US oil prices rose for the first week in four as US inflation figures came in lower than expected, stoking hopes for an interest rate cut, while major institutional forecasts indicated higher demand and higher oil prices for this summer…after falling 1.9% to $75.53 a barrel last week after OPEC reaffirmed their baseline production cuts through 2025 but decided to let their voluntary cuts lapse later this year, the contract price for the benchmark US light sweet crude for July delivery moved higher in early trading on Monday, after analysts from Goldman Sachs forecast that global oil prices would rise to $86 as transportation demand would push the oil market into a deficit this summer, and settled $2.21 higher at $77.74 a barrel despite a stronger U.S. dollar and expectations that the Fed would leave interest rates higher for longer…oil prices traded slightly lower early Tuesday, as traders awaited reports from OPEC, the International Energy Agency, and the US Fed, but managed to settle 16 cents higher at $77.90 a barrel after OPEC stuck to its robust oil demand forecasts for 2024 and 2025, seeing steady global economic growth ahead…oil prices then rose in after hours trading after the American Petroleum Institute reported a larger than expected drop in U.S. crude inventories last week, then extended those gains in early trading Wednesday as cooler-than-expected consumer prices for May pushed oil prices to a session high of $79.32, but then turned lower after the EIA reported large unexpected increases in crude and gasoline inventories, leaving oil with a 60 cent increase to $78.50 a barrel increase for the session….oil prices moved lower in overseas trading early Thursday, after US data had showed an unexpected build in U.S. crude stockpiles, and the IEA's forecast of a surplus petroleum production of up to eight million barrels per day by 2030 weighed on prices, but reversed to settle 12 cents higher at $78.62 a barrel, supported by an OPEC forecast for demand growth and data showing an easing U.S. labor market and slowing inflation, which stoked hopes for Fed rate cuts, despite recent comments from Fed officials to the contrary…oil prices declined on global markets on Friday, as falling equity markets in Europe and Asia added to growing concerns over global demand for crude, then settled the New York trading session 17 cents lower at $78.45 a barrel, amid uncertainty about the outlook for demand after the jump in crude inventories in the U.S., a drop in U.S. consumer sentiment in the month of June, and a firmer dollar, but still ended with a 3.9% gain for the week…
meanwhile, natural gas prices finished lower for the third time in four weeks, despite hitting a five month high on Tuesday, as the startup of the long delayed Mountain Valley Pipeline was expected to add to the country’s domestic gas glut….after rising 12.8% to a 21 week high of $2.918 per mmBTU last week as forecasts for late June unexpectedly turned hotter, the price of natural gas contracted for July delivery shot up above $3 in early trading Monday on forecasts for record warmth for the second half of June, before falling back to settle 1.2 cents lower at $2.906 per mmBTU on concerns that gas supplies will soon rise with the giant Mountain Valley Pipeline nearing completion….however, natural gas prices surged overnight as the market refocused on the extreme hot weather slated to spread across the country and settled Tuesday’s session 22.3 cents or nearly 8% higher at a 21-week high of $3.129 per mmBTU on a recent drop in output and on forecasts that hotter weather would boost the amount of gas power generators would burn to keep air conditioners humming….however, natural gas futures pulled back early Wednesday as traders weighed the start-up of the long-delayed Mountain Valley Pipeline against record heat forecasts, and settled 8.4 cents lower at $3.045 per mmBTU on expectations that gas supplies would soon rise with the approved startup of the Mountain Valley gas pipeline, and on plans by EQT, the nation's biggest gas producer, to boost their output….natural gas prices opened seven cents lower on Thursday, but then traded above $3 up until the storage report hit the wire, when they dropped to an intraday low of $2.898 as the weekly report included a bearish revision to the prior five weeks, but partly recovered to settle 8.6 cents, or 2.8% lower at $2.959 per mmBTU, on lowered demand forecasts for the next two weeks, expectations that supplies would rise once the MVP enters service, and news that recent increases in prices and demand had prompted EQT to start boosting output….natural gas prices slid again in early trading Friday, as traders appeared to be focused on the bearish revisions in the latest storage data and revised weather forecasts, including a cooler change in the second half of June, leading the July contract to fall 7.8 cents to $2.881 per mmBTU on forecasts for less demand this week and next than previously expected, and on signs the amount of gas flowing to LNG export plants was down a bit, and thus finish 1.3% lower for the week...
The EIA’s natural gas storage report for the week ending June 7th indicated that the amount of working natural gas held in underground storage rose by 74 billion cubic feet to 2,974 billion cubic feet by the end of the week, after gas inventories in the Midwest were revised higher by 6 bcf to 9 bcf over the five-week period from May 3 to May 31, 2024, which left our natural gas supplies 364 billion cubic feet, or 13.9% above the 2,610 billion cubic feet that were in storage on June 7th of last year, and 573 billion cubic feet, or 23.9% more than the five-year average of 2,401 billion cubic feet of natural gas that had typically been in working storage as of the 7th of June over the most recent five years…the 74 billion cubic foot addition to US natural gas working storage for the cited week was in line with the average 74 billion cubic foot addition to storage that was forecast in a Reuters poll of analysts, but was less than the 90 billion cubic feet that were added to natural gas storage during the corresponding first week of June 2023, and also less than the average 89 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 7th indicated that after a big jump in our oil imports and a big decrease in our oil exports, we had surplus oil to add to our stored commercial crude supplies for the fourteenth time in twenty weeks and for the 22nd time in the past 34 weeks, despite a big increase in oil demand that the EIA could not account for….Our imports of crude oil rose by an average of 1,245,000 barrels per day to a 70 month high of 8,304,000 barrels per day, after rising by an average of 289,000 barrels per day over the prior week, while our exports of crude oil fell by 1,313,000 barrels per day to 3,188,000 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 5,116,000 barrels of oil per day during the week ending June 7th, 2,558,000 more barrels per day than the net of our imports minus our exports during the prior week. At the same time, transfers to our oil supply from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils averaged 463,000 barrels per day, while during the same week, production of crude from US wells was 100,000 barrels per day higher 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 18,779,000 barrels per day during the June 7th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 17,047,000 barrels of crude per day during the week ending June 7th, an average of 98,000 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 581,000 barrels of oil per day were being added to the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending June 7th appear to indicate that our total working supply of oil from net imports, from transfers, and from oilfield production was 1,151,000 barrels per day more than what was added to storage plus what our oil refineries reported they used during the week……To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a [ -1,151,000 ] 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 1,326.000 barrels of oil supply per day could not be accounted for in the prior week’s EIA data, that means there was a 2,477,000 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 581,000 barrel per day increase in our overall crude oil inventories came as a rounded average of 533,000 barrels per day were added to our commercially available stocks of crude oil, while an average of 48,000 barrels per day were being added to our Strategic Petroleum Reserve, the twenty-seventh SPR increase in thirty-four 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 7,199,000 barrels per day last week, which was 11.4% more than the 6,462,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day higher at 13,200,000 barrels per day because the EIA’s rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day lower at 12,800,000 barrels per day, while Alaska’s oil production was 1,000 barrels per day higher at 425,000 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 95.0% of their capacity while processing those 17,047,000 barrels of crude per day during the week ending June 7th, down from their 95.4% utilization rate of a week earlier, but still among the highest operating rates of the past year, after US refineries had lagged normal operating rates for months after arctic cold in mid January had froze off some operations… the 17,047,000 barrels of oil per day that were refined this week were 2.8% more than the 16,586,000 barrels of crude that were being processed daily during week ending June 9th of 2023, but fractionally less than the 17,064,000 barrels that were being refined during the prepandemic week ending June 7th, 2019, when our refinery utilization rate was at a close to normal 93.2% for early June...
Even with the decrease in the amount of oil being refined this week, gasoline output from our refineries was quite a bit higher, increasing by 602,000 barrels per day to 10,086,000 barrels per day during the week ending June 7th, after our refineries’ gasoline output had decreased by 527,000 barrels per day during the prior week.. This week’s gasoline production was still 0.8% less than the 10,171,000 barrels of gasoline that were being produced daily over week ending June 9th of last year, and 1.8% less than the gasoline production of 10,276,000 barrels per day during the prepandemic week ending June 7th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 29,000 barrels per day to 5,032,000 barrels per day, after our distillates output had increased by 31,000 barrels per day during the prior week. After eleven production increases in the past sixteen weeks, our distillates output was 0.9% more than the 4,988,000 barrels of distillates that were being produced daily during the week ending June 9th of 2023, but was 4.0% less than the 5,239,000 barrels of distillates that were being produced daily during the week ending June 7th, 2019…
With this week’s increase in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the seventh time in nineteen weeks, increasing by 2,566,000 barrels to 233,512,000 barrels during the week ending June 7th, after our gasoline inventories had increased by 2,102,000 barrels during the prior week. Our gasoline supplies rose again this week because our imports of gasoline rose by 213,000 barrels per day to 912,000 barrels per day, while our exports of gasoline fell by 33,000 barrels per day to 858,000 barrels per day, and while the amount of gasoline supplied to US users fell by 94,000 barrels per day to 9,040,000 barrels per day .…But even after twelve gasoline inventory withdrawals over the past nineteen weeks, our gasoline supplies were still 5.7% above last June 9th’s gasoline inventories of 220,923,000 barrels, while slightly below the five year average of our gasoline supplies for this time of the year…
Even with this week’s decrease in our distillates production, our supplies of distillate fuels rose for the ninth time in twenty-one weeks, increasing by 881,000 barrels to 123,366,000 barrels over the week ending June 7th, after our distillates supplies had increased by 3.197,000 barrels during the prior week. Our distillates supplies increased by less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 282,000 barrels per day to 3,649,000 barrels per day, and because our imports of distillates fell by 51,000 barrels per day to 91,000 barrels per day, while our exports of distillates fell by 32,000 barrels per day to 1,348,000 barrels per day .…With 5 inventory increases over the past six weeks, our distillates supplies at the end of the week were 8.4% above the 113,854,000 barrels of distillates that we had in storage on June 9th of 2023, but were still about 7% below the five year average of our distillates inventories for this time of the year…
Finally, even after the big increase in demand for oil that the EIA could not account for, our commercial supplies of crude oil in storage rose for the 14th time in twenty-six weeks, and for the 26th time in the past year, increasing by 3,730,000 barrels over the week, from 455,922,000 barrels on May 31st to 459,652,000 barrels on June 7th, after our commercial crude supplies had increased by 1,233,000 barrels over the prior week… Even with this week’s increase, 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 about 29% above the average of our available crude oil stocks as of the first weekend 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 7th were 1.6% less than the 467,124,000 barrels of oil left in commercial storage on June 9th of 2023, while they were 9.8% more than the 418,714,000 barrels of oil that we had in storage on June 10th of 2022, but were still 1.5% less than the 466,674,000 barrels of oil we had left in commercial storage on June 11th of 2021, after refinery damage from winter storm Uri left even more crude oil remaining after 2020’s pandemic precautions had left a glut of oil unused at year end…
This Week’s Rig Count
In lieu of a detailed report on the rig count, we are again just including a screenshot of the rig count summary from Baker Hughes…in the table below, the first column shows the active rig count as of June 14th, the second column shows the change in the number of working rigs between last week’s count (June 7th) and this week’s (June 14th) count, the third column shows last Friday’s June 7th 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 16th of June, 2023…
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Tax cuts, interest-free loan program for gas pipelines clear Ohio House committee - – Bipartisan members of an Ohio House committee voted Tuesday to advance legislation that would provide interest-free loans and tax cuts for natural gas pipelines in areas deemed to have insufficient gas infrastructure in place. Should the bill become law, local governments could access $20 million of state funds in interest-free loans to buy easements on property intended for a new gas pipeline. And that pipeline’s developer could exempt up to 75% of its value from its property taxes, providing savings on the scale of millions of dollars.
Ohio committee passes bill to build natural gas pipelines - (WKBN) — The Ohio House Economic and Workforce Development Committee passed a bill to build natural gas pipelines. House Bill 349, also known as EnergizeOhio, creates several incentives to build natural gas pipelines and related infrastructure within locally designated zones. If passed, the loans from the legislation would allow communities to acquire resources within a zone. “Despite the blessings of an abundant supply of natural gas within our great state, communities everywhere are plagued by a lack of access to this resource,” said Rep. Tim Barhorst (R-Fort Loramie). “House Bill 349 will help lower long-term costs for companies wanting to invest in natural gas infrastructure and ensure our communities have a shot for economic development opportunities.” The Department of Development is working on a map of areas that will receive the loans. “The United States is currently the number 1 purchaser of natural gas, but the two largest natural gas companies are owned by Russia and China,” said Rep. Don Jones (R-Freeport). “In addition to providing the necessary infrastructure to aid parts of the state without natural gas, House Bill 349 creates necessary infrastructure to keep Ohio’s natural gas in Ohio and not reliant on natural gas from foreign countries.” A total of $20 million will be appropriated to the EnergizeOhio Program Loan Fund for 2025. The bill awaits a vote by the House.
Martins Ferry Sees No Evidence of Cleanup at Austin Master Serv. - Marcellus Drilling News - We have been tracking and reporting on the drama surrounding Austin Master Services (AMS), a radiological waste management solutions company in Martins Ferry (Belmont County), Ohio, located close to the Ohio River, since the Ohio Attorney General lodged charges against the company back in March (see our AMS stories here). AMS has stored at least 10,000 tons of fracking waste (drill cuttings with low radioactivity) at the facility. The facility is rated and permitted to hold 600 tons. In March, Ohio AG Dave Yost asked the Belmont County Common Pleas Court to block AMS from receiving more waste and order it to clean up and comply with its rating. According to Martins Ferry Mayor John Davies, who addressed the city council last Wednesday, nothing has been done so far.
Majority foreign-owned oil, natural gas producer to frack Ohio state parks - Encino Acquisition Partners, LLC has invested $300 million into extracting oil and natural gas from Ohio state parks and other public lands. EAP received mineral rights for four sites in Ohio State Parks, according to an Ohio Department of Natural Resources news release. This includes three sites in Valley Run Wildlife Area in Carroll County and one site in Zepernick Wildlife Area in Columbiana County. Encino Energy, based out of Houston, Texas, along with the Canada Pension Plan Investment Board, created EAP as a subsidiary in 2017, according to a CPP news release. The CPP holds 98% equity of the company. The CPP is a public pension distributed by the government to over 22 million Canadians, according to its website. The plan has an independent board tasked with managing funds for policyholders. “If someone (is) working in Toronto and they're paying into this pension plan – well, they're financing fracking in Ohio,” Save Ohio Parks Steering Committee Chair Cathy Cowan Becker said. Along with the rights to Ohio state parks, EAP also bought 900,000 acres of oil and gas assets from Chesapeake Energy, which used to be one of the largest natural gas producers in Ohio, in the Ohio Utica Shale region for $2 million in 2018, according to a CPP news release. According to a report from the U.S. Energy Information Administration, the Utica Shale is an expansive oil and natural gas field that covers 115,000 square miles and spans four states from northern New York to northeastern Kentucky and southern Tennessee. Daniel Karney, an economics professor at Ohio University, said EAP is trying to get a return on its investments to grow its capital. ”They think a good way to do that is to invest in generating, purchasing and then producing oil and natural gas,” Karney said. The U.S. remains the world's top destination for foreign direct investment for the 12th consecutive year, according to the U.S Department of Commerce. This is partially due to strong consumer and government expenditure and robust export levels. Karney said individual states can use parks as assets and sell them to make profits. “It's going to be, at this point, something like 18% to the state of Ohio, but that only lasts for as long as the fracking lasts, and you can only frack one place so many times before there's no more gas left,” Becker said. According to an ODNR news release, however, Ohio is only set to receive 12.5% of royalties from EAP. The operation comes after an Ohio judge dismissed a lawsuit from Save Ohio Parks allowing companies to lease public land, according to a previous Post report. The decision opens over 1,000 parcels of land to oil and natural gas companies. Melinda Zemper, Save Ohio Parks steering committee chair, said communities near fracking operations experience negative economic effects. “The eight main counties in Ohio that have been fracked for decades came to the conclusion that they lost population by about 8% and the number of jobs that they had for the community was also down,” Zemper said. She also said farmers can lease mineral rights to their land and make a lot of money. “It's the most money they've ever seen in their lives and are able to take vacations or buy cars or pass their farms on to the next generation,” Zemper said. Becker added fracking poisons the land, so farmers can’t grow or have animals on it.
Chesapeake Transfers Ohio Leases to Hilcorp --Chesapeake Energy Corp. has transferred nearly 1,100 oil and natural gas leases in and around an underground natural gas storage field in Ohio, to privately held Hilcorp Energy Co.According to a report in the Youngstown Business Journal, Columbiana County records show that Chesapeake assigned most of the 1,097 oil and gas leases to the Houston-based operator effective Feb. 15. It was unclear if the deal between the companies, which was negotiated on Jan. 23, amounted to a bona fide sale, a property swap or a farm-in agreement.The transferred leases were for properties in the six northeasternmost townships in Columbiana: Center, Elkrun, Fairfield, Middleton, Salem and Unity, the Journal noted. It also reported that nine drilled wells were also excluded from the deal. Alan Wenger, an attorney with Youngstown, OH-based law firm Harrington, Hoppe & Mitchell, told NGI the leases were in or near the Brinker Storage Field, a 30,000-acre natural gas reserve in northern and central Columbiana County. The field, which was assembled over several decades, is owned by Columbia Gas Transmission."Columbia has all kinds of leases of various vintages that say all kinds of things," Wenger said. "Some of them are storage leases and others are more conventional, production leases. As this play developed, largely after 2009, a lot of the landowners involved in this area knew their properties had leases on them but had no clue as to what they meant. Many of them had never received a royalty check or anything for years because these were ancient leases on properties that got subdivided into lots and the royalties never followed."That's when Chesapeake came to town, Wenger said. "Chesapeake was running around like a chicken [without a head], leasing anything that they could lease in this area. I don't know that [it], frankly, did a very exhaustive title run before signing a lot of these up. They wound up with a lot of leases that ostensibly were for these parcels, but many of them were already arguably held by production, at least by the storage leases that were held by Columbia."Last September, Columbia, a NiSource Inc. subsidiary, formed a joint venture (JV) with Hilcorp to develop the deep rights to the Brinker Storage Field. Four months earlier, NiSource officials said "advanced discussions" about a JV in the Brinker were ongoing, but they did not identify Hilcorp as its negotiating partner (see NGI, May 7, 2012). "I believe Chesapeake was trying to negotiate such a deal with Columbia but wasn't successful in doing so for whatever reason," Wenger said. Many of the leases would have been hard to develop units without joint venturing with others who already held some rights.Wenger said some of the leases held by Columbia were strictly for one specific geological stratum for gas storage and nothing else, which meant landowners were free to sell the deep rights. But he said most of the older leases covered all geological formations. Wenger added that he did not know the collective value of the deep rights leases, if Hilcorp purchased them outright from Chesapeake or if they were transferred between the two companies for holdings elsewhere. More troubling, he said, was that it did not appear that Chesapeake had filed any information about the leases with the U.S. Securities and Exchange Commission (SEC). "I'm not an SEC or a regulatory lawyer, but frankly I don't understand why this would not be reported by Chesapeake," Wenger said, adding that he has searched for records of the assignment in his spare time. "They report assiduously anything that they sell or buy. Maybe they're holding it because they would argue that it's not final yet. But if it were a trade, it should be reported for SEC purposes." Responding to Wenger's comments, Gipson on Friday said Chesapeake "takes the necessary steps to make all required SEC filings."
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. The Youngstown 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.” (emphasis added)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.
All clear given after officials evacuated downtown Youngstown amid reported natural gas leak - — Officials from the Youngstown Fire Department have given an all clear to return downtown after a reported natural gas leak led to an evacuation on Friday afternoon. In a post on social media, the Youngstown Professional Fire Fighters Local 312 wrote: "Downtown is now reopened and all events scheduled for this evening are a full go."Earlier in the afternoon, fire officials sent out the following advisory: "Please AVOID downtown Youngstown and surrounding areas. Buildings are currently being evacuated for a natural gas leak."According to 21 News WFMJ in Youngstown, a two-block radius from the George Voinovich Government Center was issued a mandatory evacuation. The evacuations included Youngstown City Hall and the Youngstown Police Department. Youngstown State University also issued a "Penguin Alert" ordering the immediate evacuation of the campus. "Employees will be paid the remainder of the day, there is no need to turn in leave. Students should also leave campus, immediately For those living on campus, they should also vacate their living quarters," YSU wrote in a post on its Facebook page. 3News received the following statement from Enbridge Gas Ohio:"Enbridge Gas representatives are onsite in downtown Youngstown actively investigating a reported odor of natural gas."Public safety is the top priority, and the Fire Department has evacuated buildings in a two-block area around the Voinovich Building as a safety precaution."Our trained crews are walking the area and scoping for the presence of natural gas inside and outside buildings in this area."The report of a gas leak comes just over two weeks after a deadly blast inside the Realty Tower building in downtown Youngstown that resulted in the death of a Chase Bank employee.
Continued Concerns with Water Wells Near EQT Frac-Out in Greene Co. -- Marcellus Drilling News ---In July 2022, MDN brought you news of a possible frac-out, or “inadvertent return” that happens when drilling mud pops out of places where it’s not supposed to — places outside the borehole being drilled (see Possible Frac-Out Reported at EQT Well Site in Greene County, PA). A landowner who lives near a well being drilled and fracked by EQT in Greene County complained her water well was fouled by EQT’s drilling and that a nearby abandoned well was releasing fluids and natural gas. According to the PA Dept. of Environmental Protection (DEP), EQT confirmed some of its fluids were “communicating” with the abandoned well. A year later, in August of 2023, the nearby community of New Freeport, where the frac-out happened, said the situation remained unresolved (see Possible Frac-Out Near EQT Pad in Greene County…One Year Later). However, on November 29, 2023, the Pennsylvania Environmental Hearing Board (EHB) accepted a settlement agreement between the PA Dept. of Environmental Protection (DEP) and EQT involving appeals of DEP actions related to the frac-out, settling the matter. Or so it seemed…
Briggs v SWN Rule of Capture/Trespass Court Case Resurrected - In January 2020, the Pennsylvania Supreme Court ruled in THE most consequential lawsuit for Marcellus Shale drilling we’ve seen, a case called Briggs v Southwestern Energy (see HUGE NEWS: PA Supreme Court Keeps ‘Rule of Capture’ for Fracking). The PA Supremes ruled in favor of Southwestern, retaining the “rule of capture” in the Keystone State. Little did we know, but in 2022, the Briggs filed a new lawsuit, call it “Briggs 2,” along the same lines, alleging that Southwestern’s drilling and fracking on a neighboring property has intruded (“trespassed”) under the property line and drained gas from the Briggs property. Here we go again…
7 New Shale Well Permits Issued for PA-OH-WV Jun 3 – 9 ---Marcellus Drilling News --Two weeks ago, 31 new permits were issued to drill in the Marcellus/Utica region. Last week, June 3 – 9, the number dropped (dramatically) by 77% to just seven new permits. And that seems to be the pattern: Way up one week, way down the next. Last week, for the second week in a row, Ohio issued ZERO new shale permits. The top permit receiver for last week was HG Energy, which had five permits for a single pad in Doddridge County, WV. The other two permits were issued in PA: one to CNX in Greene County, and the other to Range Resources in Washington County. CNX RESOURCES | DODDRIDGE COUNTY | GREENE COUNTY (PA) | HG ENERGY | RANGE RESOURCES CORP |WASHINGTON COUNTY
EQT Bringing Back Curtailed Natural Gas Supply; CEO Rice Sees Future Where U.S. Production Triples --EQT Corp., the largest natural gas producer in North America, scaled back output earlier this year in response to low prices amid a mild winter. However, with forecasts for sizzling summer heat domestically and abroad, CEO Toby Rice said the Pittsburgh-based company has started to bring back the 1 Bcf/d curtailed in late February. “We are in the process now,” Rice told NGI Tuesday after presenting at the LDC Gas Forums Northeast in Boston. He described it as an incremental undertaking without a specific timeline. He said EQT could unfurl the retrenchment gradually, with the pace determined in part on prices. Depressed gas prices below $2/MMBtu in February galvanized producers to pull back after U.S. output touched all-time highs around 107 Bcf/d early this year. The lofty production intersected with benign weather and soft heating demand. EQT’s decision followed Chesapeake Energy Corp.’s 15% reduction announcement in February.
CNX Releases 'Radically Transparent' Corporate Sustainability Report - Today, CNX Resources Corp. published its thirteenth annual Corporate Sustainability Report, Radical Transparency, highlighting how the Company's distinct corporate strategy and investment approach continues to deliver material results for all stakeholder groups across the Appalachian region and beyond. "The 160-year legacy of CNX is rooted in being thoughtfully innovative, and that innovative spirit has shaped our unique Tangible, Impactful, Local ESG effort which is summarized in this report," commented CNX Chief Risk Officer Hayley Scott. "This document tells the story of our ongoing strategic journey—a journey that has clearly positioned CNX as a differentiated energy solutions company poised to once again lead an energy renaissance from right here in the heart of Appalachia." CNX's 2023 report outlines the Company's continued dedication to transparency, innovation, environmental stewardship, and community engagement, aligning closely with the standards set forth by prominent international frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB), and the Global Reporting Initiative (GRI) Standards. Core to CNX's updated report is the Company's groundbreaking collaboration with the Commonwealth of Pennsylvania where, in partnership with Governor Josh Shapiro's Administration and the Pennsylvania Department of Environmental Protection (PADEP), the Company is deploying robust environmental monitoring and data collection of its operations in the state. By publicly disclosing the data in real-time via CNXRadicalTransparency.com, all stakeholders can access and better understand the natural gas development process and its critical role in the economy and environment. "Through our commitment to Radical Transparency, we aim to lead the industry into a new era of responsible domestic energy development—one where facts and data prevail over speculation and ideology," Ms. Scott continued. "Through these efforts, we are proving every day that natural gas development is safe and inherently good for the communities where we are privileged to live and operate."
MVP Restoration Work in Jefferson National Forest Begins - Marcellus Drilling News - A major effort by the radical left to block the 303-mile Mountain Valley Pipeline (MVP) from crossing a piddly 3.5 miles of the Jefferson National Forest (JNF) failed. But not for lack of trying. Big Green paid protesters to sit in trees, chain themselves to cars, and all manner of illegal tactics to try and slow or stop progress on building the pipeline through JNF (see our MVP in JNJ stories here). The pipeline itself is now completed, and restoration work is underway in some locations like JNF. In the case of JNF, MVP is removing construction debris and replanting native vegetation.
MVP “Mechanically Complete” – Asks FERC to Begin Flowing TODAY! - Marcellus Drilling News - Is today the day we’ve been waiting and writing about for the past nine years? Possibly! Yesterday, Mountain Valley Pipeline (MVP), the 303-mile, 2 Bcf/d pipeline from Wetzel County, WV, to Pittsylvania County, VA, filed a request with the Federal Energy Regulatory Commission (FERC) to say the pipeline is now mechanically complete, meaning the pipeline is in the ground, covered up, fully tested, and ready to begin operations. MVP asked FERC to allow it to begin flowing gas TODAY, June 11. At best, it’s a 50/50 shot that FERC will allow it to begin operations today. No matter. Whether today, tomorrow, or next week, MVP is done and will begin. WE WON!
Mountain Valley Pipeline is done and ready to go, developers say - After a decade of planning, construction and controversy, developers of the Mountain Valley Pipeline say it’s ready to begin operations. The company asked the Federal Energy Regulatory Commission on Monday to grant authorization by Tuesday that would allow the natural gas pipeline to start service in the coming days. “Mountain Valley confirms that the Project facilities are mechanically complete,” Matthew Eggerding, deputy general counsel for the joint venture, wrote in a letter posted to FERC’s online docket early Monday afternoon. Testing is also completed on all segments of the 303-mile interstate pipeline, including what was required last October by a safety consent order from a federal agency. “The final segments of the Project are currently being purged and packed with natural gas,” Eggerding wrote, referring to a process of venting air from the pipe before gas is introduced. People are also reading… FERC had made no decision by 6 p.m. Monday, according to its online docket. Concerns by opponents – which for years dealt largely with Mountain Valley’s failure to prevent muddy runoff from flowing off construction sites and into nearby forests and streams – have turned more recently to fears about the pipe’s integrity. Questions about whether a protective coating on the pipe’s exterior had been weakened by exposure to the elements intensified May 1, when a segment of the line on Bent Mountain ruptured during pressure testing. “To grant this request on a 24-hour turnaround while reasonable concerns remain about the project’s ability to operate safely will further erode public trust and deliver a final injustice to directly impacted community members who have engaged in this process in good faith,” Russell Chisholm of the Protect Our Water, Heritage, Rights coalition wrote in a letter asking FERC to deny Mountain Valley’s request. The company is still waiting for results from metallurgical testing of the pipe section that ruptured under high-pressure water testing. What caused the pipe to fail has not been determined. Meanwhile, Chisholm wrote, there has not been a full release of results from additional testing that was ordered last October by the U.S. Pipeline and Hazardous Materials Safety Administration. Some details, made available in response to Freedom of Information Act requests, have prompted concerns by the Pipeline Safety Trust, which wrote PHMSA in April about what it called “inadequate information” provided by Mountain Valley. It was not clear Monday how soon the pipeline will begin transporting natural gas, assuming FERC grants the request. “Final preparations are currently underway to begin flowing gas,” company spokeswoman Natalie Cox wrote in response to questions seeking clarification. But Mountain Valley has made an early June start date a high priority. “Multiple shippers have executed agreements to commence transporting volumes using the Project facilities beginning the day after the Project declares in-service, which further heightens the need for prompt authorization to meet market demands,” Eggerding wrote in his letter. Jessica Sims, the Virginia field coordinator of Appalachian Voices, made the following statement: “The community is in the dark about important safety and environmental considerations from the Pipeline and Hazardous Materials Safety Administration and FERC, while Mountain Valley Pipeline pressures FERC to prioritize the company’s sales schedule.” Records from two rounds of tests, performed by Mountain Valley at the direction of PHMSA, have been released to The Roanoke Times under open-record laws. The first report was for tests conducted last year, mostly in West Virginia, where the project originates before passing through the New River and Roanoke valleys to connect with an existing pipeline near the North Carolina line. Those tests showed about 70 “indications,” or possible flaws with the pipe, and a need for about 15 “cutouts,” or the removal and replacement of part of the pipe. The Pipeline Safety Trust, a watchdog group of the industry and its regulators, said Mountain Valley had not adequately explained its criteria for deciding which sections of the pipe needed repairs. Last month, PHMSA released an introduction letter from Mountain Valley’s report on a second period of testing, from January through the end of March. The actual report was withheld. The cover letter showed about 130 potential problem areas, but did not explain what corrective action was taken. Without that information, safety experts said it was difficult to evaluate the overall integrity of the pipeline. Mountain Valley has notified PHMSA “of its full compliance prior to introducing natural gas to the final segments” of the pipe, Eggerding wrote. A PHMSA spokesman could not be reached Monday. A FERC representative said: “This is a pending request, so we cannot comment.”
Mountain Valley pipeline seeks permission to begin operations -Equitrans Midstream Corp. has completed construction of its 303-mile Mountain Valley natural gas pipeline (MVP) and requested US Federal Energy Regulatory Commission permission to put the 2-bcfd system in service. Equitrans described the pipeline as “mechanically complete,” having finished all welding, testing, cleaning, and drying.MVP’s final segments are being purged and filled with natural gas in advance of startup and Equitrans requested that authorization be provided by June 11, 2024. "Multiple shippers have executed agreements to commence transporting volumes using the project facilities beginning the day after the project declares in-service, which further heightens the need for prompt authorization to meet market demands," the company said in its FERC filing. Equitrans initially requested in-service authorization in April 2024, but supplemented its request the following month (OGJ Online, Apr. 24, 2024). MVP (42-in. OD) runs from Wetzel County, WV, to an interconnect with Transcontinental Gas Pipeline Co.at the latter’s Compressor Station 165 in Pittsylvania County, Va. The pipeline was originally scheduled to begin operations in 2018 but has been delayed repeatedly by litigation.
FERC approves startup of Mountain Valley natural gas pipeline - Oil & Gas Journal Equitrans Midstream Corp. was granted approval June 11 by the US Federal Energy Regulatory Commission (FERC) to put its 303-mile, 2 bcfd Mountain Valley natural gas pipeline (MVP) into operation.FERC’s authorization is the final hurdle for the controversial $7.8-billion project designed to move Marcellus and Utica shale gas to Mid-Atlantic markets. The pipeline was originally scheduled to begin flows in 2018 but was repeatedly delayed by litigation involving environmental concerns and landowners.The pipeline was scheduled to start operations in May, but Equitrans delayed the start to run additional safety tests (OGJ Online, Apr. 24, 2024).“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,” Terry Turpin, FERC’s director of the Office of Energy Projects, said in the order. The commission granted authorization based on “Mountain Valley’s recent construction status reports and supplemental filings, our regular compliance monitoring reporting, a staff inspection the week of May 13-17, and our communications with the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration,” Turpin added.The 42-in OD pipeline runs from Wetzel County, WV, to an interconnect with Transcontinental Gas Pipeline Co. at compressor station 165 in Pittsylvania County, Va. “We are pleased with the agencies’ decisions and the related communications regarding in-service authorization for the MVP project,” Natalie Cox, an Equitrans spokeswoman, said in a June 11 statement. “Final preparations are underway to begin commercial operations.”
4th Circus’ Final “Screw You” to MVP in Va. Eminent Domain Case ---Marcellus Drilling News --In a clear case of sour grapes for the U.S. Court of Appeals for the Fourth Circuit (4th Circus clowns) who tried to block the 303-mile Mountain Valley Pipeline (MVP) by rendering arbitrary decisions that caused years of delays for the pipeline, the court flipped the bird to MVP one last time in a decision issued Tuesday of this week (June 11). Three judges from the 4th Circus re-inflated a jury award against MVP for an eminent domain “taking” case in the Bent Mountain, Virginia, area back in May (see 4th Circus Clowns Punish MVP One Last Time via Eminent Domain Case). MVP appealed to the full 4th Circuit to have all judges re-hear the case, called en banc. On Tuesday, the full court refused, allowing the “screw you” decision by the three loser clowns to stand.
Mountain Valley Pipeline goes into service, starts delivering gas in Virginia Mountain Valley Pipeline, the 303-mile vessel that will deliver natural gas from the Appalachian region of West Virginia into Southwest Virginia, officially went into service Friday, after about a decade of steadfast opposition over concerns about environmental and community impacts in the areas in its path. In a news release, the company said the project is now available to deliver natural gas with a capacity of up to 2 billion cubic feet of gas per day. Roanoke Gas said in a separate release Friday it had begun receiving the fossil fuel. Diana Charletta, president and chief executive officer of Equitrans Midstream Corp, the pipeline’s developer, called the day an “important and long-awaited one,” for the country that will allow “greater access to an abundant supply of domestic natural gas for use as an affordable, reliable, and cleaner energy resource.” The project was first announced in 2014 and planned to deliver natural gas from the Marcellus and Utica shale regions into Pittsylvania County, with an anticipated completion date in 2018. But numerous legal challenges led the U.S. Fourth Circuit Court of Appeals to overturn state permits, finding some agencies failed to adequately ensure protections against sediment erosion and harm to endangered fish species, such as the candy darter. In May 2023, however, Democratic West Virginia Sen. Joe Manchin included a measure in a federal stop-gap spending plan, the Fiscal Responsibility Act, that required all state and federal agencies to approve permits necessary for the project to be completed. The measure also prevented any legal challenges until it was completed. With that greenlight, MVP resumed construction in August. The company requested final approval from the Federal Energy Regulatory Commission on Monday, stating that the project was “mechanically complete.” On Tuesday, FERC granted the OK, after consultation with the Pipeline and Hazardous Materials Safety Administration revealed the agency “had no objections if Commission staff were to authorize in-service for the Mountain Valley Pipeline project.” MVP had entered into a consent agreement with PHMSA in October, because of conditions posing “an integrity risk to public safety, property or the environment.” Terry L. Turpin, director of the FERC office that oversees the project stated that “Mountain Valley has adequately stabilized the areas disturbed by construction and that restoration and stabilization of the construction work are proceeding satisfactorily.” The cost of the project, initially stated to be $3.5 billion in 2018, more than doubled to $7.85 billion, according to a news release earlier this year.. Scrutiny of the project, including the safety of coatings on the pipeline that laid out in the elements during years of delay and violations for preventing sediment erosion, increased in recent weeks as requests for the project to come online were submitted. On Wednesday, when the pipeline’s activation was imminent, groups who have been advocating on behalf of indigenous people, other community members and the environment in West and Southwest Virginia raised their concerns and called for continued caution. “I don’t know how else to express how angry, infuriated, grief stricken I am in this moment,” said Russell Chisholm, co-executive director of Protect our Water and Heritage Rights. The pipeline would have “repercussions …for everyone upstream in the fracking fields, and everyone downstream, where the gas is shipped and eventually burned, overheating our planet.” Following a test failure on May 1, Appalachian Voices continuously submitted requests for information on inspection reports, in addition to the March 29 quarterly report that was most recently released, but received no response, said Jessica Sims, the group’s Virginia field coordinator. The lack of response from PHMSA and FERC has left community members in the dark with little legal recourse to take action, Sims added, while condemning Manchin’s intervention at the federal level. “The level of congressional interference with the project was unprecedented and certainly concerning as a reality that could happen again,” Sims said. “We remain deeply disappointed that one pet project was put on an unrelated debt bill and used to pressure members of congress on a matter they should not have been weighing in on in that way. That lack of separation of judicial and legislative powers is deeply concerning,” said Sims.
Encore Energy Adds 3 KY Horizontal Wells to Sales, Drilling 3 More --Marcellus Drilling News - Kentucky is not known as a hotbed of shale drilling activity. The Marcellus/Utica does not extend under the Bluegrass State. However, as we wrote about back in 2017, Kentucky does have the Berea Sandstone, which contains oil deposits (seeFracking Comes to Kentucky – Encore Drills First Horizontal Oil Wells). In 2017, we brought you the news that Encore Energy, headquartered in Bowling Green, was just beginning to drill shale wells looking to extract oil from the Berea. Fast forward to today, and over 100 horizontal wells are permitted, drilled, and/or producing in the Berea in Lawrence County. Encore issued a press release yesterday saying it has just turned another three Berea wells online to sales and is drilling three more.
Ameren Seeks to Build 800-MW Gas-Fired Peaker Near St. Louis, MO - Marcellus Drilling News - Ameren Missouri, a subsidiary of Ameren Corporation, recently filed an application with the Missouri Public Service Commission to build an 800-megawatt, simple-cycle “peaker plant” powered by natural gas to serve as a reliable backup source of energy, ready to use when customers need it most. The Castle Bluff Energy Center is designed to bolster grid reliability, deliver energy on the hottest summer days and the coldest winter nights, and complement the increasing amount of renewable energy generation being added to the grid.
Natural Gas Producer Discipline, Demand Momentum Said to Support Prices Through Summer -Drops in natural gas production, declining storage surpluses and stronger summer weather demand in the Lower 48 and abroad all line up in bulls’ favor. These factors could prop up prices through the cooling season and potentially longer, a cadre of analysts agreed this week.Speaking at the LDC Gas Forums Northeast in Boston, Atmospheric G2 meteorologist James Caron said his firm’s seasonal forecasts call for “very, very warm” weather across most of North America and vast sections of Europe and Asia as well. The outlook mirrors predictions by AccuWeather and the National Weather Service. Such conditions have already settled across parts of all three continents, and he looks for the heat to spread in the back half of June. The sultry temperatures are expected to endure through the summer months, he said, fueling robust domestic cooling demand, strong levels of pipeline exports to Mexico, and increased calls for U.S. shipments of LNG to Europe and Asia.
Golden Pass LNG Navigates EPC Bankruptcy Fallout as Market Scrutinizes Commissioning Timeline --While Golden Pass LNG is holding to previous expectations for commissioning to begin in the first half of 2025, FERC staff said the timelines could be impacted as the lead construction contractor navigates bankruptcy. Zachry Industrial Inc. informed the Texas Workforce Commission that it has laid off about 4,400 workers assigned to the 18 million metric tons/year (mmty) export project southeast of Houston. The San Antonio-based parent company filed for bankruptcy in late May, noting “significant financial strain” from attempts to keep Golden Pass on schedule. Zachry had taken on the role of hiring and coordinating the onsite construction staff at Golden Pass as part of a engineering, procurement and construction (EPC) partnership with Chiyoda Corp. and McDermott.
NextDecade, Saudi Aramco sign 20-yr LNG supply deal (Reuters)—U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco to supply 1.2 metric MMtpy of LNG for 20 yr. The deal comes at a time when Aramco is seeking to strengthen its position in the LNG market, which is set to grow globally by 50% by 2030, especially in the U.S., where LNG capacity is set to almost double over the next four years. Aramco said the deal was part of its efforts to expand its "presence in international energy markets." Under the terms, LNG will be supplied from the fourth liquefaction train at NextDecade's Rio Grande LNG Facility at the Port of Brownsville, Texas, USA. Earlier this month, Reuters reported that Aramco was in talks with NextDecade, as well as U.S. firm Tellurian on two separate LNG projects as the Saudi firm seeks to boost its gas trading and production. Aramco and NextDecade said they were in the process of negotiating a binding agreement, effective subject to a positive final investment decision on Train 4, which NextDecade said it expects in the second half of 2024. In May, Abu Dhabi National Oil Company (ADNOC) said it had acquired 11.7% stake in phase 1 of NextDecade's LNG project, which included the first three liquefaction trains, and agreed to a 20-yr supply agreement for the fourth train.
Aramco Inks 20-Year HoA for Rio Grande LNG Supply -Saudi Arabian Oil Co. (Aramco) has signed a non-binding heads of agreement (HoA) with NextDecade Corporation for a 20-year liquefied natural gas sale and purchase agreement (LNG SPA) for offtake from Train 4 at the Rio Grande LNG Facility at the Port of Brownsville, Texas, USA. Under the terms of the HoA, Aramco expects to purchase 1.2 million metric tons per annum (mtpa) of LNG for 20 years on a free on board basis, at a price indexed to Henry Hub, according to a joint news release from the two companies. The HoA was executed through their respective subsidiaries. Aramco and NextDecade are currently in the process of negotiating a binding agreement, according to the release. The binding agreement will still be subject to a positive final investment decision on Train 4. Nasir K. Al-Naimi, Aramco Upstream President, said: "We look forward to finalizing the terms of a long-term LNG offtake agreement with NextDecade, as we explore opportunities to expand our presence in international energy markets. We expect LNG to play an important role in meeting the rising demand for secure and efficient energy”. Matt Schatzman, NextDecade Chairman and CEO, said: “We are pleased to have reached a Heads of Agreement with Aramco for LNG from Train 4, as Aramco seeks to expand its LNG portfolio. We look forward to finalizing the LNG SPA with Aramco and to pursuing other opportunities together”. In May, Abu Dhabi National Oil Co. (ADNOC) announced that it would take a 11.7 percent stake in phase 1 of the Rio Grande LNG project, according to a statement Monday. The deal also gives ADNOC 1.9 million tons a year of LNG supply from the project’s future Train 4, according to an earlier statement. ADNOC’s stake in the first phase of Rio Grande will also give it access to Trains 1 to 3, which are parts of the project. NextDecade Corp., through its subsidiary NextDecade LNG LLC, in January secured a total of $62.5 million for various purposes including the development costs of Train 4 at the Rio Grande LNG facility. NextDecade entered into a credit agreement with MUFG Bank Ltd. as lender and administrative agent that provides for a $50 million senior secured revolving credit facility and a $12.5 million interest term loan. Phase 1 of the Rio Grande LNG project, which consists of the first three liquefaction trains and has a nameplate liquefaction capacity of 17.6 mtpa, has long-term binding LNG sale and purchase agreements with TotalEnergies, Shell NA LNG LLC, ENN LNG Pte. Ltd., Engie SA, ExxonMobil LNG Asia Pacific, Guangdong Energy Group, China Gas Hongda Energy Trading Co., Galp Trading SA, and Itochu Corp. According to the company website, Rio Grande LNG is expected to produce lower carbon intensive LNG. Located on a 984-acre site on the banks of an uncongested deepwater channel, it will be the largest privately funded infrastructure project in Texas. Rio Grande LNG claims to be the first and only U.S. LNG project offering carbon dioxide (CO2) emissions reduction of more than 90 percent via planned carbon capture and storage – capturing and permanently storing more than 5 million metric tonnes of CO2 per year, equivalent to removing more than one million vehicles from the road annually.
Freeport LNG Sues EPC Contractors for Alleged ‘Defects’ in Train Motors --Extended outages at Freeport LNG this year were likely caused by defects in its liquefaction trains’ motors, the company claimed in a lawsuit against three engineering, procurement and construction (EPC) firms. Freeport LNG Development LP is seeking damages from Zachry Industrial Inc., Chiyoda International Corp. and CB&I Inc., which built and installed the Texas facility’s three electric-drive trains, for alleged faulty work. In an April petition filed in a Texas district court, Freeport’s lawyers outlined how crews reportedly found the technical faults in January while doing maintenance work after a system trip on Train 3.
FERC Sends Disagreement Over Calcasieu Pass LNG Documents to Administrative Court -Venture Global LNG Inc. has been tasked with cooperating with long-term offakers of its Calcasieu Pass LNG project to share some private information about the Louisiana export terminal. In a recent ruling, FERC appointed an administrative judge to manage negotiations between the liquefied natural gas exporter and a group of customers seeking information about the 10 million metric ton/year facility. If the parties cannot agree to a plan, the administrative judge could create their own protective order to release information to the customers. “Because Venture Global and customers disagree about the terms of a protective agreement, the Commission finds that the most efficient way for the parties to reach an agreement is with the assistance of an administrative law judge,” Federal Energy Regulatory Commission staff wrote in the order.
NGI’s 1Q2024 Natural Gas Supply and Demand Takeaways --Expectations for North American upstream natural gas capital expenditures in 2024 continue to show a year/year decline in the low- to mid-single digits, with subdued rig counts persisting throughout the year. Eventually, those rigs would need to resume work to account for the in-service of more Lower 48 LNG export capacity next year, and possibly to gear up for the rapid growth in data centers – although it is uncertain as to what that opportunity for incremental gas demand may be. NGI's natural gas prices vs Lower 48 production NGI reviewed some of the first quarter of 2024 earnings calls for players in the major North American oil and natural gas production areas in order to gauge future supply and demand trends. NGI’s Patrick Rau, senior vice president for Research & Analysis, also provided a rundown of the top ten themes of 1Q2024 in the latest episode of Hub & Flow. Baker Hughes Co. (BKR) – Baker Hughes has proclaimed this to be “The Age of Gas.” That’s more of a long-term view, and maybe not quite as apropos a description for 2024, at least not in North America (NA). Both Baker Hughes and SLB Ltd. continue to expect NA activity and spending to be down to the low- to mid-single digits for the rest of this year, primarily because of lower natural gas prices. Thus far in 2024, Lower 48 rigs have fallen to 600 from 622, per Baker Hughes. Even with the recent price rally – which has seen NGI’s daily Henry Hub spot market price index increase from a low of $1.240/MMBtu on March 13 to $2.635 June 3 – rigs are down by six this month.
US Natural Gas Prices Rise To 5-Month Highs On Hot Weather Forecasts - Prompt-month natural gas futures have exceeded $3 per million British thermal units on Monday, marking the highest level since mid-January 2024 and hitting a potential four-day winning streak, spurred by forecasts predicting increased cooling demand due to anticipated warm weather in June. Last week, natural gas prices rose by 12.8%, and are currently eyeing the seventh week of gains out of last eight. “With a blanket of heat stalling over the southern part of the country, market bulls maintained control,” said Jodi Shafto, senior natural gas reporter at Natural Gas Intel. Chart: US Natural Gas Price Have Rallied 95% Since Late April’s Lows NatGasWeather highlighted that much of the country is expected to experience temperatures ranging from the upper 70s and 80s in the Midwest and Northeast to the upper 80s and 90s elsewhere, with extreme heat in California and Texas reaching the mid-100s.The American forecast model predicts significantly above-average temperatures from Monday, June 17 to Monday, June 24."Either way, the pattern is hot enough for stronger-than-normal demand," NatGasWeather said. This trend is anticipated to reduce natural gas storage surpluses to around 450 billion cubic feet (Bcf) or slightly below by the end of the month, according to NatGasWeather.In the week ending May 31, U.S. utilities added 98 Bcf of gas to storage, surpassing market expectations of an 89 Bcf increase. This was the ninth consecutive week of seasonal storage increases, bringing the total stockpiles to 2,893 Bcf. This level is 373 Bcf higher than the same period last year and 581 Bcf, or 25%, above the five-year average of 2,312 Bcf.The weekend GFS lost a few CDDs, although the ECMWF gained a few. Both forecast light to moderate national demand through Thursday but then both are quite hot with the US pattern for the 3rd week of June, just with the EC numerous CDDs hotter compared to the GFS. #natgas pic.twitter.com/d28vw0jcka— NatGasWeather.com (@NatGasWeather) June 9, 2024 Companies involved in the natural gas market outperformed oil-related stocks on Monday.
US natgas prices jump 8% to 21-week high on output drop, hotter weather forecasts (Reuters) -U.S. natural gas futures jumped about 8%to a 21-week high on Tuesday on a drop in output in recent days and forecasts for hotter weather that should boost the amount of gas power generators burn to keep air conditioners humming. That price increase occurred despite forecasts for less demand over the next two weeks than previously expected, expectations gas supplies will soon rise with the giant Mountain Valley Pipeline nearing completion, and the tremendous oversupply of gas still in storage. Analysts said current gas stockpiles were still around 24% above normal levels for this time of year. OLL Mountain Valley said its pipeline from West Virginia to Virginia was "mechanically complete" and being "packed with gas." The company sought permission from the U.S. Federal Energy Regulatory Commission (FERC) to place the project into service by Tuesday, June 11. Analysts predicted FERC would probably authorize the project but not necessarily by Tuesday. Front-month gas futures for July delivery on the New York Mercantile Exchange rose 22.3 cents, or 7.7%, to settle at $3.129 per million British thermal units (mmBtu), its highest close since Jan. 12. In the spot market, next-day gas at the AECO hub in Alberta, Canada fell to 60 cents per mmBtu, its lowest price since October 2022 for a second day in a row. In other news, the U.S. National Hurricane Center said a tropical disturbance in the Gulf of Mexico had a 20% chance of becoming a cyclone over the next seven days as it blows across Florida and into the Atlantic Ocean off the Carolinas. Meteorologists predict this could be a record-setting year for hurricanes and other tropical storms. Financial firm LSEG said gas output in the Lower 48 U.S. states has fallen to an average of 97.8 billion cubic feet per day (bcfd) so far in June, down from 98.1 bcfd in May. That compares with a monthly record of 105.5 bcfd in December 2023. On a daily basis, output was on track to drop by around 2.8 bcfd over the past four days to a preliminary 20-week low of 95.2 bcfd on Tuesday. Traders, however, noted preliminary data is often revised later in the day. Before recent output declines in June, analysts said increases in May were a sign producers were slowly boosting output due to a 47% jump in futures prices in April and May. Output hit a six-week high of 99.5 bcfd on May 24. Overall, U.S. gas production has remained down around 10% so far in 2024 after several energy firms, including EQT and Chesapeake Energy, delayed well completions and cut drilling activities when prices fell in February and March. Meteorologists projected weather across the Lower 48 states would remain mostly hotter than normal through June 26. LSEG forecast gas demand in the Lower 48, including exports, would jump from 94.7 bcfd this week to 98.8 bcfd next week. Those forecasts were lower than LSEG's outlook on Monday. Gas flows to the seven big U.S. LNG export plants have risen to 13.1 bcfd so far in June, up from 12.9 bcfd in May. That, however, remains well below the monthly record high of 14.7 bcfd in December 2023 due to ongoing maintenance at several plants, including Cheniere Energy's LNG.N Sabine Pass, Venture Global's Calcasieu Pass and Cameron LNG's plant in Louisiana.
US natural gas prices fall 3% after Mountain Valley pipe startup approved (Reuters) -U.S. natural gas futures fell about 3% on Wednesday on expectations that supplies will soon rise with the approved startup of the Mountain Valley gas pipe and news about plans by EQT, the nation's biggest gas producer, to boost output. Federal energy regulators approved the startup of the Mountain Valley Pipeline from West Virginia to Virginia late Tuesday. Analysts expect the Mountain Valley startup will allow Appalachian producers to slowly boost output in coming months as other energy firms fix constraints on connecting pipes in Virginia and other states, allowing gas flows on Mountain Valley to reach the pipe's full 2-billion-cubic-feet-per-day(bcfd) capacity. In other news, EQT CEO Toby Rice told Natural Gas Intelligence at the LDC Gas Forums Northeast conference in Boston that EQT started to bring back some of the 1 bcfd of production it started to curtail in February when gas prices dropped. With gas prices rising in April and May, analysts said they sawsigns that EQT and other producers started to boost output again in May. Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 8.4 cents, or 2.7%, to settle at $3.045 per million British thermal units (mmBtu).On Tuesday, the contract closed at its highest price since Jan. 12. The futures price decline came despite an ongoing drop in output so far in June and forecasts for hotter weather through at least the end of the month that should boost the amount of gas power generators need to burn to keep air conditioners humming. Other factors keeping a lid on futures prices this year include consistently lower spot prices at the U.S. Henry Hub benchmark NG-W-HH-SNL in Louisiana and the oversupply of gas in storage despite six weeks of smaller-than-usualstorage builds. Analysts said current gas stockpiles were still around 24% above normal levels for this time of year. Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.7 bcfd so far in June, from 98.1 bcfd in May. That compares with a monthly record of 105.5 bcfd in December 2023. On a daily basis, output was on track to drop by around 2.3 bcfd over the past five days to a preliminary 21-week low of 95.7 bcfd on Wednesday. Traders, however, noted preliminary data is often revised later in the day. Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least June 27. LSEG forecast gas demand in the Lower 48, including exports, would jump from 95.3 bcfd this week to 98.9 bcfd next week. The forecast for this week was higher than LSEG's outlook on Tuesday. Gas flows to the seven big U.S. LNG export plants rose to 13.1 bcfd so far in June, from 12.9 bcfd in May.
US natgas prices fall 3% on forecasts for lower demand, higher output (Reuters) -U.S. natural gas futures fell about 3% on Thursday on lowered demand forecasts for the next two weeks, expectations supplies will soon rise once the Mountain Valley gas pipeline enters service, and news that recent increases in prices and demand prompted EQT, the nation's biggest gas producer, to start boosting output. Traders said prices were also pressured by upward revisions to past weeks' storage builds in the latest report even though last week's storage build was seasonally small for a fifth straight week. Producers cut output after futures prices dropped to 3-1/2-year lows in February and March. The U.S. Energy Information Administration (EIA) said utilities added 74 billion cubic feet (bcf) of gas into storage during the week ended June 7. But working gas stocks were revised higher for the five-week period from May 3-31 by increasing inventories by 6 bcf to 9 bcf for each week during the period. For the week ended June 7, the stock build was in line with the 74-bcf addition analysts forecast in a Reuters poll. That compares with an increase of 90 bcf in the same week last year and a five-year (2019-2023) average rise of 89 bcf for this time of year. This week's build left stockpiles about 24% above normal for this time of year. Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 8.6 cents, or 2.8%, to settle at $2.959 per million British thermal units (mmBtu). The futures price decline occurred despite forecasts for hotter weather through at least the end of June that should boost the amount of gas power generators need to burn to keep air conditioners humming. . On a daily basis, output was on track to rise by around 0.4 bcfd over the past two days to a preliminary 96.9 bcfd on Thursday, up from a 20-week low of 96.5 bcfd on Tuesday. Before recent output declines in June, analysts said increases in May were a sign producers were slowly boosting output due to a 47% jump in futures prices in April and May. Output hit a six-week high of 99.5 bcfd on May 24. EQT EQT.N said this week that it started boosting output. Overall, U.S. gas production was still down around 9% so far in 2024 after several energy firms, including EQT and Chesapeake Energy, delayed well completions and cut drilling activities when prices fell in February and March. Chesapeake is on track to become the biggest producer after its merger with Southwestern Energy SWN.N. Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least June 28. LSEG forecast gas demand in the Lower 48, including exports, would jump from 94.9 bcfd this week to 98.5 bcfd next week. Those forecasts were lower than LSEG's outlook on Wednesday.
Strengthening Natural Gas Prices Seen Driving Production Boost in 2025, EIA says --The U.S. Energy Information Administration (EIA) is projecting a Henry Hub natural gas spot price average of $2.50/MMBtu for 2024, up 13% from the average price the agency modeled last month.In the June release of its Short-Term Energy Outlook (STEO), published Tuesday, EIA said it expects the national benchmark’s average spot prices to climb to $3.30 in December from $2.12 in May, because of the decline in Lower 48 natural gas production. EIA said marketed natural gas production in the United States averaged 110 Bcf/d in May, 3% below the average produced in the first quarter of this year.
US weekly LNG exports reach 26 shipments - US liquefied natural gas (LNG) exports reached 26 shipments in the week ending June 5 and pipeline deliveries to US terminals increased compared to the week before, according to the Energy Information Administration.The agency said in its weekly report that 26 LNG carriers departed the US plants between May 30 and June 5. This is the same number of shipments compared to the week before.Citing shipping data provided by Bloomberg Finance, the EIA said the total capacity of these LNG vessels is 94 Bcf.Average natural gas deliveries to US LNG export terminals increased 0.2 Bcf/d from last week to 13.2 Bcf/d, according to data from S&P Global Commodity Insights.Natural gas deliveries to terminals in South Louisiana increased 7 percent (0.5 Bcf/d) to 8 Bcf/d, while natural gas deliveries to terminals in South Texas decreased 4.5 percent (0.2 Bcf/d) to 4 Bcf/d.The agency said that natural gas deliveries to terminals outside the Gulf Coast averaged 1.2 Bcf/d this week, down from 1.3 Bcf/d the previous week. Cheniere’s Sabine Pass plant shipped eight cargoes and the company’s Corpus Christi facility sent four shipments during the week under review.The Freeport LNG terminal shipped five cargoes, while Venture Global LNG’s Calcasieu Pass facility and Sempra Infrastructure’s Cameron LNG terminal each shipped three cargoes during the period.Also, the Cove Point facility sent two cargoes and the Elba Island facility sent one cargo during the week under review.This report week, the Henry Hub spot price rose 1 cent from $2.21 per million British thermal units (MMBtu) last Wednesday to $2.22/MMBtu this Wednesday.The July 2024 NYMEX contract price increased to $2.757/MMBtu, up 9 cents from last Wednesday to this Wednesday.The price of the 12-month strip averaging July 2024 through June 2025 futures contracts also climbed 9 cents to $3.223/MMBtu, the agency said.The agency said that international natural gas futures were mixed this report week.Bloomberg Finance reported that weekly average front-month futures prices for LNG cargoes in East Asia decreased 2 cents to a weekly average of $11.98/MMBtu.Natural gas futures for delivery at the Dutch TTF increased 14 cents to a weekly average of $11/MMBtu.In the same week last year (week ending June 7, 2023), the prices were $9.25/MMBtu in East Asia and $7.95/MMBtu at TTF, the agency said.
EIA: U.S. Crude Oil Production to Average 13.2 million bpd in 2024 | OilPrice.com The U.S. Energy Information Administration (EIA) released its June 2024 Short-Term Energy Outlook (STEO) today. The EIA expects U.S. crude oil production to average 13.2 million barrels per day (b/d) in 2024—an increase of 2% from 2023 levels. The EIA sees U.S. crude oil production averaging 13.7 million bpd in 2025. The increase in production will be led by the Permian, according to the EIA, and Eagle Ford. This production outlook remains unchanged from the May version of the Short-Term Energy Outlook. Meanwhile, weekly U.S. crude oil production data published by the Energy Administration Information has held at an average of13.1 million barrels per day every week for the last twelve weeks. For their global oil production outlook, the EIA sees OPEC+ largely adhering to its production targets announced earlier this month. While OPEC+ extended its production cuts, “our expectation is that OPEC+ crude oil production will follow these new targets until 2025. At that time, we expect that some OPEC+ producers will keep production below the targets in an effort to limit global oil inventory builds,” the EIA said in its report. While crude oil production forecasts have held steady, pricing forecasts have not. In terms of pricing, the EIA is now forecasting Brent crude oil prices to average $84 per barrel in 2024, up from an average of $82 per barrel in 2023 and $101 per barrel in 2022. The EIA’s previous report forecast 2024 Brent spot pricing at $88. For next year, the EIA held its Brent price forecast steady at $85 per barrel. For natural gas, the report anticipates Henry Hub natural gas spot prices to average $2.50 per million British thermal units (MMBtu) in 2024—steady on 2023 levels but up from the $2.20/MMBtu forecasted for 2024 last month, with the agency forecasting U.S. marketed natural gas production increasing by 2% next year. For 2025, the EIA anticipates $3.20/MMBtu for natural gas.
Utilities Planning Plethora of Natural Gas Power in Texas as Demand Soars -- Utility Entergy Texas Inc. is forecasting the need to add 40% more generation capacity to its fleet to meet economic and population growth in southeast Texas. The company filed an application with the Public Utilities Commission of Texas (PUCT) for two natural gas-fired power plants to be named Legend and Lone Star. "The Legend and Lone Star plants will address the critical need to increase power generation capacity, support increased economic activity throughout the region and pave the way for the creation of sustainable energy solutions that will benefit Southeast Texas for decades to come," said CEO Eliecer Viamontes. "These future projects are expected to save customers approximately $370 million over the life of the plants."
Growth in U.S. Oil and Gas Output Slows Down Oil and gas production in the United States hit record highs at the end of 2023 but has since trended lower, and the growth in output has slowed year-over-year.U.S. companies have slowed production growth rates as oil prices stabilized at lower levels last year compared to the 2022 highs, and U.S. natural gas prices saw a slump to multi-decade lows early this year. This year's increase in shale and overall U.S. crude production will be much lower than in the past two years, analysts and forecasters say.The decline in oil and gas prices compared to the spikes seen in 2022, the ongoing merger wave in the U.S. shale industry, and the focus on shareholder returns—instead of production growth—have all combined to drag output growth lower in recent months. The total number of active drilling rigs for oil and gas in the United States saw no change in the last week of May, according to data from Baker Hughes. The total rig count stayed the same at 600, compared to 696 rigs this same time last year.Meanwhile, U.S. crude oil production stayed the same for the eleventh week in a row at an average of 13.1 million barrels per day (bpd) for the week ending May 24—down by 200,000 bpd from the all-time high of 13.3 million bpd.Moreover, Primary Vision's Frac Spread Count, an estimate of the number of crews completing wells that are unfinished, fell by 6 in the week ending May 24, to 257.As a result, growth from the Lower 48 basins was no more than 500,000 bpd in March 2024 from the same month last year, per EIA data cited by Reuters columnist John Kemp. This compares to yearly growth of up to 1 million bpd in the second half of 2023.In other words, U.S. oil production is growing, but at a much slower pace than in 2022 and 2023.
Biden EIA Dumps Detailed Monthly U.S. Shale Drilling Report - Marcellus Drilling News - It is the sad end of an era brought about by the Bidenistas at the U.S. Energy Information Administration (EIA). For years, since the very first Drilling Productivity Report (DPR) issued by the EIA, MDN has brought you the monthly DPR, a report that delves into the latest numbers for each of the seven major shale plays in the U.S. The monthly DPR reported estimates of production for each play each month, along with DUC (drilled but uncompleted well) counts and other vital statistics. But, no more. We checked the EIA’s DPR report pagetoday and found this notice: “Beginning June 11, 2024, we will publish the shale gas tight oil production data and Drilling Productivity Report data in the Short-Term Energy Outlook (STEO) data tables. These improvements will provide a disaggregated STEO forecast for oil and natural gas production in different regions of the United States.”
US Democrats Escalate Oil Price Fixing Crackdown to DOJ -- The House Judiciary Committee of Democrats has urged the United States Department of Justice (DOJ) to investigate potential collusion among oil and gas companies to inflate prices artificially. The call, made through a letter to Attorney-General Merrick Garland and Assistant Attorney-General Jonathan Kanter, comes after the House Committee of Democrats for Energy and Commerce initiated a probe into the matter. Both lower house committees cited the Federal Trade Commission’s (FTC) accusation that former Pioneer Natural Resources Co. chief executive Scott Sheffield had schemed with representatives from the Organization of Petroleum Exporting Countries (OPEC) and OPEC ally countries to curb production to boost prices. The FTC found out about Sheffield’s purported attempts at price fixing during an extended anti-trust review of Exxon Mobil Corp’s $64.5 billion acquisition of Pioneer. It banned Sheffield from holding a board or advisory position at ExxonMobil as a condition in granting anti-trust clearance, according to an FTC statement May 2. While Sheffield retired from the chief executive role last year, he remained on the Pioneer board. Pioneer then issued a statement saying Sheffield would not contest the condition and prevent the merger. Pioneer however argued that the FTC accusation “reflects a fundamental misunderstanding of the U.S. and global oil markets and misreads the nature and intent of Mr. Sheffield’s actions”. “On the contrary, Mr. Sheffield focused on legitimate topics such as investor feedback on independent oil and gas company growth and capital reinvestment frameworks; unfair foreign practices that threatened to undermine U.S. energy security; and, through dialogue with government officials, the need to sustain a resilient, competitive and economically vibrant oil and gas industry in the United States”, Pioneer said. ExxonMobil announced the completion of the merger May 3. In the letter to the DOJ leadership, the Democrat lawmakers claimed, “Taken together, the FTC’s allegations suggest a potentially widespread conspiracy among U.S. oil producers to keep prices high by artificially suppressing production”. “Gas prices today average $3.60 per gallon, up from last year”, they said. “As Americans contend with the rising cost of living, prices at the pump play a major role. In a single month last year, rising gas prices made up more than half of the overall increase in the rate of inflation”. “Troublingly, the full extent of this price-fixing conspiracy may never have come to light had Exxon not acquired Pioneer”, stated the letter, signed by 10 legislators including Jerrold Nadler, ranking member of the House Judiciary Committee of Democrats. “[T]he antitrust enforcement authorities must immediately open full investigations into this illegal scheme”, the letter said. “Because DOJ has sole authority for criminal antitrust enforcement, your Department must take the lead in this effort. “We urge you to immediately open an investigation into a potential antitrust conspiracy among U.S. oil producers, OPEC, and OPEC+. We strongly encourage you to use every tool at the Department’s disposal, including criminal penalties, to uncover and punish wrongdoing”. Responding to the recent conspiracy about price fixing, industry lobby group American Petroleum Institute (API) said U.S. producers have played a key role in helping “rebalance” the global oil and gas market, but has not directly addressed the allegations of collusion. “While we don’t know the details of the FTC’s allegations against one individual, the FTC itself acknowledges the undeniable fact that U.S. producers have led the world in production gains over the past few years”, API spokesperson Andrea Woods told Rigzone in comments about the probe by the House Committee of Democrats for Energy and Commerce. “This increase in American production has been instrumental in meeting growing demand and helping rebalance markets—especially in the face of supply cuts from OPEC and other producers”, the statement added.
Fight over constitutional provisions to guard against oil, gas pollution moves ahead in New Mexico (AP) — A New Mexico judge cleared the way Monday for a landmark lawsuit to proceed that alleges the state has failed to meet its constitutional obligations for protecting against oil and gas pollution.Environmental groups and Native Americans who live near oil wells in the No. 2 producing state in the U.S. initially filed the case in 2023. They are seeking compliance with a “pollution control clause” in the New Mexico Constitution.Judge Matthew Wilson denied a motion by the state to dismiss the case, saying there needs to be more scrutiny of New Mexico’s responsibilities under the constitution and that granting the state’s request would short-circuit that examination.Attorneys for the plaintiffs celebrated the judge’s ruling, saying it will allow residents of New Mexico who have been living with the consequences of more oil and gas development in opposite corners of the state to have their day in court.“The case can go forward on the undisputed facts about the extent of the pollution and the extent of the state’s failure to control that pollution,” said Gail Evans, an attorney with the Center for Biological Diversity.She said plaintiffs have cleared a critical hurdle in the judicial process to bring forward evidence of constitutional violations.“I’m confident the court will definitively enforce the constitutional protection of our state’s beautiful and healthful environment on behalf of the plaintiffs and every resident of New Mexico,” Evans said.Lujan Grisham’s administration has in recent years adopted rule changes aimed at limiting emissions from the oil and gas industry. However, environmental groups have raised concerns that enforcement isn’t keeping pace despite fines being levied against out-of-state energy companies and major settlements being inked to address air pollution.A spokesman for Democratic Gov. Michelle Lujan Grisham said Monday evening that the administration was still reviewing the judge’s decision.“We will continue to vigorously defend these claims,” said Michael Coleman, communications director to the governor.Attorneys for the Legislature did not immediately respond to requests for comment. Two major business associations — the New Mexico Chamber of Commerce and the Independent Petroleum Producers Association of New Mexico — have formally intervened in court proceedings, unsuccessfully urging dismissal of the lawsuit.
Oil Paychecks Set a Record Even as Shale Industry Consolidates - Wages for US oil workers set a fresh record in April as a wave of acquisitions in the shale industry has yet to impact the labor force. Average hourly earnings for front-line oil and gas workers rose 0.5% from March to $44.67, according to a Labor Department report released Friday.
Study: Minorities ‘systematically’ underrepresented in US petrochemical workforce This country’s heaviest polluters also rely on a workforce that disproportionately fails to fill good-paying jobs with people of color who are more likely to be affected by their emissions, according to a new study.The research, from Tulane University’s Environmental Law Clinic — currently under peer review — finds that people of color are underrepresented in high-paying jobs in both the chemical manufacturing and petroleum/coal industry.And Louisiana, with one of the largest concentrations of petrochemical facilities in the United States, is the only state where minorities were underrepresented in low-paying and high-paying jobs in both industries.For advocates there, this new report is proof that the good jobs are going to white people while much of the toxic emissions and health risks are being endured by people living in the surrounding communities, which tend to be low-income or predominantly minority.“The pollution versus jobs narrative is really oversimplified because the trade off affects different groups unevenly,” said Kimberly Terrell, director of community engagement and a staff scientist with the Tulane law clinic who led the research team. “Petrochemical jobs that mostly go to white workers can’t offset the harm of petrochemical pollution that mostly occurs in Black and Hispanic neighborhoods.”The research showed that people of color were generally underrepresented in high-paying jobs in both the chemical manufacturing sector and petroleum/coal industry and often were over-represented in low-paying jobs in the chemical industry, with results “mixed” for the same category on the petroleum side.In another recently released report, researchers described a situation in Louisiana’s Plaquemines Parish in which local residents of color were unable to take advantage of construction jobs at a terminal that exports methane, also known as liquefied natural gas.The Mississippi River ferry connecting the plant to the community did not run early enough to get the employees to work by 5 a.m., as required. And prospective workers — many without reliable transportation — had to attend weeks of training in New Orleans 55 miles away, according to researchers from Texas Southern University and the University of Montana.Nationally, higher paying jobs in the chemical manufacturing industry disproportionately went to more white people in Texas, Louisiana and Georgia, where minorities represent 59%, 41% and 49% of their respective states’ populations but held 38%, 21% and 28% of the better-paid jobs within the industry.In the petroleum/coal industry, people of color were underrepresented in higher-paying jobs in at least 14 states — including Texas, California, Louisiana, Ohio, Pennsylvania and Illinois.
Mexico’s U.S. Natural Gas Imports Hitting All-Time Highs in June – Spotlight --North American natural gas futures for the coming summer months rose above the $3.00/MMBtu mark this week. Expect stronger prices throughout the summer, said analysts who spoke at the LDC Gas Forums Northeast in Boston. They said that sizzling temperatures, combined with lower production, would bolster prices. They also cited rising imports of U.S. natural gas in Mexico. Mexico has imported 7.61 Bcf/d over the past 10 days, according to NGI calculations. Every U.S. region has seen an increase in pipeline pulls from Mexico this month, according to NGI analyst Josiah Clinedinst.
Heatwaves, Supply Outages Supporting Global Natural Gas Prices – LNG Recap --Hot weather and maintenance work cutting into supplies pushed global natural gas prices higher on Monday. NGI's European natural gas storage chart. The Dutch Title Transfer Facility in Europe gained about 3% on Monday, when it neared the $11/MMBtu level. Norwegian output has returned to normal levels of about 12 Bcf/d after volumes dropped roughly 20% last week following an unplanned outage at the Sleipner field that pushed prices to a six-month high. “Surging gas prices across markets last Monday tell a story of vulnerability worldwide,” said Rystad Energy analyst Christoph Halser.
Atlantic LNG shipping rates continue to climb, European prices drop - Atlantic spot liquefied natural gas (LNG) freight rates continued to increase this week, while European prices decreased compared to the previous week.Last week, freight rates increased with the Atlantic rate reaching $52,500 per day.“Atlantic freight rates have experienced a third consecutive week of significant rate increases, with the Spark30 Atlantic rate increasing by $4,500 to $57,000 per day, and the Spark25 Pacific rate staying steady at $45,250 per day,” Qasim Afghan,” Spark’s commercial analyst told LNG Prime on Friday.“The last three weeks have seen the largest week-on-week Spark30 freight rate increases of the year thus far,” he said.In Europe, the SparkNWE DES LNG front month dropped compared to the last week.“SparkNWE DES LNG prices experienced some volatility this week, with the front month price assessed for July delivery rising to a year-to-date high of $11.323/MMBtu on Monday before falling to its current assessment of $10.575/MMBtu, and the discount to the TTF assessed at $0.165/MMBtu,” Afghan said.He said this is a $0.451/MMBtu week-on-week decrease in DES LNG price, the largest week-on-week decrease in six weeks.European prices rose earlier this week after an unplanned outage at Norway’s Nyhamna gas processing plant.Gassco said that the plant, which has a capacity of 79.8 mcm per day, is expected to ramp up capacity to 45mcm/day on Friday.Data by Gas Infrastructure Europe (GIE) shows that volumes in gas storages in the EU continued to rise and storages were 70.86 percent full on June 5. Gas storages were 69.48 percent full on May 29, and 70.54 percent full on June 5 last year.In Asia, JKM, the price for LNG cargoes delivered to Northeast Asia, for July settled at $11.985/MMBtu on Thursday. Last week, JKM for July settled at 11.906/MMBtu on Friday. It rose to 12.050/MMBtu on Monday this week and dropped slightly to 11.990/MMBtu on Tuesday and 11.970/MMBtu on Wednesday. State-run Japan Organization for Metals and Energy Security (JOGMEC) said in a report earlier this week that JKM continued its upward trend last week due to increased demand in Asia for the summer season and increased electricity demand due to the heatwave in India, as well as continued supply uncertainties such as troubles at Chevron’s Gorgon LNG plant in Australia.Chevron Australia resumed full LNG production from the Gorgon facility on May 29. After that, there was a temporary outage at the facility and Chevron resumed full production on June 3. US LNG exports reached 26 shipments in the week ending June 5, the same as in the week before, and pipeline deliveries to US terminals increased compared to the week before, according to the Energy Information Administration. As per spot LNG cargo tenders, Komipo is seeking 3.2-3.8 trillion British thermal units (TBtu) of LNG on a delivered ex-ship (DES) basis.The delivery window is August 7-9 and the volumes will be delivered to a Kogas-operated LNG import terminal in South Korea, according to Komipo.Power producer First Gen is also seeking one spot LNG cargo for delivery in July to its FSRU-based import terminal in Batangas, Philippines.Egypt is reportedly seeking cargoes to meet electricity needs during the summer months. Norwegian FSRU player Hoegh LNG recently confirmed it has signed a deal with Australian Industrial Energy (AIE) and Egypt’s EGAS to deploy the 2019-built FSRU Hoegh Galleon to Egypt.
Europe on Track to Refill Natural Gas Storage Inventories Despite Potential Headwinds --An influx of LNG once again has Europe on track to fill its storage inventories ahead of the winter heating season. A surge in liquefied natural gas imports has offset the loss of Russian pipeline deliveries to Europe since mid-2022, and has helped to keep storage inventories elevated. The continent remains the largest importer of U.S. LNG for the third year in a row. Storage facilities across Europe are 71% full, compared to the five-year average of about 59%. Inventories are expected to continue climbing at comfortable levels and are forecast to hit the mid-90% range by the end of October, Goldman Sachs Commodities Research said in a recent note to clients.
Europe’s Gas Supply Risks Remain Despite Record Storage Levels | OilPrice.com --Europe’s natural gas prices have jumped by 40% over the past three months despite the EU exiting the winter heating season with a record-high level of gas still in storage. The price move higher during the so-called shoulder season when household gas demand is low was the result of concerns about supply disruptions and an uptick in Asia’s LNG imports due to lower spot prices and heat waves in parts of China as well as India and other Southeast Asian countries. The stronger pull of LNG to Asia has left Europe with fewer imports in the spring, and the major surplus in European gas storage levels, while still at a record high and well above seasonal averages, has narrowed since the end of the winter heating season. Risks to Europe’s gas supply remain, as the most recent spikes in the continent’s benchmark prices have shown. Europe will likely fill up its storage sites ahead of its self-imposed November 1 deadline for a second consecutive year, analysts say. But concerns about another cut-off in the remaining supply from Russia and unplanned outages in Norway—now Europe’s single largest gas supplier—will keep the markets on edge and prices elevated toward the end of this year. The EU’s gas storage sites were 72.3% full as of June 11, according to data from Gas Infrastructure Europe.Refilling season has started, and the EU has raised its gas in storage levels from 58% at the end of the winter, which was in itself a record-high level of available gas for the end of a heating season, thanks to a milder winter and muted demand from industry.Now that the refill season is in full swing, it has been an unusually slow start to the pace of refilling, the second-slowest since 2012 and well below the ten-year seasonal average, according to data compiled by Reuters market analyst John Kemp. The surplus of gas stocks, compared to the ten-year average, has narrowed by early June compared to the end of the heating season on March 31. That said, storage levels continue to be well above seasonal averages, and it is likely that Europe will hit its full-storage target well in advance of the November 1 deadline. However, the slower-than-usual build-up of natural gas inventories has put upward pressure on European prices, which have also reflected risks to supply from Norway and Russia in recent weeks. Asia is also increasing competition for LNG supply as heat waves scorch south and Southeast Asia, diverting cargoes away from Europe. This month, Europe’s benchmark natural gas prices have already jumped on two occasions as the market feared supply shocks. First, the Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, surged by 10% on a single day in early June to the highest level in six months, as supply from Norway crumbled amid unplanned outages. The Sleipner hub offshore Norway was shut down, which also stopped operation at the Nyhamna onshore processing plant for several days. The Sleipner Riser offshore hub is a connection point for pipelines connecting the Nyhamna plant on the west coast of Norway with the Easington terminal in the UK. The unplanned outage highlighted the vulnerability of Europe relying on natural gas imports as Norway became Europe’s top gas supplier after the Russian invasion of Ukraine and the slump in Russian gas exports to the EU. Uncertainty about the remaining Russian gas supply via pipelines to Europe also lifted the gas prices at the Dutch hub this week. Prices jumped by 3% on Wednesday morning after German energy giant Uniper terminated its Russian gas supply contracts, leaving the market concerned about the remaining flows of gas from Russia to Europe.The announcement from Uniper and the recent warning from OMV that Gazprom could halt gas supply to Austria due to a foreign court ruling that could interrupt OMV payments to Gazprom Export, rekindled concerns about whether Russian supply would be further limited by Gazprom. Higher Asian Prices Could Accelerate European Refill But as prices in Europe have jumped by 40% in three months and Asia’s spot LNG prices hover around six-month highs, the higher Asian prices could create headwinds to Asia’s LNG demand growth in the near term, Wood Mackenzie said in a report this week. “Lower European demand has depressed prices and pushed LNG into Asia with imports to China alone up 22%,” said Lucy Cullen, Research Director, EMEA Gas & LNG Research at Wood Mackenzie. “Looking ahead, high prices are likely to provide some headwinds to near-term Asian demand growth. As a result, European storage levels remain on track to reach full capacity by the end of September and stay that way through October,” Cullen added. Yet, Europe still faces supply risks, the greatest being Russian gas supply, “whether this be via an early cut of transmission via Ukraine or as a consequence of pending arbitration proceedings between European energy companies and Gazprom.” Moreover, unplanned or extended Norwegian maintenance is set to play a more significant role in Europe’s gas prices and pace of filling up storage, as Norway is now Europe’s biggest gas supplier, WoodMac’s Cullen said.
Germany's Uniper terminates Russian gas supply deals - --German state-owned energy firm Uniper has decided on Wednesday to terminate its long-term Russian gas supply contracts, officially ending its long-term gas supply relationship with Russia’s state-owned Gazprom. According to a statement by Uniper, the decision was made possible after an arbitration tribunal on June 7 awarded the company the right to terminate the contracts and awarded it an amount of more than 13 billion euros ($13.96 billion) in damages for the gas volumes not supplied by Gazprom Export, a unit of Gazprom, since mid-2022. “Although only limited gas volumes had been delivered since June 2022 and no gas volumes since the end of August 2022, the long-term gas supply contracts between the two companies were still legally in force and individual contracts would have continued to exist until the mid-2030s,” it said. After Uniper suffered “substantial losses” due to the Russian gas supply restrictions, the company initiated arbitration proceedings against Gazprom Export at the end of 2022. The option of dispute resolution via an arbitration tribunal was contractually agreed and had in the past in respect of other disputes been invoked repeatedly by both sides, Uniper said. The tribunal, seated in Stockholm, ruled in accordance with Swiss law. The arbitration ruling is legally binding and final, it said. LNG portfolio and pipeline gas “From June 2022, Gazprom Export initially supplied less natural gas to Germany and then none, although such supplies to this day are not sanctioned by the EU,” Uniper said. Uniper had to procure gas for its customers by other means, in some cases at “extremely high market prices, which at times led to additional costs for Uniper in the hundreds of millions of euros every day,” it said. The company said it was only able to bear these additional costs with state support. Uniper’s insolvency was averted with the stabilization agreement in December 2022 and the entry of the federal government as the main shareholder in Uniper. Germany agreed to buy Fortum’s stake in gas and LNG importer, Uniper, to stabilize the firm and prevent an energy shortage. Uniper and its partners developed Germany’s first FSRU-based LNG import facility in Wilhelmshaven. German LNG terminal operator Deutsche Energy Terminal operates this facility and the Brunsbüttel terminal, as well as the Stade-FSRU terminal which is expected to receive its first cargo in the second half of this year, and the upcoming second Wilhelmshaven facility. “Our termination of the contracts with Gazprom Export is the latest in a series of consistent decisions over the last three years,” Michael Lewis, CEO of Uniper said in the statement. “During this time, Uniper has written off its share in the financing of the Nordstream 2 pipeline, its stake in the Russian subsidiary Unipro, and allowed its coal supply contracts with Russia to expire,” he said. “Since then, Uniper has worked hard to diversify its gas business and is now well positioned with its global LNG portfolio and pipeline gas supplies from various regions,” Lewis said.
EU and Ukraine ask Azerbaijan to facilitate Russian gas transit (Reuters)—The European Union and Ukraine have asked Azerbaijan to facilitate discussions with Russia regarding a gas transit deal that is set to expire at the end of this year. "Yes, we were approached by the EU and Ukraine to play a role in the gas transit. We are working on that as a facilitator," Hikmat Hajiyev, a presidential advisor, said. While the EU has cut most of its Russian gas imports, some central European countries still depend on gas from Russia via a pipeline that crosses Ukraine. Austria still receives most of its gas through this route Ukraine said it would not extend the 5-yr transit contract that still transmits close to 15 Bm3y (billion cubic meters per year) of Russian gas to Europe, a fraction of the 150 Bm3y of piped gas that flowed in 2022. The deal expires at the end of December. Hajiyev declined to provide more details on how Azerbaijan might facilitate an alternate contract to take Russian gas to Europe. The EU's imports of Russian LNG have also increased to compensate for the loss of piped gas accounting for 18 Bm3 last year, according to the EU's energy regulator ACER. The EU has been trying to diversify its imports of gas and signed a deal to double imports of Azeri gas to at least 20 Bm3y by 2027, but Hajiyev warned the infrastructure and financing were still not in place to facilitate this expansion. "We need more money to invest in fields and additional investment is needed in the pipelines but the banks are not investing because it's gas," Hajiyev said, referring to limits major banks place on fossil fuel investments in favor of renewable sources. German utility Uniper has been involved in talks to find a solution to keep gas supply flowing through Ukraine to southeastern Europe, Bloomberg reported on Monday. Uniper Vice President Michael Hilmer said on Wednesday the company was seeking to negotiate increasing gas supplies from Azerbaijan in light of an energy partnership between Azerbaijan and the European Commission signed in 2022 that aims to double gas export capacity via the Southern Gas Corridor. "Everybody in the EU says we need gas but imagine Azerbaijan makes its own investment and then the EU later says there is no need for it," Hajiyev said.
Aramco, Ukraine Negotiating Deals for U.S. Natural Gas – --Saudi Arabian Oil Co., aka Aramco, has signed a tentative agreement to purchase 1.2 million metric tons/year (mmty) of LNG from NextDecade Corp.’s Rio Grande export project in South Texas. Aramco, which has been working to expand its liquefied natural gas portfolio, would purchase the super-chilled fuel from Train 4 at Rio Grande over 20 years at prices tied to Henry Hub. NextDecade sanctioned the first 17.6 mmty phase of Rio Grande last year. It expects to sanction the 5 mmty Train 4 by the end of the year. Venture Global LNG Inc. also agreed to provide a subsidiary of Ukrainian power producer DTEK with more than 2 mmty. Under a heads of agreement with D.Trading, Venture Global said it would supply LNG later this year through the end of 2026 from its Plaquemines terminal that is currently under construction. It would also supply 2 mmty for 20 years from the CP2 terminal being developed in Louisiana.
Another LNG Plant Moving Ahead After Adnoc FIDs Ruwais Project --Abu Dhabi National Oil Co. (Adnoc) has reached a final investment decision (FID) and will move ahead with its Ruwais LNG export project that’s expected to come online in 2028 and add to a wave of global supply entering service later this decade. Adnoc also awarded an engineering, procurement and construction (EPC) contract valued at $5.5 billion to a joint venture of Technip Energies NV, JGC Corp. and NMDC Energy. Technip is to lead the group. The project is being developed in Al Ruwais Industrial City and comes at a time when global liquefaction capacity is set to grow by more than 100 million metric tons (mmt) of annual capacity by 2028, primarily because of projects under construction in the United States and Qatar.
Abu Dhabi’s Adnoc greenlights its biggest LNG export project - Gulf Times -The United Arab Emirates’ biggest energy company approved a major liquefied natural gas export terminal as it seeks to tap into a growing global market for the fuel. Abu Dhabi National Oil Co made the final investment decision to build the LNG plant in the industrial city of Ruwais, according to a statement. The project will add 9.6mn tonnes of annual gas export capacity and more than double Adnoc’s production capability. The company has so far relied on its own funds to build the project and on Wednesday awarded a $5.5bn engineering and construction contract for the facility to a joint venture which comprises Technip Energies NV, JGC Holdings Corp and NMDC Energy. The decision to go ahead with the facility is the latest sign of the state company’s ambition to expand in the market globally, following recent deals for LNG projects in the US and Mozambique. Adnoc has signed some sales deals with Asian and European companies for supply from the project starting in 2028, though is yet to find buyers for all of the gas. The UAE, the oil-rich state of which Abu Dhabi is the capital, aims to boost gas output to become self-sufficient in the fuel by the end of the decade. It’s looking to take advantage of gas’s role as a bridge fuel in the energy transition, but there are concerns among environmentalists that huge methane leaks across the LNG supply chain can make the fuel worse for the environment. The new Ruwais project will compete with vast amounts of supply from its rivals. Saudi Arabia is also bolstering its gas business, with government-owned Aramco boosting production at home, buying into LNG projects in Australia and seeking assets in the US. All three Gulf states are expanding their trading arms to maximise profit from selling gas. Adnoc already has 6mn tonnes of LNG capacity at Das Island, a facility that began operations in 1977. Bloomberg News reported in March that Adnoc planned to make the final investment decision on Ruwais LNG as early as June.
China boosts gas imports in May - China’s natural gas imports, including pipeline gas and LNG, increased in May compared to the same month last year, according to customs data.Natural gas imports during the last month reached about 11.33 million tonnes, rising 6.5 percent compared to some 10.64 million tonnes in May 2023, the data from the General Administration of Customs shows.China paid about $5.42 billion for gas imports last month.During January-May, China’s gas imports reached 54.27 million tonnes, a rise of 17.4 percent year-on-year.The world’s largest LNG importer paid about $26.7 billion for gas imports in January-May, down 0.7 percent compared to the same period in 2023.There is currently no official data for LNG imports in May.China’s LNG imports increased by 22.7 percent to 25.91 million tonnes in January-April.In January this year, China’s LNG import terminals took 7.25 million tonnes of LNG, up by 22.9 percent year-on-year, in February LNG imports rose by 15.2 percent to 5.95 million tonnes, while in March LNG imports increased by 25.1 percent to 6.65 million tonnes, customs data previously showed.In April, the country received 6.22 million tonnes of LNG, up by 31.5 percent year-on-year.China’s LNG imports rose 12.6 percent in 2023, and the country overtook Japan as the world’s largest LNG importer.The country received about 71.32 million tonnes in the January-December period last year.
Chevron Shuts Down Wheatstone LNG for Repairs, Tightening Global Natural Gas Market --Chevron Corp. said Tuesday it has shut down LNG production at its Wheatstone export terminal in Western Australia for repairs at a time when other outages are keeping the global natural gas market tight. A map showing the location and related pipeline infrastructure of the Wheatstone LNG export terminal. The company said it needs to repair the fuel system on an offshore platform that feeds natural gas to the liquefied natural gas terminal and other onshore facilities. A spokesperson said the company does not have an estimate for when the repairs would be finished. Production at the two-train, 8.9 million metric tons/year export terminal has been suspended along with domestic gas production.
Second, major oil spill from barge off Tobago - Trinidad and Tobago Newsday -- The Office of the Chief Secretary (OCS) of the Tobago House of Assembly (THA) has said a large amount of fuel has been discovered drifting away from the capsized Gulfstream barge off the Cove Eco-Industrial Park, Tobago. On February 7, the vessel was found overturned and leaking an oil-like substance some 200 metres off the coast of the Cove. It was later identified as bunker fuel. The Gulfstream was reportedly being towed by another boat, the Solo Creed, when it overturned on a reef. Some 15km of Tobago’s southwestern coast were affected by the oil spill, including Kilgwyn Bay, Canoe Bay, Petit Trou Lagoon, Rockly Bay and Topaz Beach. Millions of dollars have been spent to date cleaning up the original spill, and Energy Minister Stuart Young has said the eventual cost could reach US$20 million. That estimate was given before the news of the latest spill. In a release on June 12, the OCS said Chief Secretary Farley Augustine had held an emergency meeting with stakeholders to discuss the latest development. The meeting included other THA officials, representatives from the Ministry of Energy and Energy Industries, the Environmental Management Authority, Department of Marine Affairs, the TT Coast Guard and Office of Disaster Preparedness and Management. The OCS said a preliminary assessment “indicates that there is currently no imminent threat to the coastline.” But it is believed that the “existing weather and sea conditions inclusive of high tides and high wave swells have disturbed the vessel, resulting in the hydrocarbon deposits.” The OCS said the Ministry of Energy continues to manage the de-inventory of hydrocarbons from the Gulfstream. This process involves pumping hydrocarbons from the cargo tanks on the vessel to a temporary storage location at Cove, Tobago. Tanker trucks then transport the oil to the Port of Scarborough, where it is transferred to a bunkering vessel. This vessel then goes to Pointe-a-Pierre, Trinidad, where the hydrocarbons are offloaded and stored in a tank.
Finland calls for pollution response vessel as oil spill worries mount -- FINLAND has called on the European Maritime Safety Agency to bolster its pollution response network amid fears of a dark fleet* oil spill in the fragile Baltic Sea.The Finnish Ministry of Transport and Communications said the risk of an oil spill in the Baltic (and especially in the Gulf of Finland) has grown as a result of sanctions imposed on Russia, which it said had “forced Russia to transport its oil with older vessels and weaker insurance coverage”.The ministry explained that winter poses an even greater threat, with older vessels carrying sanctioned Russian oil not suited for icy conditions. Oil spill recovery was much more difficult and expensive in icy waters than open water, the department said.Finland is asking the EMSA to station another pollution response vessel in the northern Baltic in case of a major oil spill in the ecologically sensitive region.EMSA has nine response vessels stationed around Europe, including one at Malmo, Sweden, in the southern stretch of the Baltic Sea.But that vessel is more than 600 nautical miles away from the Gulf of Finland, where a large number of dark fleet tankers transit on their way to or from key Russian ports such as Ust-Luga and Primorsk.The demand from Finland follows comments made by Swedish Foreign Minister Tobias Billström earlier this year that Russia “doesn’t care” about a potential oil spill in the Baltic. * Lloyd’s List defines a tanker as part of the dark fleet if it is aged 15 years or over, anonymously owned and/or has a corporate structure designed to obfuscate beneficial ownership discovery, solely deployed in sanctioned oil trades, and engaged in one or more of the deceptive shipping practices outlined in US State Department guidance issued in May 2020. The figures exclude tankers tracked to government-controlled shipping entities such as Russia’s Sovcomflot, or Iran’s National Iranian Tanker Co, and those already sanctioned.
DOH-6 monitors effects of New Washington oil spill – The Department of Health (DOH) Region 6 continues to monitor the effects of oil spill in New Washington town. Oil leak on May 26, 2024 came from the non-operational Barge 102 which was docked in the Metallica shipyard in Barangay Polo, the Philippine Coast Guard (PCG) said. Traces of oil leakage affected the fishing communities and livelihood of fisherfolks along Lagatik River, particularly districts 1, 2 and 3 of Barangay Pinamuk-an; Sitio Malogo, Lagatik, Riverside, and Kamingawan of Barangay Poblacion; and Sitio Kamangahan of Barangay Tambak. PCG response teams are taking the lead in oil spill containment and cleanup operations. A team from DOH-6 through its Health Emergency Management Staff (HEMS) conducted rapid environmental assessment in Metallica Shipyard to address health issues related to oil spill. DOH-6 also turned over peak flow meter, Go bags, aquatabs water purification tablets, family health kits, latex gloves, and water testing kits on May 31. Likewise, DOH-6 and New Washington’s Mayor Jessica Panambo and Municipal Health Officer Dr. Daystar Sedillo held a collaborative meeting to ensure the provision of necessary medical interventions and how to address the impacts of the oil spill. In a related development, Mayor Panambo lifted the suspension of fishing activities in affected areas along Lagatik River following the assessment of the Provincial Environment and Natural Resources Office that “the oil spill is already contained due to immediate response” by installing spill booms. The Environmental Management Bureau Region 6 also reported that “the water quality has returned to safe levels for fishing activities” based on a Certificate of Analysis on June 5.
Oil Refining in China Expected to Falter This Year after Decades of Growth - China’s decades-long boom in oil processing could falter this year in a blow to global demand and the aspirations of OPEC+ producers seeking to return supply to the market. Oil refining in the world’s top crude importer is expected to be flat or fall for the first time in data that extends back to 2004 — excluding a Covid-hit 2022 — according to most market watchers surveyed by Bloomberg. The IEA this week also reduced its processing forecast, but still sees a gain. A prolonged property crisis has weighed on China’s economy this year, while the steady uptake of new-energy vehicles and trucks powered by gas are flashing bearish signs for future oil demand. The nation’s refiners are extending maintenance schedules to account for lower consumption. China refined a record 14.76 million barrels a day last year — known as crude throughput — as demand rebounded after the pandemic, but the recovery is showing signs of faltering. The International Energy Agency said in a report Wednesday that the nation’s refinery runs slumped to Covid-era levels in April. Of the six analysts and industry consultants surveyed by Bloomberg, three forecast a year-on-year decline in processing, while two predicted refining would remain flat. One projected a gain. Jianan Sun, a London-based analyst with Energy Aspects Ltd., is in the camp that sees a decrease, along with industry consultants Mysteel OilChem and GL Consulting. Sun only recently flipped his estimate from an increase of 100,000 barrels a day this year to a loss of the same magnitude. The prospect of lower Chinese demand presents OPEC+ with a dilemma when it comes to raising output this year, especially given supply from outside of the group is swelling. The alliance has said it can adjust or reverse production changes if needed, and some analysts think a boost is unlikely. Benchmark oil prices have trended lower since early April on concerns about robust supply and soft demand, particularly from China. Industry consultants FGE and JLC are predicting China’s refining will remain flat in 2024. Rystad Energy sees a gain, but has lowered its estimate to 150,000 barrels a day from 250,000 barrels a day made at the start of the year. The start of mega-refineries such as Shandong Yulong Petrochemical Co., the expansion of China Petroleum & Chemical Corp.’s Zhenhai refinery and Cnooc Ltd.’s Daxie plant will help to underpin an increase in processing, according to Lin Ye, a senior analyst for oil trading & downstream at Rystad. China’s independent refiners — known as teapots — have struggled with lower margins for making fuels, despite access to cheaper barrels from nations such as Iran and Russia. That’s led to more maintenance, while OilChem predicts diesel yields are on track to fall to a historic low this month. Refiners will ramp up slowly from maintenance, but they are expected to have at least 1 million barrels a day of spare processing capacity that they won’t use due to poor demand, according to Mia Geng, an analyst with FGE. The consultant had predicted growth of 200,000 barrels a day earlier this year.
IEA Sees Major Oil Surplus This Decade - The International Energy Agency (IEA) has forecast a surplus petroleum production of up to eight million barrels per day (MMbpd) by 2030 as cleaner transport and electricity generation drive a decline in demand while non-OPEC countries continue to grow output capacity. “Based on today’s market conditions and policies, global oil demand will level off at around 106 mb/d [million barrels a day] towards the end of the decade amid the accelerating transition to clean energy technologies”, the multigovernmental body said in its annual medium-term market report released Wednesday. The decline would be driven by surging sales of electric vehicles, efficiency improvements in air and marine transport and oil displacement in power production notably in the Middle East, according to the report. While global refining capacity is on track to add 3.3 MMbpd between 2023 and 2030, the growth is well below historical trends. Fuel demand would still be met with the concurrent surge in non-refined fuels including biofuels and natural gas liquids, said the report on the IEA website. However, the fall in oil demand this decade would be offset by rising oil use in emerging economies, the booming petrochemicals sector especially in China and increasing fuel use for transport in India so that total oil demand is still projected to rise 3.2 MMbpd between 2023 and 2030, according to the report. The IEA nonetheless maintained its claim that world oil demand could peak by 2030. “The postpandemic rebound has faded, macroeconomic drivers remain weak and the accelerating deployment of clean energy technologies weighs heavily on key sectors and regions”, the report said. “Growth decelerates from 2.1 mb/d in 2023, with demand plateauing at 105.6 mb/d by 2029, and then shifting into a narrow contraction in the final year of our medium-term outlook”. Advanced economies are expected to continue their decades-long decline in oil use. Oil consumption in Europe and the Americas could fall by 2.9 MMbpd by 2030, according to the report. Notwithstanding the decline in demand, oil production capacity is expected to expand this decade, mostly in the United States and other producers in the Americas, at a rate outpacing global demand growth. “Total supply capacity rises by 6 mb/d to nearly 113.8 mb/d by 2030, a staggering 8 mb/d above projected global demand of 105.4 mb/d”, the report stated. Barring the coronavirus pandemic, this spare capacity is unprecedented, the report said. “Such a massive cushion could upend the current OPEC+ market management strategy aimed at supporting prices”, the report said, referring to the 12-member Organization of the Petroleum Exporting Countries (OPEC) and their Plus alliance with 10 other producing nations. While OPEC+ countries with active extra voluntary cuts of up to 2.2 MMbpd agreed to reactivate these barrels by September 2025, the plan “is subject to their caveat that the production increases can be paused or reversed depending on market conditions”, the report noted. IEA Executive Director Faith Birol said in a statement, “This report’s projections, based on the latest data, show a major supply surplus emerging this decade, suggesting that oil companies may want to make sure their business strategies and plans are prepared for the changes taking place”.
OPEC output surges 120,000 b/d in May despite quotas; Russia-led allies cut: Platts survey | S&P Global Commodity Insights - The nine OPEC members subject to quotas boosted crude oil output by 100,000 b/d in May, driven by Nigeria and Iraq, pushing the group 320,000 b/d above their collective targets, while the bloc's Russia-led allies cut production, the Platts OPEC+ survey from S&P Global Commodity Insights shows June 10. With Russia, Kazakhstan and Mexico -- among the non-OPEC allies that formed OPEC+ in 2016 -- seeing cuts to output, the alliance's overall production slid 40,000 b/d month on month to 41 million b/d, the survey found. The producers' alliance is battling to shore up the oil market amid surging production in non-OPEC+ countries like the US, Canada and Guyana, sticky inflation and weak economic indicators in China, the world's biggest crude consumer, making compliance with quotas a growing point of tension in recent months. While the Russia-led allies reduced production by 160,000 b/d month on month in May to a four-year low, putting them 25,000 b/d below their collective quota, production among the OPEC nine rose from 21.45 million b/d in April to 21.55 million b/d in May. Iran, Libya and Venezuela are exempt from production quotas under the OPEC+ accord and collectively produced an additional 20,000 b/d in May. Nigerian output was up 50,000 b/d month on month after four successive monthly declines driven by rampant crude theft and underinvestment, although the country remains below its 1.5 million b/d quota. Strong exports and supplies to the landmark Dangote refinery underpinned the rise. Iraq boosted production by 40,000 b/d to 4.28 million b/d – 280,000 b/d over its current target – despite agreeing in May to compensate for overproduction. The Platts survey estimates current oil output in Iraq's Kurdistan region, over which Baghdad has scant control, at 210,000 b/d. Non-compliant Gabon and the UAE also increased production slightly, leaving both 50,000 b/d over their respective targets. The UAE, which has a huge amount of spare capacity, recently won a quota increase that will be phased in slowly during 2025, highlighting internal competition within the group. By contrast, Russia and Kazakhstan – which have also agreed to submit compensation plans – edged closer to compliance, cutting 50,000 b/d each, but remained above their targets. Russia, which has converted an export cut into a production one and is seeing its refineries come under increasing attack from Ukrainian drones, remains 191,000 b/d above its quota, according to the survey. Kazakhstan's reduction followed maintenance at its critical Tengiz development. Mexico, which is not subject to a quota, also helped reduce OPEC+ output, dropping 50,000 b/d due to declines in ageing fields, while damage to South Sudan's only export pipeline through Sudan kept tens of thousands of barrels offline. Overproducers have until the end of June to submit plans to offset heightened output in the first half of the year. The OPEC+ alliance – formed in 2016 to wrest a larger market share – will then hold its next Joint Ministerial Monitoring Committee, which oversees the alliance's output, on Aug. 1. News of strong production in May could spell greater tensions over compliance, with crude prices slumping after the OPEC+ ministerial meeting on June 2. Platts-assessed Dated Brent fell by over $4/b in the three days after the meeting and was last assessed at $78.315/b on June 7, having edged up from five-month lows of $75.92/b on June 5. During the hybrid meeting, which saw the eight countries making voluntary cuts meet in person in Riyadh and the rest of the group dial in virtually, ministers agreed to roll over 3.6 million b/d of group-wide cuts until the end of 2025 and 2.2 million b/d of voluntary cuts through September, after which they will be gradually eased, subject to market conditions. They also kicked painful discussions about production baselines – from which quotas are calculated – into late 2025. The last round of baseline talks led to Angola quitting the group in January. OPEC+ had earlier moved the meeting from in-person in Vienna to online as the market impact of its aggressive cuts appeared to be waning. Coming alongside increased non-OPEC+ production and weaker-than-hoped demand, which have weighed on prices, the market response illustrated the challenge faced by OPEC+. Nevertheless, the alliance remains the swing producer, with roughly 40% of global production, and is optimistic about rising demand for its crude through 2025.
US Department of Energy lowered its Brent price forecast in 2024 by more than 3% - TASS -- The US Department of Energy lowered its forecast for Brent oil price in 2024 by 3.4% to $84.15 from $87.79 per barrel, according to a report from the Energy Information Administration (EIA).In 2025, the Brent price is expected to reach $85.38 per barrel, as in the previous forecast. The agency noted that OPEC+ statements following the June 2 meeting put pressure on prices, bringing them to $78 per barrel on June 6. Thus, in a June report, the US Department of Energy lowered expectations for the price of Brent oil this year to reflect a lower starting point for the forecast amid the recent decline in prices.Meanwhile, the price of WTI oil is projected to reach $79.7 per barrel in 2024 and $80.88 per barrel in 2025. In addition, the US Department of Energy kept its forecast for oil production in the country for 2024 and expects output to reach 13.2 mln barrels per day (bpd). Expected oil production volumes in the country in 2025 were maintained at 13.7 mln bpd.
The Market Was Well Supported By Hopes of Increasing Fuel Demand This Summer - The crude market on Monday rallied higher, recovering after three weeks of losses. The market was well supported by hopes of increasing fuel demand this summer. Goldman Sachs analysts expect Brent prices to increase to $86/barrel in the third quarter, saying that solid summer transport demand will push the oil market into a third quarter deficit of 1.3 million bpd. The oil market posted a low of $75.23 on the opening and started its upward trend as it failed to test its support at its previous low of $75.21. The market breached its previous high of $76.25 and retraced more than 62% of its move from a high of $80.62 to a low of $72.48 as it rallied to a high of $77.96 ahead of the close. The July WTI contract settled up $2.21 at $77.74 and the August Brent contract settled up $2.01 at $81.63. The product markets ended the session in positive territory, with the heating oil market settling up 6.3 cents at $2.4147 and the RB market settling up 2.83 cents at $2.4109. Goldman Sachs said a healthy growth in consumer spending and solid summer demand will push the oil market to a 1.3 million bpd deficit in the third quarter and increase benchmark Brent prices to $86 a barrel. The bank cut its 2024 oil demand growth forecast by 200,000 bpd to 1.25 million bpd, but maintained that it expects demand growth to be strong mainly due to jet fuel recovery. The modest China-driven demand growth downgrade for 2024 offsets a 100,000 bpd cut to non-OPEC supply and an assumption of higher U.S. strategic petroleum reserve purchases. The Wall Street bank sees Brent averaging at $84/barrel and WTI at $79/barrel in 2024. It continues to expect Brent in $75-$90 range, and kept its 2025 average price forecast unchanged at $82/barrel. The bank’s analysts said they see a $75/barrel floor under Brent as physical demand for oil, including from China and the U.S. SPR, tends to rise when prices fall. Goldman Sachs said OPEC’s agreement on new production baselines through 2026 signals stronger cohesion, further reducing the likelihood of much lower prices. It noted that financial demand for oil is likely to increase substantially if currently very low speculative positioning normalizes. The U.S. Central Command said the Swiss-owned Tavvish and German-owned Norderney container ships were damaged by Iran-backed Houthi anti-ship ballistic missiles fired within the last 24 hours. According to S&P Global Commodities at Sea, Tavvish is destined for Djibouti while Norderney is headed for Dubai’s Jebel Ali. The UK Maritime Trade Operations said the attacks in the Gulf of Aden off Yemen occurred over June 8th-9th. The U.S. announced sanctions on 10 people, ships and companies in a bid to choke off commodity revenue for Yemen’s Houthi rebels. The U.S. Treasury Department said the sanctions targeted the network of Houthi financial facilitator Sa’id al-Jamal, who has already been subjected to repeated sanctions. Also among the targets was Lainey Shipping Ltd. IIR Energy said U.S. oil refiners are expected to shut in about 66,000 bpd of capacity in the week ending June 14th, increasing available refining capacity by 71,000 bpd. Offline capacity is expected to increase to 83,000 bpd in the week ending June 21st
Oil prices up 3% to one-week high on hopes of higher summer fuel demand (Reuters) - Oil prices climbed about 3% to a one-week high on Monday, buoyed by hopes of rising fuel demand this summer despite a stronger U.S. dollar and expectations the U.S. Federal Reserve will leave interest rates higher for longer. The Fed hiked interest rates aggressively in 2022 and 2023 to tame a surge in inflation. Those higher rates have boosted borrowing costs for consumers and businesses, which can slow economic growth and reduce demand for oil. Similarly, a stronger U.S. dollar can reduce demand for oil by making dollar-denominated commodities like oil more expensive for holders of other currencies. Brent futures rose $2.01, or 2.5%, to settle at $81.63 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $2.21, or 2.9%, to settle at $77.74. That was the highest close for both crude benchmarks since May 30. "Futures are higher as expectations of summer demand are supportive of prices ... despite the broader macro landscape remaining less optimistic than weeks previous," Goldman Sachs analysts said they expect Brent to rise to $86 a barrel in the third quarter, noting in a report that solid summer transport demand will push the oil market into a third-quarter deficit of 1.3 million barrels per day (bpd). The U.S. dollar, meanwhile, rose to a four-week high against a basket of other currencies as the euro fell sharply due to political uncertainty in Europe after gains by far-right parties in voting for the European Parliament prompted a bruised French President Emmanuel Macron to call a snap national election. Oil last week posted a third straight weekly loss on concerns that a plan to unwind some production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, from October will add to rising supply. Despite the OPEC+ cuts, oil inventories have risen. U.S. crude stocks increased in the latest week, as did gasoline stocks. Investor attention now turns to the release of U.S. consumer price index data for May on Wednesday for hints on when the Fed may start reducing interest rates. The market is also waiting for the conclusion of the Fed's two-day policy meeting on Wednesday, in which the central bank is overwhelmingly expected to hold interest rates steady. The market is also waiting for monthly oil supply and demand data from the U.S. Energy Information Administration (EIA) and OPEC on Tuesday and the International Energy Agency (IEA) on Wednesday.
Oil Steadies as Traders Await Fed Interest Rate Decision -- Oil prices steadied as traders await Wednesday’s interest-rate decision from the Federal Reserve to gauge the economy’s strength and the trajectory of oil demand. West Texas Intermediate swung between gains and losses before ending the session near $78 a barrel. Crude had rallied almost 3% on Monday as traders decided to “buy the dip” following a decision by OPEC+ to restore some supply this year. The initial selloff prompted the group to clarify it could pause or reverse production changes if needed. “After recent declines, oil prices have room to recover in the short term,” Morgan Stanley analysts said in a note. “Nevertheless, inventories are currently higher than we expected some time ago, and on current trends, supply/demand balances will likely weaken after the third quarter.” Traders are watching for a Federal Reserve interest-rate decision due on Wednesday. A robust economy and still-high inflation in the US have seen investors pare bets that the central bank’s pivot will happen anytime soon. The resulting strength in the dollar has added pressure to prices. Oil has trended lower since early April on concerns about soft demand and swelling supply from outside of OPEC. Output from Russia last month stayed above a level the country had pledged to the OPEC+ alliance, even as it made the deepest cuts in more than a year. In the US, signs of robust supplies continue. Crude output is expected to swell by 310,000 barrels a day this year to a record above 13.2 million barrels a day, about 40,000 barrels a day more than projected in May, according to a monthly Energy Information Administration report Tuesday. OPEC maintained its forecasts for strengthening demand in the second half on continued economic growth in China and other emerging economies, the organization said in a monthly report. The International Energy Agency will release its monthly report on Wednesday. WTI for July delivery rose 0.2% to settle at $77.90 a barrel in New York. Brent for August settlement advanced 0.4% to settle at $81.92 a barrel.
Oil prices recover from sell-off as OPEC sticks to demand and steady economic growth forecasts - Crude oil futures held to gains Tuesday as OPEC stuck to its demand forecasts, counting on steady economic growth this year.Oil prices rallied more than 2% on Monday with U.S. crude oil booking its best day since Feb. 8. The market has recovered the losses from last week, after selling off to four-month lows in the wake of the decision by OPEC+ to increase crude production in October. Here are Tuesday's closing energy prices:
- West Texas Intermediate July contract: $77.90 per barrel, up 16 cents or 0.21%. Year to date, U.S. oil has gained 8.7%.
- Brent August contract: $81.92 per barrel, up 29 cents, or 0.36%. Year to date, the global benchmark is ahead 6.3%.
- RBOB Gasoline July contract: $2.40 per gallon, little changed. Year to date, gasoline is up 14.5%.
- Natural Gas July contract: $3.12 per thousand cubic feet, up 7.67%. Year to date, gas has advanced 24%.
OPEC is projecting oil demand growth of 2.2 million barrels per day for 2024 and 1.8 million bpd in 2025, according to the group's monthly report. The oil producers see global economic growth of 2.8% this year and 2.9% in 2025.OPEC expects the services sector to maintain stable momentum and drive economic growth in the second half of the year, "particularly supported by travel and tourism, with a consequent positive impact on oil demand."Traders appeared to be "buying the dip" after many investors abandoned their long positions in the wake of the OPEC+ production decision. "After oil prices experienced a bearish confluence of events, shook out much length and toyed with being oversold, there is almost an inevitability in the rally back to current levels," . Money managers cut their net long position in Brent by 69% week over week to the lowest level since 2014 in the wake of the OPEC+ decision, according to JPMorgan.Despite the bearish sentiment last week, Goldman Sachs forecast the market will enter into a deficit on summer fuel demand that will push Brent back up to $86 per barrel in the third quarter.Traders are looking ahead to the conclusion of the Federal Reserve meeting and U.S. inflation data for May on Wednesday. The International Energy Agency will release its monthly oil market report the same day.
WTI Bounces After API Reports Crude, Gasoline Draw --Oil prices edged higher today as traders anxiously await tomorrow's CPI and FOMC risk catalysts for any signals on the trajectory of oil demand.“After recent declines, oil prices have room to recover in the short term,” Morgan Stanley analysts including Martijn Rats and Charlotte Firkins said in a note.“Nevertheless, inventories are currently higher than we expected some time ago, and on current trends, supply/demand balances will likely weaken after the third quarter.”Energy stocks ended lower on the day while WTI inched up to $78. All eyes on API for cues on whether this rebound in price can be sustained... API
- Crude -2.4mm
- Cushing -1.94mm
- Gasoline -2.55mm
- Distillates +972k
Crude and gasoline stocks saw sizable draws last week as did the inventories at the Cushing Hub... WTI was hovering around $77.80 ahead of the API print and bounced back above $78 on the draw... Along with OPEC+ plans to phase out voluntary output cuts after September, "we think this signals a cautious optimism from the organization when it comes to the trajectory of future supply/demand," says Rohan Reddy, director of research at Global X in emailed comments."The mid-$70s to low-$90s crude pricing we've seen in Brent over the past few quarters seems to be a range that OPEC is comfortable with, as the organization maintains its holding pattern," he adds.Meanwhile, pump prices have fallen to three month lows as crude and gasoline prices have fallen..
WTI Falls After Unexpected Crude & Gasoline Inventory Builds; Biggest Imports In 6 Years Oil prices extended gains this morning following the cooler than expected CPI (supporting rate cuts and potential demand) following API's reported crude draw overnight.“This week’s big recovery has weakened the bears’ hold on the market, although more price action is needed to confirm a bottom,” said Fawad Razaqzada, a market analyst at City Index and Forex.com.“But it is possible we could see crude oil prices come under pressure again after the recent recovery. The lower highs suggest the short-term path of least resistance is still downward, until told otherwise by the charts.” Expectations were for a modest draw in crude from the official data.
Crude +3.73mm
- Cushing -1.59mm
- Gasoline +2.57mm
- Distillates +881k
The official data flipped the API data and showed a sizable crude inventory build last week (and gasoline build)... The Biden admin added 339k barrels to the SPR (the lowest addition since early Dec 2023) US crude production rose by 100k b/d back near record highs, even as the rig count continues to slide...It looks like they flooded the market with imports - the largest in six years...WTI tumbled on the surprise builds...
Crude oil reverses trend on US data - Crude oil prices settled higher on Wednesday as investors assessed inflation and inventories data from the US. Cooler-than-expected consumer prices for May resulted in oil prices hitting session highs. Oil prices pared gains, however, after the US reported a surprise rise in crude and gasoline inventories. Oil prices surged to session highs earlier in the session as a lighter-than-projected reading for US consumer prices fuelled speculations around the Federal Reserve’s rate cut decision. The annual inflation rate in the US eased to 3.3% in May, recording the lowest level in three months, versus April’s reading of 3.4%. The figure was also lower than market expectations of 3.4%. Oil prices were also supported by the OPEC (Organization of the Petroleum Exporting Countries) keeping its global demand growth forecast for 2024 and 2025 unchanged at 2.2 million barrels per day and 1.8 million barrels per day, respectively. Crude oil prices pulled back from session highs after the EIA (Energy Information Administration) said that US inventories increased by 3.7 million barrels in the week ended June 7. This came as a surprise, with market estimates calling for a decline of 900,000 barrels. Data also showed gasoline stockpiles grew by 2.6 million barrels, while distillate stockpiles rose by 900,000 barrels last week. While distillates were expected to rise by only 400,000 barrels, gasoline stockpiles were projected to contact 500,000 barrels. The IEA (International Energy Agency) slashing its global oil demand growth outlook by approximately 100,000 barrels to 960,000 barrels a day for 2024 also exerted pressure on oil prices later in the session. WTI crude oil for July delivery gained 60 cents, or 0.8%, to close at $78.50 a barrel on the NYMEX (New York Mercantile Exchange) on Wednesday, after surging as high as $79.32 earlier in the session. August Brent crude climbed 68 cents, or 0.8%, to close at $82.60 a barrel on ICE Futures Europe. In other energy trading, July gasoline declined by 0.6% to $2.394 a gallon, while July heating oil added 0.8% to settle at $2.441 a gallon. July natural gas shed 2.7% to reach $3.045 per million British thermal units, after closing at a five-month high during the prior session on projections of higher-than-average temperatures across most of the US. Investors await the release of economic data on natural gas stockpiles from the EIA today. US natural gas inventories, which increased by 98 billion cubic feet during the week ended May 31, are expected to rise by 75 billion cubic feet in the latest week. Data on producer prices from the US will also remain in focus, which is expected to provide direction to oil prices ahead.
Oil Soars on Mideast Tension Despite Fresh Interest Rate Cut Woes | Business Post Nigeria -Oil closed higher on Wednesday as ongoing tensions in the Middle East lent support to prices but possible delays to interest rate cuts following the Federal Reserve’s statement concluding its two-day meeting capped gains. Brent crude futures appreciated by 68 cents or 0.83 per cent to trade at $82.60 per barrel and the US West Texas Intermediate (WTI) crude futures grew by 60 cents or 0.77 per cent to $78.50 per barrel. Palestinian militant group, Hamas, has proposed numerous changes to a US-backed proposal for a ceasefire with Israel in Gaza, and according to the US Secretary of State, Mr Antony Blinken, some were unworkable but added that mediators were determined to close the gaps. The US Federal Reserve held interest rates steady on Wednesday and pushed out the start of rate cuts to perhaps as late as December, with officials projecting only one reduction for the year amid rising estimates for what it will take to keep inflation in the world’s largest oil producer in check. This means there won’t be rate cuts before the November 5 US presidential election as officials repositioned from expecting three quarter-percentage-point reductions in March to just one. The European Central Bank (ECB) started cutting interest rates last week, and Canada has followed suit. The ECB’s recent interest rate cut, its first since 2019, marked a significant effort to tackle inflation. Following this, Denmark’s central bank also lowered its benchmark interest rate by 25 basis points to 3.35 per cent. The ECB cited progress in reducing inflation, which fell to 2.6 per cent in the eurozone from 10 per cent in late 2022. JP Morgan economists had predicted that the Federal Reserve would cut rates once or twice this year, and three times next year. The US Energy Information Administration reported an estimated inventory increase of 3.7 million barrels to 459.7 million barrels for the week to June 7. The change compared with a weekly build of 1.2 million barrels for the previous week was also accompanied by builds in fuel inventories, pressuring benchmarks. Last week, the EIA estimated more builds in gasoline and middle distillate inventories. In gasoline (petrol), the authority reported an inventory build of 2.6 million barrels for the seven days to June 7, with production averaging 10.1 million barrels daily. This compared with an inventory build of 2.1 million barrels for the prior week when production stood at an average of 9.5 million barrels daily. However, in the longer term, the EIA, the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries this week updated their views on the global oil demand-supply balance for 2024, predicting declines in global oil inventories.
Oil Steadies as Russia Plans Production Cuts | Rigzone Oil steadied after strong gains to start the week, with US economic data signaling inflation is cooling while Russia agreed to dial back output. A report on Thursday showed US producer prices fell the most in seven months, building on signs that consumer price gains are slowing. Still, the Federal Reserve left interest rates unchanged and penciled in only one rate cut this year. West Texas Intermediate fluctuated between gains and losses before settling above $78 a barrel. Futures are up about 4% for the week. Also supporting prices was news that Russia plans to compensate for exceeding its output quota by trimming production. The new pledge includes a cut of 471,000 barrels a day on top of the earlier promised 500,000 barrel-a-day reduction announced last year. The development comes as markets remain amply supplied, with traders still digesting unexpected increases in US crude and gasoline stockpiles. Despite this week’s advance, oil has trended lower since early April on demand concerns and signs of robust supplies. The International Energy Agency said in a report Wednesday that global markets face a major surplus this decade as the shift away from fossil fuels picks up pace. Meanwhile, attacks on ships off Yemen continue. On Thursday, a cargo vessel was on fire after being hit by two projectiles while sailing in the Gulf of Aden, the UK Navy said, marking the second significant assault in the area in as many days. WTI for July delivery gained 0.2% to settle at $78.62 a barrel in New York. Brent for August settlement rose 0.2% to $82.75 a barrel.
Oil edges higher as OPEC comments feed demand hopes (Reuters) - Oil prices rose slightly on Thursday in up-and-down trade, supported by an OPEC forecast for demand growth and as data showing an U.S. easing labor market and slowing inflation which stoked hopes for Federal Reserve rate cuts despite recent comments form Fed officials. Brent crude futures settled at $82.75 a barrel, up 15 cents, or 0.2%. West Texas Intermediate (WTI) U.S. crude futures settled at $78.62 a barrel, gaining 12 cents, or 0.2%. Both benchmarks had gained nearly 1% in the previous session. Fresh comments by the Organization of Petroleum Exporting Countries also helped boost crude prices. The organization expects demand to grow to 116 million barrels a day by 2045, and possibly higher, OPEC Secretary General Hathaim Al Ghais said on Thursday in a rebuke of an International Energy Agency report predicting peak oil consumption by 2029. Al Ghais, writing in Energy Aspects, called the IEA report "dangerous commentary, especially for consumers, and (that) will only lead to energy volatility on a potentially unprecedented scale." The U.S. Labor Department said the producer price index (PPI) for final demand dropped 0.2% on a month-to-month basis in May. Economists polled by Reuters had forecast a 0.1% increase. Separate data showed weekly initial jobless claims exceeded estimates to reach a 10-month high. On Wednesday, the Fed held interest rates steady and pushed out the projected start of policy easing to as late as December. In a press conference after the end of the U.S. central bank's two-day policy meeting, Fed Chair Jerome Powell said inflation had fallen without a major blow to the economy. Powell's comments "implying no definitive time frame for a rate reduction appeared to place additional pressure on the energy complex," Higher borrowing costs tend to dampen economic growth and can limit oil demand. Tomorrow, investors will turn their sights to the University of Michigan's Consumer Sentiment Index for signs of U.S. economic strength or weakness. On the supply side, U.S. crude stockpiles rose more than expected last week, driven largely by a jump in imports, while fuel inventories also increased more than expected, data from the Energy Information Administration showed on Wednesday. Oil traders are also watching continuing talks over a potential ceasefire in Gaza, which could ease fears of oil supply disruptions in the region. In the latest attack on shipping, Iran-allied Houthi militants on Wednesday took responsibility for small watercraft and missile attacks that left a Greek-owned coal carrier in need of rescue near Yemen's Red Sea port of Hodeidah.
The Oil Market Traded Mostly Sideways and Ended Slightly Higher on Thursday - The oil market traded mostly sideways and ended slightly higher, up 0.15% on the day, as the market weighed the builds in crude and product stocks and expectations of slow Federal Reserve rate cuts against the U.S. economic data showing an easing labor market and slowing inflation. The market traded lower in overnight trading as it remained pressured following the EIA’s weekly petroleum stocks report on Wednesday and the bearish IEA report, which warned of excess supply in the near future. The crude market continued to trend lower and posted a low of $77.67. However, the market bounced off its low and retraced its earlier losses and posted a high of $78.89 ahead of the close. The market was supported by hopes that the Federal Reserve will cut rates in September, reinforced by data from the Labor Department showing producer prices unexpectedly falling in May. The largest decline in prices at the factory gate since October following the report on consumer prices on Wednesday showing prices were unchanged in May for the first time in nearly two years. The July WTI contract settled up 12 cents at $78.62 and the August Brent contract settled up 15 cents at $82.75. The product markets ended the session higher, with the heating oil market settling up 4.6 cents at $2.4868 and the RB market settling up 2.12 cents at $2.4156. OPEC’s Secretary General, Hathaim Al Ghais, said OPEC does not see a peak in oil demand in its long-term forecast and expects demand to increase to 116 million bpd by 2045 and may be higher. He called the IEA report “dangerous commentary, especially for consumers, and will only lead to energy volatility on a potentially unprecedented scale.” He said similar narratives have been proven wrong previously. On Wednesday, the IEA said it sees oil demand peaking by 2029, levelling off at around 106 million bpd towards the end of the decade. ANZ Research said it expects OPEC’s supply policy to remain sensitive to oil market fundamentals. It said if demand fails to grow as they expect, they are likely to delay the phasing out of the group of eight’s voluntary 2.2 million bpd cuts for oil. It said the likelihood of oil prices surpassing $100/barrel for a sustained period had diminished greatly. ANZ Research said it maintains its 12-month oil price target of $95/barrel. It said a combination of improving market fundamentals, elevated geopolitical risks and a more positive economic backdrop should lift the Brent crude price over $85/barrel, a level it has failed to breach over the past six weeks. Kpler shipping data is showing EU and UK diesel imports are on track to reach 768,000 b/d in June down from 1.22 million b/d recorded in May. The Russian government said Thursday it has extended its retaliatory measures against a price cap on its oil imposed by Western countries until the end of 2024. The Russian government has banned domestic oil exporters and custom bodies from adhering to Western -imposed price caps on Russian crude oil. The Russian energy ministry said on Thursday that while its oil production totals exceed its OPEC+ quota in May, it was still pledging to make up for this over production during the compensation period until September 2025. It also said its overproduction levels would be resolved in June. Russian officials though did not disclose any specific production totals for the month though.
Oil pares weekly gain on sliding equities and demand concerns -- Oil declined, paring a weekly gain, as falling equity markets in Europe and Asia added to growing concerns over global demand for the commodity. Brent crude futures slipped 0.4 per cent in London, shrinking this week’s advance to 3.5 per cent. The outlook for crude has darkened as the International Energy Agency curbed forecasts for consumption growth this year, and warned of a “major surplus” over the longer term. China’s decades-long boom in oil processing could falter this year for the first time in data that extends back to 2004 — excluding a Covid-hit 2022 — according to most market watchers surveyed by Bloomberg. U.S. Federal Reserve officials this week penciled in only one interest-rate cut this year, cooling market sentiment. “In view of the still uncertain economic outlook for the major economic regions, a further price increase is not to be expected for the time being,” said Barbara Lambrecht, an analyst at Commerzbank AG. European stocks headed for their worst week since January on growing concerns about political turmoil in France. In Asia, MSCI’s Asia Pacific index slipped as losses in Australian and Chinese stocks offset gains in Japan’s benchmark. Crude prices have retreated 11 per cent from a peak reached in mid-April, on concerns over China’s economic outlook and signs of a flood of new oil supplies from the U.S. and other parts of the Americas. The market briefly wobbled after the OPEC+ alliance outlined plans to gradually restore halted output in the fourth quarter, but stabilized after the group signaled it might not go ahead. Still, timespreads are holding in a bullish, backwardated structure, where later-dated contracts trade at a discount to nearer ones, indicating tight supplies. The gap between Brent’s two nearest contracts was at 40 cents a barrel in backwardation, compared with 28 cents a week ago. Prices: Brent for August settlement fell 0.4% to US$82.41 a barrel at 9:55 a.m. in London. WTI for July delivery dropped 0.6% to $78.16 a barrel.
Oil prices settle lower, but snap three-week losing streak on demand hopes - Oil prices settled lower Friday, but still snapped a three-week losing streak, buoyed by hopes that a seasonal fuel demand over the summer period is poised to gather steam and dent crude stocks in the weeks ahead. At 14:30 ET (18:30 GMT), West Texas Intermediate crude futures fell 0.2% to settle at $78.45 a barrel, while Brent oil futures fell 0.1% to $82.66 a barrel.A bulk of crude’s gains this week came as prices rebounded from four-month lows, after the Organization of Petroleum Exporting Countries and allies (OPEC+) reiterated its commitment to keeping production low to support prices. OPEC+ had, during its June meeting, flagged the possibility of scaling back its 2.2 million barrels per day voluntary production cuts later this year- a signal that was received negatively by the crude markets. The reassurance from OPEC arrived as traders digested mostly bullish forecast for global oil demand. The U.S. Energy Information Administration lifted its world oil demand estimate to 104.5 million barrels per day for next year, up from a prior forecast of 104.3 million bpd, while OPEC maintained its outlook for strong global oil demand in 2024. In sharp contrast, however, the International Energy Agency cut its forecast for 2024 global crude demand by 100,000 barrels per day to 960,000 bpd.Softer U.S. Inflation data seen this week, spurring hopes for sooner rates cuts, also helped lift sentiment on oil, with many now pricing in two rate cuts for the year. President Vladimir Putin said on Friday, on the eve of a peace conference in Switzerland to which Russia has not been invited, that his country would cease fire and enter peace talks if Ukraine dropped its NATO ambitions and withdrew its forces from four Ukrainian regions claimed by Moscow.These conditions are wholly at odds with the terms demanded by Ukraine, with Kyiv stating that peace can only be based on a full withdrawal of Russian forces and the restoration of its territorial integrity.The weekend summit in Switzerland, which will be attended by representatives of more than 90 nations and organisations, is expected to shy away from territorial issues and focus instead on matters such as food security and nuclear safety in Ukraine.
U.S. crude oil snaps three-week losing streak as forecasts point to tighter market -- U.S. crude oil broke a three-week losing streak Friday as analysts see a tighter market heading into the third quarter.Oil prices fell for the day, but finished out the week nearly 4% higher as summer fuel demand is expected to reduce inventories in the coming weeks, even though the season has gotten off to a tepid start. Here are Friday's closing energy prices:
- West Texas Intermediate July contract: $78.45 per barrel, down 17 cents, or 0.22%. Year to date, U.S. oil is up 9.5%.
- Brent August contract: $82.62 per barrel, down 13 cents, or 0.16%. Year to date, the global benchmark is ahead 7.2%.
- RBOB Gasoline July contract: $2.40 per gallon, down 0.66%. Year to date, gasoline is up 14%.
- Natural Gas July contract: $2.88 per thousand cubic feet, down 2.64%. Year to date, gas has climbed 14.6%.
"You kind of got the bullish argument that we're going into summer, refinery runs are going to be super strong drawing down inventories," Matt Smith, lead oil analyst at Kpler, said. "We could get up to $90, but we'll come back down again," Smith said. "We're not going to $95, by no means are we going to $100 per barrel here." Though the market has largely shrugged off geopolitical risk and refocused on fundamentals, RBC Capital Markets cautioned investors to keep a close eye on an increasingly precarious situation on the Israel-Lebanon border."We are closely watching whether Benny Gantz's departure from the Israeli wartime cabinet will tip the scales in favor of a ground operation aimed at pushing Hezbollah back from the border," Helima Croft, head of global commodity strategy, told RBC clients in a note Thursday.Oil remains well below annual highs set in April but has regained ground after a sell-off last week that pushed prices to four-month lows after OPEC+ unveiled plans to increase production in the fourth quarter.Still, the cartel is keeping all output cuts in place until October, and has rolled two tranches of reductions over until the end of 2025."We stay with our tactical long crude recommendation, as our expectations for rising seasonal summer demand and lesser step-up in supply remain intact," Deutsche Bank analyst Michael Hsueh told clients in a note Thursday.Deutsche sees the oil supply deficit expanding to nearly 1 million barrels per day in the third quarter, which should support Brent prices rising to the mid-to-upper $80s per-barrel range."It would only take a minor overshoot to bring Brent to around USD 90/bbl at some point during the second half," Hsueh told clients.Citigroup also sees a tighter market in the third quarter, though it will likely enter a surplus in 2025 on solid production growth and slowing demand, according to the bank."When we're looking at the fundamental picture going into 3Q whether its oil, copper or gold, it looks very solid driven by seasonal increases in demand," Jeff Currie, an energy analyst at Carlyle, told "Squawk Box" Thursday."The supply situation given the recent OPEC meeting points to a tighter 3Q," Currie said.
Afghanistan's Taliban Reports $80 Million In Crude Oil Sales In 10 Days Afghanistan has sold 150,000 tons (1.1 million barrels) of crude oil from the Amu Darya basin for more than $80 million over the past 10 days, with Beijing’s investment in the country beginning to bear fruit. On Sunday, Humayun Afghan, the spokesperson for the Taliban's Ministry of Mines and Petroleum, revealed that the group had sold 130,000 tons of crude oil for $71.6 million before it successfully put up another 20,000 tons (146,000 barrels) of crude worth $10.5 million for bidding on the same day. This marks a reversal of fortunes for one of the Middle East’s most volatile regions with the country previously importing the 50,000 barrels of oil it consumes daily from neighboring countries such as Iran and Uzbekistan.It all began a year ago when China’s Xinjiang Central Asia Petroleum and Gas Co, or CAPEIC, signed a 25-year contract with Taliban authorities in Afghanistan. That contract requires CAPEIC to invest $150 million by the first year and a total of $540 million by 2026. So far, CAPEIC’s investment of $49 million in Afghanistan has helped boost the country's daily crude oil output to more than 1,100 metric tons (8,000 barrels per day), a volume that could increase significantly if the company is to fulfill its contract. According to a top Taliban official, CAPEIC fell short of its investment target due to inaccurate estimates of material and labor costs coupled with a three-month delay in the approval of its financial plan by Afghan authorities.“The investments will add up as the contract stipulates,” the Taliban official told VOA on condition of anonymity, adding that the Taliban’s treasury earned about $26 million from the project last year.Spanning Afghanistan and Tajikistan, the Amu Darya basin is estimated to contain 962 million barrels of crude oil and 52,025 billion cubic feet of natural gas, according to a 2011 assessment by the U.S. Geological Survey. To tap into this potential, CAPEIC plans to dig 22 additional wells in 2024, aiming to increase daily production to more than 2,000 tons, or~15,000 barrels. Beijing has been cozying up to Kabul ever since the United States withdrew from Afghanistan in 2021 after a 20-year presence. Chinese diplomats have been meeting their Afghan counterparts almost weekly since the establishment of a Taliban government in Kabul, with western analysts alluding to some sort of emerging “cooperation.” Back in January, Chinese President Xi Jinping received the diplomatic credentials of the Taliban's ambassador to Beijing. The move confounded foe and friend alike because no country has formally declared its recognition of the Taliban government. However, it's not clear if Beijing’s action constitutes diplomatic recognition.“Although the attraction of [Afghanistan’s] mining and energy resources is strong, there is considerable Chinese wariness about the internal security situation, the reliability of Taliban assurances regarding foreign investments, and Afghanistan’s poor infrastructure,” Andrew Scobell, distinguished fellow for China at the United States Institute of Peace, told VOA.
Merchant ship attacked off Yemen coast -- Maritime security agencies say a merchant ship has been attacked in the Red Sea, an area where Yemen-based Houthi rebels have been targeting ships since late last year. The United Kingdom Maritime Trade Operations said Wednesday it received a report of the ship being struck in the rear by a “small craft” measuring 5-7 meters in length. The security firm Ambrey said the attack happened about 125 kilometers southwest of the Yemeni port city of Hodeida. There was no word on damage or casualties. The Houthis say their campaign of attacks in the Red Sea and the Gulf of Aden is in solidarity with the Palestinians in Gaza amid the war between Israel and Hamas. The attacks have forced commercial shipping firms to reroute traffic from the area and use a longer and more expensive route around the African continent.
Suicide Drone Boat Hits Bulk Carrier Near Yemen --Yemen's Houthi movement might have expanded its weapon arsenal by attacking a bulk carrier in the Red Sea with a suicide drone boat (the first time in this conflict). This marks a shift from the terror group's usual anti-ship ballistic missiles and or kamikaze aerial drones. On X, the British military's United Kingdom Maritime Trade Operations said, "The vessel was hit on the stern by a small craft" about 66 nautical miles southwest of Al Hudaydah, Yemen. Bloomberg said the commodity-hauling bulk carrier is called "Tutor." Ship tracking data shows the vessel switched off its Automatic Identification System late last week after entering the Suez Canal. Maritime security company Diaplous said a suicide drone boat hit Tutor, adding the vessel's engine compartment was taking on water. There is no confirmation if Houthi rebels carried out the attack. However, the terror group has been on a half-year rampage across major shipping lanes in the Red Sea and Gulf of Aden, attacking Western-linked vessels with missiles and drones. According to an International Maritime Organization document obtained by the Middle East Eye, Houthi rebels have attacked 28 bulk carriers, tankers, container ships, cargo ships, and crude oil tankers.Nine of the vessels were Marshall Island-flagged and three were US-flagged. Others were from Malta, Barbados, Panama, Belize, Greece, Palau, Liberia, Singapore, and Portugal. On Monday, new images published on social media showed missile attack damage to the previously owned US bulk carrier "True Confidence" from March 6.These attacks have snarled global supply chains and sent containerized shipping costs soaring in recent months.
Yemen’s Houthis say they targeted Greek-owned ship in Red Sea | Israel-Palestine conflict News | Al Jazeera -- Yemen’s Houthi rebels have claimed responsibility for a small watercraft and missile attack that left a Greek-owned cargo ship taking water and in need of rescue near the Red Sea port of Hodeidah. There were no immediate reports of casualties in Wednesday’s attack on the cargo ship. It is unclear if the vessel’s ownership has any connection to Israel. The Iran-backed group, which is at war with a Saudi Arabia-led coalition, has been in control of Yemen’s capital Sanaa and its most populous areas. It has been launching scores of drone and missile attacks on shipping in the Red Sea and Gulf of Aden since November in support of the Palestinians under Israeli attack in Gaza. They have sunk one ship, seized another vessel, and killed three seafarers in several attacks. The Houthis said the Tutor coal carrier was seriously damaged and vulnerable to sinking after they targeted the vessel with an unmanned surface boat, drones and ballistic missiles. The ship was hit about 68 nautical miles (126km) southwest of Hodeidah, maritime security firm Ambrey said on Wednesday. “The impact of the [unmanned surface vessel] caused severe flooding and damage to the engine room,” the US Central Command (CENTCOM) said in a statement on the attack, which was the Houthis’ first using a boat as a weapon. The United Kingdom Maritime Trade Operations, which acts as a conduit between ship operators and military and security forces, said on Wednesday the Liberian-flagged Tutor was taking on water and not under the crew’s command after sustaining damage to its engine room. UKMTO said a small craft of white colour collided with the cargo ship’s stern and that an “unknown airborne projectile” also struck the vessel. “It was hit twice by air and by sea. There are no reports of injuries,” a Greek official said on condition of anonymity. The Tutor was sailing to India when it was hit, they said. The Tutor loaded at the Port of Ust-Luga, Russia, on May 18 and discharged at Port Said, Egypt, on June 9, according to the London Stock Exchange Group data. Its next scheduled destination was Aqaba, Jordan, according to it. The Houthi attacks have upended global trade by forcing ship owners to reroute vessels away from the vital Suez Canal shortcut, drawing retaliatory strikes from the United States and the UK since February. On Wednesday, the Houthis said they also carried out two joint military operations with Islamic Resistance in Iraq, an Iran-backed armed group, targeting sites in Israel’s cities of Ashdod and Haifa. The latter confirmed the operations.
Ship hit twice in apparent Houthi cruise missile attack off Yemeni coast | Fox News - A commercial ship was reportedly struck twice Thursday by Houthi-fired cruise missiles in the Gulf of Aden. The Palauan-flagged M/V Verbena was still on fire at the time of U.S. Central Command's report, and the mariner was flown via helicopter to another vessel for medical treatment. "The M/V Verbena reported damage and subsequent fires on board. The crew continues to fight the fire," a statement by Central Command said. The U.S. said Thursday that the Houthis launched two anti-ship cruise missiles and struck a commercial ship in the Gulf of Aden off Yemen, setting it on fire and severely injuring one civilian mariner. U.S. Central Command said the M/V Verbena was still ablaze and the mariner was flown by a U.S. helicopter based on the USS Philippine Sea to another nearby ship for medical treatment. In a statement, Central Command said the Verbena is a Palauan-flagged, Ukrainian-owned and Polish-operated bulk cargo carrier that had docked in Malaysia and was on its way to Italy carrying wood. "The M/V Verbena reported damage and subsequent fires on board. The crew continues to fight the fire," the statement said. The attack is the latest such assault in the Houthis' campaign over the Israel-Hamas war. Earlier Thursday, the British military's United Kingdom Maritime Trade Operations center said a vessel had been attacked and had caught fire. And the private security firm Ambrey said a merchant vessel made a radio distress call saying it had been struck by a missile. The Houthis did not immediately acknowledge Thursday's attacks, but it typically takes the rebels hours or even days to claim them. The attack follows the Houthis launching a boat-borne bomb attack against a commercial ship in the Red Sea on Wednesday. The Houthis, who seized Yemen’s capital nearly a decade ago and have been fighting a Saudi-led coalition since shortly after, have been targeting shipping throughout the Red Sea corridor. They say the attacks are aimed at stopping the war and supporting the Palestinians, though the attacks often target vessels that have nothing to do with the conflict.
Ship on Fire Near Yemen After Second Attack in as Many Days - A small cargo ship was on fire after being hit by three projectiles while sailing in the Gulf of Aden, marking the second significant incident in two days and a fresh ramp up of attacks.The attack on the Verbena happened about 98 miles (158 kilometers) east of Aden in Yemen and damage control efforts were underway, according to the Joint Maritime Information Centre, which coordinates liaison between military and commercial shipping. One person was injured. A second ship, the Seaguardian, also came under attack inside the Red Sea.The Verbena veered across the Gulf of Aden earlier on Thursday but was continuing to sail, ship-tracking compiled by Bloomberg shows. There were no signals from the Seaguardian at the time it was attacked, suggesting the vessel may have turned off its location transponder while passing the Yemeni coast.A Houthi spokesman said in a televised statement that the group claimed responsibility for both attacks.Yemen’s Houthi attacks on ships in the Red Sea have been a regular occurrence since the end of last year and have caused a reduction in traffic of about 70% compared with the start of December. The group has targeted vessels in what it says is a response to the Israel-Hamas war.On Wednesday, a commodity carrier called Tutor suffered severe flooding in its engine room following the first successful attack from a seaborne drone during the current campaign by the Houthis. The owners of the Tutor and Verbena didn’t respond to requests for comment.
Houthi missile attack severely injures sailor, US says -- A sailor was severely injured after a cargo ship in the Gulf of Aden was struck by two cruise missiles fired by the Houthis in Yemen, the US military said. The injured sailor was airlifted to another ship for medical treatment, the US Central Command (CentCom) reported. It added that crew members were fighting a fire on board the MV Verbena - a Palauan-flagged, Ukrainian-owned, Polish-operated ship. CentCom later said it had destroyed two Houthi patrol boats, one unmanned surface vessel and one drone over the Red Sea in the last 24 hours. "It was determined these systems presented an imminent threat to US, coalition forces, and merchant vessels in the region," CentCom said in a statement. The Houthis earlier said they had carried out attacks on three ships within the past 24 hours, including on the MV Verbena, "in retaliation to the crimes committed against our people in the Gaza Strip, and in response to the American-British aggression against our country". This latest attack comes a day after the Iranian-backed group targeted a Greek-owned ship in the Red Sea, causing severe flooding on board. The armed Houthi group sees itself as part of an Iranian-led "axis of resistance" against Israel, the US and the wider West. Since November, the rebel group has been carrying out attacks on ships they say are linked to Israel in the Red Sea and the Gulf of Aden, saying their actions are in support of the Palestinians in Gaza. The US and the UK have carried out a series of attacks on Houthi targets inside Yemen in response, leading the Houthis to retaliate against ships it believes are linked to those countries. "The Houthis claim to be acting on behalf of Palestinians in Gaza and yet they are targeting and threatening the lives of third country nationals who have nothing to do with the conflict in Gaza," CentCom said. The rebels' attacks on merchant vessels in the Red Sea prompted many shipping companies to stop using the waterway, through which about 12% of global seaborne trade passes. On Wednesday, the Houthis targeted a Liberian-flagged vessel named Tutor using a sea drone in the Red Sea. No casualties were reported.
US and British Strikes Killed 16 Civilians in Yemen on May 30 - US and British missile strikes on Yemen that were launched on May 30 killed 16 civilians and wounded 35 more, according to the Yemen Data Project (YDP).Fourteen civilians were killed in strikes on a coast guard site at a port in the Red Sea province of Hodeidah, and two were killed in a bombing of a radio broadcast building that was also in Hodeidah.At the time, the US and the UK shared little detail about the strikes, only claiming to have hit Houthi targets. The YDP said it was unclear which military was responsible for the strikes that killed civilians.The US and British bombing campaign on Yemen started in January and has failed to deter the Houthis, as the Yemeni group continues to attack commercial shipping in response to the Israeli onslaught in Gaza. Two ships were reported to be struck by missiles off the coast of Yemen on Saturday.According to the YDP, the US and the UK have launched a total of 171 strikes and dropped 393 munitions on Yemen in the first 141 days of the bombing campaign. The US and Britain have launched several rounds of airstrikes together, but most bombings have been unilateral US strikes.The US backed a brutal Saudi/UAE war against the Houthis from 2015-2022 that involved heavy airstrikes and a blockade, and the Houthis only became more of a capable fighting force during that time.The war killed at least 377,000 people, with more than half dying of starvation and disease caused by the siege. A ceasefire between the Houthis and Saudis has held relatively well since April 2022, but new US sanctions are now blocking the implementation of a lasting peace deal.
Israel Hurls Fireballs at Farmland in Southern Lebanon - Israeli attacks on southern Lebanon have already seriously damaged area farmland, and now it appears the situation is getting worse and less incidental. Footage shows Israel using a literal trebuchet to launch fireballs across the border at farms, setting serious fires.Trebuchets are a rotating arm variety of catapult, and were commonly used in the Middle Ages as a weapon for siege warfare. It isn’t clear why Israel’s military has such weapons in this day and age, as they fell out of favor in the 15th century.Supposedly, the fireballs are being used to clear out the dense vegetation from the border region, as Israeli officials suggest that such areas serve as potential hiding areas for militants, which complicates defense in the area. In practice, both sides increasingly use fire as a weapon of war. Hezbollah’s rocket fire often hits open brushy areas in northern Israel, setting fires that Israeli fire services struggle to contain. Widespread destruction of farmland has resulted from Israel’s general attack on southern Lebanon and has greatly damaged the main economic infrastructure of the region.
UN commission finds Israel guilty of “extermination,” “crimes against humanity,” killing Palestinians and Israeli hostages - The Israeli government and military have committed systematic “crimes against humanity,” including “extermination,” during their eight-month-long assault on Gaza, a key United Nations commission found in a report published Wednesday. The report is the first in-depth investigation by the United Nations into the events that have happened since October 7 and is based on detailed interviews with victims and witnesses. The three-person commission is led by Navi Pillay, a former United Nations human rights chief. The commission concluded that the Israeli military and government “committed the war crimes of starvation as a method of warfare; murder or willful killing; intentionally directing attacks against civilians and civilian objects; forcible transfer; sexual violence; outrages upon personal dignity; and [sexual and gender-based violence] amounting to torture or inhuman and cruel treatment.” It found that Israel was responsible for the crimes against humanity. According to the report “extermination; murder; gender persecution targeting Palestinian men and boys; forcible transfer; and torture and inhuman and cruel treatment were committed.” This report lends further weight to the charges by Karim Khan, the lead prosecutor of the International Criminal Court, that Israeli Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant are guilty of war crimes and crimes against humanity. While the 2023-24 Gaza genocide shares elements of previous Israeli assaults on Gaza, it is of a totally different magnitude and intensity. The report asserted that “Israel’s military operation and attack in Gaza has been the longest, largest and bloodiest since 1948. It has caused immense damage and loss of life.” It noted that “hostilities between 2005 and 2023 resulted in less than a tenth of the fatalities since October 7. The Commission has also observed an increasing trend in the number of fatalities of women and children compared with previous hostilities.” The massive civilian death toll is due to the fact that, in the words of the commission, the “Israeli government has given [the Israeli military] blanket authorization to target civilian locations widely and indiscriminately in the Gaza Strip.” The systematic mass bombing of Palestinian civilians is accompanied by a deliberate effort to starve the population of Gaza into submission in a form of collective punishment. The report concludes that “Israel has used starvation as a method of war, affecting the entire population of the Gaza Strip for decades to come, with particularly negative consequences for children.” This is a war crime. The report concludes, “At the time of writing this report, children have already died due to acute malnutrition and dehydration. Through the siege it imposed, Israel has weaponized the withholding of life-sustaining necessities, cutting off supplies of water, food, electricity, fuel, and other essential supplies, including humanitarian assistance. This constitutes collective punishment and reprisal against the civilian population, both of which are clear violations of [international humanitarian law].”
Israel's Gantz Quits War Cabinet, Calls for New Elections - Benny Gantz, the chair of Israel’s National Unity party, announced on Sunday that he was quitting the emergency government and war cabinet that was formed after October 7 and called for Prime Minister Benjamin Netanyahu to set a date for new elections.Gantz said Netanyahu was preventing Israel from achieving “true victory” in Gaza. “I call on Netanyahu: Set an agreed election date. Don’t let our people be torn apart,” he said.The National Unity party’s exit does not force elections since Netanyahu’s coalition still holds 64 out of 120 seats in the Knesset. Gantz called for others to join him, including Defense Minister Yoav Gallant, who is a member of Netanyahu’s Likud party but recently called out the prime minister over his lack of a clear long-term plan for Gaza.Gantz’s move comes a few weeks after he threatened to quit if Netanyahu didn’t agree to a list of demands by June 8. The demands included agreeing to establish a US-European-Arab-Palestinian administration to manage civilian affairs in Gaza alongside Israeli security control, which would mean long-term Israeli military occupation.Haaretz reported that Gantz informed the White House of his plans to quit several days ago and asked for the US’s opinion. The report said: “US officials told Gantz that while they did not intend on intervening in Israeli politics, they noted the fragile state of the hostage/cease-fire talks. His departure will only lead to added pressure from the US on Netanyahu.” Earlier this year, Gantz visited the US and met with several high-level officials as part of a trip that was not approved by Netanyahu. The Haaretz report said that US officials have viewed Gantz as their “preferred interlocutor” in the war cabinet.
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