international waters in the Strait of Hormuz. U.S. officials said Monday that the Pentagon is deploying F-35 jet fighters and a Navy destroyer to the Middle East as part of an effort to deter Iran from attempting to seize oil tankers and to respond to Russian aggression in the region. Iran analysts say that the Iranian navy’s seizure in late April of the Marshall Islands-flagged Advantage Sweet was likely in retaliation for the U.S. commandeering of the Suez Rajan.“We categorically reject the U.S.’s baseless allegations of hijacking foreign oil tankers by Iran,” a representative for Iran’s mission to the United Nations told The Wall Street Journal. Iranian state media, quoting the government in Tehran, claimed that the Advantage Sweet was seized because it had hit a fishing craft. The owners of the Advantage Sweet didn’t respond to a request for comment.
U.S. Sending More Warships, Marines to Middle East Amid Rising Tensions With Iran - WSJ - Washington has dispatched forces to region over past three months to discourage Iran’s ) The U.S. military said it was sending additional warships and Marines to the Middle East in an effort to deter Iran from seizing more ships in the region.
Iran ranks 3rd in oil reserves globally: OPEC – Iran has the third largest proven oil reserves across the world, new figures by the Organization of Petroleum Exporting Countries (OPEC) show. According to the data, Iran is in possession of a total of 208,600 billion barrels of oil, which remained unchanged between 2019 and 2022. The figure stood at 155,600 billion barrels in 2018, but it surged by 53 billion barrels the following year. Venezuela and Saudi Arabia had the world’s first and second largest proven oil reserves in 2022 with 303,221 and 267,192 billion barrels respectively, according to OPEC figures. OPEC’s proven oil reserves reached 1,243,523 billion barrels in 2022, rising by 0.1 percent when compared to the previous year. The world’s total oil reserves also stood at 1564.441 billion barrels at the end of 2022, showing a 1.1 percent increase compared to 2021. Iran is a founding member of OPEC, an organization enabling the cooperation of leading oil-producing countries in order to collectively influence the global oil market and maximize profit. The country is banned from international oil trade because of US sanctions, but its oil export revenues jumped by 67 percent to $42.6 billion in 2022. It is currently producing some 3.8 million barrels per day (bpd) of crude oil and more than 1 billion cubic meters per day of natural gas. Iran has some 10 active oil refineries and 21 natural gas refineries while it also counts on massive hard currency revenues from its petrochemicals sector.
US Sanctions Blocked UN Earthquake Rescue System in Syria - A life-saving United Nations mapping system to coordinate rescue efforts was blocked in Syria by US sanctions following a devastating earthquake that hit Syria and Turkey on February 6, Middle East Eye reported on Wednesday.The system, known as the Insarag Coordination & Management System (ICMS), uses a cloud-based mapping platform to help rescuers log details of their efforts and share other information.The mapping platform the ICMS uses is called ArcGIS, which is provided by a California-based company, the Environmental Systems Research Institute (ESRI). According to ESRI’s website, its technology is prohibited in Cuba, Iran, North Korea, Syria, Russia, and Belarus due to US sanctions. It’s also blocked in Crimea and the Donetsk People’s Republic, and Luhansk People’s Republic in eastern Ukraine.Rescuers could use the ICMS in neighboring Turkey, but the service was blocked in Syria during the critical first days of rescue operations. The US issued a 180-day sanctions exemption for “all transactions related to earthquake relief efforts” on February 9, but it’s unclear from the MEEreport if the ICMS ever became accessible in Syria.US sanctions are also impeding Syrian efforts to rebuild earthquake-damaged cities as they are specifically designed to prevent Syria’s reconstruction after over 10 years of war. While US sanctions technically have exemptions for humanitarian goods and services, companies typically cut off all services with sanctioned countries because they don’t want to risk running afoul of the US measures. The MEE report said that the ICMS is inaccessible in Iran, which is a very earthquake-prone country.Like in other nations, US sanctions on Iran have had a devastating impact on the country’s civilian population. UN experts said earlier this year that US and other Western sanctions are causing more deaths of Iranians with thalassemia, a congenital blood disorder that requires specialized medicine.
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