US oil prices rose for a second week after falling 3 consecutive weeks before that, on increasing geopolitical risks to oil supplies in eastern Europe and the Middle East and on an across the board draw from US oil & product inventories...after rising 3.9% to $78.45 a barrel last week as US inflation figures came in lower than expected, stoking hopes for an interest rate cut, and as major institutions forecast higher demand and higher oil prices for this summer, the contract price for the benchmark US light sweet crude for July delivery slipped in Asian trading early Monday after a survey on Friday had shown weaker U.S. consumer demand and as China’s industrial output had decreased, but steadied in New York trading Monday morning, as official Chinese data also revealed Chinese retail sales grew more than expected. then rallied as speculators covered their short positions and settled $1.88 or 2.4% higher at $80.33 a barrel as traders grew more optimistic on the demand outlook…oil prices fell in early overseas trading on Tuesday, after data showed that China’s oil refinery output had dropped for a second month in a row, but again rallied during the New York session on comments by New York Fed President John Williams, who stated that interest rates will come down gradually over time, without saying when the U.S. central bank would start its monetary policy easing, and settled $1.24 higher at $81.57 a barrel as escalating wars in Europe and the Middle East continued to threaten global supply….while US markets were closed for the Independence Day holiday on Wednesday, US oil trading overseas slipped 10 cents, or 0.1%, to $81.47 per barrel, as summer demand optimism and concerns over escalating conflicts offset an American Petroleum Institute report that said U.S. crude inventories had unexpectedly risen…oil prices were then mixed in overseas markets early Thursday, as mounting supply fears driven by tensions in the Middle East offset demand uncertainties in the US and China, but turned higher in New York after the EIA reported surprise draws from US crude and gasoline inventories, and finished its last day of trading 70 cents higher at $82.17 per barrel. as fresh data on a cooling US jobs market added to expectations that the Fed might still cut interest rates sooner this year, while the price of the more active August oil contract settled up 60 cents at $81.31 a barrel…with markets now quoting the contract price for the US benchmark crude for August delivery, oil prices eased on Friday, on worries that global oil demand growth could be hit by a strong U.S. dollar and negative economic news from other parts of the world, and settled 56 cents lower at $80.73 a barrel as improving US demand clashed with negative economic news elsewhere, but still ended 2.9% higher for the week, while the contract price for August oil, which had ended the prior week priced at $78.05 a barrel, ended 3.4% higher…
meanwhile, natural gas prices finished lower for the fourth time in five weeks as Appalachian production rose to meet demand while utilities reportedly shifted to coal for power generation…after falling 1.3% to $2.881 per mmBTU last week as the startup of the Mountain Valley Pipeline was expected to add to our domestic gas glut, the price of natural gas contracted for July delivery slid overnight Sunday and was lower early Monday, as rising production and falling LNG feed gas demand outweighed the impact of extremely hot weather and settled 9.3 cents, or 3.2% lower at $2.788 per mmBTU on forecasts for a steeper than previously expected rise in gas supplies this week, and on increasing coal use over gas in the U.S. energy mix…however, prices moved higher early Tuesday as extreme heat was expected to spread across the country and drive demand for cooling, and settled 12.1 cents higher at $2.909 per mmBTU, supported by forecasts for warmer-than-usual weather and higher demand for next week than was previously expected…however, natural gas prices opened 5 cents lower after the holiday on Thursday, and moved steadily lower throughout the day, largely due to steady production and a bearish shift in the short-term weather forecast, and settled 16.8 cents or nearly 6% lower at $2.741 per mmBTU as major producers began slowly increasing output to meet higher demand…prices continued lower early Friday, as resurgent Appalachian output offset the hot weather boost to demand, and settled 3.6 cents lower at $2.705 per mmBTU, and thus ended down 6.1% for the week..
The EIA’s natural gas storage report for the week ending June 14th indicated that the amount of working natural gas held in underground storage rose by 71 billion cubic feet to 3,045 billion cubic feet by the end of the week, which left our natural gas supplies 343 billion cubic feet, or 12.7% above the 2,702 billion cubic feet that were in storage on June 14th of last year, and 561 billion cubic feet, or 22.6% more than the five-year average of 2,484 billion cubic feet of natural gas that had typically been in working storage as of the 14th of June over the most recent five years…the 71 billion cubic foot addition to US natural gas working storage for the cited week was in line with the 72 billion cubic foot addition to storage that the market was expecting, but was less than the 92 billion cubic feet that were added to natural gas storage during the corresponding second week of June 2023, and also less than the average 83 billion cubic foot injection into natural gas storage that has been typical for the same late spring week over the past 5 years…
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending June 14th indicated that after a big jump in our oil exports and a big decrease in our oil imports, we needed to pull oil out of our stored commercial crude supplies for the seventh time in twenty-one weeks and for the 13th time in the past 35 weeks, as a shift from unaccunted for oil demand to oil supply that the EIA could not account for was also a factor….Our imports of crude oil fell by an average of 1,250,000 barrels per day to 7,054,000 barrels per day, after rising by an average of 1,245,000 barrels per day to a 70 month high over the prior week, while our exports of crude oil rose by 1,230,000 barrels per day to 4,418,000 barrels per day, which when used to offset our imports, meant that the net of our trade of oil worked out to a net import average of 2,636,000 barrels of oil per day during the week ending June 14th, 2,480,000 fewer 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 377,000 barrels per day, while during the same week, production of crude from US wells was unchanged at 13,200,000 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 16.213,000 barrels per day during the June 14th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,765,000 barrels of crude per day during the week ending June 14th, an average of 281,000 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 a net average of 309,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending June 14th appear to indicate that our total working supply of oil from net imports, from storage, from transfers, and from oilfield production was 244,000 barrels per day less than 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 [ +244,000 ] 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...Moreover, since 1,151,000 barrels per day of demand for oil could not be accounted for in the prior week’s EIA data, that means there was a 1,395,000 barrel per day difference between this week's oil balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, rendering the week over week changes we have just cited nonsense.... However, since most oil traders react to these weekly EIA reports as if they were accurate, and since these weekly figures therefore often drive oil pricing (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….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 309,000 barrel per day increase in our overall crude oil inventories came as a rounded average of 364,000 barrels per day were pulled out of our commercially available stocks of crude oil, while an average of 56,000 barrels per day were being added to our Strategic Petroleum Reserve, the twenty-eighth SPR increase in thirty-five 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 7,296,000 barrels per day last week, which was 11.6% more than the 6,540,000 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 13,200,000 barrels per day because the EIA’s rounded estimate of the output from wells in the lower 48 states was unchanged at 12,800,000 barrels per day, while Alaska’s oil production was 11,000 barrels per day lower at 411,000 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 was 0.8% higher than that of our pre-pandemic production peak, and it's also 36.1% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.
US oil refineries were operating at 93.5% of their capacity while processing those 16,765,000 barrels of crude per day during the week ending June 14th, down from their 95.0% utilization rate of a week earlier, but a near normal operating rate for mid-June, after US refineries had lagged normal operating rates for four months after arctic cold in mid January had froze off some operations… the 16,765,000 barrels of oil per day that were refined this week were 1.8% more than the 16,470,000 barrels of crude that were being processed daily during week ending June 16th of 2023, but 2.9% less than the 17,264,000 barrels that were being refined during the prepandemic week ending June 14th, 2019, when our refinery utilization rate was also at a close to normal 93.9% for mid June...
Even with the decrease in the amount of oil being refined this week, gasoline output from our refineries was somewhat higher, increasing by 84,000 barrels per day to 10,170,000 barrels per day during the week ending June 14th, after our refineries’ gasoline output had increased by 602,000 barrels per day during the prior week.. This week’s gasoline production was 3.6% more than the 9,819,000 barrels of gasoline that were being produced daily over week ending June 16th of last year, but 2.4% less than the gasoline production of 10,423,000 barrels per day during the prepandemic week ending June 14th, 2019….on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 272,000 barrels per day to 4,760,000 barrels per day, after our distillates output had decreased by 29,000 barrels per day during the prior week. Even after eleven production increases in the past seventeen weeks, our distillates output was 6.2% less than the 5,077,000 barrels of distillates that were being produced daily during the week ending June 16th of 2023, and was 11.4% less than the 5,371,000 barrels of distillates that were being produced daily during the week ending June 14th, 2019…
Even with this week’s increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the thirteenth time in twenty weeks, decreasing by 2,280,000 barrels to 233,512,000 barrels during the week ending June 14th, after our gasoline inventories had increased by 2,566,000 barrels during the prior week. Our gasoline supplies fell this week because the amount of gasoline supplied to US users rose by 346,000 barrels per day to a seven month high of 9,386,000 barrels per day, and because our exports of gasoline rose by 152,000 barrels per day to 1,010,000 barrels per day, while our imports of gasoline rose by 88,000 barrels per day to 1,000,000 barrels per day .…But even after thirteen gasoline inventory withdrawals over the past twenty weeks, our gasoline supplies were still 4.4% above last June 16th’s gasoline inventories of 221,402,000 barrels, while about 1% 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 thirteenth time in twenty-two weeks, decreasing by 1,726,000 barrels to 121,640,000 barrels over the week ending June 14th, after our distillates supplies had increased by 881,000 barrels during the prior week. Our distillates supplies decreased this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 328,000 barrels per day to 3,977,000 barrels per day, while our exports of distillates fell by 168,000 barrels per day to 1,180,000 barrels per day and our imports of distillates rose by 59,000 barrels per day to 150,000 barrels per day, .…Even with 14 inventory decreases over the past 23 weeks, our distillates supplies at the end of the week were 6.4% above the 114,288,000 barrels of distillates that we had in storage on June 16th of 2023, but were still about 8% below the five year average of our distillates inventories for this time of the year…
Finally, with the big increase in our oil exports and a similar large decrease in our oil imports, our commercial supplies of crude oil in storage fell for the 13th time in twenty-six weeks, and for the 26th time in the past year, decreasing by 2,547,000 barrels over the week, from 459,652,000 barrels on June 7th to 457,105,000 barrels on June 14th, after our commercial crude supplies had increased by 3,730,000 barrels over the prior week… With this week’s decrease, our commercial crude oil inventories were about 4% below the most recent five-year average of commercial oil supplies for this time of year, while they were still 29.3% above the average of our available crude oil stocks as of the middle of June 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 June 14th were 1.3% less than the 463,293,000 barrels of oil left in commercial storage on June 16th of 2023, while they were 9.3% more than the 418,328,000 barrels of oil that we had in storage on June 17th of 2022, but were still 0.4% less than the 459,060,000 barrels of oil we had left in commercial storage on June 18th of 2021, after refinery damage from winter storm Uri left even more crude oil remaining in storage after 2020’s pandemic precautions had left a glut of oil unused at year end…
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 June 21st, the second column shows the change in the number of working rigs between last week’s count (June 14th) and this week’s (June 21st) count, the third column shows last Friday’s June 14th 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 23rd of June, 2023…
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Ohio About to Net $60+ Million for Drilling Under State Parks -- Marcellus Drilling News --A request by the Ohio Office of Budget and Management (OBM) to set up two new bank accounts to accept payments from drillers is the tipoff that drilling is about to begin under some of Ohio’s state land, including state parks. The state will receive nearly $60 million in lease signing bonus payments to drill under Salt Fork State Park (in Guernsey County), Valley Run Wildlife Area (in Carroll County), and the Zepernick Wildlife Area (in Columbiana County). The vast majority of that is for drilling under Salt Fork.
Newfound Ohio Utica Shale Oil Play Yielding Results - Recent data from the Ohio Department of Natural Resources (ODNR) confirms an emerging Ohio oil play with untapped potential. Traditionally thought of as a natural gas play, new technologies have unlocked oil production in the Utica Shale that continues to grow: 70 percent since 2021 with 40 percent annual growth from 2022 to 2023. The first quarter (Q1) production results from ODNR indicate the state produced 7,227,503 Bbls of oil, continuing its upward trend. If these numbers continue, 2024 will be a record oil year for the state. News of this untapped market continues to raise eyebrows. TheYoungstown Business Journal reported on Q1 results, saying: “Columbiana County’s section of the Utica – traditionally known for its high volumes of natural gas and wet gas – has for the past year delivered skyrocketing oil production that is out of character for the northern tier of the play.” Similarly, Hart Energy reported on EOG Resources investing in the combo play, with EOG chairman and CEO Ezra Yacob recently declaring:“It’s funny, right? When you take the blinders off and you come with a different perspective from different basins, it’s amazing the things that you can uncover….”EOG executives told investors in May that the Utica oil play can “compete with the best plays in America.”Rob Brundrett, the president of the Ohio Oil & Gas Association, also emphasized Ohio’s “holy trinity of hydrocarbons” when speaking at the Hart Energy DUG Appalachia conference: “We’ve got oil, natural gas, natural gas liquids and crude oil. So we have them all right here in the Utica and the state of Ohio.” Ohio’s oil production is centered in a five-county area that’s responsible for 95 percent of the state’s shale oil production, including Harrison, Columbiana, Guernsey, Carroll and Noble counties. Encino Energy had the top five producing oil wells this quarter, with Southwestern Energy, EOG Resources, and Ascent Resources filling out the remaining top ten producing wells. Hart Energy reports that Encino produced 51 percent of Ohio’s total production, followed by Ascent Energy and Infinity Natural Resources as the top producers.
Phillips 66 explores sale of pipeline stake worth over $1 billion, sources say – Oil & Gas 360 - U.S. oil refiner Phillips 66 is exploring a sale of its 25% stake in the Rockies Express Pipeline that it hopes could be worth more than $1 billion, including debt, people familiar with the matter said on Tuesday. The Rockies Express Pipeline (REX) is a 1,700-mile (2730-km)interstate natural gas pipeline, stretching from Wyoming and Colorado in the U.S. West to Eastern Ohio. Phillips 66 is working with its advisers on talks with potential buyers, which include private equity firms and infrastructure funds, the sources said, requesting anonymity as the discussions are confidential. The Houston-based company is hoping to command a premium to the stake’s current book value of $451 million, the sources said, adding bidders would also need to assume debt obligations worth more than $500 million associated with the stake. A spokesperson for Phillips 66 declined to comment. Phillips 66, which has a market value of $67 billion, is aiming to raise about $3 billion from asset sales this year. In an interview earlier on Tuesday, Chief Executive Mark Lashier said the company was in discussions with potential buyers for asset sales, but it was not in a rush to complete divestments. He declined to name the assets referenced in those discussions. The company has come under pressure in recent months from Elliott Management, which disclosed a stake in November and pushed for Phillips 66 to improve its refining operations and revamp its board of directors. The activist investor and Phillips 66 agreed last month to add a new board member approved by the investment firm, and to work together to identify a second director appointment. The remainder of the REX pipeline is controlled by privately owned Tallgrass Energy. Stakes in pipelines, such as REX, are attractive to financial investors as they like businesses with steady cash flow, the sources said, adding stakes in interstate pipelines are not marketed to buyers often.
No upside | LTE - Williamsport Sun-Gazette -- I wholeheartedly agree with the headline of your editorial on May 25, “We need long-term answers to energy needs.” My solution is a rapid phasing out of fossil fuel production. It’s a solution I have come to by following the science on its impacts to the environment, health, safety, quality of life, and, yes, even the economy. I come to my solution by listening to the frontline community members I have met in the nearly decade and a half I have spent as an environmental advocate, several of whom are from Lycoming County and must take umbrage at reading that the harms they have experienced are dismissed by their county’s paper of record. I come to my solution by observing a climate crisis that is intensifying at a rate that is even shocking to the experts who warned us. Since my earliest days as an advocate, I have heard the same arguments for more drilling and fracking that emphasize job creation. I have also followed labor statistics that contradict what the industry, our political leaders, and even editors have told us. I remember hearing early on about the vast number of vehicles crowding once-peaceful country roads, each bearing an out-of-state license plate. In 2013, the Multi-State Shale Research Collaborative published a report looking at jobs numbers in six states that sit atop the Marcellus and Utica shale formations. Industry-financed studies had indicated that 31 jobs were being produced for each well when the number turned out to be only four. Shale-related jobs numbered 1 in every 795 while education jobs numbered 1 in every 6. The number of shale jobs in Pennsylvania was about a tenth of the number Governor Corbett was touting. Nearly a decade later, the Ohio River Valley Institute found equally weak jobs numbers in Southwestern Pennsylvania, Ohio, and West Virginia. You claim that your region has enjoyed economic fortunes that communities in areas where fracking bans are in place have not. A quick look at unemployment figures tells a different story. From the beginning of the fracking boom in 2008 to March of this year, three of the counties in NY that passed local ordinances prohibiting fracking – Tompkins, Otsego, and Onondaga – had an average unemployment rate of 5.13 percent. The average for Lycoming, Bradford, and Susquehanna was 6.23 percent. Although New York has fared better, the numbers are close. The big difference is that there are nearly 5,200 wells in the three Pennsylvania counties. Drilling and fracking have killed people, made countless others sick, contaminated private water supplies, polluted air, devalued property, and that’s the short list of negative impacts the costs of which we cannot ignore. Every one of the wells drilled today will contribute to the legacy issue of maintaining every well dating back to the nineteenth century in perpetuity. The taxpayers will foot a staggering bill for that that cannot be calculated. So, yes, we need long-term answers based on the facts. There is no upside to continued fossil fuel development. - Karen Feridun, Kutztown
46 New Shale Well Permits Issued for PA-OH-WV Jun 10 – 16 - Marcellus Drilling News - Three weeks ago, 31 new permits were issued to drill in the entire Marcellus/Utica region. Two weeks ago, the number dropped (dramatically) to just seven new permits. And then last week, the number of permits issued soared once again — all the way up to 46. Bam! We just kicked it up a notch. Seneca Resources took the top spot for new permits, receiving a total of nine permits, all in Tioga County, PA. Chesapeake Energy and Antero Resources tied for second place with seven new permits each, with Chessy’s permits coming in Bradford County, PA, and Antero’s in Doddridge County, WV. Coming in third was Jay-Bee Oil & Gas with six permits issued in Pleasants County, WV. State by state, PA issued 24 new permits, OH issued 9, and WV issued 13 permits. ANTERO RESOURCES | BRADFORD COUNTY | CHESAPEAKE ENERGY | CNX RESOURCES | DODDRIDGE COUNTY | ENCINO ENERGY | EOG RESOURCES |EQT CORP | GREENE COUNTY (PA) | GUERNSEY COUNTY | HARRISON COUNTY | INR | JAY-BEE OIL & GAS | LYCOMING COUNTY | PENNSYLVANIA GENERAL ENERGY | PLEASANTS COUNTY | SENECA RESOURCES | TIOGA COUNTY (PA) | TYLER COUNTY | WASHINGTON COUNTY
Dem Politicians Pressure NY Gov to Block Iroquois Pipe Expansion -Marcellus Drilling News - The Food & Water Watch (FWW) organization (anti-fossil fuel fanatics) has taken point on the left’s effort to block Iroquois Gas Transmission’s plan to upgrade compressor stations in the Empire State. Iroquois’ Enhancement by Compression (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. FWW held a “rally” (we’d call it a freak show) at the State Capitol in May, where various politicos joined paid protesters to put on a dog-and-pony-show for the cameras, delivering 8,000 form letters to Gov. Hochul’s office (seeRadicals Keep Pressure on NY Gov. Hochul to Block Iroquois Upgrade). Yesterday, FWW reassembled largely the same group for another “we hate fossil fuels” rally, this time in wealthy, snobbish Westchester County. Some 69 Democrat politicians, along with paid protesters, were in attendance. Notice all clothes, shoes, signs, podium, microphone, bullhorn, glasses — all were made from fossil fuels
Leach natgas pipe, after West Virginia blast, to resume operations early July - (Reuters) - TransCanada Corp's Columbia Gas Transmission (TCO) unit has estimated that the section of the Leach Xpress natural gas pipeline, damaged in a blast on June 7 in Marshall County, West Virginia, will resume operations early in July. The company continues to work with federal pipeline safety regulators on a repair plan, it said late Monday in a notice to customers who use the line. TransCanada also said it will reduce capacity to zero on parts of the Leach line in Pennsylvania, West Virginia and Ohio on Wednesday. This will impact scheduled volumes at the Stagecoach-Leach Xpress meter in Monroe County near the Ohio-West Virginia border. That meter, which connects Leach to EQT Midstream Partners LP's Strike Force South gathering fields in Monroe and Belmont counties in Ohio, returned to service late last week. Strike Force can also deliver gas to Energy Transfer Partners LP's Rover and Enbridge Inc's Texas Eastern Transmission (Tetco) pipelines. The shutdown of Leach Xpress had forced producers using the line to find other pipes to ship gas out of the Marcellus and Utica shale regions of Pennsylvania, West Virginia and Ohio. The company has not yet provided details on what caused the blast. Alternative pipelines include ETP's Rover, Tallgrass Energy Partners LP's Rockies Express (REX), EQT Midstream Partners LP's Equitrans and Enbridge's Tetco, according to analysts at S&P Global Platts. Columbia Gas, which declared a force majeure after the blast, said the damaged section of pipe could affect movement of about 1.3 billion cubic feet per day (bcfd). One billion cubic feet of gas is enough to fuel about 5 million U.S. homes for a day. Energy analysts, however, said overall output in the Appalachian region was little changed by the blast as producers, like Range Resources Corp and Southwestern Energy Co, found other pipes to move their gas. In fact, Appalachian output has increased to around 27.9 bcfd over the past three days from around 27.5 bcfd before the pipe blast, according to Thomson Reuters data. The 1.5-bcfd Leach Xpress in West Virginia and Ohio, which entered full service at the start of this year, transports Marcellus and Utica shale gas to consumers in the U.S. Midwest and Gulf Coast.
Equitrans starts operations on the Mountain Valley gas pipeline (US) - The US company Equitrans Midstream has announced that its 2 bcf/d (20.6 bcm/year) Mountain Valley gas pipeline has started operations, following the clearing of all applicable legal and regulatory requirements of the project by the US Federal Energy Regulatory Commission (FERC). The US$6.6bn project is a 303.5-mile (488 km) interstate natural gas pipeline that aims to unlock gas supplies from Marcellus and Utica shale production in Appalachia, the largest shale gas basin in the United States. The Mountain Valley Pipeline would cross nine West Virginia counties to transport natural gas to East Coast markets. The project initially received approval from the FERC in 2017. However, it has faced deveral setbacks due to regulatory obstacles and legal disputes, leading to delays in its completion. The operator of the project, Equitrans Midstream, announced in March 2024 that it agreed to be purchased by the US natural gas producer EQT Corporation.
Mountain Valley Gas Pipeline Starts Operation | Rigzone - Equitrans Midstream Corp. has put onstream a 303-mile pipeline from West Virginia to southern Virginia offering two billion cubic feet of daily natural gas transport capacity, after delays from environmental and land rights lawsuits. The Mountain Valley Pipeline (MVP), which began construction 2018, has recently been made available for “interruptible or short-term firm transportation service until long-term firm capacity obligations commence on July 1, 2024”, the Canonsburg, Pennsylvania-based company said in a statement. The 42-inch underground interstate conduit targets gas produced in the Marcellus and Utica shale plays, which sit in the United States’ top gas producing region of Appalachia. Equitrans said it hopes to capitalize on growing power demand in the mid-Atlantic and the Southeast regions through the pipeline. “Demand for natural gas in Southwest Virginia continues to grow, and the importance of MVP’s energy supply cannot be overstated”, Paul Nester, president and chief executive of utility Roanoke Gas Co., commented. “The MVP and its natural gas supply are essential to meeting the needs of residents and businesses across the Roanoke Valley, now and for many years to come. Further, MVP’s delivery points to Roanoke Gas in Franklin and Montgomery Counties are certain to provide direct, long-term economic benefits to our community and this region”. Transportation agreements for 550 million cubic feet per day of capacity are expected to commence under 20-year terms with the startup of the MVP. Equitrans said, “The MVP is now part of a critical network of more than 300,000 miles of interstate and intrastate natural gas transmission pipelines transporting the natural gas that fuels modern America and the U.S. economy”. The project has faced legal battles over safety and environmental concerns and right of way disputes, which caused delays and inflated costs. Equitrans insisted on announcing the start of operation, “In accordance with all permit requirements, the MVP was built under unprecedented regulatory oversight and followed stringent construction, safety, and environmental protocols, including the protection of threatened and endangered species, and cultural, historical, and environmental resources”. On June 11, the Federal Energy Regulatory Commission gave the green light for the MVP to begin operation. “We find that Mountain Valley has adequately stabilized the areas disturbed by construction and that restoration and stabilization of the construction work area is proceeding satisfactorily”, FERC Director for Energy Projects Terry Turpin said in the authorization letter. Republican Senator Shelley Moore Capito, who helped lead efforts in Congress to expedite permitting for the project, said in a statement, “After receiving all the necessary permits and approvals from both Republican and Democrat administrations, overcoming needless delays by courts and climate activists, this critical project is in now in service and can begin to deliver needed energy to markets up and down the Atlantic coast”. Environmental campaigners reacted by warning that risks from the project remain. “The project is far from final restoration when hillsides continue to slip, people lack clean well water, agricultural lands are damaged and streams are clogged with sediment”, said Autumn Crowe, interim executive director of the West Virginia Rivers Coalition. “These problems will persist long after gas is pumping through it”. Oakland, California-based Sierra Club said, “It has long been clear that the pipeline is unable to comply with basic environmental protections, with hundreds of water quality related violations throughout the course of construction”. “Regulators have also yet to complete analysis of a failed component of the pipeline”, Sierra Club said. The pipeline is a joint venture by Equitrans as the operator, AltaGas Ltd., Consolidated Edison Inc., NextEra Energy Inc. and RGC Resources Inc. The MVP will be taken over by EQT Corp. if its multi-billion-dollar acquisition of the operator is completed. The merger, which has an initial transaction price of $35 billion, would create “America's first large-scale, integrated natural gas producer with an unrivaled low-cost structure that provides investors with the best risk-adjusted exposure to natural gas prices”, EQT said March 11.
Confirmed: M-U Gas Now Flowing Through Mountain Valley Pipeline - Marcellus Drilling News -- On Friday, Equitrans Midstream, the builder and majority owner of the 303-mile Mountain Valley Pipeline (MVP) that runs from Wetzel County, WV, to Pittsylvania County, VA, announced the pipeline has, after a decade of planning and building, finally begun to flow Marcellus/Utica molecules. Who is buying those molecules? We know of at least one company. In a separate announcement, Roanoke Gas Company (a large local utility) said it had begun to purchase M-U molecules from MVP on Friday. Roanoke Gas said for the first time since 1965, the Roanoke Valley now has access to a new interstate natural gas pipeline via two interconnections Roanoke Gas has with MVP. Equitrans issued this press release on Friday: The Mountain Valley Pipeline (MVP) entered service today after satisfying all applicable legal and regulatory requirements, including all applicable in-service conditions of the U.S. Pipeline and Hazardous Materials Safety Administration’s + Consent Agreement for the project, and receiving all remaining approvals from the Federal Energy Regulatory Commission. MVP is now available for interruptible or short-term firm transportation service until long-term firm capacity obligations commence on July 1, 2024. “This is an important and long-awaited day for our Nation and the millions of Americans who now have greater access to an abundant supply of domestic natural gas for use as an affordable, reliable, and cleaner energy resource,” said Diana Charletta, president and chief executive officer of Equitrans Midstream Corp. “Natural gas is an essential fuel for modern life, and, as a critical infrastructure project, the Mountain Valley Pipeline will play an integral role in achieving a lower-carbon future while helping to ensure America’s energy and economic security for decades to come.” Spanning approximately 303 miles across West Virginia and Virginia, the MVP is designed to provide cost-effective access to natural gas for use by local distribution companies, industrial users, and power generation facilities in the growing demand markets of the mid-Atlantic and Southeast regions of the United States. The 42-inch diameter underground interstate natural gas transmission pipeline is designed to carry up to 2 Bcf of natural gas per day from the Marcellus and Utica shale production regions to these demand markets.
Analysts Expect Only 38% of MVP’s 2 Bcf/d to be Used for Now - Marcellus Drilling News - Everyone in the Marcellus/Utica industry is elated that the 303-mile Mountain Valley Pipeline (MVP) is finally up and running (see Confirmed: M-U Gas Now Flowing Through Mountain Valley Pipeline). MVP can flow 2 billion cubic feet per day (Bcf/d) of homegrown M-U molecules from Wetzel County, WV, to Pittsylvania County, VA, in the southcentral part of the state. But where does the gas go from Pittsylvania County? Where MVP terminates, it connects to the mighty Transco pipeline that theoretically has the capacity to flow most of those molecules onward, all the way to the Gulf Coast in some cases. Except Transco is currently full… Except Transco is currently full... Last November, MDN brought you the news that pipeline giant Williams had given the green light to proceed with a new Transco pipeline expansion project called the Southeast Supply Enhancement Project (see Transco Expansion to Add 1.4 Bcf/d Capacity to Flow M-U Gas South). The project was estimated to flow an extra 1.43 Bcf/d (billion cubic feet per day) of Marcellus/Utica molecules southward along the Transco pipeline system, delivering those molecules to states in the southern U.S. Since last November, Williams has upped the capacity to 1.587 Bcf/d (essentially from 1.4 to 1.6). The Southeast Supply Enhancement Project was designed to help handle MVP’s incoming molecules. On Feb. 1, Williams filed a request with the Federal Energy Regulatory Commission. (FERC) to open a pre-filing review. In essence, Williams pre-pre-filed, giving us lots of new details about the project (see Williams Pre-Pre-Files for Southeast Supply Enhancement Project). The extra capacity is not expected online before 2026. Two other pipelines interconnect with MVP along its route before it terminates at the Transco interconnection. One is Columbia Gas Transmission’s (TCO) WB line in Braxton County, VA. The other is TCO’s KA line in Monroe County, VA. All three pipelines (Transco, TCO WB, TCO KA) will need to free up capacity in order to accept new capacity from MVP — a process that will take time. According to the Hart Energy article below, analysts with East Daley Analytics estimate MVP will, for now, flow roughly 750 MMcf/d (million cubic feet per day), about 38% of the pipeline’s capacity. The bottom line, according to East Daley, is that drillers won’t be able to increase production for MVP until 2025. Be sure to look at the excellent map in the article below, which not only identifies the pipelines that connect to MVP, but the “taps” into MVP from local utility companies including Dominion Hope and Roanoke Gas.
Report Says Va. Data Center Growth Needs 15 GW of Gas-Fired Power - Data centers (huge computer server farms) have become one of the primary sources of new electricity demand across the United States. Specifically, PJM, the largest power market grid in the world (covering 65 million customers in the Mid-Atlantic region, including Pennsylvania, Ohio, and West Virginia), is seeing a huge increase in the number of data centers. The PJM grid operator expects 11 GW (gigawatts) of additional electricity will be needed for new data centers by 2030 in northern Virginia alone, representing more than 40% of the state’s current peak demand. According to a new report from Aurora Energy Research, a high-growth case could drive additions of up to 15 GW of new electric demand in PJM by 2030, compared to a conservative scenario. Aurora says there’s only one fuel source that can meet that kind of demand in the next five years: natural gas.
US natgas prices drop 3% on steeper supply rise forecast, rising coal-energy demand (Reuters) -U.S. natural gas futures dropped over 3% on Monday to their lowest in one-and-a-half weeks on forecasts for a steeper than previously expected rise in gas supply this week and increasing coal use over gas in the U.S. energy mix. Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 9.3 cents, or 3.2%, to settle at $2.788 per million British thermal units, after falling over 4% earlier in the session. "Coal-fired generation jumped over the past week in anticipation of this widespread heat wave which is expected to result in higher electric demand over the next two weeks. The stronger coal generation will displace some of the natural gas generation, which is also fueling the bearish price response," Other factors weighing on prices include rising U.S. Lower 48 production, with Appalachia output surging 0.5 billion cubic feet per day (bcfd) over the weekend, which coincides with the start of flows on the Mountain Valley Pipeline (MVP), The nation's biggest gas producer, EQT's daily production has jumped by 0.4 bcfd since MVP came online, "If current heat persists, storage surplus will erode quickly, pushing gas prices higher. Recent price retreat is likely a temporary breather," according to Zhu Zhen, managing consultant at C.H. Guernsey and Company in Oklahoma City. Meanwhile, a tropical system developing in the southern Gulf of Mexico, which has a 70% chance of turning into a cyclone, is forecast to lower temperatures across Texas this week and lower natural gas demand in the ERCOT energy mix. Financial firm LSEG said gas output in the Lower 48 U.S. states stood at an average of 98.1 bcfd so far in June, the same as the 98.1 bcfd in May. That compares with a monthly record of 105.5 bcfd in December 2023. Forecast for total U.S. supply for the ongoing week were raised from 104.7 bcfd on Friday to 106.1 bcfd on Monday. Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least July 2. LSEG forecast that heat would boost gas demand in the Lower 48, including exports, from 96.6 bcfd this week to 102.2 bcfd next week. The forecasts for this week however, were lower than LSEG's outlook on Friday. Gas flows to the seven big U.S. LNG export plants, meanwhile, were at 12.9 bcfd so far in June, the same as the 12.9 bcfd in May.
US natgas rises over 4% on hot weather, higher demand forecasts | U.S. natural gas futures rose more than 4% on Tuesday, helped by forecasts for warmer-than-usual weather and higher demand for the next week than previously expected. Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least July 3. Temperatures are expected to be above normal starting July across more parts of U.S., compared with last year “when the heat was concentrated in just Texas or currently where the heat is concentrated in just the Northeast and that’s when we start to think about true gas demands accelerating – well above last year,” Front-month gas futures for July delivery on the New York Mercantile Exchange rose 12.1 cents, or 4.3%, to settle at $2.909 per million British thermal units (MMBtu). The contract shed over 4% in the previous session, to hit the lowest in one-and-a-half weeks on forecasts for a steeper than previously expected rise in gas supply this week, and slight replacement from coal-energy in the U.S. energy mix. Meanwhile, traders also assessed the impact from potential tropical cyclone One, which is expected to become a tropical storm as it reaches the western Gulf Coast late on Wednesday, and could lead to lower demand for gas as temperatures drop across Texas. “If that storm tracks even just slightly more northward, it can have more of an impact on the LNG export terminals,” Gas prices rallied about 22% in the first 11 days of June to hit a 21-week high of $3.159/MMBtu on June 11, before shedding roughly 30 cents on the back of lower demand and higher gas output, some of which resulted from the Mountain Valley pipeline coming in service. “We see the market lifting back up to the $3.22 highs that were established a week ago and where we will be looking to accept profits in anticipation of a renewed swing south back toward the $2.80 level,” Meanwhile, European gas prices ticked up as warmer weather is set to lift power demand for cooling and competition increases for liquefied natural gas supplies.
US natgas prices drop 6% to 2-week low on rising output despite summer heat (Reuters) -U.S. natural gas futures dropped about 6% to a two-week low on Thursday with producers, including EQT EQT.N and Chesapeake Energy CHK.O, slowly increasing output to meet higher demand aspower generators burn more gas to meet rising air conditioning use. Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 16.8 cents, or 5.8%, to settle at $2.741 per million British thermal units (mmBtu), their lowest close since June 4. Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 98.2 billion cubic feet per day (bcfd) so far in June from a 25-month low of 98.1 bcfd in May. That compares with a monthly record high of 105.5 bcfd in December 2023. Analysts said the production increase, which started in late May,was a sign drillers were slowly boosting output after a 47% jump in futures prices in April and May. Prices were also up about 10% so far in June. On a daily basis, output hit a 10-week high of 99.6 bcfd on June 17. Overall, however, U.S. gas production was still down around 8% so far in 2024 after several energy firms, including EQT and Chesapeake Energy CHK.O, delayed well completions and cut drilling activities when prices fell in February and March. Earlier this week, Chesapeake CEO Nick Dell'Osso said at a fireside chat with JP Morgan that Chesapeake will be ready to provide additional gas supplies to help meet the expected spike in power demand during an upcoming heatwave. Dell'Osso said Chesapeake curtailed about 0.5 bcfd of production earlier this year. He said curtailments will decline through the quarter, with none expected by the end of the year, subject to market conditions. EQT CEO Toby Rice saidearlier this month that EQT has already started boosting output. In other news, the U.S. National Hurricane Center (NHC) projected a 50% chance a tropical cyclone would form in the Gulf of Mexico near Mexico's east coast over the next week and a 40% chance a cyclone would form in the Atlantic Ocean off the coasts of Florida and Georgia. The NHC also said Tropical Storm Alberto weakened into a depression as it moved inland over central Mexico from the Gulf of Mexico. Meteorologists projected weather across the Lower 48 states, meanwhile, would remain hotter than normal through at least July 5. LSEG forecast that heat would boost the amount of gas power generators in the Lower 48 burn to keep air conditioners humming, including exports, from 97.8 bcfd this week to 103.8 bcfd next week. Those forecasts were higher than LSEG's outlook on Tuesday before the U.S. Juneteenth holiday on Wednesday. Gas flows to the seven big U.S. LNG export plants rose to 13.0 bcfd so far in June, up from 12.9 bcfd in May. But that remains well below the monthly record high of 14.7 bcfd in December 2023 due to ongoing plant and pipeline maintenance at several Louisiana facilities, including Cameron LNG, Cheniere Energy's LNG.N Sabine Pass, Venture Global's Calcasieu Pass.
Bidenistas Open the Spigot with $200M for Pipeline Replacements -Marcellus Drilling News ---The Dems are all about handing out other people’s money. It keeps them in power (tantamount to bribes). Incidentally, Alexander Fraser Tytler said in the late 1700s: “A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury.” The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) recently began soliciting applications to hand out nearly $200 million in grants from the $1.2 trillion Infrastructure law to upgrade natural gas pipelines. Spreading around $200 million from the total of $1.2 trillion a rounding error — below two-tenths of a single percent.
Golden Pass LNG Seeking to Clear Legal ‘Logjam’ to Continue Construction - Golden Pass LNG Terminal LLC told the bankruptcy court handling Zachry Industrial Inc.’s restructuring that construction at its Texas export project could be at risk of “a near complete shut down” unless the firm is swiftly removed. In an emergency motion filed over the Juneteenth holiday, lawyers for Golden Pass requested the U.S. Bankruptcy Court for the Southern District of Texas to “immediately reject” Zachry’s interest in the $9.25 billion engineering, procurement and construction (EPC) contract for the liquefied natural gas project (No. 24-90377, #0299). “Zachry has abandoned the LNG facility and, in any event, is incapable of performing under the EPC contract,” according to the motion. “It is also beyond dispute that Zachry’s actions have caused, and continue to cause, immediate and substantial harm that compounds on a daily basis.”
The U.S. Could Take A Page From Australia's Natural Gas Playbook The U.S Government could do far worse than to look to Australia’s natural gas policy as it considers the future of LNG exports. Gas production from the U.S. and Australia is essential to global energy markets. Australia was the world’s leading LNG exporter in 2020 and 2021, a mantle the U.S. assumed in 2023.But the LNG industry in both countries has faced great policy uncertainty in recent times. In the U.S., this arrived with the unexpected January announcement of a halt to pending LNG export approvals, while Australia’s policy environment has been clouded for several years by cumbersome regulatory processes that stifled project development.The Future Gas Strategy released by the Australian Government in May addresses many of these concerns and establishes a roadmap future gas production investment. It outlines a clear role for gas in Australia’s energy transition, ensuring reliable power generation as major renewable energy projects are rolled out. Critically, it identifies the vital long-term contribution that Australian LNG will make in ensuring energy security for traditional customers in Asia and supporting emerging nations in the region as they look to reduce their reliance on high-emitting coal.While the Future Gas Strategy is underpinned by International Energy Agency (IEA) projections for global gas demand, it notes great variations between differing scenarios and early indications that real-life demand may exceed modelling. It acknowledges forecasts for much higher gas demand in Asia from reputable sources that know the region best, such as the Institute of Energy Economics, Japan.Thus far, flexibility around demand forecasts, including those of Asia, doesn’t seem to have had much of a place in dialogue around the U.S LNG export halt.As the U.S Chamber of Commerce has identified, the Department of Energy has seemingly sidelined gas projections from the U.S. Government’s own Energy Information Administration to use IEA data. However, many of the IEA projections are not forecasts based on practical assessments of future need but instead work backwards from decarbonization targets.Backcasting is not the same as providing accurate forecasts of future need on which to base energy policy.
Enbridge Loses Bid to Transfer Michigan Line 5 Suit to Federal Court - The United States Court of Appeals for the Sixth Circuit has ruled that a lawsuit by Michigan’s attorney-general to shut down Enbridge Inc’s Line 5 pipeline on safety risks should be heard in state court as Enbridge failed to timely argue for federal jurisdiction. The 645-mile Line 5 is part of a pipeline network that carries oil products to refineries in the Midwest region in the United States and the Canadian provinces of Ontario and Quebec. Line 5 runs from Superior, Wisconsin, to Sarnia, Canada. It transports up to 540,000 barrels per day of light crude oil, light synthetic crude and natural gas liquids. Judges Amul R. Thapar, John B. Nalbandian and Richard Allen Griffin said the Canadian downstream company’s application for removal — a legal term for moving a civil litigation to federal court — had not been filed within the deadline specified in the United States Code (USC). The decision on Monday favored Attorney-General Dana Nessel, who had filed for appeal after failing to convince the District Court for the Western District of Michigan that the case should be heard in state court. Governor Gretchen Whitmer earlier lost an application before the district court to move a similar suit against Enbridge to state court. The governor initiated the suit to enforce a state government notice revoking a right of way issued for Line 5. “The merits of this litigation are not before us”, the appellate judges said of the Nessel versus Enbridge case. “Instead, we consider only which court should decide this case: does it belong in Michigan state court (where the Attorney General filed it in 2019) or in federal court (to where Enbridge removed it over two years later)? “We hold that Enbridge failed to timely remove this case to federal court under 28 U.S.C. § 1446(b), and there are no equitable exceptions to the statute’s deadlines for removal”. That section of the federal code specifies that an application for removal should be filed, per the official language, “within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter”. The judgment on Monday explained, “Citing both the district court’s order denying the motion to remand in the Governor’s case and § 1446(b)(3)’s provision that permits removal within 30 days after the defendant’s receipt of an ‘order ... from which it may first be ascertained that the case is one which is or has become removable,’ Enbridge removed this case to federal court on December 15, 2021”. “Although 887 days had passed since receipt of the Attorney General’s complaint, Enbridge argued removal was nonetheless timely because it could not have ascertained that there were grounds for removal until the district court denied the motion to remand in the Governor’s case”, the appellate court said. It ruled that Enbridge had good-faith grounds to argue for federal jurisdiction within the initial window, “and to the extent § 1446(b)(3)’s later removal window was ever open, Enbridge missed that one too”. The appellate court also affirmed that the law’s time limitations for removal “are mandatory”. “When invoked in a timely motion to remand, these limitations leave no room for equitable exceptions”, it explained. “Enbridge’s failure to comply with these mandatory rules requires remand. “For these reasons, we reverse the district court’s denial of the motion to remand. We remand for the district court to enter an order remanding this case to Michigan’s 30th Circuit Court for the County of Ingham”.
Laying in Wait: San Juan's 'Remarkable' Mancos Shale Oil Wells -Billions of investment dollars are pouring into the Permian Basin in southeastern New Mexico where a frenzied land grab is underway. The same can’t be said about the San Juan Basin, far away in the state’s northwestern corner.The San Juan Basin, known mostly as a natural gas play, has languished in recent years as drilling activity stalled and some of the basin’s largest and oldest producers exited.Major companies ConocoPhillips, BP, Encana Oil & Gas(now Ovintiv) and WPX packed up and left the basin at the end of the 2010s, prioritizing their investments in higher-return locations such as the Permian.A flurry of private capital filled the void left in their wake: Companies like DJR Operating and Enduring Resources are bringing online strong, liquids-rich production and delineating untapped areas of the San Juan Basin.LOGOS Resources, a long-time San Juan operator, continues to be active under new ownership by private equity firm North Hudson Resource Partners.Private E&P Hilcorp is one of the basin’s top gas producers after acquiring legacy San Juan assets from ConocoPhillips in 2017.In 2020, BP sold its San Juan natural gas assets to Germany-based investment group IKAV.Nevertheless, the San Juan Basin and the Four Corners region are living under the oversized shadow of the prolific Permian Basin. Other basins in the Rockies—Wyoming’s Powder River Basin and Utah’s Uinta Basin—are even garnering greater investment dollars.But experts say the tailwinds of new drilling activity and oil and gas production growth will eventually gust across the San Juan, as top-tier basins mature and decline.“We expect to see a resurgence in production in the late 2030s into the 2040s,” said Josh Dixon, senior research analyst at Wood Mackenzie. Lack of activity in the San Juan Basin can be attributed in part to instability in natural gas prices.“Historically, it has been known as a natural gas basin,” said Ryan Hill, principal analyst at Enverus Intelligence Research, “and I still think, quite frankly, a lot of people view it in that light.”However, data shows the bulk of new horizontal drilling activity around the San Juan since 2020 has focused on the Gallup oil window and Mancos Shale. It’s a small subset of the overall San Juan, to the south-southwest side of the basin. DJR Operating and Enduring Resources are the two leading players developing the San Juan’s oil window—and they’re drilling wells with some “remarkable” results, Hill said.Remarkable, he said, because Enverus is screening some of the Gallup oil wells at breakeven costs at less than $40/bbl, which is “extremely competitive.”DJR Operating produced an average of approximately 13,143 bbl/d of oil and liquids during 2023, according to data from the New Mexico Oil Conservation Division.DJR acquired San Juan assets from Encana Corp., now Ovintiv Inc., for $480 million in 2018.Enduring Resources produced an average of around 11,985 bbl/d over the same period. Enduring picked up WPX’s San Juan assets for $700 million in 2018.But it was EOG Resources’ perceived interest in the play that piqued the interest of analysts and operators.EOG, well-respected across the industry as one of the few exploratory upstream producers, picked up more than 100 drilling permits and drilled two wells in the area in 2021 and 2022, state data show. EOG later plugged and abandoned those two wells in April and May of 2023; the permits the company picked up have also since expired, Hill said.“They’ve kind of walked away,” he said.Based on early production results, EOG’s wells weren’t producing at the same level DJR was achieving with its wells, according to Enverus data. It just wasn’t the kind of prodigious output that would justify entry into a new emerging play for an operator like EOG, Dixon said. “DJR is, from our perspective, the number one operator and getting the most prolific results in the basin,” Hill said, “and EOG was definitely below that.”EOG’s about-face from the San Juan Basin stands in stark contrast to the investment dollars the company is pouring into areas such as the Ohio Utica Shale or theDorado gas field, near the Texas-Mexico border.
North Dakota Natural Gas Output Outpacing Oil as State ‘Aggressively’ Seeking Takeaway Solutions --North Dakota’s natural gas production growth surpassed that of oil in April, reflecting rising gas-to-oil ratios (GOR) in the Bakken Shale formation, the state’s top oil and gas regulator said. Bar graph comparing North Dakota's oil and natural gas production. The Department of Mineral Resources’ (DMR) Lynn Helms, oil and gas division director, hosted his final monthly press briefing to discuss the state of exploration and production in the Peace Garden state. Helms is stepping down after a 26-year tenure at DMR during which the Bakken emerged as a leading source of oil and associated gas supply in the Lower 48. “This is an incredible place to work,” a visibly emotional Helms told reporters. “And I can’t say enough about the way North Dakota has treated me and what a wonderful time it’s been working here for 26 years.”
Mexico LNG Sendout from New Fortress Altamira Project Likely in July - New Fortress Energy Inc. (NFE) said the work necessary to begin operations at its LNG unit offshore Altamira, Mexico, is nearly complete with first production seen within two weeks. The company added in an update that the fast liquefied natural gas (FLNG) facility would be able to begin production in 10 days with the first cargo set for July. The project, which would be the first export facility to ship natural gas from Mexico to global markets, has seen months of delays. CFO Chris Guinta in the quarterly earnings call said a late April malfunction with the FLNG facility’s cold box resulted in some minor injuries. Related Tags
Noble, Diamond Combination to Build Global Offshore Drilling Giant - Dealmaking is continuing across the global energy sector as Noble Corp. plc, one of the world’s largest ultra-deepwater drillers, has agreed to buy Diamond Offshore Drilling Inc. in a cash-and-stock transaction worth about $1.6 billion. Bar graph showing combined Noble plc and Diamond order backlog Expand The merger between the oilfield services companies, both headquartered near Houston, would create one of the top ultra-deepwater drillers in the world. Noble CEO Robert Eifler discussed the reasoning for the merger during a conference call.
European Natural Gas Price Spikes Cool While Asian Demand, Supply Concerns Still Abound – Despite multiple maintenance and outage events weighing on LNG supply and dwindling storage levels, European natural gas prices were cooling again while Asian buyers kept drawing cargoes. NGI's LNG feedgas tracker chart. After rising almost 7% starting on June 10, European gas prices began falling Friday (June 14), according to Mizuho Securities USA LLC. They were still well below Asian prices, which rose more than 2% to above $12/MMBtu. Analysts with trading house Energy Danmark wrote “ongoing supply concerns” were stoking the Dutch Title Transfer Facility (TTF) contract for July, but the modest downturn did not mean the market has calmed its nerves.
EU Sanctions Package Targets Russian LNG — The European Union (EU) has approved a package of policies around the shipment of Russian LNG to member countries, marking the first official restrictions on natural gas from the country since the war in Ukraine began in 2022. Graph of European LNG imports by country of origin. The EU would still allow Russian liquefied natural gas deliveries to the bloc. However, the new package bans using infrastructure in member countries for transshipments to third-party countries. Transshipments are important to Russia, as LNG delivered from Novatek’s Yamal export facility is shipped in ice-class vessels, which are in short supply. Carrying cargoes from the Yamal Peninsula in Russia’s far north to European gas hubs like Zeebrugge, Belgium frees up these vessels for more shipments.
‘Gargantuan’ LNG Supply Wave Poised to Flood Market, but How Long Will The Glut Last? - The world is likely to be awash in LNG later this decade, but the surplus isn’t expected to last forever and divisions over how long the market would take to balance are coming into sharp relief. Bar chart of global LNG supply additions. Russia’s invasion of Ukraine two years ago and its decision to cut nearly all gas exports to Europe created a scramble to secure supplies that sent prices skyrocketing. As buyers sought cover from the volatile spot market and stronger energy security, they signed more long-term deals, raising prospects for investment in liquefied natural gas terminals. In some cases, the energy crisis helped push projects across the finish line. A bevy of new liquefaction trains are now set to come online starting next year, with additions poised to accelerate in the years after that. Nearly 40 million metric tons (mmt) of LNG capacity is expected to come online annually between 2026 and 2028.
Marine campaigners prepare fresh legal action over NSTA licences -- Marine conservation group Oceana UK is preparing to launch legal action against the UK government over its decision to award new oil and gas licences in the North Sea.Oceana UK said the new licences, awarded by the North Sea Transition Authority (NSTA) as part of the 33rd Licensing Round, pose a “severe threat to marine life”.The group claimed issuing the new licences was “unlawful on several grounds”, including a “failure to consider the extreme impacts of both accidental oil spills and the climate crisis on marine life”.Oceana UK also claimed incumbent energy secretary Claire Coutinho and the NSTA “ignored advice” from independent government experts about the potential impact to Marine Protected Areas (MPAs).The NSTA issued 82 new licences across three rounds between October 2023 and May this year.The licences cover 226 blocks in the North Sea, and Oceana said around a third of these blocks overlap with MPAs.More than 2,000 oil spills were recorded in UK waters between January 2011 and December 2023, according to an investigation by The Ferret.Of these spills, 215 occurred in MPAs, including a more than six tonne leak from the Repsol Auk A platform in September 2022.In a statement, Oceana claimed offshore environmental regulator OPRED’s assessment of the licence blocks did not reflect advice given by independent government experts, including the Joint Nature Conservation Committee.Oceana claimed the subsequent decision to award the licences was therefore unlawful.Oceana UK executive director Hugo Tagholm said the issuing of new licences by the UK government was a “deliberate choice to unlawfully ignore expert advice”.“The truth is, chronic oil spills are already polluting UK seas,” Mr Tagholm said.
Shell’s Deal for Pavilion LNG Business to Expand Natural Gas Contracts, Supply for Global Market -Shell plc is making good on ambitions to expand its global LNG business with an agreement to acquire Pavilion Energy Pte. Ltd. – and its 6.5 million metric tons/year (mmty) of contracted supply.Graph of Shell's Global LNG Supply & Demand forecast.The transaction by Shell Eastern Trading Pte. Ltd. was reached with Carne Investments Pte. Ltd., a subsidiary of Temasek Holdings Ltd. Headquartered in Singapore, Pavilion’s global energy business encompasses liquefied natural gas trading, shipping, natural gas supply and marketing activities in Asia and Europe. Neither Temasek nor Shell disclosed financial details.
Australian LNG Faces Double Whammy of Oversupply: IEEFA -- Australian liquefied natural gas (LNG) producers are potentially facing a couple of challenges in the global market: an oil supply glut and a global LNG oversupply. The Institute for Energy Economics and Financial Analysis (IEEFA) said in a news release that demand for LNG is starting to decrease in mature markets. European demand for LNG is expected to peak in 2025 and then decline, with its gas consumption having already decreased by 20 percent in the last two years. Japan’s LNG demand has decreased by 25 percent since 2014, and is expected to decrease by a further 25 percent by 2030 as LNG is displaced by increasing nuclear and renewables generation. South Korea’s LNG imports fell by five percent last year, and are expected to fall further by 2030. A report published by IEEFA, Global LNG Outlook 2024-28, found that global LNG markets are headed towards a supply surplus within two years. Between 2024 and 2028, global LNG supply will increase by 40 percent, an unprecedented level of growth for the LNG industry in such a short time period. Capacity additions are dominated by Qatar and the USA, which have much lower costs of production than Australia, according to the report, which noted that Australian producers could face “high risks of declining prices for the uncontracted portion of their production”. The International Energy Agency (IEA) recently predicted surplus petroleum production in the global markets of up to eight million barrels per day by 2030. The glut is due to rising oil supplies led by non-OPEC+ producers, in particular the USA and South America, while demand is forecast to level off. The oil demand slowdown is driven by the fast increasing uptake of electric vehicles worldwide, combined with the improved efficiency of petrol or diesel vehicles. Oil use is also decreasing for power generation, replaced by renewables or gas, the IEA said. The oversupply could lead to a price drop for oil, the IEEFA said, noting that Australia’s LNG sector is “heavily exposed to oil prices due to the majority of its existing LNG contracts having pricing directly linked to oil prices”. The IEEFA explained that Australian LNG contracts usually include a limited fixed-price component as well as a variable component based on a benchmark such as the Brent crude oil price or the Japan Crude Cocktail (JCC) price. “While the fixed component is typically increased slightly under a predefined threshold, low oil prices for a prolonged period of time would likely lead to financial losses for contracted LNG,” the agency remarked. While the majority of Australian LNG is currently sold through long-term contracts, a large share of those contracts will start expiring after 2030, the IEEFA continued. “As a result, producers will increasingly find themselves exposed to growing competition – either through spot market sales if they can’t secure new contracts, or through competition from lower-cost producers and overcontracted intermediaries for securing new long-term contracts,” it said noting that some buyers are already seeking to reopen negotiations on their contract pricing due to changing market conditions. The double pressure on contracted and uncontracted LNG prices from supply gluts will put financial returns at risk for Australian LNG producers, who are facing “an ever gloomier future,” the IEEFA concluded.
Global gas flaring jumps to highest level since 2019 -- The amount of gas flared worldwide rose in 2023 by nine billion cubic metres (bcm) to 148 bcm, its highest level since 2019. The increase resulted in an additional 23 million tonnes of carbon dioxide equivalent emissions, an amount similar to adding about five million cars to the roads, finds new satellite data compiled by the World Bank's Global Flaring and Methane Reduction (GFMR) Partnership, a WAM report said. “Millions of people still lack access to basic energy and greenhouse gas emissions continue to grow, while huge volumes of gas continue to be wastefully flared every year,” said Demetrios Papathanasiou, World Bank Global Director for the Energy and Extractives Global Practice. “Capturing and using this wasted gas could displace dirtier energy sources, reduce greenhouse gas emissions, and generate enough power to double the amount of electricity provided in Sub-Saharan Africa.” Gas flaring releases harmful pollutants, including black carbon and unburnt methane, which contribute to climate change and pose risks to both people and the planet. Eliminating gas flaring would avert at least 381 million tonnes of carbon dioxide equivalent emissions being released into the atmosphere each year. When productively used, wasted flared gas can help displace dirtier energy sources, increase energy access in some of the world's poorest countries, and provide many countries with much-needed energy security. “The increase in gas flaring is particularly disheartening as it comes after a long-overdue reduction in 2022. This sets global gas flaring levels back to what we experienced in 2019. We’re hopeful that this is somewhat of an anomaly and the longer-term trend will be dramatic reductions,” said Zubin Bamji, World Bank GFMR Manager. The World Bank's annual Global Gas Flaring Tracker Report is a tool for monitoring and understanding the state of flaring worldwide and the progress made towards achieving Zero Routine Flaring by 2030.--
Energean to offload oil and gas assets in Egypt, Italy and Croatia -- Energean has agreed to divest its oil and gas assets in Egypt, Italy and Croatia to an entity controlled by Carlyle International Energy Partners. The company said the deal is worth up to $945m (743.71m), of which $820m is firm. Carlyle International Energy Partners plans to set up a new company to pursue additional acquisitions in the Mediterranean region. The new entity will be spearheaded by former BP CEO Tony Hayward. Energean will sell gas-weighted assets with an expected production equivalent to 47,000 barrels of oil per day, featuring significant operations in Italy, Egypt and Croatia. Included in the portfolio are stakes in the Cassiopea gas field in Italy and Abu Qir gas production hub in Egypt.
Production starts at Senegal's first offshore oil field - Production has started at Senegal’s first offshore oil project, Australian operator Woodside Energy said on Tuesday, adding the West African country to the club of crude-producing nations. “This is a historic day for Senegal and for Woodside,” said the company’s chief executive, Meg O’Neill, calling the extraction of oil from the Sangomar field “a key milestone.” The floating facility is moored about 100 kilometres (60 miles) offshore and has a storage capacity of 1.3 million barrels, Woodside said. The project aims to produce 100,000 barrels of oil per day. The field also contains natural gas. Woodside has an 82-percent stake in the deepwater project with the remainder held by Senegal’s Petrosen. Senegal also has a liquefied natural gas project at its border with Mauritania and production there could begin in the third quarter. British energy giant BP is involved in the project. While Senegal’s fossil fuel output is not expected to be as high as that of bigger producers such as Nigeria, there are hopes the oil and gas industry will bring billions of dollars in revenue to the country and contribute to transforming its economy.
Chevron Signs Contracts for Ultra-Deepwater Blocks in Angola Amid Attractive Policies - Africa.com - Multinational energy corporation Chevron has signed two Risk Service Contracts (RSC) for Block 49 and Block 50, located in the ultra-deep waters of Angola’s Lower Congo Basin. The company – through its Angolan subsidiary Cabinda Gulf Oil Company Limited – was initially awarded the concessions by way of Presidential Decree in January 2024. The signing of the RSCs kicks off exploration and lays the foundation for the development of the blocks. As the voice of the African energy sector, the African Energy Chamber (AEC) commends the recent signing by Chevron in Angola. Chevron’s rich history of exploration and production in the country – covering 70 years – could not have been possible without Angola’s strong regulatory environment and the AEC supports the ongoing efforts by the multinational to expanding Angola’s oil and gas market. Representing the company’s first operated assets outside of the existing Cabinda concessions, Block 49 and 50 are situated in close proximity to producing concessions such as Block 17 – one of the first deep-offshore blocks to be licensed in Angola. As such, the blocks hold substantial potential for strong returns and further expand Angola’s portfolio of producing ultra-deepwater assets. Earlier this year, Chevron signed an agreement with Angola’s national concessionaire – the National Oil, Gas&Biofuels Agency – to conduct seismic surveys in Blocks 49 and 50. These studies will improve the geological understanding of the concessions and advance the exploration agenda. The RSCs add to Chevron’s strong asset portfolio in Angola. The company currently has a 26% market share in the country, with interests in Block 0 and 14 – which produce an average of 70,000 barrels of liquids per day and 259 million cubic feet of natural gas per day. Block 0 – whose concession has been extended to 2050 – is comprised of 21 fields, while Block 14 contains nine fields. An agreement signed between Chevron and the government in 2020 combined all of Block 14’s development areas, providing improved fiscal terms while extending the production sharing contract to 2028. Additionally, in 2023, Chevron signed a production sharing agreement to manage operations within the Block 14/23 concession area. The concession is situated in the Zone of Common Interest shared by Angola and the Democratic Republic of the Congo, with the agreement seeing Chevron act as operator with a 31% stake in the block. Chevron’s operations in Angola transcend oil and gas exploration, with the company holding non-operating interests in the Angola LNG plant – Angola’s inaugural LNG facility. Angola LNG processes gas from offshore concessions, generating critical revenue for the country through LNG exports. In 2023, the facility reached a milestone of delivering its 400th LNG cargo. Going forward, the development of new concessions aims to bolster LNG production at the facility. Specifically, the Chevron-operated Sanha Lean Gas Connection Project – valued at $300 million – comprises the development of a platform that ties into the existing Sanha Condensate complex and features pipelines connecting Block 0 and 14 to the Angola LNG facility. The project reached a final investment decision in 2021 and aims to address a supply gap at Angola LNG. Beyond exploration and production, Chevron is spearheading low-carbon solutions across Angola’s oil and gas industry. The multinational signed an agreement with the government in October 2023 to explore low-carbon business opportunities, with the goal to utilize nature-based and technological carbon offsets – alongside lower-carbon intensity fuels such as hydrogen – to enhance the country’s production. This will be undertaken in conjunction with oil and gas initiatives and showcases Chevron’s future-oriented approach to energy development in Angola.
Nigeria Eyes FLNG Project, Sanctions 300 MMcf/d Natural Gas Development -Africa’s largest LNG exporter is moving forward with projects to boost liquefaction capacity and natural gas production with international partners. The African country’s national oil and gas company, Nigerian National Petroleum Corp. Ltd. (NNPC), has signed a project development agreement with floating liquefied natural gas (FLNG) developer Golar LNG Ltd. for a project offshore the Niger Delta. NNPC and Golar are aiming for a final investment decision (FID) on the 400-500 MMcf/d capacity facility by the end of the year, according to the state-owned firm. First gas production is targeted for sometime in 2027, which is near the time gas export projects in Qatar and the United States are expected to come online.
Nigerian Oilfield Shut Down after Oil Spill -Oil production at Nigeria’s OML 29 onshore field has been shut down as a precautionary measure after an oil spill was detected earlier this week, the field’s operator Aiteo Eastern Exploration and Production Company (AEEPCO) said on Wednesday. “This is a precautionary measure while mobilising additional resources to contain the spill. The cause of the spill is currently undetermined,” the company said in a statement carried by Nigerian daily This Day.“We are proactively engaging with stakeholders to mitigate the immediate effects,” Aiteo added. The leak was detected on Monday and the company’s Oil Spill and Emergency Response Team was immediately activated to respond to the spill.According to Nigerian media, the leak occurred on Monday at a section of the 97-kilometre (60-mile) Nembe Creek Trunk Line that supplies crude to the Bonny Oil Export Terminal.The field shutdown due to a leak is a setback for Nigeria’s oil sector, which is looking to stem leaks and spills, oil theft, and vandalism in the onshore oil-producing fields.Raising oil production has been a key priority for the Nigerian federal government, which aims to thus boost revenues and foreign exchange reserves.Oil theft and pipeline vandalism have long plagued Nigeria’s upstream oil and gas industry, driving majors out of the country and often resulting in force majeure at the key crude oil export terminals.But OPEC member Nigeria aims to ramp up its oil production in the coming months and years.Nigeria’s oil production has started to recover in recent months and hit in February its highest level in more than three years amid a concerted effort to crack down on targeted attacks and organized theft rings.Nigeria needs annual investments of $25 billionto reach and keep its output at around 2 million barrels per day (bpd), Nigerian oil industry executive Austin Avuru said last month.
Niger stops oil exports to China over Benin disagreement -- Niger has stopped oil exports to China via its pipeline to Benin’s coast, Oil Minister Mahamane Moustapha Barke Bako said, intensifying the standoff between the West African neighbours. According to Reuters, on Friday the minister oversaw the padlocking of a section of the 2,000km (1,243-mile) pipeline at the Agadem oilfield in eastern Niger.Exports to China were flowing through the pipeline under an MOU with state-owned oil giant CNPC, worth $400m.In May, Benin blocked crude exports via its port from landlocked Niger, leading to a souring of relations between the two West African nations. Benin has demanded that the Niger junta reopen its border to Benin’s goods and then normalise relations.Earlier in June, Benin’s authorities detained five Niger nationals for allegedly entering Benin’s Seme-Kpodji pipeline terminal under false pretences.Niger has rejected the charges and claims that the group was there to ensure the loading of crude, complying with a previously signed agreement.
China’s Natural Gas Imports Hit Record High in May as Rebound Continues China, the world’s largest LNG importer, could bring in up to 80 million tons (Mt) this year as strong demand from the industrial, power generation, and transport sectors support consumption. NGI's Asia LNG Parity Price chart and graph. China’s liquefied natural gas imports surged 13% year/year in 2023 to 74.31 Mt, according to Kpler data. Those volumes are forecast to continue rising. PetroChina Co. Ltd. expects the country to import 78-80 Mt this year. Meanwhile, Bloomberg New Energy Finance said in a May forecast that it expects China’s LNG imports to reach 81 Mt this year.
Chinas jet fuel exports up 68.1% on year in May on rising travel demand - China's exports of kerosene and diesel surged in May versus year-earlier levels, customs data showed on Tuesday, on strong jet fuel output, international flight demand and high diesel inventories. Jet fuel exports in May stood at 1.59 million tonnes, General Administration of Customs data showed on Tuesday. That was up 68.1 per cent from a year ago and steady with April's exports, which were nearly double the year-earlier level. "Strong middle distillate exports followed the strong production, particularly as oil majors ran hard for jet fuel to meet the Labour Day holiday demand," said Emma Li, Vortexa's senior China oil analyst. China's kerosene output rose 32.7 per cent year-on-year in January-April, the most recent data available. International flights roughly doubled to 58,878 in May from a year earlier, although they remained 28.74 per cent lower than in May 2019, according to civil aviation data provider Variflight. Fuel provided to international flights is counted as an export in customs statistics. Higher middle distillate output "came at the expense of light distillate production, when overall crude throughputs were largely capped by seasonal refinery maintenance - so gasoline exports were down year-on-year," Li of Vortexa said. China's oil refinery output slipped 1.8 per cent from a year ago in May. Gasoline exports stood at 860,000 million metric tonnes last month, down 36.6 per cent from a year earlier. However, that was still more than twice the level of April's 400,000 million metric tonnes, the lowest since July 2015, as the recovering economy led to higher domestic fuel use. Additionally, gasoline refining margins across Asia slumped, contributing to the weakness, as the summer driving season proved weaker than expected. Exports of diesel, which accounts for the biggest share of refinery output, rose 79 per cent in May to 1.07 million metric tonnes, the data showed, driven by high inventories and decent refining margins.
Indian Oil lets contract for major unit at Paradip petrochemical complex | Oil & Gas Journal - Indian Oil Corp. Ltd. (IOC) has let a contract to Technip Energies NV to provide a suite of services for new unit to be installed at IOC’s proposed petrochemical complex to be built nearby and integrated with the operator’s existing 15-million tonnes/year (tpy) refinery in Paradip, Odisha, on India’s northeastern coast. Under the June 20 contract, Technip Energies will license its proprietary technology and deliver the basic engineering design package for the proposed 1.5-million tpy naphtha cracking unit for the complex’s production of ethylene, the service provider said. Technip Energies—which valued the contract between €50 million and €250 million—confirmed its scope of work on the order also covers delivery of key proprietary equipment, including its proprietary Ripple Tray separation trays technology, as well as catalyst supply. The technology licensing and engineering award follows IOC’s late-March 2023 in-principle approval for execution of preliminary project activities—including preparation of a detailed feasibility report—for setting up the proposed Paradip petrochemical complex (OGJ Online, Apr. 4, 2023). The Stage 1 approval estimates the project at a cost of 610.77 billion rupees ($7.39 billion), which would be IOC’s largest single-site investment ever. To become one of four of India’s proposed Petroleum, Chemicals, & Petrochemical Investment Regions (PCPIR), the Paradip petrochemical complex—once completed—will be set up on 284 sq km of land spread over Jagatsinghpur and Kendrapara districts and anchored by IOC’s Paradip refinery and petrochemical units. Together, the refinery and its existing petrochemical units would supply the proposed complex all necessary feedstock, including monoethylene glycol, petcoke-based synthetic ethanol, and paraxylene-purified terephthalic acid (PX-PTA), according to documentation from India’s National Investment Promotion & Facilitation Agency. In addition to the naphtha cracker, IOC and the government of India previously said the Paradip petrochemical complex will house downstream process units for producing derivative products including polypropylene, high-density polyethylene, high-density polyethylene, linear low-density polyethylene, polyvinyl chloride, monoethylene glycol (MEG), among others. The complex also would enable production of niche chemicals such as phenol and isopropyl alcohol.
Oil spill cleanup underway in Singapore after ship collision -- The incident took place between Netherlands-flagged dredger Vox Maxima and Singapore-flagged bunker vessel Marine Honour, according to a statement from the Maritime and Port Authority of Singapore (MPA) late Friday. The latter was berthed at the terminal at the time. The collision, which MPA said took place around 2.20 pm on Jun 14, resulted in oil from a cargo tank on Marine Honour spilling into the water. Oil spill response craft were sent to the location and a cleanup operation was underway as of 6 pm that evening. While MPA said the affected cargo tank has been isolated and the spill contained, video clips shared on social media showed black oil being washed up and coating a large part of one Singapore beach. Bloomberg News was not immediately able to verify the contents of the video. MPA said there was no impact to navigational safety or berthing operations.
Singapore struggling to clean up oil spill coating beaches -- Singapore authorities are scrambling to clean up a major oil spill that has blackened the city-state's southern coastline, days after a shipping accident. On Friday, a Netherlands-flagged dredging boat crashed into a Singaporean fuel ship moored in the shipping straits off the nation. Authorities said the dredger's loss of engine power led it to drift into the Singaporean vessel, puncturing its oil tank. At least half the oil in its tank, about 400 tonnes, spilled out, with large quantities washed ashore. "The allision caused a rupture of one of the Marine Honour's oil cargo tanks, and its contents of low-sulphur fuel oil were released to the sea," Singapore maritime and environment agencies said in a joint statement. Visitors to some of the beach clubs on the popular resort island of Sentosa reported the water was still dark and oily and a smell lingered three days after the incident. Swimming and other sea activities are prohibited for now in Sentosa, while several beaches across the country are closed until further notice. There are concerns for wildlife - with reports from responders of sea snails and other creatures coated in oil. However, initial biodiversity surveys have come back with no major damage reported. “No significant impact to marine biodiversity had been observed, though oil was observed on the roots of some mangrove plants in the area," Dr Karenne Tun from the National Parks Board told the city's Straits Times newspaper. However volunteers taking part in the clean up say it could still be too early to tell. "It is a good sign that we did not see any wildlife in distress today, but we will have to monitor the situation. It could take a while before we see the true impacts from the oil spill," Kua Kay Yaw told the newspaper.
Eyesea and SurfCleaner team up to minimise nearshore oil spill effects - Swedish water treatment firm SurfCleaner has entered into a global partnership with maritime pollution mapping specialist Eyesea to minimise the effects of nearshore oil spills.Eyesea maps analyses and supports the recovery of pollution and maritime hazards using a portfolio of tech tools. The partnership between the two is set to focus on monitoring and minimizing the effect of oil spills in nearshore areas such as ports, harbours, oil terminals, and shipyards. It also aims to improve conditions around stationary installations which are common for handling industrial wastewater.SurfCleaner’s skimmer hybrid technology is capable of separation, removal, and recovery of floating water contaminants. This kind of technology is needed in Singapore at the moment where a Van Oord dredger, Vox Maxima, lost power and control of its steering and crashed into a bunker barge, Marine Honour, which was at anchor. The barge’s hull was badly punctured with reports suggesting at least 400 tonnes of very low sulphur fuel oil spilled out. Due to the tidal currents, parts of the oil spillage have landed along the southern shorelines while an oil sheen was also seen in the waters surrounding Sister’s Islands Marine Park, a 400,000 sq m marine protected area.“Sources of oil contaminations in ports typically occur from petroleum wastewater, equipment leaks and cleaning, tank ruptures, etc. We are keen to communicate to the global maritime community, that our technology can automatically and continuously remove floating pollutants, preventing hydrocarbon pollution in the discharged water,”
Singapore to seek compensation from owner of ship that was hit in oil-spill incident --SINGAPORE’S government agencies will seek compensation for the costs incurred after the June 14 oil spill from the owner of the Singapore-flagged ship that leaked fuel after it was hit by another vessel. The Maritime and Port Authority of Singapore (MPA) said on June 20 that the shipowner of bunker vessel Marine Honour is liable for the costs incurred and that the ship has insurance coverage to meet this liability. It said that this falls under the Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Act 1998, which is Singapore’s enactment of the 1992 International Convention on Civil Liability for Oil Pollution Damage. Under this act, the owner of Marine Honour has strict liability, which means it is liable even if it is not at fault, for the pollution damage caused by the oil spill from its tanker in Singapore waters, MPA explained. It said: “The spirit of the ‘polluter pays’ principle simplifies the claims process by having a clear party against which to pursue claims without potential complications of proving fault.” The owner of Marine Honour can seek recourse against third parties for its pollution liability, it added. Clean-up of Antwerp oil spill completed - The clean-up operations of ships and quay walls are over at Deurganckdok at the Port ofAntwerp-Bruges, after the recent oil spill. All vessels involved in the incident and contaminated have left the Deurganckdok, according to the port authority. “The quay walls are fully available again and there is no longer a selective ban on navigation in the Deurganckdok,” said Port of Antwerp-Bruges in the latest update. The incident occurred on 7 June, when oil leaked during a bunker operation and was discovered in the Deurganck dock late afternoon. After the incident, the authority of the Belgian port decided to close Deurganckdok temporarily.
Fitch maintains its oil and gas price assumptions - Fitch Ratings has maintained most of its oil and gas price assumptions, reflecting broadly unchanged market fundamentals. Fitch’s base-case oil price assumptions have not changed. While Brent crude oil prices reached $90 a barrel in April due to increased tensions in the Middle East, prices declined once the concerns had abated. Opec+'s decision, announced in early June, to phase out additional output cuts, totalling 2.2 million barrels per day (mbpd) by September 2025, caused a sharp decline in prices. This phase-out of cuts, coupled with near-record oil production in the US and rising inventory levels globally, may move the market into a surplus in 2025. Opec+ highlighted that the return of these volumes to the market would depend on market dynamics and could be paused. Opec+'s ample spare capacity of 5.9 mbpd limits potential increases in oil prices and contains the geopolitical risk premium. Fitch expects global oil consumption growth, in mbpd, to continue in 2024–2025 by similar increments to previous averages. Global oil demand growth will fall to 1.1 mbpd in 2024 (2023: 2.3 mbpd) due to electric vehicle expansion and efficiency gains, and slower growth in China, and remain at a similar level in 2025, according to the International Energy Agency. Following a strong increase of almost 1 mbpd in 2023, supported by the post-pandemic rebound in mobility, oil demand in China will rise by only 0.3 mbpd in 2024. The ratings’ agency expects global production growth to be well below 1 mbpd in 2024, largely contained by Opec+'s discipline, while growth will accelerate to well above 1 mbpd in 2025, driven by strong non-Opec+ production increases, mostly in the US, Canada, and Brazil. Russian oil output remains resilient, with 9.3 mbpd produced in April 2024 (2021: about 9.6 mbpd), according to the US Energy Information Administration. Exports are being re-routed to Asia, mainly to China and India. Fitch has kept all Henry Hub base-case assumptions unchanged. US gas production continues to outstrip consumption, although the gap has narrowed. Fitch expects production to decline as a result of announced curtailments. Natural gas prices are extremely volatile and dependent on weather, particularly in the short term. Fitch has maintained all its TTF base-case assumptions. EU gas storage is 68% full, and it believes EU countries will be able to fully refill storage before the heating season, limiting upward price pressure. Nevertheless, Fitch forecasts a seasonal increase in prices in autumn, in line with the usual natural gas price seasonality. “We maintain our view that natural gas markets will remain fairly tight in 2024 and 2025, with new liquefied natural gas capacity in the US and Qatar leading to a gradual decrease in prices from 2026. We have adjusted the 2024 stress-case prices for Brent, WTI, and TTF to align them closer with a realistic stress scenario, considering the prices recorded so far this year,” Fitch said.
Oil prices fall on weaker US consumer demand, China data - Oil prices slipped in Asian trading on Monday after a survey on Friday showed weaker U.S. consumer demand and as May crude production rose in China, the world's biggest crude importer. Global benchmark Brent crude futures for August delivery were down 29 cents, or 0.4%, at $82.33 per barrel at 0330 GMT. U.S. West Texas Intermediate crude futures for July delivery were also down 29 cents at $78.16 a barrel. The more-active August delivery WTI contract slipped 0.4% as well at $77.76 per barrel. That followed prices slipping on Friday after a survey showed U.S. consumer sentiment fell to a seven-month low in June, with households worried about their personal finances and inflation. However, both benchmark contracts still gained nearly 4% last week, the highest weekly rise in percentage terms since April, on signs of stronger fuel demand. "Last week's robust rally was fuelled by forecasts of strong 2024 demand from OPEC+ and the IEA. However, given OPEC's vested interest in crude oil, there is some scepticism around OPEC’s forecasts," said Tony Sycamore, a market analyst at IG in Singapore. "Friday's soft U.S. consumer confidence numbers suggest that the resilience of the American consumer and the U.S. economy will be tested as households run down their savings to combat higher interest rates and cost-of-living pressures," he added. Meanwhile, China's May domestic crude oil production rose 0.6% on year to 18.15 million tonnes, according to data released by the National Bureau of Statistics on Monday. Year-to-date output was 89.1 million tonnes, up 1.8% from a year earlier. National crude oil throughput fell 1.8% in May over the same year-ago level to 60.52 million tonnes, with year-to-date totalling 301.77 million tonnes, up 0.3% from a year ago. The country's May industrial output lagged expectations and a slowdown in the property sector showed no signs of easing, adding pressure on Beijing to shore up growth. The flurry of data on Monday was largely downbeat, underscoring a bumpy recovery for the world's second-largest economy. On the geopolitical front, concerns of a wider Middle East war lingered after the Israeli military said on Sunday that intensified cross-border fire from Lebanon's Hezbollah movement into Israel could trigger serious escalation. After the relatively heavy exchanges over the past week, Sunday saw a marked drop in Hezbollah fire, while the Israeli military said that it had carried out several air strikes against the group in southern Lebanon. Markets in key oil trading hub Singapore and other countries in the region were closed for a public holiday on Monday.
Oil Weekly: Futures Steady on Mixed China Macros, Refining Slump -- Oil futures steadied Monday morning, after official Chinese data released overnight revealed mixed economic performance in one of the key locomotives of global oil demand growth. Data from the National Bureau of Statistics of China revealed slowing industrial growth in May, with both industrial production and fixed asset investments disappointing to the downside. While retail sales in May grew more than expected, up 3.7% year-on-year, they were overshadowed by a slowdown in refiner activity. NBS data revealed the second consecutive year-on-year decline in crude oil processing, down 3.3% year-on-year, tempering oil demand growth expectations. In the U.S., gasoline and diesel inventories continued to expand alongside crude oil stockpiles among emerging signs of a slower-than-expected summer driving season. According to Energy Information Administration data, gasoline demand trailed year-ago levels by 1.3% in the four weeks leading up to June 7, and distillate fuel oil supplied to domestic markets was down 3.5% year-on-year. A potential turn-around is not likely to come any time soon: the University of Michigan's preliminary consumer confidence index for June fell to a seven-month low 65.6. Consumer's expectations have been falling since the beginning of the year, and their assessment of current conditions hasn't been this low since December 2022. Macroeconomic data releases are set to provide more clarity this week, with U.S. industrial production and retail sales data out Tuesday and the EIA's weekly inventory report scheduled for Thursday release, sandwiched between week two regional Federal Reserve manufacturing indices. Near 7:45 a.m. EDT Monday, WTI futures for July delivery were trading near $78.73 barrel (bbl), up $0.28, and Brent for August delivery hovered around $82.91 bbl, up $0.29. RBOB for July was up $0.0164 gal to $2.4160, and ULSD for July delivery gained $0.0100 gal to $2.4806.
Oil jumps, settles at highest in over a month on demand optimism (Reuters) - Oil prices surged nearly $2 a barrel on Monday to their highest settlement levels in over a month, adding to last week's gains as investors grew more optimistic on the demand outlook. U.S. West Texas Intermediate crude futures gained by $1.88, or 2.4%, to settle at $80.33 a barrel, the highest since the end of April. Global benchmark Brent crude gained $1.63, or 2%, to $84.25 a barrel, also the highest since April. Last week, both benchmarks posted their first weekly gain in four weeks after reports from the OPEC+ producer group, the International Energy Agency and U.S. Energy Information Administration raised confidence that oil demand will improve in the second half of the year and help inventories draw down. Reassurances from OPEC+ that a plan to raise supplies from the fourth quarter of this year could be paused or reversed based on market conditions also helped prices firm. That plan, unveiled after the group's meeting on June 2, had led to a sharp selloff in prices. "The outlook for strong fuel demand into the coming quarter and Saudi reassurance about the October hike being subject to prevailing conditions and added focus on quota breakers to bring production down and into line all seems to be supporting," Investors last week repurchased some of the petroleum they had sold the week before, data from the Commodity Futures Trading Commission showed on Friday. "Those funds who thought we were heading into a production battle, had their concerns quickly assuaged when OPEC+ members went on a PR campaign to assure the world their changes to production would be market dependent," Economic data from China also supported hopes of stronger oil demand from the top importer, Hodes said. Manufacturing investment in China in the first five months of this year showed robust growth of 9.6%, government data showed on Monday. Other data was mixed, however, with industrial output lagging expectations. Oil prices have also been supported by a rising geopolitical risk premium, AEGIS Hedging analysts noted on Monday. Concerns of a wider Middle East war lingered after the Israeli military said on Sunday that intensified cross-border fire from Lebanon's Hezbollah movement into Israel could trigger serious escalation.
Crude Oil Falls Over Drop In China’s Refining Activity - BizWatchNigeria.Ng - Due to uncertainty about demand in China and the United States, the two countries that consume the most oil worldwide, oil prices fell on Tuesday. Data show that China’s oil refinery output dropped for a second month in a row, reaching its lowest point of the year. According to the American Petroleum Institute’s most recent data, US inventories increased at the same time. ICE Brent crude closed at $84.12 per barrel on the market, down 0.15% from the previous trading session’s closing price of $84.25 per barrel. West Texas Intermediate (WTI) traded at $79.58 per barrel at the same time, a 0.18% drop from the previous session that closed at $79.72 per barrel. A global oil demand boost from China is likely to be significantly lower this year as the country’s crude oil processing could stagnate for only the second time in two decades, Commerzbank said in a note on Tuesday. The International Energy Agency only expects an increase of 500,000 barrels per day in China this year, compared with an increase of 1.5 million b/d in 2023. At the same time, global oil demand is expected to increase by 1 million b/d less this year compared with 2023, the bank noted. China’s National Bureau of Statistics on Monday reported 14.3 million b/d of crude oil processing by Chinese refineries for May, slightly lower than the previous month and the lowest in five months. Crude oil processing in the first five months of 2024 amounted to 14.5 million b/d, roughly unchanged from the previous year. Crude oil processing was affected by regular maintenance work at the largest state and private refineries in May, overcoming a slight improvement in small independent refineries, according to the consultancy Oilchem. Even more processing capacities are likely to be affected by maintenance work in June than in May, Commerzbank said, citing the consultancy firm GL Consulting. There is an ongoing uncertainties over the timing of the US Federal Reserve’s (Fed) interest rate cut continue to raise demand concerns. The Fed announced its monetary policy decisions and economic projections last week. The bank did not change the policy rate in line with expectations and kept it constant at 5.25–5.50%. Following the meeting, Fed Chairman Jerome Powell said the timing was not right to start easing monetary policy. Although inflation in the US showed signs of slowing down, the Fed reduced its interest rate cut forecast for this year from three to one.
The Market Rallied on Comments Made by New York Federal Reserve President, John Williams - The oil market on Tuesday continued to trend higher following comments from a Federal Reserve policymaker on the future of interest rate cuts. The market traded mostly sideways in overnight trading and posted a low of $79.77 as it retraced some of Monday’s sharp gains. However, the market rallied on comments made by New York Federal Reserve President, John Williams, who stated that interest rates will come down gradually over time, although he declined to say when the U.S. central bank will start its monetary policy easing. It extended its gains to over $1.30 as it posted a high of $81.67 ahead of the close. The market was also supported ahead of the release of the weekly petroleum stocks reports later on Tuesday and Thursday morning which are expected to show a draw in crude stocks of over 4 million barrels. The July WTI contract settled up $1.24 at $81.57 and the August Brent contract settled up $1.08 at $85.33. The product markets ended the session higher, with the heating oil market settling up 3.83 cents at $2.5208 and the RB market settling up 3.63 cents at $2.4832. Goldman Sachs stated that as summer inventory draws materialize, the price of Brent crude will increase further to an August peak of $86/barrel led by rising time spreads. Separately, Goldman Sachs said production growth in the Permian Basin is likely to gradually slow down from a strong output level of 520,000 bpd in 2023 to 270,000 bpd in 2026. It said “Robust Permian growth and high OPEC spare capacity will likely support ceiling of our $75-$90 Brent forecast in the short run.” The American Petroleum Institute, the National Corn Growers Association, the American Farm Bureau Federation and the Owner-Operator Independent Drivers Association said on Tuesday they were suing President Joe Biden’s administration over its plan to cut emissions from heavy-duty vehicles, arguing the regulations will cause economic harm. This spring, the U.S. Environmental Protection Agency finalized new rules for models of semi-trucks, buses and other heavy-duty vehicles released from 2027 to 2032 in a bid to cut 1 billion tons of greenhouse gas emissions through 2055. The corn lobby group said they had joined the suit, arguing in favor of other methods to fight climate change like biofuels. The Buzzard oilfield in the North Sea resumed output over the weekend following a production outage last month. CNOOC reported an outage at the field on May 28th. Phillips 66 said the start-up of Canada’s Trans Mountain pipeline expansion project has tightened its margins. The pipeline project was expected to triple the flow of oil from Alberta to Canada’s Pacific coast to 890,000 bpd. Exxon Mobil Corp reported emissions at its 564,440 bpd Baytown, Texas refinery. It reported an unplanned shut down of its hydrofining unit 10. It said there is minimal impact to production. Citgo Petroleum Corp was starting up units following the completion of planned maintenance activities at its 167,500 bpd Corpus Christi West plant in Texas. TotalEnergies reported to state regulators a compressor trip was responsible for flaring that began at its 238,000 b/d Port Arthur refinery back on June 14th.
Oil settles over 1% higher on mounting tension in Europe, Mideast (Reuters) - Oil settled more than 1% higher on Tuesday due to escalating geopolitical risk in Europe and the Middle East, where wars continue to threaten global supply. Brent crude futures settled up $1.08, or 1.3%, at $85.33 per barrel. U.S. West Texas Intermediate crude futures ended $1.24, or 1.5%, higher at $81.57 a barrel. Global benchmark Brent has clambered back from an early-June close of $77.52, yet remains off its $90 peaks from mid-April. Prices rose after a Ukrainian drone strike caused a large fire in a fuel tank at an oil terminal in Russia's southern port of Azov, according to Russian officials and a Ukrainian intelligence source. The port of Azov has two oil product terminals, which handled a total of about 220,000 tons of fuel for export during the period from January to May. The ongoing attacks on Russia's oil refining complex pose a threat to physical global supply, as well as boosting the risk premium priced into crude futures. “The Ukrainian attack reminds the market that Russian energy infrastructure is very much in the crosshairs, the global market needs those barrels of crude and refined products to keep prices in check,” . Meanwhile, Israeli Foreign Minister Israel Katz warned that a decision on an all-out war with Hezbollah was coming soon even as the U.S. tries to avert a greater war between Israel and Lebanon's Hezbollah movement. Special envoy Amos Hochstein to U.S. President Joe Biden, said he had been dispatched to Lebanon immediately following a brief trip to Israel because the situation was "serious." "Everywhere you look the geopolitical risk factor is very high,". "We have not seen a major impact on supply but that could change really quickly," he added. Prices also climbed after New York Federal Reserve President John Williams said interest rates will come down gradually but gave no precise timetable. Later, oil came under pressure when Boston Federal Reserve President Susan Collins cautioned that it was "too soon to determine whether inflation is durably on a path back to the 2% target." The market is also watching U.S. stockpile data due this week for hints on the oil demand outlook during summer driving season. U.S. crude oil inventories posted a surprise build last week while gasoline stocks fell, market sources said, citing American Petroleum Institute figures. The API figures showed crude stocks rose by 2.264 million barrels in the week ended June 14, the sources said on condition of anonymity, compared with an expected draw of 2.2 million barrels. Gasoline inventories fell by 1.077 million barrels, and distillates rose by 538,000 barrels. Official inventory data from the U.S. Energy Information Administration will be released at 11:00 a.m. EDT on Thursday, delayed a day due to the Juneteenth holiday.
Oil dips after hitting seven-week highs on demand hopes, war jitters (Reuters) - Oil prices dipped on Wednesday after hitting seven-week highs as summer demand optimism and concerns over escalating conflicts offset an industry report that said U.S. crude inventories unexpectedly rose.Brent crude futures slipped 6 cents, or 0.1%, to $85.27 a barrel by 1943 GMT, while U.S. West Texas Intermediate crude was down 10 cents, or 0.1%, at $81.47 per barrel.Brent reached $85.84 a barrel earlier in the session, its highest since May 1, while WTI traded up to $81.96 a barrel, the highest level since April 30. Trading activity was thin due to a U.S. federal holiday."The current snapshot presents an underwhelming picture but there are green shoots that indicate a more optimistic outlook," The Brent price being $8 over the lows hit in early June "shows genuine optimism that the global oil balance will eventually tighten," Both benchmarks, having recovered strongly in the last two weeks, gained more than $1 in the previous session after a Ukrainian drone strike led to an oil terminal fire at a major Russian port.In the Middle East, Israeli Foreign Minister Israel Katz warned of a possible "all out war" with Lebanon's Hezbollah, even as the U.S. attempted to avoid a broader conflict between Israel and the Iran-backed group.An escalating war risks supply disruption in the oil-producing region."The potential escalation of tensions in the Middle East is adding some supply risk to the oil demand equation," , adding recent U.S. economic data supported bets the Federal Reserve would move towards cutting interest rates in coming months.China data this week showed May industrial output lagged expectations, but retail sales, a gauge of consumption, marked the quickest growth since February.Meanwhile, U.S. crude stocks rose by 2.264 million barrels in the week ended June 14, market sources said on Tuesday, citing American Petroleum Institute figures. Analysts polled by Reuters had expected a 2.2-million barrel draw in crude stocks.However, gasoline inventories fell by 1.077 million barrels, while distillates rose by 538,000 barrels, the sources said, speaking on condition of anonymity.
WTI Extends Gains After Surprise Crude Inventory Draw; Pump-Prices Set To Soar -- Oil prices continue to extend their gains as "price-supportive rhetoric" from OPEC and its allies forced algorithmic traders to switch from short to long as oil prices have tracked financial assets higher in recent weeks. “Today we are waiting for the inventory data,” “After the API data, the market is prepared for a build, so I guess there is room for a positive surprise here.”API
- Crude +2.26mm
- Cushing +524k
- Gasoline -1.08mm
- Distillates +538k
DOE
- Crude -2.55mm
- Cushing +307k
- Gasoline -2.28mm
- Distillates -1.73mm
Against the API report's build, the official data showed a decent crude inventory draw of 2.26mm barrels and products also saw notable draws. Gasoline stocks fell by the most since March...Graphs Source: Bloomberg The Biden admin continued to add (only marginally) to the SPR...
U.S. crude oil trades above $82 per barrel, on pace for second weekly gain in a row - U.S. crude rose Thursday to trade above $82 per barrel, with the benchmark heading for its second weekly gain in a row, as oil and gasoline inventories fell.West Texas Intermediate has gained 4.7% this week, while global benchmark Brent is up 3.7%. Prices found support Thursday as U.S. crude and gasoline stockpiles fell for the first time in weeks, suggesting an uptick in demand.Here are Thursday's closing energy prices:
- West Texas Intermediate July contract: $82.17 per barrel, up 60 cents, or 0.74%. Year to date, U.S. oil has gained 14.6%.
- Brent August contract: $85.71 per barrel, up 64 cents, or 0.75%. Year to date, the global benchmark is ahead by 11.2%.
- RBOB Gasoline July contract: $2.50 per gallon, up 0.71%. Year to date, gasoline has risen 18.9%.
- Natural Gas July contract: $2.74 per thousand cubic feet, down 5.78%. Year to date, gas is up roughly 9%
Crude inventories declined by 2.5 million barrels last week, according to data released by the Energy Information Administration Thursday. The drawdown outpaced the expectations of analysts surveyed by Reuters.Gasoline stocks fell by 2.3 million barrels, while analysts forecast a 620,000 barrel build. And distillate inventories, which includes diesel, dropped by 1.7 million barrels, while analysts expected a 261,000 barrel increase.Patrick de Haan, head of petroleum analysis at GasBuddy, described the drawdowns as the "wrong trifecta," warning that prices at the pump are likely to rise as a consequence.JPMorgan analysts told clients in a Thursday note that the seasonal uptick in oil demand, refinery runs, weather risks, and OPEC+ extending production cuts through the third quarter should lead to a tighter market as inventories draw down. The investment bank forecasts Brent will hit $90 per barrel in September as the market tightens on falling inventories.Crude oil has proven resilient with upside momentum firming, Ryan McKay, senior commodity strategist at TD Securities, told clients in a research note Wednesday. He cautioned, however, that the rally could fade. Commodity trading advisors could ease up on buying and liquidate some of their lengths if U.S. oil drops below $80.33 and Brent falls under $84.92, McKay said.Tensions are also escalating in the Middle East again, with Israel and the Iran-backed militia group Hezbollah threatening war.Israel's military said Tuesday in a statement on social media that "operational plans for an offensive in Lebanon were approved and validated." On Wednesday, Hezbollah leader Hassan Nasrallah warned Israel in a televised speech that the militant group would fight with "no rules and with no red lines" if war breaks out.Oil prices rallied in April to annual highs as OPEC member Iran and Israel nearly went to war. Traders shifted focus back to market fundamentals after tensions eased, unwinding the risk premium that had lifted crude futures."While many market participants have relegated this conflict to the back burner, we continue to warn that an Israel-Hezbollah confrontation could prove to be the tripwire for direct Iranian involvement in the war given Tehran's staunch support for its most important armed proxy," Helima Croft, global head of commodity strategy at RBC Capital Markets, told clients in Thursday note.
Oil hits seven-week high on renewed US Fed rate cut hopes, Middle-East war jitters; Brent nears $86/bbl -Crude oil futures hit a seven-week high on Thursday, June 20, as fresh economic data on a cooling US jobs market added to expectations that the US Federal Reserve could still cut interest rates sooner this year. Escalating conflict in the Middle East with fears of supply disruption in the major oil-producing region also supported the price uptrend.Brent crude futures were last up 78 cents, or 0.9 per cent, to $85.85, having earlier hit $85.89, a high not seen since May 1. US West Texas Intermediate (WTI) futures for July, which expire on Thursday, gained 70 cents, or 0.9 PER CENT, to $82.27. There was no WTI settlement on Wednesday because of a US public holiday, which kept trading largely subdued. The more active August contract was up 60 cents at $81.31, according to Reuters. Coming to domestic prices, crude oil futures last traded 0.91 per cent higher at ₹6,794 per barrel on the multi commodity exchange (MCX).The number of Americans filing new claims for unemployment benefits fell last week. Labour market momentum has declined with the overall economy as the Federal Reserve tries to tame inflation. With that pressure now subsiding, a rate cut by the US central bank this year remains on the table.-That could bolster oil prices, which have been dragged down this year by lacklustre global demand. A rate cut by the US would make borrowing cheaper in the world's largest economy, galvanising the appetite for oil as production picks up. Oil prices are also likely to remain supported by a growing geopolitical risk premium driven by conflict in the Middle East, according to analysts.-Israeli forces pounded areas in the central Gaza Strip overnight, while tanks deepened their advance into Rafah in the south. However, expectations of an inventories build appear to be overshadowing fears of escalating geopolitical stress for now, according to some analysts.-An industry report released on Tuesday showed that US crude stocks rose by 2.264 million barrels in the week ended June 14 while gasoline inventories fell, market sources said, citing American Petroleum Institute figures.-A summer uptick in oil demand, refinery runs and ongoing weather risks added to extended production cuts by the OPEC producer group mean that "oil balances should tighten and inventories should begin to draw during the summer months", as per JPMorgan commodities analysts.-Investors also digested the latest Bank of England's or BoE decision to keep its main interest rate unchanged at a 16-year high of 5.25 per cent in its monetary policy meeting ahead of Britain's national election on July 4.Both benchmarks have surged more than six per cent over the past two weeks, driven by outcomes from the recent OPEC+ meeting and a Ukrainian drone strike causing a fire at a major Russian port oil terminal. The potential escalation of tensions in the Middle East is adding supply risk to the oil demand equation, according to analysts.‘’Israeli tanks advanced deeper into the Gaza Strip city of Rafah on Wednesday, while a top Israeli official recently warned of an impending “all-out war" with Lebanon’s Hezbollah. Robust global demand growth forecasts from OPEC, the IEA and US EIA, which all predicted stronger consumption in 2H 2024 boosted market sentiment,'' said Kaynat Chainwala, AVP-Commodity Research, Kotak Securities.In China, recent data showed that May's industrial output lagged expectations. However, retail sales, a key indicator of consumption, grew at the fastest rate since February. The rise in US crude stocks limited further gains in prices.‘’We expect crude oil prices to remain volatile. Crude oil has support levels at $79.65 and $79.10, with resistance at $81.40 and $82.00.
Oil prices ease on strong dollar, mixed global economic news (Reuters) - Crude prices eased about 1% on Friday on worries that global oil demand growth could be hit by a strong U.S. dollar and negative economic news from some parts of the world. Prices declined despite signs of improving U.S. oil demand and falling fuel inventories that helped boost crude prices to a seven-week high a day earlier. Brent futures fell 47 cents, or 0.6%, to settle at $85.24 a barrel, while U.S. West Texas Intermediate crude (WTI) ended 56 cents, or 0.7%, lower at $80.73. The decline pushed WTI out of technically overbought territory for the first time in four days, while Brent futures remained overbought for a fourth day in a row for the first time since early April. For the week, both crude benchmarks were up about 3% after gaining about 4% last week. The U.S. dollar rose to a seven-week high versus a basket of other currencies with the Federal Reserve's patient approach to cutting interest rates contrasting with more dovish stances elsewhere. The Fed hiked interest rates aggressively in 2022 and 2023 to tame a surge in inflation. The higher rates boosted borrowing costs for consumers and businesses, which can slow economic growth and reduce demand for oil. A stronger U.S. dollar can also reduce demand for oil by making greenback-denominated commodities like oil more expensive for holders of other currencies. In the world's biggest oil consumer, U.S. business activity crept up to a 26-month high in June amid a rebound in employment, but price pressures subsided considerably, offering hope that a recent slowdown in inflation was likely to be sustained. U.S. existing home sales, however, fell for a third straight month in May as record-high prices and a resurgence in mortgage rates sidelined potential buyers. Data from the U.S. Energy Information Administration on Thursday showed total product supplied, a proxy for oil demand, rose by 1.9 million barrels per day last week to 21.1 million barrels per day. Despite the decline in crude prices, U.S. gasoline futures climbed for a fourth day to a one-month high on rising demand during the summer driving season and a drop in inventories. In India, refiners processed nearly 1.3% more crude oil in May than a year earlier, provisional government data showed, while the share of Russian supplies in imports to India, the world's third biggest oil consumer, increased. "Signs of stronger demand in Asia also boosted sentiment. Oil refineries across the region are bringing back some idled capacity after maintenance," analysts at ANZ Research said. But in the euro zone, business growth slowed sharply this month as demand fell for the first time since February. In China, the world's second biggest oil consumer, Beijing warned that escalating frictions with the European Union over electric vehicle imports could trigger a trade war. Geopolitical tensions added to the mixed picture. Ukraine's military said its drones struck four oil refineries, radar stations and other military objects in Russia. The head of Lebanon's Hezbollah this week pledged a full-on conflict with Israel in the event of a cross-border war and also threatened EU member Cyprus for the first time. In Ecuador, state oil company Petroecuador has declared force majeure over deliveries of Napo heavy crude for exports following the shutdown of a key pipeline and oil wells due to heavy rains.
Ukraine Drone Strikes Score Direct Hits On Two More Russian Oil Depots - An overnight Ukrainian cross-border drone attack impact several regions of Russia, resulting in the death of a civilian woman in the Krasnodar region, and setting several oil depots ablaze in other areas.A Russian defense ministry statement Thursday described "terrorist attacks" which involved groups of unmanned aerial vehicles coming from Ukraine territory. Six drones were intercepted over the Republic of Adygea, three over Bryansk region, and three over the Krasnodar region, as well as some over Rostov, Belgorod, and Oryol.Drone attacks reported on oil depots in Enem, Republic of Adygea, Russia, and Platonovka, Tambov Oblast, Russia. Both locations are about 420 kilometers from nearest Ukrainian-controlled territory. Ukraine is continuing its campaign to cripple Russia's oil supply infrastructure. pic.twitter.com/tUtHFm6OjNThe woman was killed in Krasnodar as a result of a direct drone hit on her now "completely destroyed" house, according to the regional governor. Additionally a statement from the governor's office of the neighboring republic of Adygea said that one or more drones struck an oil depot in the village of Enem and ignited an area as large as 400 square meters.Another oil depot was set on fire, with an oil storage tank destroyed, in the central Tombov region, according to reports. "Early this morning there was an explosion and a tank caught fire on the territory of the Platonovskaya oil depot," Maksim Yegorov, the governor of Tambov region confirmed.Starting early this year the Security Service of Ukraine (SBU) and Ukraine's Military Intelligence Directorate (GUR) began to openly tout an active campaign to take out Russia's oil refineries and thus directly harm its energy exports.As has become the expected response, Russia's military early on Thursday pummeled Ukraine's own energy infrastructure. The war-ravaged country has struggled to keep the lights on for large sectors of the population for several months. Rolling blackouts have been coordinated since March."In retaliation to the Kiev regime’s attempts to damage Russia’s energy facilities, Russian troops delivered a combined strike by air-launched long-range precision weapons and unmanned aerial vehicles against Ukrainian energy sites providing for the production of armament and military hardware for the Ukrainian army," the Russian defense ministry announced. "The goals of the strike were achieved. All the designated targets were struck."This new barrage of Russian missiles and drones reportedly caused "significant" damage to a thermal power plant, Ukraine officials said. "The attack on energy infrastructure in four regions damaged equipment, wounded seven workers and cut off electricity to more than 218,000 consumers," the energy ministry said.
Vessels Struck in Red Sea Region - In its latest Maritime Security Threat Advisory (MSTA), which was released this week, Dryad Global highlighted that two vessels were recently hit in the Red Sea region - the M/V Tutor and the M/V Verbena. “On 12 June 2024, the Liberian-flagged, Greek-owned bulk cargo carrier M/V Tutor was struck in the Southern Red Sea,” Dryad noted in the MSTA. “After being targeted by an unmanned surface boat, drones, and ballistic missiles, the coal carrier was severely damaged. The attack resulted in severe flooding and damage to the engine room, marking the Houthis’ first successful use of a boat as a weapon,” it added. “The crew abandoned the ship and were rescued by coalition forces. The vessel has been abandoned and is drifting in the vicinity of the last reported position. The Tutor was loaded at the port of Ust-Luga, Russia, and discharged at Port Said, Egypt on 09 June 2024. The next scheduled stop was Aqaba, Jordan en route to India,” it continued. Dryad also noted that, on June 13, the “Palauan-flagged, Ukrainian-owned, Polish-operated vessel M/V Verbena was struck by two cruise missiles, resulting in damage and fires on board, with one civilian mariner seriously injured”. “The injured sailor was airlifted to another ship to receive medical attention. Crew members were battling the fires for two days but were unsuccessful,” it added. “On 15 June 2024, the merchant vessel’s crew evacuated the ship. The unlit ship is now drifting 30 nautical miles northeast of Djibouti, still on fire and sinking,” Dryad said. In the MSTA, Dryad outlined that a U.S.-led effort has failed to deter the Houthi’s targeting of ships and warned that the threat is expected to persist. “Ship traffic through the strait has dropped by 67 percent and tanker traffic by about 50 percent,” Dryad said in the MSTA. “Since the attacks began in November 2023, the U.S. Navy has spent approximately $1 billion on munitions to defend the Red Sea, conducting over 450 strikes and intercepting more than 200 drones and missiles,” it added. “U.S. officials are concerned that the conflict will be unsustainable for the defense industrial base, which is already overburdened with demands for weapons from Ukraine and Israel,” it continued. “The Houthi supply of weapons from Iran is cheap and sustainable, whereas the coalition’s supply chains are constrained, and logistics tails are long and costly,” it went on to state. Dryad noted in the report that coalition forces are “engaged in whack-a-mole, whereas the Houthis are taking the long game”.
Houthis Sink Another Ship in Red Sea, Killing Sailor - A Greek-owned bulk carrier ship sank on Wednesday nearly a week after an attack by Yemen’s Houthis, which reportedly killed one crew member on board. The incident marks the second vessel downed by the armed faction following dozens of raids on ships transiting the Red Sea.Dubbed the Tutor, the cargo ship capsized off the Yemeni coast days after it was targeted by at least two Houthi munitions, with the British militarysuggesting it was struck by an “unknown airborne projectile” and another water-borne craft – likely an unmanned drone boat. The vessel took on water for some time before it ultimately sank.While most of the Tutor’s crew was quickly evacuated with the help of the US Navy, White House National Security Council spokesman John Kirby told reporters that one Philippine sailor was killed in the attack. The mariner has yet to be identified and Manila has so far offered no public comment, but the Associated Press noted the man has been missing since the Houthi strikes last week.The Houthis have launched more than 60 attacks on vessels in the Red Sea since Israel’s assault on Gaza kicked off last October, according to the AP, often targeting specific ships alleged to have ties to Tel Aviv. At least four sailors have been killed in the strikes, while dozens of hostages have been captured. Another UK-owned ship was also sunk by a missile in March, though the attack resulted in no casualties.Leading members of the shipping industry have condemned the sinking of the Tutor, with top shipping associations issuing a joint statement on Wednesday calling for a “swift de-escalation of the situation in the Red Sea.” The groups urged “states with influence in the region” to help safeguard commercial shipping lanes, adding “It is deplorable that innocent seafarers are being attacked while simply performing their jobs.”The US military has responded to the Houthi attacks in force, launching a flurry of missiles against targets in Yemen since January. As of April, the militant group said hundreds of joint US-UK strikes had killed at least 37people and injured dozens more, while a more recent operation left 16 dead in one day. Despite the bombing campaign, however, President Joe Biden previously acknowledged the mission was unlikely to prevent uture shipping raids.
Houthi video shows Red Sea attack on MV Tutor that led to sinking -- Yemen’s Houthi rebels released a video showing a June 12 attack on the Greek-owned MV Tutor coal carrier in the Red Sea. The ship later sank, maritime officials said.
Amount of Israeli bombs dropped on Gaza surpasses that of World War II - Israel has dropped more than 70,000 tons of bombs on the Gaza Strip since last October, far surpassing the of Dresden, Hamburg, and London combined during World War II. In late April, Euro-Med Human Rights Monitor estimated that approximately 70,000 tons of bombs were dropped on Gaza, covering the six-month period between Oct. 7 and April 24. "It is estimated that Israel has dropped more than 70,000 tons of explosives on the Gaza Strip in addition to its bulldozing operations, resulting in the destruction of all buildings at a distance of up to one kilometer in the east and north of the Strip in order to create a so-called buffer zone," according to the Geneva-based human rights monitor organization. The Germans bombed London, dropping around 18,300 tons of bombs between 1940 and 1941, according to various estimates, including archives from the New York Times. The Allies dropped 8,500 tons of bombs on Hamburg in the summer of 1943, said Hendrik Althoff, a research fellow at the Department of History at the University of Hamburg. The Allies also used 3,900 tons of bombs on Dresden in February 1945, according to historical records. Israel has continued its brutal offensive on Gaza following the Oct. 7 Hamas incursion, despite a UN Security Council resolution demanding an immediate cease-fire. More than 36,500 Palestinians have since been killed in Gaza, mostly women and children, and nearly 83,000 others injured, according to local health authorities. Nearly eight months into the Israeli war, vast swathes of Gaza lay in ruins amid a crippling blockade of food, clean water, and medicine. Israel stands accused of genocide at the International Court of Justice, which in its latest ruling has ordered Tel Aviv to immediately halt its operation in Rafah, where over a million Palestinians had sought refuge from the war before it was invaded on May 6.
The war in Gaza has wiped out entire Palestinian families. AP documents 60 who lost dozens or more (AP) — Youssef Salem is among the very last survivors of his Gaza family, a clan so close they knew without thinking how blood and marriage bound them across generations and city blocks.Then, branch by branch, 173 of his relatives were killed in Israeli airstrikes in a matter of days in December. By spring that toll had risen to 270.Bones and flesh strewn over the ruins of family homes. Blond curls of a young cousin peeking through bricks. Unrecognizable bodies piled on a donkey cart. Lines of burial shrouds.These images are what survivors are left with from hundreds of families in Gaza like the al-Aghas, Salems and Abu Najas.To a degree never seen before, Israel is killing entire Palestinian families, a loss even more devastating than the physical destruction and the massive displacement.An Associated Press investigation identified at least 60 Palestinian families where at least 25 people were killed — sometimes four generations from the same bloodline — in bombings between October and December, the deadliest and most destructive period of the war.Nearly a quarter of those families lost more than 50 family members in those weeks. Several families have almost no one left to document the toll, especially as documenting and sharing information became harder.Youssef Salem’s hard drive is stocked with photos of the dead. He spent months filling a spreadsheet with their vital details as news of their deaths was confirmed, to preserve a last link to the web of relationships he thought would thrive for generations more.“My uncles were wiped out, totally. The heads of households, their wives, children, and grandchildren,” Salem said from his home in Istanbul.In the last two decades, 10 members of his family were killed in Israeli strikes. “Nothing like this war,” he said.The AP review encompassed casualty records released by Gaza’s health ministry until March, online death notices, family and neighborhood social media pages and spreadsheets, witness and survivor accounts, as well as a casualty data from Airwars, a London-based conflict monitor.The Mughrabi family: more than 70 were killed in a single Israeli airstrike in December. The Abu Najas: over 50 were killed in October strikes, including at least two pregnant women. The large Doghmush clan lost at least 44 members in a strike on a mosque; AP documented over 100 family members killed in following weeks. By the spring, over 80 members of the Abu al-Qumssan family were killed.“The numbers are shocking,” said Hussam Abu al-Qumssan, who lives in Libya and has taken over documenting the family death toll as his relatives in Gaza struggled to keep track.In the 51-day war of 2014, the number of families that lost three or more members was less than 150. In this one, nearly 1,900 families have suffered multiple deaths by January, including more than 300 that lost over 10 members in the first month of the war alone, according to Gaza’s health ministry.Ramy Abdu, chairman for the Geneva-based EuroMed Human Rights Monitor, which monitors the Gaza war, said dozens of his researchers in Gaza stopped documenting family deaths in March after identifying over 2,500 with at least three deaths. “We can hardly keep up with the total death toll,” Abdu said.The killing of families across generations is a key part of the genocide case against Israel, now before the International Court of Justice. Separately, the International Criminal Court prosecutor is seeking arrest warrants for two Israeli leaders for war crimes and crimes against humanity, including for the intentional killing of civilians, as well as for three Hamas leaders over crimes connected to the Oct. 7 attack.Palestinians will remember entire families that have disappeared from their lives, Abdu said: “It is like a whole village or hamlet has been wiped out.”
UN: Israeli Authorities Responsible for Crimes Against Humanity - Speaking to the UN Security Council, the head of an investigatory body probing the Gaza war found Israeli officials committed war crimes during military operations in the Strip.Navi Pillay, chairperson of the Independent International Commission of Inquiry on the Occupied Palestinian Territory, announced her findings to the UNSC on Wednesday, stating the commission had concluded that “Israeli authorities are responsible for war crimes, crimes against humanity, and violations of international humanitarian and human rights law.”She explained that those crimes include “extermination, intentionally directing attacks against civilians and civilian objects, murder or willful killing using starvation as a method of War, forcible transfer, gender persecution, sexual and gender-based violence amounting to torture and cruel or inhuman treatment.”The commission noted that Hamas has committed similar crimes throughout the latest conflict.During the eight-month assault on Gaza, the Israel Defense Forces (IDF) have killed over 37,000 Palestinians and injured an estimated 85,000. Israeli bombings have also destroyed most of Gaza’s homes, schools, mosques, hospitals, and farmland. Hundreds of thousands of Palestinians have been plunged into near-famine conditions.Tel Aviv’s onslaught has been aided by a long list of US weapons. A separate report from the UN Human Rights Office published Wednesday documented six cases of Israel using American bombs to kill hundreds of civilians.The report stated that US-made GBU-31 (2,000 lbs.), GBU-32 (1,000 lbs.) and GBU-39 (250 lbs.) bombs were used to strike “residential buildings, a school, refugee camps and a market” between October and December 2023. The UN rights office verified 218 deaths from those six attacks, and said it had indications the number of fatalities could be “much higher.”Pillay explained that the independent commission determined the Israeli strikes were intentional. “We found that the immense numbers of civilian casualties in Gaza and widespread destruction of civilian objects and infrastructure were the inevitable result of an intentional strategy to cause maximum damage,” she said.The commission found Israel’s crimes went beyond using bombs or other conventional weapons but also food, water, and dispossession as weapons of war. Tel Aviv has also forcibly transferred much of Gaza’s population into small enclosures that are “unsafe and uninhabitable.” Pillay also noted that Tel Aviv has engaged in unprecedented violence in the occupied West Bank since October 7, but those crimes have received little attention due to the near-daily atrocities committed in Gaza.
‘Nothing Has Changed’ Since Israel Announced Limited Humanitarian Pause - The head of the UN aid agency for Palestinians (UNRWA) said there has been no change on the ground since Israel’s military claimed it would open a humanitarian aid route in Gaza. After the Israel Defense Forces (IDF) announced it would pause fighting in a limited area during daylight hours, the Israeli prime minister denounced the decision.On Monday, UNRWA chief Philippe Lazzarini said the IDF’s pause has done little to improve the situation in Gaza. “There has been information that such a decision has been taken, but the political level says none of this decision has been taken,” he explained. “So for the time being, I can tell you that hostilities continue in Rafah and in the south of Gaza. And that operationally, nothing has changed yet.”The IDF said it was continuing its operations in Rafah, near the location of the humanitarian route. After a slower initial ground attack, Israeli soldiers recently pushed deeper into the central and western regions of the city.On Sunday, Tel Aviv announced that it would pause military operations during daylight hours along a seven-mile stretch of road in Gaza to relieve a backlog of aid shipments. However, after the policy was rolled out, Israeli officials were quick to downplay and denounce the humanitarian corridor.IDF spokesperson Rear Admiral Daniel Hagari appeared to minimize the significance of the pause. “There is no cessation of fighting in the southern Gaza Strip, and the fighting in Rafah continues. Also, there is no change in the introduction of goods into the Gaza Strip,” he said in a post on X. “The axis carrying the goods will be open during the day in coordination with international organizations, for the transportation of humanitarian aid only.”Israeli Prime Minister Benjamin Netanyahu found even the limited halt to fighting “unacceptable,” while National Security Minister Itamar Ben-Gvir said whoever came up with the idea is a “fool” and should be fired.The IDF announcement came as nearly all of the Palestinians living in Gaza are suffering from severe deprivation and in need of humanitarian assistance. The UN agency for children, UNICEF, recently warned that about 90 percent of kids in Gaza lack nutrition and face “severe” threats to their “survival, growth and development.”Aid deliveries in southern Gaza have been significantly curtailed by Israeli military operations over the past month. In the 30 days following the Israeli assault on Rafah, the number of shipments entering Gaza plummeted to 68 per day – far short of the minimum of 500 needed to sustain the population.
IDF: Netanyahu's Goal of Eliminating Hamas Is Unachievable - The spokesman for the Israeli military explained that Prime Minister Benjamin Netanyahu’s goal of eradicating Hamas is not achievable. The statement comes amid a growing rift between the Israeli leader and the military.In remarks to Israel’s Channel 13 News on Wednesday, Rear Adm. Daniel Hagari, the military spokesperson, explained that the PM’s stated objective in Gaza is an insult to the Israeli people. “This business of destroying Hamas, making Hamas disappear – it’s simply throwing sand in the eyes of the public,” he said. “Hamas is an idea, Hamas is a party. It’s rooted in the hearts of the people – whoever thinks we can eliminate Hamas is wrong.”The statement from Hagari reflects assessments from US intelligence and military officials that destroying Hamas is not something that can be accomplished. The US intelligence community’s threat assessment released in March said that Israel would likely be fighting Hamas for years to come.Netanyahu’s office responded to Hagari’s remarks by saying the prime minister’s ends in Gaza remain unchanged. Netanyahu “has defined the destruction of Hamas’ military and governing capabilities as one of the goals of the war. The Israeli military, of course, is committed to this,” the statement said.It is not the only time Netanyahu has clashed with members of his militaryin recent days. On Sunday, the Israel Defense Forces (IDF) announced a limited pause to operations in a select area of Rafah during daylight hours to allow more aid to reach the Palestinians. Netanyahu quickly denounced the move as “unacceptable.”Other divides have emerged within the Israeli government. Last week, former IDF general Benny Gantz withdrew from the war cabinet over Netanyahu’s refusal to work out a hostage release agreement. Gantz’s exit led Netanyahu to dissolve the war cabinet entirely.Another source of friction is a potential law that would remove the Israeli orthodox community’s exemption from mandatory military service. The controversial measure is becoming an issue for Netanyahu, who demanded his political partners “get a grip” and abandon “petty politics.”“We are at war on several fronts, and we face great challenges and difficult decisions,” he added. “We must all focus solely on the tasks before us: defeating Hamas, returning all our hostages and returning our residents safely to their homes, both in the north and in the south.”Israel is waging a tit-for-tat war with Hezbollah in Lebanon as well as its operations in Gaza and the West Bank, which are expected to last at least five more weeks. US officials are concerned that Tel Aviv will start a wider war with Hezbollah that will grow to include Washington. Some analysts believe that Netanyahu sees Tel Aviv remaining in a state of war as the key to his political survival, as he faces intense public scrutiny over the ongoing war, the failure to prevent Hamas’ surprise attack last year, and multiple corruption scandals, among other controversies.
Report: Israel Plans More Assassinations of Hamas Figures - Tel Aviv plans to ramp up its efforts to assassinate Hamas leaders in order to force the group toward accepting a ceasefire deal, a senior Israeli official told The Times. Prime Minister Benjamin Netanyahu’s government has ruled out a ceasefire or a hostage deal to end the war, which wouldcollapse his fragile far-right ruling coalition, instead seeking to annihilate Hamas and ethnically cleanse the Gaza Strip.Speaking with the outlet on the condition of anonymity, the official said “following the refusal of the leadership of Hamas to accept the deal, Israel has international legitimacy to continue carrying out operations to assassinate senior Hamas members and release hostages.”Though the stated goal of Netanyahu’s onslaught in Gaza is the eradication of Hamas, US intelligence, Israeli intelligence, and now theIsraeli military believe that goal is unachievable. Regardless, Tel Aviv has assassinated some Hamas figures, including at least two senior members. In January, Saleh al-Arouri, an operations chief, was killed in an Israeli drone strike on Beirut. Marwan Issa, chief of staff of the al-Aqsa Brigades, was killed as well in March during a bombing of central Gaza’s Nuseirat refugee camp.Hamas’ leader in Gaza, Yahya Sinwar, and Mohammed Deif, who leads the group’s military wing, remain alive, and Israeli intelligence claims they are hiding in tunnels beneath the city of Khan Yunis. According to The Times, “senior Hamas members outside Gaza, including members of its political bureau, are deemed targets as well.”President Joe Biden unveiled a ceasefire proposal last month, which he framed as an Israeli conception despite Netanyahu’s immediate rejection of any halt in the mass slaughter campaign in Gaza. Subsequently, the offer was supported by the UN Security Council (UNSC) as well as Hamas.The deal consisted of multiple phases. In the first phase there was to be a six-week truce along with an initial exchange of hostages and prisoners. It also proposed an Israeli withdrawal from densely populated areas, the return of displaced civilians to their homes, and a significant increase in humanitarian aid. Amidst the first phase, negotiations were to take place working towards a permanent ceasefire during the second phase. Israeli officials believed the language of the deal was vague enough that Israel and Hamas could enter the first stage without ultimately ending its genocidal war.Recognizing this flaw, Hamas issued a response which contained, as theWashington Post described, “amendments… including a timeline for a permanent ceasefire and the complete withdrawal of Israeli troops from the Gaza Strip.” Since then, Israeli officials deemed this a “complete refusal” of the offer and US Secretary of State Antony Blinken has blamed only Hamas for the lack of progress. Biden has said he believes a deal is unlikely any time soon and Israel has vowed, following the destruction of Rafah, the mass killing of the Palestinians in Gaza will continue apace.
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