smallest summertime natural gas inventory build since July 2016; US oil supplies at a five month low; gasoline inventories see largest build in 25 weeks on biggest drop in demand since early April
US oil prices fell for a second straight week, after rising to a two month high over the prior 4 weeks, as Chinese demand cratered and Middle East peace talks appeared to be making progress…after falling 1.1% to $82.21 a barrel last week 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, the contract price for the benchmark US light sweet crude for August delivery moved cautiously higher in Asian trading early Monday, as downward pressure from a stronger U.S. dollar and concern about Chinese demand offset support from political uncertainty in the wake of the Trump assassination attempt and a volatile situation in the Middle East, and remained steady in early morning trading in the U.S., showing no signs of being rattled by the shooting at Trump’s rally, and settled 30 cents lower at $81.91 a barrel as downbeat Chinese economic data underlined concerns about crude demand…oil prices declined in Asia on Tuesday on worries that a slowing Chinese economy would crimp demand, despite a growing consensus that the Fed would begin cutting its key interest rate as soon as September, then fell more than 1% in US trading as many of China’s refineries began cutting back due to weaker fuel demand, and settled $1.15 lower at $80.76 a barrel, as a stronger dollar and signs of weaker demand triggered algorithmic selling…oil prices continued to be weighed down in Asian trading on Wednesday on growing concerns about China’s economic growth and oil demand which were offsetting an estimated drop in U.S. crude oil inventories, but rebounded from three-week lows in New York as technicals provided a floor for losses and the EIA report showed another big decline in US crude stockpiles, and settled $2.09 higher at $82.85 a barrel, in light of the larger than expected fall in U.S. crude oil supplies and a weaker U.S. dollar….oil prices edged higher in Asia on Thursday as rising expectations that the Fed would soon cut interest rates outweighed concerns about an economic slowdown that could dampen fuel consumption, but shed those gains on profit-taking ahead of weekly US jobless claims data and settled 3 cents lower at $82.82 a barrel even as further signs of weakness in the labor market boosted hopes for rate cuts…however, oil prices fell in Friday trading in Asia as concerns about demand more than offset falling U.S. crude inventories and rising odds of a September interest rate cut from the Fed, then tumbled during the New York session after Secretary of State Blinken said a long-sought ceasefire between Israel and Hamas was within sight, to settle $2.69 lower at a five week low of $80.13 a barrel, and thus finished down 2.5% for the week..
meanwhile, natural gas prices finished lower for the fifth time in six weeks on forecasts for less heat and closer to normal demand in the weeks ahead…after rising 0.4% to $2.329 per mmBTU last week as a spreading dome of record heat offset a bearish storage report, the contract price of natural gas for August delivery opened 11 cents lower on Monday, as rising well production rates held the contract in check in morning trading, and settled 17.1 cents or 7% lower at a 10-week low of $2.158 per mmBTU due to the delayed return of the Freeport LNG export plant in the wake of Hurricane Beryl, and on forecasts for less hot weather and lower demand over the next two weeks than was previously expected …natural gas prices opened 4 cents higher on Tuesday on higher-than-expected nominations from the Freeport LNG facility, and climbed to an intraday high of $2.218 on news that US power demand had hit a record high on Monday, before backing off to settle 3.0 cents higher for the day at $2.188 per mmBTU…however, natural gas prices opened a penny lower on Wednesday and tumbled from there, as short-term forecasts for much of the country were calling for reduced cooling demand, and settled 15.3 cents lower at a new 10-week low of $2.035 per mmBTU on a forecast of cooler-than-expected weather for the next two weeks, and on lower demand from LNG export facilities, largely due to the shutdown of Freeport LNG after Hurricane Beryl…natural gas prices opened 4 cents higher on Thursday ahead of the storage report, then jumped to an intraday high of $2.134 as the bullish report hit the wire, before stabilizing near $2.120 through the afternoon and closing 9.0 cents higher at $2.125 per mmBTU….natural gas then traded on either side of unchanged through midday Friday, as traders weighed vying potential bullish and bearish catalysts, and settled down three-tenths of a cent at $2.125 per mmBTU as rising output offset hot weather forecasts, and thus finished 8.6% lower for the week..
The EIA’s natural gas storage report for the week ending July 12th indicated that the amount of working natural gas held in underground storage rose by just 10 billion cubic feet to 3,209 billion cubic feet by the end of the week, the smallest summertime increase since July 2016, which still left our natural gas supplies 250 billion cubic feet, or 8.4% above the 2,959 billion cubic feet that were in storage on July 12th of last year, and 465 billion cubic feet, or 16.9% more than the five-year average of 2,744 billion cubic feet of natural gas that had typically been in working storage as of the 12th of July over the most recent five years…the 10 billion cubic foot addition to US natural gas working storage for the cited week was well below the 27 billion cubic foot average addition to storage that was forecast by analysts in a Reuters poll, and was also much less than the 43 billion cubic feet that were added to natural gas storage during the corresponding second week of July 2023, and far less than the average 49 billion cubic foot injection into natural gas storage that has been typical for the same mid 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 12th indicated that even after an increase in our oil imports and a decrease in refinery demand, we had to pull oil out of our stored commercial crude supplies for the tenth time in twenty-five weeks and for the 16th time in the past 39 weeks, largely due to an unexplained jump in demand for oil that the EIA could not account for….Our imports of crude oil rose by an average of 277,000 barrels per day to 7,037,000 barrels per day, after rising by an average of 214,000 barrels per day over the prior week, while our exports of crude oil decreased by 35,000 barrels per day to 3,964,000 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 3,073,000 barrels of oil per day during the week ending July 12th, 312,000 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 518,000 barrels per day, while during the same week, production of crude from US wells was unchanged 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 16,891,000 barrels per day during the July 12th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,928,000 barrels of crude per day during the week ending July 12th, an average of 181,000 fewer barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that a net average of 603,000 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 appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production during the week ending July 12th averaged 566,000 barrels per day more 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 [ –566,000 ] 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 244,000 barrels per day of oil supply could not be accounted for in the prior week’s EIA data, that means there was a 810,000 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 603,000 barrel per day decrease in our overall crude oil inventories came as an average of 696,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while an average of 93,000 barrels per day were being added to our Strategic Petroleum Reserve, the thirty-second SPR increase in thirty-nine 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 6,739,000 barrels per day last week, which was still 1.1% more than the 6,668,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at 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 unchanged at 12,900,000 barrels per day, while Alaska’s oil production was 38,000 barrels per day higher at 422,000 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 93.7% of their capacity while processing those 16,928,000 barrels of crude per day during the week ending July 12th, down from their two year high 94.5% utilization rate of a week earlier, but a quite normal refinery operating rate for mid-summer… the 16,928,000 barrels of oil per day that were refined this week were 2.1% more than the 16,585,000 barrels of crude that were being processed daily during week ending July 14th of 2023, but 2.0% less than the 17,267,000 barrels that were being refined during the prepandemic week ending July 12th, 2019, when our refinery utilization rate was at a pre pandemic near normal 94.4% for mid-summer…
With the decrease in the amount of oil being refined this week, gasoline output from our refineries was also lower, decreasing by 751,000 barrels per day during the week ending July 12th, after our refineries’ gasoline output had increased by 239,000 barrels per day to a two year high of 10,300,000 barrels per day during the prior week.. This week’s gasoline production was still 0.3% more than the 9,523,000 barrels of gasoline that were being produced daily over week ending July 14th of last year, but was 3.1% less than the gasoline production of 9,855,000 barrels per day during the prepandemic week ending July 12th, 2019…. on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 101,000 barrels per day to 5,229,000 barrels per day, after our distillates output had increased by 122,000 barrels per day during the prior week. After fifteen production increases in the past twenty-one weeks, our distillates output was 3.9% more than the 5,032,000 barrels of distillates that were being produced daily during the week ending July 14th of 2023, but was still 2.5% less than the 5,361,000 barrels of distillates that were being produced daily during the week ending July 12th, 2019…
Even with this week’s big drop in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the 9th time in twenty-four weeks, increasing by 3,328,000 barrels to 232,994,000 barrels during the week ending July 12th, the biggest gasoline supply jump since January 19th, after our gasoline inventories had decreased by 2,006,000 barrels during the prior week. Our gasoline supplies rose this week because the amount of gasoline supplied to US users fell by 615,000 barrels per day to 8,783,000 barrels per day, and because our exports of gasoline fell by 68,000 barrels per day to 851,000 barrels per day, while our imports of gasoline fell by 40,000 barrels per day to 728,000 barrels per day .…Even after fifteen gasoline inventory withdrawals over the past twenty-four weeks, our gasoline supplies are still 6.7% above last July 14th’s gasoline inventories of 218,386,000 barrels, and are slightly above the five year average of our gasoline supplies for this time of the year…
With this week’s 4th consecutive increase in our distillates production, our supplies of distillate fuels rose for the eleventh time in twenty-six weeks, increasing by 3,454,000 barrels to 128,066,000 barrels over the week ending July 12th, after our distillates supplies had increased by 4,884,000 barrels during the prior week. Our distillates supplies increased by less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 119,000 barrels per day to 3,585,000 barrels per day, and because our exports of distillates rose by 156,000 barrels per day to 1,259,000 barrels per day, and because our imports of distillates fell by 31,000 barrels per day to 108,000 barrels per day....Even with 15 inventory decreases over the past 24 weeks, our distillates supplies at the end of the week were 8.4% above the 118,194,000 barrels of distillates that we had in storage on July 14th of 2023, but are still about 7% below the five year average of our distillates inventories for this time of the year…
Finally, after an unexplained jump in demand for oil that the EIA could not account for, 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 4,870,000 barrels over the week, from 445,096,000 barrels on July 5th to a five month low of 440,226,000 barrels on July 12th, after our commercial crude supplies had decreased by 3,443,000 barrels over the prior week… With this week’s decrease, our commercial crude oil inventories were about 5% below the most recent five-year average of commercial oil supplies for this time of year, while they were still roughly 27% above the average of our available crude oil stocks as of the second 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 12th were 3.8% less than the 457,420,000 barrels of oil left in commercial storage on July 14th of 2023, while 3.2% more than the 426,609,000 barrels of oil that we had in storage on July 15th of 2022, and fractionally more than the 439,687,000 barrels of oil we had left in commercial storage on July 16th 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 19th, the second column shows the change in the number of working rigs between last week’s count (July 12th) and this week’s (July 19th) count, the third column shows last Friday’s July 12th 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 21st of July, 2023…
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State receives requests to conduct fracking in Leesville Wildlife Area in Carroll County - Canton Repository -- The Oil and Gas Land Management Commission has received two requests to open the Leesville Wildlife Area in Carroll County to hydraulic fracturing.The requests, which were received by the commission June 24 and posted Wednesday, seek permission to drill for oil or natural gas on 65 acres of public land in Orange Township and 62 acres in Monroe Township.The requests will be reviewed by the commission and go through a public comment period before any development. Under Ohio law, the companies that submit nominations are anonymous until bids are awarded so it's unclear who is seeking to open the Leesville Wildlife Area to fracking.The five members of the Oil and Gas Land Management Commission are appointed by Gov. Mike DeWine.Last year, Ohio House Bill 507 went into effect. The law speeds up the leasing process for oil and gas companies looking to drill in state parks. It also changed wording of a 2011 law from state agencies "may" lease public lands for drilling to they "shall," essentially requiring the agencies to lease public lands provided bids meet certain conditions.The change has streamlined the leasing process and rapidly increased drilling for oil and gas on public lands.The commission this year awarded bids for exploration to drill under Salt Fork, Ohio's largest state park in Guernsey County. The park has been nominated five separate times for drilling. Two were approved, two were denied and one is still pending. In February, the commission approved a bid for Texas-based company EOG Resources to drill for oil and gas in Brown Township in Carroll County at the Ohio Department of Transportation Malvern outpost. Supporters of public land leases for oil and gas drilling say it generates revenue, but opponents are concerned with environmental impacts, particularly in state parkland and wildlife areas."We've been fracking now in Carroll County for years, and it's taking place in nearly all the townships," Carroll County Commissioner Robert Wirkner said. "There's been problems here and there, but not widespread problems, so I really don't anticipate there would be any differences between fracking under the wildlife area to any other place in the county." Cathy Cowan Becker, co-founder and steering committee member of Save Ohio Parks, a group that was formed in response to last year's law change, said fracking can have harmful environmental impacts. She said fracking uses millions of gallons of water that becomes waste.." Cowan Becker said other impacts include air pollution, light pollution and noise. “You're basically industrializing an area that is meant to be preserved for people to recreate in," she said. Cowan Becker also said it is unfair to Ohioans to keep companies anonymous when they seek to nominate state lands for fracking. “We're the ones who pay the taxes. Our state parks are incredibly popular, we're the ones who use those parks," she said. "We should know who is asking to irrevocably damage them."
Deal to Take Over Austin Master Services Appears to Have Failed --Marcellus Drilling News -- In early June, the owner of Austin Master Services (AMS), American Environmental Partners (AEP), sent a press announcement to MDN to announce he had found a buyer for AMS (see AEP Announces Finding a Buyer for Austin Master Services). AMS is a radiological waste management solutions company in Martins Ferry (Belmont County), Ohio. The Ohio Attorney General lodged charges against AMS in March, accusing the company of storing 16+ times more drill cuttings at the facility than it’s rated for. According to an article in the Pittsburgh Post-Gazette, the deal to take over AMS and clean it up has fallen through.
Utica Shale Academy expands welding program with $2.5 million state funding - \— Utica Shale Academy received a one-time appropriation fund that will allow the school to expand its welding program even further. The academy received $2.5 million in funding from the State Senate's Strategic Community Investment Appropriation Fund. Superintendent William Watson outlined plans to allocate $1.2 million for HVAC, windows and other upgrades in the newly acquired Williams Collaboration Center. An additional $1.2 million will fund the construction of an indoor welding lab next to its existing outdoor facility. "Right now, we teach four processes,” Watson said. “And the junior senior processes that we teach really do require a more controlled element. So, while they're able to do them, they’re not able to do them with the fidelity that we were looking for. So, we've talked with local employers in our business advisory council, and we thought we really needed an indoor facility that was more climate controlled." The Williams Collaboration Center project is expected to be complete in time for the school's opening Sept. 1. Watson said the indoor welding lab is expected to be operational by the 2025-2026 school year. "Welding allows me to improve myself each and every time,” student Connor Smith said. “It's feeling accomplished when I weld a good pass, and just something I've always wanted to learn and I’m just glad I have the opportunity with this school here." With the academy expanding, enrollment numbers are increasing, and Watson shared that the current enrollment of 130 students reflects a 40% increase since this time last year. "At the moment, we have 20 welding bases, it’s inclusionist project, we're gonna have 40-50,” Watson said. “When you run three or four cohort cycles daily, you’re talking about the ability to impact 100 kids or more.” That's an additional 100 kids impacted solely by the welding program. The dropout prevention and recovery school focuses on more than just welding. It also encompasses other technical maintenance, such as equipment operation, robotics, diesel mechanics and industrial maintenance. Governor Mike DeWine will be in Salineville for the ribbon cutting of the Williams Collaboration Center on Aug. 23.
BLM Plan to Plug 20 Orphaned O&G Wells in Mercer County, PA - Marcellus Drilling News - The Bureau of Land Management (BLM) is seeking public input on four draft environmental assessments evaluating potential impacts from the proposed plugging of orphaned oil and gas wells on public lands in Pennsylvania and West Virginia. One of the assessments seeks public input on plans to cap twenty abandoned gas and oil wells along the river flowing into the Shenango River Lake in Mercer County.
31 New Shale Well Permits Issued for PA-OH-WV Jul 8 – 14 | Marcellus Drilling News - For the week of July 8 – 14, a total of 31 permits were issued to drill new shale wells in Marcellus/Utica. Pennsylvania had a nice increase with 25 new permits issued. A full 9 of PA’s permits went to Snyder Brothers for a single well in Armstrong County. Another 6 permits went to EQT in PA’s Greene and Washington counties. There were 5 new permits in Ohio, all of them going to Encino Energy for a single pad in Guernsey County. West Virginia had a single new permit going to EQT in Wetzel County. ARMSTRONG COUNTY | CHESAPEAKE ENERGY | COTERRA ENERGY (CABOT O&G) | ENCINO ENERGY | EQT CORP | GREENE COUNTY (PA) | GUERNSEY COUNTY | OLYMPUS/HUNTLEY & HUNTLEY | RANGE RESOURCES CORP | SNYDER BROTHERS | SULLIVAN COUNTY | SUSQUEHANNA COUNTY | WASHINGTON COUNTY | WESTMORELAND COUNTY | WETZEL COUNTY
Are AI Data Centers Sparking a Bullish Case for Natural Gas? -In a recent OilPrice article, I argued that new demand from AI Data centers would be bullish for the natural gas market. In this article, I will extend that discussion and explain why I believe there is a dramatic reset coming for gas-focused E&P stocks. Exactly when isn’t part of the discussion here, but I will lay out a compelling investment thesis for stocks exposed to this commodity.Seasonal temperatures have historically driven much of the pricing dynamic with gas. Everybody knows that when it got cold, gas prices went up as people heated their homes to stay warm. At the end of heating season, prices dropped as the thermostat switched to air conditioning with rising temperatures. King coal took over for the summer and fall. In recent years the LNG exports have created new gas demand, which was fortunate as the peaking of the shale revolution has brought new supplies of “associated gas” into the market. This is gas that, until recently was flared, if existing gathering and trunkline infrastructure wasn’t available. Flaring is bad on a lot of levels, and thousands of miles of midstream infrastructure have been built and are continuing to be built, ensuring this precious resource is utilized as efficiently as possible.Power generation has quietly begun to fill a gap left between coal plant retirements and renewable generation's inability to meet summer cooling demand. Last year, a record number of coal plants went offline, and gas demand rose by several percent to fill the gap. In fact, Bloomberg reported in an article recently that new demand from AI DataCenters has forced utilities to delay coal generating plant closures. Demand from AI Data centers is so new on the scene that it hasn’t factored in utility company demand forecasting to this point. That’s about to change as energy providers like Dominion Energy reassess their needs to meet this new source of demand, but the situation may be more complex than and energy-intensive than has previously been widely discussed. Jevon’s paradox, first applied to coal consumption in steam engines, also applies to data consumption. Brian Janous, founder of Cloverleaf Infrastructurecommented on this principle in a recentBloomberg article.“Jevons said in regard to the notion that efficiency increases in steam engines would result in the use of less coal. ‘No, that's not what's going to happen. We're going to use more coal because we're going to mechanize more things.’ And that's exactly what we do with data just because we've had Moore’s Law for years, and so chips has become incredibly more efficient than they were decades ago, but we didn't use less energy. We used much more energy because we could put chips in everything.”About a year ago, I felt that with cracks emerging in the renewable energy narrative, that gas would find new demand from new sources. It hasn’t happened with the rapidity I expected, as gas prices are still in the dumper, but when you dig into the details, the outcome appears inevitable. In that scenario, many of the gas-oriented energy equities we follow are drastically undervalued at present levels. A recent note from natural resources analyst firm Goerhring & Rosencwajg (G&R) probed this idea in some detail and cited work by Rob West of Thunder Said Energy. Essentially, AI power demand comes in two phases: Training and Inference. The Training part consumes massive amounts of data on the front end as AI models scrape the internet, absorbing data. West calculates that “training Chat-GPT-4 alone consumed 50 GWH of electricity, equivalent to the average annual consumption of 5,000 American households.”Then comes Inference as the models are queried, each query consuming a tiny amount of energy but multiplied by billions of queries for Chat-GPT-4 alone.“West estimates a ChatGPT “inference” requires ten times as much energy as a Google search --3.6 Wh compared to 0.3 Wh. Generative AI’s total energy consumption is a function of several related variables: the number of new models trained per year, the complexity of each model, the energy efficiency of new AI chipsets, and the total queries per trained model.”
Commonwealth LNG’s Approval Ordered Back to FERC for Review of Carbon Emissions - FERC has been ordered by a federal appeals court to review its analysis of the environmental impact of Commonwealth LNG, creating another potential delay for the Louisiana export project. A coalition of environmental groups has challenged the Federal Energy Regulatory Commission’s authorization of the 9.3 million metric tons/year (mmty) liquefied natural gas project on the grounds that the Commission did not determine whether its associated emissions would have significant impact on the environment. On Tuesday, the U.S. Court of Appeals for the District of Columbia Circuit agreed that FERC had not properly explained its decision, especially in comparison with other cases, and should revisit its assessment of greenhouse gas (GHG) emissions.
Appeals court sends Louisiana LNG terminal project back to regulators • Louisiana Illuminator - Federal regulators will have to reconsider its review of a proposed liquified natural gas terminal in southwest Louisiana based on an appellate court ruling Tuesday, but judges stopped short of pulling its approval. The U.S. Court of Appeals for the D.C. District determined the Federal Energy Regulatory Commission (FERC) did not adequately assess the cumulative and direct environmental and health impacts from the Commonwealth LNG near Cameron. Environmental groups have sued to block the project, which the commission approved in November 2022. Commonwealth’s plan calls for construction to begin on the 150-acre site on the Calcasieu Ship Channel in the first half of 2025 and LNG production to start by the end of 2028. In Tuesday’s ruling, Judge Brad Garcia wrote that FERC “inadequately explained its failure to determine the environmental significance of the project’s greenhouse gas emissions.” Garcia, an appointee of President Joe Biden, heard arguments in the case in February along with Judge Karen Henderson, who former President George H.W. Bush named to the appellate court. Plaintiffs in the lawsuits, which have been consolidated, include Healthy Gulf, the Sierra Club, the Center for Biological Diversity, the Louisiana Bucket Brigade and the Turtle Island Restoration Network. “This decision is a big win for communities facing the already very real and growing threats caused by expanded gas exports,” Sierra Club senior attorney Nathan Matthews said in a statement. “Commonwealth LNG would just be one of eight terminals either proposed or operating in Southwest Louisiana. FERC’s own modeling shows that air pollution in the area will exceed national standards.” Neither FERC nor Commonwealth had immediate comment on the appellate court ruling. “By using the best available technology, our facility is designed to operate well within all regulatory requirements, mitigate impact to local wildlife, preserve wetlands, and demonstrate industry best practices to minimize methane leaks and maintain air quality,” the Commonwealth LNG website reads.
Lake Charles LNG Requests Immediate Action on DOE Export Authorization - Energy Transfer LP is testing the regulatory waters after a major court decision on the Biden administration’s LNG pause, requesting that the U.S. Department of Energy (DOE) “expeditiously act” on its export license application for Lake Charles LNG. Chart showing commercially advanced NAM LNG projects affected by DOE pause. Earlier in the month, U.S. District Court Judge James Cain of the Western District of Louisiana issued a preliminary order, calling the administration’s decision to halt non-free trade agreement (FTA) permits while it reviewed the impacts on domestic prices unlawful. While DOE has yet to issue a response, Cain’s order directed the agency to restart the review of applications while it conducts studies (No. 2:24-CV-00406). Energy Transfer sent a letter to DOE staff, asking the agency to comply with the court’s order and arguing the company’s application for its liquefied natural gas facility in Louisiana is “best suited” for an immediate decision. Related Tags
What Impact Is Pause Having on LNG Projects in U.S. and Mexico? – Listen Now to NGI’s Hub & Flow -- Click here to listen to the latest episode of NGI’s Hub and Flow podcast in which NGI’s Christopher Lenton, senior editor for Mexico & Latin America, sits down with Poten & Partners LNG industry analyst Sergio Chapa to survey the current North American liquefied natural gas industry scene. They talk through the impacts of former Hurricane Beryl on Gulf Coast infrastructure. Chapa and Lenton also discuss the state of the Biden administration’s pause on U.S.-based LNG export projects and the implications for international competitors. Has the pause given impetus to other projects? How are Mexico LNG projects advancing in the wake of the regulatory back-and-forth? Believing that transparent markets empower businesses, economies and communities, NGI – which publishes daily, weekly and monthly natural gas indexes at pricing locations across North America – works to provide natural gas price transparency for the Americas. NGI’s Hub & Flow podcast is a part of that effort.
Could U.S. E&Ps Boost Activity Ahead of More LNG Exports? 2Q Results Likely to Hold Clues -- Domestic natural gas-weighted production continued to be curtailed during the second quarter to wait out better pricing, but as Gulf Coast LNG projects near completion, could Lower 48 activity increase? Second quarter results may tell the tale. Henry Hub Forward Fixed natural gas prices. Exploration and production (E&P) companies and their oilfield services (OFS) counterparts are gearing up to issue their financial and operational reports over the next few weeks. While the outlook for natural gas prices has been fuzzy, some liquefied natural gas export projects are nearing completion on the Gulf Coast – and in British Columbia. Could the additional gas needed to propel LNG exports overseas and to Mexico move the needle during the last half of this year?
Sempra, Bechtel agree on EPC contract for Port Arthur LNG Phase 2 project in Texas (U.S.) - Sempra Infrastructure, a subsidiary of Sempra, announced that Port Arthur LNG Phase 2 and Bechtel Energy have signed a fixed-price engineering, procurement and construction (EPC) contract for the Port Arthur LNG Phase 2 project under development in Port Arthur, Texas. "Building on the success of Port Arthur LNG Phase 1, which is currently under construction, the Phase 2 project is expected to further enhance the supply of secure, abundant and reliable U.S. natural gas to customers around the globe." As part of the EPC contract, Bechtel will perform the detailed engineering, procurement, construction, commissioning, startup, performance testing and operator training activities for the project. The scope of the agreement also includes the ability to conduct pre-final investment decision work to better assure project cost and schedule certainty. The proposed Port Arthur LNG Phase 2 project is competitively positioned and is under active marketing and development. The project received authorization from the Federal Energy Regulatory Commission in September 2023 and is expected to include two liquefaction trains capable of producing approximately 13 Mtpa of LNG, which would increase the total liquefaction capacity of the facility from approximately 13 Mtpa to up to 26 Mtpa. The Port Arthur LNG Phase 1 project is currently under construction and consists of trains 1 and 2, as well as two LNG storage tanks and associated facilities. Construction of the project continues to progress, and the expected commercial operation dates for train 1 and train 2 are 2027 and 2028, respectively. In June, Sempra Infrastructure and a subsidiary of Aramco signed a non-binding heads of agreement contemplating the purchase of 5 Mtpa of LNG and a 25% equity investment in the Port Arthur LNG Phase 2 project. In December 2022, Port Arthur LNG Phase 2 and INEOS also entered into a non-binding agreement for an offtake capacity of .2 Mtpa from the project. The development of the Port Arthur LNG Phase 2 project remains subject to a number of risks and uncertainties, including completing the required commercial agreements, securing and/or maintaining all necessary permits, obtaining financing, and reaching a final investment decision, among other factors.
ADCC Flowing Natural Gas to Cheniere’s Corpus Christi LNG on Texas Coast -- More natural gas is flowing to a key export terminal along the Texas coast following the in-service earlier this month of WhiteWater Midstream LLC’s Agua Dulce-Corpus Christi (ADCC) pipeline. Graph of Agua Dulce daily natgas prices vs Corpus Christi deliveries.. The 43-mile, 42-inch diameter intrastate ADCC pipeline began ramping up last week, delivering incremental volumes to Cheniere Energy Inc.’s Corpus Christi LNG facility. The pipeline is designed to transport 1.7 Bcf/d from Whistler Pipeline LLC’s Agua Dulce Waha header in South Texas. Whistler has the ability to transport up to 2.5 Bcf/d over 450 miles from the Waha header in the Permian Basin to Agua Dulce, providing access to LNG and Mexico export markets.
U.S. LNG natgas feedgas on track to fall to 12-wk low -- The amount of natural gas flowing to U.S. liquefied natural gas (LNG) export plants was on track to drop to a 12-wk low on Wednesday due to reductions at several plants, including Freeport LNG in Texas, according to data from financial firm LSEG. For years, LNG feedgas has been the fastest growing source of new U.S. gas demand and the shutdown of any export plant, especially Freeport, can sway gas prices around the world. On Monday, U.S. gas futures fell about 7% to a 10-wk low after it became clear that Freeport would not return to full service as soon as the market had previously expected. In 2023, the U.S. exported about 11% of the gas drillers pulled out of the ground as LNG, up from just 1% in 2016, the year Cheniere Energy started operating the first big LNG export plant at Sabine Pass in Louisiana. Gas flows to the seven big U.S. LNG export plants fell to 11.6 Bft3d so far in July due mostly to the shutdown of Freeport for Hurricane Beryl on July 7, down from 12.8 Bft3d in June and a monthly record high of 14.7 Bft3d in December 2023, according to LSEG data. On a daily basis, LNG feedgas was on track to drop to a 12-wk low of 10.7 Bft3d on Wednesday due to the ongoing reduction at Freeport and a new reduction over the past couple of days at Cheniere's Corpus Christi plant in Texas. The 2.1- Bft3d Freeport was on track to pull in about 0.5 Bft3d of gas on Wednesday, up from 0.4 Bft3d on Tuesday and near zero Bft3d from July 7–15. In the week before Freeport shut for Hurricane Beryl, the plant was pulling in about 1.7 Bft3d of feedgas. The 2.4- Bft3d Corpus, meanwhile, was on track to pull in about 1.6 Bft3d of gas on Wednesday, the same as Tuesday. That is down from an average of 2.4 Bft3d during the prior seven days (July 9–15), according to LSEG data. 1 Bft3 is enough gas to supply about 5 MM U.S. homes for a day.
Power, Feed Gas Nominations Slowly Rising at Freeport LNG — Feed gas nominations at Freeport LNG continued rising on Thursday along with power supply as the facility slowly ramps back up after it was shut down more than a week ago ahead of former Hurricane Beryl’s landfall. Bar graph showing Egypt's annual LNG imports. NGI data showed the facility’s feed gas nominations were at 473 MMcf on Thursday, or about 18% of the pipeline capacity feeding the facility. While that number could be revised lower in the next nominating cycle, it was well above the 4% nominated on Monday. Bloomberg also reported that power supply to the terminal was rising for a second consecutive day Thursday. Freeport was shut down on July 7 ahead of the storm. A plant spokesperson said Monday damages caused by Beryl were being repaired and one train would be restarted this week, followed by the other two sometime after that. Five liquefied natural gas tankers were floating offshore near the facility and one was scheduled to berth there on Friday, according to Kpler data.
Texas tanker bottleneck grows on slow Freeport LNG restart after Beryl 0 The number of liquefied natural gas (LNG) tankers waiting to load at Freeport LNG in Texas has increased since the U.S. second largest exporter of the supercooled gas halted processing ahead of Hurricane Beryl’s landfall last week, according to shipping data on Thursday. Beryl made landfall on July 8 near Matagorda, on the Texas coast, lashing the state with 80-mph (130-kph) winds that caused infrastructure damages and left more than 2 MM customers without electricity for days. Ports and energy companies in many coastal cities, including Freeport, suffered wind damage and slow restoration of power. Freeport LNG, which shut its three liquefaction trains on July 7 and reported wind damage after, has had a slow operational restart since. The LNG exporter said on Monday it planned to restart one processing train this week and the remaining two trains shortly after, but production would be reduced while it continued repairs. U.S. gas futures had dropped about 7% on Monday to a 10-week low after it became clear to the market that Freeport LNG would likely continue to operate at less than full capacity for several more days. On Thursday, feedgas to the facility was rising with it expected to use 500 MMft3, up from 400 MMft3 on Wednesday, according to LSEG data. The gas utilization increase is seen as an indicator of LNG production starting in the first train, which can use up to 700 MMft3d. However, vessel loading has not resumed. A total of six empty LNG tankers were anchored near the port, compared with a couple ships before the storm, with some of them accumulating more than 10 days of wait. Last-loaded vessels before Beryl's landfall departed Freeport on July 5, according to LSEG. As of Thursday, Freeport LNG had not distributed any instruction to bring tankers into its berths, even though there were some vessels in schedule, a source familiar with the company's operations said. The Port of Freeport last week reopened the navigation channel, but draft restrictions for vessels remain, the Brazos Pilots Association said. Long waits for vessels that have back-to-back contracts tend to lead to cargo cancellations. Freeport LNG has canceled at least 10 cargoes for loading through August, Bloomberg reported, citing traders familiar with the matter. Gas flows to the seven big U.S. LNG export plants have fallen to 11.6 Bft3d so far in July due mostly to the Freeport outage, down from 12.8 Bft3d in June and a monthly record high of 14.7 Bft3d in December 2023.
Global Natural Gas Market Unfazed by Ongoing Freeport Outage – Freeport LNG Development LP said Monday it would restart one liquefaction train this week after the plant was damaged during former Hurricane Beryl. Despite the plant's ongoing outage, global natural gas prices remained stable. Freeport was shut down July 7 ahead of the storm and has remained offline since then. “We are completing initial repairs on the damage sustained to our fin fan air coolers in the hurricane and anticipate restarting the first train this week,” said spokesperson Heather Browne. “We plan to restart the remaining two trains shortly thereafter.”
US natgas prices drop 7% to 10-week low on Texas Freeport LNG outage (Reuters) - U.S. natural gas futures fell about 7% to a 10-week low on Monday due to the slow return of the Freeport LNG export plant in Texas after shutting for Hurricane Beryl and on forecasts for less hot weather and lower demand over the next two weeks than previously expected. Freeport said it is repairing damage sustained in the hurricane. The company said it anticipated it would restart the first train this week and the remaining two trains shortly thereafter. Traders also said prices were depressed by rising output and the tremendous oversupply of gas still in storage. Analysts said there was currently about 18% more gas in storage than is normal for this time of year. Front-month gas futures for August delivery on the New York Mercantile Exchange fell 17.1 cents, or 7.3%, to settle at $2.158 per million British thermal units (mmBtu), their lowest close since May 3. Saturday and Sunday were the hottest days so far this year and Monday and Tuesday were forecast to be even hotter, according to meteorologists. That heat will likely force power generators to continue burning lots of gas to produce electricity to keep air conditioners humming. Power generators burned a record 54.1 billion cubic feet per day (bcfd) of gas on July 9, according to LSEG data. Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 102.3 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. Gas flows to the seven big U.S. LNG export plants fell to 11.8 bcfd so far in July after Freeport LNG in Texas shut ahead of Hurricane Beryl on July 7, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023.
US natgas prices edge up 1% on record power demand during heat wave (Reuters) -U.S. natural gas futures edged up about 1% on Tuesday from a 10-week low in the prior session after power demand hit a record high on Monday as homes and businesses cranked up their air conditioners to escape the hottest day so far this summer. That increase in gas prices came despite forecasts for less demand this week than previously projected due primarily to the slower than expected return to full power of Freeport LNG's export plant in Texas. Traders also noted that gas prices have been depressed for four of the past five weeks due to rising output and the persistent oversupply of gas still in storage versus normal for this time of year. Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange rose 3.0 cents, or 1.4%, to settle at $2.188 per million British thermal units (mmBtu). On Monday, the contract fell about 7% to close at its lowest level since May 3. Despite the small price increase, the front-month remained in technically oversold territory for a second day in a row and an eighth time in the past 10 trading days. In the spot market, high cooling demand during the heat wave boosted next-day power prices in New England EL-PK-NPMS-SNL and the Pennsylvania-New Jersey-Maryland region by over 150% to their highest levels since January. Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 102.2 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. Several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March. But higher prices in April, May and June prompted some drillers, including EQT and Chesapeake Energy, to return to the well pad. Meteorologists projected weather across the Lower 48 states would remain mostly hotter than normal through at least July 31. That heat will likely force power generators to continue burning lots of gas to produce electricity to keep air conditioners humming. Power generators burned a daily record of 54.1 bcfd of gas on July 9, according to LSEG data. LSEG forecast average gas demand in the Lower 48, including exports, will slide from 105.1 bcfd this week to 103.6 bcfd next week. The forecast for this week was lower than LSEG's outlook on Monday.
US natgas prices drop 7% to 10-week low on cooler weather forecasts, lower LNG feedgas - (Reuters) - U.S. natural gas futures fell about 7% to a 10-week low on Wednesday on forecasts for cooler weather over the next two weeks than previously expected and a drop in feedgas to liquefied natural gas (LNG) export plants due primarily to the shutdown of Freeport LNG in Texas for Hurricane Beryl. Energy traders noted prices were also weighed down by the persistent oversupply of gas still in storage versus normal for this time of year. Analysts said there was currently about 18% more gas in storage than is normal. Front-month gas futures for August delivery on the New York Mercantile Exchange fell 15.3 cents, or 7.0%, to settle at $2.035 per million British thermal units (mmBtu), their lowest close since May 2. In other news, the U.S. Energy Information Administration (EIA) revised peak hourly power demand on Monday down to 739,849 megawatts (MW), which would not break the prior all-time high of 742,600 MW set on July 20, 2022, and would only be the highest since usage peaked at 741,815 MW on July 27, 2023. Earlier in the week, EIA said U.S. power demand hit a preliminary record high on Monday. Financial firm LSEG said gas output in the Lower 48 U.S. states has risen to an average of 102.1 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. On a daily basis, however, output was on track to drop by 3.5 bcfd over the past three days to a preliminary five-week low of 99.5 bcfd on Wednesday. Preliminary data is often revised later in the day. Meteorologists projected weather across the Lower 48 states would remain mostly near normal through July 24 before turning hotter than normal through at least Aug. 1. But with less hot weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will slide from 105.5 bcfd this week to 103.5 bcfd next week. The forecast for this week was higher than LSEG's outlook on Tuesday. Gas flows to the seven big U.S. LNG export plants have fallen to 11.6 bcfd so far in July due mostly to the shutdown of Freeport LNG in Texas for Hurricane Beryl, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023. On a daily basis, LNG feedgas was on track to drop to a 12-week low of 10.7 bcfd on Wednesday due to the ongoing reduction at Freeport and a new reduction over the past couple of days at Cheniere Energy's Corpus Christi in Texas, according to LSEG data.
US natgas prices climb 4% on small storage build, hot weather forecasts (Reuters) - U.S. natural gas futures climbed about 4% on Thursday, a day after dropping to a 10-week low on a much smaller-than-expected storage build last week. Prices were also boosted by forecasts for hot weather to return in late July and early August, which should increase the amount of gas power generators burn to keep air conditioners humming. The U.S. Energy Information Administration (EIA) said utilities added just 10 billion cubic feet (bcf) of gas into inventories during the week ended July 12. Traders noted energy firms pulled gas out of Salt and Non-Salt storage facilities in the South Central region last week to feed power generator demand for the fuel to keep air conditioners humming. That 10-bcf build was well below the 27-bcf build analysts forecast in a Reuters poll and compares with an increase of 43 bcf in the same week last year and a five-year (2019-2023) average rise of 49 bcf for this time of year. Traders noted that storage builds have been smaller than usual in nine of the past 10 weeks because several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March. Despite the declining builds, gas stocks were still about 17% above normal for this time of year. Front-month gas futures for August delivery on the New York Mercantile Exchange rose 9.0 cents, or 4.4%, to settle at $2.125 per million British thermal units. On Wednesday, the front-month fell about 7% and closed at its lowest level since May 2 on forecasts for cooler weather over the next two weeks than previously expected and a drop in feedgas to liquefied natural gas (LNG) export plants due primarily to the shutdown of Freeport LNG in Texas for Hurricane Beryl. Freeport started pulling in small amounts of feedgas this week as it slowly returns to service. The price increase on Thursday pushed the front-month out of technically oversold territory for the first time in four days. Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 102.2 bcfd so far in July, up from an average of 100.1 bcfd in June and a 17-month low of 99.4 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 near normal through July 25 before turning hotter than normal through at least Aug. 2. With less hot weather expected in the coming week, LSEG forecast average gas demand in the Lower 48, including exports, will slide to 103.6 bcfd next week from 105.6 bcfd this week. Gas flows to the seven big U.S. LNG export plants fell to 11.6 bcfd so far in July due mostly to the Freeport outage, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023.
Strong oil and gas demand supporting Permian Basin’s production growth, says GlobalData --- The Permian Basin remains the largest oil-producing shale play in the US, with global demand and geopolitical shifts continuing to support growth and competitiveness in the region, according to research from Offshore Technology’s parent company, GlobalData. The region’s crude oil production averaged 5.6 million barrels per day (mmb/d) during the first quarter (Q1) of 2024, accruing benefits from a dense pipeline network and Gulf Coast infrastructure, revealed the report, titled ‘Permian Basin in the US, 2024‘.Ravindra Puranik, oil and gas analyst at GlobalData, said: “Europe’s strategic shift away from Russian energy exports has resulted in key changes to the global energy supplies. This is anticipated to benefit the US shale oil and gas drillers, as well as LNG [liquified natural gas] producers who are positioned to reap from these evolving supply chain dynamics.“The US shale oil production might also benefit from the Red Sea crisis that has added a risk premium to ship-based exports from the Middle East to Europe.”Throughout 2023, there was significant consolidation in the US oil and gas industry, with exploration companies spending as much as $234bn on mergers and acquisitions (M&A), the highest level in real dollar terms since 2012.According to the US Energy Information Administration’s (EIA) latest analysis, this uptick in deal-making marks a return to a trend of consolidation among oil companies in the US after transactions declined amid oil market volatility in 2020 and 2022.Referring to the M&A activity, Puranik added: “ExxonMobil’s acquisition of Pioneer Natural Resources was the biggest deal in the Permian Basin shale play in recent years. The deal worth $64.5bn has put ExxonMobil on the top of the pedestal, surpassing competitors in this play such as Occidental and Chevron.They added that continued “investment and strategic acquisitions in the Permian Basin will be essential to maintaining its leadership in the US shale industry, especially as global energy dynamics shift and demand for reliable oil and gas supplies remains strong.”
Broken pipe leaks oil into Turkey Creek in Kilgore -- The City of Kilgore announced on Sunday that an oil spill had taken place.A broken pipe from a local business caused oil to leak into Turkey Creek, city representatives said. The pipe has been repaired, and the creek is in the process of being cleaned.The city has informed TCEQ and the Texas Railroad Commission.
Crude Inventories Fall Again as Fuel Stocks Build -- Crude oil inventories in the United States fell sharply this week by 4.44 million barrels for the week ending July 12, according to The American Petroleum Institute (API). For the week prior, the API reported a 1.9 million barrel draw in crude inventories. This week marks the third week in a row of API-estimated inventory draws for crude oil, for a total loss of 15.5 million barrels. On Tuesday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 0.6 million barrels as of July 12. Inventories are now at 373.7 million barrels—the highest level since December 2022, but still well below the 656 million barrels in inventory in June 2020. Oil prices were trading substantially down ahead of the API data release on Tuesday. At 04:11 pm ET, Brent crude was trading down $1.04 (-1.23%) on the day at $83.81—down about $1 per barrel from this time last week. The U.S. benchmark WTI was also trading down on the day by $1.08 (-1.32%) at $80.83—down nearly $1 per barrel from this time last week. Gasoline inventories rose this week by a small amount, +365,000 barrels, after last week’s 3-million-barrel decrease. As of last week, gasoline inventories are 1% below the five-year average for this time of year, according to the latest EIA data. Distillate inventories rose this week by 4.92 million barrels, on top of last week’s 2.3-million-barrel increase. Distillates were about 8% below the five-year average for the week ending May July 5, the latest EIA data shows. Cushing inventories fell this week by 746,000 barrels, according to API data, after falling by 1.2 million barrels in the previous week.
Michigan environmental group responds to Line-5 pipeline enclosure appeal | WXPR - A Michigan environmental group is addressing an appeal challenging the state's decision to approve the enclosure of the Enbridge Line 5 pipeline.Built in 1953, this pipeline transports up to 540,000 barrels of petroleum daily through the Great Lakes. Enbridge aims to build a protective tunnel around a four mile segment at the Straits of Mackinac, which connects Lake Michigan and Lake Huron.Environmental groups and tribal leaders want the state to reverse Enbridge's permit, citing concerns about a potential catastrophic oil spill.The nonprofit group Oil & Water Don't Mix is dedicated to preventing oil spills and promoting clean energy - and they support the appeal.David Holtz, an international coordinator with the group, discussed the next steps."And the next big hurdle that the tunnel will have will be during the federal permitting process," said Holtz, "so we're going to be focusing on that in the coming days."Enbridge spokesperson Ryan Duffy said in an email statement that Line 5's safety is exclusively regulated by the Pipeline and Hazardous Materials Safety Administration.Enbridge maintains that it also conducts internal inspections via an MRI-like tool known as a "pig" that travels the line, recording data on the pipe's thickness and looking for cracks, dents or signs of corrosion.Holtz said his organization will continue its efforts to make the public and the federal government aware of what needs to be done regarding Line 5."The need for the Biden administration," said Holtz, "to take a stand in support of its own climate policy by rejecting the tunnel."Holtz added that the permitting process, known as the Environmental Impact Study, will be open for public comment - and is set for early next year.
Bad River tribe proposes plan to slow erosion near Enbridge's oil and gas pipeline - A northern Wisconsin tribe has proposed a solution to slow riverbank erosion near a Canadian energy firm’s oil and gas pipeline to reduce the threat of a potential spill on tribal lands and resources.In a July 5 letter to Enbridge, the Bad River Band of Lake Superior Chippewa proposed a plan to install interlocking and removable logs along the banks of the Bad River, or Mashkiiziibii, near the company’s Line 5 pipeline.The tribe’s proposal comes amid a contentious, years-long feud over Enbridge’s operation of Line 5 on tribal lands after the tribal council allowed pipeline easements to expire more than a decade ago. In 2019, Bad River sued the company to force it to shut down and remove Line 5 from a dozen miles of tribal lands.A federal judge has since found the company is trespassing on the tribe’s reservation, ordering Enbridge to pay $5.15 million and remove or reroute its pipeline by June 2026. That decision is currently being appealed. In the meantime, Bad River Tribal Chair Robert Blanchard said in a statement that he and tribal members live in fear “of forever losing our ability to fish, hunt, gather, and sustain our people in our homeland.”“Enbridge should recognize our treaty-protected rights and rights to our land by ending its trespass and leaving our watershed,” Blanchard continued. “And we remain hopeful that the appeals court will order Enbridge to end its trespass promptly. But so long as Enbridge refuses to stop trespassing we must continue to pursue ways to reduce the risk created by Line 5.”The company has previously submitted its own plans to address erosion that’s drawn the Bad River closer to its Line 5 pipeline, but the tribe has rejected the company’s proposals. Those included projects to install rocks or sandbags along the riverbank.Last year, Enbridge sought approval to use a helicopter to install hundreds of trees along roughly 400 feet of the river’s shoreline to avoid further erosion from runoff or flooding. The company’s project would have included installation of docks and dams, as well as use a boat or trucks to move equipment. The work also would have temporarily affected almost four acres of wetlands.Juli Kellner, an Enbridge spokesperson, said in a statement the company met with Bad River on Wednesday to discuss the plans with the tribe’s Mashkiiziibii Natural Resources Department and its consultants.“Over the weekend we received a few more details, and appreciate the Band’s invitation to learn more, and work cooperatively to control erosion at the meander. Currently, we are in the process of reviewing available information,” Kellner said.Wright Water Engineers, the tribe’s consultant and Denver-based engineering firm, developed the plan to install the interlocking logs referred to as “log jacks.” Contrary to Enbridge’s proposal, Blanchard said in its letter the project reduces environmental impacts and shortens installation time. It also requires 90 percent fewer helicopter flights. The log jacks would be put together off-site and transported by truck to a site near the eroded area. A helicopter would be used to then lower the log jacks onto the riverbank. The tribe said the process would avoid the use of heavy equipment during installation.
84,000 gallons of oil spilled in western North Dakota - — Around 84,000 gallons of crude oil spilled out from a storage tank into a secondary containment area near the storage site, according to a release from the North Dakota Department of Environmental Quality. Savage Services Corporation's spill occurred on Thursday, July 11, 6 miles southwest of Trenton, according to the release. Trenton is roughly 14 miles southwest of Williston. "Currently, there is no known impact to waters of the state," the release said. State employees from Environmental Quality are monitoring the investigation and remediation, the release said, as well as helping the "responsible party" clean up the spill. "Federal and state laws require operators to report the spillage of any materials that may pollute water, air or soil," the release said. Those looking for more information about North Dakota’s Unified Spill Reporting System notifications and the public access tool should visit spill.nd.gov .
Tribunal rejects TC Energy's $15-B claim for Keystone XL - Canada's TC Energy said on Tuesday a free trade arbitration tribunal had tossed out its claim to recover more than $15 B from the U.S. government for the cancellation of its Keystone XL project. The pipeline operator had submitted a formal request for arbitration under the North American Free Trade Agreement (NAFTA) in 2021. U.S. President Joe Biden had canceled the pipeline's permit a year after the NAFTA was terminated in July 2020. The pact was then replaced by the United States-Mexico-Canada Agreement (USMCA). TC Energy said the tribunal determined it did not have the authority to decide if the revocation of the Presidential Permit violated the obligations outlined under the NAFTA. "This ruling does not align with our expectations and views of the plain interpretation of the protections NAFTA and the USMCA were designed to offer," TC Energy said on Tuesday. Keystone XL would have carried 830,000 bpd of oil from Alberta in Canada to the U.S. Midwest, but was held up for more than a decade by environmental opposition and regulatory hurdles, before its permit was revoked. In 2022, Alberta, Canada's largest oil-producing province, had also initiated a trade challenge to recover its investment of about C$1.3 B ($949.95 MM) in the pipeline.
Asian Market Buys First Oil Cargoes From Canada’s Trans Mountain Pipeline -- China, Japan and South Korea are set to receive cargoes of oil imports from Canada's newly expanded Trans Mountain pipeline in September, becoming the first Asian countries to benefit from the facility since it became operational in May. The expanded TMX pipeline will triple the flow of crude from landlocked Alberta to Canada's Pacific coast to 890,000 barrels per day (bpd). TMX provides Asian refiners an opportunity to diversify their imports while also giving Canadian producers more access to U.S. West Coast and Asian markets. South Korean refiner GS Caltex will split a 550,000-barrel Cold Lake crude cargo with Japan's top refiner ENEOS, with GS Caltex taking 300,000 barrels while ENEOS will get 250,000 barrels. South Korea's top refiner SK Energy, a unit of SK Innovation, bought a 550,00-barrel cargo from Unipec while Hengyi Petrochemical, a refinery operator in Brunei, also purchased a similar volume of crude from PetroChina Co (OTCPK:PCCYF). All the cargoes were sold at discounts of between $5 and $6 a barrel to ICE Brent. Meanwhile, Chinese private refiner Rongsheng Petrochemical has purchased two Canadian Access Western Blend (AWB) crude cargoes from ConocoPhillips (NYSE:COP) and Vitol on top of another two AWB cargoes it bought via a tender. Cold Lake and AWB are heavy sour crude containing 3.5-4% sulfur and with API gravity of 21-22 degrees. TMX crude exports are expected to clock in at ~350,000-400,000 bpd, and will compete with heavy grades from Latin America and the Middle East. According to Muyu Xu, a senior crude oil analyst at analytics firm Kpler, Cold Lake crude is about $10 per barrel cheaper than Iraq's Basra Heavy for deliveries to China. "Canada's TMX crude attracts interest from Asian buyers who are keen to secure cheap supplies of heavy grades but do not have access to U.S.-sanctioned Venezuelan crude," XU told Reuters. "It will still take some time for refiners to experiment with and test TMX crude as the first few cargoes have just arrived," she added.
Wildfires Return and Threaten Canada’s Oil Sands Once Again --As many as 47 new wildfires were reported in Alberta over the past 24 hours, as extreme heat and dry weather are currently fanning about 150 wildfires in Canada’s oil-producing province.Fire bans and alerts of severe fire threats are in place for many areas close to oil sands producing sites.In May, a fire that was out of control came within 3 miles of Fort McMurray, the unofficial capital of Canada’s oil sands, leading to the evacuation of 6,600 residents.The wildfires returned in full force in July, disrupting some oil sands output and threatening to disrupt more.“When it’s mostly hot and dry, thunderstorms can lead to wildfires. Most new wildfires in July have been caused by lightning,” Alberta Wildfire said on Wednesday. Early on Thursday, an evacuation alert was issued for residents of the hamlet of Janvier. An evacuation order has not been issued. This is an alert for residents in the affected area to be ready to leave on short notice, the regional municipality of Wood Buffalo said.Oil sands producers Canadian Natural Resources, Imperial Oil, and MEG Energy are closely monitoring the current situation in Alberta as wildfires are currently raging within 6-7 miles of some of their production sites.Earlier this month, wildfires in northern Alberta continued to disrupt some oil sands operations as Cenovus Energy demobilized non-essential staff at its Sunrise project as a precaution amid heat and wildfire alerts in the area.In early July, Suncor shut down an oil sands project in Alberta amid wildfires. The Firebag project has a capacity of 215,000 barrels of crude daily. Suncor said that it would keep the site ready to return to full operation as soon as possible.Two months ago, authorities in Fort McMurray issued an “extreme” wildfire danger for the forest area that could threaten to shut in or disrupt some Canadian crude oil or natural gas output in the coming weeks. Indeed, the wildfires shut down some production at the time but it was quickly brought back online.
MEG Energy Responds to Regional Wildfires with Evacuation of Non-Essential Personnel at Christina Lake Regional Project - MEG Energy Corp.reports that the Corporation has proactively initiated a controlled evacuation of non-essential personnel from MEG's Christina Lake Regional Project (CLRP) as a result of nearby wildfires. "Our first operating priority is to care for ourselves and all others," said Darlene Gates, President and CEO. "Out of an abundance of caution, we are taking precautions to ensure the safe and orderly withdrawal of all non-essential personnel. Our focus is to minimize and mitigate any potential impact on our people and our operations. At this time, the wildfires do not pose an imminent threat to CLRP and production continues as normal. We are working with relevant authorities and continue to monitor the situation." As information becomes available, news releases will be issued and we will post the latest updates on www.megenergy.com. Any further inquires should be directed to media@megenergy.comand a MEG representative will assist you.
Mexico’s First-Ever LNG Cargo Poised to Ship from Altamira — LNG tanker Energos Princess has pulled up to New Fortress Energy Inc.’s floating storage unit at Altamira, Mexico, according to ship-tracking data from Kpler. The vessel has a capacity of 160,000 cubic meters over four tanks. The ship had previously signaled it could head to Boston after loading, according to Kpler data. U.S. Customs and Border Protection ruled earlier this year that transportation of LNG produced offshore Altamira by non-U.S. qualified vessels would not violate the Jones Act.
Bolivia announces discovery of natural gas mega field (Radio Havana Cuba)-- Bolivia’s president has announced plans to exploit a vast natural gas reserve north of Bolivia’s administrative capital, La Paz. President Luis "Lucho" Arce said Monday the discovery of 1.7 trillion cubic feet of gas would once again make Bolivia a major exporter of fossil fuels. The Bolivian president noted: "This will mark the beginning of a new chapter for the northern sub-Andean region. It offers the hope of maintaining our country as an important gas exporter, driving a second era of hydrocarbon production and positioning La Paz as a department that is now a hydrocarbon producer.” Bolivia is already South America’s largest exporter of natural gas, although its shipments are dwarfed by the world leader, the United States.
IEA Forecasts Lagging LNG Demand, Further Global Natural Gas Price Slides Through 2024 -Worldwide gains in natural gas demand are expected to be marginal for the rest of the year, pushing down LNG spot prices and global gas benchmarks through the later half of 2024, according to the International Energy Agency (IEA). NGI's Global Futures Settles through 2027 chart and graph Expand In the IEA’s latest gas market report, researchers noted that the liquefied natural gas market would likely be capped for the rest of the year, as global export capacity is expected to expand a comparatively small 3%, or about 530 Bcf. Meanwhile, on the demand side, falling European consumption is expected to offset growth rates in Africa, the Middle East and North America. Overall, global gas demand growth could fall to a rate below 2% in the second half of the year.
Questions Abound for Europe’s Natural Gas Demand Outlook as LNG Imports, Prices Trend Lower As national elections roll on and a new European Union (EU) presidency grasps the reins, industrial natural gas users are pushing for more supplies of the fuel and energy policies in the face of declining LNG imports. None Expand The EU has imported less liquefied natural gas from the globe despite downward pressure on futures prices. Natural gas imports into Europe dropped almost 12% in the first quarter of 2024 compared to the same period last year, according to the latest Eurostat data. LNG volumes alone dropped 11.4% compared with 1Q2023.
Prices for liquefied natural gas continue to rise due to the heat - The severe heat wave this summer is leading to a noticeable increase in prices for liquefied natural gas (LNG) in Asian countries. In mid-June, it reached $12.6 per 1 million BTU (British Thermal Unit, British thermal unit) on the spot market, Azernews reports. This is about 1.5 times more than in early March and the highest level since December 2023. In early July, the price in Asian markets fluctuated at about the same level, just below $ 12.5 per 1 million BTU. In the European Union, Nikkei notes, LNG prices were also the highest since December 2023. "The main factor in their growth," the newspaper notes, "is the intense heat. In China, the world's largest LNG buyer, temperatures rose this spring to the highest levels since 1961. In Japan, which ranks second in the world in LNG purchases, temperatures this summer will also be noticeably above average, the Nikkei warns. This leads to an increase in demand for LNG, as the heat requires large amounts of electricity for air conditioning and refrigeration units. According to the International Energy Agency, in 2024, the consumption of liquefied natural gas in the countries of the Asia-Pacific region will increase by 12% compared to the level of 2020 and will amount to 937 billion cubic meters, which is about 20% of global consumption. The growing demand for LNG in Asia is pulling up its prices on a global scale, the newspaper states.
Asian spot LNG prices remain above $12 for eighth week running Asian spot liquefied natural gas (LNG) prices fell slightly this week, tracking European gas prices, amid muted Chinese demand but they remained above $12.00 for the eighth week running. The average LNG price for August delivery into north-east Asia was at $12.10 per million British thermal units (mmBtu), industry sources estimated, down from $12.20/mmBtu the previous week, industry sources estimated. Prices for September delivery were estimated at $11.80/mmBtu. "Increased hydro(power) availability in China is pressuring demand, while economic indicators like inflation and producer prices are also not supportive of enhanced growth for the second half of the year," said Klaas Dozeman, market analyst at Brainchild Commodity Intelligence. Dozeman said that the newest outlook for the La Nina weather pattern, which is characterised by cold temperatures in the Pacific Ocean during July-September, has weakened for the third consecutive month. "A weaker La Nina typically decreases the need for winter restocking and decreases the risk of high gas demand in the U.S. and Asia, though major risk remains as any late summer heat in Asia might increase this need for LNG," he added. In general, the Asia region remains balanced with rising temperatures in north-east Asia, and continuing monsoons in south and south-east Asia lowering the need for gas-fired power generation, said Charles Costerousse, senior LNG analyst at Kpler. In Japan, high temperatures have added some upward pressure, with extra power demand and additional thermal power plants drawn into action. LNG stocks in terminal tanks have dropped as a result, said Alex Froley, senior LNG analyst at ICIS. In Europe, underground stocks remain seasonally strong and strong renewables generation compared to last year has suppressed gas demand, while strong Norwegian supply has suppressed spot LNG buying, said Martin Senior, deputy head of LNG pricing at Argus. S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in August on an ex-ship (DES) basis at $9.824/mmBtu on July 11, a $0.85/mmBtu discount to the August gas price at the Dutch TTF hub. Argus assessed the August delivery price at $11.525/mmBtu, while Spark Commodities assessed it at $9.755/mmBtu. In the United States, the market is closely monitoring the restart of U.S. Freeport LNG production, which has protectively shut down operations due to Hurricane Beryl. U.S. LNG export company Freeport's plant in Texas started pulling in small amounts of natural gas on Thursday, according to LSEG data. "Traders will have to factor in the potential for further storms later in the season which runs until November. One past example of difficulties was after Hurricane Laura at the end of August 2020 that led the Cameron LNG plant to shut for large parts of September and October," ICIS' Froley said. Following nine weeks of significant freight rate increases, the Atlantic rates decreased to $88,250/day on Friday. Meanwhile, the Pacific rates rose to $56,750/day, its highest level since February, said Spark Commodities analyst Qasim Afghan.
Consumption of natural gas rises 7.1% YoY in June - The Economic Times - Consumption of refined products increased 2.6% in June to 20 million metric tonnes (MMT). For the April-June period, the growth was 3.4%, led by 11.4% increase in aviation turbine fuel (ATF), 7.1% in petrol, 1.6% in diesel and 5% in liquefied petroleum gas (LPG).Domestic natural gas consumption increased 7.1% year-on-year in June, aided by an 11.3% surge in imports. India imported 2,648 million metric standard cubic metres (MMSCM) of liquefied natural gas (LNG) in June, according to the petroleum and natural gas ministry data. Total domestic gas consumption was 5,594 MMSCM, also aided by a 2.9% expansion in domestic gas production to 2,993 MMSCM.For the April-June quarter, the increase in consumption was 3.8% year-on-year. Domestic production went up 5.7% and imports only 0.6%. LNG prices in the spot market have risen about 50% in four months. Japan Korea Marker (JKM), the Asian spot benchmark for LNG, averaged $12.6 per MMBtu in June, a little higher than $12.2 a year ago.The onset of the monsoon has brought down electricity demand in the country, affecting imports of LNG for power generation.
Global LNG trade witnesses solid growth in 2023, says report - The Liquefied natural gas (LNG) trade increased 3.1% globally in 2023 to average 52.9 billion cubic feet per day (Bcf/d), an increase of 1.6 Bcf/d from 2022, according to a report from the International Group of Liquefied Natural Gas Importers (GIIGNL). Expanded export and import capacity and increasing natural gas demand drove the growth in global LNG trade last year. Published by the US Energy Information Administration (EIA), the report says LNG export capacity expanded primarily in the United States, Mozambique, Russia, Indonesia, Norway, and Oman. In the US, 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 Floating LNG 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 US became the world’s largest LNG exporter, with exports increasing by 12% compared with 2022. Exports from the three largest global LNG exporters—the US, 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.
Oil Leak Causes Another Spill in Matanzas Bay -- A leak in the 920-millimeter High Vanadium Fuel Oil line in the industrial zone of Matanzas has resulted in an oil spill into the sea, reported the state-run Periódico Girón.The spill, detected at 5:15 PM on Friday, July 12, was estimated to be between 30 and 32 cubic meters of fuel, with 6 to 8 cubic meters reaching the bay. The incident occurred when a failure in the pipeline caused the containment basin to overflow, detailed the report on Facebook.The Civil Defense in the province, along with specialists from the Fuel Marketing Company andCITMA, inspected the shoreline near the spill area and the beaches inside the bay on Saturday morning to assess the situation. However, they stated that no incrustations or oil stains have been detected.Among the measures taken, approximately 24 cubic meters of oil were removed from the containment basin. Additionally, efforts are underway to restore the basin area and the coastal margins near the pier, using rocky material to facilitate the extraction of embedded oil. According to specialists, the process is expected to conclude today, weather permitting. The regime added that an operation is being prepared to apply another cleaning technique previously used in past spills in the province, once the manual extraction is completed. A sediment monitoring will also be conducted after the cleanup operations to identify any potential alterations in the bay.In April, the authorities in Matanzas were investigating a toxic substance spill in the Bay of Cárdenas, with possible environmental implications for the area. The official press reported that it involved "ballast residue from a disused tank located along the Cárdenas coastline."In 2019, another significant spill involving 268,000 liters of fuel oil was reported in the Calimetemunicipality of Matanzas, near the Jesús Rabà sugar mill, following a failure in a fuel tank supplying the distillery next to the sugar processing center. In 2018, another oil spill was reported in Matanzas Bay caused by a ship unloading oil at Pier 1 of the Supertanker Terminal in the industrial zone of Matanzas.The spill was caused by a failure in the 920-millimeter High Vanadium Fuel Oil line, which led to the overflow of the containment basin.Authorities have removed approximately 24 cubic meters of oil from the containment basin and are working to restore the area using rocky material. They are also preparing to apply another cleaning technique and will monitor sediments after the cleanup.
Spain's Valencia shuts three beaches hit by oil spill - The city council of Valencia, Spain, on Tuesday closed three beaches on the Mediterranean coast after oil or fuel from a spill washed up on a 2-km (1.2-mile) line of sand. The cause of the spill was not immediately clear. "The red flag was raised on the beach of Saler, Arbre del Gos y Garrofera because of the spill," city hall spokesperson Juan Carlos Caballero told reporters. Authorities in Valencia, Spain's third-largest city, have sent a drone and a helicopter to find the origin and nature of the spill and gauge its severity. Special crews were sent to clean up the popular beaches just south of the city on a narrow strip of land between the Mediterranean and a protected wetland called L'Albufera. The extent of the spill appeared limited to that area, Caballero said. In addition to an industrial port and several heavy-industry plants, Valencia also has popular beach resorts.
Egypt launches major tender to import 740,000 tons of petroleum products -Egypt has launched an international tender to import approximately 740,000 tons of petroleum products for delivery in August, three sources familiar with the matter told Asharq Business.This move aims to address the country’s growing energy demands and ensure a stable supply of fuel during peak consumption periods.The tender includes 400,000 tons of diesel, 170,000 tons of gasoline, and 170,000 tons of butane.Egypt's annual consumption stands at about 12 million tons of diesel and 6.7 million tons of gasoline. One of the sources added thar prices of imported gasoline increased by 90% in the first five months of the year amid the increasing demand and consumption in summer.
Efforts intensify to prevent oil spill after cargo ship grounding - According to Reuters, efforts are underway at full throttle to prevent a potential environmental disaster along South Africa’s western coastline following the grounding of the Panama-flagged vessel “Ultra Galaxy.” The cargo ship ran aground near Doring Bay, approximately 300 km north of Cape Town, late Tuesday after listing severely. The vessel was abandoned by its 18-member Filipino crew while still at sea, raising concerns about the risk of an oil spill. According to Tebogo Ramatjie, spokesperson for the South African Maritime Safety Authority (SAMSA), salvage operations are proceeding swiftly to mitigate pollution risks and evaluate the condition of the cargo aboard the stranded vessel. Current efforts are focused on preventing potential fuel and oil leaks, as well as recovering the full cargo of fertilizer bags destined for Dar es Salaam, Tanzania. Ramatjie noted that despite rough sea conditions caused by recent severe weather fronts affecting South African ports, salvage operations remain unhindered for now. Earlier this week, Transnet, South Africa’s logistics firm, suspended operations at certain ports due to strong winds and heavy seas impacting parts of the country.
Oil import bill up 11% in June on reduced Russian discounts - Economy News India’s crude import bill increased 10.9% in June to $11.1 billion even as the imports volume declined by 5.6%, data from the Petroleum Planning and Analysis Cell showed. The increase in import bill can be attributed to the lowering of discounts offered by Russia on its crude oil. The country imported 18.5 million tonnes of crude oil in June compared with 19.6 million tonne in the corresponding period of last fiscal. Russia has become the top supplier of crude oil to Indian refiners post its invasion of Ukraine. The country imported 2.13 million barrels of crude oil per day from Russia last month, up 7.2% from the previous month, according to the data provided by Kpler. This was the highest since May 2023 when imports from Russia stood at 2.15 million barrels per day. During the first quarter of the current fiscal, India’s crude oil imports rose by 3% to 62.0 million tonne valued at $37.5 billion, up from $31.5 billion in the year ago period, as per PPAC data. “The rise in crude oil import bill reflects higher crude oil prices as well as lower discount on imports from Russia,” IDFC First Bank said in a note. During Apr-May, the imputed cost of crude oil from Russia has risen to $84 per barrel, which is similar to the other two key suppliers of crude oil – Iraq ($83/barrel) and Saudi Arabia ($90/barrel), according to the bank. “For the same period in FY24, the discount on Russian crude oil was $12/barrel (on an average vs Iraq and Saudi). As a result, the share of crude oil imports from Russia has reduced to 35% in FYTD25 (Apr-May) in volume terms against 38% in the same period in FY24.” The country’s dependency on import of crude oil during the first quarter of the current fiscal rose to 88.8%, up from 88.3% in the Apr-Jun quarter of FY24 as the domestic production remained stagnant. Upstream companies produced 7.3 million tonnes of crude oil during April to June, unchanged from the same quarter last fiscal. In June too, production remained muted at 2.4 million tonne from last year. Despite the government’s efforts to boost production and reduce dependency on imports, the production has remained stagnant over the last 10 years. So far, the country’s upstream sector companies have explored only 10% of the sedimentary basin. The government is now aiming to increase the explored area to 16% by the end of 2024 after the end of upcoming rounds of bids under Open Acreage Licensing Program. The government also intends to increase the country’s exploration acreage to 1 million square kilometers by 2030. The country’s consumption of petroleum products including gasoline, diesel, and jet fuel among others increased to 60.9 million tonnes during the first three months of FY25 from 58.9 million tonnes in the same period last year.
Nigeria to become net exporter of petroleum products by December, says NNPC - The Nigerian National Petroleum Company (NNPC) Limited says Nigeria will be a net exporter of petroleum products by December. Mele Kyari, group chief executive officer (GCEO), said this is based on the emerging indicators in the energy and gas sector. He spoke on Monday at the national assembly when economic stakeholders appeared before the senate committee on finance led by Sani Musa, a lawmaker. The indicators, he said, are the Port Harcourt refinery which “would start production next month”, followed by the Warri and Kaduna refineries by December this year. Kyari said there are several comments in the public space about refining and domestic production, including production that would originate from the commissioned Dangote refinery. “Yes, this country, as we have said, will be a net exporter of petroleum products by the end of this year,” he said. “We’re very optimistic that by December, this country will be a net exporter. That means a combination of production coming from us, and also from Dangote refinery and other smaller producing companies that we know are in line to do this. “So I can confirm to you, Mr. Chairman, that by the end of the year, this country will be a net exporter of petroleum products. “Specific to NNPC refineries, we have spoken to a number of your committees, that it is impossible to have the Kaduna refinery come to operation before December, it will get to December, both Warri and Kaduna; but that of Portharcourt will commence production early August this year.” On his part, Muhammad Sani Abdullahi, deputy governor (economic policy), representing Olayemi Cardoso, Central Bank of Nigeria (CBN) governor, said the triple challenges of rising inflation, foreign exchange (FX) rate fluctuations, and food inflation, would be a thing of the past soon, as indicators to that effect are already emerging.
Saudi Arabia’s crude exports up 2.51 % to 6.12m bpd: JODI data | Arab News - Saudi Arabia’s crude exports rose to 6.12 million barrels per day in May – up 2.51 percent compared to the previous month, data from the Joint Organizations Data Initiative revealed. Data also indicated that the Kingdom’s crude production increased to 8.99 million bpd, reflecting a monthly rise of 0.08 percent. Refinery crude output, representing the processed volume of crude oil yielding gasoline, diesel, jet fuel, and heating oil, surged to an almost six-year high. It increased by 17 percent compared to the previous month, reaching 3.026 million bpd, according to JODI data. This also marked a 16 percent increase from the 2.61 million bpd recorded during the same month in 2023. Exports for refinery oil products reached 1.22 million bpd, a 13 percent decline compared to the previous month. The data revealed Saudi demand for petroleum products rose by 75,000 bpd to 2.355 million bpd. As one of the world’s leading oil producers, Saudi Arabia plays a crucial role in supplying these refined products to meet global energy demands. OPEC and its allies, known as OPEC+, agreed in June to extend most of its substantial oil output cuts into 2024, with plans to gradually phase them out in 2025. This decision aims to support the market amid sluggish global demand growth, high interest rates, and increasing US production. OPEC+ has implemented several deep output cuts since late 2022. The countries participating in the second round of voluntary cuts included Algeria, Gabon, and Kazakhstan, as well Kuwait, Oman, and Russia. Saudi Arabia, the UAE, and Iraq also took part. When it came to the third round, all countries participated apart from Gabon. OPEC+ also delayed the deadline for an independent assessment of its members’ production capacities from June 2024 to the end of November 2025. These figures will guide the reference production levels for 2026. Saudi Arabia’s direct burn of crude oil, involving the utilization of oil without substantial refining processes, experienced a decrease of 2,000 bpd in May, representing a 0.5 percent decline compared to the preceding month. The total direct burn for the month amounted to 398,000 bpd. Compared to May last year, direct crude usage decreased by 80,000 bpd, a 17 percent decline. The Ministry of Energy aims to enhance the contributions of natural gas and renewable sources as part of the Kingdom’s goal to achieve an optimal, highly efficient, and cost-effective energy mix. This involves replacing liquid fuel with natural gas and integrating renewables to constitute approximately 50 percent of the electricity production energy mix by 2030.
Oil holds ground amid political uncertainty in US, Mideast --Oil held its ground on Monday as downward pressure from a stronger U.S. dollar and concern about demand in top importer China offset support from political uncertainty in the United States and the Middle East. The dollar firmed as investors wagered that the attack on U.S. presidential candidate Donald Trump at the weekend has made him more likely to win the election in November. A stronger U.S. currency tends to weigh on demand for dollar-priced oil. Brent crude futures was up 1 cent at $85.04 a barrel by 0825 GMT. U.S. West Texas Intermediate crude gained 9 cents, or 0.1%, to $82.30. "Markets ... will probably become a little more defensive" in reaction to the Trump assassination attempt," said John Evans at oil broker PVM. "For oil prices, there are no untoward movements," he said, adding that Monday's Chinese economic growth data was disappointing. Crude fell last week after four weeks of gains as hopes of strong U.S. summer demand were countered by concern over demand in China. Chinese data on Monday added to that concern. The world's second-largest economy grew by 4.7% in the April to June quarter, official figures showed, the slowest growth since the first quarter of 2023. On Friday separate figures showed China's crude oil imports fell 2.3% in the first half of this year. However, the volatile situation in the Middle East continues to provide a geopolitical premium for oil, though ample spare capacity held by Saudi Arabia and other members of OPEC has limited price support, analysts say. The oil market is also broadly underpinned by supply cuts from the broader OPEC+ group of producers. Iraq's oil ministry said at the weekend that it will compensate for overproduction since the beginning of 2024. "While fundamentals are still supportive, there are growing demand concerns, largely emanating from China,"
Oil Prices Muted After Shooting at Trump Rally The oil market and the U.S. stock futures were calm early on Monday morning after the U.S. was rattled by the assassination attempt on former president Donald Trump during a rally in Pennsylvania this weekend.Investigation showed that the shooter acted alone – a development that prevented a pronounced negative effect on U.S. markets. S&P 500 and NASDAQ futures were rising in pre-market trading on Monday, pointing to higher opening, as markets do not appear rattled by the shooting at Trump’s rally. As of 7:50 EDT on Monday, the oil markets were calm and almost flat on the day, pressured slightly down by a strong U.S. dollar, which tends to drag oil prices down because it makes oil more expensive for holders of other currencies. The U.S. benchmark, WTI Crude, traded at $82.07, down by 0.15%. The international benchmark, Brent Crude, had also barely budged and traded at $84.92, down by 0.16% on the day. “USD strength following the attempted assassination of former president Trump over the weekend is putting pressure on oil prices in early morning trading today,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a note on Monday.During the shooting in Pennsylvania, Trump was not seriously injured and traveled on Sunday to Milwaukee. There he will formally receive later this week the nomination of the Republican National Convention as the Republican presidential candidate. President Joe Biden has ordered an investigation into the shooting, in which one person in the crowd was killed and two others were left wounded before U.S. Secret Service agents shot and killed the 20-year-old shooter.The finding that the shooter acted alone may have limited a strong negative reaction in early trading on Monday, Quincy Krosby, chief global strategist for LPL Financial, told The Wall Street Journal. Meanwhile, fundamentals in oil remain supportive, but resurfacing concerns about a slowdown in Chinese oil demand growth are weighing down on prices. China’s imports of crude oil slumped by 11% in June from a record-high in the same month of 2023, amid tepid fuel demand and lower run rates at independent refiners. In its monthly report last week, the International Energy Agency (IEA) said that underwhelming Chinese consumption is slowing down growth in global oil demand. “Oil consumption in China, long the engine of global oil demand growth, contracted in both April and May, and is now assessed marginally below year earlier levels in 2Q24,” the Paris-based agency said, adding that Chinese demand for industrial fuels and petrochemical feedstocks was particularly weak.
Oil prices post back-to-back losses after weak China data -- Oil futures declined on Monday to tally back-to-back session losses as downbeat Chinese economic data underlined concerns about crude demand. Comments from Federal Reserve Chair Jerome Powell failed to provide any support for oil, as Powell said he would not provide a signal on the possible timing of the first cut to the central bank's benchmark interest rate. West Texas Intermediate crude CL00 for August delivery CL.1 CLQ24 fell 30 cents, or 0.4%, to settle at $81.91 a barrel on the New York Mercantile Exchange after losing 0.5% in Friday's session.September Brent crude BRN00 BRNU24, the global benchmark, declined by 18 cents, or 0.2%, to $84.85 a barrel on ICE Futures Europe. August gasoline RBQ24 shed 0.9% to $2.49 a gallon, while August heating oil HOQ24 added 0.2% to $2.51 a gallon.Natural gas for August delivery NGQ24 settled at $2.16 per million British thermal units, down 7.3%. Oil prices ended lower Monday as the market digested "soft economic factors in China, as well as the reaction of the wider markets to the attempted assassination of former U.S. President Donald Trump," the Kansas City energy team at StoneX, led by Alex Hodes, wrote in its Monday newsletter. "China's growth rate is directly related to global economic activity and energy demand," they said. China's economy expanded at a 4.7% annualized pace in the second quarter, the country's statistical agency said Monday, slowing significantly from the 5.3% pace seen in the first quarter. "Given that China is expected to make up the majority of oil demand growth this year, it is not surprising signs of weakness in Chinese demand are a concern," said Warren Patterson and Ewa Manthey, commodity strategists at ING, in a note. Still, the overall tone in financial markets was positive Monday, even as oil prices declined after the attempted assassination of Trump. Investors reacted to rising expectations he will win the presidential election in November accompanied by a potential Republican congressional sweep. "Trump's administration has historically prioritized energy independence and economic growth over environmental regulations," said Nigel Green, chief executive officer and founder of deVere Group, in emailed commentary. 'Trump's administration has historically prioritized energy independence and economic growth over environmental regulations.'Nigel Green, deVere Group ?"His past actions, such as rolling back Obama-era climate policies and exiting the Paris Agreement, reflect a preference for less stringent environmental oversight," he said. "Should Trump win the presidency again, a similar approach is expected, which would benefit the energy sector, particularly fossil fuels." The dollar was seen strengthening in early trade on expectations the incident would strengthen Trump's election prospects, analysts said, though the ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, gave up most of its early Monday gains. A stronger dollar can be a negative for commodities priced in the unit, making them more expensive to users of other currencies. Meanwhile, Colin Cieszynski, chief market strategist at SIA Wealth Management, told MarketWatch that oil may have recently been getting support from traders hoping that the Fed will cut interest rates this summer and "keep [oil] demand going." In remarks in Washington on Monday, however, Powell said that regarding the timing of a potential first interest-rate cut, he was "not going to be sending any signals, one way or the other, on any particular meeting." In other energy news, prices for natural gas settled with a loss of more than 7%. Bearishness "continues to be the theme of late," wrote Brian Steinkamp, commodity analyst at Schneider Electric, in a daily note. The latest forecasts from the National Oceanic and Atmospheric Administration continue to anticipate that by the middle of the week, temperatures are likely be below normal across much of the eastern U.S. over the coming two weeks, he said. That would help dull cooling demand for natural gas.
Oil prices fall on lingering Chinese demand concerns – CNA -- Oil prices slipped on Tuesday on worries about a slowing Chinese economy crimping demand, though a growing consensus that the U.S. Federal Reserve will begin cutting its key interest rate as soon as September limited declines. Brent futures fell 21 cents, or 0.25 per cent, to $84.64 a barrel by 0408 GMT, while U.S. West Texas Intermediate (WTI) crude dropped 25 cents, or 0.31 per cent, to $81.66. IG market strategist Yeap Jun Rong said in an email the weaker run in Chinese economic data "cast some doubts on whether market participants are being overly optimistic around Chinese oil demand outlook". The world's second-largest economy grew 4.7 per cent in April-June, official data showed, its slowest since the first quarter of 2023 and missing a 5.1 per cent forecast in a Reuters poll. It also slowed from the previous quarter's 5.3 per cent expansion, hamstrung by a protracted property downturn and job insecurity. "Its 2Q GDP and retail sales figures had surprised on the downside by a significant margin, while anticipation for stronger stimulus measures at the Third Plenum may face the risks of disappointment," Yeap added, referring to a key economic leadership meeting in Beijing this week. In the U.S., Fed Chair Jerome Powell said on Monday the three U.S. inflation readings over the second quarter of this year "add somewhat to confidence" that the pace of price increases is returning to the central bank's target in a sustainable fashion, remarks market participants interpreted as indicating a turn to interest rate cuts may not be far off. Lower interest rates decrease the cost of borrowing, which can boost economic activity and oil demand. Key U.S. economic data has started to show signs of softness, which could quicken the Fed's decision on monetary policy easing, with cuts likely in September and December, according to CME FedWatch Tool, said OANDA senior market analyst Kelvin Wong in a client note. On the supply side, Houthi fighters in Yemen - responding to Israel's bombardment of Gaza - targeted three vessels, including an oil tanker, in the Red and Mediterranean seas with ballistic missiles, drones and booby-trapped boats, they said on Monday. While crisis in the Middle East has not impacted supply, attacks on ships in the Red Sea has forced vessels to take longer routes, meaning oil remains on the water for longer.
Oil Falls Most in Three Weeks as Dollar Strengthens - Oil fell the most in more than three weeks as traders eyed a stronger dollar and signs of weaker demand, which have triggered algorithmic selling. West Texas Intermediate dropped 1.4% to settle below $81 a barrel on Tuesday. The dollar strengthened for a second day, making commodities priced into the currency more expensive. WTI futures have been testing their 100-day moving average, which has served as a support level for a month. Trend-following algorithms have been poised for selling since the beginning of the week, with the window for large-scale liquidations remaining open, Daniel Ghali, a commodity strategist at TD Securities, wrote in a note to clients. “With our gauge of global commodity demand trending notably lower, we expect downside pressures to continue to build without an additional boost to supply risk,” wrote Ghali. In another sign of short-term cooling, key timespreads have softened in recent days. Premiums of gasoline over crude fell to the lowest in almost a month. Though still higher for the year, oil has largely swung between $75 and $95 as OPEC+ supply cuts vie with a cautious outlook for Chinese consumption. WTI for August delivery fell $1.15 to settle at $80.76 a barrel in New York. Brent for September settlement fell $1.12 to settle at $83.73 a barrel.
Chinese Demand Concerns Weigh on Oil Prices -- Oil prices continued to be weighed down in Asian trade on Wednesday by growing concerns about China’s economic growth and oil demand which were offsetting an estimated drop in U.S. crude oil inventories. In Asian trade, both benchmarks were dropping by around 0.2%, with the U.S. WTI Crude benchmark clawing back to the $80 per barrel handle after falling to $79.50 earlier on Wednesday.The international benchmark, Brent Crude, had dropped to about $83.60, as concerns about slowing Chinese economic and oil demand growth put downward pressure on prices for a third consecutive day this week.A strong U.S. dollar weighed on oil prices earlier this week. A strengthening greenback tends to drag oil prices down because it makes oil more expensive for holders of other currencies.This added to several bearish data points from China, including indications of weak fuel demand and economic growth coming in lower-than-expected for the second quarter. China’s GDP growth was 4.7% in the second quarter, below expectations of 5.1%. Retail sales in June were also weaker than anticipated.Moreover, refinery output in the world’s top crude oil importer dropped by 3.7% in June compared to the same month last year, amid tepid fuel demand and weakening refining margins, which prompted independent refiners to slash crude processing rates. Data from last week showed that China’s imports of crude oil slumped by 11% in June from a record high in the same month of 2023, due to weak demand and refining margins. In its monthly report last week, the International Energy Agency (IEA) said that underwhelming Chinese consumption is slowing down growth in global oil demand. All these concerns have weighed on oil prices, but an estimated drop of 4.44 million barrels in U.S. crude inventories and rising chances for a Fed interest rate cut in September prevented WTI prices from staying below $80 a barrel early on Wednesday.
WTI Extends Gains As Crude Inventories Tumble To Lowest Since Feb -- Oil prices are surging this morning, playing catch up to gold and crypto, with all eyes on the official inventory and supply data for what happens next. DOE
- Crude -4.87mm (-275k exp)
- Cushing -875k
- Gasoline +3.328mm
- Distillates +3.454mm
US crude stocks fell for the third straight week (more than expected).This draw dragged crude stocks down to their lowest since February... The Biden admin added 650k barrels to SPR last week...
Oil sheds China demand worries, gains 1% on weaker US dollar & drop in stockpiles; Brent nears $85/bbl --Crude oil prices climbed about one per cent on Wednesday, July 17, on a bigger-than-expected weekly drop in US crude stockpiles. A weaker US dollar against other currencies overshadowed signs of lower economic growth in China.Brent futures rose 96 cents, or 1.2 per cent, to $84.69 per barrel, while US West Texas Intermediate (WTI) crude rose $1.36, or 1.7 per cent, to $82.12. Coming to domestic prices, crude oil futures last traded 1.95 per cent higher at ₹6,911 per barrel on the muti-commodity exchange (MCX). On Tuesday, Brent closed at its lowest since June 14, and WTI at its lowest since June 21. -The premium of Brent over WTI narrowed to around $3.82 a barrel, its lowest since October. That narrowing spread means energy firms have less reason to spend money to send ships to the U.S. to pick up crude for export. In the US, the Energy Information Administration (EIA) said energy firms pulled 4.9 million barrels of crude from storage during the week ended July 12. That compares with a drop of 4.4 million barrels in a report from the American Petroleum Institute (API) trade group. In US refining news, the diesel and 321 crack spreads, which measure refining profit margins, fell to their lowest levels since December 2021 and January 2024, respectively. A weaker US dollar also helped support oil prices after it fell to a 17-week low against a basket of other major currencies. A weaker dollar can boost demand for oil by making greenback-denominated commodities like oil cheaper for holders of other currencies. Rising geopolitical risk tensions in the Middle East and Europe, which could continue to fuel risks, also supported crude prices. A Liberia-flagged oil tanker was assessing damage and investigating a potential oil spill after it was attacked in the Red Sea by Iran-aligned Houthis in Yemen. China, the world's top oil importer, saw its economy grow 4.7 per cent in the second quarter, the slowest growth since the first quarter of 2023, capping crude price gains.
The Oil Market Rallied Higher on Wednesday in Light of the Larger Than Expected Fall in U.S. Crude Oil Stocks The oil market rallied higher on Wednesday in light of the larger than expected fall in U.S. crude oil stocks and a weaker U.S. dollar offsetting any pressure from concerns over China’s weakening oil demand. The market posted a low of $80.45 in overnight trading before it bounced higher and never looked back. The market was well supported by the crude stocks draw of 4.4 million barrels reported by the API late Tuesday. The crude market was further supported and extended its gains to over $2.10 as it posted a high of $82.94 in afternoon trading following the release of the EIA report, which showed a larger than expected draw of 4.87 million barrels on Wednesday morning. The market retraced more than 62% of its move from a high of $84.52 to a low of $80.22 as it rallied higher ahead of the close. The August WTI contract ended the session up $2.09 at $82.85 and the September Brent contract settled up $1.35 at $85.08. The product markets ended the session higher, with the heating oil market settling up 2.52 cents at $2.4940 and the RB market settling up 2.38 cents at $2.5013. The EIA reported that U.S. crude oil stocks fell more than expected, while gasoline and distillate inventories increased. Crude inventories fell by 4.9 million barrels to 440.2 million barrels in the week ending July 12th. Crude stocks at the Cushing, Oklahoma delivery hub fell by 875,000 barrels last week. Gasoline stocks increased by 3.3 million barrels in the week ending 233 million barrels. Distillate stocks increased by 3.5 million barrels in the week to 128.1 million barrels, compared with expectations for an 800,000 barrel decline. The EIA reported that U.S. imports of crude oil from Canada increased last week to its highest level on record, due to the startup of the newly expanded Trans Mountain pipeline. Imports increased by 807,000 bpd to 4.4 million bpd in the week ending July 12th, the largest gain since March 2023. The Trans Mountain expansion started operations in May and has nearly tripled shipping capacity to Canada’s Pacific Coast to 890,000 bpd. JP Morgan said it estimates the equilibrium price of WTI at around $70/barrel. It believes that even at $60/barrel, WTI prices are too low to incentivize production, potentially leading to an increase in price to $100/barrel the following year. IIR Energy said U.S. oil refiners are expected to shut in about 559,000 bpd of capacity in the week ending July 19th, cutting available refining capacity by 263,000 bpd. Offline capacity is expected to fall to 288,000 bpd in the week ending July 26th. Exxon Mobil shut down its 251,800 bpd refinery at Joliet, Illinois due to a power outage after a storm. The loss of power caused a flaring incident on Monday night. The plant went down due to heavy wind and rain. New wildfires erupted across Alberta since late Tuesday, with the first potentially threatening more than 400,000 bpd of oil production. Many of the fires are burning south of the unofficial oil sands capital of Fort McMurray. One of the fires is within 6.2 miles of MEG Energy Corp’s Christina Lake site, which produced almost 100,000 bpd in May. Another fire is also within 6 miles of Imperial Oil Ltd’s Cold Lake site, which produces 19,000 bpd and a third is close to Canadian Natural Resources’ Kirby oil sands. Imperial Oil said it started removing non-essential workers from its Kearl oil sands mine.
Oil rises as US rate-cut hopes outweigh economic slowdown signals – CNA - Oil prices edged higher on Thursday as rising expectations that the Federal Reserve would soon cut interest rates, which could boost oil demand, outweighed concerns about an economic slowdown that could dampen fuel consumption. Brent futures were up 20 cent to $85.28 a barrel by 1:10 p.m. EDT (1710 GMT). U.S. West Texas Intermediate (WTI) crude was up 40 cents at $83.25. The number of Americans filing new applications for unemployment benefits rose more than expected last week, while initial claims for state unemployment benefits increased 20,000 to a seasonally adjusted 243,000 for the week ended July 1. The data strengthened the case for the Fed to speed up rate- cutting plans, which could spur more spending on oil. "I believe that healthy expectations of a Fed rate cut in the not-so-distant future will limit downside," Tamas Varga of oil broker PVM told Reuters. Fed officials said on Wednesday the U.S. central bank is closer to cutting rates given inflation's improved trajectory and a labor market in better balance, possibly setting the stage for a reduction in borrowing costs in September. U.S. economic activity expanded at a slight to modest pace from late May through early July, with firms expecting slower growth ahead, according to a report released by the Fed on Wednesday. The rising jobless claims, however, also signalled an economic easing that could cut into crude demand, and kept oil prices from moving higher. "The reality on the ground is that we've got a slowing economy that could potentially soften crude oil demand," Despite government data on Wednesday that showed U.S. crude inventories fell by 4.9 million barrels last week, more than forecast by analysts in a Reuters poll, weak U.S. gasoline demand kept oil prices from moving higher, Kilduff said. [EIA/S] Chinese economic growth also weighed on oil prices. Chinese leaders signalled on Thursday that Beijing would stay the course with economic policy, though few concrete details were disclosed. Together, those events helped to check investor hopes of a push to boost consumption in the world's second-largest economy.
Oil prices settle slightly lower even as weaker US jobs data firm up rate-cut bets -- Oil prices settled lower Thursday, even as further signs of weakness in the labor market boosted hopes for rate cuts just a day after U.S. inventories fell much more than expected. At 14:30 ET (18:30 GMT), West Texas Intermediate crude futures dropped 0.04% to $82.82 a barrel, while Brent oil futures expiring in September fell 0.04% to $85.211 a barrel, while Data released earlier Thursday showed that the number of Americans filing new applications for unemployment benefits rose more than expected last week. Initial claims for state unemployment benefits increased 20,000 to a seasonally adjusted 243,000 for the week ended July 13, the Labor Department said on Thursday, above the 229,000 expected. Claims were also revised lower in the prior week, while the unemployment rate rose to a 2-1/2-year high of 4.1% in June. Cooling in the labor market lifted bets on U.S. rate cuts easing some concerns about slowing economic activity in the world's largest crude consumer. US crude inventories see sustained draws Official data from the Energy Information Administration, released on Wednesday, showed U.S. oil inventories shrank by nearly 4.9 million barrels, compared to expectations for a 0.9 million barrels. The data showed U.S. inventories falling for a third straight week, as demand in the world’s biggest fuel importer appeared to be picking up with the travel-heavy summer season. But the picture surrounding the weekly inventory draw was muddied by builds in distillates and gasoline inventories. China concerns remain in play Still, crude markets have been nursing steep losses over the past week, as a string of weak economic readings from top importer China drummed up concerns over slowing global demand. Data released earlier in the week showed that economic growth in the world’s biggest oil importer slowed in the second quarter. Concerns over increased trade tensions with the U.S. also grew after a Bloomberg report said the U.S. government was considering stricter restrictions on China’s technology and chipmaking sectors. Such a move could draw ire from Beijing, sparking a renewed trade war between the two countries.
Oil Prices Are Heading for a Second Consecutive Weekly Decline Oil prices fell in Friday trade in Asia and were poised for a second straight weekly decline as concerns about demand more than offset falling U.S. crude inventories and rising odds of a September interest rate cut from the Fed. Early on Friday, the U.S. benchmark, WTI Crude, was down by 0.6% and traded at around $82.30, while Brent Crude, the international benchmark, fell by 0.56% to $84.63. Both benchmarks were on track to post a weekly decline of about 0.3%. Prices rose on Wednesday and early on Thursday, pushed up by a larger-than-expected U.S. crude inventory draw the EIA reported on Wednesday morning. The EIA’s weekly inventory report showed an inventory draw of 4.9 million barrels of commercial crude stocks for the week to July 12—larger than expected. The effect of the drop in U.S. crude stocks faded after a day as China’s leadership party plenum failed to convince markets that the authorities will be employing major stimulus measures to revive the economy, which grew at a slower pace than expected in the second quarter.The Communist Party’s Central Committee meeting this week appeared not to address pressing economic issues, and its final press release was vague and clichéd, observers told VOA. “It does not make macroeconomic adjustments at all but is like a philosophical article, which is basically a cliché,” Shi He-ling, an associate professor of economics at Monash Business School at Monash University in Caulfield, Australia, told VOA.Oil prices have been pressured down by concerns about China’s oil demand and the trajectory of its economic growth.“The impact of Wednesday’s surprise data showing a weekly plunge in US crude inventory has faded and attention has snapped back to signs of tepid oil appetite across the globe and especially in Asia, which dominates demand growth,” Vanda Insights said early on Friday.Capping oil price losses this week were the words of Fed Chair Jerome Powell that recent inflation data “add somewhat to confidence” that policymakers have made good progress on curbing inflation. The remarks have given hope to the market that a September cut is coming.Wildfires in Canada threatening oil sands production also acted as a firmer floor under prices. This week, MEG Energy proactively began to evacuate non-essential personnel from it Christina Lake Regional Project (CLRP) as a result of nearby wildfires.
Oil settles at one-month low on Gaza ceasefire hopes (Reuters) - Oil prices settled over $2 lower on Friday at their lowest level since mid-June as investors eyed a possible ceasefire in Gaza, while a strengthened dollar drove values down further. Brent crude prices settled down $2.48, or 2.9%, to $82.63 a barrel. U.S. West Texas Intermediate crude futures dropped $2.69, or 3.3%, to $80.13.U.S. Secretary of State Antony Blinken said a long-sought ceasefire between Israel and the Palestinian militant group Hamas was within sight."I believe we're inside the 10-yard line and driving toward the goal line in getting an agreement that would produce a ceasefire, get the hostages home and put us on a better track to trying to build lasting peace and stability," Blinken said, using a football analogy.The war in Gaza has led investors to price in a risk premium when trading oil, as tensions threaten global supplies.If a ceasefire is reached, the Iran-backed Houthi rebels could ease their attacks on commercial vessels in the Red Sea, since the group declared the attacks in support of Hamas. "Geopolitics is starting to ease just a little bit so that ought to work in our favor, following the news of this ceasefire," The United Nations' highest court said Israel's occupation of Palestinian territories and its settlements there are illegal and should be withdrawn as soon as possible, further buoying hopes of an end to the conflict. The U.S. dollar index climbed after stronger-than-expected data on the U.S. labor market and manufacturing this week, pressuring oil prices, said Phil Flynn, an analyst at Price Futures Group.A stronger U.S. currency dampens demand for dollar-denominated oil from buyers holding other currencies.Chinese officials acknowledged the sweeping list of economic goals reemphasized at the end of a Communist Party meeting this week contained "many complex contradictions", pointing to a bumpy road for policy implementation.China's economy grew by a slower-than-expected 4.7% in the second quarter, official data showed, sparking concerns over its demand for oil.Lending some support to prices, energy services firm Baker Hughes said oil rigs fell by one to 477 this week, their lowest since December 2021.A global tech outage disrupted operations in multiple industries, with airlines halting flights, some broadcasters going off air and sectors from banking to healthcare hit by system problems.Meanwhile, two large oil tankers were on fire after colliding near Singapore.Singapore is Asia's biggest oil trading hub and the world's largest bunkering port. Its surrounding waters are vital trade waterways between Asia and Europe and the Middle East and among the busiest global sea lanes
Oil tanker capsizes southeast of Oman's Ras Madrakah, news agency says - A Comorian-flagged oil tanker capsized 25 nautical miles southeast of Oman's Ras Madrakah, Omani state news agency ONA reported on Monday, citing Oman's Maritime Security Centre. The centre said a search-and-rescue operation was activated in coordination with authorities. The cause of the incident was not immediately known.
Oil tanker capsizes off Oman, nine of sixteen crew members rescued - Indian Navy warship INS Teg on Wednesday, July 17 rescued nine crew members, including eight Indian nationals and one Sri Lankan, who went missing after an oil tanker capsized off the coast of Oman. The Indian Navy said in a post on X on Wednesday evening: "#IndianNavy's mission deployed warship #INSTeg, rendering SAR assistance for the capsized Oil Tanker MV #PrestigeFalcon, has rescued 9 (8 Indians & 1 Sri Lankan) personnel. The MV had capsized about 25 NM southeast of Ras Madrakah, #Oman on July 15 and efforts in coordination with Oman Authorities are in progress since July 16. "The MV is reported to have had a total of 16 crew, including 13 Indians and 3 Sri Lankans. The #SearchAndRescue by Indian Omani assets is being undertaken in challenging weather conditions as the area is experiencing rough sea & strong winds. #IndiaNavy's Long Range Maritime Reconnaissance aircraft P8I is also assisting in the search for survivors," it added. The MT Falcon Prestige, a Comoros-flagged oil tanker, with 16 crew members had capsized near the port town of Duqn in Oman on Monday. The Indian Embassy in Muscat said in a post on X: "Embassy is coordinating SAR ops with Omani authorities and @indiannavy for MT Prestige Falcon, a Comoros flagged vessel that capsized off the coast of Oman on July 15. Nine crew including 8 Indians have been rescued today by INS Teg. Search for the remaining survivors continues."
Dramatic Footage Shows Oil Tanker Hit By Kamikaze Boat Drone In Red Sea -- Dramatic footage has surfaced on X showing what appears to be an unmanned suicide surface drone smashing into the side of a crude tanker on Monday about 100 nautical miles northwest of Yemen's port city of Hodeidah. Reuters reports the Liberia-flagged oil tanker Chios Lion was hit on its portside by an unmanned watercraft, adding there is a potential risk of an oil spill. "While originally headed south, following the attack the vessel turned around and back north out of the threat area to further assess damage and investigate potential oil spillage," the Joint Maritime Information Center wrote in a statement. Houthis published footage of the attack on X. VIDEO OF THE DAY: The Houthis of Yemen have released a propaganda video of their attack against the oil tanker MT Chios Lion using an uncrewed surface vessel (USV). The oil tanker suffered minor damage and the crew is safe | #OOTT pic.twitter.com/CdMr1kz26v Intel firm Conflict and Environment Observatory wrote on X that satellite imagery shows Chios Lion likely suffered damage during the attack, resulting in an oil slick. Yesterday's #Sentinel2 imagery in proximity to the reported #Houthi strike on the #ChiosLion oil tanker in the #RedSea off #Yemen suggests that the damaged vessel was releasing oil. The apparent slick is 220km long https://t.co/SueseALWlo #OOTT pic.twitter.com/5WQ8MC8URM "The Houthis will continue attacks that rattle commercial shipping in the Red Sea as they are buoyed by several ongoing factors, including their own view that attacks to date have forced massive maritime distortions, a belief that ongoing talks with Saudi Arabia - backed by threats to resume attacks on the kingdom - are a source of leverage, and their unwavering commitment to remaining the strongest political and military actor in Yemen...In the coming days to weeks, the US and Israel will start to stress-test Houthi resilience with more meaningful military actions, underscoring why the market may have to price in more geopolitical risk in crude the coming days to weeks," Rapidan Energy Group's Scott Modell stated. The Houthis have been attacking commercial vessels in the Red Sea and the Gulf of Aden since November in a campaign they say is in solidarity with Palestinians amid the Gaza war. This comes as the Biden administration's efforts to ensure freedom of navigation via Operation Prosperity Guardian continue to fail on the critical maritime chokepoint.
Large Oil Slick Spotted in Red Sea After Explosive Tanker Attack - An oil slick extending more than 125 miles appeared in the Red Sea, satellite images show, a fresh environmental disaster in a waterway where commercial ships are under siege from attacks by Yemen’s Houthi militants. The slick extends from about 60 miles northwest of the Yemeni city of Hodeidah and continues northbound, the pictures show. It appears in images from the Sentinel 2 satellite that were taken on July 16 and wasn’t previously present on July 14. It wasn’t clear which vessel caused the spill, or whether it was a direct result of a Houthi attack, but multiple ships have been targeted in the region in recent days, including one — the Chios Lion — with a sea drone. That carrier was investigating a possible oil spill, the UK Navy said Tuesday. The Chios Lion collected 90,000 tons, about 600,000 barrels, of fuel oil from Russia’s Black Sea port of Novorossiysk on July 2 and was heading to China, according to shipping information compiled by Bloomberg. Most seagoing merchant ships also use fuel oil for power. Stealth Maritime, the vessel’s manager, said a small amount of damage was caused to the vessel and the crew is unharmed. The firm declined to comment on whether oil is spilling from the tanker. The Houthis have been attacking vessels in the Red Sea for months in protest at Israel’s war with Hamas. Although many ships are avoiding the area, instead sailing thousands of miles around Africa, some continue to run the gauntlet. Attacks ramped up last month, which was the most active so far this year, culminating in the sinking of a second ship with a sea drone. Earlier in the year when the Houthis sank a vessel called the Rubymar there was a fertilizer spill. Other ships have been damaged and either continued to their destinations or awaited salvage by specialists. Based on the shape of the spill, its color and the way it is spreading on the surface of the sea, it is likely fuel oil, according to Wim Zwijnenburg, a project leader at Netherlands-based PAX, who’s spent 10 years studying satellite images to identify the environmental impacts that conflicts cause. Surface winds are pushing the slick to the south, and two large gyres in the surface currents are making the slick very convoluted, according to John Amos, CEO of the investigative nonprofit SkyTruth.
Oil slick stretching 200km seen near Chios Lion tanker after Houthi attack in Red Sea - (video of tanker explosion) An oil slick more than 200km long has been spotted near an oil tanker struck by Houthi explosive drone boats in the Red Sea, satellite images revealed on Wednesday. The Chios Lion, a Liberia-flagged tanker carrying a cargo of crude oil, was shown sustaining catastrophic damage as explosive drone boats rammed into its side in a video released by the group on Tuesday evening. The attack was part of a swarm of strikes by the Houthis on the vessel and another ship sailing about 185km north-west of Yemen’s port city of Hodeidah. The Conflict and Environment Observatory, an environmental NGO, said the oil slick was 220km long. Initial reports suggested the Chios Lion had weathered the initial attack with minimal damage. “While originally headed south, following the attack the vessel turned around and back north out of the threat area to further assess damage and investigate potential oil spillage,” said the Joint Maritime Information Centre, a press office for the international coalition trying to safeguard the waterway and counter Houthi attacks. It said the captain and crew were safe. Wim Zwijnenburg, an expert on the environmental impact of conflict, said the spill will “likely cause the biggest impact from coastal pollution as the oil does not dilute easily, thus affecting the marine life on the shore”. The Red Sea, a transit point for about 12 per cent of the world's maritime trade, is home to unique coral reefs. “The area is facing frequent pollution from marine traffic passing through, including dumping of wastewater and attacks like these just add to an accumulation of pollutants in a fragile ecosystem,” Mr Zwijnenburg told The National. “Usually ecosystems are pretty resilient, but these kind of mass pollution events are not helping." While the spill stretches for many kilometres, it remains unclear exactly how much oil has leaked. Shipping data says the Chios Lion is 243 metres long, which places it in the Aframax category of oil tankers. These vessels are much smaller than the largest oil tankers in the Ultra Large class, which can carry up to 3.7 million barrels of oil, but they can still hold between 500,000 and 700,000 barrels of crude. Dean Mikkelsen, a security consultant focused on the region, said the vessel was probably double-hulled, based on information from when it was built, 14 years ago. Double-hulled tankers were introduced in the early 1990s following a series of international treaties in the wake of the Exxon Valdez oil spill disaster, and have become an increasingly common feature on such carriers. But they are designed to minimise the impact of tankers running aground, or colliding with other ships, rather than explosive attacks. Houthi footage of the attack shows blazing oil spilling across the water./p>
US Launches Heavy Strikes in Yemen - The US has launched several rounds of strikes on Yemen over the past few days as its war against the Houthis in the Red Sea continues.US Central Command reported fresh strikes on Houthi-controlled Yemen, which is where most of the country’s population lives, on July 11, July 12, and July 14. Yemeni media reported the attacks each day and described them as joint US-British strikes, although it’s unclear if the UK was involved.In the latest attack on Sunday, Yemen’s SABA news agency reported three strikes in the Red Sea province of Hodeidah. “A security source told SABAthat the US-British aggression aircraft targeted Hodeidah International Airport with two raids, and launched a raid on the Bheisi area of Alluheyah district,” the news agency said.There’s no indication if there were casualties in the three days of US strikes on Yemen. CENTCOM typically claims that its strikes destroy Houthi drones or some other type of military equipment that it deems a threat. According to the Yemen Data Project, joint US-British airstrikeskilled 16 Yemeni civilians on May 30.CENTCOM has also reported that US naval forces have been downing and intercepting Houthi missiles and drones. The US has already spent over $1 billion on munitions in its new war with the Houthis in what US commanders are calling the largest US naval battle since World War II.Since the US and the UK began bombing Yemen in January, the Houthis, officially known as Ansar Allah, have only escalated their attacks on Israel-linked and other commercial shipping in the Red Sea, the Gulf of Aden, and beyond. There were more Houthi attacks on shipping in Junethan in any other month of this year.The Houthis have been clear the only way they’ll stop their attacks is if there’s a ceasefire in Gaza. Tim Lenderking, the US’s envoy to Yemen, has acknowledged the Houthis would likely be true to their word, but the US continues to support Israel’s genocidal war in Gaza instead of pushing for a unilateral ceasefire.The US backed a brutal Saudi/UAE war against the Houthis from 2015-2022 that involved heavy airstrikes and a blockade, and the Houthis only became a more capable fighting force during that time.The war killed at least 377,000 people, with more than half dying of starvation and disease caused by the siege. A ceasefire between the Houthis and Saudis has held relatively well since April 2022, but new US sanctions are now blocking the implementation of a lasting peace deal.
Israeli military says it hit Houthi targets in Yemen -- The Israeli military said Saturday that it has hit Houthi military targets in Yemen as an act of “self-defense.”“A short while ago, [Israel Defense Forces (IDF)] fighter jets struck military targets of the Houthi terrorist regime in the area of the Al Hudaydah Port in Yemen in response to the hundreds of attacks carried out against the State of Israel in recent months,” the IDF said in its afternoon post.A later post by the IDF featured a video of Israeli military spokesperson Daniel Hagari in which he said that in recent “months, the Houthi terrorist group, Iran’s terror proxy in Yemen, has launched over 200 aerial attacks against Israeli civilians and infrastructures.”“On Friday morning, in one of these [unmanned aerial vehicle (UAV) ] attacks, the Houthis fired an Iranian explosive UAV from Yemen into Israeli territory,” Hagari said in the video. Hagari added that the UAV hit an apartment building in Tel Aviv, near the U.S. Embassy Branch Office, resulting in the death of an Israeli.“The Houthis’ attacks are acts of aggression, a violation of international law and a threat to the international peace and security,” Hagari continued. “Today, Israel stepped up its actions in self-defense against these attacks. The Israeli Air Force conducted precise strikes on Houthi military targets in Yemen.”The Associated Press reported that the Ministry of Health in the Yemeni city of Sanaa said due to the strikes, an initial amount of 80 people were injured. A spokesperson for the Houthis, Mohammed Abdulsalam, said in a post on X the “blatant Israeli aggression” had gone after facilities holding fuel and a power station.Some health officials based in Yemen also said the strikes caused the deaths of multiple people.
Israeli airstrikes massacre hundreds across Gaza over the weekend - The Gaza Health Ministry reported on Sunday that the Israeli military has killed hundreds and injured 400 others in multiple airstrikes on the Palestinian enclave since Saturday. In one of the deadliest attacks of the nine-month Gaza genocide, a massive airstrike hit an area designated as a humanitarian zone at al-Mawasi on Saturday, killing 92 and wounding 300. Palestinians had fled to the coastal town in southern Gaza near Khan Younis and Rafah to shelter, mostly in tents and with few basic services or supplies. Eyewitness accounts of the impact of the strike said it looked like an earthquake had hit the area. Reuters reported that: Footage of the aftermath showed a huge crater, charred tents and burnt-out cars. Victims were carried on the hoods and in the hatchbacks of cars, on donkey carts and on carpets. A report by the Associated Press said: “The blast threw a 2-year-old child into the air and the mother was missing,” according to Louise Wateridge, a spokesperson for the UN agency for Palestinian refugees. The AP report added: Another boy had his feet blown off, while an 8-year-old boy was killed. “They told me to go there to be safe,” his grieving mother told her of the area struck. The Gaza Health Ministry said late Saturday, “A number of victims are still under the rubble and on the roads, and ambulance and civil defense crews are unable to reach them.” Maha Hussaini, from the Euro-Med Human Rights Monitor, told Al Jazeera the attack was nothing new. “Areas where displaced Palestinians were forced to go have been under continuous bombardment. This has been ongoing for nine months straight,” she said. The policy of forced evacuation and relocation of Palestinians into so-called “safe zones” has been used repeatedly by the Israeli government as a means of terrorizing defenseless civilian populations with murderous air assaults. “BBC Verify” analyzed footage of the aftermath of the strike and confirmed that it took place within “an area shown on the Israel Defense Forces (IDF) website as a humanitarian zone.” Al Jazeera reported that most cities in the occupied West Bank went on a general strike on Sunday and protests took place in the cities of Jenin, Hebron and Tubas on Saturday night to denounce the barbaric Israeli attack at al-Mawasi. Reuters reported that many of those wounded in the strike, including women and children, were taken to the nearby Nasser Hospital, “which hospital officials said had been overwhelmed and was ‘no longer able to function’ due to the intensity of the Israeli offensive and an acute shortage of medical supplies.” The Israeli government justified the massacre by claiming it was targeting Hamas commander Mohammed Deif. Israeli Prime Minister Benjamin Netanyahu said “there still isn’t absolute certainty” that Deif was killed in the strike. Hamas rejected the claim that Deif was in the area, saying, “These false claims are merely a cover-up for the scale of the horrific massacre.”
UNRWA Headquarters in Israel 'Flattened' by Israeli Military - The head of the UN’s Palestinian relief agency, UNRWA, said Monday that the organization’s headquarters in Gaza City have been “flattened” as Israel has escalated attacks across the Gaza Strip.“Shocking,” UNRWA chief Philippe Lazzarini wrote on X. “UNRWA headquarters in Gaza, turned into a battlefield & now flattened. Another episode in the blatant disregard of international humanitarian law.”The Israeli military has waged war against UNRWA in Gaza, killing nearly 200 of the aid agency’s employees. Israel also accused 12 UNRWA employees of participating in the October 7 attacks on southern Israel but hasn’t produced evidence for the claim.The US and other Western countries immediately suspended funding for UNRWA based on Israel’s claims. In March, President Biden signed a bill into law prohibiting further US funding for the agency until at least 2025.In contrast, extensive evidence of Israeli war crimes has not led to any reductions in US funding for the Israeli military. Instead, the president signed legislation giving Israel another $17 billion in military aid on top of the $3.8 billion it receives each year.
Netanyahu Blocks Order To Build Field Hospital for Gaza Children - Israeli Defense Minister Yoav Gallant announced Wednesday that the Israeli military was setting up a field hospital inside Israel to treat Palestinian children from Gaza, but Prime Minister Benjamin Netanyahu has vetoed the plan. Netanyahu’s office said that it informed Gallant in writing that the prime minister does approve establishing a “temporary hospital” for Gaza’s children, and therefore, it would “not be established.”An official in the Israeli Defense Ministry told The Times of Israel that Netanyahu blocked the hospital for “political reasons.”Netanyahu could come under criticism from extremist members of his coalition government for enabling the treatment of Palestinian children, which includes not only kids wounded by Israeli airstrikes but also newborn babies who are dying due to a lack of nutrition since their malnourished mothers cannot breastfeed.Some children have been evacuated into Egypt for medical care, but since Israel captured the Rafah border crossing on May 7, that vital lifeline has been cut off.According to Gaza’s Health Ministry, nearly 16,000 children have been killed by the Israeli assault on Gaza, and about 38,000 have been wounded, which includes many amputees. Due to the Israeli siege, children’s limbshave been amputated without anesthetics.Foreign doctors and health workers who volunteered at Gaza hospitals have recalled horrific scenes. Nick Maynard, a British surgeon who worked at Gaza’s al-Aqsa Hospital, recalled a story about a young girl who was left to die on the hospital floor. “One child that I’ll never forget had burned so bad you could see her facial bones,” Maynard said. “We knew there was no chance of her surviving that, but there was no morphine to give her. So, not only was she inevitably going to die, but she would die in agony. And what made it even worse was that there was nowhere for her to go and die, so she was just left on the floor of the emergency department to die.”
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