oil price hits 10 month high; US commercial oil supplies and gasoline supplies both at nine month lows; total domestic oil supplies, including SPR, at a new 38 year low
US oil prices rose 2.3% over the past week and settled at $87.51 a barrel, just short of the 10 month high close of $87.54 on Wednesday, as profit-taking interrupted a nine day string of price increases on Thursday, and Friday's recovery fell short of a new high....the ostensible reason for the run-up in prices was an unexpected agreement between Russia and the Saudis to continue hold an additional 1.3 million barrels of oil off the market until the end of the year, which will further tighten already tight global supplies...a factor not often cited was that US refineries have pulled a quantity of oil roughly equal to 7% of our supplies out of storage over the past 4 weeks, driving commercial inventories to a nine month low, and leaving total US oil supplies at a 38 year low, even as the later point is not being widely reported, if at all..
natural gas prices, meanwhile, fell 5.8% to $2.605 per mmBTU, as the prospects for further significant air-conditioning demand diminished and utilities headed into winter with gas in storage roughly 8% above normal for the date and 17% more than on the same date a year ago...the combination of higher oil prices and unprofitable natural gas prices will likely pressure Utica shale exploiters to move their operations north and west, out of the major dry gas areas in the counties bordering the Ohio river,and into those areas where the shale bears a higher concentration of oil and natural gas liquids...
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending September 1st indicated that after another increase in our oil exports, we had to pull oil out of our stored commercial crude supplies for the seventh time in eight weeks, and for 18th time in the past 37 weeks, even after a big jump in oil supplies that the EIA could not accounted for....Our imports of crude oil rose by an average of 154,000 barrels per day to 6,770,000 barrels per day, after falling by an average of 316,000 barrels per day the prior week, while our exports of crude oil rose by 404,000 barrels per day to average 4,932,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 1,838,000 barrels of oil per day during the week ending September 1st, 250,000 fewer barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly unchanged at a forty month high of 12,800,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have averaged a total of 14,638,000 barrels per day during the September 1st reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,623,000 barrels of crude per day during the week ending September 1st, an average of 20,000 more 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 787,000 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 September 1st appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 1,198,000 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 [ +1,198,000 ] 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 [+287,000] barrels per day, that means there was a 911,000 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 react 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 787,000 barrel per day decrease in our overall crude oil inventories left our domestic oil supplies, including those in the SPR, at 766,977,000 barrels, the lowest since April 12, 1985, and came as an average of 901,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while an average of 114,000 barrels per day were being added to the oil in our Strategic Petroleum Reserve, the fifth consecutive increase in the SPR after three years of withdrawals.
Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports slipped to an average of 6,484,000 barrels per day last week, which was still 2.0% more than the 6,356,000 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 unchanged at a forty month high of 12,800,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 12,400,000 barrels per day, while Alaska’s oil production was unchanged at 402,000 barrels per day and 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 still 2.3% below that of our pre-pandemic production peak, but was 32.0% 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 93.1% of their capacity while using those 16,623,000 barrels of crude per day during the week ending September 1st, down from their 93.3% utilization rate during the prior week, a utilization rate that is in the normal range for late summer... The 16,623,000 barrels per day of oil that were refined this week were 4.4% more than the 15,929,000 barrels of crude that were being processed daily during week ending September 2nd of 2022, but 4.4% less than the 17,381,000 barrels that were being refined during the prepandemic week ending August 30th, 2019, when our refinery utilization rate was at 94.8%, also within the normal range for this time of year...
Even with a small increase in the amount of oil being refined this week, the gasoline output from our refineries was lower, decreasing by 217,000 barrels per day to 9,788,000 barrels per day during the week ending September 1st, after our refineries' gasoline output had increased by 290,000 barrels per day during the prior week. This week’s gasoline production was 0.6% less than the 9,852,000 barrels of gasoline that were being produced daily over the same week of last year, and 4.7% less than the gasoline production of 10,272,000 barrels per day during the prepandemic week ending August 30th, 2019. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 6,000 barrels per day to 5,017,000 barrels per day, after our distillates output had decreased by 43,000 barrels per day during the prior week. With those decreases, our distillates output was 0.3% less than the 5,031,000 barrels of distillates that were being produced daily during the week ending September 2nd of 2022, and 2.7% less than the 5,154,000 barrels of distillates that were being produced daily during the week ending August 30th, 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 twenty-first time in twenty-nine weeks, decreasing by 2,666,000 barrels to a nine month low of 214,746,000 barrels during the week ending September 1st, after our gasoline inventories had decreased by 214,000 barrels during the prior week. Our gasoline supplies fell by more this week because the amount of gasoline supplied to US users rose by 253,000 barrels per day to 9,321,000 barrels per day, and because our exports of gasoline rose by 149,000 barrels per day to 1,003,000 barrels per day, while our imports of gasoline rose by 134,000 barrels per day to 982,000 barrels per day, ....Even after twenty-one gasoline inventory decreases over the past twenty-nine weeks, our gasoline supplies were virtually unchanged from last September 2nd’s gasoline inventories of 214,808,000 barrels, while about 5% below the five year average of our gasoline supplies for this time of the year…
Meanwhile, even with this week's decrease in our distillates production, our supplies of distillate fuels increased for the thirteenth time in twenty-six weeks, rising by 679,000 barrels to 118,602,000 barrels during the week ending September 1st, after our distillates supplies had increased by 1,235,000 barrels during the prior week. Our distillates supplies rose by less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 164,000 barrels per day to 3,866,000 barrels per day, and as our imports of distillates fell by 33,000 barrels per day to 130,000 barrels per day, and even as our exports of distillates fell by 124,000 barrels per day to 1,184,000 barrels per day....With 38 inventory increases over the past sixty-eight weeks, our distillates supplies at the end of the week were 6.1% above the 111,801,000 barrels of distillates that we had in storage on September 2nd of 2022, but were still about 14% below the five year average of our distillates inventories for this time of the year...
Finally, with our oil imports lower and our oil exports higher, our commercial supplies of crude oil in storage fell for 15th time in twenty-two weeks and for the 26th time in the past year, decreasing by 6,307,000 barrels over the week, from 422,944,000 barrels on August 25th to a nine month low of 416,637,000 barrels on September 1st, after our commercial crude supplies had decreased by 10,584,000 barrels over the prior week. With this week's decrease, our commercial crude oil inventories slipped to about 4% below the most recent five-year average of commercial oil supplies for this time of year, but were about 26% above the average of our available crude oil stocks as of the first weekend of September over the 5 years at the beginning of the past decade, with the difference 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 September 1st were 2.5% less than the 427,191,000 barrels of oil we had in commercial storage on September 2nd of 2022, and were 1.7% less than the 423,867,000 barrels of oil that we still had in storage on September 3rd of 2021, and were 16.7% less than the 500,434,000 barrels of oil we had in commercial storage on September 4th of 2020, after early pandemic precautions had left a lot of oil unused…
This Week's Rig Count
in lieu of our usual rig count coverage, we are just including below a screenshot of the rig count summary pdf from Baker Hughes...in the table below, the first column shows the active rig count as of September 8th, the second column shows the change in the number of working rigs between last week’s count (September 1st) and this week’s (September 8th) count, the third column shows last week’s September 1st active rig count, the 11th 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 9th of September, 2022...
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Canadian company buying Dominion East Ohio Gas - A Canadian firm is in the process of buying the company that supplies most of the Valley’s natural gas. Enbridge has announced a $14 billion deal with Dominion Energy to purchase three gas suppliers, including the East Ohio Gas Company, also known as Dominion East Ohio, which serves more than 1.2 million customers across more than 400 communities and 27 counties in Ohio. East Ohio Gas serves the cities of Cleveland, Akron, Canton, and Youngstown with about 22,000 miles of transmission, gathering, and distribution pipelines, as well as 60 billion cubic feet of natural gas storage. The purchase also includes Questar Gas, which serves about 1.2 million customers in Utah, Wyoming, and Idaho, as well as the Public Service Company of North Carolina, which serves more than 600,000 customers across 28 counties in North Carolina. When completed, the sale will make Enbridge the owner of North America’s largest natural gas utility franchise. “Adding natural gas utilities of this scale and quality, at a historically attractive multiple, is a once-in-a-generation opportunity. The transaction also reinforces our position as the first-choice energy delivery company in North America,” says Greg Ebel, Enbridge’s President, and CEO. Enbridge Gas serves about 75% of residents in the Canadian province of Ontario. The acquisition of each gas utility is expected to close in 2024.
Utica Shale Academy opens community center - — The Utica Shale Academy has extended its reach even further into Salineville by forming a community center for students and residents alike. Lodged in the former Destiny House Church on Church Street in the village, the facility includes a fitness center in the lower level and certified health workers for other support with more plans to form an event center in the near future. CHW’s Jocelyn Reed and Thomas Redman, who are employed through the Jefferson County Educational Service Center (JCESC) and provided by USA, will also assist with employment, mental health, transportation and food needs for clientele. All of the services are free and there are plans to incorporate access to more community resources. Watson explained that plans were to occupy the building as a support system for Positive Behavior Interventions and Supports (PBIS) for students but officials saw an even larger need in the area.
The Potential of the Utica Shale Oil and Gas Reserve to Fuel Ohio's Economy - Ohio is fortunate to have the Utica Shale oil and gas basin located within its borders. This vast underground reserve stretches across Appalachian Ohio and neighboring states, containing an estimated 38 trillion cubic feet of natural gas, 940 million barrels of oil, and 208 million barrels of natural gas liquids. Thanks to advancements in technology like horizontal drilling and hydraulic fracturing, these energy deposits can now be accessed and utilized for the benefit of Ohio’s economy.The utilization of the Utica Shale is already underway in Ohio’s Columbiana County, where four wells in Hanover Township set new oil production records at the start of the year, pumping over 225,000 barrels. This is a promising indication that the Utica Shale has significant potential to fuel job growth and regional development in the state. In fact, oil production across Ohio increased by almost 12 percent compared to the previous year, with Utica Shale oil production seeing a staggering 65 percent increase.To fully unlock the potential of the Utica Shale, the oil and gas industry in Ohio needs new infrastructure, such as pipelines and refineries. However, there are challenges posed by permitting processes and regulatory restrictions imposed by the federal government. While recent reforms have made progress in streamlining project permitting, further action is needed to accelerate the construction of new energy infrastructure.Unfortunately, the Biden administration’s focus on subsidizing alternative energy sources and imposing stricter regulations on fossil fuel companies is hindering the growth of Ohio’s energy industry. By mandating environmental, social, and governance (ESG) scores on publicly traded companies and introducing burdensome emissions rules, the administration is discouraging investment in traditional energy sources. This approach not only harms the energy industry but also affects the everyday lives of Ohioans, as power outages become more common and the reliability of the energy grid declines.Ohio’s elected leaders must challenge the notion that we must accept less in terms of power generation and reliability. Instead, they should invest in infrastructure projects that will support and enhance Ohio’s energy industry. By tapping into the Utica Shale and providing the necessary infrastructure, Ohio can lead the way towards a brighter future, fueling the state’s economy and ensuring a better future for its residents.
JD Vance is one of the top recipients of oil and gas money. Now he's shilling for their interests -- J.D. Vance, the wealthy venture capitalist who moved back to Ohio to become a U.S. Senator as a reborn MAGA zealot, owes his deep-pocketed benefactors big time. Chief among them are the titans peddling fossil fuel. Vance was among the top 20 of all recipients of oil and gas donations in the 2022 campaign. He also personally benefits when oil and gas companies thrive. When the industry reaps huge windfall profits from soaring gas prices at the pump — due to oil production cuts and extreme heat this summer — fossil fuel company shareholders like Vance earn healthy dividends. So it’s not surprising that the millionaire opportunist perched in the U.S. Senate has taken up shilling for the fossil fuel industry. It’s in his self-interest. Not Ohio’s. Recently Vance penned a public relations piece (masquerading as an op/ed in the Marietta Times) to boost oil and gas conglomerates itching to exploit the state’s natural resources for big payouts. The Republican, who received tens of thousands of dollars from oil and gas producers last year, portrayed the potential for more fossil fuel development across Appalachian Ohio as a godsend — even as the economic, ecological and human costs of such drilling are alarmingly abundant. Global temperatures have soared in recent years as the world continues to burn planet-warming fossil fuels like coal, oil and gas. Methane, the main byproduct of natural gas, is much more powerful than carbon dioxide in its global warming effects. And vast releases of methane gas from routine leaks at fossil fuel extraction sites — drill pads, pipelines, compressors, and other infrastructure — cause 25% of global heating today. Scientists are now warning there is a 66% chance the planet’s temperature will climb above 1.5 degrees Celsius between 2023 and 2027. Beyond that critical tipping point, they caution, the chances of extreme flooding, drought, wildfires and food shortages could increase dramatically. We are living a roller coaster of climate catastrophes in real time with a promise of worse. But head-in-the-sand Vance is a mouthpiece for fossil fuel donors who want to get rich fracking for Utica Shale in Ohio. He hails hydraulic fracturing, a highly polluting process that involves injecting massive amounts of water, sand, and toxic chemicals into the ground to fracture rock and extract “natural” oil and gas, as Ohio’s way “to a brighter future” — of fossil fuel dependency instead renewable energy sustainability. Vance lamely attacks the Biden administration’s historic investment in climate and clean energy incentives — which propelled record growth in economically competitive renewables, especially in red districts — as an attempt “to demonize our nation’s most reliable sources of power.” He whines about the administration’s “wanton harassment of fossil fuel companies to the detriment of the American people.” Fossil fuels are the chief source of global warming emissions, one of the most pressing existential issues facing humanity today. Coal smoke is linked to everything from asthma and birth defects to cancer and premature death. Natural gas fracking is tied to contaminated groundwater and earthquakes. Oil is the single largest source of air pollution and smog in the world. Efforts to transition away from harmful, nonrenewable energy to renewable energy consumption ( solar, wind, water) are detrimental to polluters, not people.
New Pennsylvania Legislation Aims to Classify ‘Produced Water’ From Fracking as Hazardous Waste - Katie Muth knew it would be a long shot. This January, the Pennsylvania state senator reintroduced three pieces of legislation aimed at closing loopholes in the laws governing how the oil and gas industry disposes of its solid and liquid waste. In Pennsylvania’s Republican-controlled Senate, Muth said any legislation hampering business as usual for oil and gas companies would garner little to no bipartisan support. Still, there is utility in getting “a lot of legislators on the record voting down clean water,” she said. Together, SB26 and SB28, which have since been referred to the chamber’s Environmental Resources and Energy Committee, would add language to Pennsylvania’s Solid Waste Management Act that would classify oil and gas waste as hazardous, and compel companies to more thoroughly test that waste prior to its disposal. This waste is comprised of solids, called tailings, and liquids, known as produced water, or brine, which contains proprietary chemical additives, hydrocarbons, heavy metals and salt concentrations sometimes seven times higher than sea water, and can be radioactive. “The exemptions don’t remove the harm” that waste from the oil and gas industry inflicts on Pennsylvanians, Muth said. “It just saves corporations money where Pennsylvanians have to suffer.” Residents in Pennsylvania and across the country have expressed concerns about oil and gas waste disposal landfills, holding ponds and storage wells being located in their communities, and researchers and journalists have uncovered instances in which drinking water and freshwater species have been poisoned by produced water. The third bill, SB29, also in the Environmental Resources and Energy Committee, would go beyond closing loopholes by introducing regulations that require landfills to test the toxicity of residual oil and gas waste and any runoff, or leachate, it creates. Once dumped in landfills, oil and gas waste can mix with rainwater to generate highly toxic leachate that can contaminate the surrounding environment as runoff or run through storm sewers to wastewater treatment plants, where it is disposed of in local waterways. SB29 would also prevent landfills from accepting any waste that is radioactive. “These are loopholes that allow one specific industry to do business in a dirty, horrible way,” said Muth, speaking over the phone ahead of the new legislative assembly in Pennsylvania, which began Aug. 30.
13 New Shale Well Permits Issued for PA-OH-WV Aug 28 – Sep 3 | Marcellus Drilling News -- New shale permits issued for Aug 28 – Sep 3 in the Marcellus/Utica continued to decline. There were 13 new permits issued last week, down from 16 issued two weeks ago, and way down from the 27 issued three weeks ago. Last week’s permit tally included 8 new permits in Pennsylvania, 5 new permits in Ohio, and no new permits in West Virginia (WV has issued no permits in five of the last six weeks). Three drillers tied for the top recipient with a piddly 3 permits each: Chesapeake Energy, Snyder Brothers, and Southwestern Energy.ARMSTRONG COUNTY | ASCENT RESOURCES | CHESAPEAKE ENERGY | CLINTON COUNTY | JEFFERSON COUNTY (OH) | MONROE COUNTY | S.T.L. RESOURCES | SNYDER BROTHERS | SOUTHWESTERN ENERGY | SULLIVAN COUNTY
D.C. Circuit case could transform FERC's NEPA reviews - A federal appeals court is considering whether it should put more pressure on the Federal Energy Regulatory Commission to define when natural gas projects pose significant climate risk. During oral arguments Tuesday, judges of the U.S. Court of Appeals for the District of Columbia Circuit pressed the commission for a progress report on a proposed policy for determining when new natural gas projects require a more rigorous form of National Environmental Policy Act review to assess climate impacts. The challenge is the latest in a series of NEPA lawsuits before the D.C. Circuit in recent years aimed at pushing the commission to overhaul how it accounts for how new and proposed gas projects will affect rising greenhouse gas emissions. FERC has backtracked on finalizing a proposal that would set the threshold at projects that produce more than 100,000 metric tons of carbon emissions. Carol Banta, an attorney for FERC, said the commission is still working to respond to prior court rulings requiring more climate analysis — but has not found the correct tool to do so. “It has not determined whether or how to make that ultimate determination, if it needs to,” she said of FERC, “and I don’t think there is a case where this court has said that it has to.” Judge Justin Walker asked whether the D.C. Circuit should make that decision in this case — and questioned whether it would make sense for the commission to stop certifying new projects until FERC finalizes the policy. “Why is that wrong?” Walker, a Trump pick, said to Banta. “These aren’t hostile questions,” he added. “I’m giving you the opportunity to make your case.” Banta replied that FERC takes a hard look at the environmental effects of projects, as required under NEPA, but the commission does not need to make a determination that the emissions are significant. Chief Judge Sri Srinivasan, an Obama appointee, said it sounded as if FERC is making a determination in some cases in which it deems the emissions “just too insignificant” to be a concern. But in cases where the commission can’t say that the climate impact is insignificant, he said, “it is just going to do an environmental impact statement to cover itself.”
Sources: Manchin backs FERC energy analyst for commission seat - A Federal Energy Regulatory Commission staffer would be the next member of the powerful panel if Senate Energy and Natural Resources Chair Joe Manchin has his way. The West Virginia Democrat has recommended to the Biden administration that David Rosner fill the vacant FERC seat, according to six people familiar with the nomination process. The people were granted anonymity because they were not authorized to speak publicly. If nominated and confirmed, Rosner would join the commission as a Democrat — giving FERC a 3-2 Democratic majority over Republicans for the first time since early January.o0Rosner has worked since 2017 as an energy industry analyst in FERC’s Office of Energy Policy and Innovation. But he has been assigned to Manchin’s committee since last year. Detailees are employees who serve temporary assignments elsewhere in the government to offer specialized expertise. “He’s a FERC staffer who’s detailed over to work for Manchin, which is a little unusual, but he’s very knowledgeable,” said one of the FERC observers granted anonymity to speak about Rosner. “It wouldn’t surprise me if there’s some level of comfort with him based on his working [on the Hill].” While Manchin’s office did not say whether the senator is backing Rosner, the six people said Rosner has emerged as the frontrunner for FERC’s open seat.FERC oversees much of the electric grid and reviews natural gas pipelines and other large energy projects for approval. Having just four commissioners opens up the possibility of stalemates on key energy projects and regulations, spurring clean energy advocates and others to call for the confirmation of a fifth commissioner.FERC declined to comment on Rosner and the nomination process. An agency spokesperson referred questions to the White House, which did not respond to a request for comment about Rosner or whether President Joe Biden would nominate him.
Natural Gas Producers Seeing Rising Costs, but 75% of Reserves Economic at $4/Mcfe, Study Finds - Implied costs for natural gas-weighted producers rose by 46% year/year in 2022 to $4.51/Mcfe, according to a new study by BMO Capital Markets. The three-year average cost trend rose 6% to $4.06/Mcfe, the BMO team said. This is based on a comparison to a global Brent oil and Henry Hub basket price. Viewed by the Henry Hub gas price alone, the implied cost of gas supply rose 32% to $2.86/Mcfe in 2022, while the three-year average increased 3% to $2.95/Mcfe, the analysts found.
US natgas prices fall 7% on forecasts for cooler weather, lower demand (Reuters) - U.S. natural gas futures fell about 7% to a one-week low on Tuesday on forecasts for cooler weather and lower gas demand over the next two weeks than previously expected. Front-month gas futures for October delivery on the New York Mercantile Exchange fell 18.3 cents, or 6.6%, to settle at $2.582 per million British thermal units (mmBtu), putting the contract on track for its lowest close since Aug. 29. Even though gas prices gained 9% last week, speculators added so many shorts that they switched their net long futures and options position into a net short position on the New York Mercantile and Intercontinental Exchanges for the first time since early June, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report. In Texas, the state's grid operator, the Electric Reliability Council of Texas (ERCOT), issued a Weather Watch from Sept. 6-8 due to forecasted higher temperatures, higher electrical demand, and the potential for lower reserves. ERCOT said it set a new September peak demand record on Monday and expects to break that September record every weekday this week. The grid operator, however, projected those peaks would remain below its all-time high of 85,435 megawatts on Aug. 10. 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. Financial firm LSEG said average gas output in the lower 48 U.S. states slid to 101.7 billion cubic feet per day (bcfd) so far in September from 102.2 bcfd in August and a record 102.3 bcfd in May. Even though the weather in the lower 48 U.S. states will be less hot than previously expected over the next two weeks, meteorologists still forecast it will remain mostly hotter than normal through at least Sept. 20. LSEG forecast U.S. gas demand, including exports, will ease from 100.9 bcfd this week to 100.6 bcfd next week with a seasonal cooling of the weather. Gas flows to the seven big U.S. LNG export plants fell from an average of 12.3 bcfd in August to 11.7 bcfd so far in September due mostly to reductions at Cheniere Energy's Sabine Pass in Louisiana. That compares with a monthly record of 14.0 bcfd in April. The U.S. is on track to become the world's biggest LNG supplier in 2023 - ahead of recent leaders Australia and Qatar - as much higher global prices continue to feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's war in Ukraine. Gas was trading around $11 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $13 at the Japan Korea Marker in Asia.
Pipeline operator Enbridge Inc will buy three natural gas utilities from Dominion Energy for $9.4 billion — Canadian pipeline operator Enbridge Inc. announced Tuesday that it plans to acquire three gas distribution companies from Dominion Energy. The deal is valued at $14 billion, including $9.4 billion in cash and $4.6 billion in debt, and will create North America’s largest natural gas utility platform, according to Enbridge.Dominion, headquartered in Richmond, Virginia, is one of the largest producers and transporters of energy in the nation. Based in Calgary, Canada, Enbridge owns and operates pipelines in Canada and the United States.Enbridge will buy three of Dominion’s gas utilities: The East Ohio Gas Company, Public Service Company of North Carolina, Incorporated, and Questar Gas Company, which serve about 3 million homes and businesses.“Adding natural gas utilities of this scale and quality, at a historically attractive multiple, is a once in a generation opportunity,” Enbridge CEO Greg Ebel said in a statement.Dominion said the decision to sell three of its utilities comes amid an ongoing business review at the company aimed to “create maximum long-term value for shareholders.” Dominion’s stock is down more than 40% since last September.The deal comes less than two months after Dominion sold a stake in another of its subsidiaries to Warren Buffett’s Berkshire Hathaway Energy for $3.3 billion.“These businesses and employees have been an integral part of the Dominion Energy team, which is why we approached this decision with careful and deliberate consideration,” Dominion Energy CEO Robert Blue said in a statement about the company’s agreement with Enbridge.The deal is expected to close by the end of 2024, and Enbridge has agreed to honor existing union agreements with Dominion employees.
Enbridge bets big on US gas with $14 billion bid for Dominion utilities - (Reuters) - Enbridge will buy three utilities from Dominion Energy (D.N) for $14 billion including debt, the Canadian pipeline operator said on Tuesday, creating North America's largest natural gas provider and doubling its gas distribution business. The deal is seen as a bet on the future of natural gas in a regulated market even as energy companies and consumers are transitioning to a greener future by phasing out fossil fuels. The deals for East Ohio Gas, Questar Gas, and Public Service Co of North Carolina will consist of $9.4 billion in cash and $4.6 billion of assumed debt. The divestments are the latest by Dominion following a strategic refresh announced last year aimed at focusing on its regulated operations. In July, Dominion agreed to sell its 50% stake in Cove Point LNG to the energy arm of Berkshire Hathaway for $3.3 billion. Enbridge President and CEO Greg Ebel described the assets the company is acquiring as "must-have" infrastructure for providing safe, reliable and affordable energy. The deal is expected to close in 2024, subject to approvals from the Federal Trade Commission and Committee on Foreign Investment in the United States, among others. Upon closing, Enbridge would supply over 9 billion cubic feet per day (bcfpd) of gas to about 7 million customers in Ohio, North Carolina, Utah, Idaho and Wyoming, making it the largest gas utility business by volume in North America. It would give the Calgary-based company access to a bigger chunk of cash from U.S. consumers as they buy gas for cooking and heating from an Enbridge-owned utility. "Enbridge is currently the only major pipeline and midstream company that owns a regulated gas utility and we've further strengthened that position today by doubling the size of our GDS (gas distribution and storage) business," Enbridge's Chief Financial Officer Patrick Murray said in a statement. Ratings agency Moody's swiftly downgraded the outlook for Enbridge and four subsidiaries to negative from stable, saying the deal would add pressure to an "already weak financial profile that we expect to persist following the transaction close." The modest improvement in Enbridge's business risk profile is not enough to "offset ongoing pressure on the company's financial profile," said Gavin MacFarlane, vice president and senior credit officer at Moody's, in a statement.
Enbridge's $14 Billion US Gas Utility Buy Raises Eyebrows --Analysts and investors are wary of Enbridge's plans to acquire three major US gas distribution companies from Dominion Energy, a US$14 billion deal that would increase the Calgary-based company's debt load while raising questions about its cash flow potential. “Enbridge has a significant amount of floating rate debt which has become quite expensive, so I would have preferred to see Enbridge sell assets and reduce its leverage,” Infrastructure Capital Management analyst Andrew Meleney told Energy Intelligence. “Regulated utilities require a significant amount of capex, and the free cash flow yield at Enbridge will be reduced. Both factors will ultimately reduce or delay Enbridge returning capital to shareholders." On the upside, however, "those assets are highly regulated and will reduce the earnings volatility at Enbridge,” he said. Enbridge's acquisition — creating North America’s largest gas utility holding company — involves East Ohio Gas, Questar and Public Service Co. of North Carolina. It would double the size of its gas distribution business to deliver a combined 9.3 billion cubic feet of gas per day to 7 million retail customers after the deal's expected 2024 close. The transaction, which includes US$4.6 billion in Dominion debt, will add utility operations in Ohio, North Carolina, Utah, Idaho and Wyoming to Enbridge’s portfolio. It comprises about 78,000 miles of gas distribution, transmission, gathering and storage pipelines, and more than 62 Bcf of working underground and LNG storage capacity. "Enbridge is currently the only major pipeline and midstream company that owns a regulated gas utility, and we've further strengthened that position today by doubling the size of our [gas distribution] business,"
Environmentalists lose latest court battle against liquified natural gas project in Louisiana (AP) — Environmentalists opposed to a planned liquified natural gas terminal and pipeline in southwest Louisiana lost a court battle Wednesday over a federal permit for the project. The Sierra Club and the Healthy Gulf organization had asked an appeals court in New Orleans to review and vacate the permit granted by the U.S. Army Corps of Engineers for the Driftwood project. But the 5th U.S. Circuit Court of Appeals turned back the effort in a Wednesday afternoon ruling. A panel of three appellate judges rejected multiple arguments against the permit in a 26-page ruling, saying the Corps had complied with requirements of the federal Administrative Procedures Act and the Clean Water Act. The Driftwood project is being developed on the Calcasieu River. The corporation that owns the project, Tellurian Inc., has said it hopes to begin liquified natural gas production by 2027.
Baker Hughes to Supply Liquefaction Equipment to Driftwood LNG - Baker Hughes has secured an agreement with Tellurian Inc. to supply eight main refrigerant compression packages for phase one of the Driftwood LNG project. The agreement covers the delivery of eight LM6000PF+ gas turbines, main refrigerant compressors, and control units required for phase one, supporting Driftwood’s ability to achieve initial liquefied natural gas (LNG) production in 2027, Baker Hughes said in a recent news release. Baker Hughes said it is also on schedule to complete, by early next year, the fabrication of electric-powered, zero-emissions Integrated Compressor Line (ICL) packages and other turbomachinery equipment for Driftwood Pipeline 200, following a contract award in 2022. Driftwood LNG LLC, owned by Tellurian, is developing an LNG production and export terminal on the west bank of the Calcasieu River, south of Lake Charles, Louisiana, that is targeted to export up to 27.6 million metric tons of LNG globally once completed, according to the company website. “Bechtel has done a tremendous job preparing the site and has already completed the piling and compressor foundations for Plant 1 of Driftwood LNG. This agreement with Baker Hughes firms up our plans to secure the critical technology for Driftwood Phase 1. We value our continued, long-term relationship with Baker Hughes for delivering industry-leading manufactured equipment and technology solutions to enhance our ability to deliver clean energy to the world”, Tellurian President and CEO Octavio Simoes said. According to a separate news release from Baker Hughes, the company and Venture Global LNG have executed an expanded master equipment supply agreement for the delivery of additional liquefaction train systems and power island systems for Venture Global’s future LNG export projects. The agreement supports Venture Global’s long-term expansion plan to increase output from 70 million metric tons per annum (mtpa) to more than 100 mtpa of nameplate LNG export capacity, according to the release.
Oneok Says Saguaro Connector Pipeline Dependent on Mexico LNG Project FID - Oneok Inc. is waiting on the sanctioning of a proposed LNG export terminal on Mexico’s Pacific Coast before proceeding with the 2.8 Bcf/d Saguaro Connector pipeline out of the Permian Basin, management indicated Wednesday. oneokCEO Pierce Norton and his team discussed the midstreamer’s North America plans during the Barclays CEO Energy-Power Conference in New York. The 155-mile pipeline would supply Permian Basin natural gas to the Mexico border. From there, it would connect with a new pipeline in Mexico that would feed into Mexico Pacific Limited LLC’s (MPL) Saguaro Energía liquefaction terminal planned for Puerto Libertad, Sonora. MPL has yet to reach a final investment decision (FID) for the terminal.
Congress Set to Sell East Coast's 1MM Barrel Gas Cache - Congress is poised to sell off a 1 million barrel emergency cache of gasoline created in the aftermath of Hurricane Sandy amid questions about the reserve’s usefulness. Legislation needed to fund the Energy Department slated for the Senate floor as soon as this month would shut the Northeast Gasoline Supply Reserve. The Republican-controlled House included the same language in its version of the bill. The reserve was authorized in 2014 after Sandy damaged refineries and left terminals underwater leading some gas stations in New York to go without fuel for as long as 30 days. But the cache, kept in commercial storage terminals in Maine, Massachusetts and New Jersey, has never been used, according to a 2022 Government Accountability Office report. The product reserves cost about $13 per barrel on an annual basis for operations and maintenance, compared to roughly 30 cents a barrel for crude oil stored in the Energy Department’s Strategic Petroleum Reserve, the report said. The reserve “does not have the operational functionality that was envisioned post-Sandy,” President Donald Trump wrote in his 2017 budget request that also recommended killing the gasoline cache. Today, gasoline stockpiles on the East Coast are near the bottom of the 10-year seasonal range and could dwindle further with two regional refiners set to undergo maintenance. One of them is Canada’s Irving Oil, the single most important supplier to the New England market. Still, 1 million barrels doesn’t amount to much in the East Coast region, which burned through 3.26 million barrels a day of gasoline in June. According to a July committee report on the Senate’s $58 billion energy and water appropriations bill, selling the reserves would have netted the government some $94 million. At today’s pump prices, that figure is even higher.
Oil spill at Port Manatee causes more than 19,000 gallons of contaminated water - The United States Coast Guard is investigating a crude oil spill at Port Manatee that resulted in a cleanup over the weekend of more than 19,000 gallons of oil-slicked water, according to a Coast Guard spokesperson. That’s enough to fill roughly six concrete mixer trucks. The spill was first reported to the Coast Guard’s call center on Friday, and cleanup crews arrived on the scene that day to begin a multiday cleanup effort, according to spokesperson Nicole Groll. The source of the oil, including the responsible party, was still under investigation as of Tuesday. While the Coast Guard is working to contain the spill to inside the port, a full-time fishing charter captain told the Tampa Bay Times he was driving through oil-sheened water and coin-sized clumps of sludge Saturday near the port as he was out in Tampa Bay trying to catch redfish and snook. Todd Young, owner and charter captain of Reel Memories, said he launched his boat Saturday morning from Cockroach Bay for a day of fishing. When he made it near the port later in the day, his fishing line and the sides of his 22-foot boat were coated in oil. “There was a steady film across the water, and clumps of oil that were silver-dollar-sized,” He shared photos of his boat that appear to show oil staining the hull. Responders placed oil booms, or temporary floating barriers designed to contain oil spills, in the water around the port, Groll said. Since cleanup began Friday, at least 15 tons of oily debris, including booms meant to curb the spill, were removed from the polluted waters. “We don’t know how much oil was actually released,” Groll said in an interview Tuesday morning. “There’s been no new oil, and what’s being vacuumed up is the oil on top of the water and oil itself, because oil floats to the surface.” During the first night of cleanup on Friday, crews used an oil boom, stretching more than 1,000 feet long, to scoop roughly 4,500 gallons of oil-water mixture, according to the Coast Guard. On Saturday and Sunday, crews cleared a combined 10,200 gallons. And on Monday, crews cleared another 4,400 gallons from the port. Cleanup crews are also working to clean off any ship hulls that were slimed by the oil. Cleanup will continue until crews are sure all oil is removed, according to the Coast Guard.
WES to Expand Powder River Basin Assets with Meritage Acquisition A Western Midstream Partners LP (WES) operating subsidiary has signed an agreement to acquire privately-held Meritage Midstream Services II LLC in an all-cash transaction with a purchase price of $885 million. Meritage owns and operates a large-scale natural gas gathering and processing business in the Powder River Basin of Wyoming. Completion of the transaction is expected in the fourth quarter of 2023, subject to customary closing conditions and regulatory approvals, WES said in a recent news release. Meritage’s assets, located in Converse, Campbell, and Johnson counties, Wyoming, include approximately 1,500 miles of high- and low-pressure natural gas gathering pipelines, approximately 380 million cubic feet per day of natural gas processing capacity, and the Thunder Creek NGL pipeline, which is a 120-mile, 38,000 barrel-per-day (bpd) FERC-regulated natural gas liquids pipeline that connects to Meritage’s processing facilities. The Meritage assets are supported by more than 1.4 million dedicated acres from a diverse set of majority investment grade counterparties, with an average remaining contract life of approximately eight years, according to the release. Following the integration of the Meritage assets, WES said it will be “well positioned to compete for additional acreage dedications and business development opportunities from offset producers in the basin”. “The addition of the Meritage assets meaningfully expands the financial and operational scale of our existing Powder River Basin footprint by adding significant producer inventory and further diversifying our growing G&P [gathering and processing] customer portfolio”, WES President and CEO Michael Ure said. “The Powder River Basin has attracted investment from some of the largest E&P [exploration and production] companies due to the basin’s multi-stacked pay horizon potential. Throughout 2023, a combination of large, independent E&Ps and well-capitalized, private companies have operated thirteen to fourteen rigs, on average, throughout the basin”
Summit Carbon Solutions leaves open transporting CO2 for oil wells - Agweek — The top operations official for the Summit Carbon Solutions pipeline left open the possibility that liquid carbon dioxide transported to North Dakota could be used by the oil industry.Jimmy Powell, Summit’s chief operations officer, said because the Summit pipeline intends to operate as a common carrier, the product could be used for enhanced oil recovery to help wells in North Dakota produce more oil.“If another carrier decided to use, or ask us to transport CO2 for another purpose, like enhanced oil recovery, then that's a possibility,” Powell said in testimony in front of the Iowa Utilities Board on Tuesday, Sept. 5.Powell was the first Summit official to testify before the Iowa Utilities Board as the board considers whether to grant Summit a pipeline route permit.Powell made his statement under questioning from attorney Brian Jorde, who represents landowners who object to allowing the pipeline through their property.“We're a common carrier because …. if someone can meet our quality specs and has a means to get the product onto the pipeline and has a location to get it off of the pipeline and we have capacity — and we're maintaining 10% of the capacity of the pipeline for other shippers — then I believe we are a common carrier."In an interview with Agweek in February 2022, Chris Hill of Summit Carbon Solutions noted that the permit application specified that the pipeline was for “permanent” storage of the CO2 in western North Dakota.Jorde noted a news story that followed the North Dakota Public Service Commission’s rejection of the Summit permit application on Aug. 4, in which Lynn Helms, director of North Dakota’s Department of Mineral Resources, said the state needs carbon dioxide for enhanced oil recovery “or we will leave billions of barrels of oil in the ground.”Summit Carbon Solutions has appealed the North Dakota PSC’s decision. A ruling on that appeal should come later this month.
Newsom embraces dirty energy in bid to stave off blackouts - POLITICO— California Gov. Gavin Newsom campaigned on shutting down Aliso Canyon, a gas storage facility that was the site of the largest methane leak in U.S. history.Now, five years later, his administration is poised to inject even more gas into the sandstone chamber 8,500 feet beneath north Los Angeles in a bid to stave off energy price spikes and power shortages.He’s also blessed extensions of gas and nuclear power plants that were scheduled to be closed. Keeping the lights on takes precedence over California’s clean energy goals, at least for now.Newsom is grappling with the same nuts-and-bolts challenges of running the electric grid as other blue-state officials in New York as well as the Biden administration. The pivot reflects the awkward reality faced by Newsom and other climate-minded governors: Politics moves far faster than the building of solar fields, wind farms and transmission lines, while power blackouts and electric bill spikes hit home immediately.“If there’s a blackout, it’s the governor’s fault,” said former Gov. Gray Davis (D), who was recalled in 2003 partly due to rolling blackouts and electricity price spikes during his term. “Certainly they don’t send you congratulations when you keep the power on, but ultimately they’ll hold the governor responsible for maintaining the grid.”Newsom is scarred from not only the state’s bout with two nights of rolling blackouts in 2020, when energy demand spiked during a heat wave, but the memory of a political upset 20 years ago. He’s keenly aware of the political risks and the real-world consequences of outages that affect not just comfort and convenience but health, safety and the economy.“If that comes at the expense of the lights staying on, you know, you have to be practical,” Newsom spokesman Anthony York said earlier this month of Newsom’s position on delaying the nuclear and Aliso closures.The Newsom-appointed Public Utilities Commission is scheduled to vote Thursday on whether to approve the Aliso Canyon expansion, which would boost storage by two-thirds to nearly 69 billion cubic feet.His administration also extended the life of three aging natural gas plants in Southern California last month and is helping keep Diablo Canyon, the state’s remaining nuclear plant, open despite his prior support as lieutenant governor for closing it.Underpinning all of the extensions is a rapidly changing energy picture on multiple fronts. Extreme weather is becoming more common, producing dramatic swings in demand and extreme events such as wildfires and floods that can abruptly wipe out transmission.At the same time, energy demand is climbing due to a push to electrify everything from cars to homes. And new sources of renewable energy are backed up for years in permitting bottlenecks.
Biden administration cancels remaining oil and gas leases in Alaska's Arctic Refuge (AP) — In an aggressive move that angered Republicans, the Biden administration canceled the seven remaining oil and gas leases in Alaska’s Arctic National Wildlife Refuge on Wednesday, overturning sales held in the Trump administration’s waning days, and proposed stronger protections against development on vast swaths of the National Petroleum Reserve-Alaska. The Department of Interior’s scrapping of the leases comes after the Biden administration disappointed environmental groups earlier this year by approving the Willow oil project in the petroleum reserve, a massive project by ConocoPhillips Alaska that could produce up to 180,000 barrels of oil a day on Alaska’s petroleum-rich North Slope. Protections are proposed for more than 20,000 square miles (51,800 square kilometers) of land in the reserve in the western Arctic. Some critics who said the approval of Willow flew in the face of Biden’s pledges to address climate change lauded Wednesday’s announcement. But they said more could be done. Litigation over the approval of the Willow project is pending. “Alaska is home to many of America’s most breathtaking natural wonders and culturally significant areas. As the climate crisis warms the Arctic more than twice as fast as the rest of the world, we have a responsibility to protect this treasured region for all ages,” Biden said in a statement.Alaska’s Republican governor condemned Biden’s moves and threatened to sue. And at least one Democratic lawmaker said the decision could hurt Indigenous communities in an isolated region where oil development is an important economic driver. Interior Secretary Deb Haaland, who drew criticism for her role in the approval of the Willow project, said Wednesday that “no one will have rights to drill for oil in one of the most sensitive landscapes on earth.” However, a 2017 law mandates another lease sale by late 2024. Administration officials said they intend to comply with the law.
Gwich'in celebrate cancellation of oil exploration leases in Alaska's Arctic refuge --For Gwich'in on both sides of the Canada-U.S. border it's a major victory, even if it isn't set in stone.The Biden administration on Wednesday announced it's cancelling seven oil exploration leases in the Arctic National Wildlife Refuge, an area that includes the breeding grounds of the Porcupine caribou herd.Gwich'in people consider the area "the sacred place where life begins.""It's a step in the right direction for this administration to make," said Bernadette Dementieff, executive director of Alaska's Gwich'in Steering Committee. "We still have a lot of work to do to permanently protect [the refuge], but I'm really enjoying the news."Pauline Frost, chief of the Vuntut Gwitchin First Nation in Old Crow, Yukon, said the decision allows Gwich'in "breathing space" to organize further efforts to put the refuge forever off-limits to oil and gas development, something that would require an act of Congress."The entire nation really needs to start partnering with our allies and friends and ... stand together and start to use this as an opportunity to send some clear messages to the Biden administration, really to the world, that drilling in the coastal plain cannot proceed," Frost said. "It just can't."
Canada Producers Tout Lower Emissions from Conventional Natural Gas, Liquids Production - Greenhouse gas (GHG) emissions shrank while Canadian natural gas and liquids byproduct output grew during the 2012-2021 period, according to government records compiled by the Canadian Association of Petroleum Producers (CAPP). Annual GHG discharges from gas, condensate and lighter fluids production dropped by 22% to 50 million tons in 2021 from 64 million tons in 2012. Annual methane emissions by Canadian gas and liquids production fell by 40% to 15 million tons in 2021 from 25 million tons in 2012. “Canada’s conventional producers are demonstrating we can grow energy production to address energy security while also lowering emissions,” said CAPP President Lisa Baiton.
In a Small French Town Where Houston-Based LyondellBasell Is a Fixture, Residents Complain of Unending Pollution -- People living on the east side of Harris County, Texas, have an unlikely bond with residents of Berre-l’Étang in southern France: They all inhale toxic chemicals from plants owned by LyondellBasell, one of the world’s largest petrochemical companies. In the summer of 2020, LyondellBasell’s 2,471-acre industrial complex in Berre-l’Étang had more than half a dozen major incidents in which flares released large amounts of chemicals into the air. Thick clouds of smoke drifted over the community of 14,000. The flares burned so brightly, photographs show, that the normally pitch-black night was replaced by what looked like a prolonged sunset. The smoke carried benzene and other toxic substances to Marseille, France’s second-most-populous city, 10 miles away. A year later in Texas, two major chemical releases at LyondellBasell facilities in Harris County forced residents of Jacinto City, Galena Park and neighboring towns to shelter indoors. One of those incidents killed two workers and sent dozens to area hospitals. Last year Public Health Watch and the Investigative Reporting Workshop examined LyondellBasell’s record in Harris County, and that project made us curious about the company’s performance outside the United States. In eastern Harris County, 10 oil refineries process 2.6 million barrels of crude oil a day, and thousands more facilities store or manufacture the chemicals the industry uses and produces. Petrochemical plants loom over houses and playgrounds. A terminal holding millions of barrels of chemicals is seven blocks from a middle school. Berre-l’Étang lies in one of the most heavily industrialized areas of France, where it and nine other towns surround a 60-square-mile lake, Étang de Berre. A 2017 study of some of those towns found that 63% of the population had at least one chronic disease. The French national average is 37%. Local officials in France appear to have even less power to deal with industrial emissions than those in Texas, wherestate regulations are notoriously lax. Activists in both countries complain that regulators prioritize the economic well-being of polluting industries over the environment and public health.
Rystad: North Sea projects worth $14bn could be approved by end of 2024 -- UK North Sea projects totalling some $14 billion could be sanctioned by the end of 2024, according to research from Rystad Energy.Equinor’s (OSLO: EQNR) Rosebank scheme, the basin’s largest untapped resource, makes up that lion’s share of that pipeline, with Cambo and Clair Phase 3 also contributing.All in all the research firm believes there is scope for companies to press the green button on 14 UK North Sea schemes in 2024 alone.But Rystad’s chief executive and founder, Jarand Rystad caveated those forecasts with a warning about the impact of the sector windfall tax, which has “cooled the interest in sanctioning projects”.A total of four North Sea fields are still on track to reach final investment this year, Rystad notes, including BP’s (LON: BP) Murlach, Hibiscus Petroleum’s Teal West and Harsthead Resources’ (ASX: HHR) Anning and Somerville.The Oslo-headquartered group expects Equinor to sanction Rosebank in 2024, though a senior figure at the company said yesterday that it is still aiming for 2023.The elephant in the room though is the UK Government’s energy profits levy, which has severely dented sector confidence.Addressing a business breakfast on the sidelines of the Offshore Europe conference in Aberdeen, Mr Rystad said: “By the end of 2024, this is the total volume ($14bn) that could be sanctioned for development – in one way it could be a trend shift for sanctioning next year.“But one thing that is dominating this conference is sentiment, and the windfall profit tax, which has really cooled down the interest in sanctioning all these projects – will it happen or will it not? “If they are sanctioned then Equinor will be the biggest investor, with Shell (LON: SHEL), Ithaca Energy (LON: ITH), BP, Neo Energy and Harbour Energy (LON: HBR), so still three of the majors.”His comments come on the same day as Offshore Energies UK (OEUK) unveiled its latest economic report, which delivered some sobering statistics.The trade body warned around £100bn of North Sea projects are being held up over political uncertainty – while UK oil production hit its lowest in nearly 30 years.That could pose a real risk to the UK’s energy resilience, with Rystad forecasting that by 2035, 75% of North Sea production will be coming from new fields.
Chevron faces two-week total strike at Australia LNG projects - Workers at Chevron's Gorgon and Wheatstone liquefied natural gas (LNG) projects in Australia plan a total strike for two weeks from Sept. 14, a union alliance said on Tuesday, a significant escalation on disputes over pay and conditions. The decision comes amid mediation talks hosted by the Fair Work Commission (FWC), Australia's industrial arbitrator, which began on Monday and is scheduled to run every day this week, and ahead of brief work stoppages called by the union from Thursday. "The Offshore Alliance is escalating protected industrial action to demonstrate that our bargaining negotiations are far from 'intractable'," the union alliance said in a Facebook post.
Chevron and unions in talks to avert Australia LNG strike - Chevron and unions representing workers at two major liquefied natural gas (LNG) facilities in Australia are holding last-ditch talks ahead of planned industrial action. Workers are set to start a series of work stoppages from Thursday in the dispute over pay and conditions. If their terms are not met, they plan to escalate to a total strike. Concerns about the stoppages recently pushed up prices in natural gas markets. The US energy giant's Gorgon and Wheatstone plants in Western Australia account for more than 5% of global LNG capacity. Australia's industrial arbitrator, the Fair Work Commission, has been hosting mediation talks between Chevron and the Offshore Alliance - which is a partnership of two unions representing energy workers. "Lower level strikes looks set to start tomorrow, which will add inefficiencies but are unlikely to materially impact global supply," energy analyst, Saul Kavonic told the BBC. However, the threat of rolling full stoppages from 14 September could potentially have an impact on global energy markets. "In the unlikely event the situation escalates to full stoppages, then around 6% of global supply would come offline, which could see prices spike if the strikes were to be prolonged into northern hemisphere winter," Mr Kavonic said.
Workers at Chevron Australia LNG Plants to Strike for Three Weeks --Workers at Chevron Corp.'s liquefied natural gas (LNG) facilities in Australia have decided to extend their planned strike to at least three weeks, accusing the energy giant of circumventing bargaining negotiations. "The Offshore Alliance lawyers have served Chevron with a further Notice of Protected Industrial Action which will commence after our first 7 days of PIA kicks off on Thursday 7th September", the union said in a statement on Facebook. "The new Protected Industrial Action Notice will escalate workbans and the OA [Offshore Alliance] will have rolling 24 x 1 hour stoppages, each day for 14 days from Thursday 14th September". The Offshore Alliance, which consists of the Australian Workers' Union (AWU) and the Maritime Union of Australia, had said a majority of workers at the Gorgon and Wheatstone facilities in Western Australia voted in favor of a strike to press for better employment standards. Of 253 Offshore Alliance members working at Gorgon 249 voted in the strike ballot, all in favor. Of 188 members at Wheatstone 184 voted, all in support of a strike, according to an earlier Offshore Alliance statement. Meanwhile all six members of the Electrical Trades Union at Gorgon and all two at Wheatstone voted in favor of a strike, according to the ballot results statement. The latest ballot results on strikes against Chevron Australia confirmed by the Fair Work Commission (FWC) showed all 37 AWU members eligible to vote said yes to a strike while all nine members of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia who were eligible to vote also supported a strike. "The Offshore Alliance has 98 percent union density on the Gorgon and Wheatstone facilities and members have voted 100 percent in favor of taking Protected Industrial Action in support of a union EBA [enterprise bargaining agreement]", said the Offshore Alliance's announcement of the results. The union later announced its lawyers have "served Chevron with formal Notice of Protected Industrial Action on all 3 West Coast facilities, commencing Thursday 7th September 2023". The second notice served to Chevron Australia means the strike would now last at least three weeks. The Offshore Alliance said the extended action was in response to Chevron Australia attempting to dodge a union-initiated deal and opting to put forward its own terms. The union said an enterprise agreement dished out by the company for a vote had won only seven supporters out of 979 employees.
European gas prices jump 10% as strikes get underway at major LNG facilities in AustraliaEuropean gas prices moved sharply higher Friday as workers at Chevron’s Australian natural gas facilities went on strike, prompting fears that a prolonged halt to production could squeeze global supplies. The industrial action at the Gorgon and Wheatstone projects in Western Australia follow daily talks this week to try to come to an agreement. The negotiations ultimately failed, however, to resolve a long-running dispute over pay and job security. At present, no further talks are scheduled to take place between U.S. energy giant Chevron and the unions representing workers at the liquified natural gas projects. Work stoppages of up to 11 hours are scheduled to continue through to Thursday, at which point the action is poised to ramp up to a total strike of two weeks. The front-month gas price at the Dutch Title Transfer Facility (TTF) hub, a European benchmark for natural gas trading, was last seen trading around 10% higher at 36 euros ($38.50) per megawatt hour. “Unfortunately, following numerous meetings and conciliation sessions before the Fair Work Commission, we remain apart on key terms,” a spokesperson for Chevron Australia said. The Fair Work Commission refers to Australia’s independent workplace relations tribunal, which had been mediating the talks. Chevron Australia added that the unions sought terms it believed to be “above and beyond” equivalent terms with others in the industry, without offering further details. Fears of strike action in Australia, one of the world’s biggest exporters of LNG, have recently pushed up European gas prices — and analysts expect near-term market volatility to persist. European gas prices rose to around 43 euros last month but had pared gains as the two sides sought an amicable resolution. The TTF contract remains well below last summer’s extraordinary spike to more than 300 euros. “Chevron are demanding they be given special concessions in bargaining – a demand which we have put through the shredding machine,” the Offshore Alliance said in a Facebook post Friday. Offshore Alliance is the union alliance representing workers at Chevron’s Gorgon and Wheatstone gas operations. “Their bargaining performance has been the most inept effort of any employer the Union has dealt with in the past 5 years and our members have had enough,” the group added. “It’s game on, Chevron.”
Greek shipper pleads guilty to smuggling Iranian crude oil and will pay $2.4 million fine (AP) — A Greek shipping company has pleaded guilty to smuggling sanctioned Iranian crude oil and agreed to pay a $2.4 million fine, newly unsealed U.S. court documents seen Thursday by The Associated Press show.The now-public case against Empire Navigation, which faces three years of probation under the plea agreement, marks the first public acknowledgement by U.S. prosecutors that America seized some 1 million barrels of oil from the tanker Suez Rajan. The saga surrounding the ship further escalated tensions between Washington and Iran, even as they work toward a trade of billions of dollars in frozen Iranian assets in South Korea for the release of five Iranian Americans held in Tehran. The court filings also shed light on the covert world of Iranian crude oil smuggling in the face of Western sanctions since the collapse of its 2015 nuclear deal — an operation that has only grown in scale over this year.The U.S. and its allies have been seizing Iranian oil cargoes since 2019. That’s led to a series of attacks in the Mideast attributed to the Islamic Republic, as well as ship seizures by Iranian military and paramilitary forces that threaten global shipping through the Strait of Hormuz, the narrow mouth of the Persian Gulf through which 20% of the world’s oil passes.Attention began focusing on the Suez Rajan in February 2022, when the group United Against Nuclear Iran said it suspected the tanker carried oil from Iran’s Khargh Island, its main oil distribution terminal in the Persian Gulf. Satellite photos and shipping data analyzed at the time by the AP supported the allegation.The newly unsealed court documents rely on satellite images, as well as documents, to show that the Suez Rajan sought to mask its loading of Iranian crude oil from one tanker by trying to instead claim the oil came from another.For months, the ship sat in the South China Sea off the northeast coast of Singapore before suddenly sailing for the Texas coast without explanation. The vessel discharged its cargo to another tanker, which released its oil in Houston in recent days. The court documents seen Thursday confirm the U.S. government seized the oil.A lawyer for Empire Navigation, Apostolos Tourkantonis, pleaded guilty in April to a single charge of violating the sanctions on Iran. Empire, based in Athens, Greece, did not respond to a request for comment early Thursday.
Iraq-Turkiye oil flows not expected to resume before October | Arab News - Iraqi oil flows to Turkiye are not expected to resume before October, when Turkish President Tayyip Erdogan will likely visit Baghdad, sources said, after the trip originally scheduled for August was postponed. Turkiye halted Iraqi northern oil export flows on March 25 after an arbitration ruling by the International Chamber of Commerce (ICC) ordered Ankara to pay Baghdad damages of $1.5 billion for unauthorized exports by the Kurdistan Regional Government (KRG) between 2014 and 2018. In April, Iraq petitioned a US federal court to enforce the ICC arbitration award. A lack of progress on resolving this litigation was one of the reasons behind the postponement of Erdogan’s August visit, the sources said. Erdogan still intends to visit Baghdad and “wants an agreement to be signed,” but “so far the concrete steps expected by Iraq have not yet been taken,” resulting in slow progress, a senior Turkish official said. One of the steps Ankara is seeking is a halt to the US litigation and as a result, Erdogan’s visit is scheduled for October, the source added. “Until now we have not received a definite timeline from Ankara on when the Turkish president is expected in Baghdad,” another source, an Iraqi foreign ministry official, said. Energy officials in Baghdad and Ankara are “having complicated discussions,” with the resumption of flows “the most difficult question,” an Iraqi oil official with knowledge of the talks said, adding it was “not likely” flows would restart this month. Turkiye has also sought a compromise to reduce the damages to be paid to Iraq under the ICC arbitration, two Iraqi oil officials close the talks said. Iraqi sources have previously said Turkiye wants Iraq to drop a second arbitration case on exports covering the period from 2018 onwards. Turkiye’s energy ministry did not immediately respond to a request for comment. The KRG has lost roughly $4 billion since oil flows to Turkiye’s Ceyhan Port through a pipeline were halted, two sources familiar with the matter said.
Coast Guard averts oil spill in Occidental Mindoro -- The Philippine Coast Guard (PCG) averted a possible oil spill off the coast of Paluan town in Occidental Mindoro after a cargo ship ran aground, according to a belated report on Sunday. Capt. Edyson Abanilla, commanding officer of PCG in Occidental Mindoro, said they successfully drained over 15,000 liters of diesel from the fuel tank of MV Joegie 5 that ran aground off the coast of Paluan town on Friday. It was reported earlier that all 14 crew of MV Joegie 5 were safe. The ship was still full of fuel at the time. Capt. Arnie Alberto, skipper of MV Joegie 5, said in an interview that the incident happened "due to strong winds and large waves."
The great escape: Over 10,000 offshore workers evacuated from platforms and vessels ahead of super typhoon - State-owned offshore giant China National Offshore Oil Corporation (CNOOC) over the weekend evacuated more than 10,000 workers from offshore production platforms, floating production and storage vessels, construction vessels and drilling rigs in anticipation of Typhoon Saola. Qiu Zhimin, operation and emergency manager of CNOOC Shenzhen, which is spearheading exploration and production in the Pearl River Mouth basin of the South China Sea said his company had evacuated 7720 of its own crew members using 271 helicopter flights and 57 vessel operations. An additional 2861 crew members were evacuated from 14 drilling rigs and 34 construction vessels employed by CNOOC's in-house drilling contractor, China Oilfield Service Ltd (COSL), in the area. The Pearl River Mouth basin is a core area for CNOOC, where it is expanding facilities to boost hydrocarbon production. At peak, the basin sees more than 8000 crew members working simultaneously alongside almost 80 vessels, 44 fixed production platforms and nine mobile drilling platforms. The exact extent of production losses due to the shutdown remains uncertain. CNOOC typically initiates evacuation procedures and production shutdowns three days before a typhoon's arrival and factors in the production losses caused by typhoons in its annual production target. In 2022, CNOOC Shenzhen produced 129.8 million barrels of oil equivalent, accounting for 30% of CNOOC's net production in China.
Oil giant led by COP28 boss to spend an ‘eyewatering’ $1 billion a month on fossil fuels this decade, Global Witness says --UAE oil giant ADNOC — run by the president of the COP28 climate conference — is expected to spend more than $1 billion every month this decade on fossil fuels, according to new analysis by international NGO Global Witness.This is nearly seven times higher than its commitment to decarbonization projects over the same timeframe, the research says.ADNOC, which recently became the first among its peers to bring forward its net-zero ambition to 2045, disputes Global Witness’ analysis and says the assumptions made are inaccurate.It comes ahead of the COP28 climate summit, with Dubai set to host the U.N.’s annual conference from Nov. 30 through to Dec. 12. Viewed as one of the most significant climate conferences since 2015’s landmark Paris Agreement, COP28 will see global leaders gather to discuss how to progress in the fight against the climate crisis.The person overseeing the talks, Sultan al-Jaber, is chief executive of ADNOC (the Abu Dhabi National Oil Company) — one of the world’s largest oil and gas firms. His position as both COP28 president and ADNOC CEO caused dismay among civil society groups and U.S. and EU lawmakers, although several government ministers have since defended his appointment.Global Witness’ analysis, provided exclusively to CNBC, found that ADNOC is planning to spend an average of $1.14 billion a month on oil and gas production alone between now and 2030 — the same year in which the U.N. says the world must cut emissions by 45% to avoid global catastrophe.It means that ADNOC is forecast to spend nearly seven times more on fossil fuels through to 2030 than it does on “low-carbon solution” projects.By 2050, the year in which the U.N. says the entire world economy must achieve net-zero emissions, ADNOC is projected to have invested $387 billion in oil and gas. The burning of fossil fuels is the chief driver of the climate emergency.A spokesperson at ADNOC told CNBC via email: “The analysis of, and assumptions made, regarding ADNOC’s capital expenditure program beyond the company’s current five-year business plan (2023 to 2027) are speculative and therefore incorrect.”The Abu Dhabi energy group announced in January this year that it would allocate $15 billion for investment in “low-carbon solutions” by 2030, including investments in clean power, carbon capture and storage and electrification projects.
Saudi Arabia shipped less oil in August as OPEC cuts continue – Saudi Arabia shipped 175.22 million barrels of crude in August 2023, over 31 million barrels less than the 206.61 million it shipped in the previous month, according to Refinitiv’s shipping data In July, the top oil exporter implemented a cut in production of 1 million barrels per day (bpd), on top of the existing 1.5 million bpd output cuts it is already implementing. A Bloomberg report last week said shipments out of the kingdom fell in August to around 5.6 million bpd, the lowest levels since March 2021. The UAE, meanwhile, saw a slight increase in oil shipments in August versus the previous month. OPEC’s third-biggest producer shipped 91.67 million barrels last month compared with 85.13 million barrels in July, the Refinitiv data showed. Iraq’s shipments, including Kirkuk, was at 110.76 million barrels, down slightly from 111.39 million barrels in July.
Saudi Arabia, Russia extend 1.3 mn barrel a day oil cut till Dec -Saudi Arabia and Russia agreed on Tuesday to extend their oil production cuts through the end of this year, trimming 1.3 million barrels of crude out of the global market and boosting energy prices. The dual announcements from Riyadh and Moscow pushed benchmark Brent crude above $90 a barrel in trading Tuesday afternoon, a price unseen in the market since last November. The countries’ moves will increase the cost for motorists filling up at the pump and put new pressure on Saudi Arabia’s relationship with the United States.
Saudi-Russia Move Can Only Result in One Thing - In a market update sent to Rigzone, Rystad Energy Senior Vice President Jorge Leon outlined that the extension of Saudi Arabia’s one million barrel per day cut and Russia’s 300,000 barrel per day export cut to the end of the year “significantly tighten the global oil market and can only result in one thing - higher oil prices worldwide”. “The decisions surprised oil markets, and prices reacted strongly and suddenly following the announcements,” Leon said in the update. “ICE Brent front month jumped from $88.5 per barrel to over $90.5 per barrel, the highest price since November 2022,” he added. “We are now predicting global liquids demand will surpass supply by around 2.7 million barrels per day in the fourth quarter of this year,” he continued. “The big question is: are the Saudis worried about global demand in the final quarter of 2023, particularly in China, so that they need to take preempted measures”, Leon went on to state. In the update, the Rystad SVP noted that Chinese macroeconomic sentiment is a potential downside risk but added that Rystad’s latest mobility indicators “do not show an imminent deceleration that could justify such a move by Saudi Arabia”. “The impact these cuts will have on inflation and economic policy in the West is hard to predict, but higher oil prices will only increase the likelihood of more fiscal tightening, especially in the U.S., to curtail inflation,” Leon said in the update. “Western leaders, wary of an oil price spike, could explore import adjustments or open diplomatic discussions to help mitigate the impact and tame inflation,” he added. Dylan Hattingh, and Oil and Gas Analyst at Energy Aspects, told Rigzone that Energy Aspects has been “flagging the likelihood that Saudi Arabia would keep the cuts in place through year-end for some time now”. “However, this announcement has gone further than many in the market had expected, demonstrated by the rally in flat price and spreads,” Hattingh added. “Market consensus had initially expected that Saudi Arabia would extend the one million barrel per day cut through October, although doubts were starting to creep in as crude prices rose,” he added. Hattingh noted that the decision to announce a three-month extension rather than just another one-month rollover is intended to show the market that the Kingdom remains absolutely committed to rebalancing the market. “The official Saudi statement indicates the cuts will be reviewed each month and could be amended. We expect the full one million barrel per day cut will remain in force through December,” he said.
Oil prices spike as Saudi Arabia, Russia extend 1.3M barrel a day oil cut through December (AP) — Saudi Arabia and Russia agreed Tuesday to extend their voluntary oil production cuts through the end of this year, trimming 1.3 million barrels of crude out of the global market and boosting energy prices. The dual announcements from Riyadh and Moscow pushed benchmark Brent crude above $90 a barrel in trading Tuesday afternoon, a price unseen in the market since November. The countries’ moves could increase inflation and the cost for motorists at gasoline pumps. It also puts new pressure on Saudi Arabia’s relationship with the United States, as President Joe Biden last year warned the kingdom there would be unspecified “consequences” for partnering with Russia on cuts as Moscow wages war on Ukraine. Saudi Arabia’s announcement, carried by the state-run Saudi Press Agency, said the country still would monitor the market and could take further action if necessary. “This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” the Saudi Press Agency report said, citing an unnamed Energy Ministry official. State-run Russian news agency Tass quoted Alexander Novak, Russia’s deputy prime minister and former energy minister, as saying Moscow would continue its 300,000 barrel a day cut. The decision “is aimed at strengthening the precautionary measures taken by OPEC+ countries in order to maintain stability and balance of oil markets,” Novak said. Benchmark Brent crude traded Tuesday above $90 a barrel after the announcement. Brent had largely hovered between $75 and $85 a barrel since last October. A barrel of West Texas Intermediate, a benchmark for America, traded around $87 a barrel.
WTI Tops $87 as Saudi Output Cut to Further Tighten Market -- West Texas Intermediate futures on the New York Mercantile Exchange and Brent crude on the International Exchange advanced for the ninth and eighth consecutive sessions, respectively, on Wednesday following Tuesday's announcement of extended production and export cuts from OPEC+ leaders that combines with expectations for solid demand growth in the fourth quarter that is seen continuing to prompt global inventory drawdowns. Front-month Brent held above $90 per barrel (bbl) for the second session this week after Saudi Arabia prolonged its unilateral 1 million barrels per day (bpd) oil production curtailment for another three months. The move is seen as significantly tightening the global oil market later this year. Saudi Aramco on Wednesday doubled down on the strategy of defending oil prices by raising its official selling price for October for benchmark Light Arab crude to two key markets -- U.S. and Asia. For Asian refiners, Aramco lifted OSP by 10 cents against the Oman-Dubai average, while hiking selling prices to U.S. refiners by 20 cents. U.S. commercial crude oil stocks declined for all but one of the past seven weeks, falling by more than 40 million bbl since mid-July -- the month Saudi Arabia began a voluntary reduction of 1 million bpd in conjunction with OPEC+ cuts. U.S. commercial crude stockpiles currently stand at their lowest level since December 2022 and some 3% below the seasonal five-year average. For major oil-consuming nations, extended supply cuts by the Saudis and Russians clearly risk accelerating inflationary pressures that only recently started to ease from multidecade highs. A renewed inflationary spike would squeeze consumers and businesses just as central banks are seen near the end of a monetary tightening cycle. In financial markets, the U.S. dollar clawed back earlier losses to settle at the highest settlement since early March 104.821 on Wednesday after a key gauge on the U.S. service sector of the economy showed business activity unexpectedly accelerated in August, expanding for the eighth straight month. The report from the Institute of Supply Management revealed that 13 out of 18 service industries reported growth, and subindexes of employment and input prices came in well above the prior month's levels. "Warnings of a possible recession in 2024 are not being taken seriously by top management. The same experts warned that the country would be in a recession by now. Our general feeling is that the (Federal Reserve's) strategy for taming inflation and building a soft landing for the economy is working better than expected," said a representative from Public Administration. Similar sentiment was echoed in the Beige Book released by the Federal Reserve Wednesday afternoon indicating the overall economy slowed, putting downward pressure on prices without excessive job losses. "Most districts reported price growth slowed overall, decelerating faster in manufacturing and consumer-goods sectors," reports the Beige Book, adding businesses "renewed their previously unfulfilled expectations that wage growth will slow broadly in the near term." At settlement, WTI October futures on NYMEX advanced $0.85 to climb to a fresh 10-month high settlement at $87.54 bbl and Brent for November delivery rallied to $90.60 bbl, up $0.56. NYMEX RBOB October futures added $0.0204 to $2.6014 per gallon. Moving in the opposite direction, NYMEX ULSD October futures retreaded $0.0269 to $3.1927 per gallon.
The Oil Market Posted an Inside Trading Day and Ended the Session in Negative Territory, Ending a Nine-Day Streak of Gains The oil market posted an inside trading day and ended the session in negative territory, ending a nine-day streak of gains. The market traded lower on profit-taking. The crude market posted a high of $87.74 in overnight trading before it traded lower, as it retraced some more of Tuesday’s sharp gains. It traded mostly sideways ahead of the release of the EIA weekly petroleum stocks report. The market briefly traded back towards its high following the release of the inventory reports showing a larger than expected draw in crude stocks of over 6 million barrels on the week. However, the oil market retraced its gains and sold off to a low of $86.39 on profit-taking as concerns over China’s economy seemed to overshadow the draws in stocks. The October WTI contract settled down 67 cents at $86.87 and the November Brent contract settled down 68 cents at $89.92. The product markets ended the session higher, with the heating oil market settling up 1.96 cents at $3.2123 and the RB market settling up 2.16 cents at $2.623. The EIA reported that U.S. crude oil stocks fell for the fourth consecutive week, with inventories down over 6% in the last month. Crude stocks fell by 6.3 million barrels, triple the 2.1 million barrel decline that analysts expected. The EIA also reported that U.S. Midwest distillate stocks increased by 613,000 barrels in the week ending September 1st to 33.2 million barrels, the highest level since July 2021. JP Morgan said it holds a constructive view on oil prices in the short term. It still does not see oil prices breaching $100/barrel in 2023. It said Saudi determination and increasing Russian cooperation would tighten oil balances and lift Brent prices to $90/barrel or even above by September. Insights Global reported that gasoline stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp terminal in the week ending September 7th increased by 7.05% on the week and by 5.78% on the year to 1.428 million tons, while gasoil stocks increased by 3.45% on the week and by 17.21% on the year to 1.921 million tons and fuel oil stocks fell by 2.24% on the week and by 7.42% on the year to 1.048 million tons. Operations at Marathon Petroleum’s 593,000 bpd Galveston Bay refinery in Texas were normal on Thursday following an upset in a steam boiler at the power plant supplying the refinery. A leak in a steam pressure header in the Green Power 2 plant triggered warnings about excessive noise from the Texas City Emergency Management Department to area residents on Thursday. Phillips 66 experienced an equipment failure at its 139,000 bpd Carson, California refinery on Monday. It said all refinery safety systems functioned as designed and were able to shut down equipment safely. Chevron Corp reported unplanned operational issues at its 112,229 bpd Pasadena, Texas refinery.
OPEC+ In a Good Position to Keep Oil Around $85 Per Barrel OPEC+ is in a good position to keep oil at around $85 per barrel, according to a new report from Skandinaviska Enskilda Banken AB (SEB), which was sent to Rigzone earlier this week. “We expect OPEC+ to be in solid control of the global oil market over the next couple of years as U.S. shale oil production slows to a trickle,” SEB analysts Bjarne Schieldrop, the company’s Chief Commodities Analyst, and Ole R. Hvalbye, noted in the report. “An oil price of $85-90 per barrel should be a good balancing point for consumers and producers,” the analysts added. In the report, the analysts stated that OECD commercial oil inventories are up 111 million barrels over the past year but added that U.S. strategic petroleum reserves over the same period have declined “by almost the same amount - 95 million barrels”. “The global oil market has thus been nearly balanced over the past year with no real increase in OECD inventories when the decline in U.S. SPR is considered,” the analysts said in the report. The analysts also highlighted in the report that Saudi Arabia produced 10.5 million barrels per day in April “but then rapidly drew it down to only 9.0 million barrels per day in July to September”. “This did wonders for the oil price, which has shot back up to around $85 per barrel,” the analysts stated in the report. “This [is] exactly where we think Saudi Arabia wants to keep it if it can. It yields sufficient income while it is not so high that it stirs too much political kickback from its customers,” they added.
Blinken Speaks With Netanyahu, Abbas Amid Saudi Normalization Push - On Tuesday, the State Department said Secretary of State Antony Blinken held separate phone calls with Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas amid a US push to broker a normalization deal between Israel and Saudi Arabia. According to the State Department, Blinken and Netanyahu discussed several issues, including Iran and “expanding Israel’s regional integration.”Discussing Blinken’s phone calls at a White House briefing, National Security Advisor Jake Sullivan said they were not “routine” but added they did not “portend any imminent breakthrough or action with respect to the question of normalization.”Also on Tuesday, PA officials arrived in Riyadh to discuss the Saudi-Israel normalization talks that are being brokered by the US. Abbas did not make the trip, but the delegation includes officials closest to him. PA sources told Haaretz that the delegation is looking to be updated on the status of the normalization negotiations.Saudi Arabia’s long-stated position was that it would not normalize with Israel until Palestinians were granted a state, but Riyadh has softened its stance on the issue. The PA is looking to the Saudis to get concessions out of Israel for a normalization deal, but the demands do not include statehood.One of the PA’s demands is for a change to the status of Area C, which makes up over 60% of the West Bank and is entirely under Israeli military control. The PA wants partial control of the zone, but that is unlikely considering the Netanyahu government includes extremist settlers who want to annex the territory.For their part, the Saudis are making major demands of the US as conditions to normalize with Israel, including a NATO-style security guarantee and support for a civilian nuclear program.
Iraqi Official Says US 'Offensive Weapons' Violate Terms of Agreement - A senior Iraqi military official speaking to The New Arab said the US has violated the terms of its agreement to maintain a military footprint in Iraq due to the presence of “offensive weapons” at an American base.The unnamed Iraqi official said he saw offensive weapons, including Black Hawk and Apache helicopters, during a visit to the Ain al-Asad base in western Iraq. “This is contrary to the agreement concluded in 2021, which allowed the presence of defensive weapons with the advisory task force,” the official said.In December 2021, the US changed its presence in Iraq from a “combat role” to an “advisory role” to placate the many elements in Iraq who want the US to leave. But the US did not withdraw any troops and still has about 2,500 troops in Iraq today.The Iraqi government has been under pressure to expel the US since January 2020, when the US killed Iranian Gen. Qasem Soleimani and Iraqi militia leader Abu Mahdi al-Muhandis in a drone strike in Baghdad. In the wake of the assassination, Iraq’s parliament voted to end the US military presence.The US says it’s in Iraq to help the government fight ISIS remnants, but the presence also supports the US occupation of eastern Syria. The Iraqi military official who spoke with The New Arab said Baghdad will press the US about the offensive weapons at the Ain al-Asab base, especially considering US activity in neighboring Syria.Over the past week, the US-backed Kurdish-led SDF in Syria has been fighting against local Arab tribes in Deir Ezzor, who have also received support from the US. According to The New Arab, SDF commander Mazloum Abdi said the US-led coalition had provided air support in the fight against the Arab tribes, but the claim is not confirmed.
IAEA Report Shows Iran Slows Its Enrichment of Uranium at 60% - A report from the International Atomic Energy Agency (IAEA) shows Iran has slowed its enrichment of uranium at 60% purity, The Associated Press reported on Monday.Iran began enriching uranium at 60% in response to an Israeli attack on its Natanz nuclear facility in April 2021. The level is the highest uranium enrichment Iran has done, but it is still well below the 90% needed for weapons-grade, and there’s no sign Tehran is planning to build a nuclear bomb, which was recently reaffirmed by a US intelligence report.According to the IAEA report obtained by AP, Iran has 121.6 kilograms of uranium enriched at 60%, compared with just over 114 kilograms in May. The numbers mean Iran’s stockpile of 60% enriched uranium is growing at its slowest pace since it started in 2021.The revelation comes as the US and Iran have been working to exchange prisoners in a deal that will also give Iran some access to its frozen funds that are held in South Korea. Earlier this year, a series of reports said the US and Iran were close to an interim nuclear deal that would involve Iran stopping 60% enrichment and receiving some sanctions relief, but an agreement never materialized.Due to opposition from hardliners in Congress, the Biden administration’s dealings with Iran are generally kept secret, so it’s unclear if there is still a potential deal on the table related to Tehran’s civilian nuclear program. Iran hawks in both the US and Israel point to Tehran’s uranium enrichment as evidence the Iranians are racing to build a bomb, but they oppose the 2015 nuclear deal, known as the JCPOA, that capped Iran’s enrichment at 3.67%.
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