Monday, October 16, 2023

refinery utilization at 8 month low; gasoline exports at a 10 month high; 3Q global oil shortage averaged 1,540,000 bpd

US refinery throughput at a 7 month low, refinery utilization down 8% in 4 weeks to an 8 month low; gasoline exports at a 10 month high;  global oil supply was 1,570,000 barrels per day short of global demand in September as OPEC's output was 581,000 barrels per day below the their reduced target; third quarter oil shortage averaged 1,540,000 barrels per day..

US oil prices ended a volatile week 5.9% higher after a war broke out between the Palestinian nationalist group Hamas and the state of Israel, and traders feared that ​t​he conflict could ​turn regional and eventually impact Mideast oil supplies…after falling 8.8% last week to $82.79 a barrel last week after OPEC left their production cuts unchanged, Fed officials signaled tighter monetary policy in the months ahead, and US gasoline demand fell to a nine month low, US benchmark oil prices opened nearly $3 higher on Monday after analysts warned a wider Middle East conflict could send oil prices skyrocketing. and settled with a $3.59 gain at $86.38 a barrel …after​ pulling back 41 cents during a relatively quiet trading day Tuesday, oil prices tumbled $2.48 to $83.49 a barrel on Wednesday after the Saudis pledged to help stabilize the global markets, the EIA reported that US oil inventories had increased much more than expected, and the US dollar whipsawed ahead of Thursday’s consumer price report, which was expected to impact Fed interest rate policy....oil prices continued 58 cents lower Thursday, still pressured by the large US crude supply build, but then rallied on Friday​ to close $4.78, or nearly 6% higher at $87.69 a barrel, supercharged by a pledge from G7 nations to strengthen the sanction regime on Russian oil exports, while the escalating war between Israel and Hamas risked metastasizing into a broader conflict in the Middle East...

meanwhile, natural gas prices finished 3.1% lower at $3.236 per mmBTU, after trading in a narrow range all week amid rising production and forecasts for mild temperatures through October and beyond, after the EIA’s storage report indicated a more than adequate surplus ​of gas in storage heading into winter…The EIA's natural gas storage report for the week ending October 6th indicated that the amount of working natural gas held in underground storage in the US increased by 84 billion cubic feet to 3,529 billion cubic feet by the end of the week, which left our natural gas supplies 316 billion cubic feet, or 9.8% above the 3,213 billion cubic feet that were in storage on October 6th of last year, and 163 billion cubic feet, or 4.8% more than the five-year average of 3,366 billion cubic feet of natural gas that were in working storage as of the 6th of October over the most recent five years…the 84 billion cubic foot injection into US natural gas working storage for the cited week was less than the 88 billion cubic feet addition to supplies that was expected by industry analysts surveyed by Reuters, and much less than the 125 billion cubic feet that were added to natural gas storage during the corresponding week of 2022, and also less than the average 93 billion cubic feet addition to natural gas storage that has been typical for the same Autumn week over the past 5 years…

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending October 6th indicated that after a big drop in our oil exports and another large ​p​ullback in our oil refining, we had surplus oil to add to our stored commercial crude supplies for the third time in thirteen weeks, and for the 21st time in the past 42 weeks, despite a big drop in those weekly oil supplies that the EIA could not account for....Our imports of crude oil rose by an average of 115,000 barrels per day to average 6,329,000 barrels per day, after falling by an average of 1,014,000 barrels per day the prior week, while our exports of crude oil fell by 1,889,000 barrels per day to average 3,067,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 3,262,000 barrels of oil per day during the week ending October 6th, 2,004,000 more barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells reportedly rose by 300,000 barrels per day to an all time high of 13,200,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have averaged a total of 16,462,000 barrels per day during the October 6th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,203,000 barrels of crude per day during the week ending October 6th, an average of 399,000 fewer barrels per day than the amount of oil that our refineries were processing during the prior week, while over the same period the EIA’s surveys indicated that an average of 1,453,000 barrels of oil per day were being added to the supplies of oil stored in the US. So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending October 6th appear to indicate that our total working supply of oil from net imports and from oilfield production was 194,000 barrels per day less than what was added to storage plus our oil refineries reported they used during the week. To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a [ +194,000 ] 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 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 [+ 1,168,000 ] barrels per day, representing unaccounted for demand, that means there was a 974,000 barrel per day difference between this week's oil balance sheet error and the EIA's big 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 nonsense...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 1,453,000 barrel per day increase in our overall crude oil inventories left out total oil supplies at 775,513,000 barrels, and it came as an average of 1,454,000 barrels per day were being added to our commercially available stocks of crude oil, while an average of 1,000 barrels per day were being pulled out of our Strategic Petroleum Reserve, following eight SPR additions over the prior nine weeks. Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to 6,572,000 barrels per day last week, which was still 3.5% more than the 6,352,000 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 300,000 barrels per day higher at an all time high of 13,200,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 300,000 barrels per day higher at 12,800,000 barrels per day, while Alaska’s oil production was 2,000 barrels per day lower at 418,000 barrels per day but still added the same 400,000 barrels per day to the EIA's 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 is now 0.8% above that of our pre-pandemic production peak, and 36.1% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.

US oil refineries were operating at 85.7% of their capacity while processing those 15,602,000 barrels of crude per day during the week ending October 6th, ​an eight month low that's down from their 93.7% utilization rate of four weeks ago, a decline in refinery utilization that is sharper than the usual during the weeks right after Labor Day, when refineries undergo seasonal maintenance during a changeover to produce winter blends of fuel.. The 15,203,000 barrels per day of oil that were refined this week were ​a 7 month low, 3.1% less than the 15,683,000 barrels of crude that were being processed daily during week ending October 7th of 2022, and 2.9% less than the 15,656,000 barrels that were being refined during the prepandemic week ending October 4th, 2019, when our refinery utilization rate was also at 85.7%, and also down sharply from the September 6th week of that year...

Even with decrease in the amount of oil being refined this week, the gasoline output from our refineries was higher, increasing by 858,000 barrels per day to 9,684,000 barrels per day during the week ending October 6th, after our refineries' gasoline output had decreased by 313,000 barrels per day to a eight month low during the prior week. This week’s gasoline production was 5.6% less than the 9,168,000 barrels of gasoline that were being produced daily over the same week of last year, but still 3.8% less than the gasoline production of 10,066,000 barrels per day during the prepandemic week ending October 4th, 2019. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 38,000 barrels per day to 4,727,000 barrels per day, after our distillates output had decreased by 243,000 barrels per day during the prior week. With that modest increase, our distillates output was still 2.8% less than the 4,863,000 barrels of distillates that were being produced daily during the week ending October 7th of 2022, and 2.2% less than the 4,835,000 barrels of distillates that were being produced daily during the week ending September 27th, 2019...

Even with this week's increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 23rd time in thirty-four weeks, decreasing by 1313,000 barrels to 225,671,000 barrels during the week ending October 6th, after our gasoline inventories had increased by 6,481,000 barrels to a six month high during the prior week. Our gasoline supplies fell this week because the amount of gasoline supplied to US users rose by 567,000 barrels per day to 8,581,000 barrels per day, and because our imports of gasoline fell by 330,000 barrels per day to 589,000 barrels per day and because our exports of gasoline rose by 341,000 barrels per day to a ten month high of 1,178,000 barrels per day,....Even after twenty-three gasoline inventory decreases over the past thirty-three weeks, our gasoline supplies were 7.8% above than last October 7th's gasoline inventories of 209,368,000 barrels, and about 1% above the five year average of our gasoline supplies for this time of the year…

​Likewise, even with this week's increase in our our distillates production, our supplies of distillate fuels decreased for the seventeenth time in thirty-one weeks, falling by 1,837,000 barrels to 116,958,000 barrels over the week ending October 6th, after our distillates supplies had decreased by 1,269,000 barrels during the prior week. Our distillates supplies fell by more this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 145,000 barrels per day to 3,670,000 barrels per day, because our exports of distillates rose by 300,000 barrels per day to 1,440,000 barrels per day while our imports of distillates rose by 35,000 barrels per day to 120,000 barrels per day,....With 40 inventory increases over the past seventy-three weeks, our distillates supplies at the end of the week were still 10.3% above the 106,063,000 barrels of distillates that we had in storage on October 7th of 2022, but were also about 11% 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 rose for 8th time in twenty-six weeks and for the 25th time in the past year, increasing by 10,176,000 barrels over the week, from a ten month low of 414,063,000 barrels on September 29th to 424,239,000 barrels on October 6th , after our commercial crude supplies had decreased by 2,224,000 barrels over the prior week. With this week's decrease, our commercial crude oil inventories were about 3% below the most recent five-year average of commercial oil supplies for this time of year, but were still about 27% above the average of our available crude oil stocks as of the first weekend of October over the 5 years at the beginning of the past decade, with the big difference between those comparisons arising because it wasn’t until early 2015 that our oil inventories had 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 October 6th were 3.4% less than the 439,082,000 barrels of oil in commercial storage on October 7th of 2022, were 0.6% less than the 426,975,000 barrels of oil that we still had in storage on October 8th of 2021, and were 13.3% less than the 489,109,000 barrels of oil we had in commercial storage on October 9th of 2020, after early pandemic precautions had left a lot of oil unused…

OPEC's Report on Global Oil for September

Thursday of this past week saw the release of OPEC's October Oil Market Report, which includes the details on OPEC's & global oil data for September, and hence it gives us a picture of the global oil supply & demand situation as Chinese ​demand remained stalled after their first half recovery from the country's ​restrictive Covid policy, while oil supplies were impacted by an ongoing unilateral production cut by the Saudis and an additional 300,000 million barrel per day supply cut by Russia...September was also the ninth month that OPEC and aligned oil producers were operating under a 2 million barrel per day production cut, meant to take roughly 2% of global oil supplies off the market, in response to a perceived global surplus and related lower prices, and the fourth month of a Saudi led cut of an additional 1.16 million barrels per day, which, when combined with a unilateral 500,000 million barrel per day Russian cut, was intended to take an additional 1.66 million barrels per day off the market for the rest of this year...all told, then, the members of the cartel have committed to holding 4.66 million barrels per day off the market, or roughly 4.6% of global supplies...

The first table from this month's report that we'll review is from the page numbered 50 of the report (pdf page 60), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings below indicate...for all their official production measurements, OPEC has used an average of production estimates by as many as eight "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA), the industry newsletter Petroleum Intelligence Weekly, the energy consultancy Wood Mackenzie and the research and intelligence firm Rystad Energy, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures…

As we can see in the bottom right hand corner of the above table, OPEC's oil output increased by 273,000 barrels per day to 27,775,000 barrels per day during September, up from their revised August production total that averaged 27,482,000 barrels per day....however, that August OPEC output figure was originally reported as 27,449,000 barrels per day, which therefore means that OPEC's August production was revised 33,000 barrels per day higher with this report, and hence OPEC's September production was, in effect, 306,000 barrels per day more than the previously reported OPEC production figure (for your reference, here is a copy of the table of the official August OPEC output figures as reported a month ago, before this month's revision)...

the additional million barrel per day output cut the Saudis first implemented in July and recently extended to the end of this year was the latest in a series of oil supply cuts imposed by the OPEC+ cartel over the past year, beginning with a 2 million barrel per day production cut that the joint agreement imposed on all producers in October...following that, six OPEC oil producers, led by the Saudis, and two other oil producers aligned with OPEC+, came to an agreement at the beginning of April to further reduce their combined production by an additional 1.16 million barrels per day beginning in May, over and above the formal OPEC addition, Russia agreed to extend their ongoing 500,000 barrels per day cut for the rest of the year for a total cut of 1.66 million barrels per day from those nine producers...production cuts for OPEC members under that agreement included 500,000 barrels per day (bpd) from the Saudis, 211,000 bpd from Iraq, 140,000 bpd from the Emirates, 128,000 bpd from Kuwait, 48,000 barrels per day from Algeria, and 8,000 barrels per day from Gabon...​f​our months ago, our assessment was that only the Saudis managed to hit the additional production cut target in May, and only Algeria joined them in June, indeed, most of the others increased their production over the June through August period, rather than cutting it, and it appears that's also been the case in September....hence, the net production reduction remains less than half of what had been committed to by the parties to that April 2nd agreement..

furthermore, OPEC and other aligned oil producers had previously agreed to reduce production by 2,000,000 barrels per day beginning in November, so the net 1,​016,000 barrels per day OPEC ex-Saudi Arabia has cut since then is also short of that...however, OPEC's production was already running 1,585,000 barrels per day below what they were expected to produce when that policy was initiated in October, so the 27,755,000 barrels per day OPEC produced in Septembe still leaves them​ short of what they were expected to produce during the month, as we'll see in the next table...

The above table was originally included as a downloadable attachment to the press release following the 33rd OPEC and non-OPEC Ministerial Meeting on October 5th, 2022, which set OPEC's and other aligned oil producers' production quotas for November 2022 and the following months through the end of 2023, and the quotas shown above were reaffirmed by the cartel for 2023 in during the 34th OPEC and non-OPEC Ministerial Meeting on December 4th, 2022....the first column above, labeled "August 2022 required production", actually matches the October 2018 baseline production level on which OPEC and aligned producers have based all of their quotas since the onset of the pandemic, and the "Voluntary adjustment" is the production cut each country is expected to make from that benchmark level to achieve a 2 million barrel per day cut for the cartel as a whole, leaving each country with a "Voluntary Production" level they're expected to hit each month during 2023, whether they've produced that much recently or not....since war torn Libya and US sanctioned producers Iran and Venezuela have been exempt from the production cuts imposed by the joint agreement that has governed the output of the other OPEC producers since May 2020, they are not shown on the above list, and OPEC's quota excluding them is aggregated under the total listed for the 'OPEC 10', which you can see was expected to be at 25,416,000 barrels per day from November 2022 through December 2023...

with the April 2nd agreement, six members of OPEC agreed to further reduce their production by 1,035.000 starting in May and through the end of the year....thus the voluntary production level for the OPEC 10 would have been reduced to 24,381,000 through December....subtracting the million barrel per day cut from the Saudi's production initiated in July leaves OPEC's voluntary production level at 23,381,000 barrels for the month of September....therefore, the 22,800,000 barrels those 10 OPEC members actually produced in September were 581,000 barrels per day short of what they were expected to produce during the month, with Nigeria and Angola still accounting for the majority of this month's production shortfall...

The next graphic from this month's report that we'll look at shows us both OPEC's and worldwide oil production monthly on the same graph, over the period from October 2021 thru September 2023, and it comes from page 51 (pdf page 61) of OPEC's October Oil Market Report....on this graph, the sky blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple​ line graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale....

After this month's 273,000 barrel per day increase in OPEC's production from their revised production of a month earlier, OPEC's preliminary estimate is that total global liquids production was essentially unchanged at an average of 100.6 million barrels per day in September, after August's total global output figure was apparently revised down by 100,000 barrels per day from the 100.7 million barrels per day of global oil output that was reported for August a month ago, as non-OPEC oil production fell by a rounded 300,000 barrels per day in September, with most of September’s non-OPEC production decrease due to lower oil output from Russia and the US, which more than offset greater production from "other Eurasian" countries and the UK...

With little change in global oil output in September, the amount of oil being produced globally during the month again fell short of the expected global demand, as this next table from the OPEC report will show us...

The above table came from page 27 of the October Oil Market Report (pdf page 37), and it shows regional and total oil demand estimates in millions of barrels per day for 2022 in the first column, and then OPEC's estimate of oil demand by region and globally, quarterly over 2023 over the rest of the table…on the "Total world" line in the fourth column, we've circled in blue the figure that's relevant for September, which is their estimate of global oil demand during the third quarter of 2023….OPEC estimated that during the 3rd quarter of this year, all oil consuming regions of the globe used an average of 102.17 million barrels of oil per day, which was revised a rounded 120,000 barrels of oil per day higher from the 102.06 million barrels per day ​they estimated for the third quarter a month ago (we've circled this month's revisions in green)....but as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were only producing 100.60 million barrels per day during September, which would imply that there was a shortage of around 1,570,000 barrels per day of global oil production in September, when compared to the demand estimated for the month...

In addition to figuring that September oil shortage implied by this report, the downward revision of 100,000 barrels per day to August's global oil output that's implied in this report, combined with the upward revision of 120,000 barrels per day to 3rd quarter demand that we've circled in green means that the 1,360,000 barrels per day global oil output shortage we had previously figured for August would now be revised to a shortage of 1,580,000 barrels per day....similarly, the upward revision of 120,000 barrels per day to 3rd quarter demand would mean that the 1,360,000 barrels per day oil shortage we had previously figured for July would now be revised to a shortage of 1,480,000 barrels per day...

Note that in green we have circled an upward revision of 90,000 barrels per day to OPEC's previous estimate for second quarter, based on that upward revision to demand, our previous estimate of a shortage of 360,000 barrels per day in June would now be revised to a shortage of 450,000 barrels per addition, the 660,000 barrels per day global oil output shortage we had previously figured for May would now be revised to a shortage of 750,000 barrels per day...meanwhile, the global shortage of 40,000 barrels per day we had previously figured for April would now be revised to a shortage of 130,000 barrels per day, in light of that 90,000 barrel per upward revision to 2nd quarter demand....

Note that in green we have also circled an downward revision of 150,000 barrels per day to OPEC's previous estimates of first quarter demand...for March, that means that the 50,000 barrels per day global oil output surplus we had previously figured for March would be revised to a surplus of 200,000 barrels per day.. similarly, the downward revision to first quarter demand means that the global oil surplus of 350,000 barrels per day we had previously figured for February would now be revised to a surplus of 500,000 barrels per day, while the 400,000 barrels per day global oil output shortage we had previously figured for January would now be revised to a shortage of 250,000 barrels per day, in light of the 150,000 barrel per day downward revision to first quarter demand...

This Week's Rig Count

in lieu of our usual detailed rig count coverage, we are again just including below a screenshot of the rig count summary pdf from Baker the table below, the first column shows the active rig count as of October 13th, the second column shows the change in the number of working rigs between last week’s count (October 6th) and this week’s (October 13th) count, the third column shows last week’s October 6th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 14th of October, 2022...


Note: in light of its potential impact on MIdeast oil, news on the war between the israelis and the palestinians is included herein, mostly at the end of the usual global energy news..

After Fayette County’s first proposed injection well is withdrawn, residents worry there may be more to come - The first fracking waste injection well proposed in Fayette County was recently withdrawn after local opposition. Despite the proposal’s withdrawal, county residents say they’re “still trying to stay vigilant” and are working to cut off future avenues for injection well development. The injection well, proposed by Virginia-based G2 STEM LLC in 2022, was to be located about 300 feet from the nearest home and serve to dispose of wastewater from fracking, also known as produced water or brine. Brine contains hazardous materials that may pose risks to groundwater, air quality, and induce seismic activity. “It’s like your neighbor across the street was injecting fracking waste into the ground—that close to your home,” said James Cato of the Mountain Watershed Association.Oil and gas wastewater is produced during fracking and contains salts, chemicals and metals. The EPA says it can be toxic and radioactive. What to do with it is becoming a bigger issue in Pennsylvania. The EPA recently approved a second injection well in Allegheny County, just outside of Pittsburgh. There are 19 permitted wells in the state. Ohio has over 200 injection wells and accepts millions of gallons of Pennsylvania’s fracking waste. In recent months, Ohio regulators have suspended several wells where fluids had migrated into nearby oil and gas wells. Another set of Ohio wells was suspended after toxic brine releases to the surface. Besides proximity, Fayette County residents said they worried the G2 STEM well could fail, leading to contamination of nearby water sources. Dave Smith, a local resident and farm owner, explained there had been a previous test in 2020 to see whether the well would hold to pressure. “They put 4950 barrels of brine down that well, to test that well. And the tests show it failed and it lost pressure. So where’d the brine go?” Smith said. “To this day, we don’t know.”G2 STEM’s proposed well would have been located at one of the highest points in Fayette County, with a number of water sources downstream of it. Were the well to fail and contaminate nearby water sources, Smith worried for local farm animals. “We have livestock that drink out of the streams and springs and I use the wells daily to water them, so that was a big concern.” He said the county is home to a number of dairy farms whose income and water sources could be jeopardized due to contamination. “If we don’t have clean water, we don’t have nothing,” said Smith.Smith and others went “door to door” informing residents about the July 2023 EPA hearing on the proposed well. Once the word got out, “it just kept spreading like wildfire,” said Smith. Over 100 members of the community, including both environmentalists and fossil-fuel industry workers, gathered at a local church to express their dismay in the project.In August, G2 Stem LLC withdrew their injection well proposal. Fred Gumbinner, the former manager of the company, cited “concerns raised by the company’s team of geologists and engineers that would require further study” as the reason for their withdrawal.Still, Smith and other residents of Fayette County remain vigilant, aware that the company could reapply in the future. Community members worked with Local State Representative Charity Grimm Krupa (R-Fayette County) to introduce a bill aiming to prohibit the Pennsylvanian Department of Environmental Protection from “issuing any permits or authorizations which would allow for oil and gas waste water to be injected within the Commonwealth.” Injection wells in Pennsylvania are permitted by the federal government, not the state, so the result of this type of legislation is unclear. “I do not believe that it is an acceptable risk to allow injection wells to be sited within our communities considering the severe consequences that may result if an accidental spill or leakage incident occurs,” Grimm Krupa said, in a statement introducing the legislation. The bill was referred to the Committee on Environmental Resources and Energy last month and is awaiting review.

800,000 tons of radioactive waste from Pennsylvania’s oil and gas industry has gone “missing” - — Waste from the oil and gas industry contains toxic and radioactive substances. Disposal of this waste is supposed to be carefully tracked, but 800,000 tons of oil and gas waste from Pennsylvania oil and gas wells is unaccounted for, according to a recent study. Researchers at the University of Pittsburgh and Duquesne University initially set out to investigate whether sediment in rivers and streams near landfills accepting higher volumes of oil and gas waste contained higher levels of radioactivity. But they discovered significant problems with the records meant to track this waste. “We set out to write a different paper,” Daniel Bain, an associate professor at the University of Pittsburgh and one of the authors of the study, told Environmental Health News (EHN), “but once we got into the records, we realized there was no hope of being able to meaningfully do this kind of assessment.”The study, published in the journal Ecological Indicators, compared records on Pennsylvania’s oil and gas waste from 2010-2020, and uncovered significant gaps between what oil and gas operators reported they’d sent to landfills and what the landfills reported receiving. The records were so different, the researchers couldn’t find a single case where the Pennsylvania Department of Environmental Protection’s (DEP) Oil & Gas Report figures on this hazardous waste matched reports from the landfills receiving it.This type of waste often contains toxic chemicals and carcinogens, including high levels of heavy metals like arsenic, polyaromatic hydrocarbons, and radioactive materials. Previous research has shown that radioactive contaminants from fracking waste can linger in local waterways and wildlife for decades.“You assume the people regulating hazardous waste would be double-checking these records,” Bain said. “We thought they could be off by maybe 10% — we didn’t expect anything like this.” The oil and gas waste evaluated in the study originated at wells in Pennsylvania and was sent to landfills in Pennsylvania, Ohio and New York.The industry self-reports how much waste it sends to landfills, and the DEP collects that data in its annual oil and gas reports. Landfills that receive the waste weigh it and keep their own records. In some cases, the differences between these two sets of records were vast. For example, the 2019 oil and gas report said that 29,221 tons of waste were sent to the Arden landfill in Washington County, Pennsylvania, but the landfill’s records showed that it received 269,480 tons of waste that year — a difference of 240,259 tons. In total, the study found that around 800,000 tons of hazardous oil and gas waste was unaccounted for in official records. “Everything is self-reported and the [Pennsylvania Department of Environmental Protection] is understaffed and doesn’t have the resources to double-check,” Despite the hurdles with the landfill records, the authors of the study did detect higher levels of radioactive materials in waterways near municipal wastewater treatment plants that processed liquid runoff from landfills accepting oil and gas waste. This landfill runoff, called leachate, often goes to municipal sewage treatment plants, but when it comes from landfills accepting oil and gas waste, it can become radioactive. That’s because materials dredged up from deep in the Earth during oil and gas extraction — particularly during fracking, which requires more drilling — contain radium. Exposure to radioactive radium increases cancer risk, particularly for lung and bone cancers. “This waste is getting into our surface waters and streams,” Stolz said. “We found evidence that there’s up to four times as much radiation downstream from discharges from the municipal sewage treatment plants as upstream.”

Appalachia Gas Basis Outlook in a Pipeline-Constrained World | RBN Energy - Appalachian natural gas producers and marketers are adapting to a new status quo — a world where new pipeline takeaway capacity out of the Northeast is hard to come by and is more or less capped ad infinitum. Without the assurance of pipeline expansions, regional gas producers are no longer drilling with abandon in hopes that the capacity will eventually get built. Instead, producers are practicing restraint by slowing drilling activity, delaying completions and choking back producing wells to manage their inventory during periods of lower demand and prices. In today’s RBN blog, we consider what this new playbook will mean for pricing trends in the supply basin. Pipeline constraints are nothing new for Appalachian gas producers. Over the past decade, Appalachian natural gas production (blue line in Figure 1) rocketed up to more than 35 Bcf/d, often straining infrastructure and pummeling local price basis — at least until the next tranche of pipeline capacity came online. In recent years, however, Appalachian gas producers have settled into maintenance mode, keeping production relatively flat, even in 2022, despite Russia’s invasion of Ukraine, the resulting energy security crisis, and low storage inventories sending supply basin gas prices rocketing to $9/MMBtu, the highest in over a decade. Among the pressures keeping production flat, producers have battled a number of headwinds since the pandemic, from inflation to shortages of materials and labor, along with hedges entered in late 2020 and 2021 that didn’t allow them to immediately benefit from the lofty gas prices seen last year. However, far and away the biggest constraint for Appalachian producers has been the increasingly grim prospects for new pipeline takeaway capacity. If we look at Northeast production and demand going back to 2010 based on interstate pipeline flow data from Wood Mackenzie (Figure 1), we can see that Northeast production (blue line) began exceeding regional demand (purple area), seasonally at first and then year-round by the end of the last decade. The Northeast has been dependent on takeaway capacity ever since. Dozens of projects — primarily reversals and expansions of legacy pipelines — were completed in the 2014-19 period that allowed Appalachian gas supply to grow. However, there’s a long-running history of environmental opposition to new hydrocarbon infrastructure development in the region, and many projects were sidelined or canceled outright along the way. Moreover, just about all of the large-scale expansions that were planned or proposed have either been completed or canceled, and new projects to add significant takeaway capacity all but dried up. All in all, the appetite for capital investment in hydrocarbons development in the Northeast largely evaporated, particularly in light of the legal challenges and expensive delays faced by past projects. While at one point large-scale pipeline projects were able to move forward, that’s now far from a given.Producers got some good news this summer: after a series of long and expensive legal battles, the last remaining tranche of large-scale pipeline capacity, Equitrans’s 2-Bcf/d Mountain Valley Pipeline (MVP) project, resumed construction, and the operator is targeting completion by the end of 2023. However, it took nothing short of an Act of Congress — i.e., the Fiscal Responsibility Act, which mandated and expedited completion of MVP — along with an emergency appeal to the Supreme Court and a favorable ruling from Chief Justice John Roberts to clear a path for MVP. Additionally, as we noted in our Bring It on Home blogs, when it does come online MVP won’t instantly translate to incremental production out of Appalachia, or for that matter, full utilization of the new pipeline capacity, despite the project being fully subscribed. That’s because, while there’s growing demand downstream of MVP, there are bottlenecks to get gas from MVP’s terminus at an interconnect with Williams’s Transco Pipeline to where it’s needed the most. (As we detailed in that blog series, Williams is undertaking a number of brownfield projects to expand capacity on the existing system to debottleneck deliveries into the New York area as well as to growing power markets in the Carolinas.) The other hitch is that while MVP and the related downstream expansions will allow regional production to grow by as much as 2 Bcf/d, without ongoing takeaway capacity additions producers will eventually grow into MVP and end up right back at square one — constrained.

23 New Shale Well Permits Issued for PA-OH-WV Oct 2 – 8 | Marcellus Drilling News - New shale permits issued for Oct 2 – 8 in the Marcellus/Utica were the same exact number as those issued the previous week. But wow, was there a shift in where they were issued! There were 23 new permits issued last week. Last week’s permit tally included a pathetic 4 new permits in Pennsylvania, 1 new permit in Ohio, and a whopping 18 new permits in West Virginia (after WV issued 13 the week prior). Antero was the top recipient, receiving 11 permits across two counties in WV: Doddridge and Wetzel. HG Energy received 7 permits in Lewis County, WV. ANTERO RESOURCES | ASCENT RESOURCES | DODDRIDGE COUNTY | HARRISON COUNTY | HG ENERGY | LEWIS COUNTY | OLYMPUS/HUNTLEY & HUNTLEY | WETZEL COUNTY

Fear and Anger Follow the Path of Joe Manchin’s Mountain Valley Pipeline - After years of protests and lawsuits, the natural gas pipeline is almost finished. For local residents in West Virginia and Virginia, this is how the project will affect daily life in ways large and small.This summer, in a highly unusual move, Congress stepped in to fast-track the completion of the Mountain Valley Pipeline. After years of stop-and-go construction, there’s now a mad dash to finish the natural gas line stretching just over 300 miles from the northern border of West Virginia to southern Virginia.That’s largely due to one man: West Virginia Senator Joe Manchin, a Democrat, who convinced other legislators and President Joe Biden to greenlight the controversial pipeline as part of a deal to raise the debt ceiling.Across a largely rural, mountainous area, the pipeline’s 50-foot easement traverses hundreds of bodies of water, crosses fields, plunges into valleys, climbs steep slopes and passes near homes, businesses and at least one school. Along many of the final stretches awaiting completion, churned-up soil and construction equipment signal busy activity.Outside Greenville, West Virginia, workers are installing pipe under water crossings on a farm belonging to Maury Johnson. In Boones Mill, Virginia, artists Steve and Anne Bernard recently watched construction less than 200 feet from their house and studio. Meanwhile, people using heavy machinery are still burying pipe on Theresa “Red” Terry’s property along the slopes of Bent Mountain, Virginia, some of the steepest terrain that the pipe is set to cross.Operator Equitrans Midstream Corp. says the project is now approximately 94% finished and will be fully built by year’s end, to carry gas from the Marcellus and Utica shale formations to customers in the mid-Atlantic and southern US.Equitrans negotiated with landowners for easements to run the line under their properties, and it had the authority to use eminent domain when no agreement could be reached. For many of the people living and working along the route, construction started years ago — and then paused, for one reason or another. In some cases, the landowners themselves played a role in the stoppages, with somelegally challenging the company’s use of eminent domain and othersperching in trees in the path of construction. Multiple environmental groups challenged the project’s federal agency authorizations, including a right of way to cross a 3.5-mile corridor of the Jefferson National Forest. The pipeline is five years behind its original schedule and its budget has swelled from $3.5 billion to $6.6 billion, in part due to the company racking up hundreds of thousands of dollars in fines for repeatedly violating state permits.Practically all new fossil fuel projects, including the Mountain Valley Pipeline, have become international flashpoints in the fight against climate change. Every new coal, natural gas and oil project collides with the scientific reality that the world needs to cut its greenhouse gas emissions to stave off worsening heat waves, floods and wildfires. But for people on the ground, these projects aren’t symbols of global battles — they have tangible impacts on the landscape, the local economy and even residents’ daily routines.Manchin has long advocated for the pipeline, arguing it is needed to increase domestic energy production, lower energy costs and benefit the constituents of his home state. He’s joked the project’s initials stand for Most Valuable Pipeline.The bargain struck in Washington means the pipeline’s completion is effectively a done deal. But it’s not clear when exactly the project will go online, given that hurdles remain in its path.

US natgas prices ease on rising output, mild forecasts (Reuters) - U.S. natural gas futures eased about 1% on Thursday on rising output and forecasts for mild weather through late October that will keep heating and cooling demand low. Supporting prices were a smaller than expected weekly U.S. storage build, soaring gas prices in Europe and an increase in U.S. liquefied natural gas (LNG) and pipeline exports. The U.S. Energy Information Administration (EIA) said utilities added just 84 billion cubic feet (bcf) of gas into storage during the week ended Oct. 6. That was less than the 88-bcf build analysts forecast in a Reuters poll and compares with an increase of 125 bcf in the same week last year and a five-year (2018-2022) average increase of 93 bcf. Last week's increase boosted stockpiles to 3.529 trillion cubic feet (tcf), or 4.8% above the five-year average of 3.366 tcf for the time of year. Analysts said the 163 bcf surplus over the five-year average was the smallest so far this injection season for a second week in a row. The summer injection season started on April 1 and will end on Oct. 31. Energy traders said last week's storage build was smaller than usual for this time of year due in part to rising exports. Front-month gas futures for November delivery on the New York Mercantile Exchange fell 3.3 cents, or 1.0%, to settle at $3.344 per million British thermal units (mmBtu). Earlier in the week, the contract closed at an eight-month high. In Europe, gas prices at the Title Transfer Facility (TTF) benchmark in the Netherlands soared about 15% to a seven-month high of around $16 per mmBtu on worries that violence in the Middle East could reduce global supplies. Despite the small price decline, the U.S. front-month remained in technically overbought territory, with a relative strength index over 70, for a sixth day in a row for the first time since July 2022. SUPPLY AND DEMAND LSEG said average gas output in the Lower 48 U.S. states rose to 102.9 billion cubic feet per day (bcfd) so far in October, up from 102.6 bcfd in September, but still below the monthly record of 103.1 bcfd in July. With seasonally cooler weather coming, LSEG forecast U.S. gas demand, including exports, would rise from 94.5 bcfd this week to 96.0 bcfd next week. Those forecasts were similar to LSEG's outlook on Wednesday. Pipeline exports to Mexico held near 7.2 bcfd so far in October, the same as the monthly record high hit in September. Analysts expect exports to Mexico to rise even higher in coming months once New Fortress Energy's plant in Altamira starts pulling in U.S. gas to turn into liquefied natural gas (LNG) for export. Gas flows to the seven big U.S. LNG export plants rose to 13.1 bcfd so far in October with the return of Berkshire Hathaway Energy's Cove Point export plant in Maryland, up from 12.6 bcfd in September. That compares with a record high of 14.0 bcfd in April.

EIA Raises Henry Hub Forecast for 4Q as Natural Gas Exports Set to Rise - The U.S. Energy Information Administration (EIA) has raised its Henry Hub spot price forecast for 4Q2023 to $3.03/MMBtu, though the agency spotlighted storage levels that remain on the high side of historical norms. EIA in its latest Short-Term Energy Outlook modeled a Henry Hub spot price of $3.31 for 1Q2024, which would compare bullishly to 1Q2023 prices of $2.65. However, going back to the start of last winter, the national benchmark saw prices of $5.55 during the fourth quarter of 2022, EIA data show.In last month’s STEO, EIA predicted an average Henry Hub spot price of $2.95 for 4Q2023.

Golden Pass LNG Exec Says Infrastructure, Supply Partnerships Critical as Start Date Nears -- Golden Pass LNG is building relationships with domestic natural gas buyers and sellers as it inches closer to the possible start-up of a first train by the end of next year, according to management.The 18 million metric ton/year (mmty) liquefied natural gas export facility has been under construction southeast of Houston since early 2019. However, updates have been infrequent despite its status as one of the few substantial additions to U.S. gas demand anticipated before 2026.Chief Commercial Officer Jeff Hammad said the project’s low profile is part of its “unique” business model, as its entire capacity is subscribed to joint venture partners ExxonMobil and QatarEnergy. However, as Golden Pass nears the in-service date for its first train, Hammad said the company is.

Nearly Two Dozen LNG Projects Still Facing Uncertainty Over DOE Export Policy - Proposed U.S. and Mexican LNG facilities continue to face regulatory uncertainty roughly six months after federal regulators reaffirmed their expectations that projects should start exporting the super-chilled fuel within seven years of receiving export authorization from the U.S. Department of Energy (DOE). Over 40 liquefied natural gas projects are advancing across North America, with the bulk proposed for the Gulf Coast. The DOE must also issue export authorizations for Mexican projects that will use U.S. feed gas. Charlie Riedl, executive director of the Center for LNG (CLNG) said nearly two dozen projects could be impacted by the DOE’s policy statement issued earlier this year.

U.S. Natural Gas Exports to Grow to 2050 as Global Energy Demand Rises, EIA Says - Primary energy use will increase globally through 2050 in all cases examined in updated projections from the U.S. Energy Information Administration (EIA), pointing to a rise in North American natural gas production and exports to help meet the growing demand. Meanwhile, greater adoption of non-fossil fuel-based energy resources such as nuclear and renewables will likely prove insufficient to curb an increase in global energy-related carbon dioxide emissions (CO2) in the coming decades, EIA said in its 2023 International Energy Outlook (IEO) report, published Wednesday. For the latest IEO, the agency modeled outcomes through 2050 for a reference case and six side scenarios with varying assumptions on future economic growth, as well as technology and fuel prices — all based only...

A coming oil crash? Offshore permits hit 19-year low under Biden. - The Biden administration has green-lighted a record low number of new offshore oil wells, a data point that could inflame the already fierce debate over President Joe Biden’s throttling of the aging offshore oil sector in the Gulf of Mexico. An E&E News analysis of available data since the George W. Bush administration shows a steady decline in permitted offshore wells, reaching the lowest points during Biden’s tenure. The data comes as the president is facing pressure from Republicans about his domestic oil policies given the uncertain trajectory of global prices in the wake of Hamas’ attack on Israel this past weekend. The price of global benchmark Brent crude jumped 4.2 percent Monday to $88.15 a barrel. It eased slightly early Tuesday, falling 13 cents a barrel. Advertisement Permitting has been tight since Biden took office during a period of low oil prices and sluggish drilling due to the Covid-19 pandemic. Even as demand picked up and industry began to revive, the Interior Department during the president’s first two years approved 30 percent fewer oil and gas wells off the nation’s coasts compared with the same period during the Trump administration. The Bureau of Safety and Environmental Enforcement permitted 105 wells in Biden’s first two years. That’s compared to approving 148 during Trump’s first two years in office and 275 when Barack Obama took office in 2009 and 2010. Experts say this decline reflects realities at sea as much as shifts in federal oil policy. The data highlight that oil companies are drilling fewer wells in the Gulf of Mexico — where almost all the U.S. offshore drilling occurs — as companies move into deeper waters where drilling is more expensive. They are also responding to tougher regulations and the constant influence of oil prices. “It really is the economics and the strategy driving these things and not government policy,” said Scott Nance, a Gulf of Mexico research analyst with Wood Mackenzie. “The bigger economic trends are what drives permitting, far more than any one administration.” But even before the outbreak of war in the Middle East, tension over U.S. oil and gas policies has been high, following the Biden administration’s decision last month to issue the smallest five-year offshore oil plan in history — one of the administration’s boldest moves to potentially curb future development. Under the plan, Interior will hold three lease sales between 2025 and 2029. Many climate activists weren’t satisfied, slamming the White House for holding any oil sales, while drillers and GOP allies of the industry said so few opportunities to buy new drilling rights will exacerbate existing pressures to reduce activity in the Gulf of Mexico and undermine national production. Holly Hopkins, vice president of upstream policy for the American Petroleum Institute, said the administration’s actions, from the constrained five-year oil plan to trying to shrink access to offshore waters for endangered species and other reasons, have a combined effect of chilling industry willingness to invest in the United States. “[Biden’s policies] make it more difficult to substantiate the long-term, capital-intensive investments required for production in the Gulf of Mexico,” she said in an email. “This is a concerning trend for the future of American energy security.”

Billions of dollars to clean up abandoned oil and gas wells will only make a dent -An infusion of federal money has helped Louisiana plug nearly 500 abandoned oil and gas wells this year. That number doesn’t come close to the 4,500 abandoned wells that pock the state’s terrain, leaving the potential for groundwater contamination and the near-certainty of greenhouse gas emissions. But the money has allowed the state to nearly double the record number of wells it’s ever plugged in a year.“Everything helps,” said Patrick Courreges, spokesperson for the Louisiana Department of Natural Resources. “If we didn’t have the federal help, we’d be over 5,000 [abandoned wells].”Louisiana is among 24 states that received millions of dollars for well plugging from the federal Bipartisan Infrastructure Law, which made the largest investment in legacy pollution reduction in American history.But in many ways, the difficult work is just beginning. Of the $4.7 billion the law set aside for plugging wells that oil and gas companies have abandoned, $560 million has gone out so far. The rest will be spent in the coming years.During the first round of grants, the feds didn’t require states to calculate the methane emissions each plug prevents. But from now on, states seeking grants will have to measure methane releases at each well. That will require states to develop new methods and spend more time and money. And the workforce shortage only makes it harder for states to use their grants.Long-standing state programs to tackle the problem, usually backed by fees from oil and gas companies, generally have targeted the most problematic wells, such as those with visible leaks or spills. But countless others remain, allowing methane or carcinogens to escape.“It’s easy to see a blowout. It’s tougher to see 100 small leaks,” Courreges said. “I think you’re just now seeing regulators figuring out, ‘OK, how do we approach that? How do we do that?’ Obviously, you’re probably going to need more funding for everybody.”In Louisiana, the state generally has $10 million to $12 million available each year for well site restoration efforts, Courreges said. The state received $25 million in its first round of federal funding from the infrastructure law and is primed to receive some $86 million more.A well is considered orphaned when the government cannot locate the operator of an idled well or the operator is unable to plug or remediate the well. Beyond blighting property and limiting land use, abandoned wells are a major threat because unseen leaks can allow pollutants into water sources and spew greenhouse gases into the atmosphere.The federal government gave states wide latitude on how to prioritize wells for plugging. Aggressive timelines have pushed qualifying states to quickly allocate their first round of grant funds by hiring contractors to plug abandoned oil and gas wells.“The timeline was so tight that these guys just went out and started plugging wells without any idea,” said Curtis Shuck, chair of the Well Done Foundation, an environmental nonprofit. “They just knew it was a hole in the ground and they were going to go dump cement in it and call it a party.”

ExxonMobil agrees to buy shale rival Pioneer in $60 billion deal — ExxonMobil has agreed to buy Pioneer Natural Resources, a major shale oil producer in the deal that will more than double Exxon’s footprint in the Permian Basin in the Southwest United States. Though it’s the largest US oil company, ExxonMobil was relatively slow to develop shale oil as the rest of the industry used to to greatly increase US oil production in the last decade. Pioneer is the largest producer in the Permian Basin, with 850,000 net acres in the area around Midland, Texas, with ExxonMobil’s 570,000 net acres in the Delaware and Midland Basins. ExxonMobil’s Permian production volume would more than double to the equivalent of 1.3 million barrels of oil a day, according to the company. “Pioneer is a clear leader in the Permian with a unique asset base and people with deep industry knowledge. The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of doing on a standalone basis,” said ExxonMobil CEO Darren Woods. Under the deal Pioneer shareholders would receive 2.3234 shares of ExxonMobil for each Pioneer share, an 8% premium based on Tuesday’s closing price. Shares of Pioneer were up about 2% in premarket trading on the news, while shares of ExxonMobil were lower. But the deal could face regulatory hurdles. The Biden administration has taken a much more critical position on approving mergers than past administrations, challenging some deals on antitrust grounds. And it has also been critical of big oil for high oil and gas prices, even though those prices are primarily set on global markets, not by the oil companies themselves.

Exxon Mobil doubles down on fossil fuels with $59.5 billion deal for Pioneer Natural as prices surge -- Exxon Mobil is buying Pioneer Natural Resources in an all-stock deal valued at $59.5 billion, its largest buyout since acquiring Mobil two decades ago, creating a colossal fracking operator in West Texas. Including debt, Exxon is committing about $64.5 billion to the acquisition, leaving no doubt of the Texas energy company’s commitment to fossil fuels as energy prices surge. Pioneer shareholders will receive 2.32 shares of Exxon for each Pioneer share they own. “I think fossil fuels, as the world looks to transition and find lower sources of affordable energy with lower emissions, fossil fuels oil and gas are going to continue to play a role over time,” Exxon Mobil CEO Darren Woods said during an interview with CNBC. “That may diminish with time. The rate of that is, I think, not very clear at this stage. But it will be around for a long time.” Woods explained that Exxon and Pioneer will be able to use their combined capabilities to drive down emissions and produce lower carbon intensity oil and gas. Exxon purchased XTO Energy in 2009 for approximately $36 billion. In the late 1990s, the merger between Exxon and Mobil was valued around $80 billion. The deal with Pioneer Natural vastly expands Exxon’s presence in the Permian Basin, a massive oilfield that straddles the border between Texas and New Mexico. Drilling the Permian accounted for 18% of all U.S. natural gas production last year, according to the U.S. Energy Information Administration. Pioneer’s more than 850,000 net acres in the Midland Basin will be combined with Exxon’s 570,000 net acres in the Delaware and Midland Basin, nearly contiguous fields that will allow the combined company to trim costs. Woods said in prepared remarks that the combined company will have an estimated Permian resource of 16 billion oil equivalent barrels, with 15 to 20 years of remaining inventory. Natural gas rigs in operation have declined over 26% in the U.S. since the start of the year, according to government data, largely due to the rising costs for drilling materials and labor over the past two years. “Their tier-one acreage is highly contiguous, allowing for greater opportunities to deploy our technologies, delivering operating and capital efficiency as well as significantly increasing production,” Woods said of Pioneer in a statement. Once the deal closes, Exxon Permian production volume will more than double to 1.3 million barrels of oil equivalent per day, based on 2023 volumes. It’s expected to climb to about 2 million barrels of oil equivalent per day in 2027. Woods said that by 2027, about 60% of the combined company’s production will come from low-cost, high-growth strategic assets, including the Permian, Guyana, Brazil, and LNG, with total production of more than 5 million oil equivalent barrels per day.

ExxonMobil Creating Permian Juggernaut with Pioneer Natural Merger Valued at $59.5B - As has been speculated for months, ExxonMobil on Wednesday agreed to buy Permian Basin pure-play Pioneer Natural Resources Co. in a mega all-stock transaction valued at $59.5 billion. The implied total enterprise value, including net debt, is estimated at $64.5 billion.“Pioneer is a clear leader in the Permian, with a unique asset base and people with deep industry knowledge,” ExxonMobil CEO Darren Woods said. “The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of doing on a standalone basis. Their tier-one acreage is highly contiguous, allowing for greater opportunities to deploy our technologies, delivering operating and capital efficiency as well as significantly increasing...

GOP Legislators Urge FERC to Approve TC’s GTN Xpress Natural Gas Pipeline - Eight Republican lawmakers are imploring FERC to grant final approval to TC Energy Corp.’s proposed Gas Transmission Northwest, aka GTN Xpress, natural gas pipeline. The long awaited project would add 150,000 Dth/d of capacity to TC’s GTN system, which serves the Pacific Northwest and Malin interconnect markets. GTN spans 1,377 miles and can supply up to 2.7 Bcf/d from resources in Western Canada and the Rocky Mountains to utilities, power generation facilities, and residential and commercial customers. In a letter to the Federal Energy Regulatory Commission, the legislators, who represent California, Idaho, Oregon and North Dakota, urged commissioners to grant TC a certificate of public convenience and necessity (CPCN) for the expansion.

Newsom signs Orphan Well Prevention Act, AB 1167, vetoes SB 842, bill weakening price gouging law — Climate, environmental, consumer and labor groups celebrated a victory today after Governor Newsom signed AB 1167, the Orphan Well Prevention Act authored by Assemblymember Wendy Carrillo. The act will require oil companies to take out full bonding to cover the clean up cost of idle and marginally-producing wells when they are transferred in ownership, helping to solve the growing orphan well crisis in California. according to a statement from a coalition of organizations. The bill’s signing took place as oil production in California has declined in recent years as the once huge crude oil reserves are being depleted. The state has declined from being the number three producer of crude oil in the nation to the seventh largest. “I am signing Assembly Bill 1167, which creates a process requiring the State Oil and Gas Supervisor to approve transfers of marginal oil and gas wells only once the full cost of well plugging and abandonment and site restoration is covered by a bond or other financial assurance mechanisms,” said Governor Newsom in his signing statement. “I share the author's desire to minimize the risk that the state will be liable for costs of plugging and abandonment of orphaned and abandoned oil and gas wells where operators failed to provide sufficient financial assurances. This bill helps achieve this objective,” he stated. However, Newson noted that increasing the financial assurances required for oil and gas well transfers “also potentially creates risk of current oil and gas well operators deserting these hazardous wells.” “I look forward to working with the Legislature to enact legislation to make any necessary revisions to address this risk and otherwise align this law with programs that the Department of Conversation's Geologic Energy Management Division is already developing to address orp aned and abandoned wells,” he added. Environment California last week released a new interactive map to show the breakdown of idle and orphan wells and the threats wells posed to groundwater in California by county, Senate and Assembly district, as well as estimated costs for clean up, the groups noted.The groups said there are currently about 5,400 orphan wells in California — idle wells that owners have abandoned their responsibility to clean up — leaving them for California taxpayers to address. “Current bonding rules only require oil companies to take out a minimal bond to cover the cost of cleaning up oil wells at the end of their life, sometimes amounting to as little as a few hundred dollars per well,” the groups stated. “However, the average cost statewide to clean up a well according to the California Council on Science and Technology is $68,000.” With nearly 70,000 idle and marginally-producing wells across the state, many at high risk of becoming orphaned, taxpayers are vulnerable to pay exorbitant fees to clean up wells that rightfully should be paid by the companies responsible for the oil wells, the groups noted.

U.S. crude oil exports reached a record high in first half of 2023 – EIA - U.S. crude oil exports in the first half of 2023 averaged 3.99 million barrels per day (b/d), which is a record high for the first half of a year since 2015, when the U.S. ban on most crude oil exports from the United States was repealed. In the first half of 2023, crude oil exports were up 650,000 b/d (19%) compared with the first half of 2022.Europe was the largest regional destination for U.S. crude oil exports by volume, at 1.75 million b/d, led by exports to the Netherlands and UK. Asia was the regional destination with the next-highest volume, at 1.68 million b/d, led by exports to China and South Korea. The United States also exported significantly smaller volumes of crude oil to Canada, Africa, and Central America and South America.Although exports increased in the first half of 2023, the United States still imports more crude oil than it exports, meaning it remains a net crude oil importer. The United States continues to import crude oil despite rising domestic crude oil production in part because many U.S. refineries are configured to process heavy, sour crude oil (with a lowAPI gravity and high sulfur content) rather than the light, sweet crude oil (with a high API gravity and low sulfur content) typically produced in the United States.U.S. crude oil imports come primarily from historical trading partners such as Mexico and Canada. Heavy, sour grades of crude oil are often discounted compared with light, sweet grades of crude oil because they require more complex refinery units to produce profitable yields of refined products such as motor gasoline, diesel, and jet fuel. Most U.S. crude oil imports take place when it is more profitable for U.S. refiners to process discounted heavier grades because those refineries have already invested in the additional complexity required to refine them. The rapid increase in U.S. domestic production in the early 2010s increased domestic light, sweet crude oil production. Light, sweet grades of crude oil traditionally benefit from a price premium in the global crude oil market because they yield high amounts of profitable petroleum products from less complex refining processes.Some U.S. refiners on the Gulf Coast have invested in expanding their light, sweet crude oil processing capacity. However, for many refiners, particularly in the Midwest and along the Gulf Coast, refining discounted heavy, sour crude oil grades remains more profitable.

Northern Mexico Needs Pipelines to Meet Growing Natural Gas Demand, Says Expert - Northern Mexico needs additional natural gas infrastructure to meet rising energy demand, energy lawyer Alain Duthoy told NGI’s Mexico GPI. “The recent announcements of more natural gas capacity and supply are positive, but there is still a lack of infrastructure in place to distribute it to the companies and industries that need it,” he said. Duthoy, who has led the legal practice for Lexoil’s legal practice since 2018, specializes in energy law and providing legal services to industry clients. Based in Monterrey, Duthoy is also a co-founder of the Nuevo León Energy Cluster, which is an association and advocacy group for members of the state’s energy industry. Additionally, he lectures at the University of Monterrey, UDEM, and teaches undergraduate law students...

‘Time Is Running Out’ on Colombia Natural Gas Market as Supply Shortfall Looms - Colombia needs to expand domestic natural gas production and/or add more LNG import capacity to avoid a potential gas supply deficit, energy experts are warning. “Currently, Colombia is on course to run short of domestic gas this decade, with a gap between gas supply, including import capacity, and demand of 560 MMcf/d projected for 2030,” Wood Mackenzie analysts said in a recent report. Substantial offshore gas deposits could provide a lifeline to South America’s second-most populous country, but several challenges must be overcome first, the consultancy found. Development of the Gorgon, Uchuva and Orca discoveries would need to reach a breakeven point range of $6-7.00/Mcf to help avoid a future demand gap, researchers said. “This is a substantial challenge..."

EU’s Full Gas Storage Doesn’t Eliminate Supply Risks --The European Union has accumulated record amounts of natural gas in its storage facilities and has done so ahead of its own schedule.The news about the advanced fill-up of storage caverns was first announced in August by Brussels with understandable pride. In mid-August, storage was full at 90%, which was the November target.But energy suppliers did not stop there because, as of early October, gas storage in the EU is close to 100% full. There is just one slight problem: it might still not be enough to secure winter gas supply.Last year, European countries saw a milder-than-usual winter for most of the heating season, which was a welcome manifestation of climate change given the concerns about the sufficiency of gas in storage. In the end, much of the gas bought at exorbitant prices during the summer remained in storage unused because of the weather.Even with the mild winter and the full storage, however, European governments imposed energy austerity measures on large consumers. This year will be no different. Storage may be full to the brim, but there will be energy savings initiatives—including mandatory ones—recently voted in Germany. Because one thing that commentators often forget when they talk about European gas storage is that it does not cover 100% of consumption.The storage capacity for natural gas in the European Union actually covers about a third of demand, according to the EU itself. There is space to store up to 100 billion cubic meters of natural gas in the bloc and that is 33% of what it consumes—far from enough if we are talking about supply security.Because storage can only cover a third of European consumption—or perhaps a little more if we assume energy austerity measures will work as well this year as they did last year—European countries will need to continue importing liquefied natural gas through the winter. Unless, of course, Europe gets lucky with climate change again and has another unusually warm winter.European officials have been busy this past year to find ways to enhance gas supply security. There was the agreement for joint gas buying, which seems to be working so well Brussels is considering making it a permanent fixture of EU life. There were talks about buying more gas from Azerbaijan, but that kind of fell through after the latest events in Nagorno-Karabakh.Meanwhile, demand for gas in the European Union has declined by between 10% and 15% over the past 12 months thanks to government efforts—and prices. According to Reuters’s John Kemp, there is little chance for a recovery in demand given that it has remained subdued this year as well, despite greater supply security.Just how vulnerable Europe’s supply of gas is was demonstrated recently by price movements amid the labor dispute at Chevron’s Gorgon and Wheatstone LNG projects in Australia. Europe is not a big buyer of Australian LNG, but Australia is the world’s largest exporter and any disruption in Australian supply disrupts global supply.So, when workers at the Chevron projects began striking, prices for gas in Europe surged, adding 13% in a single day. In fairness, they are still nowhere near where they were in the summer of 2022, but a 13% daily price rise is still considerable.Interestingly, prices are currently higher than they were when the Chevron workers started striking in September. Then, the first day of striking saw Europe’s benchmark TTF price rise to 34.50 euro per megawatt-hour. Now, the front-month TTF contract, per Reuters, is trading at 38 euro per MWh, while the January delivery contract is trading at 44 euro.This is the price of reliance on a global market for liquefied natural gas that, as we saw last year, can quite easily turn into a sellers’ market whatever plans buyers might have, including a buyers’ cartel. Last year, Europe priced poorer countries out of the market, pushing them back to coal. Yet, while this might be dubious from a climate change fighting perspective, it was the natural thing to do for Europe: secure energy supply. This year, Europe appears to be content in the knowledge its gas storage caverns are full, and with average seasonal drawdowns at less than 600 TWh, the chances of a shortage are slim. Of course, there is also the lower energy consumption by industrial users, which may be positive for gas storage levels but is negative from an economic growth perspective, yet it is not drawing much attention, at least from European officials. Commentators do pay attention, however. In a September column about the reduction in industrial gas consumption, Reuters’ Kemp spelled it out quite simply. Noting the significant reduction in consumption, which has enhanced supply security for the winter months, he went on to write that “the region has paid a high price in terms of reduced manufacturing activity, which could lead to permanent deindustrialization unless gas prices are reduced significantly within the next couple of years.”

Finland Investigating Cause of Balticonnector Pipeline Damage – Damage to the subsea Balticonnector natural gas pipeline that links Estonia and Finland was likely caused by “external activity,” Finland President Sauli Niinistö said Tuesday. A leak forced operators to shut the system down over the weekend, and repairs could take months.“The cause of the damage is not yet clear, the investigation continues in cooperation between Finland and Estonia,” Niinistö said, adding that he has been in contact with the North Atlantic Treaty Organization for possible assistance with the investigation.The leak on the 92 Bcf/year Balticonnector comes roughly a year after the Nord Stream natural gas system linking Russia and Europe ruptured after it was sabotaged following Russia’s invasion...

A Baltic Sea gas pipeline between Finland and Estonia is shut down over a suspected leak(AP) — Finland and Estonia said Sunday that the undersea Balticconnector gas pipeline running between the two countries across the Baltic Sea was temporarily taken out of service due to a suspected leak. Gasgrid Finland and Elering, the Finnish and Estonian gas system operators, said they noted an unusual drop in pressure in the pipeline shortly before 2 a.m. Sunday, after which they shut down the gas flow. “Based on observations, it was suspected that the offshore pipeline between Finland and Estonia was leaking,” Gasgrid Finland said in a statement. “The valves in the offshore pipeline are now closed and the leak is thus stopped.” The Finnish operator gave no reason for the suspected leak and said it was investigating the incident together with Elering. If it turns out that the detected pressure drop is due to a leak that has caused damage to the pipeline, repair work could take “at least several months” depending on the nature of the damage, according to Gasgrid Finland. In September 2022, the Nord Stream gas pipelines running between Germany and Russia in the Baltic Sea were hit by explosions in an incident deemed to be a sabotage. A total of four gas leaks were discovered on the Nord Stream 1 and Nord Stream 2 pipelines. The case remains unsolved.

Poland takes over Gazprom stake in key pipeline and major oil and gas producer - Authorities in Poland have fully kicked out Russian gas giant Gazprom from a key transit natural gas pipeline, the Yamal Pipeline. It comes as the country’s largest oil and gas producer Orlen has been assigned to take over the Gazprom’s interest in Europol Gaz. Europol Gaz is the owner of the Polish 680-kilometre segment of the Yamal Pipeline that start in Russia and crosses Belarus and Poland before connecting to the gas transmission network in Germany. Gazprom had the 48% interest in Europol Gaz, with the stake of similar size in hands of Polish PGNiG which is now a part of the Orlen group. However, soon after the Russian invasion into Ukraine in February last year, authorities in Poland sanctioned Gazprom and suspended its shareholder rights in Europol Gaz, imposing temporary administration on its equity holdings. The Yamal Pipeline can carry about 33 billion cubic metres of Russian gas.

War, Labor Strikes and Possible Sabotage Spook LNG Market as Winter Nears - Israel’s war against Hamas has done little so far to disrupt global natural gas supply balances, but a confluence of factors have combined in a short period of time to shatter the perceived sense of calm that had prevailed over the market heading into winter.“I don’t think fundamentals have changed at all, however, sentiment has,” said Marex’s Toby Copson, a managing director and head of Asia-Pacific energy. “Conflicts spook markets, and coupled with the damage to the European pipeline and fears of shipping lanes being affected, the market is pricing in these disruptions.” Natural gas prices in Asia and Europe are at their highest levels in about six months. The prompt Dutch Title Transfer Facility contract has gained 40% since Israel’s declaration of war...

Israel just shut a gas field near Gaza. Here's why that matters - - Chevron said Monday that it had shut down a natural gas field off the coast of Israel at the behest of local officials, two days after Hamas militants launched their deadly assault on the country.The Tamar field, located 15 miles off Israel's southern coast, meets 70% of Israel's energy needs for power generation, according to the US energy company.A prolonged shutdown could lead to a drop in Israeli gas exports to its neighbors, Egypt and Jordan, as well as squeeze an already tight global gas market.For now, Chevron (CVX) continues to supply its customers in Israel and the region with gas from the larger Leviathan platform."Chevron is focused on the safe and reliable supply of natural gas for the benefit of the Israeli domestic market and our regional customers," Chevron spokesperson Sally Jones said in a statement. "Our top priority is the safety of our personnel, the communities in which we operate, the environment and our facilities."Jones said Chevron was "instructed" by Israel's Ministry of Energy to stop production at the Tamar platform.The closure of Tamar comes just as countries in the northern hemisphere head toward winter, when demand for natural gas to heat homes increases.Futures prices on the Dutch Title Transfer Facility — Europe's benchmark gas exchange — jumped 12% Tuesday to hit nearly €49 ($52) per megawatt hour. They have risen by a total of 29% since Friday, the last trading day before Hamas launched its unprecedented attack on Israel.Still, prices are far below their levels this time last year, when they hit €169 ($179) per megawatt hour, as Europe emerged from its energy crisis sparked by Russia's war in Ukraine.Analysts at energy consultancy Wood Mackenzie attribute the price rises since Friday mostly to the unfolding conflict in Israel.Goldman Sachs analysts think the Tamar shutdown has "contributed" to the rally in European gas prices."Going forward, should the ongoing events evolve into a more sustained tightening of global LNG balances, this will reduce Europe's gas markets' ability to handle other unforeseen events, such as cold weather spikes, or other supply disruptions," they wrote in a note Monday.But Simone Tagliapietra, a senior fellow at the Bruegel think tank, points to two factors that he believes are more important in driving European prices higher.One is a temporary shutdown of a gas pipeline in the Baltic Sea, and the other is planned industrial action by liquefied natural gas (LNG) workers in Australia, he told CNN.On Sunday, Finland's gas transmission operator announced that it had closed a key pipeline in the Baltic Sea transporting gas between Finland and Estonia due to a suspected leak. Then, on Tuesday, Chevron said it had received notice of strikes by some workers at two of its LNG facilities in Australia. If the strikes, scheduled for later this month, go ahead, they will disrupt production at Chevron's Wheatstone and Gorgon sites, which account for about 7% of global LNG supply, according to Wood Mackenzie. A drawn-out shutdown at Tamar might add to the upward pull on European gas prices, Tagliapietra said, as it could force Israel to procure gas from the global market, fueling competition for exports."That might put upward pressure on the European gas price," he said.However, all in all, the consequences for the global gas market would be "very limited," he added, because Israel isn't a major supplier.

Israel reroutes gas exports to Egypt via Jordan All Israeli gas pipeline exports to Egypt have been redirected via the FAJR gas pipeline that runs through Jordan, Chevron said late last night, after flows via the East Mediterranean Gas (EMG) pipeline halted. Chevron shut down the 285bn m³ Tamar gas field, which also supplies Egypt with gas, on 9 October, on the instruction of the Israeli energy ministry. Islamist group Hamas launched an attack on Israel early on 7 October. But the larger 620bn m³ Leviathan offshore gas field appeared to remain operational as of this afternoon. Israel has already used the Jordanian route to supply gas to Egypt in recent years. Deliveries via the country started in 2022 in an effort to bypass pipeline constraints within the Israeli transmission system at Ashkelon, which led to flows along the EMG pipeline being capped below the 5bn m³/yr capacity of the line. The port of Ashkelon was also closed yesterday. Chevron had previously shut down production from the Tamar field on 12-21 May 2021. Gas deliveries to Egypt from Israel fell by 86mn m³ in May 2021 to 273mn m³ from a month earlier that year, and then rose again to 375mn m³ in June, according to data from the Joint Organisations Data Initiative (Jodi) (see table). It remains unclear how much of an effect Tamar being off line could have on Egyptian imports, because the majority of Israeli gas for export is sourced from Leviathan. Egyptian import volumes from Israel have also doubled since 2021(see imports graph). Egypt exported its first LNG cargo since July on 6 October, as falling domestic output and increased domestic demand led to Egypt curbing use of gas for re-export as LNG.

IEA Sees China Driving Global LNG Demand Growth as Mature Gas Markets Have ‘Peaked’ Global natural gas demand is set to expand at a slower pace over the coming years, with most of the growth coming from China and other emerging Asian markets, the International Energy Agency (IEA) said Tuesday. In its latest medium-term gas market forecast, the global energy watchdog said it expects worldwide demand to rise every year by 1.6% on average between 2022 and 2026, down from 2.5% between 2017 and 2021. “After their heyday between 2011 and 2021, the world’s gas markets have entered a new and more uncertain period that is likely to be characterized by slower growth and higher volatility – and could lead to a peak in global demand by the end of this decade,” said IEA’s Keisuke Sadamori, director of energy markets and security. “Different trends are playing...

UN-led FSO Safer operation safely concludes oil transfer, averts catastrophe - Reinsurance News - In a remarkable achievement, the United Nations-led FSO Safer operation has successfully concluded the transfer of oil from the FSO Safer, averting a potential environmental and humanitarian catastrophe of unprecedented proportions. “I welcome the news that the transfer of oil from the FSO Safer has been safely concluded today. The United Nations-led operation has prevented what could have been an environmental and humanitarian catastrophe on a colossal scale,” said UN Secretary-General António Guterres.“Today is a proud moment for the many people across the UN System as well as our donors and partners who have worked tirelessly over the past months and years to avert a disaster in a country already vulnerable following protracted conflict. There is still work to be done, but today we can say with confidence that the immediate threat of a spill has been averted,” said UNDP Administrator, Achim Steiner.“It reminds us of why we exist as the UN, to tackle some of the world’s most difficult problems, using our convening power to bring together the international community to solve seemingly impossible challenges,” said Mohammed Siddig Madawi, Safer Coordinator and Adviser, UNDP on this news.More than 100 underwriters had been involved in the successful binding of insurance coverage for the FSO Safer operation, enabling the UN to proceed with an emergency ship-to-ship transfer to avert an oil spill that would amount to one of the world’s largest man-made environmental disasters in history. UN Resident Coordinator for Yemen, David Gressly, who has been working on the project for over a year, said the worst-case scenario has been avoided, but this is not the end of the story.

2 shipping companies face first sanctions over Russian oil shipments - In an announcement, the department’s Office of Foreign Assets Control (OFAC) said that a ship owned by Turkish company Ice Pearl Navigation sold Russian oil at $80 a barrel, above the $60 limit imposed by the U.S., the European Union, Australia and the Group of 7. The second company, UAE-based Lumber Marine SA, priced Russian oil at $75, according to the OFAC. The sanctions will bar the companies, both of which used U.S. service providers in violating the price cap, from conducting business in the U.S. or accessing their properties or assets in the country. The price cap was imposed in 2022 in retaliation for the Russian invasion of Ukraine, with a goal of reducing Russian energy profits while maintaining reliable supplies to international markets. Treasury officials claim the cap has cost Russia’s oil industry 45 percent in tax revenue since its imposition. Under the cap, western countries are also banned from providing maritime and financial services for Russian exports above the cap. “Today’s action demonstrates our continued commitment to reduce Russia’s resources for its war against Ukraine and to enforce the price cap,” Deputy Secretary of the Treasury Wally Adeyemo said in a statement. “We remain committed to implementing a price cap policy that has two goals: reducing the oil profits upon which Russia relies to wage its unjust war against Ukraine and keeping global energy markets stable and well-supplied despite turbulence caused by Russia’s unprovoked invasion of Ukraine. We will continue to take actions to achieve these two goals.” Yasa Holding, which operates the Turkish vessel, the Golden Bosphorus, has said the ship is under a charter to ExxonMobil for between three months and five months. The Hill has reached out to ExxonMobil for comment.

Russia's oil exports cuts include oil products: Deputy PM, Russia -- Deputy Prime Minister Alexander Novak said on Thursday that Russia's pledges to the OPEC+ group to cut its oil exports included a reduction in oil products, news agencies reported, stoking confusion over Russia's plans to reduce oil supplies. In the original announcement of the plans to cut oil exports by 300,000 barrels per day by year-end, Novak had not mentioned oil products but had spoken only about oil. "When we talk about the oil market and production, oil is produced and then supplied for processing. Therefore, of course, everything is considered together. The final product, of course, takes into account the volumes that are produced," Novak said in response to a question on whether oil products were included in the export reductions, according to Interfax news agency. It would be easier for Moscow to cut overall exports of crude oil and fuel after Russia announced on Sept. 21 a ban on fuel exports to tackle domestic shortages and high prices. It lifted the ban for most oil products last week.

China restricts refined oil product exports despite oil inventory increase of 0.7 mbpd During the first three quarters of 2023, China has continued expanding its crude inventories by an estimated 0.7 million barrels per day (mbpd). These increased inventories could allow China to maintain strong exports of refined products even if crude oil imports are lowered. China does not reveal changes to its crude oil inventories, but an estimate can be made using official statistics. We have used import and export data from China’s General Administration of Customs, oil production and refinery statistics from China’s National Bureau of Statistics and ship movement data from Oceanbolt in order to estimate oil movements in and out of China. From January to September, we estimate that China’s crude oil production reached 4.2 mbpd (up 2% y/y). In the same period, imports hit 11.3 mbpd (up 14% y/y). This allowed China’s refineries to increase their refined volumes by 11% y/y to 14.8 mbpd and expand exports of refined products to 1.2 mbpd, an increase of 28%. At 15.5 mbpd, total oil supply was 0.7 mbpd higher than refined volumes, allowing China to increase its crude oil inventories accordingly. VLCC and Aframax ships have seen the highest increase in demand due to China’s increased crude oil imports. VLCC tonne miles into China have risen by 38% y/y while Aframax tonne miles have risen by 70% due to an increase in volumes from Russia. For the rest of the year, Chinese crude oil imports, however, appear likely to fall. It seems that Chinese authorities will not release any additional crude oil import quotas to independent refineries. The 2023 quotas will thus end at 203.6 metric tonnes, up 10% y/y, and are expected to constrain import volumes during the 4th quarter. At the same time, no further export quotas for refined products are expected. Exports of refined products are therefore expected to suffer and may fall to only 0.7 mbpd during the 4th quarter compared to the 1.2 mbpd during the first three quarters. MR product tanker ships carry about 50% of China’s refined product exports and must be expected to bear the brunt of the export reduction. Should China want to, exports of refined oil products could continue at the year-to-date level without expanding the crude oil import quota. Releasing about 25% of the 0.7 mbpd so far added to crude oil inventories could allow refined product exports to remain at 1.2 mbpd, also in the fourth quarter.

OPEC Oil Production Rises In September - OPEC's crude oil production rose in September compared to August, according to the group's latest Monthly Oil Market Report (MOMR) published on Thursday. According to the MOMR, OPEC's crude oil production rose to 27.755 million bpd in September—up 273,000 bpd from the 27.482 million bpd the group produced in August. Based on the report's secondary sources, the largest increase in production was from Nigeria, which saw a 141,000 bpd increase month over month. Saudi Arabia also saw a production increase, of 82,000 bpd. Other OPEC members saw an increase, although smaller, including Algeria, Iran, Iraq, Kuwait, Libya, and the UAE. But some members saw their production decline like Algeria, Equatorial Guinea, Gabon, and Venezuela—the latter of which saw its production fall by 25,000 bpd to 733,000 bpd, the lowest level since April 2023. Saudi Arabia's September production rose to 9.006 million bpd. The country's quota—which includes The Kingdom's 1 million bpd voluntary production cut quota—is 9 million bpd. Iran's September production, which rose to 3.058 million bpd, was the highest in years as the United States struggles to keep its oil revenues in check through sanctions, in a sign that the country is on its way to restoring production to pre-sanction levels. OPEC members Iraq, Kuwait, Saudi Arabia, and the UAE reaffirmed their commitment to "collective and individual voluntary adjustments" to oil production after meeting on the sidelines of the UN MENA climate week last weekend. The members also said it would be willing to take "additional measures at any time" to support market stability. The group's current production quota agreement runs through the end of next year, but Saudi Arabia's extra 1 million bpd production cut runs through the end of this year and will then be subject to monthly reviews.

OPEC hikes long-term oil demand outlook — in stark contrast to other predictions of peak crude - OPEC on Monday raised its medium- and long-term forecasts for global oil demand. The oil producer group said the crude sector would require a whopping $14 trillion in investment if it is to meet this upswing, even amid a rapid expansion of renewable energy technologies. OPEC’s long-term forecast for global oil demand diverges from that of the International Energy Agency, the world’s leading energy watchdog. OPEC and the IEA, both big names in the energy industry, are currently locked in a war of words over peak oil demand. In its 2023 World Oil Outlook, OPEC said it expects global demand to reach 116 million barrels per day (bpd) by 2045, up from 99.6 million bpd in 2022 and roughly 6 million more bpd than it predicted in last year’s report. OPEC made clear that there’s potential for this jump to be even higher, too. The growth is likely to be fueled by India, China, other Asian countries, Africa, and the Middle East. For its long-term oil demand forecast to be met, OPEC said oil sector investments of $14 trillion, or around $610 billion on average per year, would be needed. The group said it is “vital” that these investments are delivered, saying it is beneficial to both producers and consumers. In the medium term, OPEC said global oil demand was likely to reach a level of 110.2 million bpd in 2028, reflecting a jump of 10.6 million bpd when compared to 2022 levels. “Recent developments have led the OPEC team to reassess just what each energy can deliver, with a focus on pragmatic and realistic options and solutions,” OPEC Secretary General Haitham al-Ghais said in a foreword to the report. “Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos,” al-Ghais said. “History is replete with numerous examples of turmoil that should serve as a warning for what occurs when policymakers fail to acknowledge energy’s interwoven complexities.” OPEC’s forecasts contrast starkly with those of the IEA, which said last month that the world was now at the “beginning of the end” of the fossil fuel era.In an op-ed published in the Financial Times, IEA Executive Director Fatih Birol said for the first time that demand for coal, oil and gas would all peak before 2030, with fossil fuel consumption then predicted to fall as climate policies take effect. Birol’s assessment is based on the IEA’s World Energy Outlook, an influential report which is due out in October. The IEA chief hailed the forecast as a “historic turning point” but made clear that the projected declines would be “nowhere near enough” to put the world on a path to limiting global warming to 1.5 degrees Celsius above pre-industrial levels.This temperature threshold is widely regarded as critical to avoiding the worst impacts of climate change. The burning of fossil fuels is the chief driver of the climate crisis.OPEC was sharply critical of the IEA’s forecast of peak fossil fuel demand before the end of the decade. The group said in a statement published Sept. 14 that the IEA’s narrative was “extremely risky,” “impractical” and “ideologically driven.” OPEC has previously urged the IEA to be “very careful” about undermining industry investments.

OPEC predicts world oil demand will rise until 2045 - The Organisation of the Petroleum Exporting Countries (OPEC) has predicted that world oil demand will rise to 116 million bpd by 2045, a larger prediction than its 2022 estimate. In its 2023 World Oil Outlook report, released on 9 October 2023, OPEC also stated that US$14 trillion of investment in oil will be needed by 2045 to meet demand. OPEC’s estimates contrast strongly with forecasts made by the International Energy Agency (IEA), which has predicted that global oil demand will peak before 2030. While launching the report in Riyadh, Saudi Arabi, OPEC Secretary-General Haitham Al Ghais claimed that many nations are showing resistance to net-zero policies. "Over the past year what is clear is that we have seen populations voice concerns about the costs and actual benefits of net-zero targets," he said. Continued investment in oil could bring significant financial benefit to OPEC member states, whose members make billions of dollars per year from the oil industry. As such, the organisation has continually shown hesitancy about divesting from oil. Al Ghais reiterated this view in Riyadh, stating: "Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos. "There are some who unfortunately continue to push the extremely risky narrative of dismissing oil with talk of oil demand dropping by almost 25 million bpd by the year 2030," he added. OPEC’s report states that global oil demand will rise from 2023’s 102 million bpd to 110.2 million by 2028. OPEC's estimates have increased from its 2022 predictions; its 2022 report estimated demand would reach 106.9 million bpd by 2027, while the latest report predicts 109 million bpd of demand by 2027.

'Knee-jerk surge': Oil experts predict market impact of Israel-Hamas conflict -- Crude oil prices could see a spike on Monday but the overall impact of the attack on Israel by Palestinian militants Hamas will likely be limited, energy experts told CNBC. That’s provided the conflict does not escalate further, they said. “We may see a knee-jerk surge in crude prices when markets open on Monday,” Vandana Hari, CEO of Vanda Insights, told CNBC via email. “There will be some risk premium factored in as a default, until the market is satisfied that the event is not setting off a chain reaction and Mideast oil and gas supplies won’t be affected,” said Hari. Militants from Hamas infiltrated Israel by land, sea and air on Saturday, during a major Jewish holiday. The incursion came hours after the Islamist militants fired thousands of rockets into Israel from Gaza. Civilians including women, children and the elderly have been abducted, and others killed in their homes, Israeli Prime Minister Benjamin Netanyahu said. Israel has begun the offensive phase, and will “continue with neither limitations nor respite until the objectives are achieved,” Netanyahu said. He vowed to “exact an immense price from the enemy, within the Gaza Strip as well.” Late Saturday, Israel cut off the supply of electricity, fuel and goods to the narrow strip where 2.3 million Palestinians live. At the time of publication, there were at least 250 Israelis killed and more than 1,860 injured, including 320 in serious condition, NBC News reported. The Palestinian Health Ministry recorded 256 deaths and 1,790 injuries in Gaza. How much oil is involved? Both Israel and Palestine are not major oil players, but the conflict sits in a wider key oil producing region, analysts told CNBC, warning that it has the potential to conflagrate further. Hari noted that while the conflict does not directly impact oil production or supply, it is still “on the doorstep of an important oil-producing and exporting region.” Israel boasts two oil refineries with a combined capacity of almost 300,000 barrels per day. According to the U.S. Energy Information Administration (EIA), the country has “virtually no crude oil and condensate production.” The Palestinian territories produce no oil, data from EIA shows. “The impact on the oil price will be limited unless we see the ‘war’ between the two sides expand quickly to a regional war where the U.S. and Iran and other supporters of the parties get directly involved,” Middle East managing director of energy consultancy Facts Global Energy, Iman Nasseri, told CNBC. Similarly, French businessman and hedge fund manager Pierre Andurand said that since the Levant is not a large oil producing region, the war is unlikely to impact oil supply in the short term. “One should not expect a large oil price spike in the coming days. But it could eventually have an impact on supply and prices,” he said in a post on X, the social media platform that was formerly Twitter.

Markets whipsaw, oil prices rise as Israel declares war on Hamas - The surprise attack on Israel by Hamas over the weekend and the resulting declaration of war by Israeli Prime Minister Benjamin Netanyahu are weighing on financial markets and unsettling commodity prices as the global economy braces for military and diplomatic fallout. Stocks of energy and defense companies rose sharply Monday while shares of airlines and resorts tumbled as investors weighed reports of escalating military action. Major U.S. stock indices opened lower on the news Monday morning, with the S&P 500 losing half a percentage point in early trading, falling to 4,285. The index closed up 0.6 percent at 4,334. The technology-heavy Nasdaq Index was down more than 100 points to 13,321, before also closing up 52 points, and the Dow Jones Industrial Average dropped 85 points in early trading before rebounding to finish 197 points up. International equities followed suit, with the German DAX falling 100 points in afternoon trading. The Shanghai Composite Index fell 0.44 percent to close at 3,096 on Monday. A sharp increase in oil prices was a major force behind Monday’s market movements. The price of a barrel of West Texas Intermediate crude oil jumped 4.31 percent to hit $86.36 after falling in recent weeks. Brent crude also popped more than 4.16 percent to reach $88.10 per barrel. Concerns about retaliation toward oil-producing Iran for its support of Hamas have jostled energy markets. Iran has denied any involvement in the attacks on Israel, though a White House national security official said Iran is “broadly complicit.” Experts said oil prices are also rising over fears of violence spilling out beyond Gaza. “The crude oil market remains hyper-alert to any indication that the conflict between Israel and Hamas is poised to expand into the oil producing region in the Middle East,” “Reports regarding Iran’s support for the Hamas attack have been denied by Iran but concern is focused on a broader Iran-Israeli conflict, which would, in turn lead to a dramatic escalation of conflict in the region, and a dramatic climb in oil prices,” A 2022 report by the U.S. Energy Information Administration puts Iranian crude oil production capacity at 3.7 million barrels of oil per day. That number was restricted in practice to around 2.4 million barrels in 2021 by international sanctions, according to the Organization of Petroleum Exporting Countries (OPEC).

Oil Prices Soar After Attacks on Israel -- Oil prices surged after a shock attack on Israel by Hamas brought renewed instability to the Middle East. More than 1,400 people have died since the fighting between Israel and militant group Hamas broke out over the weekend, in a conflict that has potential repercussions across the wider region. US crude futures settled above $86 a barrel, at one point rallying 5.4%. While Israel’s role in global oil supply is limited, the bloody outbreak threatens to embroil both the US and Iran. Iran has become a major source of extra crude this year, alleviating otherwise tightening markets, but additional American sanctions on Tehran could constrain those shipments. “Recently crude has been prone to overreact to geopolitical events and price increases have been short-lived,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “This situation may prove to be the exception,” with the market especially sensitive to potential supply disruptions. Any retaliation against Tehran — amid reports that it helped to plan the attacks — could endanger the passage of vessels through the Strait of Hormuz, a vital conduit that transports much of the world’s crude and which the Iranian government previously threatened to close. Iran denied on Monday that it was involved in the assault. The surge after the attacks added a fresh bout of volatility to a market that has seen sizable swings over the last month. In late September, Brent was on course to rally up to $100 a barrel as cuts from Saudi Arabia and Russia tightened the market, before retreating sharply last week as concerns about consumption and financial flows pulled prices lower. Early trading on Monday saw a flurry of bullish activity in the Brent options markets, with call options that profit from higher oil prices outpacing — by more than three-to-one — bearish put options. WTI for November delivery climbed $3.59 to settle at $86.38 a barrel in New York. Brent for December delivery rose $3.57 to settle at $88.15 a barrel. The conflict may have far-reaching consequences for crude. Banks had a wide range of takes on the potential impacts:

  • Citigroup said the hostilities reduce expectations that Saudi Arabia will cut or eliminate its 1 million barrels-a-day of output curbs. Risks are also growing that Israel will attack Iran, analysts including Ed Morse said.
  • Morgan Stanley said that they thought the impact of the conflict would be limited. For now they don’t expect a spillover into other countries, meaning there will be a muted longer-term impact on crude prices.
  • Societe Generale SA said heightened geopolitical tensions could add $5-$10 risk premium to crude prices.
  • RBC Capital Markets analysts including Helima Croft said Israel will likely escalate a long-running shadow war against Iran, but Tehran’s response to such a move will be less clear.

Fears of a Disruption to Supplies Amid the Conflict in the Middle East Receded Saudi Arabia Pledged to Help Stabilize the Market -- The oil market on Wednesday sold off as fears of a disruption to supplies amid the conflict in the Middle East receded after Saudi Arabia pledged to help stabilize the market. The market retraced some of its losses in overnight trading and posted a high of $86.51 before it began to erase its gains and sold off sharply. The market backfilled its gap from $84.67 to $83.28 as it posted a low of $83.11 by mid-day. This followed Saudi Arabia’s assurances on Tuesday that it was working with regional and international partners to prevent an escalation of the conflict in Israel and its efforts to stabilize oil markets. The market later traded in about a $1.50 range from $83.11 to $84.64 during the remainder of the session. The November WTI contract settled down $2.48 at $83.49 and the December Brent contract settled down $1.83 at $85.82. The product markets in negative territory, with the heating oil market settling down 2.16 cents at $2.9985 and the RB market settling down 4.83 cents at $2.2101. The EIA cut its global oil demand growth forecast for 2023 by 50,000 bpd to 1.76 million bpd and its 2024 estimate by 40,000 bpd to 1.32 million bpd. Total world petroleum demand is estimated at 100.92 million bpd in 2023 and increase to 102.24 million bpd in 2024. The EIA reported that global oil inventories are expected to fall by 200,000 bpd in the second half of 2023 due to the voluntary cuts from Saudi Arabia, along with reduced production targets among OPEC+ countries. Total world oil output is forecast to increase by 1.31 million bpd to 101.26 million bpd in 2023 but fall by 930,000 bpd to 102.19 million bpd in 2024. OPEC’s oil output in 2023 is expected to fall by 750,000 bpd to 27.92 million bpd and fall by 140,000 bpd to 27.78 million bpd in 2024. U.S. oil output is forecast to increase by 1.46 million bpd to 21.76 million bpd in 2023 and by 40,000 bpd to 22.16 million bpd in 2024. Meanwhile, U.S. petroleum demand is forecast to increase by 60,000 bpd to 20.07 million bpd in 2023 and by 150,000 bpd to 20.22 million bpd in 2024. U.S. gasoline demand is forecast to increase by 3,000 bpd to 8.84 million bpd in 2023 but fall by 150,000 bpd to 8.69 million bpd in 2024, while distillate demand is expected to fall by 110,000 bpd to 3.92 million bpd in 2023 and increase by 50,000 bpd to 3.97 million bpd in 2024. In regards to oil prices, the price of Brent crude is expected to increase to $94.91/barrel in 2024, up from a previous forecast of $88.22/barrel.Russian Deputy Prime Minister, Alexander Novak, said that he and Saudi Arabia's Minister for Energy Prince Abdulaziz bin Salman discussed the oil market and cooperation within the OPEC+ group of oil producers amid the escalating conflict between Israel and Hamas. IIR Energy said U.S. oil refiners are expected to shut in 2 million bpd of capacity in the week ending October 13th, increasing available refining capacity by 87,000 bpd. Offline capacity is expected to fall to 1.6 million bpd in the week ending October 20th.

Brent Tops $90 as Russian Sanctions Add to Mideast Turmoil -- Nearby-delivery oil futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange settled Friday's session with gains between 4.5% and 5.5%, supercharged by a pledge from G7 nations to strengthen the sanction regime on Russian oil exports that kicked off with penalizing two foreign oil tankers, while the escalating war between Israel and Palestinian militant group Hamas risks metastasizing into a broader conflict in the Middle East. Iran's foreign minister, Hossein Amir-Abdollahian, whose government explicitly supports Hamas, on Friday threatened to open the second front on Israel's northern border should violence in the Gaza Strip escalate any further. Although Tehran denied its direct involvement in the brutal attack on Israeli civilians, recent statements from Iranian officials sound increasingly aggressive toward Israel and a potential ground offensive in the Gaza Strip. Israel has given Palestinians residing in northern Gaza 24 hours to evacuate to the southern parts of the Strip, although not a single humanitarian corridor currently operates for the civilians to leave the besieged enclave. Talks with Egypt to open a humanitarian corridor through a pedestrian-only crossing in Rafah have so far failed, according to the most recent reports. The United Nations warned on Friday the relocation of 1.1 million people in such a short timespan would be impossible to implement, resulting in a "humanitarian disaster." Explosive conflicts like these can take a sudden turn in any direction, according to analysts and traders, prompting disruption of oil supplies in the Middle East. "A sharp escalation in geopolitical risk in the Middle East, a region accounting for more than one-third of the world's seaborne oil trade, has markets on edge. While there has been no direct impact on physical supply, markets will remain on tenterhooks as the crisis unfolds," said the International Energy Agency in its October Oil Market Report released Thursday. Friday's move higher in the oil complex also follows renewed efforts by G7 nations to clamp down on sanctions evasion by international shipping companies carrying Russian oil above the established price cap of $60 per barrel (bbl). U.S. Treasury Department on Thursday slapped sanctions on two shipping companies based in Turkey and the United Arab Emirates for violating the sanctions' regime while using U.S. banking and insurance services. "Taking the steps is sending a clear message to Russia that we will continue to be focused on forcing them into two costly options. And attempts to expand beyond them will face a decisive and unified response," read a U.S. Treasury Department statement. The United States, European Union, Group of Seven countries and Australia, imposed a $60-per-bbl limit last year on what Russia could charge for its oil. The cap was designed to deprive the Kremlin of revenue to fund its war in Ukraine, forcing the Russian government either to sell its oil at a discount or divert money for a costly alternative shipping network. At settlement, NYMEX West Texas Intermediate futures for November delivery jumped $4.78 to $87.69 per bbl, while ICE Brent spiked $4.89 to finish a volatile week of trading at $90.89 per bbl. NYMEX November ULSD futures climbed to $3.2117 per gallon, surging $0.1668 in afternoon trading, and front-month RBOB futures added $0.1003 to settle at $2.2653 gallon..

The Israeli war on Hamas from a geopolitical perspective – Gilbert Doctorow -- The devastating attack on Israel by Hamas yesterday and Israel’s declaration of total war have been the featured news items in Western media today. Some of what the talking heads are saying to CNN, Euronews and the BBC is perceptive and valuable, much more so than any of their commentary on the war in Ukraine, which is my primary focus. I think that I am impressed not merely because the less you know about any given subject, the easier it is to take seriously what mainstream presents. No, what I have heard about the failures of Israeli intelligence on these stations has made good sense and seems credible. There are, incidentally, two markers that would justify giving the geopolitical perspective more thought. One is the news that the head of the Arab League flew to Moscow today for talks with Foreign Minister Lavrov. The other is the statement from an official in the Russia-controlled Donbas that NATO arms delivered earlier in the year to Ukraine were resold and likely are being used against Israel in the war there now under way. That brings up the remarks of Benjamin Netanyahu this past July that the Palestinians were known to have procured anti-tank weapons, presumably Javelins, from the Ukrainians. That is not an irrelevancy, because the Israelis will have to move armor into the Gaza Strip to take control and this type of NATO weaponry could inflict great damage on IDF personnel and equipment. Mainstream commentators with some military experience have pointed out that an attack like this one must have taken a long time in preparation, perhaps as long as a year. And so the question arises, why now? One clue mentioned by commentators is that it has come just after the Jewish High Holy Days. However, I believe the timing was driven by something entirely different, something purely in the domain of geopolitics: the attack was staged to disrupt the ongoing rapprochement of Saudi Arabia and Israel under the direction of Washington. If the parties succeeded in concluding the agreement on normalization of relations, then that would put in jeopardy all hopes of the Palestinians to enjoy the support of their Arab brethren in the region for realization of their political ambitions for statehood. Meanwhile, if there should be a Saudi-Israeli agreement, then the power balance in the region between Iran and Saudi Arabia would shift significantly in Saudis’ favor, since the conditions they were negotiating with Washington to make peace with Israel included declaration of a formal security treaty with the United States and access to U.S. nuclear technology up to and including enrichment of uranium. In other words, the Saudis would close in on the current Iranian advantage of being a hair’s breadth away from possessing bombs. Under present conditions of all-out war by Israel on Hamas and the prospect of a bloody incursion into Gaza by the Israeli Defense Force, it is unthinkable for Saudi Arabia to proceed with normalization of relations. This means, in effect, that a serious blow has been dealt to the foreign policy of the Biden administration. This failure comes on top of the Afghanistan withdrawal fiasco. If the allegations that NATO weapons have come into the hands of Hamas via Ukraine, then the consequences of uncontrolled delivery of weapons to Kiev will be on display for everyone to see. Failure breeds failures, and you cannot dress up this new pig in the Middle East policy of Biden and Blinken and Sullivan with lipstick.

Palestinians reportedly capture Israeli tanks -Hamas militants appeared to capture Israeli tanks during unprecedented attacks on Israel early Saturday, according to social media reports.The Palestinian militant group launched the largest attack on Israel in decades early Saturday, invading multiple Israeli towns from Gaza and launching masses of missiles into the country.Video shared on social media appears to show Hamas militants walking around an abandoned Israeli military base and capturing armored vehicles. Other videos, which could not be confirmed, show militants taking photos with captured tanks.The Hamas attacks appeared to catch the Israeli military off guard, while the massive scale and coordinated effort of the attacks point to a significant Israeli intelligence failure.The attacks come on the Jewish holiday of Simchat Torah and is nearly 50 years to the day after the beginning of the 1973 Yom Kippur war.An Israeli military spokesman confirmed Saturday that militants had captured Israeli soldiers and civilians and taken them hostage in the fighting.At least 250 Israelis and 232 Palestinians have been killed in the fighting, according to Israeli media reports and the Palestinian government. The Palestinian government said the attacks Saturday are a result of Israel discrimination against Palestinians in the country, including attacks on Muslim minorities and occupation of the West Bank.“We have repeatedly warned against the consequences of blocking the political horizon and failing to enable the Palestinian people to exercise their legitimate right to self-determination and establish long their own state,” a statement reads.

Israeli Lawmaker Says 'Pogroms' Against Palestinians Provoked Hamas Assault - An Israeli lawmaker told Al Jazeera on Saturday that his party had been warning that Israeli policies toward Palestinians would “erupt” into the violence that Israel is experiencing in the wake of Hamas’ assault.The comments were made by Ofer Cassif, a member of the Knesset and the leftist Hadash party, which holds four seats in the 120-seat Knesset.“We condemn and oppose any assault on innocent civilians. But in contrast to the Israeli government that means that we oppose any assault on Palestinian civilians as well. We must analyze those terrible incidents [the attacks] in the right context – and that is the ongoing occupation,” said Cassif, who is Jewish.“We have been warning time and time again… everything is going to erupt and everybody is going to pay a price – mainly innocent civilians on both sides. And unfortunately, that is exactly what happened,” he added.Since the Israeli government of Prime Minister Benjamin Netanyahu came into power at the end of December 2022, violence against Palestinians has significantly risen, mainly due to an escalation of Israeli raids in the West Bank. Settler attacks have also been on the rise, and Netanyahu’s governing coalition made expanding settlements a top priority with the ultimate goal of annexing the West Bank.Gaza has also been under an Israeli-imposed land, sea, and air blockade since 2007, and Israel frequently bombs the besieged enclave. The last major bombing campaign took place in 2021, when over 250 Palestinians were killed.“The Israeli government, which is a fascist government, supports, encourages, and leads pogroms against the Palestinians. There is an ethnic cleansing going on. It was obvious the writing was on the wall, written in the blood of the Palestinians – and unfortunately now Israelis as well,” Cassif said.Cassif also urged for de-escalation on X, writing that those calling for the destruction of Gaza “are only encouraging another bloodbath.” He also strongly denounced the Hamas assault, calling the actions “horrific crimes that the mind does not tolerate.”

Israel Says It Has No Evidence Iran Was Involved in Hamas Attack - On Monday, Israeli officials said they had no evidence that Iran was involved in the Hamas attack on southern Israel after a report from The Wall Street Journal claimed Iranian officials helped plot the operation.“We have no evidence or proof” that Iran was involved, Israeli Defense Forces (IDF) spokesman Maj. Nir Dinar told POLITICO. Dinar left open the possibility that Tehran was linked to the attack, saying, “Just because you don’t have that evidence doesn’t necessarily mean Iran isn’t behind it.”Rear Adm. Daniel Hagari, another IDF spokesman, made similar comments. “Iran is a major player, but we can’t yet say if it was involved in the planning or training,” Hagari said.Iran and Hamas also denied Iranian involvement in the assault. “The accusations linked to an Iranian role… are based on political reasons,”said Iranian Foreign Ministry spokesman Nasser Kanani. He insisted that Iran does not intervene in the “decision-making of other countries, including Palestine.”Ali Barakeh, a Hamas leader living in exile in Beirut, said only top Hamas military officials were aware of the plot before the attack was launched. “Only a handful of Hamas commanders knew about the zero hour,” he told AP.The Wall Street Journal report claimed Iran gave Hamas the green light for the attack during a meeting in Beirut last week, but Barakeh said no one from the central command or the political bureau of Hamas was in the Lebanese capital last week. He acknowledged that Iran has previously aided Hamas but said since the 2014 Gaza war, the group has been manufacturing its own rockets and training its own fighters.Barakeh said he was surprised that the attack, dubbed “Operation Al-Aqsa Storm,” did so much damage to Israel. “We were surprised by this great collapse,” he said. “We were planning to make some gains and take prisoners to exchange them. This army was a paper tiger.”The Wall Street Journal claimed Iran started helping plot the attack in August, but according to AP, the operation had been planned for over a year. Barakeh denied speculation that it was launched to derail Israel-Saudi normalization talks and said it was a reaction to the various provocations from the government of Israeli Prime Minister Benjamin Netanyahu, which came to power at the end of December 2022.

NYT: US Intelligence Shows Iranian Leaders Were Surprised by Hamas Attack - The New York Times reported on Wednesday that US intelligence shows Iranian leaders were surprised by the Hamas attack on southern Israel and that no evidence has been found indicating Iran helped plan the operation.The report reads: “These key Iranian officials did not know the attack was coming, according to the intelligence. The United States, Israel and key regional allies have not found evidence that Iran directly helped plan the attack, according to the US officials and another official in the Middle East.”The officials who spoke with the Times would not name which Iranian leaders they were talking about but said they are people who would typically be aware of operations involving Iran’s Quds Force, a branch of Iran’s Islamic Revolutionary Guard Corps (IRGC) that specializes in unconventional warfare, which includes working with foreign forces.The report said that Morgan Muir, a deputy Director of National Intelligence, told Congress in a briefing on Tuesday that there was no direct link between Iran and the Hamas attack. He also said US intelligence agencies had evidence contradicting assertions that Iran had helped plan the attack. On Sunday, The Wall Street Journal published a report claiming that Iran helped plan the operation and gave Hamas the green light for the attack during a meeting in Beirut last week. But the Times report said that the US and its allies “track and monitor meetings between Quds Force leaders and their proxies and allies, including Hamas” and that “officials say there is no evidence that those meetings were used to plan the attack in Israel.”After The Wall Street Journal report was published, the Israeli military saidit had “no evidence or proof” of Iranian involvement in the Hamas attack. Both US and Israeli officials have left open the possibility that Iran was linked to the operation and that they have discovered the evidence yet. The fact that they’re not blaming the attack on Iran signals the US and Israel don’t want to escalate the situation into a wider war, at least while they’re focusing on destroying Gaza.

Egypt Says Israel Ignored Warning That 'Something Big' Was Coming - An Egyptian intelligence official has said that Israel ignored warningsthat “something big” was coming amid questions about how the Hamas attack that was launched Saturday took the Israeli government by surprise, considering Gaza is under constant Israeli surveillance.“We have warned them an explosion of the situation is coming, and very soon, and it would be big. But they underestimated such warnings,” the Egyptian official, who spoke on condition of anonymity, told AP.The official said that Israeli officials played down the threats from Gaza and focused on the West Bank, where Israel has conducted major raids since the government of Prime Minister Benjamin Netanyahu came into power in December. Netanyahu’s coalition includes settlers who are working to expand settlements in the West Bank with the ultimate goal of annexing the territory.According to The Times of Israel, Ynet reported that Egypt’s Intelligence Minister General Abbas Kamel called Netanyahu just 10 days before the Hamas attack, warning that militants in Gaza were planning “something unusual, a terrible operation.”For their part, Netanyahu’s office dismissed the reports as fake news. “No early message came from Egypt and the prime minister did not speak or meet with the intelligence chief since the establishment of the government — not indirectly or directly. This is completely fake news,” his office said.

Hezbollah fires again at Israel, spurring fears of second front - The Lebanese militant group Hezbollah on Monday fired more rockets and artillery at Israel in retaliation for the deaths of three fighters, raising fears of another front opening as Israeli forces combat the Palestinian militant group Hamas.In a statement carried by state media, Hezbollah said it struck two Israeli command centers in the Galilee region in northern Israel “using guided missiles and mortar shells, causing direct hits.”Hezbollah said the rocket strikes were in response for the “martyrdom” of three fighters who were reportedly killed during Israeli attacks earlier Monday.According to Reuters, Israel sent helicopters to strike targets and shelled southern Lebanon on Monday after a cross-border raid from Palestinian Islamic Jihad members.Israel’s Channel 12 reported that one Israeli soldier died and six others were injured during the Islamic Jihad raid. Israeli forces said they defeated the gunmen who stormed across the border.Hezbollah and Israel also exchanged fire Sunday, a day after Hamas invaded southern Israel and killed hundreds of people.In 2006, Israel and Hezbollah fought a brief war that ended after about 34 days. The two armies have since exchanged incremental rocket fire over the borders.Israel is now conducting a major counteroffensive operation against Hamas, striking targets in Gaza with fighter jets and rockets, while cutting off electricity and food to the Gaza Strip ahead of a possible ground operation.If Hezbollah, which is backed by Iran just as Hamas is, were to join the fight against Israel, that would open up another front in northern Israel that would divide forces. Hezbollah also has much more strength and capabilities than Hamas.

Israel Announces 'Complete Siege' of Gaza, Says They're Fighting 'Human Animals' - The Israeli defense minister on Monday announced a “complete siege” on Gaza and said Israeli forces were fighting “human animals” as Israeli airstrikes have been bombarding the enclave, which is home to about one million children.“I have ordered a complete siege on the Gaza Strip. There will be no electricity, no food, no fuel, everything is closed,” said Israeli Defense Yoav Gallant,” according to The Times of Israel. “We are fighting human animals, and we are acting accordingly.”Also on Monday, Hamas warned it would start executing Israeli captives it has taken into Gaza if Israel does not stop its airstrikes. According toMiddle East Eye, Abu Ubaida, spokesman for the military wing of Hamas, said the prisoners were currently safe and sound but that they are being forced to act due to Israel’s airstrikes on civilians. He said if the bombing didn’t stop, civilian prisoners would be killed, and the executions would be documented.Since Hamas launched an unprecedented attack on southern Israel on Saturday, about 1,600 people have been killed on both sides, including 900 Israelis and 700 Palestinians. President Biden said on Monday that 11 Americans were among the dead and that he believes others may have been captured.An Israeli military spokesman said early Monday morning that about 100,000 troops are amassed in southern Israel waiting to execute their orders, which include making sure “Hamas will not be able to govern the Gaza Strip.”US officials expect Israel to launch a ground incursion into Gaza soon, and the Biden administration is providing full support, including new military aid and the deployment of an aircraft carrier strike group to the region as a show of force.Gaza has over 2 million residents and has been under an Israeli blockade since 2007, and has come under frequent Israeli bombings since then, leaving the people living in the enclave in a dire situation. Gaza is one of the most densely populated places on earth, meaning a full-scale Israeli invasion will incur substantial civilian casualties.

Gaza 'soon without fuel, medicine and food' - Israel authorities --The Gaza Strip could be on the brink of a new humanitarian crisis if supplies are not allowed in, authorities say, as Israel responds to the Hamas attacks. On Monday, Israel declared a "complete siege" on the territory, saying electricity, food, fuel and water would be cut off. According to residents, aid has not reached the enclave since Saturday. BBC footage shows deserted streets covered with rubble from collapsed buildings following Israeli airstrikes. Nearly 700 people have died in these attacks and thousands more are reported to have been injured. The area is home to about 2.3 million people in total - 80% of whom rely on humanitarian aid mainly due to the ongoing hostilities with Israel. It is ruled by Hamas militants but Israel controls the airspace and its shoreline. It also restricts who and what goods can cross its borders. Neighbouring Egypt strictly controls what or who can pass through its border with Gaza too. Since the attacks began on Saturday morning, Israel has stopped all supplies entering Gaza, including food and medicine. Stéphane Dujarric, spokesman for the UN secretary-general, said more than a dozen healthcare workers had been killed or injured and at least seven medical centres had been damaged. Meanwhile, many people are currently without electricity and internet, and could soon be out of essential food and water supplies. "Damage to water, sanitation and hygiene facilities has undermined services to more than 400,000 people," said Mr Dujarric. "The Gaza Power Plant is now the only source of electricity and could run out of fuel within days."

Egypt's Border Crossing With Gaza Closed Off as Palestinians Have Nowhere to Flee - The Rafah border crossing between Egypt and Gaza has been closed off as Palestinians have nowhere to flee amid relentless Israeli airstrikes that started in response to the Hamas attack on southern Israel.The Israeli military on Tuesday revised a recommendation for Palestinians to “get out” of Gaza through the Rafah crossing into Egypt. “Clarification: The Rafah crossing was open yesterday, but now it is closed,” the office of spokesman Lt-Col. Richard Hecht said, according toReuters.The New Arab reported that Egyptian officials said the crossing was closed off indefinitely. “The crossing will be closed indefinitely, for the situation has become quite dangerous after the Israeli bombardment of the Gaza Strip has had an impact on the Egyptian side of the crossing,” an Egyptian security source told the outlet.Another source said Egypt was trying to ensure “no attempts of infiltration by Palestinians into Egypt can take place.” According toIsrael’s Channel 13, Israel has threatened Egypt it would bomb any aid trucks heading into Gaza.According to the Red Crescent, three Israeli airstrikes hit the Rafah border crossing within 24 hours after Israeli Defense Minister Yoav Gallant announced a “complete siege of Gaza,” which involved cutting off food, water, electricity, and fuel.Israeli Maj. Gen. Ghassan Alian, the head of an Israeli military agency in charge of policies in the West Bank and Gaza, said on Tuesday that Israel was turning Gaza into “hell.” “Human animals must be treated as such. There will be no electricity and no water [in Gaza], there will only be destruction. You wanted hell, you will get hell.”Gaza is one of the most densely populated places on earth, home to over two million people, including about one million children.

'A Massive War Crime': Israel Announces Total Blockade of Gaza Strip --Israeli Defense Minister Yoav Gallant announced a "complete siege" of the Gaza Strip on Monday, pledging to block food and fuel from entering the occupied enclave and cut off the territory's electricity—steps that international law experts and other observers decried as a clear war crime that will devastate civilians."There will be no electricity, no food, no fuel, everything is closed," said Gallant.Using rhetoric that one commentator called "blatantly genocidal," Gallant added that "we are fighting human animals and we are acting accordingly."Israel has been imposing a land, air, and sea blockade on the Gaza Strip for nearly two decades, impoverishing much of the crowded enclave's population and denying millions sufficient access to clean water and other necessities. Children, who make up roughly half of Gaza's population, have been disproportionately affected.An intensification of the blockade against Gaza—often described as the world's largest open-air prison—would be both unlawful and catastrophic, analysts warned."Starving 2 million people who cannot move and are under a land siege and naval blockade is genocide," Pakistani writer Fatima Bhutto wroteon social media. "This is a war crime."Tom Dannenbaum, a legal scholar and associate professor of international law at the Fletcher School of Law and Diplomacy, agreed with that assessment, pointing to International Criminal Court statutes. "Gallant is ordering a massive war crime (ICC 8(2)(b)(xxv)) and very likely a crime against humanity (ICC 7(1)(b), 7(2)(b) [extermination] / 7(1)(k) [inhumane acts])," Dannenbaum wrote. "Presence of combatants within a civilian population does not affect its civilian character (AP I 50(3)). ICC has jurisdiction."Omar Shakir, Israel and Palestine director at Human Rights Watch, called Gallant's comments "abhorrent" and said that "depriving the population in an occupied territory of food and electricity is collective punishment, which is a war crime, as is using starvation as a weapon of war." "The International Criminal Court should take note of this call to commit a war crime," said Shakir.Israel has since launched a wave of airstrikes in Gaza, killing more than 500 people and injuring thousands. Dozens of Palestinians were reportedly killed Monday by an Israeli attack on Gaza's largest refugee camp. "The intense bombardment has so far displaced more than 120,000 people in the besieged Palestinian enclave," Al Jazeerareported.An analysis published earlier this year by the human rights group Euro-Med Monitor estimated that Israel's 16-year blockade "has impoverished more than 61% of Gaza's total population" and "left nearly 53% of the population facing food insecurity." In a statement on Monday, the Israeli human rights group B'Tselem said that Israeli officials "who now call for killing, destroying, crushing, smashing, and even starving the residents of the Gaza Strip" in the wake of Hamas' attack "forget that this is already Israeli policy.""At this moment, Israel is attacking in the Gaza Strip, when it is clear that once again many of the victims are civilians—including women, children, and the elderly," the group added. "Deliberate harm to civilians is always wrong and prohibited. There can be no justification for such crimes, not when they are committed as part of a struggle for freedom and liberation from oppression, and not when they are justified as a fight against terrorism."

Israel launches ‘one of the largest air strikes ever’ on Hamas Israeli forces say they launched one of the largest air strike operations “ever” against Hamas in the city of Gaza, claiming to have struck hundreds of targets with fighter jets on Monday alone as troops seek to destroy Palestinian militants for launching a massive attack on Israel over the weekend. The Israel Defense Forces (IDF) said its air force hit 1,200 targets in Gaza between Saturday and Monday, but forces “doubled that number” Monday. Israel said it is targeting weapons storage units, manufacturing sites, and command and control centers operated by Hamas and other Palestinian militants. “The [air force] is conducting one of the largest air strikes ever against Hamas in Gaza to degrade and destroy their ability to terrorize the people of Israel,” the IDF wrote on X, formerly Twitter. “Hamas launched a war. We will restore security to our country.” The Israeli Air Force said targets have been struck in Beit Hanoun, Sajaiya, El-Furqan and Rimal in the Gaza Strip. Videos shared by the Air Force on X show buildings completely decimated by rocket strikes. Close to 500 people have died inside of Gaza, according to the Palestinian Ministry of Health. Israel has mostly regained control of communities on the border of Gaza in southern Israel, where scores of Hamas militants invaded Saturday in an unprecedented attack that left at least 700 dead in Israel. Israeli Prime Minister Benjamin Netanyahu declared war shortly after the attack and formally declared war Sunday at a security cabinet meeting. Netanyahu on Monday said forces will begin a major counteroffensive to clear out Hamas and Palestinian militants to exact a “huge price” against them for the attack. That’s expected to include a ground operation inside Gaza, after Israeli Defense Minister Yoav Gallant said Gaza will be under “complete siege” and has ordered electricity, fuel and food to be cut off in the city.

Gaza's Only Power Plant Out of Fuel as Israeli Airstrikes Pound Enclave - Gaza’s only power plant was shut down on Wednesday after it ran out of fuel as the situation in the besieged enclave is becoming increasingly desperate for civilians after days of relentless Israeli airstrikes.At least 1,100 Palestinians have been killed in Gaza, and 5,339 have been wounded since Hamas launched its attack on southern Israel. According to Israeli officials, the bodies of 1,500 Hamas militants have been found inside Israel, but the death toll is not confirmed. Violence has also spiked in the West Bank, where at least 29 Palestinians have been killed since Saturday.On the Israeli side, at least 1,200 people have been killed, and 3,007 have been wounded. It’s estimated that Hamas captured about 150 people in Israel that have been brought into Gaza in an apparent attempt to gain leverage for negotiations.Gaza has been under Israeli blockade since 2007, but was put under a “complete siege” this week, meaning no food, fuel, medicine, or water, can enter the territory. The only way out for Gazans, the Rafah border crossing into Egypt, has been closed after airstrikes hit. Israel has threatened to bomb aid trucks entering from Egypt.Gaza hospitals are overwhelmed with people injured from airstrikes and will soon run out of fuel for their generators. A Gaza-based Doctors Without Borders official said the enclave’s largest hospital, Al-Shifa, only has enough fuel for three more days.Ghassan Abu Sitta, a reconstructive surgeon at al-Shifa, told AP the hospital was also running out of other vital supplies. “We’re already beyond the capacity of the system to cope,” he said. He added that the health system in Gaza “has the rest of the week before it collapses, not just because of the diesel. All supplies are running short.”Israel has mobilized 300,000 reservists and is expected to launch a ground invasion of Gaza, one of the most densely populated places on earth that’s home to over 2 million people, half being children. According to Middle East Eye, about a third of the 1,100 people killed in Gaza so far were children, but the true toll is unclear.The US is strongly backing Israel’s onslaught and according to National Security Advisor Jake Sullivan, is not setting any red lines, giving Israel free rein to kill civilians. “I’m not here to draw red lines or issue warnings or give lectures to anybody,” Sullivan said.

Egypt's Border Crossing With Gaza Closed Off as Palestinians Have Nowhere to Flee - The Rafah border crossing between Egypt and Gaza has been closed off as Palestinians have nowhere to flee amid relentless Israeli airstrikes that started in response to the Hamas attack on southern Israel.The Israeli military on Tuesday revised a recommendation for Palestinians to “get out” of Gaza through the Rafah crossing into Egypt. “Clarification: The Rafah crossing was open yesterday, but now it is closed,” the office of spokesman Lt-Col. Richard Hecht said, according toReuters.The New Arab reported that Egyptian officials said the crossing was closed off indefinitely. “The crossing will be closed indefinitely, for the situation has become quite dangerous after the Israeli bombardment of the Gaza Strip has had an impact on the Egyptian side of the crossing,” an Egyptian security source told the outlet.Another source said Egypt was trying to ensure “no attempts of infiltration by Palestinians into Egypt can take place.” According toIsrael’s Channel 13, Israel has threatened Egypt it would bomb any aid trucks heading into Gaza.According to the Red Crescent, three Israeli airstrikes hit the Rafah border crossing within 24 hours after Israeli Defense Minister Yoav Gallant announced a “complete siege of Gaza,” which involved cutting off food, water, electricity, and fuel.Israeli Maj. Gen. Ghassan Alian, the head of an Israeli military agency in charge of policies in the West Bank and Gaza, said on Tuesday that Israel was turning Gaza into “hell.” “Human animals must be treated as such. There will be no electricity and no water [in Gaza], there will only be destruction. You wanted hell, you will get hell.”Gaza is one of the most densely populated places on earth, home to over two million people, including about one million children.

Israel Accused of ‘Blatant War Crime’ as Human Rights Watch Confirms White Phosphorus Used in Gaza - Human Rights Watch on Thursday said it has confirmed reports that Israeli military forces unleashed white phosphorus munitions during artillery attacks on targets in Lebanon and Gaza this week, including over a heavily populated civilian area of the besieged Palestinian strip—an apparent war crime. HRW said it has interviewed witnesses and verified video footage shot in Lebanon and Gaza on Tuesday and Wednesday “showing multiple airbursts of artillery-fired white phosphorus over the Gaza City port and two rural locations along the Israel-Lebanon border.”The HRW announcement came as Israeli forces continue to bombard Gaza from air, land, and sea in an assault that has killed more than 1,500 Palestinians, including at least 500 children, in retaliation for Hamas’ surprise infiltration of Israel and killing of over 1,300 Israeli soldiers and civilians.As HRW explained Thursday:Upon contact, white phosphorus can burn people, thermally and chemically, down to the bone as it is highly soluble in fat and therefore in human flesh. White phosphorus fragments can exacerbate wounds even after treatment and can enter the bloodstream and cause multiple organ failure. Already dressed wounds can reignite when dressings are removed and the wounds are reexposed to oxygen. Even relatively minor burns are often fatal. For survivors, extensive scarring tightens muscle tissue and creates physical disabilities.WP burns as hot as 1,500°F. Water does not extinguish it.“Any time that white phosphorus is used in crowded civilian areas, it poses a high risk of excruciating burns and lifelong suffering,” HRW Middle East and North Africa director Lama Fakih said in a statement. “White phosphorous is unlawfully indiscriminate when airburst in populated urban areas, where it can burn down houses and cause egregious harm to civilians.” HRW previously accused Israel of war crimes for using WP munitions in densely populated areas—including over a United Nations school—during the 2008-09 Operation Cast Lead invasion of Gaza. In response to a 2013 petition to Israel’s High Court of Justice filed by human rights groups including HRW, the Israel Defense Forces said it would no longer use WP in populated areas, with “very narrow exceptions” that it would not disclose.

Israeli Official Calls for 'Doomsday' Nuclear Missile Option - Israeli lawmaker is calling for her nation's military to use nuclear warfare in response to attacks by Hamas. Revital "Tally" Gotliv, an Israeli lawyer and member of the Knesset for the Likud, published multiple posts advocating for a forceful retaliation following a surprise attack on Gaza on Saturday at the hands of the militant Palestinian group designated as a terrorist organization by the United States. More than 1,600 combined Israelis and Palestinians have reportedly been killed since Hamas launched attacks, according to the Associated Press, and hundreds of others have been injured. Hamas has reportedly taken an unknown number of hostages as the conflict has escalated."Jericho Missile! Jericho Missile! Strategic alert. before considering the introduction of forces. Doomsday weapon! This is my opinion. May God preserve all our strength," Gotliv wrote on X, formerly Twitter, on Monday, according to a translation. One Israeli lawmaker, Revital "Tally" Gotliv, has advocated for her government to use a "doomsday weapon" to bomb Hamas without mercy.Another post says: "I urge you to do everything and use Doomsday weapons fearlessly against our enemies," adding that Israel "must use everything in its arsenal." On Tuesday, she continued with her calls of urgency. "Only an explosion that shakes the Middle East will restore this country's dignity, strength and security!" Gotliv posted. "It's time to kiss doomsday. Shooting powerful missiles without limit. Not flattening a neighbourhood. Crushing and flattening Gaza. ... without mercy! without mercy!" She also stressed a swift response from her own government in response to Hamas "laughing" at the country.Nikolai Sokov, senior fellow at the Vienna Center for Disarmament and Non-Proliferation, told Newsweek via email that "loose talk" regarding nuclear weapons has become prevalent and more commonplace in recent years due to the war in Ukraine and now the escalation in Gaza.Part of it is understandable, he said, due to serious security crises, a lack of knowledge about nuclear weapons, visible political positions, and more people generally pondering the use of such weapons and the effect on a global scale."For Israel, such loose talk is perhaps even more damaging because the country does not even admit it has nuclear weapons, so an indirect confirmation is not good for its image," Sokov said.Sokov added that Gotliv's calls for escalatory measures is nearsighted for two reasons: one, any potential targets are in the immediate vicinity, hence damage to Israel would be considerable; and two, the military utility of nuclear weapons is often grossly overestimated, especially by those who have limited or no knowledge of nuclear weapons."There are, effectively, no targets for nuclear weapons in this war/conflict," he said.

Israeli official calls for 'Doomsday' missile that 'shakes the Middle East' to be used in response to Hamas attacks - despite the nation never openly admitting to having nuclear weapons -- An Israeli lawmaker has called for her nation's military to deploy nuclear weapons in response to the Hamas terror attacks that have left 1,200 Israelis dead. Revital 'Tally' Gotliv, a member of the right-wing Likud party in the Knesset has called multiple times on her social media accounts for her country to wipe Gaza off the map. Israel's military arsenal is extensive, and though it is believed the country has possessed a significant number of nuclear weapons since the 1960s, the small country situated in a hostile area has never officially confirmed its nuclear power. Since Saturday, when Iran-backed Hamas terrorists brutalized Israeli towns and cities in the south, Israel has declared war on the Palestinian terrorists and begun a counteroffensive that Israeli leaders say will involve significant destruction to Gaza. In one tweet, Gotliv, who has previously been extremely critical of Prime MinisterBenjamin Netanyahu despite their shared party membership, wrote: 'Jericho Missile! Jericho Missile! Strategic alert. before considering the introduction of forces. Doomsday weapon! This is my opinion. May God preserve all our strength.' The message was written and posted in Hebrew and has been translated.Jericho missiles are a general name given to a family of ballistic missiles that were first developed by Israel in the 1960s.She encouraged her country's army to 'shell Gaza mercilessly!' 'Only an explosion that shakes the Middle East will restore this country's dignity, strength and security,' wrote. 'I urge you to do everything and use Doomsday weapons fearlessly against our enemies.'Israel, she declared, 'must use everything in its arsenal.'She stressed that the Israeli government must respond quickly as Hamas is currently 'laughing' at her country. She wrote that merely 'flattening' a Gazan neighborhood would not be enough. The government must 'crush' all of Gaza.Following the terror attacks, Prime Minister Benjamin Netanyahu immediately declared a state of war and has since promised 'mighty vengeance' on Israel's attackers that will end in victory for his country.Israeli Defense Forces have begun bombarding key Hamas sites in the Gaza Strip and issued warnings to civilians in certain regions before a wave of retaliatory attacks began Monday morning. Early Wednesday morning, another wave of attacks against Gaza began. Yoav Gallant, the Israeli defense minister, said he has 'released all restraints' on the troops in their fight against Hamas. 'Hamas wanted a change and it will get one. What was in Gaza will no longer be,' he said, speaking to soldiers near the Gaza fence. Gallant promised to show no mercy to the terrorists. 'Whoever comes to decapitate, murder women, Holocaust survivors - we will eliminate him at the height of our power and without compromise.'

New Middle East war delivers a new threat to world economy - The new war in the Middle East is throwing yet another wrench into the world’s energy markets — hitting a struggling global economy at a politically perilous moment for leaders in the United States and Europe.This weekend’s surprise attack in Israel by the Palestinian group Hamas brought new calls from lawmakers for tightened U.S. sanctions against Iran and threatened to derail efforts to normalize relations between Israel and Saudi Arabia. Either outcome could send already-high oil prices soaring.Prices began climbing as soon as markets resumed trading Sunday night, with the global benchmark up 5 percent to nearly $89 a barrel just after 9:30 p.m. EDT. The price settled below $88 by 9 a.m. Monday.The stew of economic troubles and war is adding to President Joe Biden’s challenges as he faces reelection next year amid persistent inflation concerns, at the same time that U.S. allies in countries such as Germany arefacing a populist uprising tied in part to energy costs.Most immediately, Biden is facing calls from both Democratic and Republican lawmakers to tighten enforcement of sanctions restricting oil exports by Iran, Hamas’ main sponsor and supporter.GOP lawmakers also spent the weekend ramping up attacks on the president’s efforts to ease tensions with Tehran — prompting the administration to stress that all sanctions remain in place.Global petroleum supplies have already been roiled by Russia’s war on Ukraine and the resulting Western sanctions against Moscow’s oil exports. Those prices had slumped slightly last week, but many analysts are bracing for a spike in the coming days or weeks.Prices are likely to rise “not so much because the conflict impacts any oil supply at the moment, but on the fear that the conflict could draw in other players such as Iran who has been backing Hamas,” said Andy Lipow, head of the energy consulting firm Lipow Oil Associates.Iran was the world’s eighth-largest oil producer last year and exported about 2 million barrels per day in August, despite sanctions aimed at pressuring Tehran to abandon its nuclear ambitions.Energy analysts say it has grown more adept at evading those trade sanctions using ship-to-ship transfers to help it move increasing volumes of discounted oil to China.Biden needs to clamp down on those exports now, lawmakers said afterIran’s leaders praised and offered support for Hamas’ attacks on Israel.“These attacks reinforce the need for a more aggressive U.S.-Iran policy that more effectively deprives the regime and its proxies of resources,” said Sen. Jim Risch of Idaho, the top Republican on the Senate Foreign Relations Committee, in a statement Saturday.He added, “Sanctions and sanctions enforcement — particularly Chinese purchases of Iranian oil — need vast improvement.”

Israel-Hamas war looms over slowing world economy - The outlook for the global economy is getting worse. International economic agencies are coalescing around slower growth projections after a year of interest rate hikes from central banks, even as the U.S. economy has so far defied a long-predicted downturn. The International Monetary Fund (IMF) on Tuesday said global growth will slow from 3.5 percent in 2022 to 3 percent in 2023 and 2.9 percent in 2024, a 0.1 percentage point downgrade for 2024 from the group’s July estimate. “Part of the slowdown is the result of the tighter monetary policy necessary to bring inflation down. This is starting to bite,” Economists are once again worried about commodities and energy specifically, which is in the spotlight because of renewed conflict in the Middle East, just as it was after Russia’s invasion of Ukraine in February 2022. And another Federal Reserve rate hike could boost the pressure on the global economy as it faces rising Middle East tensions and slowing growth. The U.S. economy has “surprised on the upside, with resilient consumption and investment,” Gourinchas noted as he warned about drags like the Chinese real estate market, the lapsing of pandemic-era social safety net programs, and the risk of further commodity shocks that prolonged inflation in 2022. The IMF’s sentiments were echoed in recent forecasts from the group of developed economies in the Organization for Economic Cooperation and Development (OECD) as well as the United Nations Conference on Trade and Development (UNCTAD). The OECD is also expecting 3-percent growth for the global economy in 2023 along with 2.7-percent growth in 2024, arguing like the IMF that “the impact of tighter monetary policy is becoming increasingly visible.” “With uncertainty about the strength and speed of monetary policy transmission and the persistence of inflation, a key question is whether the policy tightening that has already been undertaken is sufficient to bring inflation smoothly back towards target,” OECD economists said in their September interim report. Economists with UNCTAD struck a more pessimistic tone, putting the 2023 global growth outlook at 2.4 percent, but seeing the economy move in an upward direction in 2024. “The world economy is flying at ‘stall speed,’ with projections of a modest growth of 2.4 percent in 2023, meeting the definition of a global recession,” they said. “Central banks must strengthen international coordination with a greater focus on long-term financial sustainability for the private and public sectors, and not just on price stability.” But Fed officials are still focused on their 2-percent inflation target in spite of the risks of a downturn. Inflation proved stubborn over the last tightening cycle due in part to commodity shocks that prolonged higher prices through initial supply disruptions boosted by stimulus-driven demand. The prospect of a broader Middle East conflict triggered by the war between Israel and Hamas is also driving inflation fears across markets. “Commodity prices could become more volatile under renewed geopolitical tensions,” the IMF warned Tuesday. “Since June, oil prices have increased by about 25 percent, on the back of extended supply cuts from OPEC+ (the Organization of the Petroleum Exporting Countries plus selected nonmembers) countries.” “Adverse supply shocks in global commodity markets might reoccur,” OECD economists said in September, adding that “a renewed spike in energy prices would give new impetus to headline inflation.” U.N. economists noted that the production cuts ordered by OPEC+ have been countered by OECD countries through production increases and reserve releases. “Despite the announced rounds of production cuts by OPEC+ countries in April 2023 – representing a reduction of over 1 million barrels per day – a significant increase in oil production from non-OPEC+ countries as well as a substantial release of strategic petroleum reserves by OECD member countries have more than offset the agreed OPEC+ cuts,” they said.

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