oil well production at a record high; highest refinery utilization in 13 months; gasoline output at a two year high; biggest jump in distillates supplies in six months.
US oil prices fell for the first time in five weeks on diminishing threats to supplies in the Middle East, and after Hurricane Beryl was not as disruptive to US Gulf oil operations as had been feared….after rising 2.0% to $83.16 a barrel last week on the threat to supplies from Hurricane Beryl and the largest crude inventory drop in nearly a year, the contract price for the benchmark US light sweet crude for August delivery dipped in Asian trading early on Monday, as concerns over supply disruptions eased amid hopes for a ceasefire deal for Gaza, then sold off in New York trading, as talks over a U.S. ceasefire plan to end the nine month old war in Gaza were underway, mediated by Qatar and Egypt, and settled 83 cents or 1% lower at $82.33 a barrel as traders monitored the impact of Beryl on Gulf Coast refining, production and export infrastructure after it made landfall in Texas as a Category 1 hurricane with maximum sustained winds of 80 mph…oil prices eased further early on Tuesday after traders learned that prolonged supply disruptions from Hurricane Beryl were unlikely after a U.S. oil-producing hub in Texas suffered less storm damage than feared, and fell further as weak economic data out of China led to demand concerns, and settled 92 cents lower at $81.41 a barrel, as it appeared that major refineries along the Gulf Coast did not experience the kind of damage that many had expected…oil prices lifted off that one week low in overnight trading, after the American Petroleum Institute reported a larger than expected withdrawal from US crude inventories, then further rallied during regular hours Wednesday morning after the official inventory data from the EIA confirmed the larger than expected inventory drawdown, & settled the session 69 cents higher at $82.10 a barrel as comments from Fed Chair Jerome Powell raised hopes for interest-rate cuts later this year…oil continued to move higher in overnight trading on the supportive EIA weekly petroleum stocks report, but gave up some of its overnight gains after the IEA reported global demand growth was at its lowest level in more than a year in the second quarter, but rallied again early Thursday after new data showed US consumer prices unexpectedly fell in June, potentially drawing the Fed another step closer to cutting interest rates, and settled 52 cents higher at $82.62 a barrel as hopes rose for U.S. interest rate cuts after data showed an unexpected slowdown in inflation….oil prices rose in Asian trading on Friday amid expectations that the US Fed’s interest rate cuts would start soon, on ongoing conflicts in the Middle East contrary to ceasefire attempts, and on rising demand hopes as the summer driving season began, but edged lower in New York as traders weighed weaker consumer sentiment against data that supported a Fed rate cut in September, and settled down 41 cents at $82.21 a barrel after news of progress on a cease-fire between Israel and Hamas outweighed signs of rising US crude demand that had propped up prices earlier, thus leaving oil prices 1.1% lower for the week…
natural gas prices, on the other hand, finished higher for the first time in five weeks, as a spreading dome of record heat offset a bearish storage report....after falling 10.8% to a two month low of $2.319 per mmBTU last week as production continued to rise amid a cooling trend in the central US, the contract price of natural gas for August delivery opened 7 cents higher on Monday on the heels of a limited impact from Hurricane Beryl and persistent cooling needs in the region, but backed off the day’s highs to settle 4.7 cents higher at $2.366 per mmBTU on forecasts for more demand next week than had been expected, as a brutal heat wave continued to blanket much of the country…the front month natural gas contract price opened 6 cents higher on the expanding heat on Tuesday, but soon pulled back as feed gas volumes at the Freeport LNG terminal remained negligible following Hurricane Beryl, and settled 2.2 cents lower at $2.344 per mmBTU after weather forecasts shaved off some of the blistering heat expected in the Lower 48 over the next two weeks…natural gas prices opened a penny lower on Wednesday and withdrew further through the morning session, as production remained steady and supplies in storage were more than ample, but steadied in afternoon trading to settle 1.5 cents lower at $2.329 per mmBTU on recent increases in output, a drop in the amount of gas flowing to LNG export plants, and a tremendous surplus of gas in storage for this time of year…natural gas prices opened 4 cents lower on Thursday, then dipped to an intraday low of $2.261 at 10:30AM as the weekly storage publication landed on the bearish side of expectations,tthen traded sideways to settle 6.1 cents lower at $2.268 per mmBTU on the bigger-than-expected weekly storage build, as output rose and the amount of gas flowing to LNG export plants remained depressed, with Freeport LNG in Texas still shut down…natural gas prices rose on Friday to reverse Thursdays decline, as the heat dome that had been siting over the western US spread eastward and natural gas settled 6.1 cents higher at $2.329 per mmBTU as traders covered short positions and anticipated a demand boost, and thus finished a penny or 0.4% higher for the week..
The EIA’s natural gas storage report for the week ending July 5th indicated that the amount of working natural gas held in underground storage rose by 65 billion cubic feet to 3,199 billion cubic feet by the end of the week, which left our natural gas supplies 283 billion cubic feet, or 9.7% above the 2,916 billion cubic feet that were in storage on July 5th of last year, and 504 billion cubic feet, or 18.7% more than the five-year average of 2,695 billion cubic feet of natural gas that had typically been in working storage as of the 5th of July over the most recent five years…the 65 billion cubic foot addition to US natural gas working storage for the cited week was more than the 55 billion cubic foot average addition to storage that was forecast by analysts in a Reuters poll, and was also more than the 57 billion cubic feet that were added to natural gas storage during the corresponding first week of July 2023, and also more than the average 57 billion cubic foot injection into natural gas storage that has been typical for the same early summer 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 July 5th indicated that even after an increase in our oil imports and a decrease in our oil exports, we had to pull oil out of our stored commercial crude supplies for the ninth time in twenty-four weeks and for the 15th time in the past 38 weeks, but by much less than during the prior week….Our imports of crude oil rose by an average of 214,000 barrels per day to 6,760,000 barrels per day, after falling by an average of 65,000 barrels per day over the prior week, while our exports of crude oil decreased by 402,000 barrels per day to 3,999,000 barrels per day, which when used to offset our imports, meant that the net of our trade of oil worked out to a net import average of 2,761,000 barrels of oil per day during the week ending July 5th, 616,000 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 380,000 barrels per day, while during the same week, production of crude from US wells was 100,000 barrels per day higher at a record 13,300,000 barrels per day. Hence our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a rounded total of 16,441,000 barrels per day during the July 5th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 17,109,000 barrels of crude per day during the week ending July 5th, an average of 317,000 more 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 424,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending July 5th appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production was 244,000 barrels per day less than what our oil refineries reported they used during the week. To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a [ +244,000 ] barrel per day figure onto line 16 of the weekly U.S. Petroleum Balance Sheet, in order to make the reported data for the supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus indicating there must have been an error or omission of that magnitude in the week’s oil supply & demand figures that we have just transcribed…Moreover, since 606,000 barrels per day of oil demand could not be accounted for in the prior week’s EIA data, that means there was a 850,000 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, making 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 424,000 barrel per day decrease in our overall crude oil inventories came as an average of 492,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while an average of 68,000 barrels per day were being added to our Strategic Petroleum Reserve, the thirty-first SPR increase in thirty-eight weeks, following nearly continuous withdrawals from the SPR over the prior 39 months… Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to 6,743,000 barrels per day last week, which was still 5.1% more than the 6,415,000 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 a record 13,300,000 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 higher at 12,900,000 barrels per day, while Alaska’s oil production was 1,000 barrels per day higher at 384,000 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 1.5% higher than that of our pre-pandemic production peak, and it’s also 37.1% 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 95.4% of their capacity while processing those 17,109,000 barrels of crude per day during the week ending July 5th, up from their 93.5% utilization rate of a week earlier, and the highest refinery operating rate in 13 months… the 17,109,000 barrels of oil per day that were refined this week were 2.7% more than the 16,659,000 barrels of crude that were being processed daily during week ending July 7th of 2023, but 1.9% less than the 17,438,000 barrels that were being refined during the prepandemic week ending July 5th, 2019, when our refinery utilization rate was at a pre pandemic near normal 94.7% for mid-summer…
With the increase in the amount of oil being refined this week, gasoline output from our refineries was also higher, increasing by 239,000 barrels per day to a two year high of 10,300,000 barrels per day during the week ending July 5th, after our refineries’ gasoline output had increased by 180,000 barrels per day during the prior week.. This week’s gasoline production was 1.9% more than the 10,107,000 barrels of gasoline that were being produced daily over week ending July 7th of last year, but 1.1% less than the gasoline production of 10,418,000 barrels per day during the prepandemic week ending July 5th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 122,000 barrels per day to 5,128,000 barrels per day, after our distillates output had increased by 204,000 barrels per day during the prior week. After fourteen production increases in the past twenty weeks, our distillates output was 0.8% more than the 5,086,000 barrels of distillates that were being produced daily during the week ending July 7th of 2023, but was 4.3% less than the 5,358,000 barrels of distillates that were being produced daily during the week ending July 5th, 2019…
Even with this week’s increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 15th time in twenty-three weeks, decreasing by 2,006,000 barrels to 229,666,000 barrels during the week ending July 5th, after our gasoline inventories had decreased by 2,214,000 barrels during the prior week. Our gasoline supplies fell again this week even as the amount of gasoline supplied to US users fell by 26,000 barrels per day to 9,398,000 barrels per day, and as our exports of gasoline fell by 52,000 barrels per day to 919,000 barrels per day, because our imports of gasoline fell by 83,000 barrels per day to 768,000 barrels per day .…But even after fifteen gasoline inventory withdrawals over the past twenty-three weeks, our gasoline supplies were still 4.7% above last July 7th’s gasoline inventories of 219,452,000 barrels, while about 1% below the five year average of our gasoline supplies for this time of the year…
With this week’s increase in our distillates production, our supplies of distillate fuels rose for the tenth time in twenty-five weeks and by the most in six months, increasing by 4,884,000 barrels to 121,263,000 barrels over the week ending July 5th, after our distillates supplies had decreased by 1,535,000 barrels during the prior week. Our distillates supplies increased this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 249,000 barrels per day to 3,466,000 barrels per day, and because our exports of distillates fell by 602,000 barrels per day to 1,103,000 barrels per day, and because our imports of distillates rose by 45,000 barrels per day to 139,000 barrels per day....Even with 15 inventory decreases over the past 24 weeks, our distillates supplies at the end of the week were 5.6% above the 113,366,000 barrels of distillates that we had in storage on July 7th of 2023, but are still about 8% below the five year average of our distillates inventories for this time of the year…
Finally, with a pickup in refinery demand. our commercial supplies of crude oil in storage fell for the 14th time in twenty-six weeks, and for the 28th time in the past year, decreasing by 3,443,000 barrels over the week, from 448,539,000 barrels on June 28th to 445,096,000 barrels on July 5th, after our commercial crude supplies had decreased by 12,157,000 barrels over the prior week… With this week’s decrease, our commercial crude oil inventories were still about 4% below the most recent five-year average of commercial oil supplies for this time of year, while they were still roughly 28% above the average of our available crude oil stocks as of the first week of July 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 July 5th were 2.8% less than the 458,128,000 barrels of oil left in commercial storage on July 7th of 2023, while 5.0% more than the 423,800,000 barrels of oil that we had in storage on July 8th of 2022, and fractionally less than the 445,476,000 barrels of oil we had left in commercial storage on July 9th of 2021…
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 July 12th, the second column shows the change in the number of working rigs between last week’s count (July 5th) and this week’s (July 12th) count, the third column shows last Friday’s July 5th 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 14th of July, 2023…
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Fracker Wants to Drill Under State Wildlife Area in Carroll County - Marcellus Drilling News - In January 2023, Ohio House Bill (HB) 507 became law with the signature of Gov. Mike DeWine (see OH Gov. Signs Bill Expanding Drilling in State Parks, NatGas “Green”). The new law allows shale drilling under (but not on top of) Ohio state-owned land, including state parks. HB 507 encourages (pushes for) more drilling under state-owned land. The special commission created to award contracts — called the Ohio Oil & Gas Land Management Commission (OGLMC) — meets periodically to consider “nominations” (requests to drill). The OGLMC has just received another nomination…this one to drill under (not on) 128 acres of the Leesville Wildlife Area in Carroll County.
Encino expanding footprint in Utica Shale with $300 million investment -- Encino Energy (EAP Ohio) is producing over half the oil in Ohio, according to first quarter 2024 figures released recently by the Ohio Department of Natural Resources Division of Oil and Gas. Oil production from Encino represented 51.3 percent of all Ohio Utica Shale oil production during the first period. The percentage translates into 3,708,011 barrels of oil in the first quarter. According to Ray Walker, Encino chief operating officer, Encino recently received an investment that will allow the company to expand its footprint in the Utica and Point Pleasant shale regions by securing leases on additional land. The Canadian Pension Plan Investment Board (CCPIB), which is the major backer of Encino, announced an investment of $300 million in the company to support its accelerated development in the shale plays. “We are very excited about the investment, and they are excited about the potential upside and opportunities in this play and are willing to put more money in to help us grow bigger to capture a lot of this opportunity,” Walker said on a recent visit to Carrollton. Welker has nearly 49 year’s experience in the oil and gas industry and says this is the most exciting times of his career. “The Utica oil play is sort of the last big frontier as far as shale plays in the U.S.,” he said. “Our asset is really big in this area because of the early days and previous owner (Chesapeake) leased up all over. So, we already have a big footprint and now we are basically filling in and expanding our opportunity. We needed some capital to grow this thing bigger. This investment shows how confident they are in us to do that.” Encino has about 1.1 million acres under lease at the present time in the Utica Shale play, which makes the company the largest leaseholder. “We are the largest by a long shot,” Walker noted. Ascent Resources was the next closest oil producer the first quarter with 21.8 percent (1,576,362 barrels) in the first quarter. Encino’s Burdette wells in Harrison County took the top five slots in the first quarter in oil production, led by the 201M well which produced 139,413 barrels. Encino owns 16 of the top 25 wells in oil production during the first quarter. The Oliver CR 201H well was the top producing oil well in Carroll County with 62,459 barrels (18th on the top 25 list). Two other Oliver wells made the top 25 list along with two Timberwolf wells in Carroll County. Harrison County ranked first in oil production for the first quarter with 2,283,645 barrels (31.60%), followed by Guernsey County, 1,903,902 barrels (26.34%) and Carroll County 1,897,061 barrels, a close third at 26.25%. Walker said when Encino bought the asset and took over in 2018 and early 2019, we always had had designs on moving to the up-dip portion or kind of the western edge of the Utica play. “The play is not the same everywhere,” he noted. “The east side is dry gas, and the west side is oil. We always had designs on moving out to the west side and testing the oil play because we, and others, believed this could be a big commercial oil play.” In 2021, the company began drilling in earnest in the oil play and gradually directed more of the program to the oil play. Today, he said, the company is about 98 percent focused in the oil play. “We are now over 200 wells, all very successful, and now produce more than half the oil in the state,” Walker stated. The company has been operating with three rigs in the play. Walker said a fourth will be added this July. “The additional rig will make us one of the biggest, if not the biggest, operator in all of Appalachia,” said Welker. “We are really excited. It’s the real deal. We are over 200 wells in without a failure.” He sees the wells lasting 75 to maybe 100 years. He backed the statement by saying there are shale wells in Kentucky that are over 100 years old. Looking into the crystal ball as to what the future holds for Carroll County and the surrounding areas in relation to the oil and gas play, Walker, said it comes down to economic impact. “A lot of money has been injected into the community and jobs created and, in many cases, careers. At Encino we have a policy of using local vendors whenever possible. We have a lot of probably 200 vendors which are Ohio based. We are the only company that can say 100 percent of our casing comes from Ohio (Youngstown).” He believes the company has built a solid reputation, based on safety and being environmentally sound. “The message is, we want people to call us,” Walker noted. “We are interested in leasing. We think we’re different and landowners will get more value for their minerals by leasing with the company. Jackie Stewart, director of External Affairs for Encino, noted the company is leasing land on a more aggressive basis than ever before. “We are filling in the gaps,” she said. “We are looking for the 5–10-acre pieces of land. We are ready to take calls from landowners and will be transparent with them. If their land is not in our area, we will let them know upfront. However, if we lease you, we are going to drill.”
Early morning oil tank fire in Carroll County leads to minor injuries — An oil tank fire early Wednesday at a facility in Carroll County had crews and first responders called to the scene off Ohio 164 on Branch Road near Amsterdam. Crews were called to the scene at 8 when reports of an explosion happened at an Encino oil tank facility. "We were toned for a self-extinguishing fire with a couple injuries,” Loudon Township Volunteer Fire Chief Theodore Berardineli said. “The injured were transported and the fire was extinguished when we came on scene. "One was transported by Amsterdam Volunteer Fire Department and the other individual was transported by EMT.” Crews from multiple departments were on scene for approximately one hour as they worked to secure the area and to ensure that the employees were safe and the scene was cleared to resume operations. "It was actually self-extinguished when we got here,” Berardineli said. “The fire was out and all safety protocols by Encino were administered, and all went off without a hitch. "We had myself with Loudon Township. We also had Station 11 and Amsterdam EMT as our medical support" According to Carroll County Emergency Management Agency Director Tom Cottis, crews were performing routine maintenance at the site when the flash fire occurred. It lasted less than 30 seconds and public safety was never at risk. The incident left those two workers who were transported with minor injuries. "When we get to something like this where we do have protocols that we have to make sure that are in place when we arrive on scene to make sure all the safety protocols are followed,” the chief said.
Two injured in oil pad flash fire -- An investigation will be conducted to determine the cause of the flash fire on an oil pad that sent two men to the hospital. Carroll County Emergency Management Agency (EMA) Director Tom Cottis said the flash fire occurred on an oil pad on Branch Rd. in Loudon Twp. just after 8 a.m. Wednesday morning. Cottis said a flash fire occurred from an underground overflow holding tank and the two men working on a remote tank on the pad were injured. One suffered burns and the other was injured trying to get away from the fire. Cottis said the flash fire extinguished itself in probably less than 30 seconds. Both men were transported to area hospitals by EMT Ambulance and Amsterdam Emergency Squad. Loudon Twp. and Carrollton village firefighters responded to the scene.
Cleveland Democrat Floats Bill to Require Frack Chemical Disclosure -Marcellus Drilling News An anti-drilling Democrat member of the Ohio House of Representatives (representing a Cleveland suburb) would love nothing more than to ban all shale drilling in his state. He has just introduced a bill requiring drillers to disclose any and all chemicals they use for any purpose when drilling a new shale well under state-owned land. State Rep. Sean Patrick Brennan, representing the 14th Ohio House District, claims House Bill (HB) 562 will “improve public safety and transparency.” Will it? Is that its real purpose?
Owner of 3 Athens, OH Injection Wells Applies to Permanently Plug -- In April, the Ohio Oil and Gas Commission upheld a regulatory order from the Ohio Dept. of Natural Resources (ODNR) suspending operations of three wastewater injection wells located in Torch (Athens County), OH, owned by K&H Partners, a subsidiary of Tallgrass Energy (see Ohio O&G Commission Votes to Shut Down 3 Athens Injection Wells). The Athens County Independent is reporting K&H is officially throwing in the towel and has applied to plug its three Torch injection wells.
Disabled veteran's yard center of complaint against Columbia Gas - A Chesapeake man says he’s getting the “runaround” regarding attempts to get Columbia Gas of Ohio to restore his yard to how it was before the company’s contractor dug it up and removed part of his curb to lay new lines. William Taylor, longtime resident and a disabled veteran, said he didn’t mow part of his yard to show the type of grass the contractor put down is inconsistent with the rest of his lawn. “This is their grass,” Taylor said pointing to it. “It’s what they put on hillsides.” RLA, according to Taylor, as a contractor for Columbia Gas put in a pipeline along Route 7. Taylor showed where the line went through his neighbor’s and his father’s yards. Taylor says he tried to work with RLA and nd curb restored. He said that did not work, so he contacted the Public Utilities Commission of Ohio to file a complaint. “They’re saying they don’t have jurisdiction,” Taylor said. An email from PUCO indicates that the organization “reached out to Columbia Gas on (Taylor’s) behalf. Columbia Gas of Ohio’s response was after multiple attempts to reach (Taylor) by phone, they completed a site visit on June 20, 2024.” The email says Columbia Gas visited Taylor’s house to contact him again, and there was no answer. After a review, the construction field leader and general contractor manager do not agree with Taylor’s claims, according to PUCO. PUCO’s Jenifer Phillips said those reps said the steps were removed per Taylor’s request. “They stated the area then had topsoil and grass seed laid down,” she said. “They stated there is grass in the area where they completed work; however, it has not been taken care of and is consistent with other parts of (Taylor’s) yard.” As for the curb, Phillips said the reps don’t believe it was there before the work.
In U.S., overall emissions down as oil and gas production rises — but in Pa. region, emissions are up - Carbon dioxide and methane emissions declined as oil and gas production rose across the U.S. between 2015-2022, according to a new study.However, in the region that includes Pennsylvania, the story is different: Reported total emissions – carbon dioxide plus methane – have gone up by 4 percent as oil and gas production increased. The study is based on data that companies report to the Environmental Protection Agency. It was conducted by Ceres and Clean Air Task Force, two non-profit advocacy groups, and Environmental Resources Management, a sustainability consultancy.The drop in the total emissions across the U.S. is linked to state and federal policies that have been put in place since 2015, the study says.In the Appalachian basin — the nation’s largest gas-producing basin, which includes Pennsylvania — the rise in the total emissions comes from carbon dioxide. That is typical when production surges and companies burn more fuel to run processes, explained Lesley Feldman, the research and analysis manager on the Clean Air Task Force’s methane pollution prevention team. Feldman said to bring CO2 emissions down, the companies will have to electrify processes and cut down on flaring – burning of gas during oil extraction.While carbon emissions have gone up, emissions of methane, a greenhouse gas with 28 times more heat-trapping capacity than CO2, have gone down by 25 percent in the region. Zachary Barkley, an assistant professor at Penn State who works on using top-down or satellite-based methods to track methane emissions, said, “You have to take all EPA’s numbers with a grain of salt.” Barkley, who was not involved with the study, said EPA uses an average estimate factor for each type of device a company has and then scales up for the total equipment in the well. He said that would work if measurements were accurate and all devices were identical. But when his research teams compared EPA’s numbers to what they were seeing from satellite measurements, they found “that the EPA was wrong from somewhere between 50-500 percent,” he said. Feldman said the data also does not account for emissions from abandoned wells and does not require companies to report large release events. She said that is “the main source of discrepancy between the reported and the measured emissions.”In 2024, EPA finalized the New Source Performance Standards and Emissions Guidelines which it says is intended to regulate best practices among oil and gas drillers. The agency said the revised reporting method will include large leak events, updated average estimate factors, and will incorporate direct measurement techniques. Barkley and Feldman say the revisions can make the EPA data more accurate. But there is still value in the existing EPA data, to compare companies to each other and to see if regulations have had an impact, Feldman said. “The data is not perfect, but at least it’s a good apples-to-apples comparison.”Feldman noted the study shows variation among companies in emissions intensity, a measurement defined as greenhouse gas emitted compared to the amount of fuel produced.“We’re seeing up to 32 times the difference in methane emissions intensity, between the highest and the lowest section of natural gas producers, which exemplifies the gap between companies using best practices and those that are not,” Feldman said.The Marcellus Shale Coalition, which represents oil and gas companies, lauded the industry’s practices in reducing emissions. “It’s clear these efforts are working to boost both the energy security of our nation” and fossil-fuel industry jobs, the coalition said in a news release. The coalition cites steps companies are taking, such as improved leak detection and adopting electric drilling and fracking units. Oil and gas basins in and around Pa. have the lowest methane intensity of all basins in the country, according to the study. But, Feldman said, “There’s still a lot of emissions and this report is underestimating them. So, even though reported emissions may have come down, there’s still a lot of room. They can and should come down even further.”
PA Antis Split Over Issue of Carbon Capture & Sequestration | Marcellus Drilling News Pennsylvania Democrat leftists face a conundrum. Do they listen to one set of environmentalist wackos, including the Pennsylvania Environmental Council, Environmental Defense Fund, Nature Conservancy, and Clean Air Task Force? Or do they listen to a different set (on the same ideological side of the aisle), including Better Path Coalition, 350 Pittsburgh, 412 Justice, the Center for Coalfield Justice, and the Clean Air Council? Two weeks ago, the first set of wackos threw their support behind PA Senate Bill (SB) 831, the Carbon Capture & Sequestration (CCS) Act (see PA House Advances Carbon Capture & Sequestration (CCS) Act). Earlier this week, the latter group of wackos sent lawmakers a letter opposing SB 831. What’s a lib Dem to do?
15 New Shale Well Permits Issued for PA-OH-WV Jun 24 – 30 -- We’re playing catch-up following our brief Wednesday through Friday vacation last week. The first order of business is to bring you the list of permits issued for the week of June 24 – 30. A total of 15 new permits were issued, with most (10) issued in Pennsylvania. Ohio issued four new permits, and West Virginia issued one new permit. Both Seneca Resources and Apex Energy tied for most new permits (three each), with Seneca’s permits issued in Tioga County, PA, and Apex’s permits issued in Westmoreland County, PA. Apex Energy | Ascent Resources | Beaver County | Bradford County | Chesapeake Energy | EQT Corp | Greene County (PA) | Guernsey County | INR | Jay-Bee Oil & Gas | Jefferson County (OH) | Pleasants County | Range Resources Corp | Seneca Resources | Tioga County (PA) | Westmoreland County
18 New Shale Well Permits Issued for PA-OH-WV Jul 1 – 7 | Marcellus Drilling News - We noticed that permit data has already been updated for last week, so we’re bringing you our weekly permit report a day early. For the week of July 1 – 7, a total of 18 permits were issued to drill new shale wells in Marcellus/Utica. There were six new permits issued in Pennsylvania, with four of them going to Range Resources for a pad in Washington County. There were four new permits in Ohio, all of them going to Encino Energy for a pad in Guernsey County. West Virginia was the surprise with eight new permits, six of which were issued to Antero Resources in Tyler County. Allegheny County | Antero Resources | Arsenal Resources | Encino Energy | Guernsey County | Harrison County | Marion County | Olympus/Huntley & Huntley | Range Resources Corp | Seneca Resources | Tioga County (PA) | Tyler County | Washington County
EOG Zags with Organic Growth While Everyone Else Zigs with Mergers Marcellus Drilling News --Mergers and Acquisitions (M&A) have been all the rage over the past year or so. In 2024 alone, Chesapeake Energy announced a $7.4 billion deal to buy Southwestern Energy (see Deal is Done! Chesapeake & Southwestern Announce $7.4B Merger). However, oil plays, including the Permian and Bakken, are where the biggest deals are happening. ExxonMobil announced a deal to buy the Permian’s largest independent, Pioneer Natural Resources, for $60 billion. Diamondback Energy is buying Endeavor Energy Resources for $26 billion. Chevron is attempting to buy Hess Corporation (big assets in the Bakken and assets in foreign markets) for $53.5 billion. However, one large, publicly traded company is charting a different course, preferring to grow acreage organically and concentrate on previously unknown or overlooked hydrocarbon plays. That company is EOG Resources.
TETCO Pipe Replacement Project in Fayette County, PA July Thru Oct | Marcellus Drilling News -Texas Eastern Transmission Pipeline (TETCO) is a major natural gas pipeline originally built to flow gas from the Gulf of Mexico coast in Texas and Louisiana up through Mississippi, Arkansas, Tennessee, Missouri, Kentucky, Illinois, Indiana, Ohio, and Pennsylvania to deliver gas in the New York City area. Owned by Canadian-based Enbridge, TETCO is one of the largest pipeline systems in the United States. Years ago, large portions of TETCO were reversed to flow Marcellus/Utica gas southward along the pipeline. Here’s something we’re sure happens with big pipes like TETCO, but not something you read about often: TETCO is replacing a segment of its pipeline that runs through Fayette County, PA.
Marcellus Sees Soaring Costs, Lower Production – Ranking Decreased -- Marcellus Drilling News - Operators and investors are more concerned than ever about the remaining inventory of drillable locations. Who has it? Where is it? Will it be economic? The North American inventory rankings by shale play are always of interest. Enverus Intelligence Research (EIR), a subsidiary of Enverus, recently issued a report that ranks the plays by the number of economic-to-drill locations each play has left. Unfortunately, Marcellus Shale play is on the list of “losers” in this latest report. Why? A huge jump in Bidenflation — rig day rates were up 25% year-over-year in September in the Marcellus, compared to about 15% across the other plays. Also a factor is dropping productivity in the Marcellus (“productivity degradation”), particularly in northeast PA.
Marcellus Shale Testing Lab in PA Sells Itself to Minneapolis Co. - Incorporated in 1988, Environmental Service Laboratories, Inc. (ESL) is an environmental testing laboratory based in Indiana, PA, providing various analytical testing, consulting, and field sampling services. ESL customers include Marcellus/Utica natural gas drilling companies, industrial facilities, municipalities, engineering firms, local/state/federal government, and the general public. ESL is accredited to test drinking water, wastewater, soil, solid materials, natural gas, frozen dairy products, and meat. ESL has just sold itself for an undisclosed amount to Pace Analytical Services, based in Minneapolis, MN.
U.S. Natural Gas Operators Said Looking to Measure Methane Intensity as European Scrutiny Rises --Domestic natural gas producers are going to be under increasing pressure to differentiate the methane intensity of their LNG cargoes as Europe cracks down on greenhouse gas emissions, according to experts. Bar graph showing destinations for U.S. LNG by major portfolio players. Ministers for the European Union (EU), representing one of the biggest markets for U.S. liquefied natural gas, finalized rules in late May that impact both oil and natural gas imports. The rulemaking, scheduled to be implemented in 2030, would impose "maximum methane intensity values" on imported fossil fuels. The European Commission (EC) has been tasked with setting the methane limits. Certifying the methane intensity of natural gas will ensure U.S. supply has a welcome home in the EU, MiQ CEO Georges Tijbosch recently told NGI. The rulemaking will be a “game changer,” as measuring methane emissions will no longer be “just voluntary. That's the biggest difference.” The rules are likely to upend “the entire global LNG market…It’s a sea change.”
Natural Gas Consumption Increasing in Every Scenario, as U.S.-Driven LNG Demand Spurs Growth, Says BP --U.S. LNG exports are forecast to more than double by 2030 from 2022 levels, with domestic natural gas consumption declining “only slightly” over the next 25 years, according to BP plc. BP’s chief economist Spencer Dale explained the London-based supermajor’s projections to 2050 during a webcast on Wednesday. BP’s respected Energy Outlook 2024 is the 11th annual forecast about the world’s energy economy. BP’s economist team tested projections for energy consumption using a Current Trajectory and Net Zero scenario to explore the range of possible outcomes to 2050. In both scenarios, natural gas consumption is seen rising.
Greater Houston Area Recovering from Deadly Beryl, but Freeport LNG Still ‘Ramped Down’ --The major ports along the upper Texas coast were set to reopen on Tuesday as cleanup continued in the aftermath of former Hurricane Beryl, but operations at a major LNG export facility remained shuttered. Beryl stormed ashore as a Category 1 hurricane Monday on the upper Texas coast near Matagorda, leaving widespread destruction in its path. The hurricane killed at least seven people as of Tuesday morning, according to Harris County officials. For the energy sector, the overall impact to natural gas prices appeared to be minimal. The New York Mercantile Exchange August contract had risen in early trading Tuesday, but fell 2.2 cents on the day to $2.344/MMBtu.
Houston – Nation’s Fourth-Largest City – Struggling Post-Beryl; Freeport LNG Awaiting Power --Freeport LNG Development LP’s export facility on the upper Texas coast was still offline on Wednesday, four days after it was shut down ahead of former Hurricane Beryl as the region continued to grapple with the effects of the storm. Chart showing hurricane predictions for 2024. “We intend to resume liquefaction operations when post-storm assessments are complete, and it is safe to do so,” Freeport spokesperson Heather Browne told NGI on Wednesday, adding that there were no other updates. No liquefied natural gas tanker had been loaded at the terminal since July 4, according to Kpler ship-tracking data. Four vessels signaling for the terminal were floating nearby offshore on Wednesday.
Freeport Restart Uncertain as Power Outages Continue After Beryl — The Freeport LNG Development LP terminal on the upper Texas coast remained offline on Thursday for the fifth day in a row since it was shuttered on Sunday ahead of former Hurricane Beryl. CenterPoint Energy Inc., which provides nearly 700 MW for the facility, reported that nearly 40% of its customers in Brazoria County, where Freeport is located, were still without power. CenterPoint’s restoration map showed early Thursday that post-storm assessments were completed on Quintana Island, home to the terminal, but electricity had not been restored there. Freeport nominated 100 MMcf of feed gas on Thursday, lower than the 150 MMcf nominated the day before. The 2.1 Bcf/d facility had nominated 1.6 Bcf before it was shut down Sunday. Kpler vessel-tracking data on Thursday still showed five ships offshore near Freeport.
1 MM in Texas without power, Freeport LNG to restart after Beryl -- One million homes and businesses in Texas remained without power on Thursday, four days after Hurricane Beryl lashed the state with fierce winds and flooding, sparking frustration among companies, officials and residents who were facing extreme heat. A little more than half of CenterPoint Energy's 2.3 MM customers had power restored by Thursday morning, the company said, following Beryl's landfall near Matagorda. CenterPoint is Texas' largest electricity provider. Hiccups in the restoration of power are slowing down some companies' efforts to return operations to normal, especially around Freeport, among Texas' largest energy hubs. More rain on Thursday added to the delays. However, most oil and gas companies have resumed normal operations after Beryl made landfall as a Category 1 storm. Freeport LNG, the U.S.’s third-largest liquefied natural gas (LNG) producer, began pulling in small volumes of natural gas for processing on Thursday, according to data from financial firm LSEG. The company has not provided an operational update since Sunday, when it said it ramped down production. A small flare could be seen flickering at the facility, according to a witness. No vessels were docked at the LNG company's berths, but many power restoration crews were working in the area with service trucks arriving from as far as Nebraska and North Carolina, according to locals interviewed. "The major concern of the week over the impact of Hurricane Beryl on U.S. LNG production has receded," said consultancy Rystad's vice president, Wei Xiong, in a note to clients. The port of Freeport said restrictions for navigating during daylight could be lifted on Thursday. U.S. natural gas futures fell about 2% to a two-month low on Thursday on a bigger-than-expected weekly storage build as output rose and the amount of gas flowing to LNG export plants dropped due to Beryl. Chemical maker Olin on Wednesday declared a force majeure for some product and aromatic shipments after Beryl caused damage to its Freeport facilities. The firm said the duration of the disruption was uncertain, and did not respond to requests for more details. Formosa Plastics, which temporarily shut down operations at its Point Comfort plant after a malfunction with a gas compressor system, said it did not receive any severe damage from Beryl. The company expects operations to be back to normal by the end of next week. Chemical company BASF said its facilities in Texas experienced minimal impact from Hurricane Beryl and the site was working to resume normal operations. The ports of Houston, Galveston and Texas City were open on Thursday, with some of them operating with restrictions that were expected to be lifted soon. The U.S. Coast Guard on Thursday afternoon rescinded port conditions issued during storms, signaling normal operations.
US natgas prices climb 2% on forecasts for more demand in heat wave (Reuters) -U.S. natural gas futures climbed about 2% on Monday on forecasts for more demand next week than previously expected as a brutal heat wave continues to blanket much of the country, forcing power generators to burn more gas to produce electricity to keep air conditioners humming. The price increase came despite forecasts for less demand this week than previously expected, rising output and a drop in the amount of gas flowing to liquefied natural gas (LNG) export plants after Freeport LNG in Texas shut ahead of Hurricane Beryl. Hurricane Beryl lashed Texas with strong winds and heavy rains as it churned inland, forcing the closure of oil ports, cancellation of hundreds of flights and leaving over 2.7million homes and businesses without power. Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange rose 4.7 cents, or 2.0%, to settle at $2.366 per million British thermal units (mmBtu). It was the front month's first price gain in six days and pushed the contract out of technically oversold territory for the first time in four days. Higher prices in recent weeks have prompted some producers, including EQT and Chesapeake Energy, to start pulling more gas out of the ground. Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 102.4 billion cubic feet per day (bcfd) so far in July. On a daily basis, output hit a 17-week high of 103.0 bcfd on Sunday. That was up from an average of 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May when many producers reduced drilling activities after prices fell to 3-1/2-year lows in February and March. U.S. output hit a monthly record high of 105.5 bcfd in December 2023. Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least July 23. With hotter weather expected next week, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 105.7 bcfd this week to 107.0 bcfd next week. The forecast for this week was lower than LSEG's outlook on Friday, while the forecast for next week was higher. Gas flows to the seven big U.S. LNG export plants fell to 12.1 bcfd so far in July after Freeport LNG in Texas ramped down ahead of Hurricane Beryl on Sunday, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023.
Beryl’s Impact on U.S. Export Facilities, International Natural Gas Prices Seen Waning as Storm Moves Inland — Hurricane Beryl weakened after coming ashore in Texas early Monday and was downgraded to a tropical storm after it disrupted some LNG feed gas demand along the U.S. Gulf Coast. NGI's LNG export tracker (graphic). Beryl made landfall as a Category 1 hurricane between Houston and Corpus Christi, bringing with it storm surge, damaging winds and flooding rainfall. Ahead of its arrival on Sunday, Freeport LNG Development LP shut down its export facility, cutting feed gas demand there from 1.6 Bcf/d to nearly zero before Beryl made landfall about 40 miles to the northeast. Spokesperson Heather Browne said the facility would return to service when it’s “safe to do so.” Unlike other liquefied natural gas facilities along the Gulf Coast, neither Freeport nor Sempra Infrastructure’s Cameron facility have their own power supply and instead rely on the grid. In the Houston area alone, CenterPoint Energy Inc. said Monday that power service for more than 2 million people had been impacted by the storm.
U.S. power generators burn record amounts of natgas on hottest day of summer to date U.S. power generators burned a record amount of natural gas on Tuesday, the hottest day so far of this summer, according to preliminary data from financial firm LSEG on Thursday. Extreme weather reminds consumers of the fatal freeze in February 2021 that left millions of Texans without power, water and heat for days and a brutal heat wave in August 2020 that forced the California power grid operator to impose rotating outages that affected about 800,000 customers over two days. As homes and businesses cranked up their air conditioners to escape the brutal heat this week, LSEG said power generators burned a preliminary 54.2 Bft3d of gas on Tuesday, which would top the current record of 52.8 Bft3d on July 28, 2023. Power generator demand for gas slid to around 51.8 Bft3d on Wednesday and 50.5 Bft3d on Thursday with a slight reduction in average daily temperatures across the U.S. Lower 48 states as the remnants of Hurricane Beryl moved from Texas to Michigan. 1 Bft3 is enough to supply about 5 MM U.S. homes for a day. As soaring demand stresses electric grids, next-day power prices soared this week to their highest since January in Southern California, New England, the Pennsylvania-New Jersey-Maryland region and the Pacific Northwest, according to pricing data on the LSEG terminal. In Arizona, where AccuWeather said high temperatures hit 118°F (47.8°C) this week, power prices soared to their highest since August 2023. LSEG said Tuesday was the hottest day so far this summer with average temperatures across the Lower 48 states of 81.2°F. Meanwhile, the European Union's Copernicus Climate Change Service (C3S) said last June was the hottest month on record, leading some scientists to warn 2024 could be the world's hottest year. Climate scientists have long said countries need to drastically reduce greenhouse gas emissions and burning fossil fuels, which are the main cause of climate change like intensifying heatwaves. AccuWeather forecast temperatures would reach 92°F in Chicago on July 14 and 95°F in New York on July 15–16. That compares with normal highs of 85°F in both cities at this time of year. Electric grid operators across the country declared hot weather alerts this week and told energy companies to put off unnecessary maintenance so all available generating plants and power lines would be ready for service. But despite the extreme heat, the grid operators have not taken more extreme actions to manage supply and demand - like calls for conservation or rotating outages - and none were currently projecting power use would break all-time highs over the next week. In California, where AccuWeather projected high temperatures in Los Angeles would reach 88°F for a third day in a row on Thursday, the California ISO, which operates the state's power grid, did tell customers to "prepare for the need to conserve energy" on Wednesday and Thursday.
US natgas prices ease on rising output, lower LNG feedgas (Reuters) - U.S. natural gas futures eased about 1% on Wednesday on recent increases in output, a drop in the amount of gas flowing to liquefied natural gas (LNG) export plants after Freeport LNG in Texas shut for Hurricane Beryl and a tremendous surplus of gas in storage for this time of year. That price decline was limited by forecasts for more demand over the next two weeks than previously expected as a brutal heat wave will continue to blanket much of the country through at least late July, stoking demand for air conditioning and forcing power generators to burn more gas. Analysts said gas stockpiles were about 18% above normal levels. One factor depressing power demand this week was the roughly 1.6 million homes and businesses still without power in Texas on Wednesday in the wake of Hurricane Beryl. Front-month gas futures for August delivery on the New York Mercantile Exchange fell 1.5 cents, or 0.6%, to settle at $2.329 per million British thermal units (mmBtu), keeping the contract in technically oversold territory for a second day in a row. Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 102.4 billion cubic feet per day (bcfd) so far in July, up from an average of 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May. U.S. output hit a monthly record high of 105.5 bcfd in December 2023. Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least July 25. With hotter weather expected next week, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 106.1 bcfd this week to 107.0 bcfd next week. Those forecasts were higher than LSEG's outlook on Tuesday. Gas flows to the seven big U.S. LNG export plants fell to 12.2 bcfd so far in July after Freeport LNG in Texas shut ahead of Hurricane Beryl on Sunday, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023. Sources told Reuters that Freeport LNG would likely restart by Thursday. The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia's invasion of Ukraine. With worries about Hurricane Beryl receding, gas prices fell to a seven-week low of around $10 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and a three-week low of $12 at the Japan Korea Marker (JKM) benchmark in Asia .
US natgas prices fall 3% to two-month low on big storage build, rising output (Reuters) - U.S. natural gas futures fell about 3% to a two-month low on Thursday on a bigger-than-expected weekly storage build as output rose and the amount of gas flowing to liquefied natural gas (LNG) export plants dropped after Freeport LNG in Texas shut early this week for Hurricane Beryl. Freeport started taking in small amounts of gas again on Thursday after power generators consumed a daily record amount of gas on Tuesday to keep air conditioners humming on the hottest day so far this summer. Front-month gas futures for August delivery on the New York Mercantile Exchange fell 6.1 cents, or 2.6%, to settle at $2.268 per million British thermal units (mmBtu), their lowest close since May 10. That price drop also kept the front-month in technically oversold territory for a third day in a row. The U.S. Energy Information Administration (EIA) said energy firms added 65 billion cubic feet (bcf) of gas into storage during the week ended July 5. That was more than the 55-bcf build analysts forecast in a Reuters poll and compares with an increase of 57 bcf in the same week last year and a five-year (2019-2023) average rise of 57 bcf for this time of year. That build boosted the amount of gas in storage to around 19% above normal levels for this time of year. Before the latest storage build, traders noted that injections were smaller than usual for eight weeks in a row because several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March. Higher prices in April, May and June prompted some producers, including EQT and Chesapeake, to return to the well pad. But with prices now down about 12% so far in July, energy traders say it will be interesting to see whether drillers will keep boosting output over the next month or two. Even though power generators were burning near record amounts of gas to keep air conditioners humming during a brutal heat wave, those gas burns were slightly depressed because roughly 1.3 million homes and businesses were still without power in Texas on Thursday in the wake of Hurricane Beryl. At its peak Beryl, which hit Texas on Monday, knocked out power to over 2.7 million customers. Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 102.1 billion cubic feet per day (bcfd) so far in July, up from an average of 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May. U.S. output hit a monthly record high of 105.5 bcfd in December 2023. Meteorologists projected weather across the Lower 48 states would remain mostly hotter than normal through at least July 26. With hotter weather expected next week, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 106.3 bcfd this week to 106.6 bcfd next week. The forecast for next week was lower than LSEG's outlook on Wednesday. Gas flows to the seven big U.S. LNG export plants fell to 11.9 bcfd so far in July after Freeport LNG in Texas shut ahead of Hurricane Beryl on Sunday, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023.
EIA: US natgas output to decline in 2024, while demand rises to record high -HomeNewsEIA: US natgas output to decline in 2024, while demand rises to record high EIA: US natgas output to decline in 2024, while demand rises to record high 7/10/2024 U.S. natural gas production will decline in 2024 while demand will rise to a record high, the U.S. Energy Information Administration (EIA) said in its Short-Term Energy Outlook (STEO). The EIA has projected dry gas production will ease from a record 103.8 Bft3d in 2023 to 103.5 Bft3d in 2024 as several producers reduce drilling activities after gas prices fell to 3-1/2-year lows in February and March. In 2025, the EIA projected output would rise to 105.2 Bft3d. The agency also projected domestic gas consumption would rise from a record 89.1 Bft3d in 2023 to 89.4 Bft3d in 2024 before easing to 89.2 Bft3d in 2025. If the projections are correct, 2024 would be the first time output declines since 2020 when the COVID-19 pandemic cut demand for the fuel. It would also be the first time demand increases for four years in a row since 2016. The latest projections for 2024 were higher than the EIA's June forecast of 102.1 Bft3d for supply and unchanged from the agency's June forecast of 89.4 Bft3d for consumption. In Appalachia, the biggest U.S. shale gas basin spanning Pennsylvania, Ohio and West Virginia, output is set to rise from 34.7 Bft3d in July to 34.8 Bft3d in August. Appalachia output hit monthly records of 37.1 Bft3d in November and December 2023. The agency forecast average U.S. liquefied natural gas (LNG) exports would reach 12.2 Bft3d in 2024 and 14.3 Bft3d in 2025, up from a record 11.9 Bft3d in 2023. That was higher than the EIA's LNG export forecast in June of 12.1 Bft3d. The agency projected U.S. coal production would fall from 577.5 MM short tons (t) in 2023 to 509.7 MMt in 2024, the lowest since 1964, and 489.5 MMt in 2025, the lowest since 1963, as gas and renewable sources of power displace coal-fired plants. The EIA projected carbon dioxide (CO2) emissions from fossil fuels would rise from 4.793 metric Bt in 2023 to 4.819 metric Bt in 2024 as all fossil fuel use increases, and 4.825 metric Bt in 2025 as petroleum use increases. That means carbon emissions were on track to rise in four out of five years through 2025 since dropping to 4.584 metric Bt in 2020, the lowest since 1983, when the pandemic sapped demand for energy. Carbon emissions also fell in 2023 as power companies burned less coal.
Natural Gas Prices Poised to Rally Through Back Half of 2024 and Next Year, EIA Says --Benchmark natural gas spot prices are poised to jump this summer and prove substantially stronger through the balance of 2024, according to updated federal forecasts. Chart showing bidweek and residential natural gas prices. In the July release of its Short-Term Energy Outlook (STEO), published Tuesday, the U.S. Energy Information Administration (EIA) projected a Henry Hub natural gas spot price average of $2.90/MMBtu for the final six months of 2024, up 80.0 cents from the first half of the year. Prices floundered early this year amid mild weather and record production that topped 106 Bcf/d late last year and again in the first quarter. Producers scaled back in the spring, keeping output below the century mark, but benign shoulder season weather further restrained bullish sentiment.
Gas Trader Predicts NatGas $2.50 in 2024, $3.00+ in 2025 & Beyond -- Marcellus Drilling News - Yes, we’ve been keeping an eye on the (pathetic) price of natural gas as it flounders and flops. The NYMEX Henry Hub front-month contract briefly went above $3/MMBtu earlier this year, but since that time, it’s had a hard time staying above $2. It’s depressing. From time to time, we bring you predictions from various studies and government agencies. Just yesterday, we told you that EIA’s monthly Short-Term Energy Outlook predicts an average HH price of $2.50 in 2024, and $3.30 in 2025 (see July STEO Predicts U.S. Natgas Output Declines, Demand Rises 2024). The people who create the price — natural gas traders — often provide unique insights. We have one such trader’s insights into what he believes will happen for the balance of 2024 and into 2025.
Bids, Offers Rolling in For Abaxx's U.S. LNG Futures Contract After Exchange Launches -- Abaxx Technologies Inc. has seen active trading of its physically settled Gulf Coast LNG futures contracts since they were launched June 28 in what the company said is a strong sign of the market’s interest. Global LNG imports by contract type bar graph. Bids and offers for Abaxx’s front month October United States Gulf of Mexico (GOM) contract started soon after launch and have come in on a daily basis since then, Chief Commercial Officer Joe Raia told NGI. Raia said the early trades, which aren’t always common after launch, are partly thanks to the firms who helped Abaxx build the contracts. “...That’s really a testament to the product itself, the design of the product and our interaction with the trading community and the clearing firms too,” he added.
US crude and gasoline inventories fell last week, distillate stocks rose, EIA says (Reuters) - U.S. crude and gasoline stocks fell by more than expected last week as refineries ramped up activity, while distillate stocks rose, the Energy Information Administration (EIA) said on Wednesday.Global Brent and U.S. West Texas Intermediate (WTI) futures rose following the report. Brent futures were trading at $85.11 a barrel, up 45 cents, at 1513 GMT. WTI futures were trading at $82.06 a barrel, up 65 cents.Crude inventories fell by 3.4 million barrels to 445.1 million barrels in the week ended July 5, the EIA said on Wednesday, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel draw.Crude stocks at the Cushing, Oklahoma, delivery hub fell by 702,000 barrels in the week, the EIA said.Refinery crude runs rose by 317,000 barrels per day, while utilization rates rose by 1.9 percentage points in the week, the EIA said. Gulf Coast refinery utilization hit its highest since June 2023."A rebound in refinery runs last week helped usher in a crude inventory draw," "Despite higher refining activity, gasoline inventories drew amid ongoing strong implied demand ahead of the long holiday weekend," Smith said.U.S. gasoline stocks ab fell by 2 million barrels in the week to 229.7 million barrels, the EIA said, compared with analysts' expectations in a Reuters poll for a 0.6 million-barrel draw.Distillate stockpiles, which include diesel and heating oil, rose by 4.9 million barrels in the week to 124.6 million barrels, versus expectations for a 0.8 million-barrel rise, the EIA data showed.Even with the decline in gasoline stocks, some market participants remained concerned about demand. "While there was some solidness to gasoline demand, we know that it's all downhill from here,". "There's a real warning flag over the distillate number."U.S. diesel futures and gasoline futures pared losses after the report.
U.S. Crude Oil Stocks Fall as Refineries Step Up Capacity Use — U.S. crude oil inventories fell for a second straight week as refineries raised their capacity use to its highest level in more than year, according to data released Wednesday by the U.S. Energy Information Administration. Commercial crude oil stocks excluding the Strategic Petroleum Reserve fell by 3.4 million barrels to 445.1 million barrels in the week ended July 5, and were about 4% below the five-year average for the time of year, the EIA said. The drawdown followed a 12.2 million barrel reduction the week before. Analysts surveyed by The Wall Street Journal had predicted crude stockpiles would fall by 1.1 million barrels. Oil held in the SPR increased by 477,000 barrels to 373.1 million barrels. Oil stored at Cushing, Okla., the Nymex delivery hub, was down by 702,000 barrels at 33.5 million barrels. Refinery capacity use increased by 1.9 percentage points to 95.4%, its highest level since June 2023 and above expectations for refinery runs to be unchanged. The EIA estimated U.S. crude oil production at 13.3 million barrels a day, up 100,000 from the week before. Crude imports increased by 214,000 barrels a day to 6.8 million barrels a day, while exports fell by 402,000 barrels a day to 4 million barrels a day. Gasoline inventories fell by 2 million barrels to 229.7 million barrels as demand held around 9.4 million barrels during the July 4 holiday week, although down by 26,000 barrels from the week before. Gasoline stocks were forecast to be down by 1.4 million barrels. Inventories were 1% below the five-year average, the EIA said. Distillate fuel stocks jumped by 4.9 million barrels to 124.6 million barrels, compared with expectations of a 200,000 barrel build. Distillate stocks were 8% below the five-year average. The impact of Hurricane Beryl, which landed early Monday along the Texas coast between Corpus Christi and Galveston, forcing the closure of major energy ports, is likely to be reflected in the following EIA report. Several producers evacuated offshore platforms ahead of the storm, but expected minimal impact on production.
GAO: Congress can use CRA to undo whale drilling safeguards - Congress’ watchdog has concluded that an Interior Department advisory to offshore drillers protecting an endangered whale qualifies as a “rule” and so should have been run by lawmakers.The finding from the Government Accountability Office means a 2023 notice to lessees (NTL) laying out voluntary restrictions on oil companies in the Rice’s whale potential habitat should be submitted for congressional review.GAO’s conclusion opens the door for a Congressional Review Act resolution to undo the guidance, which has been criticized by several prominent Republicans. Congress has passed several resolutions against Biden administration rules, all which President Joe Biden has vetoed.“The NTL is a rule for CRA purposes because it meets the [Administrative Procedure Act] definition of a rule,” said Shirley Jones, a GAO lawyer, in an email. “The NTL is subject to CRA’s requirement that it be submitted to Congress before it can take effect. That also means it could face a CRA resolution of disapproval.”
Devon Energy to buy PE-backed Grayson Mill's Williston assets for $5 bln (Reuters) - Devon Energy said on Monday it had entered into a deal to acquire certain assets of Bakken-focused energy producer Grayson Mill Energy, which is owned by private equity firm EnCap, in a cash-and-stock deal worth $5 billion. The deal value includes $3.25 billion in cash and $1.75 billion in stock, and will enhance Devon's "multi-basin business", the company's executives said on a conference call. Shares of the company were down 2.5% in a lower crude price environment. A consolidation in the U.S. energy sector that triggered $250 billion worth of deals in 2023 has bled into this year, with companies seeking opportunities to deploy their capital and expand reserves. This has created a favorable environment for firms like EnCap to cash out on assets. In June, the private equity firm sold some shale assets of XCL Resources for about $2 billion. Reuters reported in January that the firm planned to sell Grayson Mill, a major Bakken-focused energy producer in North Dakota, Montana, and the Powder River Basin in Wyoming. Monday's deal, expected to close by the end of the third quarter, will add up to 10 years of inventory life with 500 additional wells, primarily in the Bakken, contributing 307,000 net acres to Devon's Williston Basin position. Devon expects its output to grow to 765,000 barrels of oil equivalent per day (boepd) from 664,000 boepd. "A more conservative outlook on deals may have prevented Devon from coming out on top in the various scrambles for core Permian opportunities," said Andrew Dittmar, principal analyst at Enverus. "The Eagle Ford and MidContinent now stand out as some of the least consolidated plays with the most remaining private opportunities." Devon's board of directors also expects to expand its share repurchase by 67% to $5 billion through mid-year 2026, while the acquisition is expected to add to the company’s dividend payout starting 2025.
Marathon Oil reaches $241 million settlement with EPA for environmental violations in North Dakota - The federal government announced a $241.5 million settlement with Marathon Oil on Thursday for alleged air quality violations at the company’s oil and gas operations on the Fort Berthold Indian Reservation in North Dakota. The Environmental Protection Agency and Department of Justice said the settlement requires Marathon to reduce climate- and health-harming emissions from those facilities and will result in over 2.3 millions tons worth of pollution reduction. “This historic settlement — the largest ever civil penalty for violations of the Clean Air Act at stationary sources — will ensure cleaner air for the Fort Berthold Indian Reservation and other communities in North Dakota, while holding Marathon accountable for its illegal pollution,” said Attorney General Merrick Garland. Marathon officials did not immediately respond to a request for comment. Houston-based Marathon operates 169 well pads in North Dakota, where the company extracts oil and natural gas. A proposed consent decree for implementing the settlement says the company does not admit any liability over the allegations, but that the two sides agree it will avoid litigation and serve the public interest. A spokesperson for the Mandan, Hidatsa and Arikara Nation based at the Fort Berthold Reservation did not immediately respond to a request for comment either. While Marathon is the country’s 22nd-largest oil producer based on 2022 data, the federal agencies said, it’s also the seventh-largest emitter of greenhouse gas emissions in the oil and gas industry. Much of its emissions come from flaring, the industry practice of burning waste gases, including methane, which the EPA says is 25 times more potent of a contributor to climate change than carbon dioxide. While flaring burns off methane and other pollutants, it’s not completely efficient, so significant quantities still get released into the atmosphere, which the agencies said can have health impacts on nearby communities. The settlement is part of an EPA climate change enforcement initiative that focuses in part on reducing methane emissions from oil and gas production and from landfills. It calls for Marathon to eliminate the equivalent of over 2.25 million tons of carbon-dioxide emissions over the next five years, which the agencies said was tantamount to taking 487,000 cars off the road for one year, and will also eliminate nearly 110,000 tons of volatile organic compound emissions, which contribute to asthma and other respiratory diseases.
Meet the Christian oil mogul spending big to elect Trump -Donald Trump has a new friend in the oil industry, but billionaire Tim Dunn probably has a lot more in mind than “drill, baby, drill.”The CEO of CrownRock is an evangelical Christian from Midland who pulled an oil fortune from the plains of West Texas. He remains largely unknown outside of the Lone Star State, where he has spent more than $30 million to push state politics and policy far to the right.Now, he’s going national with his efforts. Late last year, the Texas oilman ensconced himself among Trump’s top donors with a $5 million contribution.“It’s not too much to say he has reshaped Texas politics,” University of Houston political science professor Brandon Rottinghaus said. “Dunn hopes that what is working in Texas will work across the country. The time is good. The ground is soft.”Dunn did his reshaping not by fighting Democrats so much as financing primary challenges to Republicans who don’t conform to his religious-right orthodoxy. Now, he is harnessing his petrodollars to gravitate into Trump’s orbit.He joined the board of directors of the America First Policy Institute, considered a policy and personnel incubator for a potential second Trump administration. He’s gone into business with Brad Parscale, the pollster who’s back helping Trump’s 2024 effort. And he is the longtime vice chair of the Texas Public Policy Foundation, which supplied some of Trump’s most controversial nominees and is now contributing to a policy road map for Trump called Project 2025.Dunn’s national debut has led to new scrutiny, with profiles in The Wall Street Journal and Rolling Stone. He is now one of the top 10 contributors to Trump’s campaign, according to OpenSecrets.org, ranking fifth until a recent update.Dunn will soon have more money to pour into his causes. In December, he agreed to sell his company to Occidental Petroleum. Bloomberg reported Dunn is set to collect about $2.2 billion.He’s part of a constellation of oil moguls feeding Trump’s campaign. Oil production and natural gas exports have reached record levels during the Biden administration, but the industry is seeking a more favorable regulatory environment. Its lawyers are drawing up ready-to-sign executive orders for Trump to roll back pollution limits, boost natural gas exports and increase offshore leases.
Natural Resources Democrats join oil collusion probes - House Natural Resources Committee Democrats want the Interior Department to turn over information about potential wrongdoing by U.S. oil companies.A letter Tuesday to Interior Secretary Deb Haaland, obtained by POLITICO, stems from price fixing litigation against Pioneer Natural Resources and other firms.The Federal Trade Commission has accused former Pioneer CEO Scott Sheffield of colluding with OPEC competitors and barred him from joining the board of Exxon Mobil, which bought Pioneer. Sheffield has denied the claims.Congressional Democrats, who have for years accused the oil and gas industry of working to keep energy prices high, have launched various probes.
America’s NATO Partners Anticipate U.S. LNG Supplies To Europe -- The 2024 NATO Summit, to be held this week in Washington, D.C., marks the trans-Atlantic Alliance’s 75th anniversary. NATO, which came to the U.S.’s aid after 9/11 and deployed a contingent to Afghanistan, guarantees not just strategic cooperation across the Atlantic but also bolsters the economic prosperity of its member states. America’s abundant energy resources pair perfectly with Europe’s scarcity of oil and gas to create a win-win partnership, enabling Europe to avoid total energy dependence on authoritarian suppliers in Russia and the Middle East. This partnership between American energy and European industry was placed in jeopardy after a January 2024 decisionby the Biden administration placed a controversial pause on future LNG export permits. This pause was intended to secure Biden’s progressive flank within the Democratic Party in the heavily contested November 2024 presidential elections, albeit at the expense of American national priorities. It put Europe’s ability to purchase cheap and reliable American LNG in question when it was needed to replace sanctioned Russian piped natural gas and eventually not-yet-sanctioned Russian LNG. By placing the flow of US LNG to Europe at risk, Biden, who claims to bolster NATO, shook the energy security pillar of the alliance and may have jeopardized Ukraine, according to many observers. The pause ended in early July after 16 states successfully suedthe Biden administration, arguing that the export restrictions were unconstitutional. This came as a relief to European and East Asian allies, who were otherwise being torn between the necessity to decouple from Russian energy and the Administration’s domestic political play. Coincidentally, energy giant Shell signed a 10-year agreement to sell U.S. LNG to the Swiss-based energy company MET Group. The agreement will "help to ensure security of supply for its customers across Europe, ranging from its own gas-fired power plant demand to energy-intensive industrial companies, SMEs, and households,” MET announced. MET Group has one of the most geographically diversified LNG import structures in Europe. Tom Summers, Senior Vice President of Shell LNG Marketing and Trading, recognized the role agreements of this type play in bolstering security, noting, “LNG has a crucial role to play in delivering energy security, and agreements such as this are instrumental in achieving that.” The long-term relationship between the United States and its European allies is enhanced and strengthened by the stability afforded by American LNG. In a Forbes interview with the veteran energy journalist Llewellyn King, Benjamin Lakatos, CEO of MET Group, remarked, “In the middle of the heavy turbulence, the U.S. had a stabilizing effect on global gas prices.” By acting as a reliable energy source, the U.S. can reinforce its reputation in Europe and support trans-Atlantic stability and cooperation with some of its most important allies.A strong energy supply is essential for NATO’s future goals. This week’s summit will discuss deterrence, defense, and assistance to Ukraine. These depend on reliable energy flows from the U.S. to Europe, including Ukraine. As Russia continues its invasion of Ukraine and is reportedlyconducting hybrid operations in other European states as well, its role as an LNG supplier remains one of the most significant sources of leverage over NATO members and a primary source of funding for its war effort. Though the EU recently took action to begin weaning itself off Russian LNG in its 14thsanctions package, its penalties against Moscow will remain limited unless the U.S. steps up to the plate as an alternative supplier. To truly maximize NATO’s commitment to assisting Ukraine and deterring the conflicts being incited by Russia, American LNG must be able to replace Russian LNG, nullifying it as a source of influence and income.
NEPA lawsuits challenge Biden's Alaska drilling protections - New challengers are lining up to oppose the Biden administration’s latest restrictions on oil and gas development in Alaska’s 23 million-acre National Petroleum Reserve. In parallel lawsuits filed last week, ConocoPhillips Alaska and Republican state Attorney General Treg Taylor urged a federal judge to toss out an Interior Department rule that set stronger environmental protections for more than half of the reserve. Interior’s Bureau of Land Management advanced the protections as it sought to address public backlash for approving new fossil fuel development in the remote Arctic region, also referred to as the NPR-A. At the same time, Alaskan politicians on both sides of the political aisle have warned that limiting oil and gas drilling in the state would seriously undercut revenue needed to fund a range of public services. In their lawsuits filed in the U.S. District Court for the District of Alaska, Taylor and ConocoPhillips Alaska claimed the BLM rule “dramatically and fundamentally changes” how the reserve is managed.
LNG Canada Nears Commissioning Phase for First Train, Fluor Says --Canada’s fledgling LNG export industry could be reaching a milestone as one major project nears start-up and another receives critical support. NGI's map of BC natural gas pipelines and operational/under construction LNG facilities. Fluor Corp., one of the lead construction engineering, procurement and construction firms working on LNG Canada disclosed earlier in the week that crews had finished the final weld on Train 1. Fluor’s Jim Breuer, president of energy solutions, said the final push on completing the first of two liquefaction trains is a pivotal moment for both Canada’s liquefied natural gas industry and what is expected to be its first operational terminal.
Canadian Storage Inventories Threaten to Max Out in Key Alberta Region, Battering Natural Gas Prices -Working natural gas in storage is on the cusp of topping out in Alberta, the Canadian province with the largest capacity. NGI's Canadian border tracker for natural gas prices and trade (graphic). RBN Energy LLC estimated natural gas inventories reached 449 Bcf on July 1, representing the second-highest figure on record for this point of the year – surpassed only by the 467 Bcf in 2016. This year’s tally puts storage within 31 Bcf of Alberta’s estimated effective capacity of 480 Bcf. The lofty levels emerged after a mild winter and robust levels of Canadian production over the past 18 months. Output reached records above 18 Bcf/d multiple times last year and again in 2024 as producers ramped up ahead of the pending LNG Canada. The Shell plc-led liquefied natural gas export project in British Columbia is targeting final commissioning this year.
With Cedar LNG Sanctioned, Pembina Eyeing More Natural Gas Processing in Montney, Duvernay --Western Canada-focused Pembina Gas Infrastructure Inc. (PGI) is aiming to expand its natural gas infrastructure in the Montney and Duvernay formations after securing a half-stake in Whitecap Resources Inc.’s 15-07 Kaybob Complex. Map showing Pembina Pipeline's natural gas and oil operations. Kaybob, being sold for C$420 million ($307 million), has natural gas processing capacity of 165 MMcf/d and condensate stabilization capacity of 15,000 b/d. PGI, jointly owned by Pembina Pipeline Corp. and private equity giant KKR, also agreed to support “future infrastructure development” in Whitecap’s recently sanctioned Lator project.
Anchors Aweigh for Manatee Natural Gas Field as Shell Building More Global LNG Capacity --Shell plc, a top natural gas producer in Trinidad and Tobago’s offshore, is building capacity after sanctioning the Manatee field, estimated to hold 2.7 Tcf. Graph showing Shell's gloabl LNG supply forecast. Shell Trinidad and Tobago Ltd. took the final investment decision on the gas field, which is in the East Coast Marine Area (ECMA). Manatee is slated to ramp in 2027. Once online, peak production is expected to be 104,000 boe/d, with 604 MMcf/d of gas. “This project will help meet the increasing demand for natural gas globally, while also addressing the energy needs of our customers domestically in Trinidad and Tobago,” Shell’s Zoë Yujnovich, Integrated Gas and Upstream director, said. “The investment bolsters our world-leading LNG portfolio in line with our commitment to invest in competitive projects that deliver more value with less emissions.”
Global LNG trade increased more than 1.6 Bcf/d in 2023 - LNG trade increased 3.1% globally in 2023 to average 52.9 Bcft/d, an increase of 1.6 Bcf/d from 2022, according to a report from the International Group of Liquefied Natural Gas Importers (GIIGNL). LNG export capacity expanded primarily in the United States, Mozambique, Russia, Indonesia, Norway, and Oman. In the United States, Freeport LNG returned to service in February 2023 after being offline since June 2022, and it was operating at full production capacity by April. Developers in both Mozambique and Russia commissioned new projects in 2022—the 0.4-Bcf/d Coral South FLNG in Mozambique and the 0.2-Bcf/d Portovaya LNG in Russia—and these projects reached full production in 2023. In Indonesia, the Tangguh LNG export facility added a third train. Norway and Oman increased LNG production capacity by optimizing operational efficiency of existing LNG plants. In 2023, the U.S. became the world’s largest LNG exporter, with exports increasing by 12% compared with 2022. Exports from the three largest global LNG exporters—the United States, Australia, and Qatar—accounted for 60% of all LNG exports in 2023. Algeria’s LNG exports increased 0.4 Bcf/d as additional natural gas feedstock became available from the newly commissioned production fields. Exports also increased from Norway and Australia mainly due to optimization of the export plants’ operational performance and from Indonesia after a capacity expansion at Tangguh LNG. LNG import capacity was expanded primarily in Europe and Asia. In Europe, operators placed several new Floating Storage and Regasification Units in service and expanded regasification capacity at some existing terminals. In Asia, new capacity was added primarily in China, India, the Philippines, and Vietnam. Asian countries continued to lead the growth in LNG imports globally, with imports increasing by 3.5% (1.2 Bcf/d) in 2023. LNG imports increased by 12% (1.0 Bcf/d) in China, the most of any country in the world, making China the world’s largest LNG importer for the second year since 2021. LNG imports in India increased by 11% (0.3 Bcf/d) as new regasification terminals were placed in service and LNG prices declined. Lower LNG prices also contributed to increased imports into Thailand (by 0.4 Bcf/d), Bangladesh (0.1 Bcf/d), and Singapore (by 0.1 Bcf/d). LNG imports in Europe increased slightly by 1.4% (0.2 Bcf/d). Imports into Germany—the newest LNG importer—averaged 0.7 Bcf/d. Imports also increased to countries that expanded regasification capacity, such as the Netherlands, Italy, and Finland. LNG imports to the United Kingdom, France, and Spain declined by a combined 1.3 Bcf/d, mainly because natural gas demand in these countries decreased. In Latin America, LNG imports increased mainly in Colombia, by 0.1 Bcf/d. Colombia experienced drought and used LNG for natural gas-fired electric power plants to offset lower hydropower generation. In Brazil, LNG imports declined by 0.2 Bcf/d because more electricity was generated by hydropower, reducing demand for natural gas-fired electricity generation in 2023. LNG imports into Puerto Rico also increased by 0.1 Bcf/d.
Golar Setting Stage for Argentina’s LNG Exports by 2027 with Pan American Energy -Golar LNG Ltd. has inked an agreement with oil and natural gas producer Pan American Energy S.L. (PAE) to begin exporting liquefied natural gas from Argentina for 20 years starting in 2027. Under the agreement, Golar would deploy a 2.45 million metric tons/year (mmty) floating LNG (FLNG) vessel to the Argentine coast, “establishing Argentina as an LNG exporter,” the firm said. Plans are to liquefy and export natural gas sourced from the Vaca Muerta shale play in Argentina’s Neuquén Basin. Golar touted Vaca Muerta as the world’s second largest shale gas resource.
Vitol Doubles Down on LNG Marine Fuel Growth with Bunkering Vessel Deals -Trading house Vitol Inc. is expanding its exposure to the LNG marine bunkering market as demand for cleaner fuels in the shipping sector reaches record levels. Vitol has signed a seven-year deal with a three-year extension for a 20,000 cubic meter (cm) liquefied natural gas bunkering vessel from Avenir LNG. The charter is expected to start by the end of 2026, when the vessel is targeted to be delivered from a Chinese shipyard. The independent commodity trader also has ordered a 12,500 cm bunkering vessel and one 20,000 cm bunkering vessel from the Nantong CIMC SinoPacific Offshore & Engineering Co. Ltd. shipyard in China. The vessels would be delivered in 4Q2026 and 3Q2027, respectively.
Honeywell Betting on Rising Global Natural Gas Consumption with Air Products Deal --Industrial conglomerate Honeywell International Inc. sees a future fueled by natural gas, CEO Vimal Kapur said. To that end, the company is expanding its global LNG prowess with the takeover of Air Products’ liquefied natural gas process technology and equipment business. Charlotte, NC-based Honeywell agreed to pay $1.81 billion for the Air Products unit. Allentown, PA-based Air Products provides industrial gasses, related equipment and applications expertise for customers worldwide. It has expertise in the LNG, refining, chemical, metals, electronics, manufacturing, and the food and beverage industries. Air Products’ LNG business develops, engineers, builds, owns and operates some of the world's largest industrial gas projects.
Russian Gas Flows East via Yamal-Europe Pipeline for Fifth Day --The Yamal-Europe pipeline that usually sends Russian gas to Western Europe was operating in a reverse mode for a fifth day on Saturday, shipping fuel from Germany to Poland, data from German network operator Gascade showed. Russian gas exporter Gazprom did not book gas transit capacity for exports via the Yamal-Europe pipeline for Sunday as well, auction results showed. European gas prices climbed to a record high this week after Yamal switched direction but eased on Friday. Russia said the flow reversal was not a political move, though it coincides with rising tensions between Moscow and the West over Ukraine. Russian President Vladimir Putin on Thursday said the reversal was because of a lack of requests from buyers, Reuters reported. Putin also said on Friday that Russia was "sidelined" by Poland in managing the pipeline and Europe had only itself to blame for soaring gas prices. Flows at the Mallnow metering point on the German-Polish border were going east into Poland at an hourly volume of more than 1.1 million kilowatt hours (kWh/h) on Saturday and were expected to stay at these levels during the day, the data shows. Putin has also said that Germany was reselling Russian gas to Poland and Ukraine rather than relieving an overheated market. Gazprom spokesman Sergey Kupriyanov told the NTV channel that the company was ready to supply additional gas within its long-term contracts, which would be cheaper than short-term deals concluded on European spot market. Reverse flows from Germany to Poland - and probably to Ukraine as well - stand at between 3 million cubic metres (mcm) and 5 mcm per day, he said, reiterating that accusations that Gazprom was undersupplying gas are "groundless". Kupriyanov added that the gas is being taken off underground storage facilities that are already depleted. Data from Slovak pipeline operator Eustream showed capacity nominations for Saturday's Russian gas flows from Ukraine to Slovakia via the Velke Kapusany border point were at 747,031 megawatt hours (MWh), slightly up from Friday's 739,843 MWh but below levels in recent weeks. That drop was being balanced by higher nominations for flows from the Czech Republic to Slovakia, meaning that nominations for flows from Slovakia to Austrian hub Baumgarten were roughly stable compared with levels in recent days and weeks.
Russia boosts LPG rail exports to China by almost a third in H1 - Russia cranked up liquefied petroleum gas (LPG) exports to China via rail by almost a third in the first half of the year to 133,000 metric tons (t), data from industry sources showed on Wednesday. The fuel supplies are still curbed by infrastructure constraints and congestion on Russian railways. According to the data, supplies in June declined by 16.5% from May to 12,300 t, falling for the second month in a row. Traders said that railcar congestion was especially pronounced at the Zabaikalsk-Manchuria border crossing due to maintenance work at the Manzhouli Far East Gas terminal in May and June. Russian railway station Zabaikalskaya was also undergoing reconstruction, they said. The sources said that supplies from Irkutsk Oil Company's (INK) Ust-Kut gas processing plant contributed most to the first-half increase, boosting supplies by 37,200 t year-on-year. INK accounted for almost 70% of Russia's LPG exports to China in January–June. Other large suppliers are Novokuibyshevsk Petrochemical Company, BerezkaGas and Taneko. LPG, or propane and butane, is mainly used as fuel for cars, heating and to produce other petrochemicals. In 2023, Russia raised rail exports of LPG to China by 35% to 202,000 t. Russia also supplies LPG by trucks.
Bayelsa community cries out over massive oil spill from Agip facility - Residents of Olugboboro community in Southern Ijaw Local Government Area of Bayelsa State, have cried out over a massive crude oil spill from a facility operated by the Nigerian Agip Oil Company, NAOC, in the area. The leak, according to the aggrieved community folks, occured about two months ago, following a rupture they blamed on equipment failure, along Ogboinbiri/Tebidada pipeline. Leaders of the community, Azeke Akpowari, Ebimobowei Ipkesiware and Assistant Secretary General, Amos Oweifighe, in a letter to the Bayelsa State Government called for urgent intervention to stop the oil spill. They stated in the letter addressed to the deputy governor: “We wish to register our utter displeasure and intimate you of the inaction of NAOC to the oil spillage that occured in a pipeline operated by the company, at Olugboboro community in Southern Ijaw LGA of Bayelsa State. “The spillage occured two months ago along Ogboinbiri/Tebitada pipeline when the pipeline ruptured, which has been attributed to equipment failure. “As a result, for two months, crude oil has been gushing out from the pipeline, thereby devastating a large swath of farm lands, ponds, economic trees and lakes in the forest. “It will be difficult to quantify the damage wrecked on the people’s livelihood and the environment, because of the huge quantities of crude oil spilled. “It will be pertinent to note that Biedinobou, where the equipment failure occured, is a major farming and fishing hub of the community. Hundred of thousands of barrels of crude oil have been spilled since sometime in May this year when the pipeline ruptured, thereby turning farm lands, lakes and ponds into rivers of crude oil. “Consequently, collateral damage has been done to farms, economic trees, ponds and lakes, which are the mainstay of the people in Biedinobou forest for the past two months since the pipeline began to seep crude oil to the environment. We are in a rainy season, it’s aiding the fast spread of the spill to distance areas and rivers. “Agip has been informed of the ugly incident, however, till date, it has not made any attempt to contain the spillage from further polluting and degrading the environment.
BP predicts global oil demand will peak in 2025, bringing to end rising emissions - BP has predicted that the world’s demand for oil will peak next year, bringing an end to rising global carbon emissions by the mid-2020s amid a surge in wind and solar power.The energy company’s influential outlook report has found that oil use will increase by about 2m barrels a day to peak at about 102m in 2025 across both of its forecasts.The first forecast scenario shows the world’s current energy transition trajectory and the other shows the pathway to meeting global net zero targets by 2050.BP predicts in both scenarios that carbon emissions will reach a peak in the middle of the decade amid a rapid expansion of wind and solar power as technology costs continue to fall.However, the report sets out starkly different pathways for the future demand for gas, which has emerged in recent years as key growth area for energy companies including BP.Under the report’s net zero scenario, gas use would peak around the middle of this decade before halving by 2050, compared with 2022 levels. But the current trajectory suggests gas demand will continue to grow throughout the forecast, expanding by about a fifth by 2050.In the scenarios, demand for liquefied natural gas, which is cooled to be transported on ships, climbs by 40% and 30% above 2022 levels respectively.The report also suggests higher-than-expected oil consumption in the 2030s compared with BP’s previous forecasts, which would pose a serious threat to the world’s climate targets.The oil company said its forecasts for the current global trajectory, which included climate policies already in place, showed the world would breach the carbon budgets keeping global temperatures from rising above 2C above preindustrial levels.Under the current trajectory oil demand is expected to fall to 97.8m barrels a day in 2035, which is 5% higher than last year’s BP forecasts. The net zero model predicts demand will remain at 80.2m barrels in 2035, up 10% on last year’s outlook.
Kpler Data: Saudi Arabia's Oil Exports Fall to Lowest In Decade - Recent data from Kpler reveals a significant decline in crude oil exports from major OPEC+ producers in June, driven largely by weak demand in Asian markets and increased domestic consumption in the Middle East. This has resulted in Saudi Arabia's exports plummeting to their lowest level in over a decade. OPEC+ production fell to its lowest point of the year as Saudi Arabia, Russia, and Iraq all implemented cuts to curb overproduction and respond to lower Asian demand. Saudi exports decreased dramatically by 930,000 barrels per day to 5.42 million barrels per day, a level not seen since at least 2013. Other Middle Eastern producers, including Iraq, Kuwait, Iran, and the UAE, also reduced their exports significantly. In June, Middle Eastern crude flows hit a three-year low, primarily due to reduced availability of medium-density grades. This decline is attributed to stronger domestic consumption, higher crude burn for power generation, and possibly coordinated efforts to tighten the market. Saudi refinery runs rose by 207,000 bpd to 2.7 million bpd, driven by the return of major units from maintenance, and crude burn increased by 81,000 bpd to 553,000 bpd. The key factor behind the export reduction is the tepid demand from Asian markets. China’s economic indicators, such as PMIs, are below 50, signaling contraction. India’s imports of Saudi oil fell to a ten-year low in June at 428,000 bpd. As the monsoon season approaches, Indian imports are unlikely to rebound soon. The weak demand has prevented a rebound in the Asian medium sour crude market despite reduced cargo availability. Prices for Middle Eastern medium sour grades have softened due to weak demand and ample supplies. The reopening of the West-East arbitrage window and attractive Russian crude prices are expected to draw interest away from regional grades. This scenario suggests that producers may further cut their official selling prices (OSPs) in the coming months.
Saudi to Increase Crude Oil Supply to China, Reaching 44 mmbbl | Egypt Oil & Gas -- Saudi crude oil exports to China will rebound in August to at least 44 million barrels (mmbbl) after deep price cuts by state energy firm Saudi Aramco supporting demand, according to Reuters. August exports to China will rise for the first time in four months, from about 36 mmbbl in July. This rebound will help the biggest oil exporter regain its share in the largest import market. Notably, Saudi exports to China tumbled in June to 1.12 million barrels per day (mmbbl/d), the lowest since March 2020, showed data from analytics firm Kpler. Chinese buyers of Saudi oil include Zhejiang Petrochemical, Sinopec, Sinochem and PetroChina. Separately, Saudi Aramco will supply full contractual volume to at least three other North Asian refiners in August. This decision comes shortly after Aramco reduced prices for August-loading crude to Asia for the second consecutive month, with its flagship Arab Light crude priced at its lowest level since March
OPEC daily crude output falls by 0.3% in June - Crude oil production from the Organization of Petroleum Exporting Countries (OPEC) decreased by 0.3%, or by 80,000 barrels per day (bpd), in June to average 26.57 million bpd, according to OPEC's monthly oil market report released on Wednesday. Crude oil output fell mainly in Saudi Arabia, while production experienced the biggest increase in Libya and Venezuela. Production in Saudi Arabia, the group's largest producer, declined by 76,000 bpd, whereas output rose by 24,000 bpd in Libya and by 21,000 bpd in Venezuela. Total daily crude oil production of the OPEC+ group, which consists of OPEC and some non-OPEC producing countries, fell by 125,000 barrels to 40.80 million bpd. The global oil demand growth forecast for 2024 remained broadly unchanged from last month's assessment at 2.25 million bpd year on year, OPEC said. Total world oil demand is anticipated to reach 104.5 million bpd in 2024, bolstered by strong demand for air travel and healthy road mobility, including trucking, the organization said. It is estimated that oil demand in OECD countries will increase by 190,000 bpd this year to 45.84 million barrels. In non-OECD countries, demand is expected to increase by 2.06 million bpd this year to 58.62 million barrels. Petrochemical capacity additions in non-OECD countries, mostly in China and the Middle East, are also predicted to contribute to this rise. On the other hand, global demand is expected to reach 106.31 million barrels in 2025 with an increase of 1.85 million bpd. In this period, demand is expected to increase by 110,000 bpd in OECD countries and by 1.74 million barrels in non-OECD countries.
Oil prices plunge on Gaza peace talks, Hurricane Beryl impact; brent crude at $86.12/bbl Oil prices dipped on Monday after four weeks of gains, as concerns over supply disruptions eased amid hopes for a ceasefire deal in Gaza. However, the potential impact of Hurricane Beryl on supplies limited the decline. By 12:30 GMT, Brent crude futures had fallen 42 cents, or 0.5%, to $86.12 a barrel. U.S. West Texas Intermediate (WTI) crude dropped 52 cents, or 0.63%, to $82.64 a barrel."Crude oil exhibited significant volatility, slipping from its highs amid ceasefire talks between Israel and Gaza. The Israeli Prime Minister’s office announced on Friday that the head of Israel’s Mossad had returned from Doha after an initial meeting with Gaza mediators. They are attempting to reach a ceasefire and hostage release deal, with negotiations set to resume next week. Following this news, the risk premium on crude oil eased in the international markets. Also, crude oil prices declined due to downbeat U.S. job data and increased concerns about oil demand. However, a weaker dollar index and stronger euro and pound sterling supported prices at lower levels. We expect crude oil prices to remain volatile in today’s session. Crude oil has support at $82.10-81.50 and resistance at $83.24-83.70," Negotiations for a U.S.-proposed ceasefire to end the nine-month-old conflict in Gaza are currently underway, with Qatar and Egypt acting as mediators. Meanwhile, in the U.S., Hurricane Beryl made landfall near Matagorda, Texas on Monday. In preparation for the hurricane, the ports of Corpus Christi, Houston, Galveston, Freeport, and Texas City closed on Sunday. Texas is the largest producer of oil and natural gas in the U.S. Port closures could temporarily halt crude and liquefied natural gas exports, disrupt oil shipments to refineries, and affect motor fuel deliveries from those facilities, according to analysts. WTI rose by 2.1% last week after Energy Information Administration data revealed a decline in crude and refined product stockpiles for the week ending June 28. IG's Sycamore noted a strong possibility of another significant weekly draw in U.S. oil inventories amid peak driving season. Investors were also monitoring potential impacts on geopolitics and energy policies from last week's elections in the UK, France, and Iran.
The Oil Market on Monday Sold Off as Concerns Over Supply Eased on Hopes of a Ceasefire Deal in Gaza - The oil market on Monday sold off as concerns over supply eased on hopes of a ceasefire deal in Gaza. The market was pressured as talks over a U.S. ceasefire plan to end the nine month old war in Gaza are under way and are being mediated by Qatar and Egypt. The crude market posted its high of $83.32 on the opening overnight ahead of Hurricane Beryl’s landfall in Texas early on Monday. The market was initially supported as the Ports of Corpus Christi, Houston, Galveston, Freeport and Texas City were closed on Sunday to prepare for the hurricane. However, the market retraced any of its gains and sold off to a low of $82.10 early on Monday. The market later bounced off its low and traded sideways as it held resistance at the 83.00 level as major refineries along the Gulf Coast saw minimal impacts from the storm. The August WTI contract settled down 83 cents at $82.33 and the August Brent contract settled down 79 cents at $85.75. The product markets ended the session lower, with the heating oil market settling down 2.33 cents at $2.5791 and the RB market settling down 2.12 cents at $2.5379. The Texas energy industry braced for Hurricane Beryl’s impact on Monday, with threats from the storm forcing the closure of key oil and gas shipping ports, slowing refining and prompting the evacuation of some production sites. Hurricane Beryl, which made landfall near Matagorda, Texas, packing maximum sustained winds of 80 mph is posing problems in Texas. The U.S. National Hurricane Center said the storm’s center was forecast to move over eastern Texas on Monday, before passing over the Lower Mississippi Valley into the Ohio Valley later in the week. Over the weekend, the port of Corpus Christi, the country’s leading crude oil export hub, closed operations and vessel traffic in preparation for Beryl. The ports of Houston, Galveston, Freeport and Texas City were also shut ahead of the storm making landfall. The Corpus Christi Ship Channel reopened by mid-day Monday with no significant impacts from the storm. The Port of Houston said that operations will remain suspended for the day and for Tuesday morning as terminal prepares to resume operations. The 52-mile Houston Ship Channel, which on Sunday operated under transit restrictions before halting all traffic, allows access to 8 public facilities and some 200 private terminals. Enbridge Inc, which runs crude oil export facilities near Corpus Christi, also said it had activated emergency plans for assets along or near the U.S. Gulf Coast. Some oil producers, including Shell and Chevron had also shut in production or evacuated personnel from their Gulf of Mexico offshore platforms. IIR Energy said U.S. oil refiners are expected to shut in about 260,000 bpd of capacity in the week ending July 12th, cutting available refining capacity by 151,000 bpd. Offline capacity is expected to remain unchanged at 260,000 bpd in the week ending July 19th. Citgo Petroleum Corp was cutting production at its 165,000 bpd Corpus Christi refinery on Saturday. The refiner plans to keep the plant in operation at minimum during Hurricane Beryl’s passage. A brief power interruption on Friday night triggered multiple unit malfunctions at Valero Energy Corp’s 360,000 bpd Port Arthur, Texas refinery. Marathon Petroleum Corp’s 631,000 bpd Galveston Bay refinery in Texas City, Texas suffered a power interruption on Monday as Hurricane Beryl came onshore.
U.S. crude oil prices fall 1% as market assesses Tropical Storm Beryl impact -- U.S. crude oil futures fell 1% on Monday as traders assessed the impact of Tropical Storm Beryl on Gulf Coast refining, production and export infrastructure.Beryl made landfall near Matagorda, Texas, as a Category 1 hurricane with maximum sustained winds of 80 miles per hour, according to the National Hurricane Center. Matagorda is about 150 miles northeast of Corpus Christi, a leading crude export facility in the U.S.Beryl was subsequently downgraded to a tropical storm with maximum sustained winds of 60 miles per hour and is forecast to weaken further, according to the NHC. The storm is moving in a northeast direction."Oil and products are sliding on the storm as some of the worst-case scenarios of Hurricane Beryl thankfully, won't come to be," Here are Monday's energy prices:
- West Texas Intermediate August contract: $82.33, down 83 cents, or 1%. Year to date, U.S. oil has gained 14.9%.
- Brent September contract: $85.75 per barrel, down 79 cents, or 0.91%. Year to date, the global benchmark is ahead 11.3%.
- RBOB Gasoline August contract: $2.53 per gallon, down 2 cents, or 0.83%. Year to date, gasoline is up 20.7%.
- Natural Gas August contract: $2.36 per thousand cubic feet, up 4 cents, or 2.03%. Year to date, gas is down 5.9%.
Shell shut in production and evacuated personnel from its Perdido platformabout 200 miles south of Galveston, according to a company statement Friday. The platform was producing roughly 100,000 barrels per day, or bpd, about 5.5% of oil production in the Gulf of Mexico, "I don't foresee this storm affecting either supply or price to any significant degree; the consumer will get their gasoline. Most people will not even notice," There will be some reduction in refining operations and a delay in getting products to Florida, but the price of gasoline should remain steady through the storm, Lipow said. Afterward, gasoline prices may drift higher as crude futures have risen recently, he said.Investors are worried about hurricane season this year with Colorado State University forecasting an "extremely active" storm season this year.Prices at the pump were averaging about $3.50 per gallon nationwide on Monday, about 1 cent higher than last week but 3 cents lower than last month, according to the motorist association AAA."There's enough market momentum to push prices higher throughout the next couple weeks, probably up to about $3.60 or so," Denton Cinquegrana, chief oil analyst at Oil Price Information Service, told CNBC's "Fast Money" on Friday.But gasoline prices are unlikely to hit the $4 per gallon mark unless "we have something really go nuts," Cinquegrana said.
Oil prices slip after US crude hub escapes serious storm damage - Oil prices eased on Tuesday after traders learned that prolonged supply disruptions from Hurricane Beryl were unlikely after a U.S. oil-producing hub in Texas suffered less storm damage than feared.Brent futures for September delivery fell 31 cents to $85.44 a barrel by 11:17 a.m. EDT (1517 GMT). U.S. crude fell 23 cents to $82.10 per barrel.Although some offshore U.S. production sites were evacuated, ports closed and refining slowed, major refineries along the country’s Gulf Coast appeared to see minimal impact after Beryl weakened into a tropical storm.“Early indications suggest that most energy infrastructure has come through unscathed,” ING analysts wrote in a client note, adding price action in crude oil and refined fuel markets reflected waning expectations of ongoing supply disruptions from the hurricane. Texas accounts for more than 40% of crude supplied in the U.S., the world’s top producer.“The sum total of these various developments appears to be negligible and temporary, as underscored by this week’s selling across the complex,” said Jim Ritterbusch of Ritterbusch and Associates.Major Texas oil shipping ports were set to reopen on Tuesday, and some facilities were ramping up output again.Several refiners such as Marathon Petroleum were also preparing to restart their refining units.Market participants are also watching the situation in the Middle East. On Monday, oil prices settled down 1% on hopes a possible ceasefire deal in Gaza could reduce worries about global crude supply disruption.Senior U.S. officials were in Egypt for talks on Monday, but gaps remained between the two sides, the White House said, and Hamas said a new Israeli push into Gaza threatened the potential agreement.“Crude futures were inching lower early Tuesday after a second consecutive session of losses suggested an overdue pullback from (a) nine-week high,” Markets were also waiting for the release of key U.S. inflation data, with Federal Reserve Chair Powell set to appear before Congress on Tuesday and Wednesday, as investors wagered a slew of soft labour market data has greatly increased the chance of an interest rate cut in September to about 80%.The “market will find a sympathetic bid if Powell’s comments are indeed friendly to a rate cut and if the U.S. CPI backs such language with a lower reading,”
Oil prices down following cease-fire talks, uncertainty over Fed interest rate cut -- Oil prices decreased on Tuesday with ongoing diplomatic efforts to achieve a cease-fire agreement in Gaza and uncertainty over the timing of the US Federal Reserve's (Fed) interest rate cut, while further price decline was limited amid worries over the potential impact of Hurricane Beryl on oil production in the Gulf of Mexico. International benchmark Brent crude traded at $85.57 per barrel at 10.17 a.m. local time (0717 GMT), a decrease of 0.20% from the closing price of $85.75 per barrel in the previous trading session. The American benchmark West Texas Intermediate (WTI) traded at $82.12 per barrel at the same time, a 0.25% fall from the previous session that closed at $82.33 per barrel. Cease-fire talks in the Middle East, which is home to a vast majority of global oil reserves, relieve some supply concerns among market players and put downward pressure on prices. The US State Department announced on Monday that Barbara Leaf, the US assistant secretary of state for Near Eastern affairs, is visiting the Middle East on July 8–14 to discuss a cease-fire deal in Gaza. "The Assistant Secretary will meet with government officials on continued diplomatic efforts to achieve a cease-fire agreement, secure the release of all hostages, and ensure humanitarian assistance is distributed throughout Gaza," according to the State Department. Meanwhile, Ronen Bar, the head of Israel's Shin Bet internal security services, and CIA Director William Burns arrived in Egypt on Monday for talks on a Gaza cease-fire and prisoner swap deal between Israel and the Palestinian group Hamas. Also, ongoing uncertainties over the timing of the Fed interest rate cut continue to influence prices by raising demand concerns. Analysts noted that although macroeconomic data continue to indicate a slowdown in the US economy, Fed officials still maintain their cautious stance on rate cuts. The probability of the Fed's first rate cut in September is 81% and 78% for November. The possibility of the bank cutting interest rates for the second time in December is 98%. The upward trend in the US dollar against other currencies also dulled oil demand and supported price declines. A strong dollar is expected to reduce demand by making oil more expensive for foreign currency users. The US dollar index rose by 0.02% to 105.02 at 10.38 a.m. local time (0738 GMT). However, the potential impact of Hurricane Beryl on oil production in the Gulf of Mexico limited further price declines. It has been reported that more than 1 million households and businesses have experienced power outages due to the hurricane, which reached the Texas coast of the US with a "category 1" intensity. The concern that some ports in the US might close down due to the hurricane fueled fears that the closure could temporarily halt exports of crude and liquefied natural gas, oil shipments to refineries, and deliveries of motor fuel from these facilities.
Easing Concerns Over Supply Disruption in the Wake of Hurricane Beryl, Which Caused Minimal Damage to Energy Infrastructure - The oil market continued to trend lower on Tuesday amid easing concerns over supply disruption in the wake of Hurricane Beryl, which caused minimal damage to energy infrastructure. While oil refining activity slowed and some production sites were evacuated as a precautionary measure, major refineries along the U.S. Gulf Coast appeared to see minimal impact from the hurricane, which weakened into a tropical storm after hitting the Texas coast. The crude market traded sideways in overnight trading before it breached the $82.00 level. It traded sideways posting a high of $82.48 before some further selling pressure pushed the market lower to a low of $81.25 ahead of the close. The August WTI contract settled down 92 cents at $81.41 and the September Brent contract settled down $1.09 at $84.66. The product markets also ended the session lower once again, with the heating oil market settling down 5.55 cents at $2.5236 and RB market settling down 1.05 cents at $2.5274. In its Short Term Energy Outlook, the U.S. EIA left its 2024 world oil demand growth forecast unchanged at 1.10 million bpd and increased its oil demand growth estimate for 2025 by 300,000 bpd to 1.80 million bpd. Total world petroleum demand is forecast at 102.91 million bpd in 2024 and 104.68 million bpd in 2025. Total world oil output is expected to increase by 640,000 bpd to 102.43 million bpd in 2024 and by 2.3 million bpd to 104.6 million bpd in 2025. OPEC’s oil output is estimated to fall by 210,000 bpd to 26.68 million bpd in 2024 but increase by 470,000 bpd to 27.15 million bpd in 2025. Meanwhile, U.S. oil output is forecast to increase by 320,000 bpd to 13.25 million bpd in 2024 and by 520,000 bpd to 13.77 million bpd in 2025. The EIA also forecast that U.S. oil demand in 2024 is forecast to increase by 110,000 bpd to 20.36 million bpd and by 290,000 bpd to 20.65 million bpd in 2025. U.S. gasoline demand in 2024 is forecast to fall by 40,000 bpd to 8.9 million bpd and by 10,000 bpd to 8.89 million bpd in 2025. U.S. distillate demand fell by 70,000 bpd to 3.86 million bpd in 2024 but increase by 110,000 bpd to 3.97 million bpd in 2025. The EIA raised its 2024 Brent price forecast to $86.37/barrel from a previous forecast of $84.15/barrel. It also raised its 2025 forecast to $88.38/barrel from a previous estimate of $85.38/barrel.Goldman Sachs said expectations for a more severe Atlantic hurricane season than usual this year will pose an upside risk to refining margins rather than to crude prices. Goldman Sachs said it still expects Brent prices to average $86/barrel this quarter as OECD commercial stocks continue to be drawn down and “spreading wildfires in Alberta are already disrupting Canadian oil production.”Oil and gas companies in Texas were restarting operations on Tuesday after Hurricane Beryl made landfall in the state with 80-mph winds. On Tuesday, ports were set to reopen, and some producers and facilities were ramping up output after preventively cutting down processing. Some were limited by slow restoration of power to homes, businesses and industrial customers. On Monday, Shell said it would start redeploying personnel to its Perdido and Whale oil platforms in the Gulf of Mexico on July 9th. As a precautionary measure against Hurricane Beryl, the company had shut-in production at its Perdido production platform. The Port of Corpus Christi reopened ship navigation on Monday afternoon, but the Port of Houston said its terminals would remain closed on Tuesday after conducting a preliminary assessment of facilities and systems.
WTI Lifts Off One-Week Lows After API Reports Bigger Than Expected Crude Draw - Oil prices had dropped today as traders hung on every word from Fed Chair Powell prompting some wild intraday swings.Earlier, prices traded above $82 a barrel after Powell said the labor market has “cooled considerably,” but further comments that avoided sending signals about imminent rate cuts caused markets to give up previous gains.Crude markets are in a “nervous trade”, said Dennis Kissler, senior vice president for trading at BOK Financial Securities, ahead of Thursday's CPI data. API
- Crude -1.9mm (-1.3mm exp)
- Cushing-1.2mm
- Gasoline -3.0mm
- Distillates +2.3mm
Crude stocks fell more than expected last week according to API and gasoline inventories also fell for the second straight week... WTI rebounded off one-week lows after the bigger than expected crude draw (but remains lower on the day for now)... Adding to bearish sentiment, the oil hub of Houston made it through the worst of storm Beryl and reported progress on recovery efforts.On the bullish side, Russia’s crude exports in the week to July 7 slumped the most since before the 2022 invasion of Ukraine, according to vessel-tracking data compiled by Bloomberg.There was no clear reason for the sudden weekly drop, but shipments fell from the major ports.Forecasts for higher fuel consumption throughout the Northern Hemisphere’s summer have supported prices, though slumping supertanker earnings are a reminder of ongoing concerns about Chinese consumption.
WTI Rebounds Off One-Week Lows On Large Crude Draw As Oil Volatility Plummets --Crude prices remain lower this morning ahead of the official inventory data - though continuing yesterday's somewhat chaotic intraday swings. This is notable as oil options markets are pricing in the lowest volatility in six years - despite the potential geopolitical chaos. “The market has been buffeted by opposing forces, with OPEC, geopolitics, weather on the one hand providing a floor and weak economic data and relatively strong dollar, Fed on hold providing the cap which has ultimately left us range bound,” Overnight, API reported a bigger than expected crude and gasoline draw; traders are anxiously awaiting the official confirmation. DOE
- Crude -3.44mm (-1.3mm exp)
- Cushing -702k
- Gasoline -2mm
- Distillates +4.88mm
The official data confirmed an even larger crude inventory draw. Distillates stocks rose more than exp3ected - perhaps driven by refinery outages from Beryl.... The Biden admin added to SPR once again (+477k barrels)
USA EIA Raises 2024 and 2025 Brent Oil Price Forecasts | Rigzone The U.S. Energy Information Administration (EIA) raised its Brent oil price forecasts for 2024 and 2025 in its latest short term energy outlook (STEO), which was released this week. According to its July STEO, the EIA now sees the Brent crude spot price averaging $86.37 per barrel this year and $88.38 per barrel next year. In its previous June STEO, the EIA projected that the Brent crude spot price would average $84.15 per barrel in 2024 and $85.38 per barrel in 2025. The EIA forecasts in its latest STEO that the Brent spot price will average $87.97 per barrel in the third quarter, $89.64 per barrel in the fourth quarter, $90.66 per barrel in the first quarter of 2025, $89 per barrel in the second quarter, $88 per barrel in the third quarter, and $86 per barrel in the fourth quarter. In its June STEO, the EIA projected that the Brent spot price would come in at $83.25 per barrel in the third quarter, $86.64 per barrel in the fourth quarter, $88 per barrel in the first quarter of next year, $86 per barrel in the second quarter, $85 per barrel in the third quarter, and $82.66 per barrel in the fourth quarter. “The Brent crude oil spot price averaged $82 per barrel in June, unchanged from May,” the EIA said in its July STEO. “Prices fell to $75 per barrel on June 4 following the OPEC+ meeting on June 2, when the group announced that 2.2 million barrels per day of voluntary cuts would gradually be unwound beginning in the fourth quarter of 2024,” it added. “Prices fell following this announcement as market participants assessed that unwinding production cuts could cause a significant increase in global oil inventories. The Brent crude oil spot price has since reached $88 per barrel as of July 3, as market participants have reassessed the announcement based on current global inventory levels and the indication by OPEC+ that production cuts remain subject to market conditions,” the EIA continued. The EIA noted in the report that it expects oil prices will increase from an average of $82 per barrel in June to $89 per barrel for the remainder of 2024 and $91 per barrel in the first quarter of next year. “Total oil inventories in the OECD remain near the lower bound of their recent five-year range (2019–2023),” the EIA said in its latest STEO. “We expect that OPEC+ will produce less crude oil than the group’s announced targets through the rest of the forecast period, which will reduce global oil inventories through mid-2025 and keep OECD inventories near the bottom of the range,” it added. “Global oil inventories decreased by an estimated 0.6 million barrels per day in 2Q24, and we expect they will decrease by 0.8 million barrels per day on average from 3Q24 through 1Q25,” it continued. The EIA stated in the STEO that it anticipates that the market will gradually return to moderate inventory builds in 2025 after the expiration of voluntary OPEC+ supply cuts in 4Q24 and after forecast supply growth from countries outside of OPEC+ begins to offset growth in global oil demand. “Beginning in 3Q25 we estimate that global oil inventories will increase at an average of 0.3 million barrels per day and will increase by 0.4 million barrels per day in 4Q25,” it added. “We forecast the Brent price will average $88 per barrel in 2025, as growing inventories reduce oil prices in the second half of next year,” it continued. The EIA highlighted in the STEO that “uncertainty remains around heightened tensions in the Middle East, and an escalation in Houthi attacks on shipping vessels around the Red Sea”. “These attacks have largely cut off the shipping channel for many oil shipments,” the EIA noted in the STEO. “Although these attacks have yet to directly reduce oil supply, the potential for further escalation and the lack of any potential resolution around the Red Sea attacks has added higher shipping costs and an ongoing risk premium to oil prices in the near term,” it added. In its latest STEO, the EIA also pointed out that its latest report does not include any potential effects from Hurricane Beryl. “The hurricane hit the Texas Gulf Coast, a major hub for the U.S. energy industry, on July 8,” the EIA said in the STEO. “EIA will continue to monitor the effects of the hurricane on critical energy infrastructure and will communicate important information in subsequent reports,” it added. In a report sent to Rigzone late Tuesday by Standard Chartered Bank Commodities Research Head Paul Horsnell, analysts at the company, including Horsnell, noted that “after getting within $0.05 per barrel of $88 per barrel intra-day on 5 July, front-month Brent prices have weakened sharply, falling below $85.50 per barrel in early trading on 9 July”. “We do not think the upwards trend is broken; we see the move lower as primarily due to short-term profit taking, as well as bearish technicals after failures to breach key levels in both Brent and WTI,” the analysts stated in the report. “The forward curve has flattened noticeably, with the back of the curve now level with its equivalent 2022 position despite the $21 per barrel reduction at the front,” they added. “The other key market feature is low volatility; 30-day front-month Brent annualized realized volatility reached a nine-month low of 16.2 percent at settlement on 5 July, placing it in the lower one percent tail of all trading days in the past five years and in the lower 2.5 percent tail of all trading days in the past 10 years,” they continued. The Standard Chartered analysts highlighted in the report that SCORPIO, the company’s machine-learning oil price model, “had indicated a Brent settlement of $88.30 per barrel on 8 July”. The analysts outlined in the report that this “was looking possible as prices neared $88 per barrel on 5 July; however, the slide in prices left that indication well above Brent’s $85.75 per barrel 8 July settlement”. “For settlement on 15 July SCORPIO indicates $85.45 per barrel”. In the report, Standard Chartered projected that the ICE Brent crude oil nearby future price will average $98 per barrel in the third quarter and $106 per barrel in the fourth quarter. Standard Chartered expects the commodity to average $109 per barrel in 2025, according to the report.
Oil settles higher on hopeful demand outlook as US oil stocks sink (Reuters) - Oil prices settled higher on Wednesday after a jump in U.S. refining activity last week drove a larger-than-expected decline in gasoline and crude inventories, but gains were capped due to minimal supply disruptions from Hurricane Beryl. Brent futures settled up 42 cents, or 0.5% at $85.08 a barrel. U.S. West Texas Intermediate (WTI) crude settled up 69 cents, or 0.85%, at $82.10 a barrel. WTI rose by as much as $1 during the session, after the U.S. Energy Information Administration reported that U.S. crude inventories fell by 3.4 million barrels to 445.1 million barrels in the week ended July 5, far exceeding analysts' expectations in a Reuters poll for a 1.3 million-barrel draw. Gasoline stocks fell by 2 million barrels to 229.7 million barrels, much bigger than the 600,000-barrel draw analysts expected during U.S. Fourth of July holiday week. "More than anything the EIA data seems to be the driving force right now for higher prices," Both crude futures contracts had ended the previous three sessions lower on signs that the Texas energy industry came off relatively unscathed from Hurricane Beryl. Oil and gas companies restarted some operations on Tuesday. On Wednesday morning, the Port of Houston said it had returned to normal start times for operations at its eight public terminals. Refineries and offshore production facilities saw limited storm damage and have largely returned to normal operations, easing concerns of a supply disruption. Federal Reserve Chair Jerome Powell said he was not yet ready to declare inflation beaten, but felt the U.S. remained on a path to stable prices and continued low unemployment. Investors are betting on interest rate cuts for September, which could boost economic growth and oil demand. Geopolitical risk did little to move prices, analysts said, with investors somewhat fatigued over discussions about a ceasefire in Gaza and the war in Ukraine, said Tim Snyder, economist at Matador Economics. “We see news stories out there that are having little impact on the market, which means the market is discounting those,” he added. In the Middle East, Hezbollah chief Sayyed Hassan Nasrallah said that if Hamas reached a Gaza ceasefire deal with Israel, Hezbollah would stop its operations with no need for separate talks. The group began firing at Israeli targets on the border in support of Palestinians after its ally Hamas launched the Oct. 7 attack on Israel that precipitated the war in Gaza.
The Market Continued to Trade Higher in Overnight Trading on the Supportive EIA Weekly Petroleum Stocks Report -- The crude market on Thursday rallied higher and settled in positive territory for the second consecutive day on supportive economic news. The market continued to trade higher in overnight trading on the supportive EIA weekly petroleum stocks report, which showed a larger than expected draw in crude stocks on Wednesday. The market gave up some of its overnight gains and remained pressured after the IEA reported global demand growth at its lowest level in more than a year at 710,000 bpd in the second quarter and while it kept its demand growth forecast for 2024 mostly unchanged at 970,000 bpd, its 2025 forecast was cut by 50,000 bpd to 980,000 bpd. The market was also awaiting the release the Consumer Price Index for June. Despite increased expectations that the Federal Reserve would cut interest rates in September in light of the CPI data showing a slowdown in inflation, the crude market sold off to a low of $81.63. However, the market bounced off its low and rallied ahead of the close to a high of $82.99. The August WTI contract settled up 52 cents at $82.62 and the September Brent contract settled up 32 cents at $85.40. The product markets settled in mixed territory, with the heating oil market settling down 2 points at $2.5182 and the RB market ending the session up 1.44 cents at $2.5178. The International Energy Agency said in its monthly report that global oil demand growth will slow to just under a million bpd this year and next year, as Chinese consumption contracted in the second quarter amid economic issues. Global demand in the second quarter increased by 710,000 bpd year on year in its lowest quarterly increase in over a year. It said China accounted for 70% of global demand gains in 2023 but will account for about 40% in 2024 and 2025. The IEA’s forecast for relatively low oil demand growth of 970,000 bpd this year was largely unchanged from its outlook last month. It sees an increase of 980,000 next year, down 50,000 bpd from its previous outlook. The IEA added that as the post-COVID economic rebound flattens out worldwide, slow economic growth, increased energy efficiency and the rise of electric vehicles will act as headwinds for growth this year and next. The IEA reported that it sees the third quarter call on OPEC+ crude 800,000 bpd higher than its output in June. It stated that oil supply growth in 2024 is expected to reach 770,000 bpd, increasing oil supply to a record 103 million bpd and global supply growth will reach 1.8 million bpd in 2025, with the U.S., Canada, Guyana and Brazil leading the gains. Bloomberg News reported that the U.S. Federal Trade Commission plans to delay its decision whether to block Chevron’s takeover of Hess until after an arbitration case with Exxon Mobil is settled. Valero Energy reported operations requiring flaring at its 360,000 bpd Port Arthur, Texas refinery. Colonial Pipeline Co is allocating space for Cycle 41 shipments on Line 20, which carries distillates from Atlanta, Georgia to Nashville, Tennessee. Gasoline stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp terminal in the week ending July 11th fell by 4.69% on the week and by 20.82% on the year to 1.057 million tons, while gasoil stocks fell by 1.19% on the week but increased by 12.05% on the year to 2.158 million tons and fuel oil stocks fell by 1.34% on the week but increased by 0.72% on the year to 1.403 million tons.
Oil rises settles higher; US inflation data feeds rate cut hopes (Reuters) - Oil prices rose for the second consecutive session on Thursday with the Brent benchmark settling above $85 a barrel as hopes rose for U.S. interest rate cuts after data showed an unexpected slowdown in inflation. Brent crude futures rose 32 cents, or 0.4%, to settle at $85.40 a barrel. U.S. West Texas Intermediate crude futures rose 52 cents, or 0.6%, to $82.62 a barrel. Data showed U.S. consumer prices fell in June, stoking hopes the Federal Reserve will cut rates soon. After the data, traders priced an 89% probability of a rate cut in September, up from 73% on Wednesday. Slowing inflation and interest rate cuts will likely spur more economic activity. Fed Chair Jerome Powell acknowledged the recent improving trend in price pressures, but told lawmakers more data was needed to strengthen the case for rate cuts. The data pulled the U.S. dollar index lower and that should support oil prices,. A softer greenback can lift demand for dollar-denominated oil from buyers using other currencies. Prices also rose on Wednesday, snapping a three-day losing streak after U.S. data showed a draw in crude stocks in the world's top oil market along with declining inventories and strong demand for gasoline and jet fuel. Front-month U.S. crude futures recorded their steepest premium to the next-month contract since April. Market participants' willingness to pay premiums for earlier delivery dates, a structure known as backwardation, is typically a sign of supply tightness. Some still believe the oil demand outlook is tenuous. In its monthly oil market report, the International Energy Agency (IEA) saw global demand growth slowing to under a million barrels a day this year and next, mainly reflecting a contraction in China's consumption. Still, producer group OPEC in its monthly report on Wednesday kept forecasts for world demand growth unchanged, at 2.25 million for this year and 1.85 million bpd next year. "OPEC and the IEA demand forecast are wider apart than usual, partly due to the differences of opinion over the pace of the world's transition to clear fuels,"
Oil prices up over strong oil demand, ongoing conflicts in Middle East -- Oil prices increased on Friday amid expectations that the US Federal Reserve's (Fed) interest rate cut will start soon, ongoing conflicts in the Middle East contrary to ceasefire attempts, and rising demand hopes as the summer driving season begins. International benchmark Brent crude traded at $86.03 per barrel at 10.36 a.m. local time (0736 GMT), up 0.73% from the closing price of $85.4 per barrel in the previous trading session. American benchmark West Texas Intermediate (WTI) traded at $83.39 per barrel, a 0.93% rise from the previous session when it closed at $82.62 per barrel. The rise in oil prices was driven by signs of easing inflationary pressures in the US, the world's largest oil-consuming country, increasing expectations for strong oil demand. Consumer price index (CPI) in the country fell by 0.1% on a monthly basis in June, while it increased by 3% on an annual basis, remaining below market expectations, according to the data released on Thursday. On a monthly basis, the CPI fell for the first time since May 2020, while annual inflation fell to the lowest level in the last year. In the same period, gasoline prices also fell by 3.8% month-on-month and 2.5% year-on-year. Analysts stated that the data, which indicates that the disinflation trend continues in the country, increased expectations that the Fed will start rate cuts soon. Low interest rates support a lower US dollar, making oil cheaper for holders of other currencies. Meanwhile, escalating geopolitical tensions in the Middle East, home to a vast majority of global oil reserves, despite ongoing cease-fire negotiations, continue to support upward price movements. An Israeli warplane targeted a gathering in the city of Khan Younis, southern Gaza Strip, Anadolu learned from on late Thursday. Witnesses said the fighter jet bombed a crowd of citizens near the Abu Hamid roundabout, resulting in an unspecified number of casualties. However, the statements of US President Joe Biden indicating that he is determined to broker an end to Israel's ongoing war on the besieged Gaza Strip on Thursday limited further price rises by easing market players' supply concerns. Moreover, according to the US Energy Information Administration (EIA) data released Wednesday, gasoline demand in the US was recorded as 9.4 million barrels per day (bpd) in the week ended July 5. The data suggested a strong demand for fuel in the US, the world's largest oil consumer, in the travel-heavy summer vacation season and supported upward price movements.
Oil futures fall on weaker consumer sentiment (Reuters) -Oil prices edged lower on Friday as investors weighed weaker consumer sentiment against data that supported a U.S. Federal Reserve rate cut in September. Brent crude futures were down 6 cents to $85.34 a barrel at 2:01 p.m. EDT (1801 GMT). U.S. West Texas Intermediate crude futures fell 6 cents at $82.62 a barrel. Brent futures were set to post a weekly loss exceeding after four weeks of gains. WTI futures were on track for a 0.7% weekly decline. A monthly survey by the University of Michigan showed U.S. consumer sentiment fell to eight-month low in July, although inflation expectations improved for the next year and beyond. The U.S. Labor Department said the producer price index (PPI) rose 0.2% in June, slightly more than expected, as the cost of services climbed. Still, investors expect the Fed could start cutting rates in September. "The market isn't afraid of the Fed at this point," said Phil Flynn, an analyst at Price Futures Group. Lower rates are expected to boost economic growth, which could boost fuel consumption. "Cooling U.S. inflation numbers may support the case for the Fed to kick-start its policy easing process earlier rather than later," said Yeap Jun Rong, market strategist at IG. "It also adds to the series of downside surprises in U.S. economic data, which points to a clear weakening of the U.S. economy," he added. Oil prices have drawn some support from U.S. gasoline demand, which government data showed on Wednesday was at 9.4 million barrels per day (bpd) in the week ended July 5, the highest since 2019 for the week that includes the Independence Day holiday. Jet fuel demand on a four-week average basis was at its strongest since January 2020. The strong fuel demand encouraged U.S. refiners to ramp up activity and draw from crude oil stockpiles. U.S. Gulf Coast refiners' net input of crude rose last week to more than 9.4 million bpd for the first time since January 2019, government data showed. Signs of weaker demand from China, the world's biggest oil importer, could counter the outlook from the U.S. and weigh on prices. "The recent downside correction is evidently over, although the speed of further ascent might be hindered by falling Chinese crude oil imports, which plummeted 11% in June from the previous year," . U.S. active oil rig count, an early indicator of future output, fell by one to 478 this week, the lowest since December 2021, energy services firm Baker Hughes reported on Friday.
Oil Falls as Cease Fire News Offsets Robust Market Signs -Oil fell after progress on a cease-fire between Israel and Hamas outweighed signs of rising US crude demand that had propped up prices earlier in the week. West Texas Intermediate retreated 0.5% to settle near $82 a barrel. US President Joe Biden said Friday in a social media post that Israel and Hamas have agreed to a cease-fire framework, potentially reducing geopolitical risks to crude supplies. The potential for a wider regional conflict in the Middle East, the source of a third of the world’s oil, had pushed crude prices near $87 earlier this year. Earlier this week, National Security Adviser Jake Sullivan said negotiators have made progress toward a cease-fire, but tamped down hopes of a deal anytime soon. “The signs are more positive today than they have been in recent months,” Sullivan said, while adding that “there’s still miles to go before we close — if we are able to close.” News of the possible cease-fire is counteracting signals of a robust market. On Wednesday, a US government report showed signs of strengthening fuel consumption after the Fourth of July holiday. Meanwhile, the premium for WTI’s front-month futures over the next contract — known as the prompt spread — reached the highest since October, indicating tighter supplies. “Spreads suggests that refinery appetite, the possible bellwether of seasonal growth in consumption in the Northern Hemisphere, is on the rise,” . Summer is presenting risks to supply, too. In Canada, a ring of wildfires has erupted around the country’s unofficial oil-sands capital of Fort McMurray, with some production having already been curtailed by a blaze to the northeast. WTI for August delivery slipped 0.5% to settle at $82.21 a barrel in New York. Brent for September settlement dropped 0.4% to $85.03 a barrel.
Oil prices settle lower as traders weigh summer demand, weak China imports By -- Oil prices settled lower Friday as traders weighed up rising summer demand and data showing Chinese crude imports shrank in June. At 14:30 ET (18:30 GMT), West Texas Intermediate crude futures fell 0.5% to $82.21 a barrel, while Brent oil futures fell 0.4% to $85.03 a barrel. Data on Friday showed that Chinese imports of crude oil sank 11% year-on-year in June to 46.45 million metric tons. The soft reading offset otherwise strong trade data from the country, which showed China's trade balance grew more than expected, while exports also surged. But weak imports brewed concerns over sluggish crude demand in the country, especially as it grapples with weak economic growth. Still, analysts at ANZ said that imports would likely pick up in the coming months amid low inventory levels and increased refinery activity. Crude prices also benefited from a drop in the dollar despite higher-than-expected U.S. inflation data as bets on a September rate cut remained firm. Producer price index data, which measures the average change over time in the selling prices received by domestic producers for their output, rose to a 0.2% last month, contrary to the 0.1% rise anticipated by economists, taking the annualized figure for June to 2.6%. But the dollar continued to trend lower on expectations that the Fed may soon lay out the carpet for a September rate cut. "At this month’s FOMC meeting the Fed could provide stronger guidance that they are moving closer to cutting rates in September," Summer demand optimism continues; rig counts drop Sentiment on oil prices has also been propped up by signs of improving summer following data earlier this week showing an expected dip in crude inventories for the week ended July 5. Oilfield services firm Baker Hughes reported Friday its weekly count of U.S. oil rigs fell to 478 from 479.
Iran’s run-off presidential election won by “reformer” advocating rapprochement with US imperialism as it sets Mideast ablaze -- Friday’s run-off election for President of Iran was won by Masoud Pezeshkian, a representative of the “reform” wing of the Islamic Republic’s bourgeois-clerical political establishment. Pezeshkian’s campaign combined denunciations of corruption and the state enforcement of conservative Islamic mores (such as the obligatory wearing of the veil by women in public) with calls for rapprochement with the United States and the European imperialist powers. Central to his campaign was an explicit call for the revival of the 2015 Iran nuclear accord. In May 2018, the Trump-led United States unilaterally repudiated the accord with the stated aim of using brutal economic sanctions to crash Iran’s economy and precipitate “regime change.” Six years on and under conditions where US imperialism is sponsoring the Netanyahu regime’s genocidal onslaught on the Palestinians of Gaza, and using its Israeli attack-dog to prepare the terrain for a wider war whose principal target would be Iran and its “axis of resistance” allies, Pezeshkian provided no explanation as to how the nuclear accord could be revived and the punishing economic sanctions removed. Rather he relied on support from sections of the bourgeoisie and upper middle class who believe that Iran’s wholesale surrender to the imperialist powers will result in their personal enrichment, and who fear deep-rooted popular anger over social inequality, an inflation-driven collapse in living standards, and the regime’s violent suppression of anti-government protests in 2018, 2019 and 2022. Pezeshkian won 16.4 million votes (53.6 percent) in Friday’s run-off election to 13.5 million (44.2 percent) for Saeed Jalili (with some 600,000 votes spoiled or otherwise invalid.) A long-time member of Iran’s security establishment, Jalili is notorious for his strident advocacy of socially conservative views and is considered a “hardliner” even among the dominant “conservative” or Principlist faction. The other major candidate in the first round, the current speaker of Iran’s parliament and one-time Islamic Revolutionary Guard Corps (IRGC) commander Mohammad Bagher Ghalibaf, threw his support behind Jalili in the run-off, but it is apparent that not all of his voters followed suit. This and a significant increase in voter participation enabled Pezeshkian to increase his vote total by almost 6 million votes in the second round, and his lead over Jalili from about 4 to 9 percentage points. In all, close to 31 million people participated in the second round of the presidential election. This represented a 10-percentage point jump from the first round, which saw the lowest turnout in any presidential or parliamentary election since the 1979 revolution that overthrew the despotic rule of the US-installed Shah. Nevertheless, according to the government’s own reckoning only 49.8 percent of Iranians voted.
Putin & Erdogan Discuss Syria Rapprochement To Squeeze Out Pentagon Occupation - During the ongoing Shanghai Cooperation Organization (SCO) annual summit which is being held in Kazakhstan's capital of Astana, Russia's Putin and Turkey's Erdogan publicly broached the subject of a potential Turkey rapprochement with the Syrian government of Bashar al-Assad. The two have been in a de facto state of war for over a decade, with Turkish troops still occupying parts of northern Syrian territory, and after relations were cut in 2011 upon the start of the war. Turkey was foremost among NATO allies pushing regime change in Damascus, which involved covert support to ISIS, al-Qaeda, and other jihadist insurgents.But more recently Ankara's priorities have shifted as it seeks to root out Syrian Kurdish paramilitary groups in north Syria, as well assqueeze out the US troop presence there. The Pentagon has long backed the Kurds and their aspirations for an autonomous region, but both Assad and Erdogan agree that the US occupation must end immediately."We couldn’t meet with my dear friend for a long time,” Erdogan had told Putin at the SCO during introductory remarks. And the Russian leader in turn told a press briefing, "We continue to work actively on a number of the most important lines of international policy. We are in constant contact with you. Our ministries and agencies are constantly exchanging information and coordinating positions on key areas."Regarding Syria, a Turkish readout of the Putin-Erdogan meeting said, "He [Erdogan] stressed the importance of taking concrete steps toend the instabilities that create fertile ground for terrorist organizations, especially in the Syrian civil war... Turkey is ready to cooperate for a solution."This comes one week after Erdogan shocked his own population and officials by saying there's currently no obstacle which would prevent the restoration of official ties with Syria. According to the Associated Press: His comments came just days after Syrian President Bashar Assad made similar remarks, indicating a willingness among the two neighboring countries to end tensions and normalize relations."There is no reason why (diplomatic ties) should not be established," Erdogan told reporters.“In the same way that we kept our relations with Syria alive in the past — we had these meetings with Mr Assad that included family meetings — we cannot say that it will not happen again,” Erdogan said. He was referring to a vacation that the Erdogan and Assad families took in southern Turkey in 2008, before their relationship soured.
Erdogan Says He Plans To Invite Syria's Assad to Turkey for Normalization Talks - On Sunday, Turkish President Recep Tayyip Erdogan said he plans to invite Syrian President Bashar al-Assad to Turkey for talks on potentially restoring ties.“We will extend our invitation (to Assad); with this invitation, we want to restore Turkey-Syria relations to the same level as in the past. Our invitation may be extended at any time,” the Turkish leader said,according to Reuters. “We have now arrived at a point where if Bashar Assad takes a step towards improving relations with Turkey, we will also show that approach towards him.” Erdogan made similar comments a few days earlier and said he wants Russian President Vladimir Putin to join the talks. “If Mr. Putin can visit Turkey, this could be the beginning of a new process. All the years that have passed in Syria have clearly shown everyone that a permanent solution mechanism must be established,” he said on Friday.Turkish and Syrian officials began holding Russian-mediated talks in December 2022. The step was significant since Turkey was a major supporter of the failed regime change effort against Assad and still occupies areas of northern Syria. Turkey also frequently conducts military operations against Kurdish militants in northeastern Syria, including the US-backed SDF.The Assad government has been clear that any normalization deal with Turkey must involve a Turkish withdrawal from northern Syria. Turkey has said the requirement for a withdrawal is an end to the “YPG threat” in the country, referring to the primary military component of the SDF. One potential solution would be for Syrian Arab troops to deploy to the areas currently controlled by Turkey and Turkish-backed militants instead of the SDF. But the US could get in the way of such an arrangement since itdoesn’t want to give up its occupation of eastern Syria and opposes regional normalization with the Assad government.
Hezbollah Launches Largest Strike Yet Against Israeli Mountain Base - Hezbollah officials announced Sunday that they had launched their biggest attack on Israel, with a massive drone assault on the Mount Hermon reconnaissance base in the occupied Golan Heights. This was thebiggest attack since the beginning of the tit-for-tat Israeli and Hezbollah attacks that started after October 7.The attack came as Hezbollah sent a flurry of explosive drones across the border targeting the Mount Hermon base, destroying electronic and surveillance systems and starting a fire in the area.Hezbollah said the attack was part of the retaliation for the death of Maytham Mustafa al-Attar. Attar was a member of Hezbollah’s air defense unit who was killed in an attack on his vehicle in Baalbek District, in northeastern Lebanon.This is reported to be the first Hezbollah attack on the base. A media source said this was the first attack on the Mount Hermon base since the 1973 Arab-Israel war. Hezbollah has, however, targeted other military bases in northern Israel.Later in the evening, Israel carried out a drone attack against a target close to the border in southern Lebanon’s Tyre District. This attack killed Mustafa Hassan Salman, a Hezbollah figure who was a member of the rocket and missiles unit.Israel and Hezbollah have been trading attacks since October, with a growing number of strikes in recent weeks. There has been concern that the escalating strikes will lead to a full-scale Israeli invasion of Lebanon.Israel is doing nothing to downplay the chances of war. The US and other nations are concerned that Israel’s involvement in the Gaza War precludes Israel’s ability to commit enough forces to successfully invade Lebanon. Efforts to forge a ceasefire in Gaza have provoked Israeli officials to present peace as an opportunity to further escalate on its northern border.Hezbollah says it would honor a Gaza ceasefire, but Israeli Defense Minister Yoav Gallant says a separate deal is needed, and that Israel fully intends to continue fighting Hezbollah even if a Gaza truce is reached.
New Fires Erupt In Israel After Hezbollah Sends 200 Rockets, Drone Swarms - Large wildfires are once again raging in northern Israel's Galilee region after on Thursday Hezbollah launched a particularly intense barrage of 200 rockets as well as drone swarms. Some of the fires are believed the result of burning fragments from interceptor shrapnel which fell as anti-air defenses are heavily at work. Soon after, the Israel Defense Forces (IDF) sent a stern warning and message to all of Lebanon, sending jets over Beirut which broke the sound barrier. This happened in other parts of the country as well. The IDF further said the Air Force "struck Hezbollah military structures" in south Lebanon's Ramyeh and Houla areas. Casualties - whether among militants or civilians - were not immediately known. Throughout Thursday fires have raged in at least ten locations in the Galilee and Golan Heights areas due to the ramped up Hezbollah attacks. Israeli emergency and civic services have reported that at least one highway in the area has been blocked as a result of the fast encroaching fires.Just the day prior, on Wednesday, Israel killed a top Hezbollah commander in southern Lebanon, Muhammad Nimah Nasser, and Thursday's huge rocket barrage is seen as retaliation for that.
Latin Patriarchate of Jerusalem Condemns Israeli Bombing of Catholic School in Gaza - The Latin Patriarchate of Jerusalem, the Catholic authority in the Middle East, has strongly condemned the Israeli bombing of a Catholic school in Gaza City, which killed at least four Palestinians.“The Latin Patriarchate of Jerusalem is monitoring, with grave concern, the news of the raids, apparently launched by the Israeli army against the Holy Family School in Gaza this morning. Footage and media reports from the place include scenes of civilian casualties and of destruction in the compound,” the Latin Patriarchate said in a statement on Sunday.The statement says that the school, which is the property of the Latin Patriarchate, has been “a place of refuge for hundreds of civilians” and that “no religious personnel” currently reside there.“The Latin Patriarchate condemns in the strongest terms the targeting of civilians or any belligerent actions that fall short of ensuring that civilians remain outside the combat scene,” the statement reads. “We continue to pray for the Lord’s mercy and hope that the Parties will reach an agreement that would put an immediate end to the horrifying bloodbath and humanitarian catastrophe in the region.”Gaza’s civil defense agency said among those killed in the strike was Ehab al-Ghussein, Gaza’s deputy secretary of labor. “Civil Defense crews in Gaza Governorate were able to retrieve four martyrs and a number of injured individuals after Israeli occupation aircraft targeted the ‘Holy Family’ school, which houses a large number of displaced persons west of Gaza City,” the Civil Defense Directorate said, according to CNN. Al-Ghussein’s sister and wife were previously killed by Israeli airstrikes.Sami El-Yousef, the CEO of the Latin Patriarchate of Jerusalem, told theCatholic News Agency that the priest and other people based at the Holy Family Church in Gaza City could not confirm the casualties in the strike on the school since it was unsafe to travel there. Over the weekend, Israel ordered another mass evacuation from most of Gaza City and escalated military operations.“We don’t have accurate numbers because our own parish priest and members of the community could not get to the location because there’s intensive fighting around the parish,” El-Yousef said. “It’s too dangerous for anyone to actually leave. We cannot really with any certainty verify the number of people killed and injured.”In December, the Holy Family Parish came under Israeli siege. Two Catholic women were killed by Israeli gunfire, and seven people were wounded, an attack Pope Francis denounced as “terrorism.”Gaza’s Orthodox Christians have also been targeted by the Israeli military. In October, an Israeli airstrike hit part of the Greek Orthodox St. Porphyrius Church in Gaza City, killing at least 18 Palestinian civilians, including relatives of former US House Rep. Justin Amash. At the time, about 500 Christian and Muslim Palestinians were sheltering there.
Netanyahu Sabotaging Deal With Hamas By Issuing List of Demands - Israeli Prime Minister Benjamin Netanyahu issued a list of demands for a potential hostage deal ahead of more indirect negotiations between Israel and Hamas, a move seen by mediators and Israeli officials as an attempt to sabotage the chances of an agreement. Netanyahu’s list of demands, which he called “non-negotiable,” included a condition that Israel would be allowed to resume military operations “until all of the objectives of the war have been achieved.” Netanyahu’s objectives include the “eradication” of Hamas, a goal the Israeli military has said is not realistic. Hamas’s primary condition for a deal is a permanent ceasefire, and Netanyahu’s insistence on having the ability to resume his genocidal war appears to be the main obstacle. The Israeli leader’s repeated public comments about the issue led Hamas to ask for stronger guarantees during previous negotiations. According to media reports, Hamas has softened its stance a bit by not asking for Israel to commit to a permanent ceasefire right away. However, the Palestinian group is asking mediators to provide written guaranteesthat negotiations for a permanent truce will continue once the first phase of the deal goes into effect. An Israeli security official told Channel 12 that by issuing his list of demands, Netanyahu is “emphasizing the gaps” between Israel and Hamas just before an Israeli delegation heads to a fresh round of negotiations. Netanyahu’s full list of demands includes:
- Any deal will allow Israel to resume fighting until all of objectives of the war have been achieved.
- There will be no smuggling of weapons to Hamas from Egypt to the Gaza border.
- There will be no return of thousands of armed terrorists to the northern Gaza Strip.
- Israel will maximize the number of living hostages who will be released from Hamas captivity.
Another Israeli security official slammed Netanyahu, saying he “pretends that he wants a deal, but is working to torpedo it.” The official added that Netanyahu was “dragging out the process, trying to stretch time until his speech in Congress and then the [Knesset] recess.” A senior official from one of the countries mediating the negotiations toldThe Times of Israel that Netanyahu’s non-negotiable demand about the resumption of fighting hits at the most sensitive issue in the negotiations. The report said mediators have convinced Hamas to keep in place the ambiguous language “that allows both Israel to feel comfortable enough that it has the ability to resume fighting if Hamas ceases to negotiate in good faith and Hamas to feel comfortable enough that the mediators will prevent Israel from resuming the war instead of implementing the permanent ceasefire that is stage two of the deal.” The senior official said statements “made by the prime minister severely harm efforts to maintain that ambiguity” and added that it’s likely been done “purely for political purposes.”Netanyahu’s demands are seen as an effort to appease National Security Minister Itamar Ben Gvir, who has threatened to quit the government if a deal with Hamas is reached.
Israeli Opposition Leader Offers To Support Netanyahu If He Accepts Hostage Deal - Israeli opposition leader and former Prime Minister Yair Lapid on Monday said he would support Prime Minister Benjamin Netanyahu if he reaches a hostage and ceasefire deal with Hamas.Netanyahu’s coalition government holds 64 out of the 120 seats in the Knesset, meaning only five members would need to quit for it to lose the majority, which would dissolve the government and force elections.Israeli Minister of National Security Itamar Ben Gvir has threatened that his Jewish Power party, which holds six seats, would quit the government if Netanyahu agrees to a deal with Hamas. Polling shows that Netanyahu would lose if there were new elections, giving him the motive to continue the genocidal war to maintain his hold on power. Yair Lapid, who leads the Yesh Atid party, which holds 24 seats in the Knesset, has previously offered to bail Netanyahu out if he reached a hostage deal and coalition members quit.“There’s a hostage deal on the table. It is not true that Netanyahu has to choose between the hostage deal and his continued tenure as prime minister. I promised him a safety net, and I will keep that promise,” Lapid said, according to The Times of Israel.“This is not an easy statement, and it is not an easy decision. Netanyahu is a bad, failed prime minister, and he is to blame for the October 7 disaster, but the most important thing is to bring the kidnapped people back home,” he added. Lapid also criticized Netanyahu for releasing a list of “non-negotiable” demands for a hostage deal ahead of renewed indirect talks with Hamas. Included in the list is a requirement that Israel will be able to restart military operations in Gaza, but Hamas’s primary demand has been a permanent ceasefire.
UN experts confirm famine throughout Gaza, condemn Israel’s starvation policy -- A group of highly qualified, independent UN experts declared in a statement Tuesday that there is no doubt that famine has spread throughout the entire Gaza strip as a consequence of a deliberate policy of mass starvation against Palestinians by the Israeli government. The experts pointed to three children in particular who died of malnutrition and lack of access to adequate healthcare: “Fayez Ataya, who was barely six months old, died on 30 May 2024 and 13-year-old Abdulqader Al-Serhi died on 1 June 2024 at the Al-Aqsa Hospital in Deir Al-Balah. Nine-year-old Ahmad Abu Reida died on 3 June 2024 in the tent sheltering his displaced family in Al-Mawasi, Khan Younis.” Their statement explained that the death of a child from malnutrition and dehydration indicates that health and social structures have been attacked and are critically weakened. “When the first child dies from malnutrition and dehydration, it becomes irrefutable that famine has taken hold,” they said. The experts explicitly condemned Israel’s genocide. “We declare that Israel’s intentional and targeted starvation campaign against the Palestinian people is a form of genocidal violence and has resulted in famine across all of Gaza. We call upon the international community to prioritise the delivery of humanitarian aid by land by any means necessary, end Israel’s siege, and establish a ceasefire,” they stated. After pointing to earlier infant deaths confirming famine in northern Gaza, the group indirectly censured all the imperialist powers, above all the United States, that have backed to the hilt Israel’s barbaric onslaught in Gaza which has reduced its buildings to rubble and its people to refugees constantly facing death by starvation, disease and bombardment. “The whole world should have intervened earlier to stop Israel’s genocidal starvation campaign and prevented these deaths,” the experts declared. “Thirty-four Palestinians have died from malnutrition since 7 October, the majority being children. Inaction is complicity.” The group of 10 are special rapporteurs and independent experts appointed under the Special Procedures of the UN Human Rights Council. Their statement follows the publication this month in the prestigious British medical journal The Lancet of a study demonstrating that the likely death toll in Gaza since October 7 is vastly higher than the official number of deaths recorded by Gaza Ministry of Health—currently more than 38,000. The study noted that the official death toll did not include the many thousands that remain buried under the rubble that is now Gaza nor those that have died from the lack of food, healthcare and sanitation. Its conservative estimate is that 186,000 people have died as a consequence of Israel’s genocidal war, or 8 percent of the total population, but the figure could be much higher.
Israel Controls 26% of Gaza, Potentially Paving the Way for Jewish Settlements - The Israeli military has taken control of 26% of the Gaza Strip and is building bases and paving roads in the areas to ensure long-term occupation, which could lead to Jewish settlements, Haaretz reported on Monday.Israel established a “buffer zone” along the Israel-Gaza border by demolishing buildings and agricultural land. The zone cuts into about 1 kilometer along Gaza’s entire border with Israel and accounts for about 16% of the Strip’s territory.Israel has also taken control of the Philadelphi Corridor, which runs along the Egypt-Gaza border, and demolished buildings in the Netzarim Corridor, a 38 kilometer square area that separates northern Gaza from the rest of the Strip.The Israeli military has built bases in the corridor and is using the Turkish hospital, which was Gaza’s only cancer treatment hospital, as another base. The US-built pier is also located in the Netzarim Corridor. Haaretzreported that Graffiti written in Hebrew near the pier reads, “Without settlement, there’s no victory.” An Israeli settlement called Netzarim used to be located where the Turkish hospital was built. All Israeli settlements in Gaza were evacuated by 2005 as part of a policy known as the “disengagement.” According to Haaretz, the Netzarim settlement was part of an Israeli government plan to bisect Gaza and strengthen Israeli control by means of civilian settlements. Today, Israeli soldiers in Gaza are taking symbolic steps to show their support for re-establishing Jewish settlements in the territory. One video in the Haaretz report shows a uniformed Israeli soldier placing a menora in a building near the Turkish hospital. The menora was said to be the same one that was removed from a synagogue in the Netzarim settlement before it was evacuated. Israeli Prime Minister Benjamin Netanyahu has denied establishing Jewish settlements in Gaza was one of his goals, but members of his coalition government and Likud party openly support the idea, as well as the expulsion of Palestinians.“In order to preserve the security achievements that our soldiers lost their lives for, we must resettle Gaza with security forces and settlers that will embrace the land with love,” Communications Minister Shlomo Karhi, a member of the Likud party, said at a pro-settlement march in May.At the same march, National Security Minister Itamar Ben Gvir, leader of the Jewish Power party, called for the expulsion of Palestinians from Gaza. “We must return to Gaza now! We are coming home to the Holy Land!” he said. “And second, we must encourage emigration. Encourage the voluntary emigration of the residents of Gaza. It is moral!” In October 2023, a document prepared by Israel’s Intelligence Ministry that was leaked to the media said the best post-war scenario for Israel would be the expulsion of all 2.3 million Palestinians living in Gaza.
Israel Orders the Evacuation of Gaza City - On Wednesday, the Israeli military told the residents of Gaza City in the northern Gaza Strip to evacuate and head south, signaling its assault on the city will escalate even more. The military dropped leaflets that said “all those in Gaza City” should head to Deir al-Balah in central Gaza, but nowhere in the Strip is safe from Israeli bombs as so-called “safe zones” have frequently been hit.The UN noted that Deir al-Balah is already overcrowded, and the area was also targeted by Israeli strikes early Wednesday. Israel bombed four houses in Deir al-Balah and the nearby Nearby Nuseirat refugee camp, killing 20 Palestinians, including six children and three women.AP reported that one of its reporters counted the bodies at al-Aqsa Martyrs Hospital and that the houses in Deir al-Balah were in the so-called “humanitarian safe zone” where Israel told Palestinians in Gaza City to flee.Israel has ordered the evacuation of Gaza City several times throughout the past nine months of its genocidal war. The city lies north of the Netzarim Corridor, a 38-square-kilometer zone that separates the north from the rest of the Strip. The Israeli military has demolished most buildings in the corridor and is building bases and paving roads.According to AP, there was no mass exodus from Gaza City after the evacuation order since Palestinians understand there’s no place safe in the south. Palestinians also know that if they leave their homes, they likely won’t be able to return. It’s estimated that around 300,000 Palestinians remain in north Gaza, the majority being in Gaza City.Haaretz reported this week that including the Netzarim Corridor, a “buffer zone” along the Gaza-Israel border, and the Philadelphi Corridor on the Egypt-Gaza border, the Israeli military controls about 26% of Gaza’sterritory. Many Israeli soldiers and politicians, including members of the Netanyahu government, want to re-establish Jewish settlements in these areas. Clearing Palestinians out of the north would allow Israel to conquer more territory for potential settlements.
Saudis Threatened To Sell European Bonds If Russian Assets Were Confiscated PP - In a fascinating geopolitical development, Bloomberg reports that Saudi Arabia privately hinted earlier this year it would sell some (or all) of its European debt holdings if the G-7 confiscated Russia's frozen assets.As a reminder, we noted in May the European Union had approved a US-backed plan to use profits and interest generated from Russian assets to help arm Ukraine; however that was a sharp reversal from the previously proposed plan - one which was heavily promoted by Zelensky and Ukraine - to confiscate some $300 billion in Russian assets. Many were wondering what prompted the reversal.Now we know, and as Bloomberg notes "the Kingdom’s finance ministry told some G-7 counterparts of its opposition to the idea, which was meant to support Ukraine, with one person describing it as a veiled threat." The Saudis specifically mentioned debt issued by the French treasury, two of the people said. Most of the $300 billion in frozen Russian assets are held in Europe - particularly France, Germany, and Belgium. Which makes today's report from Bloomberg even more interesting from a geopolitical fissures perspective, as it means that as a result of its ability to spark a liquidation panic in Europe's unstable bond market, it has far more leverage than Ukraine and the "virtue signaling" western media.Now, notably, Macron called an election and that election swung wildly to the far-left in the interim, but since these 'talks' happened with the Saudis, French bond yield spreads to Germany have exploded wider...Surely this selling panic coming at a time when the Saudis are using French bonds as political leverage, was just a coincidence.Curiously, while Saudi Arabia has maintained strong relations with Moscow, it has also built ties with Ukraine. And yet, it is clear that when push comes to shove, the Crown Prince is firmly in Putin's corner. Bloomberg concludes by noting that whatever its motive, Saudi Arabia’s move underscores its growing clout on the world stageand the G-7’s difficulty in garnering support from so-called Global South nations for Ukraine.
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