US oil prices finished lower for the third time in four weeks as ongoing Israeli-Hamas peace talks reduced geopolitical risks while US production and oil supplies grew more than expected…after rising 2.0% to $83.85 a barrel last week on an unexpected drop in US crude inventories and on increasing hostilities in the Middle East, the contract price for the benchmark US light sweet crude for June delivery traded lower early Monday as Israel-Hamas ceasefire talks in Cairo over the weekend reduced fears of a wider Middle East conflict, then extended its losses in afternoon trading to settle $1.22 lower at $82.63 a barrel as U.S. inflation data dimmed the prospect of imminent interest rate cuts...US oil contracts traded slightly higher in overseas trading early Tuesday, as traders weighed whether a possible cease-fire in the Middle East could help soothe political tensions in the region, but sold off midmorning after the EIA’s monthly report showed the largest monthly increase in U.S. crude oil production since October 2021, and settled 70 cents lower at $81.93 a barrel after the market was hit with another round of disappointing inflation and economic data…oil prices extended their slide in overnight trading, after the American Petroleum Institute reported a large and unexpected increase in US crude inventories, then continued to plummet on Wednesday on the EIA’s confirmation of a surprise U.S. inventory build, and over uncertainty about interest rate cuts and the future of oil demand growth, and settled $2.93 lower at $79.00 a barrel as the market continued to sell off on the prospect of a ceasefire agreement between Israel and Hamas…oil prices recovered a bit in Asian trading Thursday, supported by speculation that if WTI fell below $79, the U.S. would move to build up its strategic reserves, but erased their gains and breached their previous low after U.S. data pointed to persistent labor market strength and further cut hopes of an early decline in U.S. interest rates, before settling 5 cents lower at $78.95 a barrel as traders grew worried about a possible economic slowdown in the U.S….oil prices edged up in Asian trading on Friday on the prospect that OPEC+ would continue its output cuts, but turned south after the April employment report showed US jobs growth slowed more than expected while wage gains cooled, and settled 84 cents lower at $78.11 a barrel as an unexpected contractionary index for the U.S. service sector accelerated losses in gasoline prices and weakness in the U.S. dollar, and which thus left oil prices down 6.8% for the week, the steepest weekly drop in three months....
natural gas prices, on the other hand, finished higher for the second time in three weeks on ongoing production cuts, higher LNG demand, and a bullish storage report…as the price of the expiring contract for natural gas for May delivery was falling 7.9% to $1.614 mmBTU and hitting a 28 year low on its last day of trading last week as additions to storage came in above expectations, exacerbating the gas glut, the contract price for natural gas for June delivery was falling 3.3% to close the week at $1.923 per mmBTU….with the market quoting the June contract price this week, Monday saw that contract open at $1.942, two cents above Friday’s closing price, and rally from that level, as production curtailments continued and the Freeport LNG showed signs of increased LNG demand, and settle 10.7 cents higher at $2.030 per mmBTU, boosted by a full restart of Freeport LNG’s third train, supply interruptions in the Permian Basin and expectations for a below-average storage injection…after continuing 6 cents higher early Tuesday, prices turned south and traded down more than 13 cents from the day’s high as doubts about Freeport LNG’s recovery lingered, and markets braced for bearish monetary policy news Wednesday, before settling 3.9 cents lower at $1.991 per mmBTU, as the pressure of large storage levels was offset by forecasts for more demand than was previously expected…natural gas prices opened 5 cents lower Wednesday, as traders evaluated growing LNG volumes and production cuts against high gas storage levels, and settled 5.9 cents lower at $1.932 per mmBTU on forecasts for less demand over the next two weeks than had been expected, and on an ongoing massive glut of gas in storage…but natural gas prices started Thursday 3 cents higher and quickly rose to surpass the $2.00 level, as traders anticipated a bullish weekly storage report, and continued higher after the report to settle up 10.3 cents at $2.035 per mmBTU on an ongoing drop in output and on forecasts for more LNG demand next week than had been expected….natural gas prices continued to rally on Friday, as production held at lighter levels, and forecasters continued to call for a hot summer ahead, and settled 10.7 cents higher at a 13 week high of $2.142 per mmBTU, and thus ended 11.4% higher for the week...
The EIA’s natural gas storage report for the week ending April 26th indicated that the amount of working natural gas held in underground storage rose by 59 billion cubic feet to 2,484 billion cubic feet by the end of the week, which left our natural gas supplies 436 billion cubic feet, or 21.3% above the 2,048 billion cubic feet that were in storage on April 26th of last year, and 642 billion cubic feet, or 34.9% more than the five-year average of 1,842 billion cubic feet of natural gas that had typically been in working storage as of the 26th of April over the most recent five years…the 59 billion cubic foot addition to US natural gas working storage for the cited week was more than the 55 billion cubic foot addition to storage that was forecast in a Reuters poll of analysts, but was less than the 62 billion cubic feet that were added to natural gas storage during the corresponding fourth week of April 2023, and also less than the average 72 billion cubic foot injection into natural gas storage that has been typical for the fourth week of April over the past 5 years…
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending April 26th indicated that after an increase in our oil imports and a big drop in our oil exports, we had surplus oil to add to our stored commercial crude supplies for the eleventh time in fourteen weeks and for the 19th time in the past 28 weeks, as refinery throughput was also lower….Our imports of crude oil rose by an average of 274,000 barrels per day to an average of 6,772,000 barrels per day, after rising by an average of 36,000 barrels per day over the prior week, while our exports of crude oil fell by 1,261,000 barrels per day to 3,918,000 barrels per day, which when used to offset our imports, meant that the net of our trade in oil worked out to a net import average of 2,854,000 barrels of oil per day during the week ending April 26th, 1,535,000 more barrels per day than the net of our imports minus our exports during the prior week. At the same time, transfers to our oil supply from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils averaged 397,000 barrels per day, while during the same week, production of crude from US wells was unchanged at 13,100,000 barrels per day. Hence our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a rounded total of 16,351,000 barrels per day during the April 26th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 15,641,000 barrels of crude per day during the week ending April 26th, an average of 230,000 fewer barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that an average of 1,123,000 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 April 26th appear to indicate that our total working supply of oil from net imports, from transfers, and from oilfield production was 413 barrels per day less than what was added to storage plus what 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 plugged a [+413,000 ] barrel per day figure onto line 16 of the weekly U.S. Petroleum Balance Sheet, in order to make the reported data for the 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 indicating there must have been an error or omission of that magnitude in the week’s oil supply & demand figures that we have just transcribed...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 (as is obvious to anyone who watches oil prices), 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….and there is also an aging twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had hoped to do about it)
This week’s average 1,123,000 barrel per day increase in our overall crude oil inventories came as an average of 1,038,000 barrels per day were being added to our commercially available stocks of crude oil, while an average of 85,000 barrels per day were being added to our Strategic Petroleum Reserve, the twenty-first SPR increase in twenty-eight weeks, following nearly continuous withdrawals from the SPR over the prior 39 months… Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to 6,541,000 barrels per day last week, which was 3.6% more than the 6,315,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at 13,100,000 barrels per day because the EIA’s rounded estimate of the output from wells in the lower 48 states was unchanged at 12,700,000 barrels per day, while Alaska’s oil production was 7,000 barrels per day lower at 430,000 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 just matches that of our pre-pandemic production peak, while it's also 35.1% 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 87.5% of their capacity while processing those 15,841,000 barrels of crude per day during the week ending April 26th, down from their 88.5% utilization rate of a week earlier, and a below normal operating rate for late April, as US refineries have lagged normal operating rates since arctic cold penetrated to the Gulf Coast in mid January and froze off some operations… the 15,641,000 barrels of oil per day that were refined this week were 0.6% less than the 15,735,000 barrels of crude that were being processed daily during week ending April 28th of 2023, and 4.9% less than the 16,446,000 barrels that were being refined during the prepandemic week ending April 26th, 2019, when our refinery utilization rate was at a closer to normal 89.2%..
Even with the decrease in the amount of oil being refined this week, gasoline output from our refineries was somewhat higher, increasing by 254,000 barrels per day to 9,396,000 barrels per day during the week ending April 26th, after our refineries’ gasoline output had decreased by 275,000 barrels per day during the prior week. This week’s gasoline production was 0.2% more than the 9,378,000 barrels of gasoline that were being produced daily over week ending April 28th of last year, but 5.3% less than the gasoline production of 9,927,000 barrels per day during the prepandemic week ending April 26th, 2019….on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 271,000 barrels per day to 4,508,000 barrels per day, after our distillates output had increased by 178,000 barrels per day during the prior week. After seven production increases in the past eleven weeks, our distillates output was still 1.5% less than the 4,576,000 barrels of distillates that were being produced daily during the week ending April 28th of 2023, and 12.1 less than the 5,128,000 barrels of distillates that were being produced daily during the week ending April 26th, 2019…
With this week’s increase in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the third time in thirteen weeks, increasing by 344,000 barrels to 227,087,000 barrels during the week ending April 26th, after our gasoline inventories had decreased by 634,000 barrels during the prior week. Our gasoline supplies rose this week even as the amount of gasoline supplied to US users rose by 195,000 barrels per day to 8,4618,000 barrels per day, because our imports of gasoline rose by 197,000 barrels per day to 977,000 barrels per day, while our exports of gasoline rose by 142,000 barrels per day to 920,000 barrels per day.…Even after thirty-four gasoline inventory withdrawals over the past fifty-four weeks, our gasoline supplies were still 1.9% above last April 28th’s gasoline inventories of 222,878,000 barrels, but were about 3% below the five year average of our gasoline supplies for this time of the year…
With this week’s decrease in our distillates production, our supplies of distillate fuels fell for the eleventh time in fifteen weeks, following eight consecutive prior increases, decreasing by 732,000 barrels to 115,850,000 barrels over the week ending April 26th, after our distillates supplies had increased by 1,614,000 barrels during the prior week. Our distillates supplies fell this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 126,000 barrels per day to 3,678,000 barrels per day, while our exports of distillates fell by 96,000 barrels per day to 1,038,000 barrels per day, and while our imports of distillates fell by 35,000 barrels per day to 103,000 barrels per day.…Even with 30 inventory decreases over the past fifty-three weeks, our distillates supplies at the end of the week were 5.0% above the 110,323,000 barrels of distillates that we had in storage on April 28th of 2023, but were about 7% below the five year average of our distillates inventories for this time of the year…
Finally, after the big decrease in our exports of crude oil, our commercial supplies of crude oil in storage rose for the 17th time in twenty-six weeks and for the 24th time in the past year, increasing by 7,265,000 barrels over the week, from 453,625,000 barrels on April 19th to 460,890,000 barrels on April 26th, after our commercial crude supplies had decreased by 6,368,000 barrels over the prior week… With this week’s increase, our commercial crude oil inventories remained about 3% below the most recent five-year average of commercial oil supplies for this time of year, while they were also about 31% above the average of our available crude oil stocks as of the fourth weekend of April 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 due to higher exports relating to the onset of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze offs, our commercial crude supplies as of this April 26th were 0.3% more than the 459,633,000 barrels of oil left in commercial storage on April 28th of 2023, and were 10.9% more than the 415,727,000 barrels of oil that we still had in storage on April 29th of 2022, while still 5.0% less than the 485,117,000 barrels of oil we had in commercial storage on April 30th of 2021, after refinery damage from winter storm Uri left even more crude oil remaining after 2020’s pandemic precautions had left a glut of oil unused…
This Week’s Rig Count
In lieu of a detailed report on the rig count, we are again just including a screenshot of the rig count summary from Baker Hughes…in the table below, the first column shows the active rig count as of May 3rd, the second column shows the change in the number of working rigs between last week’s count (April 26th) and this week’s (May 3rd) count, the third column shows last Friday’s April 26th 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 period a year ago, which in this week’s case was the 5th of May, 2023…
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OH AG Asks Court to Find Austin Master Services, CFO in Contempt -- --Marcellus Drilling News -Ohio Attorney General Dave Yost is asking a Belmont County judge to find Austin Master Services (AMS) and Brad D. Domitrovitsch, who is in control of the company, in contempt for “failing to meet the court’s deadline to clean up the illegal levels of fracking waste stored at its recycling facility in Martins Ferry.” AMS is a radiological waste management solutions company operating in Belmont County, OH, close to the Ohio River. Media accounts report that AMS has stored at least 10,000 tons of fracking waste (drill cuttings with low radioactivity) at the Martins Ferry facility. The facility is rated and permitted to hold 600 tons. In March, Yost requested Belmont County Common Pleas Court to block AMS from receiving any more waste and order it to comply with its rating (see Ohio AG Sues Austin Master Services for Unsafe Storage of Wastewater). The court granted both requests with a deadline of April 17 to comply (see Court Orders Austin Master to Clean Up Martins Ferry Frack Waste). The deadline came and went. Yost says AMS is still out of compliance, hence the request for an order holding the company in contempt.
Martins Ferry Asks ODNR to Begin Cleanup of Austin Master Services --Yesterday we told you that Ohio Attorney General Dave Yost is asking a Belmont County judge to find Austin Master Services (AMS) and Brad D. Domitrovitsch, who is in control of the company, in contempt for “failing to meet the court’s deadline to clean up the illegal levels of fracking waste stored at its recycling facility in Martins Ferry” (see OH AG Asks Court to Find Austin Master Services, CFO in Contempt). AMS is a radiological waste management solutions company operating in Belmont County, OH, close to the Ohio River. Local residents and their political leaders, the Martins Ferry City Council, sent a letter yesterday to the Ohio Dept. of Natural Resources (ODNR) asking the agency to begin cleaning up the AMS facility immediately.
EPA, Sunoco Reach $2.4M Deal Over Ohio Oil Pipeline Spill - Law360 (paywalled)
Utica Shale Academy Uses MPLX Grant To Advance Welding Trade Program MPLX, the midstream segment of Marathon Petroleum, presented the Utica Shale Academy in Salineville, Ohio, with a $20,000 grant for its outdoor welding program. The school purchased fire-resistant personal protective gear, crucial for the safety and comfort of students involved in the program. Emery Tyson, Utica Region Operations Director for MPLX, was touched by the academy's needs and the potential impact of this donation. "We deeply believe that safety comes first, so supporting personal protective equipment needs of students learning valuable trades is an honor," said Tyson. The tuition-free school is open to students in grades 9-12 who are considering an alternative career path in the trade workforce. Its focus is on dropout prevention and recovery through career education. The donation from MPLX and Marathon Petroleum is a significant boost to the academy's efforts to serve its 130 students from 26 school districts.
Encino Energy Spent $2M to Help 145 Ohio Nonprofits Past 5 Years | Marcellus Drilling News --Encino Energy published its annual Community Progress Report for 2023 yesterday. The report provides insight into the company’s achievements through its Community Partnership Program and highlights its investments in the communities in which it operates. In five years of active operations in Ohio, Encino has donated more than $2 million to 145 community groups and organizations in the state. In addition, Encino employees have donated more than 2,000 hours of time to volunteer. Recipients include first responders at fire and police departments, seniors groups, 4H, hospitals, and many more.
Gas line struck in Beavercreek, Ohio; 'Transit alert' issued - — A gas line has been struck in Beavercreek. The Beavercreek Police Department posted to social media that drivers traveling westbound around the 4200 block of Colonel Glenn Highway should expect delays. “Crews are actively working on the scene, but expect lane restrictions,” said police. Beavercreek police said crews will be on-site for the next number of hours to fix the issue. If you can, Beavercreek police requests that you find an alternative route.
A Plastics Plant Promised Pennsylvania Prosperity, but to Some Residents It’s Become a ‘Shockingly Bad’ Neighbor -- Shell’s new ethane cracker was supposed to be an economic “game changer” for Beaver County. But some of its neighbors are now fleeing its light, noise and air pollution–and the facility is facing two lawsuits. In 2016, Shell officially announced the construction of a new ethane cracker plant that would produce millions of tons of plastic on 386 acres along the Ohio River at a site in Monaca, about two miles from their home 25 miles northwest of Pittsburgh. The ethane would be sourced from natural gas from wells in the Marcellus and Utica shale formations.Like many of their neighbors, Jackie Shock-Stewart and her husband Matt Stewart were not initially worried. “They did a really good and effective job of making it seem like a positive for the community,” Stewart said. “It was very much marketed as a modern, clean industry.” Pollution from the plant has been far more disruptive than most people expected. In May 2023, Shell was fined $10 million for air quality violations. Though it had only been operational for about six months, the plant had exceeded its 12-month emission limits for volatile organic compounds (VOCs), carbon monoxide, nitrogen oxides and hazardous air pollutants. The same month, the Environmental Integrity Project and Clean Air Council filed a citizen suit against Shell over the Monaca plant to “redress and prevent repeated and ongoing violations of the Clean Air Act and the Pennsylvania Air Pollution Control Act.” In February 2024, a Beaver resident named John Flynn filed another lawsuit against Shell, seeking class-action status and alleging that Shell had “wrongfully and tortiously released substantial and unreasonable noxious odors, fugitive dust and light emissions” that “invaded” nearby properties and caused damages. The lawsuit defines its class of plaintiffs as anyone who lives within two miles of the facility.“I think expectations from the beginning were extremely low,” said Anaïs Peterson, who is based in Pittsburgh and works as a petrochemicals campaigner for Earthworks, a nonprofit focused on fenceline communities and the impacts of oil, gas and minerals development. “It was very clear what kind of facility this was going to be. We all knew it was going to be bad, but it’s shockingly bad.”Before Shell even began operations, Shock-Stewart noticed sweet smells in the air outside her home in 2021, and she began to wonder about the impact the facility could have on her family. (The Pennsylvania Department of Environmental Protection cited Shell for “malodorous air contaminants” in September 2021.) The plant takes ethane, a liquid hydrocarbon separated from fracked natural gas, and heats it to extremely high temperatures, “cracking” the molecular bonds holding it together to form ethylene and polyethylene pellets called nurdles. A plastics feedstock, the nurdles are then melted down to make everything from plastic bottles to car parts. Shock-Stewart reviewed map projections of the plant’s effects on air quality and saw that her children’s elementary school was “smack dab in the middle of an area of concern.” The Shell plant was expected to emit carbon monoxide, nitrogen oxides, PM2.5 fine particles, sulfur dioxide, VOCs and hazardous air pollutants. Both sulfur dioxide and nitrogen oxide are associated with respiratory health effects like shortness of breath, asthma and wheezing, and nitrogen oxide has been shown to have a “more serious” impact on children than on adults. Short-term exposure to a VOC like benzene, a known human carcinogen, can cause drowsiness, vomiting, convulsions and headaches; chronic exposure can lead to blood disorders and cancer. There are at least three elementary schools within a five-mile radius of the plant. As she learned more, Shock-Stewart realized that she no longer felt comfortable living so close to the plant, and the couple decided to move to Ohio in 2022. “It was a very difficult decision. We didn’t want to leave our home and our community.” Two other families they knew in the area had also moved away because of the plant, Stewart said. “They had young kids, and the mothers of the family, just like Jackie, were particularly concerned and worried about their kids.” With the plant now operational, some in Beaver County are asking if others will follow in the couple’s footsteps, leaving the area—or choosing not to move to the county at all—because of the plant. Like Shock-Stewart, residents and activists are concerned about the consequences of the plant’s air, water, light and noise pollution. They are worried about the number of air and water quality violations that Shell has accumulated in the months since start-up and what they see as a lack of transparency from the company about those violations. And they wonder what the plant will mean for Beaver County’s long-term fortunes. Set along the banks of the Ohio, the plant is close to several neighborhoods and towns, including Beaver, the charming county seat, where Hallmark has filmed exterior shots to use as a stand-in for “the quaint setting for some fictional northern town” in its Christmas movies. The now-complete petrochemical facility cuts a striking contrast to this quiet backdrop. “It’s like the eye of Sauron. It’s like hell opened up a portal above Beaver,” said Mark Dixon, an activist and filmmaker who lives in Pittsburgh and is leading a community air monitoring effort around the plant. He has also photographed the site. His photos show the sprawling plant emitting huge plumes of smoke, lit orange against the night sky. “Western Pennsylvania is no stranger to industrial activity,” Peterson said. Down the river from the Shell plant are two other chemical plants, BASF and Styropek, and Shell replaced the Horsehead company’s zinc production facility when they bought the Monaca property in 2014. But Shell’s presence in southwestern Pennsylvania has been marred by years of violation notices, malfunctions and lawsuits. Since 2017, DEP has issued 27 notices of violation to the plant, mainly for air quality. Most of the violations were issued after the plant began operations in the fall of 2022; the most recent is from earlier this month.
Well-Plugging Bill by Pittsburgh Radical Dem Passes in U.S. House -- --Marcellus Drilling News - Sometimes, even a radicalized, anti-Semitic leftist like Congresswoman Summer Lee, Democrat from Pittsburgh and member of “The Squad” of truly Communistic radicals in the U.S. House of Representatives, can swerve into a good piece of legislation. In July 2023, Lee introduced the Abandoned Well Remediation Research and Development Act (H.R. 4877), which directs the Dept. of Energy (DOE) “to establish a research, development, and demonstration program concerning abandoned oil and gas wells.” It doesn’t actually solve the abandoned well problem, but it moves the ball in the right direction by setting up a national database to catalog such wells and propose a program to help fix the issue. Lee’s bill just passed the U.S. House in a bipartisan vote of 333-75. Credit where credit is due, although we fervently hope she is defeated in the November election.
26 New Shale Well Permits Issued for PA-OH-WV Apr 22 – 28 --Marcellus Drilling News - Two weeks ago, during the week of April 15 – 21, there were 16 new permits issued to drill in the Marcellus/Utica. Last week, for the week of April 22 – 28, there were 26 new permits issued. Finally! A little good news on the permit front. Snyder Brothers took the top prize with eight new permits issued, all of them for a single well pad in Armstrong County, PA. Chesapeake Energy scored five new permits, all of them for a single pad in Bradford County, PA. EQT Corporation (using its Rice Drilling subsidiary) received four permits in Greene County, PA. Encino Energy also received four permits, all for one pad in Harrison County, OH. Antero Resources received three permits in Wetzel County, WV, and Southwestern Energy received two permits in Brooke County, WV. ANTERO RESOURCES | ARMSTRONG COUNTY | BRADFORD COUNTY | BROOKE COUNTY | CHESAPEAKE ENERGY | ENCINO ENERGY | EQT CORP | GREENE COUNTY (PA) | HARRISON COUNTY | SNYDER BROTHERS | SOUTHWESTERN ENERGY | WETZEL COUNTY
MPLX 1Q – Marcellus Gathered Volumes Increase 10% Over 2023 --Marcellus Drilling News -In late 2015, MPLX (i.e., Marathon Petroleum) bought out and merged in the Utica Shale’s premier midstream company, MarkWest Energy, for $15 billion (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). The “new” MarkWest, aka MPLX, plays on a much larger stage now, including ownership and operation of major assets in the Permian Basin and in the Bakken Shale, in addition to the Marcellus/Utica. Yesterday, MPLX issued its first quarter 2024 update. During the conference call with analysts, MPLX executives said the Marcellus is the company’s largest basin for gathering and processing. MPLX saw year-over-year volume increases of 10% for gathering and 7% for processing in the Marcellus, “driven by increased drilling and production growth.” That’s a bit of good news we weren’t expecting.
MPLX Opens Door to Growth Opportunities in 'Liquids-Rich' Marcellus, Utica and Permian --MPLX LP management said two strategic transactions announced in the first quarter would open the door to growth opportunities in the Marcellus and Utica shales and the Permian Basin. During a conference call to discuss quarterly performance, CEO Michael Hennigan told analysts that exploration and production (E&P) companies are targeting liquids-rich acreage in the Northeast. “We have already seen growth in the rich gas window of the Utica, and we see new producers moving in the region.”As such, Findlay, OH-based MPLX enhanced its footprint in the Utica by acquiring pipeline operator Summit Midstream Partners LP’s Utica assets. The package included Summit’s natural gas gathering system in southeastern Ohio and its equity interests in Ohio Gathering and Ohio Condensate,...
Deep Well Services & CNX Partner to Launch Flowback Services Co. Marcellus Drilling News - Two of our favorite companies in the Marcellus/Utica, one a driller (CNX Resources) and the other an oilfield services company (Deep Well Services), have partnered in a joint venture, creating a new company called AutoSep Technologies. The new JV uses groundbreaking new technology developed in CNX’s New Technologies unit that targets flowback, the “junk” that comes out of the borehole for the initial month or two after a well is drilled and fracked. Flowback includes methane and other hydrocarbons, sand, water, and fracking chemicals. All of the junk needs to be cleared so the well can start producing clean gas or oil. CNX has found a way to clean the junk that captures the methane (doesn’t escape into the air), is cheaper than current methods, and (most importantly) is safer. The process is being patented.
CNX Drilled 14 & Delayed 11 Wells in 1Q; Rev. Down 39%; Prod. Up 3% - Marcellus Drilling News -- Last week, CNX Resources issued its first quarter 2024 update. The company’s earnings totaled a paltry $6.8 million, or just $0.04 per share in 1Q24. That compares with $710 million, or $4.22 per share, in last year’s first quarter (down 99%). CNX’s revenue for 1Q24 fell 39% to $384.6 million from $1.28 billion last year. Production was 140.4 Bcfe (billion cubic feet equivalent) in 1Q24 — which works out to 1.54 Bcfe/d — up from 135.9 Bcfe last year (up 3%). The company announced it had delayed completion activities on three Marcellus Shale pads consisting of 11 wells “due to the challenging near term gas market conditions.” By delaying, the company will produce roughly 30 Bcfe less this year for a new target of 540 to 560 Bcfe.
CNX, Appalachia Peers Defer Completions as NatGas Prices Languish - CNX Resources and other Appalachia producers are pushing out well completions and slashing production with natural gas prices near historic lows.Canonsburg, Pennsylvania-based CNX Resources will defer completions on three Marcellus Shale pads, consisting of 11 wells, due to near-term challenges in the natural gas market, the company disclosed to investors last month.The company lowered its spending outlook by $50 million in response to the deferral decision. CNX also slightly lowered its full-year production forecast from 580 Bcfe (approximately 1.58 Bcfe/d) to 550 Bcfe (approximately 1.5 Bcfe/d).In order to return to its original guidance of 580 Bcfe, CNX would need to invest that $50 million in deferred well capital in early 2025, CNX said in first-quarter earnings on April 25.“However, we will continue to monitor natural gas prices as we move into 2025 and will adjust capital activity levels to reflect the best possible capital allocation decision at that time,” the company said in prepared remarks. “In other words, we will continue to follow the math.”CNX’s first-quarter production averaged 1.54 Bcfe/d (140.4 Bcfe total). CNX still anticipates generating $300 million in free cash flow in 2024, despite lower gas prices on unhedged volumes and decreased production.The deferral in capital spending, and stronger fundamentals supporting NGL prices, are expected to largely offset the declines, the company said.During the first quarter, CNX drilled 14 Marcellus wells with an average lateral length of about 16,500 ft; That included a five-well pad with average laterals of 19,700 ft.Four planned Marcellus turn-in-lines came in ahead of schedule, supporting CNX’s quarterly output of 140.4 Bcfe.CNX plans to bring online three deep Utica Shale wells in Westmoreland County, Pennsylvania, that were drilled last year. Other major producers in Appalachia are adjusting their spending and drilling in response to the challenging price environment.Pittsburgh-based EQT Corp. is prioritizing gas curtailments and its divestiture program, but remains bullish on future gas demand stemming from LNG exports and AI data centers.EQT’s updated 2024 production outlook ranges between 2.1 Tcfe and 2.3 Tcfe, including non-operated gas curtailments and deferred well completions.And the company got a head start on its divestiture program through an Appalachian asset swap with Equinor earlier this month.Range Resources is also pushing back completions for certain dry gas wells in Appalachia into the back half of the year, the Fort Worth-based E&P said in first-quarter earnings.
Range Resources Sees Strong Natural Gas Demand, Keeps Production Steady -Range Resources Corp. kept natural gas production steady through the first quarter, even as others pulled back, and it expects to maintain the same pace through 2024.The Appalachian Basin pure play’s executives reiterated to analysts during a call to discuss first quarter earnings on Wednesday that they intend to hold output flat this year. They aim to meet strong and diversifying domestic industrial needs for natural gas as well as a looming spike in LNG demand. Range is positioned to address current needs and “to help meet future energy demand, whether that is through exports to international markets or serving our needs closer to home for further electrification of our economy related to power generation needed for artificial intelligence and data centers or increased...
Chesapeake ‘Encouraged’ by Natural Gas Demand Signals as Production Cuts Continue - Chesapeake Energy Corp. said Wednesday it would continue to curtail natural gas output until demand rebounds, forecasting another 400 MMcf/d of cuts in the second quarter. The company first announced the cuts in February and said they would mostly come by not turning wells in progress to sales. Chesapeake curbed 200 MMcf/d of output during the first quarter and expects cuts to be lower as the year progresses and its inventory of drilled but uncompleted (DUC) wells and deferred turn-in-lines (TIL) grows. At the end of the first quarter, Chesapeake had 50 DUCs, or twice its normal average at current rig counts. It also had 22 deferred TILs at the end of the period.
Chesapeake (CHK) Issues Common Stock to Reduce Debt Burden - Yahoo Movies Canada -- Chesapeake Energy Corporation CHK recently entered into a privately-negotiated agreement to issue a total of 250,721,554 common shares in exchange for senior notes and convertible preferred stock. This move is expected to help the company to strengthen its balance sheet.Notably, at the end of second-quarter 2019, Chesapeake had a cash balance of only $4 million. On the other hand, its net long-term debt was $9,701 million, leading to a debt-to-capitalization ratio of 69.6%. The figure was way above the industry average of 40.4%.Moreover, the company’s debt-laden balance sheet restricts its ability to gain capital from the markets while losing credibility among shareholders. Though the recent move of issuance of common stock to retire a portion of its debt dilutes equity, management’s focus to tackle leverage is appreciable.The company intends to keep lowering the debt level through several techniques like divesting non-core assets, improving capital efficiency, optimizing capital allocation program and others. Among the resources sold, the most notable one is the $1.9 billion divestment of Utica Shale assets in Ohio during late 2018. These initiatives can further improve its financial flexibility.Markedly, the common stock issuance represents 15.3% of the upstream company’s 1.63 billion shares outstanding as of Jul 31, 2019. These newly issued stocks will be exchanged for around $40 million in 5.75% convertible preferred stock, $155.8 million in 5.5% convertible senior notes due 2026, $112.7 million in 4.875% senior notes due 2022, $129.3 million in 5.75% senior notes due 2023 and $150 million in 8% senior notes due 2027.
Depth of Natural Gas Production Drop Questioned as Prices Fail to Find Momentum - Nobody is questioning the downward direction of natural gas production over the past two months, a trend hastened by soft demand during a mild winter that put prices persistently near four-year lows. Major exploration and production (E&P) companies, including Chesapeake Energy Corp. and EQT Corp., announced curtailments to activity during the first quarter – cutbacks that continue. But estimates showing production dropping from record levels around 107 Bcf/d late in 2023 and again in February to around 99 Bcf/d through much of April may be overstating the depths of the downshift, some analysts say. By extension, this may explain why more buyers have yet to step in and begin bidding up prices. The thinking is that traders see massive amounts of supply in storage and are skeptical...
Radicals Pressure NY Gov. Hochul to Block Iroquois Pipe Expansion - Marcellus Drilling News --As we told you earlier this month, the radicals who run the New York Dept. of Environmental Conservation (DEC) are gearing up to block the Iroquois Gas Transmission system from completing its Enhancement by Compression (ExC) project (see NY DEC Attempting to Use Draft Reg to Block Iroquois Compressor). The ExC project increases horsepower at three compression stations — two in New York and one in Connecticut — by an extra 125 MMcf/d, flowing more Marcellus/Utica gas into New York City and New England. The radicals of Food & Water Watch recruited 5,000 drones (no doubt paying some of them) to write comments against ExC in an effort to give New York’s very weak Governor, Kathy Hochul, political cover to reject ExC.
E&Ps Signaling Uptick in U.S. Drilling, but Timing Still Uncertain, Says H&P CEO - The slump in natural gas prices has pressured the U.S. land market, but signs are emerging that the rig count may be “nearing a leveling off point,” according to the CEO of Helmerich & Payne Inc. (H&P). Activity between January and March in the Lower 48 was fairly solid, CEO John Lindsay said during the recent fiscal 2Q2024 conference call. The Houston-based contractor owns the largest U.S. fleet of super specs, aka walking rigs, through its FlexRig standard bearer fleet. The North American market continues to be “somewhat choppy,” Lindsay said. The “contractual churn” in the U.S. land market “is still prevalent and pushed our rig count just below the projected exit rate late in the quarter.”
Could Summer Demand, Lower Production Curb East Region Natural Gas Inventory Surpluses? - Supplies of natural gas in storage are stout everywhere, but East region inventories are closer to historical norms than any other section of the Lower 48. Should the densely populated Northeast sizzle amid scorching temperatures as forecast this summer, utilities in the heavy-gas consuming corner of the country could burn through more gas in the coming months and have less to inject into underground stockpiles. That could trim supply excesses relative to past years and bolster prices. Spot prices in the Northeast and neighboring areas are often volatile in peak demand periods, bouncing higher when there are demand surges or supply interruptions. On Friday, NGI’s Northeast Regional Avg. clocked in at $1.235/MMBtu – low but notably above the National Avg. of 95.5 cents
WV PSC Approves Massive 2,060 MW Gas-Fired Plant for Doddridge Co. ----Marcellus Drilling News -In September 2022, Competitive Power Ventures (CPV) announced that it had selected West Virginia for a 1,800-megawatt (later upgraded to 2,060 MW), combined-cycle natural gas power station that also uses carbon capture and storage (see CPV Announces Plans for Massive $3 Billion, 1,800 MW Gas-Fired Plant in WV). At that time, CPV was not prepared to announce where the massive new power plant would be built — but later confirmed that the project, called the Shay Energy Center, would be located in Doddridge County (see CPV Confirms Doddridge County, WV Location for Gas-Fired Plant). In January of this year, we questioned why there has been no word on the status of this important project (see WV Still Waiting to Build State’s First Big Gas-Fired Power Plant). We are delighted to report the WV Public Service Commission (PSC) approved the Shay Energy Center on Monday. Let the bulldozers start!
Mountain Valley seeks early start amid unfinished safety measures and environmental uproar Mountain Valley Pipeline LLC’s recent request to the Federal Energy Regulatory Commission (FERC) to initiate operations of their incomplete methane gas pipeline has ignited a firestorm of criticism from environmental groups and activists. This plea, made notably on Earth Day, seeks to expedite the activation of the 303-mile pipeline that stretches through Virginia and West Virginia, reaching into North Carolina, despite significant portions of the project remaining unfinished and not fully compliant with safety regulations. The Mountain Valley Pipeline (MVP) project, designed to transport natural gas from the Marcellus and Utica shale formations, has been mired in controversy since its inception. It has faced persistent legal challenges, environmental protests, and substantial delays. Critics argue that the project’s rush to completion disregards fundamental environmental protections and safety concerns, posing a threat to local communities and ecosystems. MVP’s request to FERC highlighted that less than two-thirds of the project had reached final restoration, with ongoing non-compliance issues related to a consent decree with the Pipeline and Hazardous Materials Safety Administration (PHMSA). Jessica Sims, Virginia field coordinator for Appalachian Voices, condemned the move as indicative of MVP’s “ongoing disrespect for the environment,” critiquing the company’s disregard for completing essential safety measures. Russell Chisholm, co-director of the Protect Our Water, Heritage, Rights (POWHR) Coalition, labeled the request as “reckless and impossible,” reflecting a broader sentiment that MVP is prioritizing contractual obligations over environmental and community safety. Chisholm’s statement underscores the anxiety permeating communities along the pipeline’s route, who have already witnessed the adverse environmental impacts during the construction phase. The project’s legal entanglements include a recent challenge in the U.S. Court of Appeals for the D.C. Circuit, contesting FERC’s approval of the MVP’s planned Southgate extension. Opponents argue that the project has deviated substantially from its original plans, rendering previous governmental approvals irrelevant. This legal contention highlights a growing resistance against the pipeline, emphasizing governmental failures to protect public interests in favor of corporate gains. The pipeline has garnered significant political backing, notably from outgoing U.S. Senator Joe Manchin (D-W.Va.), who has been instrumental in embedding expedited construction provisions for the MVP into broader political deals, such as the debt ceiling negotiations. Financially, the pipeline is a high-stakes endeavor, with substantial investments from major financial institutions like Bank of America, which are targeted by upcoming protests. The pipeline’s route through sensitive ecological zones has raised alarms about potential impacts on endangered species and vital water sources. Environmental defenders have documented instances of water contamination and habitat destruction during the pipeline’s construction phase. The upcoming demonstration outside Bank of America’s headquarters in Charlotte, organized by POWHR and other groups, aims to highlight these issues and press financial backers to reconsider their support. “Approving the Southgate project is irresponsible. This project will pose the same kinds of threats of damage to the environment and the people along its path as we have seen caused by the Mountain Valley Pipeline during the last six years,” stated David Sligh, Conservation Director at Wild Virginia.
Is U.S. Natural Gas Infrastructure a Target for Cyberattacks? FBI Director Puts Industry on High Alert - The oil and natural gas industry should remain vigilant against cyberattacks as global tensions mount and threaten U.S. critical infrastructure, according to Federal Bureau of Investigation (FBI) director Christopher Wray. The Chinese Communist Party (CCP) has repeatedly sponsored cyberattacks against the United States and has “made it clear that it considers every sector that makes our society run fair game, and its bid to dominate on the world stage,” Wray said recently at Vanderbilt University. The issue has been prevalent for years, according to Wray. From 2011-2013, “China-sponsored hackers pre-positioned for potential cyberattacks against U.S. oil and natural gas companies.”
NFE says 'minor mechanical issue' will not affect Altamira LNG launch - US LNG player New Fortress Energy said that “a minor technical issue” which took place last week on one of its rigs as part of the Altamira LNG project will not affect the launch of production. “This was a minor mechanical issue that we experienced during the commissioning of our cold box,” an NFE spokesperson told LNG Prime in an emailed statement. “All relevant team members were assessed by medical staff and no serious injuries were reported,” the spokesperson said. “We’re in the final stages of commissioning this project and this is not expected to have an impact on our timeline to begin production of LNG,” the spokesperson added. NFE’s spokesperson did not provide any additional details regarding the issue or when NFE expects to produce first cargo. According to images posted via social media, the incident took place on Friday on Pioneer II, which is the project’s liquefaction rig. The images show the rig covered in a white, powdery substance with several comments saying that it could be perlite. The Wes Edens-led firm said in February that it was expecting “first LNG in March and first cargo in April 2024.” Prior to that, in its latest update in November 2023, NFE said it completed “sailaway, installation, and first gas for our first FLNG asset in offshore Altamira, Mexico.” The company said in its third-quarter report it expected to achieve first LNG and to reach full commercial operation by the end of the fourth quarter last year. NFE sent its liquefaction rig Pioneer II on September 26, 2023 to Altamira to start serving the FLNG project. Prior to this, NFE’s utilities and accommodation rig, Pioneer III, arrived off Altamira, as well as the gas treatment rig, Pioneer I. Besides the three rigs, the 160,000-cbm Penguin FSU serves the project as a floating storage unit.
Venture Global Aims for Plaquemines LNG First Production By Summer – Venture Global LNG Inc. is looking to import at least three liquefied natural gas cargoes to aid in commissioning of Plaquemines LNG, according to a Department of Energy (DOE) filing. The Virginia-based company asked DOE for permission to import up to 600 MMcf over a two-year period. The company also asked for imports to begin in mid-June, and expects all LNG cargoes to be received later this year. Venture Global told DOE it expects LNG production at Plaquemines to begin by mid-2024 and that sourcing LNG for cooling down the facility is the “optimal method” to begin start-up on schedule. New Fortress Energy Inc. (NFE) reported a malfunction during start-up at its offshore export terminal in Altamira, Mexico, that injured...
Federal Court Affirms Kinder’s Evangeline Pass Natural Gas Pipe Expansion to Supply Plaquemines LNG - A move to force more scrutiny of Kinder Morgan Inc.’s Evangeline Pass natural gas pipeline expansion in Louisiana was struck down Tuesday by a federal appeals court. The U.S. Court of Appeals for the District of Columbia Circuit tossed a petition to halt the Evangeline Pass Expansion underway by Kinder’s Tennessee Gas Pipeline Co. LLC. The expansion is designed to serve the Plaquemines LNG export project by Venture Global LNG Inc. Evangeline Pass, which already has FERC approval, is expanding and modifying infrastructure on Southern Natural Gas Co. LLC and Tennessee pipelines.
US Appeals Court Upholds FERC Approvals for Gas Pipeline Expansion -A U.S. appeals court on April 30 upheld federal approvals for a natural gas pipeline system expansion project in Louisiana and Mississippi, rejecting environmentalists’ claims that the government performed an insufficient review of its climate harms. A unanimous three-judge panel of the U.S. Circuit Court of Appeals for the D.C. Circuit held that the Federal Energy Regulatory Commission (FERC) was right to determine the Evangeline Pass Expansion project is functionally separate from four related gas infrastructure developments being developed independently. FERC therefore did not need to analyze their emissions together, the D.C. Circuit said. The Kinder Morgan-backed project would expand existing pipelines to feed more fuel to Venture Global's Plaquemines LNG export terminal in the Gulf of Mexico. The Sierra Club and Healthy Gulf said in their 2022 lawsuit seeking to vacate FERC's approvals that the expansion and the related projects — new pipeline infrastructure projects that connect to the same export terminal and to the terminal itself — would together cause a massive release of greenhouse gas emissions. But the D.C. Circuit said on April 30 that since the other projects have separate ownership and would likely be built anyway, FERC was not obligated under federal environmental review laws to consider their collective emissions when issuing approvals. The environmental groups, Kinder Morgan and FERC didn’t immediately respond to requests for comment. The projects are all part of a major buildup of LNG export capacity in the Gulf. The U.S. last year became the world’s largest LNG exporter, and that capacity is expected to double before the decade ends. The environmental groups had argued that FERC violated the National Environmental Policy Act when it segmented its analysis of Evangeline Pass' environmental harms from the other projects. The groups said the projects are connected because the terminal won’t be able to export gas without supply from the pipelines, and the pipelines wouldn’t have anywhere to put the gas without the terminal. FERC had argued in court that the cumulative analysis demanded by the environmental groups wasn’t necessary because the individual projects would likely proceed regardless of whether the Evangeline Pass project is approved. The Evangeline Pass expansion is currently under construction. Work on the Plaquemines terminal is also ongoing and its first exports are expected later this year.
Labor Crunch Could Push Back Golden Pass Start-Up – Three Things to Know About the LNG Market - Golden Pass LNG’s timeline for starting production could slip further into 2025. A shortage of skilled workers and other construction issues are reportedly causing delays. Market speculation about the project has grown this week as traders continue to watch U.S. export projects along the Gulf Coast for signs of new demand later this year and next as prices trend below $2/MMBtu. The 2.4 Bcf/d Golden Pass project in Texas is a joint venture of QatarEnergy, which owns 70%, and ExxonMobil, which owns 30%. ExxonMobil said late last year that exports would begin in early 2025 instead of 2024 as the partners had long signaled. Further construction delays could possibly push the start of liquefied natural gas production at the terminal into the second half of 2025
Freeport Outage Cuts Into TotalEnergies’ First Quarter LNG Sales - TotalEnergies SE said Friday that its LNG sales decreased in the first quarter mainly due to lower demand in Europe and an unplanned outage at the Freeport export terminal on the upper Texas coast. The company has 2.2 million tons (Mt) of annual tolling capacity at Freeport’s Train 3, which was offline most of the first quarter to repair damage caused by freezing temperatures in January. The other two trains are currently undergoing similar work and Freeport has reported ongoing problems with Train 3. TotalEnergies said its liquefied natural gas sales were 10.7 Mt in the first quarter, down 3% from the year-ago period and down 9% from...
Feed Gas Flows, Vessel Traffic Indicate Stabilized Production at Freeport LNG - Feed gas flows to Freeport LNG continued to tick up as a fully loaded vessel left the Texas export facility for the first time in a week, indicating Train 3 operations could be stabilizing. Nominations of natural gas to the plant began increasing April 27 after hovering near zero for several days, according to Wood Mackenzie pipeline data. Flows appeared to slip again Tuesday, coinciding with a critical notice from Gulf South Pipeline Co. LLC, but were up to near 500,000 MMBtu Wednesday (May 1). It marks the first time nominations for the Freeport liquefied natural gas export facility have been near 30% of capacity since April 10, a day before a reported issue with Train 3’s ventilation flow meter that caused a system trip.
US natgas prices jump to 12-week high on contract expiry, Freeport LNG return (Reuters) -U.S. natural gas futures jumped about 6% to a 12-week high on Monday with the start of the higher priced June contract as the front-month andforecasts for more demand than previously expected due in part toan increase in feedgas atFreeport LNG's export plant in Texas. On its first day as the front-month, gas futures for June delivery on the New York Mercantile Exchange rose 10.7 cents, or 5.6%, from where the June contract closed on Friday to settle at $2.030 per million British thermal units (mmBtu) on Monday. That was the front-month's highest close since Feb. 5 and put it up about 26% from where the May contract closed when it was still the front-month on Friday. That was also the contract's biggest daily percentage increase since January 2022 when it jumped by a record 46.5% around the time the front-month switched from February to March. In the spot market, power and gas prices in many states, including Texas, California and Arizona, have traded below zero several times over the past month or sodue to low demand, ample renewable power supplies and pipeline outages and other workthat has trapped gas in Texas. In California, next-day power at South Path-15 (SP-15) EL-PK-SP15-SNL in Southern California fell to a record low of negative $20 per megawatt hour (MWh) on April 26, down from positive $4 on April 25. That compares with the prior all-time low of negative $15 on April 5. Next-day gas at the Southern California Border fell to positive$1.35 per mmBtu, its lowest since hitting a record low of $1.14 in June 2019, while spot gas at the PG&E hub in Northern California fell to $1.85, its lowest since July 2019. In Canada, next-day gas at the AECO hub in Alberta fell to positive 70 cents per mmBtu,its lowest since October 2022 for a fourth day in a row. Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.7 billion cubic feet per day (bcfd) so far in April, down from 100.8 bcfd in March. That compares with a monthly record of 105.6 bcfd in December 2023. On a daily basis, output was on track to drop by 1.4 bcfd over the past five days to a preliminary 14-week low of 95.7 bcfd on Monday. Meteorologists projected weather across the Lower 48 states would remain mostly warmer than normal through May 11 before turning near normal from May 12-14. LSEG forecast gas demand in the Lower 48, including exports, would hold near 92.8 bcfd this week and next. Those forecasts were higher than LSEG's outlook on Friday. Gas flows to the seven big U.S. liquefied natural gas (LNG) export plants slid to an average of 11.9 bcfd so far in April, down from 13.1 bcfd in March. That compares with a monthly record of 14.7 bcfd in December. On a daily basis, LNG feedgas was on track to rise from 12.2 bcfd on Sunday to a preliminary three-week high of 12.9 bcfd on Monday on signs that at least one of three liquefaction trains at Freeport LNG's export plant in Texas was exiting an outage.
US natgas prices jump 5% on higher demand forecast, lower output - (Reuters) - U.S. natural gas futures jumped about 5% on Thursday on a continued drop in output and forecasts for more demand next week than previously expected due to an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants. The price rise came even though last week's storage build was slightly bigger than analysts expected. The U.S. Energy Information Administration (EIA) said utilities added 59 billion cubic feet (bcf) of gas into storage during the week ended April 26. That was more than the 55-bcf build analysts forecast in a Reuters poll and compares with an increase of 62 bcf in the same week last year and a five-year (2019-2023) average rise of 72 bcf for this time of year. That leaves gas stockpiles about 35% above normal levels for this time of year. U.S. gas production has dropped by around 10% so far in 2024 after several energy firms, including EQT and Chesapeake Energy, delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in February and March. Front-month gas futures for June delivery on the New York Mercantile Exchange rose 9.4 cents, or 4.9%, to $2.026 per million British thermal units (mmBtu) at 10:44 a.m. EDT (1444 GMT). Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 95.7 billion cubic feet per day (bcfd) so far in May, down from 98.1 bcfd in April. That compares with a monthly record of 105.5 bcfd in December 2023. On a daily basis, output was on track to drop by 2.1 bcfd over the past eight days to a preliminary 15-week low of 95.6 bcfd on Thursday. Meteorologists projected weather across the Lower 48 states would remain mostly warmer than normal through May 10 before turning to near-normal levels in the May 11-17 period. LSEG forecast gas demand in the Lower 48, including exports, would rise from 91.6 bcfd this week to 92.5 bcfd next week. The forecast for next week was higher than LSEG's outlook on Wednesday. Gas flows to the seven big U.S. LNG export plants rose from an average of 11.9 bcfd in April to 12.2 bcfd so far in May with the slow return to service of Freeport LNG's plant in Texas. That compares with a monthly record of 14.7 bcfd in December. The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia's war in Ukraine. Gas was trading around $10 per mmBtu at both the Dutch Title Transfer Facility (TTF) benchmark in Europe and the Japan Korea Marker (JKM) benchmark in Asia.
Lower 48 E&P Activity Waning but Renewed Opportunities Seen in Deepwater GOM - The Gulf of Mexico (GOM) for decades was the breadbasket for U.S. natural gas and oil production, but the Lower 48 took over as unconventional drilling uncorked massive reserves. As onshore activity has waned, however, the deepwater is once again beckoning. Enverus Intelligence Research (EIR) director Andy McConn recently shared the firm’s outlook about the potential in the GOM during an oversight hearing before the House Natural Resources Subcommittee on Energy and Mineral Resources. “It is well known that growth momentum has shifted in previous decades from the offshore region to onshore, namely to shale resources,” he said. “But we forecast U.S. onshore oil growth to moderate significantly by the end of the decade.
Gulf Coast Petrochemical Buildout Draws Billions in Tax Breaks Despite Pollution Violations -- A booming petrochemical buildout on the Gulf Coast has drawn billions of dollars in public subsidies from state tax abatement programs despite regular violations of pollution permits, according to a new report released Thursday. The Environmental Integrity Project, an environmental nonprofit based in Texas and Washington, D.C., compiled data on all U.S. plastics projects built, expanded or proposed since 2012, almost all of them along the Gulf Coast. The report identified 50 plastics complexes built or expanded in the last 12 years, 33 of them in Texas, where they have drawn a total of $1.65 billion in property tax breaks through the state’s Chapter 313 program for energy and manufacturing companies, which the state legislature replaced last year with a new but similar program. That’s a tiny dent in Texas’ $250 billion annual tax revenue, but it’s just one visible slice of the total concessions corporations receive to do business in Texas, and it represents lost income that would have gone primarily to the state’s public schools, which are struggling with shortfalls in teachers and funding. Now, companies are proposing to build an additional 42 plastics plants, 24 of them in Texas, according to the 73-page EIP report, “Feeding the Plastics Industrial Complex.”“The industry is expanding rapidly, and more communities are being asked to consider public subsidies,” it said. “None of the state programs we examined require industries to follow the terms of their state pollution control permits.”While Texas hosts the most new plastics production, the most generous tax breaks come from neighboring Louisiana, among the nation’s poorest states, where three projects alone drew $6.5 billion in local discounts since 2013. All operating projects considered in the EIP report claimed a total of $9 billion in exchange for commitments to economic development and job growth. That money would have otherwise funded local schools and public services, said Alexandra Shaykevich, research manager at the Environmental Integrity Project. Instead, it’s given to highly profitable corporations that are often foreign-owned and likely would have located near the nation’s major oil and gas resources with or without local tax incentives, according to her group’s report. Texas Sen. Charles Schwertner, chair of the Senate Committee on Business and Commerce, said the state’s tax incentive program “bolsters economically distressed communities and enhances its competitive advantage in attracting vital industries.” “The program ensures that the Texas economic miracle continues to thrive by offering quality employment opportunities for Texans and investments in our communities,” Schwertner said. The recent growth in Gulf Coast petrochemicals, which include plastics, are a result of the ongoing boom in hydraulic fracturing upstream in the Eagle Ford Shale and Permian Basin of Texas. Pipelines carry oil and gas hundreds of miles to the coast, where refineries and chemical plants produce commercial products and load them onto ships for sale overseas. The United States . remains a world leader in petrochemical production and export thanks primarily to these industries, said Joe Powell, executive director of the Energy Transition Institute at the University of Houston.“We’ve got really good energy prices here on the Gulf Coast because of fracking,” he said. “That makes the U.S. Gulf Coast a really good investment opportunity, especially in petrochemicals.”Within plastics, he said, most recent growth has come from ethane crackers, facilities that turn natural gas into ethylene, which, according to the American Chemistry Council, can be made into polymers that are “used to manufacture fibers, bins, pails, crates, bottles, piping, food packaging films, trash liners, bags, wire and cable sheathing, insulation, surface coatings for paper and cardboard, and a wide variety of other products.” The U.S. is the top exporter of ethylene polymers, much of which go to China, the world’s top importer.Powell, a former chief scientist for Shell, the global energy company, said years of rapid expansions have brought a glut of ethylene to market and left the Gulf Coast overbuilt in the short term, which he called “typical of the chemical business.”
Crews try to contain oil spill in Galveston Bay - (AP) -- A barge carrying nearly a million gallons of especially thick, sticky oil collided with a ship in Galveston Bay on Saturday, leaking an unknown amount of the fuel into the popular bird habitat as the peak of the migratory shorebird season was approaching. Booms were brought in to try to contain the spill, which the Coast Guard said was reported at around 12:30 p.m. by the captain of the 585-foot ship, Summer Wind. Coast Guard Lt. j.g. Kristopher Kidd said the spill hadn't been contained as of 10 p.m., and that the collision was still being investigated. The ship collided with a barge carrying 924,000 gallons of marine fuel oil, also known as special bunker, that was being towed by the vessel Miss Susan, the Coast Guard said. It didn't give an estimate of how much fuel had spilled into the bay, but there was a visible sheen of oil at the scene. Officials believe only one of the barge's tanks was breached, but that tank had a capacity of 168,000 gallons. "A large amount of that has been discharged," Kidd said. He said a plan was being developed to remove the remaining oil from the barge, but the removal had not begun. The barge was resting on the bottom of the channel, with part of it submerged. He said boom was being set up in the water to protect environmentally-sensitive areas and that people would be working through the night with infrared cameras to locate and skim the oil. The barge was being towed from Texas City to Bolivar at the time. The Coast Guard said that Kirby Inland Marine, which owns the tow vessel and barge, was working with it and the Texas General Land Office at the scene. The Coast Guard said six crew members from the tow vessel were in stable condition, but it offered no details about their injuries. Jim Suydam, spokesman for the General Land Office, described the type of oil the barge was carrying as "sticky, gooey, thick, tarry stuff." "That stuff is terrible to have to clean up," he said. Mild weather and calm water seemed to help containment efforts, but stormy weather was forecast for the area on Sunday. Suydam said almost every private cleanup outfit in the area was out there helping out under the coordination of the Coast Guard and General Land Office. Bruce Clawson, the director of the Texas City Homeland Security, told The Daily News in Galveston that the barge sank, but that there is no danger to the community, which is about 40 miles southeast of downtown Houston. Suydam said he could not confirm whether the barge sank. Tara Kilgore, an operations coordinator with Kirby Inland Marine, declined to comment Saturday. On its Facebook page, Texas City Emergency Management said the dike and all parks on the water are closed until further notice. And the Coast Guard said that part of the Houston ship channel was closed to traffic. Richard Gibbons, the conservation director of the Houston Audubon Society, said there is very important shorebird habitat on both sides of the Houston ship channel. Audubon has the internationally-recognized Bolivar Flats Shorebird Sanctuary just to the east, which Gibbons said attracts 50,000 to 70,000 shorebirds to shallow mud flats that are perfect foraging habitat. He did not know how much oil had been spilled, but said authorities were aware of the sanctuaries and had practiced using containment booms in the past. "The timing really couldn't be much worse since we're approaching the peak shorebird migration season," Gibbons said. He added that tens of thousands of wintering birds remain in the area.
Chevron’s Permian Operations See Improvements in ‘Frack-to-Pop Cycle Times’ - Chevron Corp.’s domestic operations, particularly in the Permian Basin, performed “stronger than we had anticipated” in the first quarter, with improved cycle times and natural gas and oil output, CEO Mike Wirth said Friday. During a conference call to discuss quarterly performance, Wirth explained to analysts how the Permian portfolio improved as the wellhead-to-sales times were shorter. More efficiencies helped to reduce the costs and time for drilling and fracturing (fracking). “We’ve seen reliability improvements that translate into slightly less decline in our base production,” Wirth said. “We saw significantly shorter frack-to-pop cycle time between when we completed a frack and when we put it on production.
Crews Work To Cleanup Oil Spill In Northwest Oklahoma City - Crews are focused on cleaning up the mess an oil geyser made Monday in northwest Oklahoma City. Officials say more than 80,000 gallons of oil spilled out onto the ground, creating a 30-foot geyser that spewed for multiple hours. Sam Coury, a nearby landowner, was not too worried with the oil that made its way onto his land. “We did catch some oil and some contamination,” Coury said. “We’re oil country. We have pipelines all across the state. From time to time, we’re going to have mishaps like this.” One thing to thank for the containment of the spill was the quick response of crews. “It’s been very efficient,” Coury said. “They were on it all night. They’re down now, probably removing the dirt, and that’s it.” Removing the dirt is the first step, according to Matt Skinner with the Oklahoma Corporation Commission. “The contaminated soil is dug up and taken to a facility that is licensed to deal with such products,” Skinner said. The same goes for the oil that leaked into the storm water drainage system. “You flush it out with fresh water and then vacuum it up. That also goes to be disposed of in the proper facility,” Skinner said. Skinner says Oklahoma law is clear on who is responsible for the cleanup efforts, regardless of liability. “An operator, be it an operator of an oil and gas well, a pipeline, or anything of that sort, is responsible for the product,” Skinner said. Energy Transfer is the oil company that is in charge of the cleanup effort, with the OCC’s oversight. Officials say we won’t know the extent of the long-term environmental impact, if any, until the cleanup is done.
Battle to Prioritize Public Health over Oil Company Profits Heats Up - Proposed California bills would protect residents in mostly low-income communities of color by speeding cleanup of dangerous neighborhood oil wells. But industry is fighting to keep even idle wells unplugged. On a dreary afternoon in January, a geyser of oily water shot over the fence of an oil and gas company in the Los Angeles neighborhood of Wilmington, splattering the street, cars and a local coffee shop with petroleum just a block away from Ashley Hernandez’s house. The frightening spectacle was just the latest in a long line of blowouts, spills and explosions to contaminate a community long dominated, and sickened, by oil drilling in the neighborhood. Hernandez, an organizer for the nonprofit Communities for a Better Environment, was three or four years old when her parents moved from the San Fernando Valley, north of Los Angeles, to Wilmington, a heavily industrialized neighborhood at the city’s southern edge. One of her earliest memories in the family’s new home was seeing her mom strap on an odd contraption while gasping for air. Hernandez grew up thinking it was normal to use a nebulizer every day. She thought it was normal to endure the headaches, nosebleeds and heart palpitations she and so many of her classmates always seemed to have. She thought it was normal to lose so many relatives and loved ones to cancer. Now 31, Hernandez wishes she knew then what she knows now. Her community straddles the Wilmington Oil Field, the third largest field in the country, where energy companies have recovered more than 2.5 billion barrels of oil and operate the largest concentration of active wells in Los Angeles. Residents of this mostly working-class Latino neighborhood live, work and play near more than 2,300 wells, including hundreds left idle. The majority of wells sit within 650 feet of residential areas, like those crowded into the block across from the Hernandezes’ house. Oil operations routinely release toxic gases that cause respiratory disorders, cancer and numerous developmental and reproductive problems, studies show. They also emit millions of tons of the climate super-pollutant methane. “We have a very peculiar cough in my family,” said Hernandez, who has worked with Communities for a Better Environment since high school. “We’re always coughing, always clearing our throats. Doctors call it the Wilmington cough.” It wasn’t until Hernandez went to a meeting after school one day that she realized oil wells surrounded the community baseball park in the block across the street. She knew there was some sort of business there, but she couldn’t tell what it was because a wall blocked her view. “It was at that meeting that I learned, whoa, I’m living next to a toxic site.” Warren Resources, an independent crude oil developer, manages close to 220 wells in that block, state records show. More than 50 sit idle. The idle wells produce no oil, but can release harmful pollutants that contaminate the air, soil and groundwater and emit even more methane than productive wells. With the easy-to-exploit oil reserves largely gone, energy giants like Chevron have left the Los Angeles Basin. Smaller operators now dominate the region, often using more polluting methods like acidization, which injects acid-based solutions with highly toxic chemicals into wells to extract the dregs. Acidizing equipment operates feet from homes at the former Jefferson Drill Site in South Los Angeles. Costs to plug idle wells vary, state estimates show, from an average of $87,000 per well in the Central Valley to $923,200 per well around Los Angeles, where urbanization increases expenses. Instead of spending the money to remediate marginal sites, most operators across the state have avoided plugging requirements by paying a nominal fee or offloading their bad assets to smaller companies that don’t have the means to properly “plug and abandon,” or clean up the sites.
U.S. Oil and Gas Production Is Booming. So Are the Industry’s Donations to Its GOP Allies -August Pfluger, an Air Force veteran and member of the U.S. House representing a small district in West Texas, isn’t exactly a household name on the national political scene, with little press coverage in the last two months outside a recent Fox News appearance.But he is the country’s top recipient of campaign contributions from the oil and gas industry — out of all federal candidates, including President Biden, Donald Trump and Texas Sen. Ted Cruz — receiving $573,721 during the current 2024 election cycle, according to campaign finance data compiled by Open Secrets. Pfluger is running for reelection, though it’s not a competitive race in the strongly Republican district, which includes part of the Permian basin, the largest oil-producing region in the country.But Pfluger has been a loyal ally of the industry, leading the congressional opposition to the Biden administration’s pause on liquefied natural gas exports. When Pfluger entered Congress in 2021, his first piece of legislation proposed prohibiting the Biden administration from demanding a moratorium on issuing new oil and gas permits for drilling on federal lands. He declared on the floor of the House: “My primary concern in Congress is to protect our oil and gas industry from the radical Democrats who will soon control the House, Senate, and White House.” Pfluger’s office did not return calls for comment.Along with Pfluger, the other top five recipients of oil and gas money this cycle are all Republicans — Trump ($501,014), losing presidential candidates Ron DeSantis ($496,927) and Nikki Haley ($431,817), and Cruz ($445,232).
Docs show why the oil industry pours money into certain universities -- Over decades, major oil and gas companies have poured millions into academia to back up their policy stances, boost their influence and track new technology. Newly released House and Senate documents shed fresh light on companies' motivations for providing funding for external research programs — a practice long accepted and disclosed, but nonetheless opaque. For example, BP has funded research on climate science, energy and policy at Princeton University, via their Carbon Mitigation Initiative, for more than two decades.Along with ExxonMobil, BP supported Princeton's highly influential "Net-Zero America" report that came out in 2020. It helped inform the White House's approach for its landmark climate law enacted in 2022. BP's internal communications made it clear that the company saw access to a Biden administration-in-waiting as a good use of their investments. "If Presidential elections go the way it looks now, I would not be surprised to see some of our friends in senior government policymaking roles as well!" wrote Robert Stout, then head of BP's US policy, in a 2020 email. The documents were released as part of an investigation by Democrats on the House Oversight and Governmental Affairs Committee as well as the Senate Budget Committee.They show that BP, for example, does not just view its spending on Princeton's programs as a way to keep current on climate science and policy. It also sees it as an opportunity to bolster its views on natural gas and carbon capture and storage techniques, for example. In that same 2020 email, Stout referred to the CMI's work as "increasingly synergistic" with BP's stances, "as of course we had planned." Documents describe the Princeton-BP tie-up as a "genuine collaboration," which the company felt contrasted with its funding of some other higher education institutions that received less money over a shorter period. BP's investment in CMI's work over the years has been complemented by more policy-oriented research, as the company supported programs at Harvard's Kennedy School of Government and Tufts University's Fletcher School of Law and Diplomacy.One internal memo, addressed to Dev Sanyal, then executive vice president of gas and low carbon energy at BP, laid out the case for renewing a program at Fletcher that cost the company about $200,000 per year in 2016, and a $400,000 program at Harvard. Such relationships, plus the investment in Princeton can "provide BP access to unparalleled expertise at the forefront of research in the areas of climate change science, technology and policy," the memo states. BP also saw the projects it funded as a way to push its priorities with academic backing, rather than just gaining information from universities."It has also been an opportunity for us to provide business perspectives to help shape international policy thinking in low carbon energy discussions," the memo states.About its relationship with Harvard, an internal document notes what makes the school so attractive for BP: "Harvard is a revolving door for US government officials." Stanford University is looking into fossil fuel industry funding of its Energy Modeling Forum, after E&E News reported on documents showing the program offered the American Petroleum Institute, an oil and gas lobbying group, pre-publication access to its research.API is still listed as an affiliate of the program. House and Senate Democrats, in a joint committee report, say the documents show how fossil fuel companies use academic partnerships as a way to "enhance their credibility, shape academic research programs to provide studies supportive of a prolonged life for oil and gas, leverage the resulting research to their advantage, and bolster access to policymakers."The industry's academic ties provide new evidence of companies using their funding to advance their business aims. They are reminiscent of playbooks followed by other sectors involved in polarizing business activities.However, these relationships aren't illegal, and it is ultimately up to individual institutions to put conditions on the funding or turn it down altogether.It is only when viewed from a 30,000-foot level that a broader, more problematic picture emerges, given how much fossil fuel companies knew about climate change as early as the 1950s, and the tactics they have pursued since to delay action.
Mystery Spill Returns to San Juan Harbor --The U.S. Coast Guard is working to clean up a mystery spill at the port of San Juan, Puerto Rico. According to Sector San Juan, a recurring discharge of heavy oil is seeping out of the storm drain system into the water, and experts are trying to trace it back to its source. In the meantime, thanks to funding from the Oil Spill Liability Trust Fund, a contractor is keeping the contamination contained and pulling oil out of the water. So far, about 1,770 gallons of waste have been recovered, including 17 drums of absorbent materials. "The discharged oil is being contained and recovered," said Lt. Cmdr. Ray Lopez, Sector San Juan Incident Management Division Chief. "We suspect this spill may be tied to an unidentified inactive historical source that for years has resulted in a series of mystery spills along the Old San Juan waterfront." It is not the first time that an oil seep like this has leaked into San Juan's harbor. Three years ago, another release of a substance that looked like Bunker C occurred at Pier 4 (the San Juan cruise terminal). Recurring contamination was found in a storm drain system, as well as in the harbor, and response crews used vacuum trucks and absorbent boom for three weeks to clean it up. The responders suspected that the source might be somewhere in a network of buried oil pipelines that dated back to the early 1900s. The response crews are now planning an underground survey to find and assess the condition of long-abandoned oil pipelines that were buried in the area in the early or mid-1900s. The lines are no longer in service, but they may well have some residual oil inside. Samples of the 2021 and 2024 leaks have some similarities, according to the Coast Guard, and might come from one common source of petroleum leaking into the storm drain system. Like last time, the response team plans to do a subsurface site assessment to determine the extent of any soil contamination and determine the source of the spill.
Pemex’s Natural Gas Production Slumps as Mature Fields Decline - Mexico’s state oil and gas giant Petróleos Mexicanos, or Pemex, reported a 7.5% year/year drop in natural gas production in the first quarter as the country’s aging offshore oil fields showed weaker output. Natural gas production, including from partners, was 3.836 Bcf/d in the first quarter, down 312 MMcf/d compared to the comparable period in 2023, management said during the first quarter earnings call. Associated gas production declined considerably, down by 12.5% year/year to 1.952 MMcf/d in the quarter. During the call, executives attributed the drop to declines at the offshore Akal and Ku fields. Non-associated gas dropped by 33 MMcf/d to 1.884 Bcf/d in the quarter. The drop was primarily due to lower production at the Quesqui field, which is considered one of…
Mexico Imports of U.S. Natural Gas Gas Surge as Domestic Production Sputters – North American natural gas futures worked their way above $2.00/MMBtu this week amid tighter U.S. production and storage levels. Mexico imports, meanwhile, of U.S. natural gas have started to hit their stride in the lead-up to summer. Over the last 10 days, Mexico imported 7.38 Bcf/d of natural gas via pipeline from the United States, including a max flow of 7.80 Bcf last Thursday (April 25). April pipeline imports averaged 6.82 Bcf/d, versus 6.45 Bcf/d the previous month and 5.76 Bcf/d in April of last year. “The over 1 Bcf/d increase in demand compared to a year ago can most likely be attributed to the increase of nearshoring industrial demand and an increase in electricity consumption across all categories as well,”
Canada E&P Outlook for Natural Gas ‘Surprisingly Strong,’ Despite Weak AECO Pricing, Says Precision CEO - The imminent startup of Canada’s Trans Mountain oil pipeline, with LNG Canada set to ramp late this year, should provide “significant tidewater access” to boost near-term activity, according to the CEO of Calgary-based Precision Drilling Corp. CEO Kevin Neveu laid out the near-term forecast for the international contract drilling expert during the recent quarterly conference call. “In Canada, we currently have 48 rigs operating, 10 more rigs than a year ago, and expect this trend to continue throughout spring break-up,” he said.
Husky Oil fined $2.5 million for oil spill – NTV -- Last week the Provincial Court ordered Husky Oil Operations Limited to pay $2 million after earlier pleading guilty to one charge under the federal Fisheries Act and one charge under the Migratory Birds Convention Act. The company was also ordered to pay $500,000 for an offence under the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act that was investigated by conservation officers with the Canada-Newfoundland and Labrador Offshore Petroleum Board. The charges relate to a crude oil release back in 2018, at the White Rose oil field in the Newfoundland and Labrador offshore area, where an estimated 250,000 litres of crude oil were released into the environment due to a failure of the subsea flowline connector from the SeaRose Floating Production, Storage and Offloading installation.
Cenovus fined $2.5 million for biggest oil spill in Newfoundland and Labrador history– Cenovus Energy has been ordered to pay a $2.5-million fine for its role in the largest offshore oil spill ever recorded in Newfoundland and Labrador. The fine was handed down in provincial court recently, and the company has 30 days to pay up. The 2018 spill from a flowline connector in the White Rose oilfield released about 250,000 litres of oil into the Atlantic Ocean, off the coast east of St. John’s. N.L. The spill happened when the field was operated by Husky Energy, which merged with Cenovus in 2020. The company expressed its deep regret for the spill in a statement today, adding that it has shared the lessons it learned with industry partners so they can prevent a similar incident. Today’s $2.5-million fine represents less than one tenth of one per cent of the $4.1 billion in net earnings Cenovus reported for 2023.
'Emergency action' - video footage shows River Mersey oil spill -A video, shared on social media, appears to show thick black oil dropping onto mud in the Mersey estuary.‘Emergency action’ is having to be taken taken to stop oil being spilled into the River Mersey. A video, shared onsocial media, appears to show thick black oil dropping onto mud in the Mersey estuary on April 28 at a dilapidated pier in Rock Ferry in Wirral following work to remove parts of the pier.It has been confirmed that an oil spill occurred in the area last week on April 25 and the videos, taken three days later, appear to show a black substance on the river bank and material still leaking from a broken pipe. The person who took the videos wishes to remain anonymous but raised concerns about the spill. He told the Local Democracy Reporting Service that oil was still dripping out of a broken pipe at the time he shot the clip, adding ‘the smell is horrific and stinks to high heaven of oil’.The pier’s crane collapsed in 2019 and since then, the safety and condition of the structure has continued to worsen due to severe winter storms and vandalism. In order to stop people climbing the structure, the Rock Ferry Maritime Hub which now owns the pier and slipway hired a contractor ‘to try and make it safe to prevent further collapse’ and stop trespassers getting onto the pier.The organisation has raised concerns about the condition of the pier and potential dangers to shipping and oil spill risks in the past. However as parts of the pier were taken down, it said oil left in the pipes emptied out onto the river bank which is in a protected area.It is not currently known how much oil has entered the Mersey Estuary which is a site of special scientific interest (SSSI) as “internationally important numbers of various species of waterbirds feed and roost at the site in winter, or stage at the site in spring and fall (autumn).”The Maritime Hub said it was not a continuous leak and work to prevent further spills had been carried out claiming the situation had been sorted by April 26. However data attached to the videos of the spill sent to the LDRS show they were taken at 5.12pm on April 28.The Environment Agency and Peel have been asked for further clarification about when the pollution stopped. A Peel Ports spokesperson said it understands there have been no new incidents reported since April 25. A spokesperson for the Maritime Hub said there had been numerous incidents of trespassing since the crane collapse as more of the pier fell into the river with police and coastguards needing to be called out. The most recent incident of someone trespassing on the pier occurred in December 2023.The organisation which was set up to regenerate the area said: “After demolishing the handrail it was agreed that to prevent anyone trespassing onto the pier the safest option would be to remove the first two sections of the pier.“Unfortunately as one of the sections was being removed of some residual oil seeped from one of the old pipes on to the seabed and after a site inspection with the Maritime Coastguard Agency and Peel Ports it was agreed that further emergency action would be taken to cap off the pipes and remove the remaining debris.
Equinor Says EQT Asset Swap Upgrades International Portfolio - Equinor ASA’s recent swap of U.S. onshore assets with EQT Corp. is an example of the Norwegian company “high-grading” its international E&P portfolio, the company’s CFO Torgrim Reitan said during a quarterly webcast. The swap allows Equinor to build “size and scale in certain areas where we do operate and where we can take advantage of that,” Reitan said during Equinor’s first-quarter 2024 financial webcast on April 25.“On [the] production side, it typically will add around 15,000 bbl/d in increased production, and … lower breakeven [costs], lower emissions and [generate] better returns,” Reitan said, responding to questions from analysts.“This was sort of the last piece of operated activities within U.S. onshore activity. And it was a small operation where we lacked scale and we have come to the conclusion that we don't see ourselves as a future operator within U.S. onshore activities. And we instead want to prioritize working with the best operators,” Reitan said.On April 15, Equinor entered into a swap deal with EQT subsidiary EQT ARO LLC. The deal will see Equinor divest its 100% interest in the Marcellus and Utica shales in the Appalachian Basin in southeastern Ohio, and transfer the operatorship to EQT. In exchange, Equinor will acquire 40% of EQT’s non-operated working interest in the Northern Marcellus Shale in Pennsylvania, the Norwegian company said in its quarterly financial statements.Equinor will pay a cash consideration of $500 million to EQT to balance the overall transaction. Following the transaction, Equinor will boost its average working interest to 25.7% from 15.7% in certain Chesapeake Energy-operated Northern Marcellus gas units, Reitan said. Closing is expected in the second quarter, subject to approval by relevant authorities.
Shell Overcomes Slumping Natural Gas Prices as Global LNG Volumes, Production Increase - Anyone wanting to perfect the basic fundamentals of trading and optimizing LNG sales on the global market probably need look no further than to Shell plc. The No. 1 global liquefied natural gas trader, and Europe’s leading oil and gas producer, overcame slumping commodity prices during the first quarter to deliver increased production and higher LNG volumes. European gas prices slipped between January and March from a year ago. The decline was expected to ding the Integrated Gas segment profits. The segment includes LNG and the gas-to-liquids (GTL) business. That, however, was far from the case. [Inside the Political Firestorm: NGI sits down with Neil Chatterjee, a former FERC chairman and commissioner, to discuss the impacts of President Biden’s LNG pause on authorizing...
Egypt Boosts LNG Import Capacity with FSRU Charter – Egypt has secured a floating storage and regasification unit from Höegh LNG Holdings Ltd. to secure more natural gas imports to the energy-hungry country as the outlook for its exports to the global market dims. Egyptian Natural Gas Holding Co. has brokered a deal between Höegh and Australian Industrial Energy Pty. Ltd. (AIE) to deploy the Hoegh Galleon at Ain Sokhna, Egypt for around 19-20 months. The Hoegh Galleon is chartered to AIE and was intended to be deployed at its import terminal at Port Kembla in New South Wales, Australia, which is currently under construction. Egyptian liquefied natural gas exports have cratered since last year as rising energy demand and dwindling domestic production have limited available...
Egypt Again Halts LNG Exports to Meet Domestic Demand This Summer - Egypt has halted all LNG exports beginning in May as lower domestic natural gas production has forced the North African country to divert supply to local power demand during the summer months. Last year was Egypt’s hottest summer on record, with temperatures surpassing 95 F. This summer is forecast to have similar temperatures. Egypt’s Ministry of Electricity and Renewable Energy has already resorted to daily power cuts since mid-April in some regions of the country to reduce gas consumption. Egypt’s energy minister Tarek El-Molla noted in February that Egypt had stopped liquified natural gas exports last summer, and warned it may again this summer.
Qatar Continues Push to Secure LNG Shipping Ahead of North Field Expansion - QatarEnergy has signed another three agreements to secure even more LNG shipping, this time chartering what the company calls QC-Max vessels that would be built in China. QatarEnergy signed long-term charter party agreements for four liquefied natural gas vessels from China Merchants Group, three vessels from Shandong Marine Group and two vessels from China LNG Shipping Holdings Ltd. Those companies would operate the vessels, which are part of 18 massive LNG carriers that would be built in Hudong-Zhonghua shipyards. All nine vessels would have a capacity of 271,000 cubic meters, or well above more conventional ships today that typically carry about 174,000 cubic meters.
The Oil Market Traded Lower on Monday as Israel-Hamas Ceasefire Talks in Cairo Cut Fears of a Wider Middle East Conflict - The oil market traded lower on Monday as Israel-Hamas ceasefire talks in Cairo cut fears of a wider Middle East conflict. Over the weekend, Hamas said it was reviewing a new Israeli proposal for a ceasefire in Gaza as Egypt continued its efforts to broker a deal to end the war and stave off a planned Israeli ground offensive into the southern Gaza city of Rafah. The crude market traded lower on the opening and traded slightly below the $83.00 level before it bounced off that level and posted a high of $83.91. The market, however, sold off and breached its earlier low as it retraced more than 50% of its move from a low of $80.70 to a high of $84.46. It extended its losses to $1.45 as it posted a low of $82.40 ahead of the close. The June WTI contract settled down $1.22 at $82.63, while the June Brent contract settled down $1.10 at $88.40. The product markets ended the session in negative territory, with the heating oil market settling down 1.69 cents at $2.5313 and the RB market settling down 1.59 cents at $2.7487. According the Department of Energy, the U.S. added 2.3 million barrels of oil to the SPR during the first four weeks of April, marking a sixth consecutive month where inventories have increased. The DOE reported that as of Friday, there were 366.3 million barrels in the SPR, including 143.8 million barrels of sweet crude and 222.5 million barrels of sour crude.On Saturday, Hamas said it was reviewing a new Israeli proposal for a ceasefire in Gaza as Egypt intensified its efforts to broker a deal to end the months-long war and stave off a planned Israeli ground offensive into the southern city of Rafah. A senior Hamas official said it was in response to a Hamas proposal two weeks ago. Meanwhile, according to an Egyptian official, an Egyptian delegation ended a visit to Israel where it discussed a “new vision” for a prolonged ceasefire in Gaza.U.S. Secretary of State Antony Blinken said that Israel must still do more to increase the flow of humanitarian aid into the beseiged Gaza Strip and that he would use his current Middle East trip to press that case with Israeli leaders. He said that the best way to ease the humanitarian catastrophe in Gaza would be to conclude an elusive ceasefire agreement that would release hostages held by Hamas. He added that Hamas has been presented with an “extraordinarily generous” offer by Israel that he hoped the group would accept.IIR Energy reported that U.S. oil refiners are expected to shut in about 865,000 bpd of capacity in the week ending May 3rd, increasing available refining capacity by 339,000 bpd. Offline capacity is expected to fall to 759,000 bpd in the week ending May 10th.Analysts at Rystad Energy said the global upstream industry is expected to see deals worth $150 billion over the rest of the year, with focus shifting to shale plays in the U.S. other than the Permian Basin. M&A activity in the global upstream industry has already crossed the $64 billion mark this year, with most of it focused around the U.S. shale patch. M&A activity in the first quarter in North America was nearly $54 billion or 83% of the worldwide total and the region is expected to be the driving force for consolidation for the rest of the year.The United Kingdom Maritime Trade Operations agency said a vessel that reported an explosion in its proximity, 54 nautical miles northwest of Yemen's Mokha, has sustained damage but the ship and crew are safe and proceeding to next port of call.
Oil price news: Oil recovers near US$83 with focus on Middle East cease-fire - Oil clawed back some of its biggest drop in almost two weeks as traders weighed whether a possible cease-fire in the Middle East will help soothe political tensions in the region.West Texas Intermediate traded slightly higher near US$83. The gap between Israel and Hamas on an agreement to release hostages has narrowed in recent weeks and a deal was close, according to two people familiar with the deliberations.Crude prices endured a rocky April after surging to its highest since October following Iran’s unprecedented attack on Israel. Conflicts in the Middle East and Ukraine, as well as OPEC+ supply curbs, bolstered prices. But uncertainty over U.S. monetary policy and softness in some fuel markets like diesel are countering those bullish factors.U.S. Secretary of State Antony Blinken, on an ongoing visit to the Middle East, urged leaders of the Hamas militant group — designated a terrorist organization by the U.S. and the European Union — to quickly reach a decision on Israeli conditions for a cease-fire. “We’ve already seen crude ease a bit on anticipation of a rapprochement, but prices may now remain rangebound until the outcome of the latest push for a truce is known,” Brent for July added 0.3 per cent to $87.46 a barrel. WTI added 0.3 per cent to $82.86 a barrel.
U.S. crude oil falls below $82 a barrel after disappointing inflation, manufacturing data -- U.S. crude oil dropped below $82 a barrel on Tuesday as the market was hit with another round of disappointing inflation and economic data. Traders are increasingly pricing in the risk the Federal Reserve could raise interest rates again at some point rather than maintaining them at the current level, Consumer confidence sagged in April to the lowest level since July 2022. Manufacturing activity in the Chicago area contracted with the purchasing managers index coming in at 37.9, the lowest level since November 2022. And compensation costs for workers rose by by 1.2% in the first quarter, which was faster than the 1% expected."You've got the stagflationary environment," . "The market is pricing in the Fed fears that they're going to come out a lot more hawkish." Higher interest rates for longer would result in a stronger dollar compared to other currencies which would put pressure on oil prices, said Andy Lipow, president of Lipow Oil Associates.Oil prices were positive earlier in the session after Israeli Prime Minister Benjamin Netanyahu dismissed hopes that a proposed hostage deal would prevent an attack on the southern Gaza city of Rafah.The U.S. is pushing for a ceasefire to head off an Israeli offensive against Rafah. Washington fears an invasion of the city will dramatically escalate the humanitarian crisis and regional tensions. But Netanyahu threatened to move against Rafah regardless of whether a hostage deal is reached."The idea that we will halt the war before achieving all of its goals is out of the question," Netanyahu said Tuesday at a forum of hostage families. "We will enter Rafah and we will eliminate the Hamas battalions there – with or without a deal, in order to achieve the total victory." Israel has proposed the release of 33 hostages held in Gaza in exchange for a ceasefire and the release of Palestinian prisoners. Senior U.S. administration officials and Arab diplomats told NBC News that Israel has indicated for the first time that it would accept a truce lasting more than six weeks."If that should occur, you're seeing geopolitical risk come out of the oil market as the probability of a supply disruption out of the Middle East would fall," Lipow said of the potential cease-fire. Oil prices fell more than 1% on Monday on hopes that a deal will ease regional tensions.A Hamas delegation discussed the proposal with Egyptian officials in Cairo on Monday. Israel is waiting for Hamas' response before sending its negotiators to Egypt, an Israeli official told NBC News.
Oil eases on higher US crude output, hopes of Israel-Hamas ceasefire (Reuters) - Oil prices lost more than $1 a barrel on Monday as Israel ceasefire talks in Cairo tempered fears of a wider Middle East conflict, while U.S. inflation data dimmed the prospect of imminent interest rate cuts.Brent crude futures for June settled at $88.40 a barrel, falling $1.10, or 1.2%. The more active July contract ended at $87.20, losing $1.01 a barrel.U.S. West Texas Intermediate (WTI) futures settled at $82.63 a barrel, falling $1.22, or 1.5%.Israeli airstrikes killed at least 25 Palestinians and wounded many others on Monday, as Hamas leaders arrived in Cairo for a new round of talks with Egyptian and Qatari mediators. Egypt is hopeful but waiting for a response on the plan from Israel and Hamas, Egyptian Foreign Minister Sameh Shoukry said. "You're seeing the geopolitical risk premium leak out again today because of no new escalation in the Israel-Hamas situation," "A ceasefire or hostage negation release would take out even more risk premium." Markets were also on watch for the U.S. Federal Reserve's May 1 monetary policy review, which could indicate the direction of the central bank's interest rate decisions."The language and forward forecasts will be pored over by all market participants," Investors are cautiously pricing a higher probability that the Fed could hike interest rates by a quarter percentage point this year and next as inflation and the labor market remain resilient.U.S. monthly inflation rose moderately in March, putting a damper on expectations of rate cuts in the near future. Lower inflation would have increased the likelihood of rate cuts, which tend to stimulate economic growth and oil demand. "The sticky U.S. inflation sparks concerns for 'higher-for-longer' interest rates," leading to a stronger U.S. dollar and putting pressure on commodity prices, A stronger dollar makes oil more expensive for those holding other currencies. Additionally, the oil market was looking forward to the monthly U.S. nonfarm payrolls report, which is due on Friday and closely watched by the Fed."That will likely have a significant impact on next week's oil trade," By contrast, an early look at April inflation data from the euro zone, from Spain and Germany, offers a mixed picture for the European Central Bank, but looks unlikely to derail a June rate cut.
WTI Extends Losses After API Reports Unexpected Crude Build -- WTI ended April on a down-note (closing lower on the month, as opposed to Brent which saw its fourth straight monthly gain) as hopes for cease-fire talks between Israel and Hamas dampened fears of a wider conflict that could threaten crude supplies.The recent declines come as a "relief to both central bankers and consumers alike," Stephen Innes, managing partner at SPI Asset Management, told MarketWatch.There's been a notable decrease in speculation about the possibility of U.S. benchmark WTI surpassing the $100-a-barrel threshold, at least for now, he said. This shift in sentiment can be attributed, in part, to "reduced concerns about disruptions to Iranian production, following Israel's measured response to previous drone attacks."Meanwhile, "attention should also be directed towards peace talks, as progress in this area could further contribute to a decrease in oil prices," said Innes.But, after last week's big crude draw, analysts expect another drawdown in stocks this week.
- Crude +4.91mm (-1.5mm exp)
- Cushing +1.48mm
- Gasoline -1.48mm (-1.2mm exp)
- Distillates -2.19mm (+400k exp)
Crude stocks unexpectedly rose almost 5mm barrels last week while distillates inventories declined notably...
Oil Futures Continue Slide; USD at 7-Month High as Fed Meets (DTN) -- Nearest delivered oil futures on the New York Mercantile Exchange (NYMEX) and Brent crude on the Intercontinental Exchange extended Tuesday's losses into May, pressured by ongoing concerns over demand as consumers worry about inflation and high-interest rates, potentially denting discretionary spending and purchases of big-ticket appliances. The U.S. dollar rallied to a 106.380 seven-month high overnight ahead of the afternoon monetary policy announcement by the Federal Open Market Committee (FOMC), with no change to the federal funds rate expected until September. The Federal Reserve's preferred inflation indicator, the Bureau of Economic Analysis' Personal Consumption Expenditures price index, increased 2.7% during the 12 months that ended in March, up from 2.5% in January and February. That's well ahead of the Fed's 2% inflation target. Data released Tuesday by the Bureau of Labor Statistics (BLS) offered more evidence that inflationary pressure continues, reporting wages increased 4.4% during the year ended in April. BLS will publish its Nonfarm Employment Situation report Friday morning, with the market expecting robust job growth of 230,000 in April. While that would be a slowdown from March's 303,000 new jobs, the estimate is in line with the monthly average for the year ending in February of 231,000 job gains per month.The Institute of Supply Management is expected Wednesday morning to show manufacturing activity in April stalled. Weak factory activity along with a recession in freight movement has crimped demand for diesel, with Energy Information Administration (EIA) reporting distillate fuel supplied to the U.S. market during the four weeks through April 19 down 11.6% against the comparable year-ago period.EIA will update figures through April 26 at 9:30 a.m. CDT, with the American Petroleum Institute late Tuesday reporting a build in commercial crude oil inventory and draws in product stock levels.Shortly after 7 a.m., June West Texas Intermediate was down about $1.50 at $80.40 barrel (bbl), a five-week low. Brent's front-month contract is now for July delivery, which gapped down on the spot continuous chart to trade at a seven-week low, falling $1.30 to $85 bbl.June ULSD futures fell $0.0235 to $2.5040 gallon, holding above Tuesday's $2.4746 10-month intraday low on the spot continuous chart. June RBOB futures declined to a $2.6435 seven-week low on a spot continuous basis overnight in its debut as the front month contract, down $0.0319 at $2.6595 shortly after 7 a.m. CDT.
WTI Extends Losses After Bigger Than Expected Crude Build --Oil prices extended losses overnight (3rd day lower in a row) following API's report showing an unexpected crude build. Rising stocks would add to bearish headwinds for prices driven by hopes that peace (or some such variant of it) may break out in the Middle East.“The potential for a cease-fire agreement between Israel and Hamas has eased concerns of an escalation of the conflict and any possible disruptions to supply,” ANZ Banking Group Ltd. analysts Brian Martin and Daniel Hynes said in a note.“Continued signs of inflation also raised concerns about demand for crude oil” ahead of the US driving season, when gasoline consumption rises.Additionally, OPEC’s crude production stayed steady last month, leaving the group’s latest cutbacks incomplete. The Organization of Petroleum Exporting Countries pumped 26.81 million barrels a day in April, about 50,000 a day less than the previous month, according to a Bloomberg survey. Minor increases by Libya and Iraq were offset by reductions in Iran and Nigeria. As a result, supply curbs agreed by the group and its allies at the start of the year to avert a surplus are still unfinished. DOE
- Crude +7.265mm (-1.5mm exp)
- Cushing -1.089mm
- Gasoline +344k (-1.2mm exp)
- Distillates -732k (+400k exp)
The official data showed an even bigger crude build than API (and stocks at Cushing also rose significantly)...The Biden admin added another 594k barrels to the SPR last week...US Crude production was flat at 13.1mm b/d... WTI was hovering around $81.25 (off the morning lows) ahead of the official data and extended losses after the big build..
The Market Continued to Sell Off on the Prospect of a Ceasefire Agreement The oil market traded lower on Wednesday for the third consecutive session as the market continued to sell off on the prospect of a ceasefire agreement between Israel and Hamas. The market was also pressured by the weekly petroleum stocks reports showing unexpected builds in crude stocks. Expectations that a ceasefire agreement between Israel and Hamas could be in sight have grown following a renewed push led by Egypt, even though Israeli Prime Minister Benjamin Netanyahu has promised to go ahead with an assault on Rafah. The market traded back to Tuesday’s lows in overnight trading after the API reported a build of 4.9 million barrels in crude stocks late Tuesday afternoon. The oil market posted a high of $81.57 ahead of the release of the EIA report. However, the market erased it gains and sold off to $78.93 in light of the EIA report showing a build of more than 7.2 million barrels in crude stocks on the week. The market later traded sideways before it posted a low of $78.83 following the Federal Reserve’s expected decision to leave interest rates unchanged at its meeting. The June WTI contract settled down $2.93 at $79.00, the lowest settlement since March 12th, while the July Brent contract settled down $2.89 at $83.44. The product markets ended the session sharply lower, with the heating oil market settling down 6.15 cents at $2.4519 and the RB market settling down 13.34 cents at $2.5774. The EIA reported that U.S. crude oil and gasoline inventories increased unexpectedly last week as refineries slowed down operating rates. The EIA said crude inventories increased by 7.3 million barrels to 460.9 million barrels in the week ending April 26th. Crude stocks were at the highest level since June, driven by a 6.8 million barrel increase in Gulf coast inventories, increasing them to the highest level since April 2023 at 261.6 million barrels. Refinery crude runts fell by 230,000 bpd, while refinery utilization rates fell by 1% to 87.5% of total capacity.The Association of American Railroads reported that weekly railcar loadings on major U.S. railroads in the week ending May 1st fell by 6.4% on the year to 214,414. The number of railcar loadings transporting petroleum and petroleum products increased by 4.6% on the year to 9,800.IIR Energy reported that U.S. oil refiners are expected to shut in about 987,000 bpd of capacity in the week ending May 3rd, increasing available refining capacity by 170,000 bpd.The U.S. Federal Reserve held interest rates steady on Wednesday and signaled it is still leaning towards eventual reductions in borrowing costs. The Fed's latest policy statement, issued at the end of a two-day meeting, kept the main elements of its economic assessment and policy guidance intact, noting that "inflation has eased" over the past year, and framing its discussion of interest rates around the conditions under which borrowing costs can be lowered. The benchmark policy rate has been held in the current 5.25%-5.50% range since July.U.S. manufacturing contracted in April amid a decline in orders after briefly expanding in the previous month, while a measure of prices paid by factories for inputs approached a two-year high. The Institute for Supply Management said that its manufacturing PMI fell to 49.2 in April from 50.3 in March, which was the highest and first reading above 50 since September 2022.
Oil crawls back towards 7-week low-mark after US Fed keeps rates at 23-year high; Brent at $83/bbl | Mint - Oil edged back towards the previous day's seven-week low-mark on Thursday, May 2, paring earlier gains, after US data pointed to persistent labour market strength which further diminished hopes of early decline in US interest rates.Brent crude futures for July were up 40 cents, or 0.5 per cent, at $83.84 a barrel heaving earlier touched a session peak of $84.44. US West Texas Intermediate (WTI) crude for June was 27 cents, or 0.3 per cent, firmer at $79.27, off a high for the day of $79.90. Coming to domestic prices, crude oil futures declined 0.08 per cent lower at ₹6,617 per barrel on the multi commodity exchange (MCX). On Wednesday, crude oil prices fell more than three per centto a seven-week low after the US Federal Reserve kept interest rates steady and warned of stubborn inflation, which could curtail economic growth this year and limit oil demand increases.Data also showed US jobless claims held steady at lower levels last week as the labour market remains fairly tight, ahead of April's employment numbers. The oil market was supported by speculation that if WTI falls below $79, the US will move to build up its strategic reserves, according to analysts.Crude oil rates also traded under pressure by data from the Energy Information Administration (EIA) showing an unexpected increase in the US crude inventories, which were at their highest mark since June 2023. The Organisation of Petroleum Exporting Countries and its allies (OPEC+) have yet to begin formal talks on extending voluntary oil output cuts beyond June, three sources from OPEC producers told news agency Reuters that such an extension could be agreed if demand fails to pick up.In the Middle East meanwhile, expectations grew that a ceasefire agreement between Israel and Hamas could be in sight after a renewed push led by Egypt, even as Israeli Prime Minister Benjamin Netanyahu has vowed to proceed with a long-promised assault on the southern Gaza city of Rafah.WTI crude oil futures extended declines for the fourth consecutive day and plunged almost three per cent on Wednesday. ‘’OPEC’s crude production steadied in April, at 26.81 mbpd, about 50,000 bpd less than March, as minor increases by Libya and Iraq were offset by reductions in Iran and Nigeria. With improving stability in middle-east, we might see weakness in prices,'' said Kaynat Chainwala, Senior Manager-Commodity Research, Kotak Securities.Analysts also added that crude oil prices exhibited significant price volatility, plummeting to a two-month low amidst a surprise build in US stocks. Profit-taking in the dollar index and the US Federal Reserve's indication of no further rate hikes could lend support to prices at lower levels. ‘’We anticipate crude oil prices to remain volatile. Crude oil is supported at $78.10–77.20, with resistance at $79.90–80.70. In terms of the Indian Rupee (INR), crude oil finds support at₹6,540–6,460 and resistance at ₹6,690–6,760,'' said Rahul Kalantri, VP Commodities, Mehta Equities Ltd/
Oil settles near 7-week lows, focus shifts to economy – CNA - Oil prices settled on Thursday near their lowest level in seven-weeks, narrowly mixed and under pressure from weaker global demand, rising inventories and fading hopes for a quick cut in U.S. interest rates. U.S. West Texas Intermediate crude futures fell 5 cents to settle at $78.95 a barrel, the lowest since March 12. Global benchmark Brent crude futures also hit the lowest since early March, then bounced off session lows to settle 23 cents, or 0.3 per cent, higher at $83.67 a barrel. Both benchmarks closed below their 200-day moving average, which is the key technical indicator of a bear market shift in crude oil prices, StoneX oil analyst Alex Hodes said. Oil investors have grown worried about a possible economic slowdown in the U.S., as the war between Israel and Hamas continues without any major hit to Middle Eastern oil supplies. On Wednesday, oil prices fell more than 3 per cent after the U.S. government reported a surprise jump in crude oil stocks and the Fed left interest rates unchanged citing stubborn inflation. "Now it's all a story of demand as risk premium from tensions in the Middle East seen last month morphs into residual risk," said Gaurav Sharma, an independent oil analyst in London. A slump in worldwide diesel demand is also feeding concerns about slowing oil demand growth in big economies. Gasoil stocks, which include diesel, rose by more than 3 per cent in Europe's Amsterdam-Rotterdam-Antwerp refining and storage hub during the week to Thursday, data from consultancy Insights Global showed. Diesel demand in the U.S. Gulf Coast refining hub, also called PADD 3, is estimated to be below the prior three-year range, Hodes said. "The bearish kicker is that even with these inventory builds, production of distillates in PADD 3 is at its lowest level since the start of March," he added. U.S. ultra-low sulfur diesel futures fell to their lowest since July 2023 for the third session on the trot. Supporting prices, the Organization of Petroleum Exporting Countries and allies (OPEC+) could extend output cuts if demand fails to pick up, three sources from the group told Reuters. Traders were watching whether lower oil prices will spur the U.S. government to replenish strategic reserves. "The oil market was supported by speculation that if WTI falls below $79, the U.S. will move to build up its strategic reserves,"
Crude oil prices drop 5% in 2 sessions on sharp rise in US inventories, down 10% from April peaks -- Brent crude futures kicked off May with a significant drop, declining by 3% to reach a seven-week low of $83.29 per barrel. This decrease was driven by rising US stockpiles, signalling increased supply and raising concerns about weakening demand. Additionally, optimism surrounding a potential ceasefire in the Middle East contributed to a reduction in the commodity's risk premium. As a result, Brent crude is now nearly 10% lower than its April 2024 peak of $92.18 per barrel. In the previous session, WTI crude futures also experienced a decline, dipping below $79 per barrel to a seven-week low with a drop of nearly 3%. Both Brent and WTI crude ended their three-month winning streak in April, concluding the month with declines of 1.13% and 1.91%, respectively. The Energy Information Administration released data indicating a surprising increase in US crude stockpiles, rising by 7.3 million barrels last week, contrary to the anticipated decline of 2.3 million barrels. Additionally, the EIA reported a notable rise in US crude oil production to 13.15 million barrels per day in February, up from 12.58 million bpd in the previous month. This marks the most significant monthly increase in almost three-and-a-half years. In just two sessions in May, both Brent and Crude futures experienced a 5% decline. This drop follows last month's surge to the highest levels since October, which was prompted by Iran's unprecedented attack on Israel. The attack was seen as a response to a suspected Israeli strike on the Iranian Consulate in Damascus, Syria, earlier in the month. In the subsequent sessions, prices moderated as tensions between Israel and Iran did not escalate as anticipated by the markets. Additionally, the Federal Reserve's indication in its latest meeting that interest rates will remain higher for longer also influenced prices. This stance is expected to keep the dollar index elevated, thereby increasing expenses for countries reliant on crude oil imports. In April 2024, the Federal Reserve opted to maintain the fed funds rate at its current level of 5.25% – 5.5%, marking the sixth consecutive meeting without a change, as widely anticipated by the market. The Federal Reserve signalled new worries regarding inflation while suggesting that it would probably maintain higher borrowing costs for an extended period. Chair Jerome Powell remarked that it's improbable for the Fed to raise interest rates next, emphasising the need for convincing evidence indicating that current policy measures are not sufficiently restrictive to guide inflation back toward its 2% target. In the Middle East, expectations grew that a ceasefire agreement between Israel and Hamas could be in sight following a renewed push led by Egypt. Still, Israeli Prime Minister Benjamin Netanyahu has vowed to go ahead with a long-promised assault on the southern Gaza city of Rafah despite the U.S. position and a U.N. warning that it would lead to "tragedy," as per the media reports. On the supply side, OPEC has failed to complete its latest cutbacks. Iraq and the United Arab Emirates continue to pump several hundred thousand barrels a day above their agreed limits, according to a Bloomberg survey.
Oil prices fall, head for steepest weekly drop - Oil prices edged lower on Friday, on course for their steepest weekly loss in three months, as investors weighed weaker-than-expected U.S. jobs data and the timing of a Federal Reserve interest rate cut. Brent crude futures for July were down 29 cents, or 0.35%, to $83.38 a barrel at 11:30 a.m EDT (1530 GMT). U.S. West Texas Intermediate crude for June fell 37 cents, or 0.47%, to $78.58 per barrel. Both benchmarks are set for weekly losses as investors are concerned that higher-for-longer interest rates will curb economic growth in the U.S., the world’s leading oil consumer, as well as in other parts of the world. Brent was on course for a weekly decline of about 6.8% while WTI was headed for a loss of 6.4% on the week. U.S. job growth slowed more than expected in April and the annual wage gain cooled, data showed on Friday, prompting traders to raise bets that the U.S. central bank will deliver its first interest rate cut this year in September. “The economy is slowing a little bit,” said Tim Snyder, economist at Matador Economics. “But (the data) gives a path forward for the Fed to have at least one rate cut this year,” he said. The Fed held rates steady this week and flagged high inflation readings that could delay rate cuts. Higher rates typically weigh on the economy and can reduce oil demand. The market is repricing the expected timing of possible rate cuts after the release of softer-than-expected monthly jobs data, said Giovanni Staunovo, an analyst at UBS. Energy services firm Baker Hughes on Friday is due to release its weekly count of oil and gas rigs, an indicator of future crude output from the world’s top producer. Geopolitical risk premiums due to the Israel-Hamas war have faded as the two sides consider a temporary ceasefire and hold talks with international mediators. Further ahead, the next meeting of OPEC+ oil producers – members of the Organization of the Petroleum Exporting Countries and allies including Russia – is set for June 1. Three sources from the OPEC+ group said it could extend its voluntary oil output cuts beyond June if oil demand does not increase.
Oil Slumps as Macroeconomic Data Highlight Demand Slowdown (DTN) --- Oil futures nearest delivery on the New York Mercantile Exchange (NYMEX) and Brent crude on the Intercontinental Exchange fell Friday and registered steep losses on the week. The geopolitical risk premium in crude prices was erased while macroeconomic data showed a U.S. economic slowdown taking hold in April, undermining fuel demand. An unexpected contraction in the U.S. service sector in April reported Friday by the Institute of Supply Management (ISM) accelerated losses in RBOB futures and weakness in the U.S. dollar. The dollar came under pressure earlier in the session from an unexpected uptick in the national unemployment rate while job growth of 175,000 was less than expected. The gasoline contract was already under pressure from souring consumer confidence reported Tuesday by The Conference Board, with consumers surveyed stating their intention to cut back on discretionary spending, including dining out and vacations. Underlying consumer concerns were inflation and an increasing belief for interest rates to remain high over the next year. These economic indicators bode poorly for driving demand, while the consumption pattern for gasoline is under pressure from increasing fuel economy efficiencies for the national fleet. June RBOB futures settled at a $ 2.5551-gallon eight-week low on the spot continuation chart, down $0.0414 on the session and $0.2095 or 7.6% on the week. June ULSD futures settled Friday's session flat at $2.4434 gallon, holding above Thursday's $2.4219 10-month low on a spot continuous basis, while down $0.1048 or 4.1% on the week. ULSD has trended lower since early April, fully retracing a first-quarter uptrend on weak demand. ISM on Wednesday reported manufacturing activity moved back into contraction in April after a short-lived recovery in March, while freight movement remains in recession. July Brent futures settled Friday's session $0.71 lower at $82.93 a barrel (bbl), and erased $6.54 or 7.3% of value this week, as concerns over a direct military conflict between Israel and Iran dissipated, erasing a buildup in the geopolitical risk premium. Building commercial crude inventory, up 15.9 million bbl or 3.6% from mid-March through April 26, according to data from the Energy Information Administration, also weighed on the U.S. crude benchmark. June West Texas Intermediate futures fell $0.84 Friday and $5.74 or 6.8% on the week to a $78.11 bbl settlement, with a 7.265 million bbl build reported Wednesday for the final week of April punctuating the growth in domestic supply.
Oil settles down on US jobs data, steepest weekly loss in 3 months (Reuters) - Oil prices settled lower on Friday, and posted their steepest weekly loss in three months as investors weighed weak U.S. jobs data and possible timing of a Federal Reserve interest rate cut. Brent crude futures for July settled 71 cents lower, or 0.85%, to $82.96 a barrel. U.S. West Texas Intermediate crude for June fell 84 cents, or 1.06%, to $78.11 a barrel. Investors were concerned that higher-for-longer borrowing costs would curb economic growth in the U.S., the world's leading oil consumer, after the Federal Reserve decided this week to hold interest rates steady. For the week, Brent declined more than 7%, while WTI fell 6.8%. U.S. job growth slowed more than expected in April and the annual wage gain cooled, data showed on Friday, prompting traders to raise bets that the U.S. central bank will deliver its first interest rate cut this year in September. "The economy is slowing a little bit," . "But (the data) gives a path forward for the Fed to have at least one rate cut this year," he said. The Fed held rates steady this week and flagged high inflation readings that could delay rate cuts. Higher rates typically weigh on the economy and can reduce oil demand. The market is repricing the expected timing of possible rate cuts after the release of softer-than-expected monthly jobs data. U.S. energy companies this week cut the number of oil and natural gas rigs operating for a second week in a row, to the lowest since January 2022, Baker Hughes said in its closely followed report on Friday. The oil and gas rig count, an early indicator of future output, fell by eight to 605 in the week to May 3, in the biggest weekly decline since September 2023. The number of oil rigs fell seven to 499 this week, in the biggest weekly drop since November 2023. Geopolitical risk premiums due to the Israel-Hamas war have faded as the two sides consider a temporary ceasefire and hold talks with international mediators. Further ahead, the next meeting of OPEC+ oil producers - members of the Organization of the Petroleum Exporting Countries and allies including Russia - is set for June 1. Three sources from the OPEC+ group said it could extend its voluntary oil output cuts beyond June if oil demand does not increase. Money managers cut their net long U.S. crude futures and options positions in the week to April 30, the U.S. Commodity Futures Trading Commission (CFTC) said.
ISIS Attacks Pro-Government Fighters in Syria, Killing at Least 15 - ISIS forces carried out a series of attacks against pro-government military sites In the eastern Homs desert of Syria on Friday, sparking gun battles that left at least 15 pro-government forces dead and an unknown number of others wounded.The wounded were evacuated to hospitals in Homs Province, with the number of wounded expected to rise as sites recover from the onslaught.Weakened in protracted offensives during the Syrian Civil War, ISIS has been attempting to return to its previous level of power and influence across the nation and is carrying out a growing number of attacks.In addition to the attacks on pro-government forces, ISIS reportedly threw a grenade against a house in Deir Ezzor, further to the east. One person was injured.This is the first big series of attacks since April 19, when ISIS killed 28 soldiers and other pro-government fighters across the east of the country. The majority of the pro-government fighters killed in that case were from the Palestinian Quds Force.After losing most of their territory, ISIS fighters fled into the Syrian deserts. Though some efforts were made to eradicate them from the area, these attempts mostly failed. A substantial fighting force is believed to remain inside Syria, capable of carrying out such attacks as occurred Friday.
Houthis Show Long-Range With Attack on Ship in the Indian Ocean - Yemen’s Houthis targeted an Israel-linked container ship deep in the Arabian Sea, demonstrating an ability to hit targets at a long range after Houthi Leader Sayyed Abdul-Malik al-Houthi vowed to expand attacks into the Indian Ocean. The attack on the MSC Orion took place last Friday but was just confirmed by maritime authorities on Tuesday. The crew of the vessel said they discovered debris that looked like a drone and reported minor damage and said no one was hurt.According to the Joint Maritime Information Center, the ship was hit in the Indian Ocean about 170 miles south of the Yemeni island of Socotra, which is not controlled by the Houthis, and about 400 miles from the Yemeni mainland.The MSC Orion is owned by London-based Zodiac Maritime, which is part of Israeli billionaire Eyal Ofer’s Zodiac Group. The Houthis began targeting Israel-linked shipping in the Red Sea and the Gulf of Aden last year in response to the Israeli slaughter in Gaza and expanded to targeted American and British shipping after the US and UK began a new bombing campaign in Yemen on January 12.The Houthis, officially known as Ansar Allah, restarted attacks on commercial shipping last week after about a two-week lull. During the lull, the Houthis were examining “incentives” to stop the attacks put forward by the US, which included an offer to fully lift the blockade on Yemen that’s been imposed since 2015. But the Houthis decided to stick with their position that the campaign will continue until there’s a ceasefire in Gaza.The US tried diplomacy with the Houthis after months of bombing Yemen, which only escalated the situation. From 2015-2022, the US backed a brutal Saudi/UAE war against the Houthis that involved heavy airstrikes and a blockade, and the Houthis only became more of a capable fighting force during that time.
Russia Installs 'Cope Cages' On Oil Refineries As Ukraine Ramps Up Kamikaze Drone Attacks A sudden surge in Ukrainian drone strikes targeting Russia's vast energy industry materialized early last week (read here) and continued into the weekend (read here). To combat drone strikes on refineries and crude and or crude product storage tanks, "cope cages" have been installed to fortify at least one refinery against potential aerial threats. The proliferation of drones on the modern battlefield in Eastern Europe, more specifically in Ukraine, has been absolutely stunning to spectate over the last two years. From suicide drones taking out infantry troops on the first and second lines to Ukraine launching drone swarm attacks on Russia's energy complex, warfare is forever changing. With that being said, military forces and even countries must adapt to this changing environment where drones and AI dominate the battlefield. And that's why Russia is now installing anti-drone cages, known as "cope cages," to protect these critical facilities that help fund Moscow's "special military operation" in Ukraine. According to EurAsian Times: The latest development involves the installation of what is commonly referred to as a “cope cage” on a Russian oil facility, likely to fortify it against potential aerial threats. An image circulating on the internet on April 27 depicted Russian oil depots equipped with these anti-drone cages. Although specific details regarding the location of the fortified depot remain undisclosed, speculations suggest it might be under the ownership of the Slavyansk ECO Group, based on the logo painted on the oil depot.X user Special Kherson Cat has posted an image of a Russian oil tank farm with anti-drone cages.
Russia seizes on final window before US weapons fortify Ukraine’s front lines - As Ukraine desperately awaits the arrival of new U.S. weapons and equipment approved last month, Russia is seeking to make the most of the remaining window. Moscow’s forces in the past week have taken several villages in eastern Ukraine after Kyiv’s threadbare army ceded ground, and they are positioned to secure additional territory in the days ahead. Russia’s relentless missile and drone strikes have also been increasingly effective as Ukraine runs short on defensive weapons to counter the attacks. But Russia’s window for exploiting Ukraine’s weakness is swiftly closing, with limited time before American weapons flood the battlefield and reinvigorate the Ukrainian forces, experts say. “Knowing that the renewed aid is on the way, Ukraine’s stiffening up their defenses. I think [Russians] are still trying to sort of push as the window closes,” Steven Horrell, a nonresident senior fellow with the Center for European Policy Analysis, told The Hill. And Michael O’Hanlon, an expert with the Brookings Institution think tank in Washington, said Russia’s forces could “pick up the pace, and the carnage, by 10 to 20 percent” in the gap between the U.S. announcing new aid last week and when those weapons reach Ukrainian troops. The Defense Department last week announced a $1 billion package for Ukraine shortly after President Biden signed a national security supplemental into law. Much of the weapons tranche, which aims to deliver critical artillery rounds and air defense munitions to Kyiv, was already pre-positioned in Europe to be able to quickly move it into Ukraine, according to the Pentagon. “As soon as we were able to announce that $1 billion … we were ready to support Ukraine almost immediately,” Pentagon deputy press secretary Sabrina Singh said Wednesday. She was not able to say, however, whether the lethal assistance had reached the front lines and the units that need them the most. Another $6 billion package announced last week was not from U.S. stocks, and could take months if not years to get to Ukraine. U.S. and Ukrainian officials and lawmakers lauded the passage of the $95 billion supplemental, which includes roughly $61 billion to support Kyiv, but Congress’s months-long delay before sending the bill to Biden’s desk proved damaging to the embattled country. Most U.S. assistance to Ukraine dried up at the end of 2023, making Ukrainian troops desperate for ammunition and air defenses as Russia pressed forward on the battlefield and pummeled key cities and energy infrastructure with artillery, drones and bombs.
UN: Scale of Destruction in Gaza Not Seen Since WWII, Will Take 16 Years To Rebuild - The UN said on Thursday that the scale of destruction in Gaza hasn’t been seen since World War II and that it would take a minimum of 16 years to rebuild homes in the Strip.“We have not seen anything like this since 1945,” said Abdallah al-Dardari, a UN assistant secretary-general. “That intensity, in such a short time and the massive scale of destruction.”Al-Dardi said 72% of all residential buildings in Gaza have been partially or completely destroyed. “The United Nations Development Programme’s initial estimates for the reconstruction of… the Gaza Strip surpass $30 billion and could reach up to $40 billion,” al-Dardi said.Israel’s bombing campaign has been compared to the US and Allied strategic bombing of Japanese and German cities during World War II, which includes the firebombing of Dresden and the dropping of the atomic bombs on Hiroshima and Nagasaki.Israeli officials have pointed to World War II to justify the massive number of civilian casualties, including Prime Minister Benjamin Netanyahu, who made the argument to President Biden.“It was pointed out to me that — by Bibi (Netanyahu) — that ‘Well, you carpet-bombed Germany. You dropped the atom bomb. A lot of civilians died,'” Biden said back in December. “Biden said he told Netanyahu: “That’s why all these institutions were set up after World War II to see to it that it didn’t happen again.” At the time, Biden called the Israeli bombing campaign “indiscriminate,” but nearly five months later, he continues to support it.
China Hosts Hamas & Palestinian Authority For Rare Talks - Representatives of Hamas and the Palestinian Authority’s (PA) Fatah party met recently in Beijing and held talks on reconciliation, the Chinese Foreign Ministry announced Tuesday. "Representatives of the Palestine National Liberation Movement and the Islamic Resistance Movement [Hamas] recently came to Beijing," China’s Foreign Ministry spokesman Lin Jian said. "The two sides fully expressed their political will to achieve reconciliation through dialogue and consultation, discussed many specific issues, and made positive progress," he added. The spokesman did not clarify exactly what day the meeting took place. China, Hamas, and Fatah confirmed beginning last Friday that intra-Palestinian talks would be held in the Chinese capital. "They agreed to continue the course of talks to achieve the realization of Palestinian solidarity and unity at an early date," Jian went on to say, adding that the two sides thanked China for efforts to "promote Palestinian internal unity and reached an agreement on further dialogue."China has continued to call for a ceasefire and an end to the war in the Gaza Strip and has long been an advocate of Palestinian unity and a two-state solution between the Palestinians and Israelis. Chinese diplomat Wang Kejian met with Hamas leader Ismail Haniyeh in Qatar last month, where they both called for an end to the war in Gaza and the achievement of "political goals and aspirations of establishing an independent Palestinian state."Hamas assumed leadership of Gaza in 2006 after a political victory against Fatah in local elections. The Beijing talks come as Hamas has yet to deliver an official response to a new Israeli–Egyptian initiative for a ceasefire and prisoner release deal. While the initiative reportedly reflects an Israeli openness for the return of the displaced to northern Gaza and the establishment of a sustainable ceasefire, a Hamas official told Al-Mayadeen on Sunday that the proposal "does not reflect a fundamental shift" in Tel Aviv’s position.
Israel Threatens Rafah Invasion If Hostage Deal Not Reached - Israeli officials are threatening to invade Rafah if a hostage deal is not reached amid Egyptian and Qatari-mediated negotiations with Hamas.Axios reported on Friday that Israeli officials told their Egyptian counterparts that Israel is giving Hamas “one last chance” to reach a deal. If an agreement is not reached, Israel will order a ground invasion of Rafah, which is packed with over 1 million civilians.Israeli Foreign Minister Israel Katz said on Saturday that Israel could suspend its plans to launch an assault on Rafah. “If there is a deal, we will suspend the operation,” he said. “The release of the hostages is a deep priority for us.”Hamas is currently reviewing Israel’s latest proposal, which reportedly includes a proposal to discuss a “restoration of sustainable calm” as part of a second phase after an initial round of hostage and prisoner exchanges. Israeli officials deny that the offer was an agreement to reach a permanent ceasefire, something Hamas has been proposing for months.An unnamed Hamas official told AFP on Sunday that there were no “major” issues with Israel’s latest proposal. “The atmosphere is positive unless there are new Israeli obstacles. There are no major issues in the observations and inquiries submitted by Hamas regarding the contents,” the official said.However, a Hamas official told Al Mayadeen that the Israeli proposal does not reflect a fundamental shift in Israel’s position. “[Hamas] is still studying the Israeli proposal in the negotiations, but there are no great expectations for its acceptance unless fundamental amendments are made to it,” the official said.
Israel’s Smotrich Calls for ‘Total Annihilation’ of Rafah, Other Cities in Gaza --Israeli Finance Minister Bezalel Smotrich on Monday called for the “total annihilation” of Rafah and other cities in the Gaza Strip. “There are no half measures. Rafah, Deir al-Balah, Nuseirat – total annihilation. ‘You will blot out the remembrance of Amalek from under heaven’ – there’s no place under heaven,” Smotrich said. Smotrich’s reference to “Amalek” was from a line in Deuteronomy, a book in the Hebrew Bible. Amalek is a nation the ancient Israelites were commanded to destroy, and in the book of Samuel, the Israelites were told to “slay both man and woman, infant and suckling.” Israeli Prime Minister Benjamin Netanyahu has previously compared Gaza to Amalek, which has been cited as evidence of genocidal rhetoric in South Africa’s genocide case against Israel at the International Court of Justice. “You must remember what Amalek has done to you, says our Holy Bible. And we do remember, and we are fighting,” Netanyahu said in October. The “annihilation” of Rafah would mean the death of over 1 million civilians who are sheltering there. Netanyahu vowed on Tuesday that Israel will invade the city “with or without” a hostage deal with Hamas. Smotrich said any hostage deal with Hamas would be a “humiliating defeat” for Israel. “Don’t wave a white flag. Don’t let Sinwar humiliate us again and win the war. A government that submits to international pressure and stops the war in the middle will, at that moment, lose its right to exist,” he said. He also called for the destruction of Hezbollah in Lebanon, saying Israel must “clear out, with God’s help, with one blow, wicked Hezbollah in the north, and really send a message that what will happen to those who harm the Jewish people is the same as those who have tried to harm us in the past – they will be destroyed, destroyed, destroyed. And it will echo for decades to come.”
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