lowest week ending price for US oil since Feb 3rd; lowest week ending price for natural gas since April 26th; US oil supplies at a 25 week low; gasoline supplies at a 8 month low; refinery utilization is lowest for July since 2020 lockdowns...
US oil prices fell for a fourth straight week, even after Israel bombed a Beirut suburb in retaliation for a rocket attack on Syrian children in the Golan Heights and assassinated the lead Hamas peace negotiator in Tehran, largely due to weak economic data from the US and China….after falling 1.9% to $77.16 a barrel last week as concerns over sluggish demand from China and ceasefire talks in the Middle East discouraged oil traders, the contract price for the benchmark US light sweet crude for September delivery rose on global markets early on Monday after a deadly strike in the Israeli-occupied Golan Heights over the weekend killed 12 Syrian children, but sold off sharply in New York after Israeli officials said they wanted to avoid widening the conflict in the Middle East when they responded to that strike, and settled $1.35 lower at a seven-week low of $75.81 a barrel, as global demand concerns outweighed rising geopolitical tension in the Middle East…the oil market continued to trend lower on demand concerns early Tuesday, after a Reuters survey showed that China’s manufacturing activity likely fell for a third consecutive month in July, and settled down $1.08 at another 7 week low of $74.72 a barrel as traders worried that demand from China was weakening while OPEC+ seemed likely to increase supplies…however, oil prices rose in overnight trading following the assassination of Hamas' political leader in Tehran, then extended their gains on Wednesday after the EIA reported that US crude inventories had fallen to a six month low, and settled $3.18 or 4.3% higher at $77.91 a barrel, as traders worried that the conflict in the Middle East could widen, in light of the killings of the Hamas leader in Iran, Hezbollah's most senior commander in an Israeli airstrike on Beirut, and Iraqi security forces in US airstrikes on Iraq….oil prices continued higher in early trading Thursday, amid growing fears of a wider war in the Middle East, but gave up those early gains as traders weighed OPEC+’s decision to keep its output policy unchanged, and then tumbled 2% to settle $1.60 lower at $76.31 a barrel as anxiety about the U.S. economy overshadowed red-hot tensions in the Middle East…oil prices rose in early Asian trade on Friday, as oil markets took middling cues from a meeting of the OPEC and its and allies, wherein the cartel made no changes to its production policies and reiterated that it could pause plans to increase output from October, and traded higher as the market feared an all-out war in West Asia following the recent developments in the region, but tumbled sharply in New York to settle $2.79 or 3.7% lower at a six month weekly closing low of $73.52 a barrel as U.S. job growth slowed more than expected in July and unemployment increased to 4.3%, raising fears of a possible recession and leaving oil prices down 4.7% for the week…
at the same time, natural gas prices fell for a seventh week in the past eight and ended at a 4 month closing low, as the glut of natural gas in storage offset record heat and increased LNG demand….after falling 5.7% to a twelve week low ot $2.006 per mmBTU last week as natural gas supplies in storage remained 16.4% above normal for late July, the price of the contract for natural gas for August delivery opened three cents higher on its last day of trading on Monday, but immediately pulled back on pressure from steady production and increased LNG nominations and fell sharply throughout the session to hit a three-month intraday low of $1.856 at 2:25 PM, before steadying to settle 9.9 cents lower at $1.907 per mmBTU, as stout levels of gas supply pushed the contract price lower at expiration, while the more actively traded September natural gas contract traded as high as $2.092 before settling 1.5 cents lower for the session at $2.036 per mmBTU….with the markets now citing the contract price of natural gas for September delivery, that contract opened lower and slid to $1.992 by 9:25 AM, but then jumped on Chesapeake Energy's announcement it would be holding the line on production cuts. and settled 9.0 cents higher at $2.126 per mmBTU, on forecasts for record-breaking heat later in the week that could boost the amount of gas that power generators would burn to an all-time high…natural gas prices opened 3 cents lower Wednesday and continued falling after the opening bell, following a bearish revision to cooling demand forecasts for August, and after a short-lived rally in the early afternoon, again turned lower to settle 9.0 cents, or 4.2% lower at $2.036 per mmBTU on rising output and forecasts for less hot weather and lower gas demand next week than previously expected….natural gas prices opened 5 cents higher on Thursday and jumped to an intraday high of $2.126 as the bullish weekly storage report hit the wire, but fell from there to settle 6.8 cents lower at $1.968 per mmBTU after the lighter-than-forecast storage build appeared to not be enough to divert storage levels off their lofty trajectory into the fall…natural gas prices moved higher early Friday with widespread and intensifying heat gripping the Lower 48, but could not hold those gains into afternoon trading and settled a tenth of a cent lower at $1.967 per mmBTU, the lowest weekly close since April, as rising gas flows to LNG export plants and forecasts for near record-breaking heat were offset by rising output, the formation of a likely demand-killing storm near Florida, and a tremendous oversupply of gas in storage….natural gas prices thus finished 1.9% lower on the week, while the the price of the September gas contract, which had ended the prior week at $2.051, finished 4.1% lower and at it's lowest on record..
The EIA’s natural gas storage report for the week ending July 26th indicated that the amount of working natural gas held in underground storage rose by 18 billion cubic feet to 3,249 billion cubic feet by the end of the week, which left our natural gas supplies 252 billion cubic feet, or 8.4% above the 2,997 billion cubic feet that were in storage on July 26th of last year, and 441 billion cubic feet, or 15.7% more than the five-year average of 2,808 billion cubic feet of natural gas that had typically been in working storage as of the 26th of July over the most recent five years…the 18 billion cubic foot addition to US natural gas working storage for the cited week was well below the 31 billion cubic foot average addition to storage that the market was expecting, but was a bit more than the 15 billion cubic feet that were added to natural gas storage during the corresponding week in July 2023, while less than the average 33 billion cubic foot injection into natural gas storage that had been typical for the same midsummer 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 26th indicated that after a big increase in our oil exports, we had to pull oil out of our stored commercial crude supplies for the fifth week in a row and for the 18th time in the past 33 weeks....Our imports of crude oil rose by an average of 62,000 barrels per day to 6,953,000 barrels per day, after falling by an average of 166,000 barrels per day over the prior week, while our exports of crude oil increased by 733,000 barrels per day to 4,919,000 barrels per day, which, when used to offset our imports, meant that the net of our trade of oil worked out to a net import average of 2,034,000 barrels of oil per day during the week ending July 26th, 651,000 fewer barrels per day than the net of our imports minus our exports during the prior week. At the same time, transfers to our oil supply from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils averaged 513,000 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 15,847,000 barrels per day during the July 26th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,150,000 barrels of crude per day during the week ending July 26th, an average of 258,000 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 393,000 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 26th averaged a rounded 91,000 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 [ –91,000 ] barrel per day figure onto line 16 of the weekly U.S. Petroleum Balance Sheet, in order to make the reported data for the supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus indicating there must have been an error or omission of that magnitude in the week’s oil supply & demand figures that we have just transcribed… However, since most oil traders react to these weekly EIA reports as if they were accurate, and since these weekly figures therefore often drive oil pricing 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 393,000 barrel per day decrease in our overall crude oil inventories came as an average of 491,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while an average of 98,000 barrels per day were being added to our Strategic Petroleum Reserve, the thirty-fourth SPR increase in the past forty-one weeks, following nearly continuous SPR withdrawals over the prior 39 months… Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to 6,906,000 barrels per day last week, which was 5.9% more than the 6,523,000 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 90.1% of their capacity while processing those 16,150,000 barrels of crude per day during the week ending July 26th, down from their 91.5% utilization rate of a week earlier, and the lowest refinery operating rate in July in 13 years, ex the 2020 pandemic lockdowns… the 16,150,000 barrels of oil per day that were refined this week were 2.2% less than the 16,517,000 barrels of crude that were being processed daily during week ending July 28th of 2023, and 4.9% less than the 16,991,000 barrels that were being refined during the prepandemic week ending July 26th, 2019, when our refinery utilization rate was at a near normal 93.0% 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 205,000 barrels per day to 10,008,000 barrels per day during the week ending July 26th, after our refineries’ gasoline output had increased by 664,000 barrels per day during the prior week.. This week’s gasoline production was 1.8% more than the 9,829,000 barrels of gasoline that were being produced daily over week ending July 28th of last year, but was 3.9% less than the gasoline production of 10,416,000 barrels per day during the prepandemic week ending July 26th, 2019…. on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 43,000 barrels per day to 4,980,000 barrels per day, after our distillates output had decreased by 292,000 barrels per day during the prior week. After fifteen production increases in the past twenty-two weeks, our distillates output was 2.4% more than the 4,861,000 barrels of distillates that were being produced daily during the week ending July 28th of 2023, but was still 3.6 less than the 5,164,000 barrels of distillates that were being produced daily during the week ending July 26th, 2019…
With this week’s decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 17th time in twenty-six weeks, decreasing by 3,665,000 barrels to an eight month low of 223,757,000 barrels during the week ending July 26th, after our gasoline inventories had decreased by 5,572,000 barrels during the prior week. Our gasoline supplies fell by less this week because the amount of gasoline supplied to US users fell by 206,000 barrels per day to 9,250,000 barrels per day, and because our imports of gasoline rose by 139,000 barrels per day to 917,000 barrels per day, while our exports of gasoline rose by 92,000 barrels per day to 1,007,000 barrels per day.…Even after seventeen gasoline inventory withdrawals over the past twenty-six weeks, our gasoline supplies are still 2.1% above last July 28th’s gasoline inventories of 219,081,000 barrels, but are now about 3% below the five year average of our gasoline supplies for this time of the year…
With this week’s increase in our distillates production, our supplies of distillate fuels rose for the 12th time in twenty-eight weeks, increasing by 1,534,000 barrels to 126,847,000 barrels over the week ending July 26th, after our distillates supplies had decreased by 2,753,000 barrels during the prior week. Our distillates supplies allso increased this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 136,000 barrels per day to 3,725,000 barrels per day, and because our exports of distillates fell by 402,000 barrels per day to 1,175,000 barrels per day, while our imports of distillates rose by 28,000 barrels per day to 140,000 barrels per day....Even with 16 inventory withdrawals over the past 28 weeks, our distillates supplies at the end of the week were 8.3% above the 117,153,000 barrels of distillates that we had in storage on July 28th of 2023, but are still about 7% below the five year average of our distillates inventories for this time of the year…
Finally, after the big increase in our oil exports, our commercial supplies of crude oil in storage fell for the 15th time in twenty-six weeks, and for the 28th time in the past year, decreasing by 3,436,000 barrels over the week, from 436,485,000 barrels on July 19th to a 25 week low of 433,049,000 barrels on July 26th, after our commercial crude supplies had decreased by 3,741,000 barrels over the prior week… With this week’s decrease, our commercial crude oil inventories were about 4% below the most recent five-year average of commercial oil supplies for this time of year, while they were still about 29% above the average of our available crude oil stocks as of the fourth 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 in the Spring of 2020, then jumped again after February 2021’s winter storm Uri froze off US Gulf Coast refining, but then fell sharply 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 26th were 1.5% less than the 439,771,000 barrels of oil left in commercial storage on July 28th of 2023, while 1.5% more than the 426,553,000 barrels of oil that we had in storage on July 22nd of 2022, but 1.4% less than the 439,225,000 barrels of oil we had left in commercial storage on July 23rd 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 August 2nd, the second column shows the change in the number of working rigs between last week’s count (July 26th) and this week’s (August 2nd) count, the third column shows last Friday’s July 26th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting period a year ago, which in this week’s case was the 4th of August, 2023…
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After more than a decade of advocacy, a majority of injection wells in Athens County are suspended • Ohio Capital Journal -After sounding the alarm on fracking waste injection wells for more than a decade, Roxanne Groff from Athens County is now finally starting to see some of the fruits of her and her friends’ labor. A handful of Athens County injection wells were suspended afterOhio Department of Natural Resources determined they pose an “imminent danger to the health and safety of the public and is likely to result in immediate substantial damage to the natural resources of the state,” according to letters from Chief of the Division of Oil and Gas Resources Management Eric Vendel. Groff’s advocacy against injection wells started back in 2012 with the Hazel–Ginsburg well. It has since grown to include many Southeast Ohio residents who are also sounding the alarm — something Groff believes helped led to the wells being suspended. “All of us together, all of the community members stood up for themselves and pushed back,” Groff said. “We know that this is dangerous.” There are seven class 2 injection wells in Athens County, but five are no longer in operation and the ODNR Division of Oil & Gas Resources Management expects those wells to be plugged, ODNR spokesperson Karina Cheung said in an email. Historically, three injection wells have been plugged in the county, she said. Class 2 wells are used to inject fluids — primarily brines — associated with oil and natural gas production, according to the EPA. Included in the five Athens wells that are out of operation are three K&H injection wells that were operational until a decision by the Oil and Gas Commission on April 19.The plugging permits for the three K&H wells will be issued soon and will be effective for two years once they are issued, Cheung said. She said the wells will be plugged this summer (according to the company Tallgrass Energy that owns the K&H wells). The Frost well was last used in 2021 and has been ordered to be plugged by the Chief of the Division of Oil & Gas Resources Management.“The company is in receivership and the Division has been in communication with the receiver about their obligation to plug the well,” Cheung said in an email. Plugging a well includes removing all uncemented casing and tubing from the well, and using cement to plug the well “ in a manner to isolate all oil, gas, and brine to formations that they originate in,” Cheung said. The exact cost of plugging a well is tough to determine.“Plugging costs vary due to differences in wells and the costs of abandonment and decommissioning of the surface storage facilities associated with the wells,” Cheung said in an email. But just because the wells will eventually be plugged doesn’t mean the environmental risks are gone, Athens County resident Susie Quinn said. “All the stuff that they’ve injected down there, it’s still down there,” she said. “This is not a cleanup. It’s just there stopping anymore from going in.”The Quinns got earthquake insurance for their house nearly a decade ago because “we’ve had so many little ones because of the fracking and injection wells.”Groff echoed Quinn’s sentiments about the plugged wells. “The threat remains … all that waste is there,” she said. “It’s down there. It’s under pressure. If it feels like going somewhere, it’s going to find a crack, and it’s going to keep going through that crack … until it gets to someplace where it either comes up to the surface or it just stops fracturing.Even though some of the wells are no longer in use, Groff isn’t hanging up her activist hat just yet. For one, not all injection wells are suspended. The last two remaining wells in operation in Athens County are in Canaan Township and Lee Township, Cheung said. The long-term effects of the injection wells are not totally known at the moment and could not show up for years or decades, Groff said. Athens County Commissioner President Lenny Eliason said he would like to focus on long-term monitoring.“Appalachia has been extracted for years for a number of different materials and the pain of the short term gains sticks around a long time after,” he said. “So we have to get people that are more forward thinking about balancing what that short term gain is going to bring in the long term.”
US Chemical Safety Board issues damning report on 2022 BP refinery disaster that killed two in Ohio --Late last month, the US Chemical Safety Board (CSB) published a 169-page investigation report on the causes of the September 2022 explosion at the former BP Husky refinery in Oregon, Ohio, which killed brothers Ben and Max Morrissey. The report, based on a two-year investigation of on-scene evidence, eyewitness testimony and company and government records, makes it clear the Morrisseys’ deaths were entirely preventable. The CSB report also vindicates the assessment of the World Socialist Web Site, which explained that the tragedy was result of the subordination of workers’ safety to profit by BP management, aided and abetted by state and federal safety agencies and the United Steelworkers bureaucracy. After the release of the report, Ben’s widow Kaddie Morrissey told local news outlet WTOL, “I’m saddened that this workplace incident could have been completely avoided if BP would have followed safety protocols and made sure their employees were coming into a safe work environment. We miss Ben and Max so much.” Max’s widow, Darah, told local news station,“That whole place could have blown up. I have no doubt in my mind they were doing everything and everything they could to save more lives, but obviously I think they would want to be here today.” Max Morrissey, 34, had been an employee at the refinery since 2020. His brother Ben, 32, was an operator trainee who had only been working there since March 2022. The two were among the 315 members of United Steelworkers Local 1 Chapter 346 employed at the refinery, which processes crude oil for gasoline, diesel, jet fuel, propane, asphalt and other products. The CSB report provides a timeline of events on September 20, 2022, which the agency described as a “series of cascading—and worsening—events' over a 12-hour span, during which time 3,700 emergency alarms overwhelmed management and refinery employees. Rather than shutting down the facility as many workers demanded, management ordered operators and trainees to take ever-riskier measures, leading to the fatal explosion. “Nearly everything that could go wrong did go wrong during this incident,” CSB Chairperson Steve Owens stated. According to the report, flammable liquid naphtha began to fill a fuel gas mix drum, which overflowed and sent the naphtha into the plant's various boilers and furnaces. The Morrissey brothers and two other workers were instructed to drain the gas mix drum as fast as possible, unaware they were handling highly flammable naphtha. After the other two workers left, the Morrissey brothers began draining to the naptha directly to the ground, creating a vapor cloud around them. The report says shifting winds from a coming storm likely pushed the cloud toward an ignition source—a nearby crude oil furnace. At 6:46 p.m., a massive blast reverberated for miles and a wall of flame engulfed the two young workers. The CSB attributes the root causes of the disaster to five factors:
- Failure to implement effective preventive safeguards [and] an over-reliance on human intervention to prevent incidents.
- Failure to implement a shutdown.
- Ineffective policies, procedures, and practices to avoid and control abnormal situation.
- Alarm system which flooded operators with alarms throughout the day resulting in poor decision making.
- Failure to learn from previous incidents.
The Chemical Safety Board details how BP flaunted industry-wide practices, regulator fines, and the lessons of past disasters, including the 2005 Texas City refinery explosion where 15 workers were killed and 180 injured. A CSB chart highlights the violations that led up to the 2005 Texas City refinery explosion, which continued to be ignored and contributed to the 2022 disaster, 17 years later. As direct evidence of BP’s gross negligence, the CSB included a 2019 incident report at the BP Husky refinery wherein naphtha was back flowing into a bypass line and accumulating in the fuel gas mix drum—precisely the precipitating circumstance that led to the Morrissey brothers’ death. The report notes that refinery operators were regularly working 12-hour shifts and the company employed a practice of “job rotation,” which undermined safety. In a Hazard Alert Letter issued by the Occupational Safety and Health Administration (OSHA) six months after the disaster, OSHA stated: [R]otating process operators among multiple positions, instead of a single position, can reduce the level of expertise and knowledge of operators on the unit for which they are initially qualified. In the event of a process upset condition or catastrophic incident, this decrease in expertise can negatively affect incident response efforts, posing a higher likelihood of exposure to toxic vapor/gas, fire and explosion hazards.
Austin Master Services CEO Pays $25,000 Bond to Stay Out of Jail --Marcellus Drilling News - Last week, MDN exclusively brought you the news that the CEO of American Environmental Services, which owns Austin Master Services (AMS), had filed a brief with Belmont County Court to either forgive or reduce a $1.2 million bond needed to keep the CEO, Brad Domitrovitsch, out of jail (see Austin Master Serv. CEO Asks Court to Block Jail Time, $1.2M Bond). The judge in the case reconsidered and reduced the bond from $1.2 million down to $25,000. Quite the reduction in Domitrovitsch’s “stay out of jail” card.
Public Employees Retirement System of Ohio Sells 67,383 Shares of Kinder Morgan, Inc ...Kinder Morgan, Inc operates as an energy infrastructure company primarily in North America. The company operates through Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline, and storage systems; natural gas gathering systems and natural gas processing and treating facilities; natural gas liquids fractionation facilities and transportation systems; and liquefied natural gas gasification, liquefaction, and storage facilities.
CNX Drilled 8 Marcellus, Turned to Sales 2 Utica Wells in 2Q24 ---Marcellus Drilling News -- Last week, CNX Resources issued its second quarter 2024 update. The company lost $18.3 million in 2Q24, compared with making a profit of $475 million in 2Q23. This is quite a whack due to the low price of natural gas. Production was 134.0 Bcfe (billion cubic feet equivalent) in 2Q24 — which works out to 1.47 Bcfe/d — down from 134.2 Bcfe last year (statistically the same). On the bright side, management was excited about the early results of two deep Utica gas wells that were brought online last quarter.
9 New Shale Well Permits Issued for PA-OH-WV Jul 22 – 28 | Marcellus Drilling News --For the week of July 22 – 28, a total of nine permits were issued to drill new shale wells in Marcellus/Utica. Pennsylvania had the fewest with just two new permits, one each for Seneca Resources and Rice Drilling (i.e., EQT). Ohio had the most with four new permits, all of them for EOG Resources for a single pad in Noble County. West Virginia came in between with three new permits, all three for Antero Resources in Tyler County. ANTERO RESOURCES | ELK COUNTY | EOG RESOURCES | EQT CORP | GREENE COUNTY (PA) | NOBLE COUNTY |SENECA RESOURCES | TYLER COUNTY
The Story of Utica Oil Part 1: Encino Becomes Most Active Driller - Marcellus Drilling News --We’ve written a number of times about the Ohio Utica Shale and its beginnings with gas legend Aubrey McClendon, who, as CEO of Chesapeake Energy, was one of (if not THE) first to recognize the Utica as an oil play. However, it was a successor company, Encino Energy, that figured out how to coax large quantities of oil out of the Utica shale. Encino is one of the big success stories of drilling for oil in the Ohio Utica Shale. Roughly six years ago, Encino, in partnership with the Canada Pension Plan Investment Board (CPP Investments), closed on buying Chesapeake Energy’s Ohio Utica assets for $2 billion (seeEncino Takes Over from Chesapeake in Ohio Utica; Big Plans). What Encino and a former Range Resources executive who now works for Encino have done is nothing short of magical (see Oil Prod. in Northern Utica Comes Alive – Encino Cracks Oil Code).
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DT Midstream in Talks to Expand Appalachian Gathering System -Marcellus Drilling News -- DT Midstream (DTM), headquartered in Detroit, owns major assets in the Marcellus/Utica region and other regions like the Haynesville. DTM issued its second quarter 2024 update yesterday. Of keen interest to us was any talk of the company’s Phase III expansion to the Appalachian Gathering System and an expansion in the Tioga County gathering system. To understand the comments coming from yesterday’s update, we need to go back to the first quarter 2024 update…
Kamala Harris won't seek fracking ban if elected: Campaign official - Vice President Kamala Harris will not seek to ban fracking if she’s elected president, an official with her campaign told The Hill on Friday. Harris’s position not to support a ban on fracking differs from where she stood when she was running for president last cycle. While she was one of several Democrats vying for the 2020 nomination, she told CNN, “There’s no question I’m in favor of banning fracking.” However, since that time, she joined the Biden campaign and administration, neither of which supports a ban on fracking Since Harris became the party’s likely nominee after Biden dropped out of the race, Republicans, including former President Trump, have highlighted her 2019 stance. “She wants no fracking,” Trump told supporters this week during a rally in Charlotte, N.C. “You’re going to be paying a lot of money. You’re going to be paying so much. You’re going to say ‘bring back Trump.’” A spokesperson for Harris’s campaign pushed back, saying, “Trump’s false claims about fracking bans are an obvious attempt to distract from his own plans to enrich oil and gas executives at the expense of the middle class.” “The Biden-Harris Administration passed the largest ever climate change legislation and under their leadership, America now has the highest ever domestic energy production,” the spokesperson said in an email. “This Administration created 300,000 energy jobs, while Trump lost nearly a million and his Project 2025 would undo the enormous progress we’ve made the past four years.”
Kamala Harris reverses stance on fracking as she tries to court swing voters - Vice President Harris has reversed her position on fracking, signaling a move to the center on the issue. The rightward shift comes as she tries to court swing voters in states like Pennsylvania. Harris was met with a wave of left-wing enthusiasm when she became the party’s presumptive nominee after President Biden left the race. Her shifted stance on fracking could dampen excitement among progressives, but the party’s left flank is still poised to ultimately back her over former President Trump. The Hill first reported, citing a Harris campaign official, that the vice president no longer supports a ban on fracking, despite taking the opposite stance when she ran for the Democratic nomination in the 2020 presidential cycle. Pennsylvania, a pivotal swing state in the upcoming election, is the second biggest gas-producing state, and the energy sector represented4.6 percent of its total employment in 2022. The state had nearly 18,000 people working in fuel extraction that year. However, fracking has come under scrutiny due to its environmental impacts. Beyond its role in producing planet-warming fossil fuels, it has been linked to earthquakes and pollution. A 2022 study also found that children living near fracking sites had a higher likelihood of developing leukemia. Climate is a weighty issue for many in the Democrats’ constituency, especially young voters. Nevertheless, some political strategists said they believed Harris’s pivot was smart because it could reassure some voters, particularly those concerned about economic and labor issues. “Fracking is a central part, a foundational part, a significant portion of Pennsylvania’s economy. The economic argument is going to be extremely significant nationally, and in the States, it’s the top issue on voters’ minds,” said Jon Reinish, a national Democratic strategist. Samuel Chen, a Pennsylvania-based Republican strategist, expressed a similar opinion, saying that if Harris doubled down on her previous support of a fracking ban, “it’s not going to play well in states like Pennsylvania.” Others disagreed, saying they don’t believe Harris’s stance on fracking will have major implications for the race. Her path to victory in key states like Pennsylvania is unlikely to include many hardcore oil and gas supporters, said Pennsylvania-based Democratic strategist Mike Mikus. Mikus was skeptical Harris’s reversal on the issue will be a millstone in the state, which was ground zero for the 2010s natural-gas boom. He noted that Republicans levied similar attacks on President Biden, who, unlike Harris, has not signaled support for a ban. “The Republicans have always used this as an attack regardless of whether that was a candidate’s position — it’s like the boy who cried wolf,” Mikus told The Hill. “It became an attack that never stuck.” Mikus added that Harris’s most likely path to victory in Pennsylvania runs through the suburbs of Pittsburgh and Philadelphia, a virtual world away from the southwestern regions of the state that were the site of its natural gas boom. “Now that she has stated her position, I really don’t think it’s going to have much of an impact here,” he said. “People who are strongly in favor of fracking to the point that it affects who they’re going to vote for, they’ve already picked a side.”
Court axes FERC pipeline approval that threatened New Jersey climate goals - A federal appeals court on Tuesday tossed out an approval for a Northeastern gas project, a major victory for New Jersey’s climate ambitions and advocates who want federal regulators to rethink how they weigh the need for new fossil fuel infrastructure.The U.S. Court of Appeals for the District of Columbia Circuit found that the Federal Energy Regulatory Commission had failed to consider significant environmental consequences and a lack of market demand for additional gas capacity when it granted a certificate for the contested project in 2023.The court also found that FERC had not accounted for New Jersey state laws requiring reductions in gas consumption. The record before FERC showed that the Transcontinental Pipe Line Co. Regional Energy Access Expansion (REAE) project would result in “enormous” emissions for the next half century, said Judge J. Michelle Childs, writing the opinion for the D.C. Circuit.“But it then walked away from the issues with a fatalistic shrug,” she said.Nowhere in FERC’s certificate approving construction of the Transco project did the commission explain whether or how it had considered emissions, or how it found that those emissions were outweighed by the project’s benefits, Childs continued.Instead, she said, FERC stated that it agreed with the conclusion of its National Environmental Policy Act analysis that this was an acceptable project, and summarized other impacts.“These broad-brush statements do not provide assurance that the Commission balanced the climate-related emissions to which the Commission refused to assign a significance label,” she said.Judges Cornelia Pillard, an Obama pick, and Brad Garcia, a Biden appointee, also joined Childs’ opinion.The three-judge panel ordered FERC to start over on the certificate, noting that it was not “sufficiently likely” that the commission would be able to explain its decision-making if the court simply remanded the approval.“It is far from clear that FERC’s failure here is only one of explanation,” Childs wrote. “Petitioners have identified potentially consequential deficiencies in the Certificate Order’s requisite considerations of market need and balance of public benefits and harms.”Opponents of the Transco project hailed the ruling and predicted the decision could push FERC to expand its justification for future gas projects in light of their expected effects on the climate.“The D.C. Circuit’s opinion is clear and unequivocal,” said Jennifer Danis, federal energy policy director at New York University’s Institute for Policy Integrity. Danis penned a “friend of the court” brief on behalf of the project’s opponents.“FERC ignored its [Natural Gas Act] mandate to protect the public interest when it approved the REAE pipeline despite substantial record evidence showing the project would serve private interests at the public’s expense,” she said.The D.C. Circuit took a “significant step” toward ensuring that FERC rigorously evaluates project proposals, said Megan Gibson, chief counsel at the Niskanen Center, which represented challengers in the case.“The court has set a precedent for demanding greater accountability and thoroughness in FERC’s decision-making, which hopefully takes hold and FERC starts really looking under the hood and examining these projects,” she said.The $1 billion Transco gas expansion project included about 36 miles of new pipe, as well as new and modified compressor stations and other facilities to serve about 3 million customers, primarily in New Jersey, as well as in other Eastern states.
Companies Argue Over Who Can Supply NatGas to WV Hydrogen Plant -Marcellus Drilling News - Hope Gas, West Virginia’s largest natural gas utility company, and Quantum Pleasants, which is working on a plan in Pleasants County, WV, to use natural gas to produce hydrogen for electricity generation at what is currently a coal-burning plant, are squabbling before the state Public Service Commission (PSC) over whether or not Quantum Pleasants has the right to buy its natural gas from a different vendor (with a different pipeline).
Virginia Fines MVP Another Piddly $30K for Erosion Violations - --Marcellus Drilling News - The Virginia Department of Environmental Quality (DEQ) slapped the Mountain Valley Pipeline (MVP) project (which is now online) with a fine of $30,500 for violations of erosion and sediment control rules that happened during the second quarter. It is the fourth consecutive quarter in which MVP was fined by the DEQ for violations. In total, MVP has been fined nearly $100,000 by the DEQ over the past one year. Which is pretty much a nothingburger.
US energy reform bill a ‘wishlist for the fossil industry’, say environmental groups --US senators should reject an energy-permitting reform bill being brought to committee on Wednesday by senators Joe Manchin and John Barrasso because it’s a “wishlist for the fossil industry” of the kind envisioned by Project 2025, environmental groups say.Manchin, a senator from West Virginia and a former Democrat who registered as an independent in May, and Barrasso, a Republican from Wyoming, argue their bill will speed permitting of power transmission, mining and liquefied natural gas (LNG) export projects. Their bill will be voted on by the Senate energy and natural resources committee, of which Manchin, a longtime proponent of the reforms, is the chair and Barrasso is the committee’s top Republican.The prospects of the bill becoming law, however, are uncertain given election-year politics and fierce opposition from environmental groups.Earthjustice described the legislation as an “egregious attempt to fulfill the wishlist of the fossil fuel industry, which is laid out in the Heritage Foundation’s Project 2025, under the guise of promoting renewable energy and developing transmission infrastructure”.A letter signed by about 360 environment groupsdescribed how environmentalists are concerned the legislation would force the Department of Energy to use outdated climate science and economic analysis, while ignoring any assessment of environmental justice impacts.“This legislation guts bedrock environmental protections, endangers public health, opens up tens of millions of acres of public lands and hundreds of millions of acres of offshore waters to further oil and gas leasing, gives public lands to mining companies, and would defacto rubberstamp gas export projects that harm frontline communities and perpetuate the climate crisis,” the letter said.The group Appalachian Voices said it was concerned that the legislation would reduce deadlines from challenges to energy projects “from six years to 150 days”. Chelsea Barnes, the group’s director of government affairs and strategy, said the bill “silences community voices by further eroding the National Environmental Policy Act”, adding that “all people deserve an opportunity to influence the development of energy projects in their communities”.Manchin and Barrasso say the bill would strengthen the power grid and help keep power prices low. Manchin called it a “commonsense, bipartisan piece of legislation that will speed up permitting and provide more certainty for all types of energy and mineral projects without bypassing important protections for our environment and impacted communities”.The bill gives companies more chances to bid on offshore oil and gas leasing between 2025 and 2029. In addition, the legislation sets a 90-day deadline for a secretary of energy to approve or deny liquefied natural gas export applications, which Barrasso said would “permanently end” Joe Biden’s pause on such approvals.
NatGas Demand in Powergen Grows, but Falls in Other Sectors | Marcellus Drilling News - As you may have noticed, a number of our posts today are stories about gas-fired power plants, which are vitally important (very big) customers for shale gas. According to an analysis by Reuters, natural gas use by power generators has expanded by around 3.5% a year over the past three years and is by far the largest single source of gas used in the U.S. However, natural gas consumption by the other major sectors, including industry, households, and commercial, is falling each year. The fall in usage by industry, etc., is more than the growth in powergen.
Oglethorpe Investing $2.3B in New Gas-Fired Power Plants in Ga. -- Marcellus Drilling News -- Oglethorpe Power is investing more than $2.3 billion in two new natural gas-fired power plants to supply its 38 member cooperatives with an additional 1,400 megawatts of electricity to meet escalating demand across residential, commercial, and industrial sectors. We think some, perhaps most of the gas that will feed these two new plants will come from the Marcellus/Utica.
TVA Plans for Miss. Gas-Fired Plant Triggers Hoaxers to Pitch a Fit --Marcellus Drilling News -- The Tennessee Valley Authority (TVA) is the sixth-largest power supplier and the largest public utility in the country. In 2021, MDN told you that TVA is spending over $1 billion to replace six coal-fired plants with natgas-fired turbines (see TVA Investing $1B to Build New Natgas-Fired Electric Plants). Earlier this week, TVA asked for public input on one of the projects, the New Caledonia Natural Gas Plant in Mississippi. The TVA plan for New Calendonia has triggered the radical left to respond.
Haynesville-Focused Comstock Taking ‘Frack Holiday’ to Await Uptick in Natural Gas Prices - Comstock Resources Inc., one of the most prolific natural gas producers in the Haynesville Shale, has dropped rigs, cut completion crews and suspended the quarterly dividend to wait out more favorable commodity prices. Chart showing Comstock Resources' natural gas price realizations. The Frisco, TX-based independent, with close to 750,000 net acres across the Haynesville, reported solid production results within its core development, the western portion of the play. Once prices cooperate, the company would be “well-positioned to benefit from the longer-term growth in natural gas demand,” CEO Jay Allison said. He discussed the outlook during a quarterly conference call on Wednesday. Comstock is “best located to serve the growing natural gas demand along the Gulf Coast,” Allison said. “The future for the company has never ever been brighter.
Crowley takes delivery of LNG bunkering barge chartered by Shell - US shipping and logistics company Crowley has taken delivery of a 12,000-cbm LNG bunkering barge which will serve a unit of LNG giant Shell.Fincantieri Bay Shipbuilding in Sturgeon Bay, Wisconsin, built the LNG bunkering barge named Progress.Crowley claims this is the largest US Jones Act-compliant vessel of its kind.The company and Shell NA LNG revealed this project in September 2021, and Fincantieri Bay Shipbuilding started work on the 126.8 meters long vessel in January 2021.Shell’s unit will take the barge on a long-term charter.According to Crowley, Progress will expand access to “cleaner energy” for ship operators at the Port of Savannah, Georgia.Progress’ technologies include capability developed by Shell and Crowley’s engineering services group to flexibly deliver LNG to various types of LNG containment systems, it said.Shell has a worldwide LNG bunkering network, including in the US.In January, 2021 Shell completed the first ship-to-ship bunkering operation using Q-LNG’s barge, Q-LNG 4000, in Florida.Last year, Shell completed the first LNG bunkering operation in the Caribbean with the 18,000-cbm bunkering vessel, New Frontier 2.Earlier this year, Shell expanded its global LNG bunkering network with the completion of its first operation in the port of Zeebrugge, Belgium.
US weekly LNG exports rise to 21 shipments - US liquefied natural gas (LNG) exports reached 21 shipments in the week ending July 24, and pipeline deliveries to US terminals rose compared to the week before, according to the Energy Information Administration.The agency said in its weekly report, citing shipping data provided by Bloomberg Finance, the total capacity of these 21 LNG vessels is 79 Bcf.This compares to 20 shipments and 75 Bcf in the week ending July 17. Average natural gas deliveries to US LNG export terminals increased 0.4 Bcf/d from last week to 11.5 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana decreased by 0.8 percent (0.1 Bcf/d) to 7.7 Bcf/d, while natural gas deliveries to terminals in South Texas increased 19.2 percent (0.4 Bcf/d) to 2.6 Bcf/d.Also, natural gas deliveries to terminals outside the Gulf Coast were essentially unchanged from last week at 1.1 Bcf/d, the agency said.Freeport LNG, south of Houston, continued to ramp-up operations this week according to Gulf South Pipeline Company and Texas Eastern Transmission following a period of being offline due to Hurricane Beryl.Last weekend, Freeport LNG has shipped the first cargo from its LNG export plant since the shutdown on July 7.During the week under review, Cheniere’s Sabine Pass plant shipped nine cargoes and the company’s Corpus Christi facility sent four shipments.Sempra Infrastructure’s Cameron LNG terminal shipped three cargoes, while Venture Global LNG’s Calcasieu Pass facility and the Freeport LNG terminal each shipped two cargoes.Also, the Elba Island facility sent one cargo, and the Cove Point terminal did not ship cargoes during the week under review.This report week, the Henry Hub spot price rose 5 cents from $1.98 per million British thermal units (MMBtu) last Wednesday to $2.03/MMBtu this Wednesday.The agency said the price of the August 2024 NYMEX contract increased 8.2 cents, from $2.035/MMBtu last Wednesday to $2.117/MMBtu this Wednesday.The price of the 12-month strip averaging August 2024 through July 2025 futures contracts climbed 6 cents to $2.887/MMBtu. The agency said that international natural gas futures were mixed this report week.Bloomberg Finance reported that weekly average front-month futures prices for LNG cargoes in East Asia decreased 15 cents to a weekly average of $12.13/MMBtu.Natural gas futures for delivery at the Dutch TTF increased 10 cents to a weekly average of $10.26/MMBtu.In the same week last year (week ending July 26, 2023), the prices were $11.13/MMBtu in East Asia and $9.67/MMBtu at TTF, the agency said.
India was top destination for US LNG cargoes in May --India was the top destination for US liquefied natural gas cargoes in May, as Asia overtook Europe as the main destination for US LNG supplies, according to the Department of Energy’s newest LNG monthly report.The DOE report shows that US terminals shipped 45.3 Bcf of LNG to India in May, 41.2 Bcf to Japan, 37.7 Bcf to the Netherlands, 28.4 Bcf to South Korea, and 26.2 Bcf to Germany.These five countries took 48.6 percent of total US LNG exports in May.Dutch and French LNG import terminals were the top destinations for US LNG supplies in March and April.According to DOE’s data, the Netherlands was the top destination for US LNG supplies in January-May with 229.7 Bcf or 69 cargoes, down by 12 percent year-on-year, while France took 195.5 Bcf or 60 cargoes, down by 5 percent year-on-year.In 2023, the Netherlands was also the the prime destination for US LNG cargoes with 588.6 Bcf, followed by France with 493.2 Bcf.The US exported in total 367.7 Bcf of LNG in May to 32 countries, up by 0.3 percent compared to the same month in 2023 and a rise of 21 percent from the prior month, the DOE report shows.Asia received 186.6 Bcf or 50.8 percent of these volumes, while Europe received 140.7 Bcf or 38.3 percent of these volumes and Latin America/Caribbean received 40.4 Bcf or 11 percent.The DOE said that 84.8 percent of total May LNG exports went to non-free trade agreement countries, while the remaining 15.2 percent went to free trade agreement countries.US terminals shipped 122 LNG cargoes in May, up from 105 LNG cargoes in April.Cheniere’s Sabine Pass plant sent 40 cargoes and its Corpus Christi terminal shipped 20 cargoes, while the Freeport LNG terminal shipped 24 cargoes and Sempra’s Cameron LNG plant and Venture Global’s Calcasieu plant each sent 14 cargoes.The Cove Point LNG dispatched 8 shipments and Elba Island LNG sent 2 cargoes. According to DOE’s report, the average price by export terminal reached 5.42/MMBtu in May, and this compares to 7.05/MMBtu in May 2013, while the average price was 5.25/MMBtu in April, $5.47/MMBtu in March, $6.31/MMBtu in February, and 6.63/MMBtu in January this year.The most expensive average price in May comes from Venture Global’s Calcasieu Pass terminal and it reached $8.04/MMBtu.Prices at other facilities ranged between $4.08-$6.04/MMBtu, the data shows.
Eagle LNG Seeks Extension to Build Jacksonville LNG Export Facility ---Marcellus Drilling News - In September 2019, the Federal Energy Regulatory Commission (FERC) gave its blessing to Eagle LNG to build a small LNG export facility project at a site on the St. Johns River in Jacksonville, Florida (see FERC Grants Final Approval to Jacksonville, FL LNG Export Plant). According to our research, some of the gas that will feed it will come from the Marcellus/Utica. FERC’s blessing in September 2019 came with a deadline to get the facility built by September 2024. Eagle says it can’t meet the deadline and has asked FERC to extend it by another five years.
Venture Global LNG wraps up $1.5 billion senior notes offering - US LNG exporter Venture Global LNG has closed its $1.5 billion offering of senior secured notes.The 7 percent senior secured notes will mature on January 15, 2030 and were issued at par, according to Venture Global.Also, the firm said the notes were secured on a pari passu basis by a first-priority security interest in substantially all of the existing and future assets of Venture Global and the future guarantors, if any, subject to customary exclusions.Venture Global said the notes were not registered under the Securities Act of 1933, or the securities laws of any state or other jurisdictions, and the notes may not be offered or sold in the US.In November last year, Venture Global closed its $1 billion offering of senior secured notes.The firm said at the time that this offering takes Venture Global’s total year-to-date high yield debt raised to $9.5 billion, which marks the “largest US dollar high yield issuance by volume in a single year since 2015”.Venture Global currently exports LNG via its 10 mtpa Calcasieu Pass liquefaction plant in Louisiana, which is still in the commissioning phase.The firm is also working to launch production at its Plaquemines LNG export terminal in Louisiana.Venture Global took a final investment decision in May 2022 on the first phase of the Plaquemines project with a capacity of 13.3 mtpa and the related pipeline. It also secured $13.2 billion in project financing.In March last year, the company sanctioned the second phase of the Plaquemines LNG export plant in Louisiana and also secured $7.8 billion in project financing.The full project, including the second stage, will have a capacity of 20 mtpa coming from 36 modular units, configured in 18 blocks.Last month, the US Pipeline and Hazardous Materials Safety Administration (PHMSA) last month gave the green light to Venture Global LNG for its proposed Plaquemines LNG uprate project.In addition to these projects, the US FERC has recently given the green light to Venture Global for its proposed CP2 LNG project in Louisiana.The CP2 LNG plant will be located next to Venture Global’s existing Calcasieu Pass liquefaction plant.
Baker Hughes Natural Gas Orders – for LNG and Beyond – Robust and Climbing, Says Simonelli -- Global natural gas and LNG consumption continues to strengthen, supported by accelerating Asian demand and “resiliency” in the industrialized nations, Baker Hughes Co. CEO Lorenzo Simonelli said Friday. Graph of Baker Hughes' global gas demand outlook. All signs look positive for gas consumption for the medium term, Simonelli said during a conference call to discuss second quarter performance. In addition to rising liquefied natural gas demand, he pointed to trends suggesting burgeoning growth in gas technology, driven in part by data centers powering artificial intelligence (AI). “The notable rise in generative AI could provide upside to our current expectations for natural gas demand to increase by almost 20% between now and 2040,” Simonelli told investors. “We are confident that strong underlying natural gas demand will lead to robust and sustainable growth in LNG through the end of this decade.”
Freeport LNG says all three trains back online -- Freeport LNG, the operator of the 15 mtpa liquefaction plant in Texas, has resumed operations at all of its three liquefaction trains.“All three of Freeport LNG’s liquefaction trains have been safely restarted,” a Freeport LNG spokeswoman told LNG Prime on Monday.“We are now in the process of completing our return to normal production rates,” the spokeswoman said.The LNG terminal operator ramped down production at its liquefaction end export facility on Sunday, July 7, ahead of Hurricane Beryl making landfall.Freeport LNG said on July 15 that it expects to restart the first train during that week after the terminal’s fin fan air coolers were damaged during Hurricane Beryl.The spokeswoman said at the time that the company plans to restart the remaining two trains “shortly thereafter”.Moreover, the spokeswoman said production levels after restart would be at “reduced rates for a period of time” as Freeport LNG continues repairs while operating the facility.Freeport LNG shipped its first cargo after Hurricane Beryl on July 22 onboard the 2024-built 174,000-cbm LNG carrier, Axios II, owned by Capital Product Partners.Of the 15 mtpa of Freeport LNG’s export capacity, 13.4 mtpa has been sold to Osaka Gas, Jera, BP, TotalEnergies, and SK E&S.
US natgas prices jump 4% on forecast for record heat (Reuters) - U.S. natural gas futures jumped about 4% to a one-week high on Tuesday on forecasts for record-breaking heat later this week that could boost the amount of gas power generators burn to an all-time high. That price increase came despite a bearish rise in output and forecasts for lower demand over the next two weeks than previously expected. On its first day as the front-month, gas futures for September delivery on the New York Mercantile Exchange rose 9.0 cents, or 4.4%, from where the contract traded on Monday to settle at $2.126 per million British thermal units (mmBtu) on Tuesday, their highest since July 23. That was also up about 11.5% from where lower-priced August contract closed on Monday when it was still the front-month. The August contract settled at $1.907 per mmBtu, the front-month's lowest close since April 26. Another bullish factor was an increase in the amount of gas flowing to Freeport LNG in Texas was on track to reach a preliminary 14-month high on Tuesday after the plant slowly returned to full service following a nine-day outage for Hurricane Beryl in early July. Analysts said the combination of higher gas use by power generators and rising LNG exports could cause utilities to take the unusual step of pulling gas out of storage during the first week of August. That would be the first weekly storage withdrawal in August since 2006. There was currently about 17% more gas in storage than normal for this time of year. Storage builds have been mostly smaller than usual in recent weeks, because several producers cut output earlier this year after futures prices dropped to 3-1/2-year lows in February and March. Higher prices in April and May, however, prompted some drillers, including EQT and Chesapeake, to slowly boost output. But with prices down about 23% so far in July, some analysts think producers may keep their drilling activities reduced for longer. Financial firm LSEG said gas output in the Lower 48 states rose to an average of 102.5 billion cubic feet per day (bcfd) so far in July, up from 100.2 bcfd in June and a 17-month low of 99.4 bcfd in May. U.S. output hit a monthly record of 105.5 bcfd in December 2023. Meteorologists forecast temperatures across the Lower 48 states will average 83.5 degrees Fahrenheit (28.6 Celsius) on Aug. 1 and 83.9 F on Aug. 2, according to LSEG data. That would top the daily record high average temperature of 83.0 F set on July 20, 2022, when power demand peaked at an all-time high of 742,600 megawatts, LSEG and federal energy data showed. To keep air conditioners humming during that record heat, LSEG forecast power generators would burn about 55.0 bcfd of gas on Aug. 2, which would top the all-time high of 54.1 bcfd reached on July 9 when generators had to burn more gas due to a lack of wind power. But the amount of wind power was on track to rise from 4% last week to around 11% this week. With more heat coming, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 105.2 bcfd this week to 111.3 bcfd next week. Those forecasts were lower than LSEG's outlook on Monday.
Natural-gas prices have dropped during the hottest summer ever, thanks to Europe --Air conditioners are running at full tilt in many parts of the U.S. during what's expected to be the hottest summer on record, but the price of the natural gas used to help power them has dropped to its lowest level in three months. Consumers can, at least in part, thank Europe for that. On its expiration day Monday, the August natural-gas futures contract settled at $1.907 per million British thermal units on the New York Mercantile Exchange, down a fifth consecutive session to end at the lowest level since April 26, according to Dow Jones Market Data. The September contract, which is now the front month, edged up by 4.4% to settle Tuesday at $2.13. Based on the front month, prices have fallen 37.3% from this year's intraday high of $3.392 on Jan. 9, during the higher-demand winter heating season, according to Dow Jones Market Data. Prices have lost 15.4% year to date. Natural gas has become "a more international fuel" given the ability to transport liquified natural gas, also known as LNG, around the world, said Beth Sewell, president and chief executive officer at Quantum Gas & Power Services. "LNG shipments in Europe are down due to higher storage levels after last winter's non-event" - milder winter weather - "coupled with South and Southeast Asia's demand expected to start falling as monsoon season ramps up," she said. European natural-gas storage levels finished the natural-gas supply-withdrawal season at the end of March at 58.72% full, or 3% higher than the prior year, Sewell told MarketWatch, citing data included in an article from the Financial Times. Last winter was generally mild in Europe, and strong LNG imports and slow economic activity, along with the European Union's gas usage reduction targets, contributed to higher storage levels, she said, adding that demand for natural gas was about 20% lower in February than the 2019 to 2021 averages. European LNG imports have declined, with Europe's imports tracking at 6.56 million tons for July, the lowest since September 2021 and down from 7.21 million in June, according to a report from Reuters citing data from Kpler. All of that has helped keep more supplies in the U.S., even as the nation experienced its warmest year on record in 2023, and with temperatures tracking even higher this year to date, according to data from the National Oceanic and Atmospheric Administration's National Centers of Environmental Information. In the U.S., supplies have also been more than ample to meet consumer needs. "There's plenty of gas in inventory, thanks in part to the warm winter we had," As of the week that ended July 19, domestic natural-gas inventories were 16% above the five-year average for this time of year, according to the Energy Information Administration. It pegged total working gas in storage at 3.231 trillion cubic feet, which is 249 billion cubic feet above the year-ago level. Meanwhile, production in the Permian basin is increasing "rapidly," as oil prices remain elevated and natural gas is produced as a byproduct of drilling for oil, Monthly Permian production is up 12% over the last 12 months, "despite lower natural-gas prices," Hatfield said. The Permian now makes up 26% of total gas production, versus 23% in the prior year, he said. U.S. exports are also likely down in July, leading to more natural gas staying in the country to push prices down, because Hurricane Beryl, which made landfall earlier this month on the Texas coast, affected operations at Freeport LNG, the second-largest U.S. LNG export facility, Matt Smith, head U.S. analyst at Kpler, told MarketWatch. The Atlantic hurricane season, which officially begins on June 1 and runs through Nov. 30, has historically fueled concerns over potential disruptions to energy production in the Gulf of Mexico. However, more recently, hurricanes typically haven't been that supportive for natural-gas prices, VettaFi's Morris told MarketWatch. That's because there's "relatively modest natural-gas production offshore relative to onshore" in the lower 48 states, she said. Power outages from lines damaged during hurricanes can lead to less natural-gas demand for power generation as well, she said. Industrial power loads in the U.S., meanwhile, are "starting to slip" as the country's economy "endures continued inflation and a potential recession - meaning demand for goods will start to slip," reducing energy demand, Quantum Gas & Power's Sewell said. Against this backdrop, the dip in natural-gas futures below the $2 per million Btu level may be low enough to entice some investors back into the market. Usually, natural gas does bottom near the $2 level, said Infrastructure Capital Advisors' Hatfield, but the market is headed into the "shoulder months," the period after summer when weather is milder and demand is lower. Morris warned that for the typical investor, playing natural gas can be "complicated, and even getting exposure through an [exchange-traded fund] like UNG is not straightforward." The United States Natural Gas Fund UNG was trading down nearly 31% year to date in Tuesday dealings. Hatfield said the "best opportunity to take advantage of the national gas surplus" is to invest in pipelines that transport natural gas for export and in the companies that own the liquefaction capacity. Investors can also buy individual companies or ETFs, such as Infrastructure Capital's InfraCap MLP ETF AMZA, that own shares of the largest natural-gas infrastructure companies, he said. The companies that produce or export LNG include Cheniere Energy Inc. (LNG) and Chevron Corp. (CVX). When natural gas has a "1-handle," said Morris, referring to prices under $2, "it feels cheap." There is "arguably more upside risk to prices over the coming months than downside risk," she said, but natural-gas prices "could get worse before they get better." In the near term, forecasts for cooler weather and bearish weekly storage reports could put further pressure on prices, Morris said. Some producers have curtailed production in response to low prices, and that is clearly a symptom of weak prices and a weak fundamental backdrop. So if natural-gas inventories are high heading into the winter and production curtailments are reversed, it would be "difficult to see a lot of upside to prices, even if it's a cold winter," she said. "The startup of LNG export facilities in 2025 should be supportive for prices," however, and the "consensus expectation is that natural-gas prices will be higher in 2025 than in 2024," Morris said.
US natgas prices fall 4% on rising output, less heat forecast for next week (Reuters) -U.S. natural gas futures slid about 4% on Wednesday on rising output and forecasts for less hot weather and lower gas demand next week than previously expected. Theprice decline came despite forecasts for record-breaking heat later this week that could boost the amount of gas power generators burn to an all-time high. Front-month gas futures for September delivery on the New York Mercantile Exchange fell 9.0 cents, or 4.2%, to settle at $2.036 per million British thermal units (mmBtu). For the month, the contract was down about 22% after gaining about 48% during the prior three months. In the spot market, gas prices at the Waha hub in the West Texas Permian Shale turned negative for a third time in July, even as a record-breaking heat wave could boost U.S. power demand to an all-time high as homes and businesses crank up air conditioners. In the Pennsylvania-New Jersey-Maryland region, next-day power at the PJM West hub fell to $14 per megawatt hour, its lowest since April 2021. Analysts said higher gas use by power generators could cause utilities to take the unusual step of pulling gas out of storage during the second week of August. That would be the first weekly storage withdrawal in August since 2006. There was currently about 16% more gas in storage than normal for this time of year. In other news, the U.S. National Hurricane Center said a tropical disturbance in the Atlantic Ocean has a 60% chance of strengthening into a cyclone that could hit the U.S. East Coast somewhere between Florida and SouthCarolina over the next seven days. Analysts said an East Coast storm could reduce gas demand by cutting power use through outages and cooler weather. Meteorologists forecast temperatures across the Lower 48 states will average 83.5 degrees Fahrenheit (28.6 Celsius) on Aug. 1 and 83.9 F on Aug. 2, according to LSEG data. That would top the daily record high average temperature of 83.0 F set on July 20, 2022, when power demand peaked at an all-time high of 742,600 megawatts, LSEG and federal energy data showed.
US natgas prices little changed despite near-record breaking heat (Reuters) -U.S. natural gas futures held steady on Friday, supported by rising gas flows to liquefied natural gas (LNG) export plants and forecasts for near record-breaking heat over the next few days but pressured by rising output, formation of a likely demand-killing storm near Florida and a tremendous oversupply of gas in storage. Front-month gas futures NGc1 for September delivery on the New York Mercantile Exchange fell 0.1 cents to settle at $1.967 per million British thermal units. For the week, the contract declined about 2%, putting it down for a third week in a row and the seventh time in eight weeks. During those eight weeks, the contract has lost about 32%. That near record-breaking heat could boost the amount of gas power generators burn to keep air conditioners humming over the next few days. There was currently about 16% more gas in storage than is normal for this time of year. EIA/GAS NGAS/POLL Storage builds havebeen smaller than normal in 11 of the past 12 weeks because several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March. Higher prices in April and May, however, prompted some drillers to boost output. But after prices dropped 22% in July, some analysts said producers could keep their drilling activities lower for longer. In other news, the U.S. National Hurricane Center said Tropical Depression 4, currently located over Cuba, would likely strengthen into a Tropical Storm on Saturday before hitting the West Coast of Florida on Sunday. Meteorologists slightly reduced their temperature forecasts for the Lower 48 states, which is part of the reason power demand did not hit an all-time high on Thursday as some analysts predicted. The forecasters now expect temperatures across the country to rise from an average of 82.6 degrees Fahrenheit (28.1 Celsius) on Thursday to 82.7 F on Friday and 82.8 F on Monday, according to LSEG data. That would remain below the daily record high average temperature of 83.0 F set on July 20, 2022, when power demand peaked at an all-time high of 742,600 megawatts, LSEG and federal energy data showed. U.S. power demand, however, could still hit a record high on Friday or Monday. Gas flows to the seven big U.S. LNG export plants rose to 12.8 bcfd so far in August, up from 11.9 bcfd in July when Freeport shut for nine days for Hurricane Beryl. That compares with a monthly record high of 14.7 bcfd in December 2023.
Natural gas electricity generation in the United States spiked with July heatwave U.S. power plant operators generated 6.9-MM megawatt hours (MWhr) of electricity from natural gas on a daily basis in the Lower 48 states on July 9, 2024, probably the most in history and certainly since at least January 1, 2019, when we began to collect hourly data about natural gas generation. The spike in natural gas-fired generation on July 9 was because of both high temperatures across most of the country and a steep drop in wind generation. According to the National Weather Service, most of the U.S. experienced temperatures well above average on July 9, 2024. Temperatures were particularly high on the West Coast and East Coast. Wind generation in the Lower 48 states totaled 300,000 MWhr on July 9, 2024, much lower than the 1.3-MM MWhr daily average in June 2024.
Natural gas shows its staying power as U.S. wind output slumps -- Power producers in the U.S. are becoming increasingly reliant on natural gas for generation, even as the country builds out renewable energy capacity at a record pace. Renewable energy sources have been grabbing a steadily growing share of the power mix for years, which has allowed power firms to cut coal-fired power and reduce emissions. But due to the volatile nature of renewable energy flows, power firms have needed to increase the use of natural gas within power systems and remain heavily dependent on gas whenever renewable energy supplies drop off. That high gas dependency was highlighted again this month as wind generation slumped just as overall power use climbed due to high temperatures and strong demand for air conditioning. On the hook. Power firms must ensure supply meets demand by adjusting fuel mixes as necessary, and this month they had to offset a steep drop in output from wind farms while also accommodating a climb in total power demand due to greater use of cooling systems across much of the country. From July 1–July 23, power generation from U.S. wind farms dropped by 78% from 57,274 megawatt hours (MWh) to 12,608 MWh, data from LSEG shows. Wind generation levels often slump during the summer due to lower wind speeds at turbine level, but on July 23 the production levels were the lowest for that date in more than least three years. To offset such a notable dip in clean power supply, power firms boosted natural gas-fired generation by 27% over the same period, from 217,617 MWh on July 1 to 276,453 MWh on July 23, according to LSEG. This steep climb in gas-fired generation pushed natural gas's share of the national power generation mix to 46.3% so far in July, from an average of 40% for the opening half of 2024. But the higher gas-fired output also helped lift total generation levels by 3.4% on July 23 from July 1, ensuring the national power system was able to meet elevated demand needs. Key power pillar. The ability of natural gas to speedily plug supply shortfalls from other sources means the fuel will remain a critical pillar of the U.S. power system for years to come, despite continued rapid growth in renewable energy sources. Natural gas supplied just over 42% of U.S. electricity in 2023, according to energy think tank Ember. That was by far the largest single power source in the country and compared to 15.61% from combined wind and solar sources, 16% from coal plants, 18.25% from nuclear plants and around 6% from hydro dams. With power firms committed to reducing emissions, renewables look set to grow their share of the national generation mix while coal's share will decline further. But natural gas will remain the primary fuel source in a majority of key power systems across the U.S., and will likely continue to expand its share of the overall generation pie before being gradually reduced in generation systems over the coming decades.
Baltimore Antis Protest Fossil Fuels Wearing Costumes Made from O&G --Marcellus Drilling News - You really can’t make this stuff up. A big picture is splashed across the pages of the Baltimore Sun website showing anti-fossil fuel nutters protesting “burning oil and gas indoors” (i.e., protesting the continued use of fossil fuels in stoves and furnaces). They were there to lobby the state Public Service Commission to disallow spending on new natural gas pipelines of any kind (local delivery, statewide transportation, etc.). Two of the protesters were dressed up as characters from The Flintstones. Both costumes were made from plastics — from oil and gas. That is, they were there protesting fossil fuels and WERE TOO STUPID to know they were wearing fossil fuels! Hilarious!!
Revolutionary research unlocks secrets of shale oil recovery - Navigating the complexities of oil extraction requires a deep understanding of the unique properties of shale—a rock formation that harbors vast reserves of oil and gas. However, the extreme tightness of these formations, marked by their tiny, intricate pore structures, has long posed significant challenges. We present the trailblazing work of Williams Ozowe, Rodney Russell, and Prof. Mukul Sharma, which promises to revolutionize industry practices with their innovative methodologies.Their study, “A Novel Experimental Approach for Dynamic Quantification of Liquid Saturation and Capillary Pressure in Shale,” unveiled at the 2020 SPE/AAPG/SEG Unconventional Resources Technology Conference, introduces a pioneering technique that dramatically enhances the precision of measuring liquid saturation and capillary pressures in shale formations. The core of this technique is the observation of the transient decay in pressure within the fluid encasing the shale during confinement, allowing for accurate estimations of the fluid volumes infiltrating the tight rock matrix.Conducted with shale samples from the Eagle Ford, Utica, and Bakken formations—regions noted for their abundant but challenging reserves—the research employed batch tests to gauge the total pressure drop across these samples. This data enabled the team to assess oil saturations and establish a “pseudo capillary pressure curve.” Understanding this curve is essential for grasping how fluids interact within the shale’s pores, particularly the dynamics between oil vapor and liquid oil.A key discovery from their research is that shales with higher permeability absorb more oil during spontaneous imbibition compared to forced imbibition, a mechanically induced process. This insight is invaluable as it suggests that recovery strategies could be specifically tailored to the properties of the shale in question. Furthermore, the study observed that larger shale particles, often containing micro-cracks that serve as additional conduits for oil, facilitate more significant oil absorption at lower pressures during forced imbibition.This research transcends academic interest; it holds practical implications that could lead to more efficient extraction techniques and ultimately, more effective exploitation of shale resources. As the oil and gas industry grapples with the intricacies of unconventional reservoirs, Ozowe and his team’s contributions provide new tools and insights that could transform operational strategies and bolster the economic viability of shale oil production.
BP Makes FID on 6th GOM Project -- BP plc has made a final investment decision (FID) on the Kaskida project in the U.S. Gulf of Mexico (GOM). Kaskida, which will be the oil giant’s sixth hub in the Gulf of Mexico, will have a new floating production platform with the capacity to produce 80,000 barrels of crude oil per day from six wells in its first phase. Production is expected to start in 2029, BP said in a news release. BP’s 100-percent-owned Kaskida field has discovered recoverable resources currently estimated at around 275 million barrels of oil equivalent from the initial phase. Additional wells could be drilled in future phases, subject to further evaluation. Located in the Keathley Canyon area about 250 miles southwest off the coast of New Orleans, the Kaskida project unlocks the potential future development of 10 billion barrels of discovered resources in place across the Kaskida and Tiber catchment areas, according to the release. BP noted that Kaskida is in “a prime location,” with a stable fiscal regime and access to the market. The project will be its first development in the GOM to produce from reservoirs that will require well equipment with a pressure rating of up to 20,000 pounds per square inch (20K). Advancements in 20K drilling technology, coupled with updated seismic imaging, enable the company to safely develop the field and to progress plans to develop other fields such as Tiber, which is expected to advance to a final investment decision next year, it said. “Developing Kaskida will unlock the potential of the Paleogene in the Gulf of Mexico for BP, building on our decades of experience in the region,” Gordon Birrell, BP Executive Vice President of Production and Operations, said. “Technology has and will continue to play a pivotal role in propelling Kaskida from discovery to production. Together with the other resources we have in the Paleogene, we expect it to prove to be a world-class development. Today is a critical step in realizing its potential,” Birrell added. BP said it plans to leverage existing platform and subsea equipment designs that can be replicated in future projects to drive cost efficiencies across Kaskida’s construction, commissioning and operations. “By employing an industry-led design solution, Kaskida will be simpler to construct and simpler to operate, enhancing safety and delivering greater value for BP," Andy Krieger, BP Senior Vice President for the Gulf of Mexico and Canada, said. BP discovered the Kaskida field in 2006. The company operates five platforms in the Gulf of Mexico: Argos, Atlantis, Mad Dog, Na Kika and Thunder Horse. It produced approximately 300,000 barrels of oil equivalent per day from the GOM last year. Kaskida, Tiber and nearby discoveries combined have an estimated 10 billion barrels of discovered resources in place, according to the release.
How Dangerous Is Extreme Weather for Oil and Gas Companies In 2024? - Extreme weather can always pose a risk for oil and gas operations, Frederick J. Lawrence, the ex-Independent Petroleum Association of America (IPAA) Chief Economist, told Rigzone in an exclusive interview held recently. “Two weather-related events to watch include hurricanes and extreme heat or cold temperatures, in addition to other one-off weather phenomena,” he added. “In 2024, meteorologists have forecasted increased risk for the Atlantic hurricane season … This raises the prospect for weather related production outages for U.S. oil and natural gas operations,” Lawrence continued. Lawrence highlighted to Rigzone that Hurricane Beryl was impacting power supply in the Texas region even last week. The hurricane made landfall in Texas on July 8. “The storm impacted power for up to 2.7 million homes and outages continue for many as 250,000 were still without power on July 16,” Lawrence said. “The storm impacted operations at several ports in addition to the high number of power outages which also impacted demand,” he added, noting that Freeport LNG was also impacted. A Freeport LNG spokesperson told Rigzone on Monday that the company was “safely progressing the restart of … [its] liquefaction trains”. In the interview, Lawrence said the oil and gas industry must constantly improve its defense toward weather-related events and warned that more preparation and faster response will always be needed in addition to improved standards and resilience. “Companies continue to integrate real time weather insights into their operation strategy in addition to hardening plants,” he added. “Given the interconnectedness of the global oil and gas industry (with the U.S. weighing in as the top producer in addition to top oil and gas exporter), increased preparations for extreme weather events will remain a top priority given what appears to be an increased frequency and intensity of events according to groups that track weather-related incidents,” he added. “This adds risk to markets given that both global oil and natural gas demand are forecast to grow in 2024 and geopolitical instability remains high as well,” he continued. Alex Stevens, the Manager of Policy and Communications at the Institute for Energy Research (IER), told Rigzone in another exclusive interview that “hurricanes have always posed risks to oil and gas companies due to their potential impact on supply chain logistics, infrastructure, and extraction demands”. “For instance, the Gulf Coast, where over half of oil refining and most natural gas exports occur, regularly faces challenges from hurricanes that disrupt supply chain management,” he added. “Despite these ongoing threats and their historical and future impacts on the industry, continuous advancements in infrastructure and weather forecasting are key to staying ahead of predictable extreme weather events,” he continued. Stevens highlighted to Rigzone that oil and gas companies have been actively advancing technologies to mitigate these risks. “One significant development is the integration of artificial intelligence (AI) for analyzing operational data and predicting the impacts of weather events,” he pointed out. Ellen R. Wald, the President of Transversal Consulting, told Rigzone in a separate exclusive interview that “extreme weather risks vary considerably for oil and gas companies depending on their location and type of production”. “For example, the degree of danger from extreme weather for offshore drilling in the Gulf of Mexico is considerably higher than it is for unconventional gas drilling in the Marcellus Shale region in Pennsylvania,” Wald added. “Due to the chance of a La Nina developing in the summer and fall of 2024, extreme weather risks are much higher for offshore drilling in the Gulf of Mexico. La Nina conditions make it more likely that hurricanes will develop and track into the Gulf of Mexico,” Wald continued. “Offshore drilling platforms in this area will have to be evacuated in preparation for hurricane conditions and then after hurricanes pass, damages will have to be assessed and repaired for oil production to recommence,” Wald stated. In a statement posted on its website back in May, the National Oceanic and Atmospheric Administration (NOAA) warned that its National Weather Service forecasters at the Climate Prediction Center predict above normal hurricane activity in the Atlantic basin this year.The organization revealed in the statement that its outlook for the 2024 Atlantic hurricane season predicts an 85 percent chance of an above normal season. NOAA highlighted in the statement that it is forecasting a range of 17 to 25 total named storms, including four to seven major hurricanes.
Biden administration replenishes oil reserve after Russia war drawdown -The Biden administration says it has replenished the 180 million barrels of oil it withdrew from the nation’s Strategic Petroleum Reserve in response to high prices following Russia’s invasion of Ukraine. The Energy Department on Friday announced a 4.65 million barrel purchase, bringing the total purchased since the 2022 drawdown up to more than 40 million barrels. In addition, the administration has worked with Congress to cancel 140 million barrels in planned sales — accounting for the rest of the 180 million. “This milestone is a proof point that when the Biden-Harris Administration makes and implements a plan, we deliver for the American people,” Energy Secretary Jennifer Granholm said in a written statement. “As promised, we have secured the 180 million barrels back to the Strategic Petroleum Reserve released in response to [Russian President Vladimir] Putin’s war in Ukraine – and we accomplished this while getting a good deal for taxpayers and maintaining the readiness of the world’s largest Strategic Petroleum Reserve,” she added. The department said that the 43.25 million barrels it purchased were procured at an average price of $77 per barrel, while the oil it sold in 2022 averaged $95 per barrel. The other 140 million barrels were essentially bought at $74 per barrel, a senior Energy Department official said.
Debunking Claims That The Biden Administration Has Replenished The SPR -- On July 29, multiple news outlets reported that the Biden Administration has replenished the 180 million barrels of oil it removed from the Strategic Petroleum Reserve. One headline read “U.S. Restores SPR to pre-2022 Levels.” An article in The Hill reported:“The Biden administration says it has replenished the 180 million barrels of oil it withdrew from the nation’s Strategic Petroleum Reserve in response to high prices following Russia’s invasion of Ukraine.”It is absolutely false that the SPR has been replenished. In fact, here were the SPR levels as of July 19: The reporting seems to be a misreading of the following precisely-worded commentary by Secretary of Energy Jennifer Granholm:“As promised, we have secured the 180 million barrels back to the Strategic Petroleum Reserve released in response to Putin’s war in Ukraine – and we accomplished this while getting a good deal for taxpayers and maintaining the readiness of the world’s largest Strategic Petroleum Reserve.”Let’s review what’s happened here, because these comments have resulted in confused reports on the outcome. President Joe Biden inherited an SPR at 638 million barrels when he took office in January 2021. However, first in response to rising gasoline prices, and then as a result of Russia’s invasion of Ukraine, President Biden announced the most aggressive SPR drawdown in history.At its low point in July 2023, the SPR was drawn down by 288 million barrels, although some of that was due to congressionally-mandated sales. Since then, the Biden Administration has made a few purchases to put oil back in the SPR. But, as of the week ending July 19, SPR levels had only risen 27.7 million barrels from the low point. That is only 9.6% of the oil that was removed from the SPR.Today, the SPR is still 260.6 million barrels below the level it was when Joe Biden was inaugurated. There is an obvious disconnect in that and what is being reported.Here is the confusion explained. Secretary Granholm and the DOE said that they initially removed 180 million barrels in response to Russia’s invasion of Ukraine. This doesn’t account for all the oil that was removed since Biden took office, so that’s the first error in reports that it has been replenished to pre-2022 levels (which were >600 million barrels).But note the full context of the DOE press release, which wasn’t widely reported:“On top of the 140 million barrels of oil secured by working with Congress to cancel previously-mandated sales, this brings the total purchased or kept in the SPR since 2022 to 180 million barrels – the full amount sold following the unprecedented Russian war against Ukraine.”What exactly are they saying here? Well, the first thing they are doing is taking credit for barrels that have yet to be delivered. They have crafted a minor SPR purchase into creating an impression that they have replaced 180 million barrels of oil that were removed from the SPR.But the most important aspect of the story is that the DOE worked with Congress to cancel previously-mandated sales. So, it wasn’t that 140 million barrels were put back, they are saying they avoided depleting it by another 140 million barrels in the future.So, it is absolutely false that the SPR has been replenished to pre-2022 levels. This reporting is based on a misunderstanding of the DOE’s comments, which seem designed to imply that 180 million barrels were put back into the SPR.Today, the SPR remains over 40% below the level it was when Joe Biden took office, and it will remain at approximately that level through the election.
USA Upstream Merger Activity Hits Nearly $90B Year to Date - In a release sent to Rigzone, Enverus Intelligence Research (EIR) revealed that U.S. upstream M&A activity “notched its third consecutive quarter of heightened value with more than $30 billion transacted”. “That brings year to date activity, including July deals, to nearly $90 billion and nearly $250 billion transacted in the last 12 months,” the company said in the release, adding that, “prior to the latest run of consolidation, quarterly M&A value had only topped $30 billion three times since the start of 2017”. EIR noted in the release that M&A value in the second quarter was heavily weighted toward one large transaction, with ConocoPhillips acquiring Marathon for $22.5 billion. EIR highlighted in the release that the transaction is the fifth largest U.S. upstream deal of the last decade and described it as “another historic name exiting the E&P space, as Marathon Oil has roots that reach back more than 100 years”. The rest of the top five deals during the quarter comprised SM Energy and Northern Oil & Gas’ deal with XCL Resources for $2.55 billion, Crescent Energy’s deal with SilverBow Resources for $2.10 billion, Matador Resources’ deal with Ameredev II for $1.90 billion, and TXO Partners’ deal with EMEP and Kaiser-Francis Oil for $298 million, the release outlined. “M&A momentum carried into the second quarter as pressure built on companies like ConocoPhillips, Devon Energy and SM Energy, that had previously stayed out of the market to keep pace with peers and grow in scale,” Andrew Dittmar, Principal Analyst at EIR, said in the release. “In the case of ConocoPhillips and Devon Energy, running out of inventory doesn’t appear to be as high a concern, but there is still a perception that successfully navigating the maturing phase of shale requires building resource base with M&A,” he added. “The increasing cost of buying drilling inventory, particularly in the Permian, has been the main story in upstream M&A throughout 2024,” Dittmar continued. “With the highest quality inventory selling at premium pricing, there has been a scramble for middle-tier inventory that provides strong returns even if it isn’t as economic as core Permian assets,” he went on to state. In the release, EIR noted that an advantage of buying in plays like the Eagle Ford and Williston Basin is the ability to capitalize on the potential of older horizontal wells by recompleting them with what the industry terms refracs. In its investor materials, ConocoPhillips in particular highlighted refrac potential in its Marathon Oil acquired assets, and Devon Energy called out 300 refrac candidates, EIR said in the release, adding that the opportunity to revisit older wells is something companies are paying increasing attention to, both within their existing assets and when evaluating deal opportunities. “Companies are also looking for opportunities to expand their inventory base by testing new zones,” EIR stated in the release. “Besides high prices in the Permian, SM Energy made a move into Utah’s underdeveloped Uinta Basin with its purchase of XCL Resources because the company feels it can develop new productive intervals and expand the resource base to justify its entry price,” it added. EIR noted in the release that a rising tide of inventory prices has lifted all boats for private sellers, which it said have capitalized on the market to divest more than $100 billion of assets to public companies since the start of 2022. “Among private equity firms, EnCap Investments has led the way with roughly $20 billion divested since then, including selling nearly $10 billion in portfolio companies since the start of June,” EIR stated. “Other top sellers during that time include Lime Rock, which invested in CrownRock, NGP Energy Capital and Quantum Energy Partners. The collection of companies, which are all energy specialist investment firms, reflect changes in the private equity landscape in oil and gas as large, generalist firms have pulled back,” it added. “An extremely strong market has also tempted long-held family companies like Endeavor Energy Resources, which contributed $26 billion to total private sales, to exit. An outstanding question in the industry is if more family-owned companies, specifically Mewbourne Oil which now holds the deepest bench of privately owned Permian locations following the sale of Endeavor, will also be tempted into the market,” it continued. “A sales process by Mewbourne Oil would likely draw attention from all large companies active in the Delaware, potentially including even EOG Resources which has not made a significant acquisition since it last purchased private, family-owned Yates Petroleum in the Delaware Basin in 2016,” it went on to state. There is still room for private equity companies to divest more portfolio companies, particularly in the Eagle Ford and SCOOP/STACK plays, EIR said in the release.
Occidental to Sell Delaware Basin Assets to Permian Resources for $818MM Occidental Petroleum Corp. announced Monday an agreement to sell about 29,500 net acres in the Delaware Basin to Permian Resources Corp. for around $818 million and said it had completed several divestments totaling approximately $152 million. The oil and gas and chemicals producer launched a $4.5 billion–$6 billion divestiture program when it announced its acquisition of Permian Basin competitor CrownRock LP late last year. The divestitures help Houston, Texas-based Occidental manage debt as it seeks more borrowings to fund the cash-and-stock purchase, announced with a $12 billion price. Warren Buffett-backed Occidental has so far announced or completed $970 million worth of acquisitions this year, it said in a statement announcing the new sale to Permian Resources. The transaction with Midland, Texas-based Permian Resources involves about 27,500 acres on the Texas side of the Delaware Basin and about 2,000 acres on the New Mexico side. The assets are expected to add 15,000 barrels of oil equivalent per day to Permian Resources’ production in the fourth quarter of 2024. The parties expect to close the transaction in the third quarter, subject to customary conditions.
Texas Crude Oil Pipelines Near Full Capacity, Potential Export Constraints Near - Pipelines transporting crude from America's top-producing shale basin to major export hubs in Texas are nearing capacity limits. With US crude production hitting record highs, these pipeline constraints could throttle US oil exports at a time when uncertainty looms in the energy and geopolitical spaces. Bloomberg cites new data from energy researcher East Daley Analytics, which says major pipelines between the Permian Basin and the Port of Corpus Christi pipeline are currently more than 90% full. That number could easily rise to 94% or 95% by the second half of 2025. Bloomberg pointed out, "While output is set to keep growing, it will be difficult for that incremental output to reach international buyers without ample pipeline space." Some of this crude will likely be redirected to the Houston area to ease congestion. Specifically, OneOK's Longhorn and BridgeTex pipelines could serve as alternative routes for transporting crude to the Gulf Coast. Meanwhile, Enbridge's Gray Oak pipeline expansion could help alleviate some of the bottlenecks in the Corpus Christi route. "Still, East Daley estimates even the company's goal of increasing capacity on the line by 120,000 barrels per day won't bring overall regional utilization below 90%," Bloomberg said. With the US leading the world in crude oil production... Export limitations on US energy products will spell disaster for the EU and other major trading partners that heavily rely on the US more than ever.
Texas crude oil pipelines full to the brim, getting worse— Crude oil pipelines connecting the busiest Texas oil fields to a critical export hub across the state are nearly out of space, threatening to cap US oil exports at a time when the world needs more. Key pipelines that transport barrels produced in the Permian Basin to the Port of Corpus Christi are more than 90% full, and companies that operate some of these lines say the congestion is likely to get worse. By the second half of 2025, the pipes could be 94% or 95% full, estimates researcher East Daley Analytics. Demand for the limited pipeline space comes at a time when the US is producing more crude oil than any other nation, with output set to hit a new record next year. The Permian region, one of the top producing shale basins in the world, accounts for nearly half of all US oil production. While output is set to keep growing, it will be difficult for that incremental output to reach international buyers without ample pipeline space. If growth in the US’s crude exports stalls, it threatens to create pockets of oversupply domestically and exacerbate supply tightness in other regions of the world, which have come to rely on US barrels more than ever after Russia’s invasion of Ukraine and OPEC+ supply curbs. Demand from China and the price of Brent crude will all play a role as well in the medium-term supply-demand balance, said Kristy Oleszek, East Daley’s director of energy analytics. To be sure, some of the oil may be rerouted to the Houston area instead, alleviating some congestion. OneOK’s Longhorn and BridgeTex pipelines in particular could offer alternative options to get barrels down to the Gulf Coast. Meanwhile, a plan to expand Enbridge Inc.’s Gray Oak pipeline system will likely reduce some bottlenecks to Corpus Christi. Still, East Daley estimates even the company’s goal of increasing capacity on the line by 120,000 barrels per day won’t bring overall regional utilization below 90%. When asked about the expansion, Enbridge pointed to its upcoming earnings call on Friday that might provide more information.
West Texas hit by over 100 earthquakes in a week, state of disaster declared - west texas earthquakes july 2024 More than 100 earthquakes struck West Texas between July 22 to 29, 2024, prompting the declaration of a state of disaster. The strongest in the series thus far was M5.1 on July 26 — making it the 6th strongest earthquake in Texas history. The earthquakes are caused by activities related to oil and gas extraction. There have been 4 earthquakes of magnitude 4.0 or higher, with the highest registered as M5.1 on the morning of July 26 — making it the 6th strongest in the history of Texas. The quake hit at a depth of 3.3 km (2 miles) and was located 17 km (10.5 miles) NNE of Hermleigh. The magnitude of the earthquakes is considered strong for the region. While it is unlikely for a very strong earthquake to hit the area, it cannot be ruled out. This area has seen a significant increase in earthquake activity since 2019, and USGS scientists believe it is linked to enhanced recovery techniques used in depleted oil fields to economically extract the most difficult-to-get oil and natural gas. “We can say with confidence that these are related to oil and gas extractions,” said Justin Rubinstein, a geophysicist with the USGS in Menlo Park, California. The Scurry County Judge has declared a state of disaster due to increased seismic activity, structural damage, safety concerns, and resource mobilization. In a statement released on Monday morning, July 29, the Railroad Commission of Texas reported on its investigation into the earthquakes. To reduce seismicity possibly caused by the underground injection of produced water, several operators in the area have converted deep saltwater disposal wells to shallow saltwater disposal wells within the last year. Disposal wells are used to dispose of produced water, which is water that comes out from wells during oil and gas production. RRC inspectors have been inspecting saltwater disposal wells within a 4 km (2.5 miles) cluster of earthquakes, and they will evaluate the next steps to mitigate earthquakes. The commission said it will continue to take necessary measures to protect the environment and residents in the area.
Texas Oil Regulator Investigating Earthquakes --The Texas Railroad Commission (RRC) has been investigating earthquakes that occurred recently in the Camp Springs area along the Fisher/Scurry County line in West Texas, an RRC spokesperson told Rigzone. “In efforts to reduce seismicity possibly caused by underground injection of produced water, several operators in the area have converted deep saltwater disposal wells to shallow saltwater disposal wells within the last year,” the spokesperson told Rigzone late Friday, noting that “disposal wells are used to dispose produced water, which is water that comes out from wells during oil and gas production”. “RRC inspectors are out inspecting saltwater disposal wells within two and a half miles of the cluster of earthquakes this week [week commencing July 22] and the RRC will evaluate next steps that can be taken to mitigate earthquakes,” the spokesperson added. “We’ll continue to take measures necessary to protect the environment and residents in the area,” the RRC spokesperson went on to state. On July 26, a 5.1 magnitude earthquake occurred at 3.3 km depth, 17 km north northeast of Hermleigh, Texas, the U.S. Geological Survey (USGS) website shows. “This event is identified as the potential mainshock of an earthquake sequence,” the site states. On July 23, a 4.9 magnitude earthquake occurred at 3.2 km depth, 17 km north northeast of Hermleigh, Texas, according to the site. The RRC is the state agency with primary regulatory jurisdiction over the oil and natural gas industry, pipeline transporters, natural gas and hazardous liquid pipeline industry, natural gas utilities, the LP-gas industry, critical natural gas infrastructure, and coal and uranium surface mining operations, the RRC website states. In a statement posted on its site earlier this month, the RRC noted that its geologists and engineers will work with environmental experts from other states “to analyze an important agency program that protects underground sources of drinking water”. “The RRC has requested the Groundwater Protection Council (GWPC), a respected organization of national groundwater experts, conduct an independent peer review of its Class II Underground Injection Control (UIC) program,” that statement said. Class II injection wells are used for oil and gas operations such as enhanced oil recovery, disposal of produced water, and underground hydrocarbon storage, the RRC highlighted in the statement, adding that the GWPC is comprised of more than 30 ground water and environmental regulatory agencies in states spanning coast to coast “The GWPC’s peer reviews include, but are not limited to, an evaluation of the state’s rules, permit application workflows, permit review criteria, protection of underground drinking water, well inspection practices, program funding, and data management,” the RRC said in the statement. “The RRC’s UIC program has been commended by federal regulators in recent years. The Environmental Protection Agency’s annual evaluations have highlighted RRC’s strong oversight of injection wells in protecting underground sources of drinking water and our continuing efforts to mitigate seismicity in Texas,” it added.
Should Companies Get Paid When Governments Phase Out Fossil Fuels? They Already Are - Before the sun set on his inauguration day, Joe Biden reversed a raft of his predecessor’s deregulation policies with the stroke of a pen. Among them was an order revoking the permit for the controversial Keystone XL oil pipeline. Canceling the project was a campaign pledge to address the climate crisis. But looming over that decision was the risk that an obscure but powerful international legal system could force the United States to pay billions of dollars to Keystone XL’s Canadian developer, TC Energy. That system—embedded in thousands of trade and investment treaties—allows corporations to drag governments before panels of arbitrators, usually behind closed doors. Governments have been ordered to pay billions of dollars in damages to oil and mining companies for violating those treaties. While the system was intended to protect foreign investors from unfair treatment or asset seizure, many environmental advocates, lawyers and politicians say it is now being used to win awards from governments that enact new environmental regulations or raise taxes on polluting industries.Increasingly, these critics warn the system threatens climate action by punishing governments that phase out fossil fuels. The $15 billion claim TC Energy brought against the United States was one of the largest-ever in response to a climate policy. The company lost earlier this month, but the case was dismissed on a technicality and its outcome says nothing about other pending cases around the world.Australia, Canada, Colombia and Slovenia are facing tens of billions of dollars in claims from companies for phasing out coal power plants, rejecting mining licenses or disallowing liquefied natural gas permits. In 2022, Italy was ordered to pay a British oil company roughly $200 million after offshore drilling restrictions upended the firm’s development plans. In other countries, the system set up for these claims—investor-state dispute settlement, or ISDS—has driven up costs of closing coal power plants, prevented governments from canceling oil and gas licenses or otherwise impeded efforts to reduce fossil fuel use, government ministers and researchers say. Companies even win awards despite leaving behind environmental contamination, violating human rights or breaking national laws. The ISDS system is uniquely daunting for governments because arbitrators overseeing the cases can award compensation not just for real losses but also for unearned, expected future profits. It’s a key reason awards can balloon into the billions of dollars. Governments already face numerous practical and political obstacles as they attempt to move away from fossil fuels, said Canadian lawyer and professor Gus Van Harten, who has studied ISDS’s evolution for decades. “This system is providing an unwarranted and unexpected further minefield.” As Mary Robinson, former president of Ireland, put it in a speech this year: “I cannot overstate just how perverse this is.”A lucky break on timing may be all that saved the U.S. from a multi-billion dollar loss. And in an ironic turn, Keystone XL supporter Donald Trump delivered that break.TC Energy’s case was based on part of the North American Free Trade Agreement. Like thousands of other trade and investment treaties, it included an ISDS section that provided special rights to foreign investors. The Trump administration largely removed ISDS from NAFTA’s successor treaty, arguing that it impinged on U.S. sovereignty and encouraged American companies to invest abroad.Because the new agreement had already gone into effect by the time Biden revoked the permit, the arbitrators overseeing the case determined the claim was invalid, according to TC Energy. The ruling has not yet been released.ISDS cases are heard by panels of three arbitrators. Generally, the parties each pick one and agree on the third. Those arbitrators are typically lawyers from corporate law firms, and their awards are not subject to appeal. They also do not have to follow precedent set in other rulings, leading to unpredictable and conflicting decisions that make it difficult for governments to know what acts might violate treaties. That means a separate NAFTA claim over Keystone XL, filed by the Alberta government after it invested in the project, could go the other way. Alberta is seeking at least $1 billion.
Wall Street Says a Trump Presidency Could Send Oil Prices Lower - A US election victory for former president Donald Trump could send oil prices lower, according to some prominent Wall Street banks. While the Republican nominee’s pledges to bolster the nation’s crude production are unlikely to be fulfilled, his imposition of trade tariffs could be bearish for prices, Goldman Sachs Group Inc. and Citigroup Inc. said in separate reports. If the tariffs severely affect the global economy, it could slash prices by as much as $11 to $19 a barrel next year, Goldman analysts led by head of oil research Daan Struyven wrote. His re-election would create “downside risks” to crude’s expected range of $75 to $90 a barrel, they said. The bank’s economists examined a scenario in which Trump imposes an across-the-board tariff of 10% on all goods imports, provoking a retaliatory levies of the same amount from other countries. The candidate has said he may target China with new tariffs ranging from 60% to as much as 100%. “A Trump administration continues to pose mostly bearish risks,” analysts at Citigroup including Eric Lee wrote, pointing to “trade, oil and gas policy,” and his influence on the OPEC+ producer alliance. Both banks added the caveat that Trump could also bolster oil prices if he renews the crackdown on Iranian exports deployed in his previous term. The former president had used a strategy of “maximum pressure” in an attempt — which ultimately failed — to renegotiate a nuclear pact with Tehran. Iranian output could fall by about 1 million barrels a day, or almost a third, during a second Trump term, Goldman projected. However, other exporters in OPEC+ would likely try to fill in the gap, limiting the boost to oil prices to roughly $9 a barrel. Despite Trump’s vow to bolster American oil production with a slogan of “drill, baby, drill,” the banks envisage little material impact on output, which is already at record levels. The most likely options available would include an increase in leasing and acreage auctions, and lifting any ban on leasing of the National Petroleum Reserve in Alaska, according to Citigroup. “Even though Trump appears to have a more oil and gas friendly agenda than a Democratic candidate, its immediate impact on physical oil markets is likely to be limited,” the bank said. “Broader market conditions look more binding on constraining US oil and gas production growth than regulatory factors.” Earlier this year, Citigroup forecast that a Trump win would strengthen the bank’s confidence in prices sinking to $60 a barrel in 2025. Conversely, Sanford C. Bernstein analysts predicted in January that oil prices could strengthen during a Trump administration if it squeezed shipments from Iran.
Campaign funds and charity help Big Oil wield power in California - LA Times -- In the weeks before California lawmakers left Sacramento for their summer recess, more than a dozen environmental bills died amid heavy industry opposition in a Legislature overwhelmingly controlled by Democrats.One would have held oil companies liable for respiratory illness in children who live near their drilling sites. Another would have asked voters to declare a “right to clean water and air” in California. Others would have divested public employee retirement funds from fossil fuels, or stopped state agencies from purchasing plastic bottles.Legislators say there were many factors in these bills’ demise — the state’s $45-billion budget deficit, for instance, and several lawmakers being out with COVID-19 just before a key deadline.But there was another common thread: Industries that opposed these bills have a record of financially supporting the Legislature’s moderate Democrats through a mix of campaign contributions and donations to the politicians’ favored charities. In the last two election cycles, Chevron spent nearly $10 million on California races, according to data from the secretary of State. Valero spent another $3.9 million, the data show, and Marathon Petroleum spent $3.3 million. A quarter of their donations to legislative candidates went to Democrats and millions more went to committees that support them.The companies also routinely make charitable donations at the behest of politicians, which can serve as another way to curry favor. Between 2021 and 2023, Chevron, Marathon Petroleum, Calpine, Phillips 66 and the Western States Petroleum Assn. combined gave more than $800,000 to nonprofit groups at the request of state lawmakers, according to data from California’s Fair Political Practices Commission. More than half of this money came from Chevron, which gave more than $440,000.“What big money in politics does is block legislation. It maintains the status quo. And I’m very willing to say that is not good for California,” said Assemblymember Steve Bennett (D–Ventura), whose bill to limit plastic purchases was among those that died quietly in May when it didn’t come up for a vote by a critical midyear deadline.In June, Assemblymember Isaac Bryan (D–Los Angeles) shelved a constitutional amendment to establish a right to a clean environment for Californians, vowing to reintroduce an improved version next year. The petroleum association had lobbied against it and the California Chamber of Commerce, whose board includes executives from Chevron and other energy companies, had branded it a “Job Killer,” a label that often impedes support from business-friendly legislators.Also in June, Sen. Lena Gonzalez (D–Long Beach) announced she wouldn’t advance her bill to divest public employee retirement funds from the fossil fuel industry. SB 252 faced heavy opposition from the oil industry, and multiple moderate Democrats did not support it on the Senate floor. Gonzalez said in a statement that her decision to hold the bill was because of committee amendments that would have weakened it.In a Legislature generally known as one of the most progressive in the nation, where Democrats hold a supermajority and fighting climate change has been a priority, moderate Democrats can serve as a key swing vote that determines how far left California will go. While environmentalists see them as beholden to the corporations that support their campaigns, business leaders see moderate Democrats as a balancing force in a Capitol where one party has all the control.“That middle group is really important to policy,” said Kevin Slagle, a vice president of the Western States Petroleum Assn., which lobbies for oil companies at the Capitol.“They play an important role … in keeping policy going too far one way or the other.”
ConocoPhillips Working Toward ‘Seamless Transition’ as Marathon Oil Takeover Nears Closing - ConocoPhillips said Thursday that it would earmark more spending this year to cover rising costs across its U.S. onshore portfolio, more partner-operated activity and higher expenses in Alaska as it advances the Willow oil project there. Increased transportation and processing costs, along with inflationary pressures in the Lower 48, prompted the company to raise its full-year operating cost guidance to $9.2-9.3 billion from the previous range of $8.9-9.1. Capital expenditures (capex) guidance also increased to $11.5 billion from a previous range of $11-11.5 billion. The initial capex guidance range “included a number of uncertainties, including Willow,” said Andy O’Brien, senior vice president of strategy, commercial, sustainability and technology.
Alaska Greenlights LNG Import Plan as Cook Inlet Natural Gas Production Wanes - Alaska’s utility and pipeline regulator supported LNG imports as a “public necessity” as the state’s largest natural gas service provider progresses plans to stave off an expected supply shortfall. Cook Inlet annualized natural gas volumes bar chart. The Regulatory Commission of Alaska (RCA) granted conditional approval to Alaska Pipeline Co. (APLC), a unit of Enstar Natural Gas Co., to allow it to expand its service area. It also approved a 16-mile extension to the existing 20-inch diameter Beluga Pipeline, according to a filing. The extension is part of Enstar plans for potentially supplementing production from Alaska’s Cook Inlet Basin with imports via a floating liquefied natural gas import terminal at Port MacKenzie.
Shell’s Sawan Touts Ever-Stronger Global Natural Gas Portfolio, as LNG Canada Nears Start Up - Shell plc, the world’s No. 1 LNG trader, extended its prowess during the second quarter by making some big deals to secure more natural gas as demand continues to increase. Shell's estimated peak production from new projects. CEO Wael Sawan, who helmed a webcast to discuss quarterly performance, noted that a year ago, management committed to advancing three guiding principles regarding performance, discipline and simplification. “Today, I hope you can see this track record developing and gathering momentum,” he said.
YPF, Petronas Select Río Negro for LNG Project as ‘Largest Investment in Argentine History’ - Argentina’s 51% state-owned oil and gas company YPF SA, in partnership with Malaysian national oil company Petronas, have settled on the northern edge of Patagonia for their planned LNG export project. “After an extensive technical and economic evaluation process undertaken by the YPF and Petronas teams we came to the conclusion that the most advantageous place for the project is Sierra Grande in the province of Río Negro,” executives said in a joint statement. Río Negro, considered to be in northern Patagonia, borders Neuquén, home to the vast majority of the natural gas-rich Vaca Muerta shale formation. The companies said the proximity to the unconventional gas fields, and the shorter pipelines, would be needed to transport the feed gas to the facilities.
Oil and gas extraction causes pollution to spike 10,000% --North Sea oil and gas extraction can cause pollution to spike by more than 10,000% within half a kilometer around off-shore sites, a study has found. The University of Essex research has uncovered the true impact on Britain's seabed life—with the number ofspecies plummeting nearly 30% near platforms.The findings, published in Science of The Total Environment, come in the face of continued global fossil fuel exploration.The study discovered pollutants such as hydrocarbons were up to 10,613% higher within 500 m of the platforms than unimpacted, farther away sites.And heavy metals—such as lead, copper, and nickel—were 455% higher within the same distance.Contaminants have been accumulating for decades around platforms and this study shows a direct impact on marine invertebrates—which play a key role in underwater ecosystems, acting as food for larger animals such as fish. The study examined data for 4,216 species collected from 1981 to 2012 at nine oil and gas platforms off the coast of Scotland and England and observed a general decrease in the number of species and individuals in the contaminated sediments.Food webs—which describe the network of feeding interactions between species in an ecosystem—also became simpler and smaller from sediments within 500 m of oil and gas platforms.Large predators like starfish disappeared closer to the platforms with smaller organisms like worms able to thrive in the contaminated sediment, "We've known for a while that hydrocarbon extraction can impact biodiversity, but this is the first time consistent trends have been found across several platforms."There were clear changes in community diversity and composition, with a general decrease in the number and type of species near the platforms after oil and gas production began."We were surprised at how simple the food web is close to the rig, with larger predators being more vulnerable to the changes than other species."Chen used chemical data to define an impact zone within 500 m of a platform, a buffer zone within 500 m–1500 m, and unimpacted areas beyond that.He then examined biological samples from each zone that were taken before and after production of oil and gas commenced at each platform between 1981 and 2012.They showed the impact sites had a 28% decline in species richness, with fewer food web connections closer to platforms.
BP Holding Natural Gas Output Steady, with Aim to Build Cash Flow Over Volumes --With a plethora of global natural gas and oil opportunities from which to pick and choose, BP plc wants to build volumes, but the priority still continues to be value, CEO Murray Auchincloss said Tuesday. NGI's global natural gas futures settles chart Expand Speaking with the executive team from London, Auchincloss laid out the objectives during a wide ranging quarterly discussion with analysts. The integrated major, the top natural gas trader in North America, also is one of the leading gas producers in the Haynesville Shale. Don’t look for gas activity to rise in the near term, though. BP has cut its Haynesville rig count to one from three a year ago.
German LNG Buyers Skip Import Capacity Auction Amid Falling Prices, Natural Gas Demand - State-owned LNG terminal operator Deutsche Energy Terminal GmbH (DET) reported it received no bids for capacity during its latest contracting period, attributing the lack of interest to low natural gas prices in Europe. DET’s three marketing rounds took place between June 13 and July 3 for regasification capacity at the Brunsbüttel and Wilhelmshaven facilities. It offered short-term contracts for 2025 and long-term agreements for 2025-2029. DET spokesperson Dirk Lindgens told NGI that marketing rounds without bids are not unusual and are a part of market behavior.
Russia-Ukraine Natural Gas Transit Expiration Adds More Supply Uncertainty for Europe - The five-year natural gas transit agreement between Russia and Ukraine is due to expire at the end of the year, halting around 13.7 billion cubic meters (Bcm) of supply the European Union (EU) would need to replace with additional Norwegian pipeline and LNG imports to meet current demand. NGI's European Union Gas storage chart. Prior to Russia invading Ukraine in 2022, Europe received nearly 150 Bcm of Russian pipeline gas through several transit points. But, as EU members moved to shrink reliance on Russian imports and sections of the Nord Stream system remained filled with seawater, pipeline shipments to Europe shrank to 14 Bcm last year. The majority of those remaining gas volumes were shipped through Ukraine’s pipeline network under the existing transit agreement. Rystad Energy Gas and LNG analyst Christoph Halser said without another third party to replace supplies shipped via Ukraine, “the EU will need about 7.2 Bcm of gas to be sourced from the liquified natural gas market.”
Ukraine Earns Rebuke From an EU Ally Over Lukoil Oil Transit Ban - Ukraine should consider the implications of moves like its recent transit ban of crude from a major Russian supplier on its neighbors such as Hungary and Slovakia, Luxembourg’s Foreign Minister Xavier Bettel said on Tuesday. The rebuke of Kyiv by a European partner over an escalating row comes after Budapest warned the country may face fuel shortages as early as September and threatened to retaliate. Speaking at a news conference in Latvia on Tuesday, Bettel said that if such moves affect consumers in other nations then “other countries have to be around the table too or at least be informed.” “We should avoid to create new tensions where we make it too easy for other countries, and especially this time for Hungary and Slovakia to say that they don’t agree,” Bettel said. That in turn could lead to a tit-for-tat of sanctions and restrictions between the countries, said the Luxembourg foreign minister. Ukraine in June toughened sanctions against Lukoil PJSC, effectively prohibiting the Russian oil company from using the war-torn country as a transit route to some customers in central Europe. Hungary has asked the European Union to help broker a solution with Kyiv. Ukraine is in close contact with the European Commission and ready to join consultations to resolve the dispute if the EU’s executive decides on them, foreign ministry spokesman Heorhii Tykhyi said on Tuesday. “We’re in constant contact with the Slovak side — at the level of prime ministers but also at other ministries and we are studying incoming proposals,” he told reporters in Kyiv, without elaborating on the progress in talks with Budapest. Orban, who maintains close ties with Russian President Vladimir Putin, antagonized Ukraine and its western allies with a self-styled “peace mission” from Moscow to Beijing. Since the Kremlin launched its full-scale invasion more than two years ago, the Hungarian leader has repeatedly sought to delay the approval of the EU’s aid for Kyiv and sanctions on Russia. Bettel also criticized Orban’s trip as the “middle finger to the Ukrainians fighting, fighting on the ground against Russian aggression.” “When you want peace you start with the victims and you don’t just start with the aggressors,” he said.
Europe Needs COP29 Host Azerbaijan to Keep Exporting Fossil Fuels -- From the city of Baku’s shoreline along the Caspian Sea, amid restaurants and high end hotels, Azerbaijan’s relationship with fossil fuels is plain to see by the rigs and tankers that dot the horizon. Azerbaijan, one of the birthplaces of the modern fossil fuel industry, will become another oil and gas exporter tasked with hosting the annual round of United Nations climate talks when delegates and world leaders descend on COP29 in Baku this November. The former Soviet republic of 10 million people follows the United Arab Emirates, which held the event last year. To climate activists, countries like Azerbaijan and the UAE, dependent on oil and gas export revenues for their economic well being, are compromised diplomatic brokers. But a recent visit to Baku reveals a more nuanced picture: Azeri officials say the country fully accepts the logic of the energy transition and the need to lower carbon emissions. The trouble is neighbors in Europe, who are desperate to buy more of the country’s gas, need them to remain fossil fuel producers. For Baku’s European customers, the priority has been securing alternatives to Russian gas supplies ever since Moscow’s invasion of Ukraine in 2022. This has meant tapping into much more gas from Azerbaijan’s fields under the Caspian. Europe imported 11.8 billion cubic meters of gas from Azerbaijan last year and that’s expected to increase to 13 bcm this year. Azerbaijan in 2022 signed a memorandum of understanding with the European Commission to double its gas exports to Europe to 20 billion cubic meters by 2027. There are also talks underway about the option to pump Azeri gas into another pipeline that runs via Ukraine in a attempt to keep supplies flowing to Europe without buying from Russia. In an interview at Baku Energy Week in early June, Deputy Energy Minister Orxan Zeynalov said there was no indication that European countries, Georgia or Turkey would stop buying its gas. All of this seems to fly in the face of an agreement nearly 200 countries made at COP28 in Dubai last year to phase out the use of fossil fuels. The deal was hailed as a landmark achievement, though it also included the caveat that gas will be key to helping countries shift to renewables. This is an important proviso for countries like Azerbaijan, which says it’s taking steps to green its economy despite the increasing demand for fossil fuels. In an interview in Baku, Mukhtar Babayev, the former oil executive who is now environment minister and president of COP29, pointed to the growing number of hybrid and pure electric cars driving around the capital, saying demand for them has grown so much that charging is starting to disrupt the grid. “Now the country has turned the economy to green growth,” he said. Socar, its state run energy company, is planning to become net zero by 2050; the government has signed memorandums of understanding to build 27 gigawatts of new wind and solar farms, said Kamran Huseynov, deputy director at the state run Azerbaijan Renewable Energy Agency, in an interview. This would add more than three times Azerbaijan’s total installed electricity generation capacity today. There are also speculative plans to install a fiber optic cable to export renewable electricity to the European Union, while excess wind and solar power would be used to create hydrogen or green ammonia for export too. “We want to do this, it’s not like we’re being forced by EU rules,” said Zeynalov, the deputy energy minister. The idea is that the pipelines that run more than 2,000 miles from Baku to southern Italy may one day be exporting green gas such as e-methane to help the European Union meet its net zero goal.
Asia's LNG imports shift higher as Europe's fades - Asia continues to draw liquefied natural gas (LNG) from Europe with imports in July rising to the most in six months, even as spot prices stayed near seven-month highs. The top-importing region is on track for arrivals of 24.85 metric MMt of the super-chilled fuel, up from 22.60 MMt in June and the highest since January's 26.19 MMt, according to data compiled by commodity analysts Kpler. In contrast, Europe's imports are tracking at 6.56 MMt for July, the lowest since September 2021 and down from 7.21 MMt in June. Europe's LNG imports have declined every month since December, when they were 11.75 MMt, or almost double the level expected for July. Much of the reason for the shift in global LNG flows can be attributed to Asia's higher price, with spot cargoes for delivery to North Asia LNG-AS being assessed at $12/MMBtu in the week to July 26. This was down from the previous week's $12.20/MMBtu, but still close to the $12.60 for the week to June 21, which was the highest price since mid-December. The benchmark Dutch contract ended at €32.60 per megawatt hour (MWh) on July 26, which is equivalent to $10.30/MMBtu, or a discount of 14.2% to the Asian spot price. The Asian spot price is currently close to the sweet spot of being high enough to draw cargoes to the region, but not quite at levels to start crimping demand in price-sensitive buyers such as China and India. China, the world's biggest LNG buyer, is on track for imports of 6.41 MMt in July, up from 5.80 MMt in June and the highest since April, according to Kpler. India, Asia's fourth-biggest LNG importer, is forecast to see arrivals of 2.61 MMt in July, up from 2.60 MMt in June and the most since October 2020. In some ways the ongoing strength in India's LNG imports are surprising, as the South Asian country tends to cut back in the face of higher prices. The spot price has been rallying since its 2024 low of $8.30/MMBtu in early March, and has been above $10 since mid-April, a level that has in the past seen India, and even China, cut back on spot purchases as LNG becomes uncompetitive in their domestic markets. It's likely that India's strong economic growth is keeping LNG demand robust, especially since the fuel is generally used in industrial processes rather than for electricity generation. Similarly, China's appetite for LNG is being boosted by its use as a transport fuel, with research from consultants Wood Mackenzie showing sales of LNG-powered heavy vehicles rose from below 10% of the market to as much as 30% by the end of 2023. Japan, the world's second-biggest LNG buyer, also saw solid imports in July, with Kpler tracking 5.62 MMt, up from 4.75 MMt in June and the highest since March. However, Japan's imports may ease in coming months as the summer demand peak passes and inventories remain elevated, with stocks held by major utilities rising to 2.35 MMt by July 21, which is 21% higher than a year earlier, and 7% above the five-year average of 2.19 MMt. The strength in Asia's demand can be readily seen in the import data from the U.S. and Qatar, the world's top and third biggest LNG shippers, and also swing suppliers to both Europe and Asia. Asia's imports from the U.S. are expected at 3.41 MMt in July, second only to the record high of 3.75 MMt from February 2021 and up from 2.71 MMt in June. In contrast, Europe's imports from the U.S. are forecast at 2.25 MMt, down from 2.85 MMt in June and the lowest since November 2021. Asia's imports from Qatar are forecast at 6.09 MMt, up from 5.23 MMt in June and the highest since January. Europe's imports from Qatar are estimated at 740,000 t in July, down from June's 1.05 MMt and the weakest since September.
Pacific LNG shipping rates rise to $73,000 per day, European prices down - Pacific spot liquefied natural gas (LNG) freight rates continued to increase this week, while European prices decreased compared to the week before. Last week, Pacific rates experienced a $10,500 increase and Atlantic rates decreased. “Spark30s Atlantic rates continued to decrease for the third consecutive week, falling by $4,250 to $75,000 per day and reducing by $14,500 since the reported Freeport LNG outages on July 7th,” Qasim Afghan, Spark’s commercial analyst told LNG Prime on Friday. In comparison, Spark25S Pacific rates experienced a fifth consecutive weekly increase, rising by $5,500 to $72,750 per day, he said. “As a result, the Atlantic-Pacific basin spread has reduced from a Summer record high of $37,250 down to $2,250, as Spark25S Pacific rates experience an expected seasonal rally whilst Spark30S Atlantic rates continue to stall,” Afghan said. In Europe, the SparkNWE DES LNG front month was down compared to the prior week.“The SparkNWE DES LNG front month price for August delivery is assessed at $9.980/MMBtu and at a $0.13/MMBtu discount to the TTF,” Afghan said.“This is a $0.317/MMBtu week-on-week decrease in SparkNWE DES LNG price,” he said.Data by Gas Infrastructure Europe (GIE) shows that volumes in gas storages in the EU continued to rise and were 83.52 percent full on July 24.Gas storages were 81.83 percent full on July 17, and 83.91 percent full on July 24 last year.In Asia, JKM, the price for LNG cargoes delivered to Northeast Asia, for September settled at $12.075/MMBtu on Thursday.Last week, JKM for September settled at 12.115/MMBtu on Friday.Front month JKM dropped this week to 12.095/MMBtu on Monday, 12.010/MMBtu on Tuesday, and it rose to 12.235/MMBtu on Wednesday.US LNG exports reached 21 shipments in the week ending July 24, and pipeline deliveries to US terminals increased compared to the week before, according to the Energy Information Administration.Freeport LNG, south of Houston, continued to ramp-up operations this week according to Gulf South Pipeline Company and Texas Eastern Transmission following a period of being offline due to Hurricane Beryl.Last weekend, Freeport LNG has shipped the first cargo from its LNG export plant since the shutdown on July 7. In June, Egyptian General Petroleum Corp., the parent company of EGAS, awarded a total of 20 LNG cargoes with the awardees reportedly including TotalEnergies, BP, Vitol, Trafigura, and Aramco. Several reports said this week that EGAS has issued a new tender for five LNG cargoes. Kpler said on Thursday that EGAS has issued its fourth summer tender to satisfy high seasonal gas demand which forced it to switch from an exporter to an importer of LNG. The tender closes on July 29 and the cargoes will be delivered to both Egypt’s Ain Sokhna and Jordan’s Aqaba in mid- and late-August and September, Kpler said.
Asia, Industrials Tug Global LNG Demand Above Historical Levels, but Growth is ‘Fragile,’ IEA Says - Global natural gas demand accelerated during the first half of the year at a rate well above the historical average, according to the International Energy Agency’s (IEA) latest quarterly report. LNG supply cycles vs demand graph. IEA said initial estimates indicated that global gas demand increased by 3% year/year from January to June, higher than the historical rate of 2% over the same period between 2010 and 2020. The trend also was a reversal from tepid demand growth in recent years after the Covid-19 pandemic and Russia’s invasion of Ukraine prompted a global rebalancing of energy flows. Demand growth was largely supported by Asia, with China and India both increasing consumption by 10% year/year. IEA added that higher gas use in industry contributed to almost 65% of global demand growth during the first half of 2024.
Oman LNG to boost capacity with new train - State-owned Oman LNG plans to add a new liquefaction train at its three-train Qalhat complex by 2029.Oman’s Ministry of Energy and Minerals said in a statement on Saturday the new train will have a capacity of 3.8 million metric tonnes per year.“The strategic expansion will boost Oman’s production of LNG to 15.2 mtpa, optimize the utilization of the country’s available discovered volumes of natural gas resources, while enhancing its LNG export capabilities,” it said.According to the statement, Oman’s government is now progressing with finalizing the front-end engineering design (FEED) study for this new LNG train project.This “critical step” is expected to pave the way for the project’s final investment decision (FID), it said.The project is expected to be completed and operational by 2029, helping to meet the growing global demand for LNG, the statement said.Oman LNG delivered 173 cargoes of LNG from its Qalhat complex in 2023, down by three cargoes compared to the year before, while its revenue decreased by 15.5 percent year-on-year to $4.9 billion.Oman LNG delivered 176 cargoes in 2022, 163 in 2021, 155 in 2020, and 166 in 2019.According to Oman LNG’s 2023 annual report, out of the 173 LNG cargoes delivered last year 94 percent were contracted cargoes and 6 percent were spot supplies.Oman produced 11.5 mtpa of LNG, exceeding the enhanced nameplate capacity. This compares to 11.5 mtpa in 2022, 10.6 mtpa in 2021, 10.2 mtpa in 2020, and 10.7 mtpa in 2019.Oman LNG operates three liquefaction trains at its site in Qalhat near Sur and the trains maintained an “exceptionally high level”, standing at 95 percent, alongside a plant utilization rate of 92 percent last year, Oman LNG previously said.
Oman plans third LNG train, boosting domestic production to more than 15 MMtpy - Oman is advancing its commitment to bolster global energy security with plans to develop an additional 3.8-MMtpy LNG train at the Qalhat Industrial Complex in South Sharqiyah Governorate. This strategic expansion aims to increase Oman's LNG production capacity to 15.2 MMtpy, utilizing its abundant natural gas resources more efficiently and enhancing export capabilities. Currently in the final stages of the front-end engineering design (FEED) study, this project underlines Oman's ambition to consolidate its role as a prominent global LNG producer. Scheduled for completion by 2029, the initiative not only meets rising international LNG demand but also supports Oman's economic diversification and sustainability goals.
Malaysia's Biggest State Starts Takeover of Gas Assets in Autonomy Push --Malaysia’s biggest state, Sarawak, is set to take control of its natural gas assets from federal government-run companies, as its campaign for economic autonomy bears fruit in the Southeast Asian country’s fragile political landscape. The Borneo island state’s oil firm, Petroleum Sarawak Bhd., last week signed its first gas sale agreements. It is effectively starting a take-over of the gas distribution network in Sarawak that’s controlled by Malaysian oil giant Petroliam Nasional Bhd. Petronas, which answers only to the prime minister, is asking for more time before it cedes full control. It wants to finalize gas supply agreements with Sarawak first to keep its liquefied natural gas complex running in the state — one of the biggest in the world at 30 million metric tons a year. “We said we respect their concern because we have equity in the LNG plants,” Sarawak Premier Abang Johari Openg was cited as saying by the News Straits Times newspaper this week. “The discussions must be finalized by October 1, otherwise, we will go ahead with the arrangement.” The state has long demanded for higher oil and gas royalties from Petronas, the custodian of Malaysia’s energy reserves, only to be rebuffed or given small increments at best. The renewed push for autonomy began after the November 2022 elections since Prime Minister Anwar Ibrahim now depends on the backing of Abang Johari and the Sarawak-based parties he leads to keep a government coalition intact. The Prime Minister’s Office and the Sarawak Premier’s Office didn’t respond to Bloomberg requests for comment. Petronas, whose sole shareholder is the federal government, now has to make concessions. It will soon cede control of the gas distribution network in Sarawak for the first time in its history, and analysts say it could lead to more negotiations with the state over revenue sharing, operational control and regulatory oversight. “The relationship with Petronas might become more complex,” said Awang Azman Awang Pawi, an associate professor at Universiti of Malaya, who is from Sarawak. “It might create tension, but both parties might seek a cooperative framework to avoid disrupting the industry.” The impact on earnings for Petronas, a major source of revenue to the Malaysian government, is uncertain. RHB Research said in a July 22 note that the oil firm could lose some earning power given the gas segment accounts for about 38 percent of Petronas’ headline profit last year. Petronas said it was in discussions to achieve a mutual resolution on the gas distribution in Sarawak. The firm told Bloomberg in a statement that it “will continue to be a strategic partner to Sarawak to preserve a thriving and conducive investment climate in Malaysia.” A lot is at stake for Sarawak, which is almost as big as mainland Malaysia and has oil and gas fields in the disputed South China Sea. Abang Johari had forecast the value of Sarawak’s energy sector will surpass 60 billion ringgit ($13 billion) by the end of the decade, up from the 10 billion ringgit it currently collects just in royalties from Petronas, according to a report. By next year, Sarawak will become the owner-operator of the port where the Petronas LNG complex sits, once the Malaysian parliament passes legislation to dissolve the federal government-owned Bintulu Port Authority. The state is not just betting on oil and gas, it is also going to build two hydrogen plants at the same port. If the takeover goes through, Sarawak will have come full circle. It joined Malaysia in 1963 under an agreement that allowed it to self-govern and manage its resources. However this wasn’t the case until the 2022 elections gave an opening to Abang Johari, a politician who had a role in every Sarawak administration since 1982.
China's CNOOC raises roof on giant Zhejiang LNG tank - LNG Prime --A unit of China National Offshore Oil Company (CNOOC) has completed lifting the roof on one 270,000-cbm tank as part of an expansion project at its Ningbo LNG import facility in the Chinese province of Zhejiang. According to a statement by CNOOC Gas & Power, the operation of lifting the roof on the fifth LNG storage tank using air pressure took place on July 30. CNOOC Gas & Power said the roof weighs about 1,200 tons. The LNG tank is 62.6 meters high and has nearly 100 meters in diameter. It features CNOOC’s CGTank core storage tank technology. The state-owned energy giant is building six 270,000-cbm LNG tanks as part of the third expansion phase of the Ningbo LNG facility. In March this year, it raised the roof on the first LNG tank and recently lifted the roofs simultaneously on two tanks. The company said these onshore tanks have the world’s largest LNG storage capacity. CNOOC recently completed all of the six 270,000-cbm LNG storage tanks at its Binhai LNG import terminal in Jiangsu, and it is also building five 270,000-cbm tanks at the Zhuhai LNG import terminal in Guangdong.Earlier this year, the Ningbo LNG import facility received the 600th cargo of LNG since the launch of the plant in 2012. The LNG terminal currently has a capacity of 6 mtpa and six LNG tanks with a total capacity of 960,000 cbm. The third expansion phase will double the capacity to 12 mtpa and is expected to be operational in 2025.
Rystad Says Global Recoverable Oil Reserves Hold Steady -In a release sent to Rigzone recently, Rystad Energy said its latest research shows that global recoverable oil reserves “held largely steady at around 1,500 billion barrels”. This figure was “down some 52 billion barrels” from Rystad’s 2023 analysis, the company highlighted in the release, noting that, “of this year over year decrease, 30 billion barrels are due to one year of production, and 22 billion barrels are mostly due to downward adjustments of contingent resources in discoveries”. “This total recoverable oil resource of 1,500 billion barrels gives an upper limit of how much oil can be produced over the next 100 years or more,” Rystad stated in the release. “Of course, this upper limit is only realistic and economical if oil demand is not impacted by the energy transition, meaning oil prices would rise far above $100 per barrel,” it added. “In this theoretical ‘high case’, total oil production would peak around 2035 at 120 million barrels per day, then decline steeply to 85 million barrels per day in 2050,” it continued. The company stated in the release that, in a more realistic outlook for oil production, total output would peak in 2030 at 108 million barrels per day and decline to 55 million barrels per day in 2050, with oil prices staying around $50 per barrel in real terms. “Under this scenario, about one-third of the world’s recoverable oil, 500 billion barrels, would become stranded due to unprofitable developments,” Rystad said. “Such an aggressive energy transition scenario would theoretically limit global warming to 1.9 degrees, but given the current trajectory of oil demand, this path seems unlikely,” it added. In the release, Rystad reported proven oil reserves at 449 billion barrels, “according to recognized standards”. This provides a lower limit for remaining oil reserves if no new development projects were to be approved and all exploration activities were stopped, the release stated. Head of Analysis at Rystad Energy Per Magnus Nysveen, said in the release, “the world’s remaining oil reserves are insufficient to support oil demand if there is no transition to electric vehicles”. “Attempts to limit the supply of oil will have hardly any effect on limiting global warming. Instead, the only feasible way of keeping global temperatures rising less than 2.0 degrees Celsius is to ensure fast electrification of road transportation,” he added. Rystad highlighted in the release that its estimates of total recoverable oil resources have fallen by 700 billion barrels since 2019 due to reduced exploration activities. “Exploration has fallen as investors fear new discoveries will remain stranded due to the ongoing electrification of vehicles and the expected slump in both oil demand and crude prices,” Rystad said in the release. Rystad pointed out in its release that Saudi Arabia was the country with the most recoverable oil at 247 billion barrels. The U.S. ranked second with 156 billion barrels, Russia was third with 143 billion barrels, Canada was fourth with 122 billion barrels, and Iraq was fifth with 105 billion barrels, according to the release. “The largest downward revisions are seen in Saudi Arabia, where development priorities have shifted from offshore capacity expansions to onshore infill drilling,” Rystad stated in the release. “The only country with any significant increase in 2024 is Argentina, with a gain of four billion barrels thanks to the derisking of shale projects in the Vaca Muerta formation,” it added. According to the Energy Institute’s (EI) 2024 statistical review of world energy, Saudi Arabia produced 9.60 million barrels of crude oil and condensate per day in 2023. The U.S. produced 12.92 million barrels per day, Russia produced 10.55 million barrels per day, Canada produced 4.93 million barrels per day, and Iraq produced 4.27 million barrels per day, the review showed.
BofA Report Says Oil's Bermuda Triangle Is Nearing an End -Oil’s Bermuda triangle is nearing an end, a Bofa Global Research report sent to Rigzone by the BofA team this week stated. “Oil prices have been trading in a narrowing range, or a triangle pattern, for over a year now,” the report stated, adding that a triangle pattern is technically synonymous with a compressed coil or spring. “When it becomes too tight and what’s holding it lets go, a sharp and sudden breakout trend occurs,” the report noted. “This becomes increasingly likely after five or more swings within the triangle occur. Our weekly chart of Brent oil prices labels five swings ... Another tendency is for price to break out from the triangle 61.8-76.4 percent of the way through it, which we estimate to be in August-October of 2024,” it added. “Our current wave count associates this pattern with an urban legend, the Bermuda triangle, where things are said to have disappeared. Perhaps some disappearance of macro risk premium, global demand and/or supply cut hope is on the horizon and causes a breakdown in oil to $63.02/$60.00 a barrel by year end 2024,” the report continued. The report stated that a weekly close in Brent below $78 would look like a bearish triangle breakdown. “Alternatively, the burden is on the bulls to push oil higher to signal a different wave count. A weekly close above $89 per barrel could trigger a bullish spring higher to $105 per barrel,” it added.
Oil prices surge following Golan Heights attack | Malay Mail — Oil prices rose today due to concerns about an escalating conflict in the oil-rich Middle East, reported Anadolu. International benchmark Brent crude traded at US$80.67 (RM374.17) per barrel at 09.51am local time (0651 GMT), an increase of 0.49 per cent from the closing price of US$80.28 per barrel in the previous trading session. The American benchmark West Texas Intermediate (WTI) traded at US$77.50 per barrel at the same time, a 0.44 per cent rise from the previous session that closed at US$77.16 per barrel. Both benchmarks started the week with upward movements following an attack in the Israeli-occupied Golan Heights. Despite ceasefire negotiations, escalating geopolitical tensions in the Middle East, home to a vast majority of global oil reserves, increase supply risk in the markets. Meanwhile, negotiations regarding the ceasefire in Gaza and the exchange of prisoners between Hamas and Israel are currently stalled after the postponement of the Israeli delegation’s visit to next week, which was initially scheduled for Thursday. However, gains were weak as the outlook for crude demand in the world’s largest crude oil importer remained bleak. Prices continue to be depressed by concerns about demand in China as it grapples with a slowing economic recovery. This week, market players will be watching the US Federal Reserve’s (Fed) meetings in a bid to gauge the oil market trajectory. Fed will review its policy on July 30-31. While investors expect the bank to keep rates unchanged, they will also look for further evidence that a rate cut will happen at the September meeting. Experts believe that reducing policy interest rates soon would support economic activity in the country, resulting in higher oil demand. —
The Oil Market Sold Off Sharply After Deadly Strike in the Israeli-Occupied Golan Heights The oil market on Monday sold off sharply after Israeli officials said they wanted to avoid the widening of conflict in the Middle East as it responded to a deadly strike by Hezbollah in the Israeli-occupied Golan Heights over the weekend. In overnight trading, the market rallied to a high of $77.69 as concerns over Middle East tension resumed due to the attack. On Sunday, Israel’s security cabinet authorized Prime Minister Benjamin Netanyahu’s government to decide on a response to the deadly attack in Israeli-occupied Golan Heights, with Israel vowing retaliation in Lebanon against Hezbollah. However, the market sold off to a low of $75.35 after two Israeli officials said Israel wanted to hurt Hezbollah but not drag the Middle East into an all-out war. The market later retraced some of its sharp losses ahead of the close. The September WTI contract settled down $1.35 at $75.81 and the September Brent contract settled down $1.35 at $79.78. The product markets ended the session sharply lower, with the heating oil market settling down 4.47 cents at $2.3750 and the RB market settling down 4.52 cents at $2.4153.The U.S. Department of Energy said it had finalized a contract to purchase 4.65 million barrels of crude oil for the Strategic Petroleum Reserve for delivery to the Bayou Choctaw site in Louisiana during the last three months of the year. Exxon Mobil will supply 3.9 million barrels of the contract, while Macquarie Commodities Trading US LLC will supply the rest. The contracts bring the total amount of oil bought to refill the reserve to 43.25 million barrels. The DOE said the average purchase price for the oil is about $76.92/barrel.On Sunday, Israel’s security cabinet authorized Prime Minister Benjamin Netanyahu’s government to decide on the “manner and timing” of a response to a rocket strike at a football field in the Golan Heights that killed 12 teenagers and children. Iran-backed Hezbollah denied responsibility for the attack. Israel has vowed retaliation against Hezbollah in Lebanon and Israeli jets hit targets in southern Lebanon on Sunday. Cabinet Office Minister, Pat McFadden, said an escalation in fighting between Israel and Lebanese militant group Hezbollah could be “much more serious” than the war in Gaza. Later, two Israeli officials said Israel wants to hurt Hezbollah but not drag the Middle East into all-out war.IIR Energy said U.S. oil refiners are expected to shut in about 490,000 bpd of capacity in the week ending August 2nd, increasing available refining capacity by 255,000 bpd. Venezuelan President Nicolas Maduro and his opposition rival Edmundo Gonzalez were each claiming victory in a presidential election on Monday morning, after a vote marked by accusations of underhand tactics and isolated incidents of violence. The country’s electoral authority said just after midnight on Monday that Maduro had won a third term with 51.2% of the vote, despite multiple exit polls which pointed to an opposition win. The authority said opposition candidate Gonzalez won 44% of the vote, though the opposition had earlier said it had “reasons to celebrate” and asked supporters to continue monitoring vote counts. Opposition leader, Maria Corina Machado, said Gonzalez had won 70% of the vote and that multiple independent exit polls and quick counts decisively showed his victory. U.S. Secretary of State, Antony Blinken, said the United States had “serious concerns that the result announced does not reflect the will or the votes of the Venezuelan people.” He called for electoral authorities to publish a detailed tabulation of votes.
Oil Falls To 7-Week Low In U.S. Trading On Demand Fears -- Oil futures slid by nearly 2% to seven-week lows by the close of trading in the U.S. on Monday, as global demand concerns outweighed rising geopolitical tension in the Middle East.At market close, the Brent front-month (or September) futures contract was down 1.66% or $1.35 to $79.78 per barrel, having breached the $80 price-floor yet again after seven weeks. The West Texas Intermediate also ended the session down 1.75% or $1.35 at $75.81 per barrel. Monday's intraday declines follow a three week losing streak for oil, which may yet spillover into a fourth week. Traders appeared to focus on lackluster global demand and a distinct lack of economic turnaround signals from China.That's despite escalating tensions between Israel and Lebanon's Iran-backed militia group Hezbollah and political unrest in OPEC member Venezuela.With the Middle East's crude oil output largely unaffected, and the situation in Venezuela remaining pretty fluid, the market awaits clear signals on the Northern Hemisphere's summer demand in general, and that of the U.S. in particular, just as China's economic picture remains mixed.On July 20, China's General Administration of Customs said the country's total fuel oil imports dropped 11% in the first half of 2024. In volume terms, imports totaled 11.95 million metric tons, or just shy of 76 million barrels sparking a round of selling as traders fretted over the market direction of the world's largest importer of crude oil.Meanwhile, as global demand downsides accumulate, oil supply remains strong. The U.S. continues to lead production that is not originating from the Organization of Petroleum Exporting Countries or OPEC.On Friday, energy industry services firm Baker Hughes observed that the number of U.S. rigs - considered a strong indicator of future production - had risen by three to 589 in the week to July 26.It also marked the second consecutive weekly rise in the number of rigs, taking the U.S.' uptick to its highest level since November 2022.OPEC is itself set to unwind its production cuts later this year and forecasts of an oil market surplus either in Q4 2024 or Q1 2025 appear to be rising.And the International Energy Agency (IEA) forecasts that global supply growth may be much stronger next year, with non-OPEC output growth, mainly in the U.S., Canada, Guyana and Brazil, leading gains for a third consecutive year by adding 1.5 million barrels per day (bpd) to the global supply pool.Such sentiments are keeping Brent, considered the global proxy benchmark, in backwardation, i.e. a position wherein the current price is higher than prices trading in the futures market for later months.The difference came in at over $3 per barrel on Monday, with the Brent April and May 2025 contracts trading at discounts of over $3 to the September contract. The West Texas intermediate is also showing similar levels of discount in a market that is at present not liking what it is seeing on the demand front. Afterall, oil isn't just a story of demand.
A Reuters Survey Showed that China’s Manufacturing Activity Likely Fell for a Third Consecutive Month in July The oil market continued to trend lower on Tuesday settling lower for the third consecutive session amid concerns over demand in China. Some disappointing economic news from China has been weighing on market sentiment. A Reuters survey showed that China’s manufacturing activity likely fell for a third consecutive month in July. The market was also weighed by the strength in the dollar ahead of the Federal Reserve’s policy meeting that ends on Wednesday, when any new clues regarding an interest rate cut in September will be in focus. The market posted a high of $75.97 in overnight trading before it continued to trend lower. It sold off to a low of $74.59 by mid-day. The market later retraced some of its losses and remained in a sideways trading range as it positioned itself ahead of the release of the weekly oil inventory reports later on Tuesday and Wednesday morning. The September WTI contract settled down $1.08 at $74.73 and the September Brent contract settled down $1.15 at $78.63. The product markets ended in negative territory, with the heating oil market settling down 3.82 cents at $2.3368 and the RB market settling down 2.82 Sources stated that an OPEC+ panel is unlikely this week to make any changes to its current deal to cut production and to start unwinding some cuts from October, despite recent sharp declines in oil prices. Top ministers from OPEC and allies led by Russia or OPEC+ will hold an online Joint Ministerial Monitoring Committee meeting on Thursday morning. On Tuesday, Israel targeted a commander of Hezbollah near the suburbs of Lebanon’s capital Beirut. Israel confirmed it acted in response to the rocket attack in the Golan Heights. A senior Israeli official said that Tuesday’s strike constitutes Israel’s response to the strike from Hezbollah, suggesting no further military activity should be expected at this time. Earlier, United States Defense Secretary Lloyd Austin does not believe that a fight between Israel and Hezbollah is inevitable, and said Washington would like to see things resolved in a diplomatic fashion. Venezuela’s opposition said it had voting-tally proof it had won the election claimed by President Nicolas Maduro. Protesters took to the streets after President Maduro was declared winner of the disputed poll. Maduro, in a live broadcast from the presidential palace, said his forces were acting against what he called violent protesters. The armed forces have long supported Maduro and there are no signs leaders were breaking from the government. The Venezuelan Conflict Observatory said “numerous acts of repression and violence carried out by paramilitary collectives and security forces have been reported”. On Monday, electoral authorities said that Maduro had won a third term as president with 51% of the vote. However, the opposition said the 73% of voting tallies to which it has access showed its candidate Edmundo Gonzalez had won an unassailable victory, winning more than twice as many votes as Maduro. Independent pollsters called Maduro’s claim of victory implausible, and governments in the U.S. and elsewhere immediately cast doubt on the results and called for a full tabulation of votes. The Organization of American States’ election observation department said it cannot recognize the results by Venezuela’s national electoral council declaring President Nicolas Maduro the winner of Sunday’s vote.
Oil prices slide 1%, settle at 7-week low on China worries (Reuters) - Oil prices slid about 1% to settle at a seven-week low on Tuesday as investors worried that demand from China could be weakening while OPEC+ seems likely to stick to plans to increase supplies. Market participants have been talking for days about a possible ceasefire deal in Gaza that could reduce the geopolitical risk premium for crude prices. Brent futures delivery fell $1.15, or 1.4%, to settle at $78.63. U.S. West Texas Intermediate (WTI) crude fell $1.08, or 1.4%, to $74.73. That was the lowest close for both benchmarks since June 5 and kept both in technically oversold territory for a second day. U.S. futures for diesel and gasoline also closed at their lowest since early June. Manufacturing activity in China, the world's largest crude importer, likely shrank for a third month in July, according to a Reuters poll. Chinese leaders have vowed to step up support for the economy, but investors expect such measures will be limited since the Third Plenum policy meeting largely reiterated existing goals. In Lebanon, an Israeli air strike targeted a senior Hezbollah commander in Beirut's southern suburbs in what the Israeli military called retaliation for a cross-border rocket attack over the weekend that killed 12 children and teenagers. Some analysts have said Israel's measured response could signal a deal was close on Gaza. A ceasefire deal with Hamas has "the potential to (remove) $4 to $7 (a barrel) of risk premium out of the market," B On Thursday, top ministers from OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, will meet to review the market, including a plan to start unwinding some output cuts from October. No changes are currently expected. Analysts projected U.S. energy firms pulled about 1.1 million barrels of crude out of storage during the week ended July 26. , If correct, that would be the first time U.S. crude stocks declined for five weeks in a row since January 2022. U.S. job openings fell modestly in June and data for the prior month was revised higher, suggesting the labor market continued to cool, which analysts say makes it more likely the Federal Reserve will reduce interest rates. The Fed is expected hold its benchmark overnight interest rate steady at its July 30-31 meeting and signal that rate cuts may begin as soon as the central bank's September meeting. The Fed hiked rates aggressively in 2022 and 2023 to tame a surge in inflation. Lower rates can boost economic growth and demand for oil. The U.S. is considering fresh sanctions on OPEC member Venezuela following disputed results in the South American country's presidential election. President Nicolas Maduro's victory in the latest Venezuelan election "is a headwind for global supply, as this could result in tighter U.S. sanctions," ANZ analysts said in a note, estimating such a scenario could cut Venezuela's exports by 100,000-120,000 barrels per day
WTI Hovers Above 2-Month Lows After API Reports Across-The-Board Inventory Draws - Oil prices declined for the third straight day as general risk-off sentiment combined with traders anxiety over Chinese demand to pull WTI down near two-month lows. "Questionable data coming out of China is the main driver in the overall retraction" for oil, Gary Cunningham told MarketWatch. China's "petroleum demands may not be as robust as we thought just a few weeks ago." Meanwhile, U.S. summer travel demands remain a "bright spot, but are not enough to support the entire market as political risks due to escalating tensions in the Mideast are also easing,"
- Crude -4.495mm (-3.9mm exp)
- Cushing -929k
- Gasoline -1.917mm (-1.6mm exp)
- Distillates -322k
API reports that crude inventories tumbled for the 5th straight week. All cohorts saw drawdowns last week..
Oil Prices Soar After Israel Kills Hamas Leader and Hezbollah Senior Commander | OilPrice.com
- Oil prices were soaring early on Wednesday morning, with Brent breaking back above $80 and WTI nearing $77.
- Israel carried out two strikes on Tuesday, the first killing Hezbollah senior commander Fuad Shukr and the second killing Hamas’ political leader Ismail Haniyeh.
- The two strikes, carried out in Beirut and Tehran respectively, marked a significant escalation in the regional conflict.
Geopolitical risk has well and truly returned to oil markets after Israeli strikes killed Hamas leader Ismail Haniyeh and senior Hezbollah military commander Fuad Shukr. Oil prices spiked immediately on the news and have continued to climb, with WTI rising past $77 and Brent nearing $81.The first of Israel’s two strikes on Tuesday was an airstrike on Beirut targeting Fuad Shukr who Israel claimed was responsible for Saturday’s rocket attack on the Golan Heights which killed 12 civilians, most under the age of 16.Israel’s defense minister, Yoav Gallant, said Hizbollah had “crossed the red line” with the attack, and days later launched three rockets into the Haret Hreik neighborhood in Beirut. Lebanon's Prime Minister Najib Mikati condemned "blatant Israeli aggression" and Iran’s foreign ministry condemned the attack as “a blatant violation of Lebanon’s sovereignty and territorial integrity”.The second of the two strikes, and the one that sent oil prices spiking, came just hours later when Hamas’ political leader was killed while in Iran for the swearing-in ceremony of the country’s new president.The strike has dramatically heightened tensions in the region and is likely to undermine Gaza ceasefire talks, with Iran, Qatar, Jordan, and Lebanon all condemning Israel. The Supreme Leader of Iran, Ali Khamenei added to fears of a broader war by saying “It is our Duty to take Revenge and Severely Punish the Zionist Entity for the Assassination in Iran, because the Assassination was carried out on our Soil.”As Hamas’ leader in exile, Ismail Haniyeh played a key role in the Gaza ceasefire talks brokered by Qatar, the US, and Egypt. His killing will undoubtedly delay and potentially derail entirely those talks. The significance of these two attacks compared to previous escalations in this conflict can be seen in recent oil price movements. Both WTI and Brent had been falling consistently for a month, hitting 7-week lows on Tuesday even after the Hezbollah rocket attack on the Golan Heights.The geography of Tuesday’s strikes is arguably more significant than the figures involved, with strikes in Beirut and Tehran marking a significant escalation in the conflict and threatening to push the region into a full-blown war. Since the strike, US Secretary of State Antony Blinken has said that the killing of Ismail Haniyeh was “something we were not aware of or involved in”. Qatar, one of the lead mediators in ceasefire talks, described Haniyeh’s killing as a “heinous crime and dangerous escalation”.
WTI Extends Gains After US Crude Inventory Tumbles To 6-Month-Lows -- Oil prices have surged overnight following the assassination of Hamas' political leader in Tehran. This geopolitical risk premium surge came on top of an across the board inventory draw reported by API last night. Traders are watching for confirmation of the drawdown trend in US crude stocks from the official data this morning. DOE
- Crude -3.44mm (-3.9mm exp)
- Cushing -1.1mm
- Gasoline -3.67mm (-1.6mm exp)
- Distillates +1.53mm
US crude inventories fell for the 5th straight week, dropping 3.44mm barrels and stockpiles at the Cushing Hub also declined (for the 4th straight week) Graphs Source: Bloomberg That drawdown has dragged total US crude stocks to their lowest since February... The Biden administration added 685k barrels to the SPR last week (which offset the big commercial draw modestly)... US crude production remains at a record high, despite the accelerating trend lower in rig counts...
Oil jumps as killing of Hamas leader reignites geopolitical risk –-- Oil jumped the most since October after Hamas said Israel killed its political leader, stoking tensions in a region that produces around a third of the world’s crude.West Texas Intermediate climbed 4.3% to settle near US$78 a barrel. Hamas said the leader, Ismail Haniyeh, was killed in an airstrike in Iran, while Iran Supreme Leader Ayatollah Ali Khamenei said Israel has “prepared the ground for its severe punishment.” The conflict has escalated since last weekend, when a Hezbollah strike in the Israel-controlled Golan Heights killed 12, potentially jeopardizing the ongoing cease-fire talks between Israel and Hamas.Meanwhile in broader markets, traders embraced risk after the Fed signaled it’s moving closer to lowering borrowing costs amid easing inflation and a cooling labor market.On the supply side, U.S. crude inventories fell by 3.44 million barrels last week, reaching the lowest level since February, government data showed. Stockpiles have slid for five straight weeks, the longest streak of declines since January 2022. An OPEC+ committee meeting is scheduled for Thursday, with markets split on whether the alliance will proceed with a scheduled output increase next quarter.The market has been assessing the risk that fresh escalation could affect production and exports, including from Iran. Crude prices hadn’t reacted particularly sharply to recent developments in the war, which started in early October. “Right now, putting $2 of geopolitical risk premium back in the market is telling me the market is covering shorts, but not worried about a real supply event,” In a sign that oil traders are hedging against further conflict, Brent call volumes were the highest since early June on Tuesday. A gauge of market volatility is also the highest since the start of the summer.
Oil gains nearly 3% on rising Mideast tension, falling US crude stockpiles (Reuters) - Oil prices rose nearly 3% on Wednesday as investors worried the conflict in the Middle East could widen after the killing of a Hamas leader in Iran, and after a sharp fall in U.S. crude stockpiles. Global benchmark Brent crude futures for September delivery , which expired on Wednesday, settled up $2.09, or 2.66%, at $80.72 a barrel. The more active October contract gained $2.77 to $80.84. U.S. West Texas Intermediate (WTI) crude futures rose $3.18, or 4.26%, to settle at $77.91 a barrel, their biggest daily gain since October 2023. Still, Brent finished July with nearly a 7% monthly decline with WTI down nearly 4% for the month. U.S. crude stocks decreased by 3.4 million barrels last week, government data showed, more than triple the 1.1 million-barrel decline analysts had expected in a Reuters poll. Stocks fell for a fifth straight week, the longest streak of drawdowns since January 2021. "Robust exports have helped to offset lower refining activity and strong imports to encourage a fifth consecutive draw to crude inventories," A day earlier, Brent and WTI both lost about 1.4%, closing at their lowest levels in seven weeks after falling last week on hopes of a Gaza ceasefire agreement that could ease Middle East tensions and accompanying supply concerns. Tensions in the oil-producing region heated up overnight on news that Hamas leader Ismail Haniyeh was assassinated in Iran. This came a day after the Israeli government claimed it killed Hezbollah's most senior commander in an airstrike on Beirut in retaliation for Saturday's rocket attack on Israel. Separately, the U.S. also conducted a strike in Iraq in the latest conflict in the region. "Overnight developments and elevated geopolitical risk merely provide temporary reprieve for oil benchmarks. Unless oil and gas infrastructure is hit, the latest spike is unlikely to last," said Gaurav Sharma, an independent oil analyst in London. A 0.4% fall in the U.S. dollar index (.DXY), opens new tab also supported prices. A weaker dollar can boost demand for oil by making the greenback-denominated commodity cheaper for holders of other currencies. Limiting gains were concerns about fuel demand in China, the world's top crude oil importer. China's manufacturing activity in July shrank for a third month, an official factory survey showed on Wednesday. Ample spare production capacity held by OPEC members also weighed on prices. OPEC+ is expected to stick to their current deal on production and start unwinding some output cuts from October. Top ministers from OPEC+, will hold an online joint ministerial monitoring committee meeting (JMMC) on Thursday.
Oil Rises on Retaliation Reports After Hamas Leader Killed Oil extended gains in late trading to more than 5% after the New York Times reported Iran ordered retaliation against Israel for the killing of a Hamas leader on its soil. West Texas Intermediate climbed as high as $78.55 in the hour after prices officially settled. Wednesday’s gain already had been the largest since October, spurred by the news of Israel’s strike on Hamas’s political leader. The conflict has escalated since last weekend, when a Hezbollah strike in the Israel-controlled Golan Heights killed 12, potentially jeopardizing the ongoing cease-fire talks between Israel and Hamas. For months, traders were concerned the conflict could spiral into a more devastating proxy war, embroiling the US and Iran and possibly hampering crude exports. Meanwhile in broader markets, traders embraced risk after the Fed signaled it’s moving closer to lowering borrowing costs amid easing inflation and a cooling labor market. On the supply side, US crude inventories fell by 3.44 million barrels last week, reaching the lowest level since February, government data showed. Stockpiles have slid for five straight weeks, the longest streak of declines since January 2022. An OPEC+ committee meeting is scheduled for Thursday, with markets split on whether the alliance will proceed with a scheduled output increase next quarter. The market has been assessing the risk that fresh escalation could affect production and exports, including from Iran. Crude prices hadn’t reacted particularly sharply to recent developments in the war, which started in early October. “Right now, putting $2 of geopolitical risk premium back in the market is telling me the market is covering shorts, but not worried about a real supply event,” said Rebecca Babin, senior energy trader at CIBC Private Wealth. In a sign that oil traders are hedging against further conflict, Brent call volumes were the highest since early June on Tuesday. A gauge of market volatility is also the highest since the start of the summer. Earlier, WTI for September delivery rose $3.18 to settle at $77.91 a barrel in New York. Brent for September settlement, which expires Wednesday, rose climbed $2.09 to $80.72 a barrel. The more active October contract settled at $80.84.
Oil Prices Rise Amid Growing Fears of a War in the Middle East -
- Crude oil prices spiked after Israel assassinated Hamas’s political leader on Iranian soil, leading to threats of retaliation from Tehran.
- The ongoing conflict in the Middle East, combined with record US oil demand, has created a bullish environment for oil prices.
- Early on Thursday morning, WTI was trading around $78.50 while Brent had climbed above $81.
Crude oil prices continued their climb today after a surge yesterday following the news of Israel assassinating Hamas’s political leader Ismail Haniyeh in Iran and a senior Hezbollah official in Lebanon.The fact the Haniyeh assassination was done in Iran gave a significant boost to prices as Tehran immediately threatened retaliation of the sort that oil analysts have said could send Brent crude into three-digit territory."We fear the region is at the brink of all-out war," Japan’s deputy representative to the United Nations said as the Security Council called on UN members to double down on diplomatic pressure to resolve the conflict between Israel and its neighbors."Countries with major influence must put more pressure and work more vigorously ... to put out the flames of war in Gaza," China’s UN ambassador said.Iran’s representative called the assassination of Haniyeh an act of terrorism, according to a Reuters report on the latest developments in the situation.As pressure remains high in the Middle East,Brent crude topped $81 per barrel before paring some of its gains earlier today, andWest Texas Intermediate climbed closer to $79 per barrel.In additional bullish news for oil, the Energy Information Administration reported that oil demand in the United States had reached a seasonal record in May, at 20.80 million barrels daily. That was quite a significant revision from EIA estimates, which saw May demand at 20 million barrels daily.Global oil inventories, meanwhile, are on a downward trajectory, reaching a record deficit relative to their average levels, Eric Nuttall, senior portfolio manager at Ninepoint Partners told Bloomberg this week. Nuttall also noted OPEC+ production cut compliance improvements as a factor for a bullish view on oil. Unless tension in the Middle East gets defused through diplomacy, oil may continue up based on fundamentals and the geopolitical premium.
OPEC+’s Decision to Keep its Output Policy Unchanged -- The oil market gave up its early gains on Thursday as it weighed OPEC+’s decision to keep its output policy unchanged, as expected, against the threat of a wider Middle East conflict, which helped support the market early in the session. The crude market traded higher on the news that Iran is meeting with regional representatives to discuss a retaliation strike against Israel. The September WTI contract continued on its upward trend and posted a high of $78.88 in overnight trading. However, the market’s gains were limited and erased its earlier gains as OPEC+ decided to keep its oil output policy unchanged, including a plan to start unwinding some of the output cuts starting in October. The market sold off to a low of $76.24 ahead of the close as it retraced almost 62% of its recent move higher from a low of $74.59 to its early high of $78.88. The September WTI contract settled down $1.60 at $76.31 and the September Brent contract settled down $1.32 at $79.52. The product markets ended the session lower, with the heating oil market settling down 3.19 cents at $2.4064 and the RB market settling down 4.45 cents at $2.3980. Russian Deputy Prime Minister, Alexander Novak, said that the current level of oil prices is comfortable for the Russian budget. He added that the oil market supply and demand remains in balance.Bloomberg reported that more than 300,000 Brent call option contracts traded on Wednesday, amid increased tensions in the Middle East. The volume was dominated by large call spreads, including $87 and $90 spreads for October, as well as $110 and $130 spreads for November.On Thursday, a meeting of top OPEC+ ministers has kept oil output policy unchanged including a plan to start unwinding some output cuts from October and repeated that the increase could be paused or reversed, if needed. The current policy, as agreed in June, calls for some OPEC+ members to gradually phase out output cuts of 2.2 million bpd over the course of a year from October 2024 to September 2025. OPEC+ said the members making those cuts “reiterated that the gradual phase-out of the voluntary reduction of oil production could be paused or reversed, depending on prevailing market conditions.” Thursday’s meeting also noted assurances from Iraq, Kazakhstan and Russia to achieve full conformity with pledged output cuts. Those countries had earlier delivered plans to compensate for past overproduction. An OPEC+ source said the chair of the meeting was insisting that members show commitment to the compensation plan. The Joint Ministerial Monitoring Committee will hold its next meeting on October 2nd.S&P Global Commodities at Sea estimates diesel shipments from the Middle East to Europe averaged 310,000 b/d in July, the lowest level since October, as the economic incentive for shipping diesel from the Arb Gulf to NW Europe was basically negative. Meanwhile, U.S. diesel exports to Europe in July reached a record high as the diesel arbitrage from the U.S. to Northwest Europe has been positive since November.
U.S. crude oil falls 2% as economic worries outweigh Middle East escalation -- Crude oil futures fell 2% on Thursday, as anxiety about the U.S. economy overshadowed red-hot tensions in the Middle East.The manufacturing sector contracted in July for a fourth consecutive month and jobless claims surged last week, renewing fears that the U.S. economy could tip into a recession.Here are Thursday's closing energy prices:
- West Texas Intermediate September contract: $76.31 per barrel, down $1.60, or 2.05%. Year to date, U.S. crude oil has gained 6.5%.
- Brent October contract: $79.52 per barrel, down $1.32, or 1.63%. Year to date, the global benchmark has gained 3.2%.
- RBOB Gasoline September contract: $2.39 per gallon, down 4 cents, or 1.82% Year to date, gasoline is up 14%.
- Natural Gas September contract: $1.96 per thousand cubic feet, down 6 cents, or 3.34%. Year to date, gas is down 21.7%.
Oil prices had rallied Wednesday after the assassination of Hamas political leader Ismail Haniyeh in Tehran, Iran heightened the risk of a regional war in the Middle East.Iranian Supreme Leader Ayatollah Ali Khamenei has ordered a direct strike on Israel in response to the killing of Haniyeh,three Iranian officials told The New York Times.Khamenei ordered the direct strike at an emergency meeting of Iran's national security council Wednesday morning after the Hamas leader was assassinated, the officials told the Times.Top Iranian officials are scheduled to meet Thursday with representatives of Yemen's Houthis, Lebanon's Hezbollah and militant groups in Iraq, five sources told Reuters."The assassination of the Hamas political leader Ismail Haniyeh overnight in Tehran moves this conflict appreciably up the escalatory ladder and edges the region closer to a wider war," Helima Croft, head of global commodity strategy at RBC Capital Markets, told clients in a note Wednesday.Iran and Israel traded direct strikes in April, pushing oil prices to the highest point of the year, but the enemies ultimately pulled back from a full-scale war."At the time of writing, we are not certain whether the same containment dynamics will prevail, especially given that this current chapter involves Hamas, Hezbollah, as well as Iran," Croft wrote."At a minimum, the ongoing Gaza ceasefire talks appear to be severely imperiled," she said.
Oil prices rise but head for fourth week in red on demand concerns -- Oil prices rose in Asian trade on Friday but were headed for a fourth straight week of losses as concerns over slowing economic growth and demand largely offset a brief boost from worsening tensions in the Middle East. Crude prices tumbled in the prior session, cutting short a brief recovery after a raft of weaker-than-expected purchasing managers index data from the U.S. ramped up concerns over a slowdown in global economic growth. The data followed dismal readings from top oil importer China. The weak economic prints saw markets largely look past heightened tensions in the Middle East after the killing of a Hamas leader in Iran earlier in the week. Concerns over a bigger war in the region helped crude prices recover from near two-month lows. Oil markets took middling cues from a meeting of the Organization of Petroleum Exporting Countries and allies (OPEC ), where the cartel made no changes to its production policies and reiterated that it could pause plans to increase output from October. Brent oil futures expiring in October rose 0.4% to $79.84 a barrel, while West Texas Intermediate crude futures rose 0.4% to $75.71 a barrel by 21:24 ET (01:24 GMT). Brent and WTI prices were set to lose between 0.4% and 0.9% this week, after sinking to near two-month lows in the week. Weakness in oil was driven chiefly by growing concerns that an economic slowdown will batter oil demand in the coming months. This was furthered by weak manufacturing PMIs from both the US and China this week. China remained a major pain point for oil markets, as Beijing provided scant details on how it planned to shore up economic growth in the world’s biggest oil importer. In the U.S., the Federal Reserve signaled a potential interest rate cut in September. But traders feared that the cut would be too late for the U.S. economy to still see a soft landing. Crude prices did curb a bulk of their weekly losses on concerns over an all-out war in the Middle East. Israel allegedly killed Hamas leader Ismail Haniyeh in Iran, ramping up concerns over retaliation by the Palestinian group and Iran. Earlier in the week, Israel said it had killed Hezbollah commander Fouad Shukur in an airstrike, drawing ire from the Lebanon-based, Iran-backed group. The prospect of an all-out war between Israel and its surrounding states saw traders attach some risk premium to oil prices, on the prospect of potential supply disruptions in the Middle East.
Oil settles at 8-month low after disappointing US job numbers - Oil prices fell on Friday, settling at their lowest since January, after data showed the U.S. economy added fewer jobs than expected last month, and weak Chinese economic data added more pressure. Brent crude futures settled down $2.71, or 3.41%, to $76.81 a barrel. U.S. West Texas Intermediate crude futures settled down $2.79, or 3.66%, at $73.52. At their session lows, both benchmarks fell by more than $3 per barrel. U.S. job growth slowed more than expected in July and unemployment increased to 4.3%, pointing to raising fears of a possible recession. "We moved from a demand-driven market to a geopolitical one for maybe two days then we absolutely nosedived on all this economic data," Economic data from top oil importer China and surveys showing weaker manufacturing activity across Asia, Europe and the U.S. raised the risk of a sluggish global economic recovery that would weigh on oil consumption. Falling manufacturing activity in China also inhibited prices, adding to concerns about demand growth after June data showed imports and refinery activity lower than a year earlier. Asia's crude imports in July fell to their lowest in two years, sapped by weak demand in China and India, data from LSEG Oil Research showed. Meanwhile, OPEC oil output rose in July, a Reuters survey found, as a rebound in Saudi Arabian supply and small increases elsewhere offset the impact of ongoing voluntary supply cuts by other members and the wider OPEC+ alliance. The Organization of the Petroleum Exporting Countries pumped 26.70 million barrels per day (bpd) last month, up 100,000 bpd from June, according to the survey based on shipping data and information from industry sources. An OPEC+ meeting on Thursday had left the group's oil output policy unchanged, including a plan to start unwinding one layer of production cuts from October. Oil investors are also watching the Middle East, where Lebanon's Iran-backed group Hezbollah said its conflict with Israel had entered a new phase. Still, analysts noted no material disruption of oil supplies from the region as prices slumped to multi-week lows days after the killing of senior leaders of Iran-aligned militant groups Hamas and Hezbollah stoked fears of all-out war. “Oil has been pumped up on just extraordinary jitters over the Middle East situation but here we are several days after a significant event,”
US Launches Airstrikes in Iraq, Four Members of the PMF Reported Killed - A US official told Reuters that the US carried out a strike in Iraq on Tuesday just hours after Israel bombed Beirut.The official didn’t share details about the attack, but earlier, a drone strike was reported in the Iraqi province of Babylon that hit a base housing Iraq’s Popular Mobilization Forces (PMF), a coalition of mostly Shia militias that’s part of Iraq’s security forces. A PMF official told AFP that the base was hit by four or five missiles. An Iraqi security source confirmed that four people were killed and said the death toll was expected to rise.The US has a history of targeting the PMF as retaliation for rocket attacks on US bases in the region. The US’s latest bombing came a few days after rockets were fired toward the Ain al-Asad airbase in western Iraq, which houses US troops. A US base in eastern Syria was also targeted in recent days. The Iraqi government strongly opposes unilateral US strikes on the PMF since the coalition is part of its military. US attacks on the PMF led to Iraqi Prime Minister Mohammed Shia al-Sudani calling for a US withdrawal.
Iraq Condemns US Airstrike as 'Heinous Crime and Blatant Aggression' - Iraq has strongly condemned a US airstrike that targeted the country on Tuesday and killed several members of the Popular Mobilization Forces (PMF), a coalition of mostly Shia militias that was formed in 2014 to fight ISIS and are part of Iraq’s security forces.The US attack came as Washington and Baghdad have been discussing the future of the US military presence in Iraq. US strikes against the PMF in 2023 and at the beginning of this year prompted Prime Minister Mohammed Shia al-Sudani to call for an end to the US-led anti-ISIS coalition in Iraq.“Despite extensive efforts through political and diplomatic channels … in the efforts [to end] the presence and operations of the Global Coalition against Daesh (ISIS) in Iraq and transitioning to a bilateral security relationship based on mutual respect and safeguarding Iraq’s sovereignty and security, the coalition forces have committed a heinous crime and blatant aggression,” said Iraqi Maj. Gen. Yehia Rasool, a spokesman for al-Sudani.“Such serious and uncalculated transgressions can significantly undermine all efforts, mechanisms, and frameworks of joint security work to combat ISIS in Iraq and Syria. They also risk dragging Iraq and the entire region into dangerous conflicts and wars. Therefore, we hold the coalition forces fully responsible for these consequences following this flagrant aggression,” Rasool added.The PMF announced on Tuesday that at least four of its fighters were killed in the US attack. The US bombing came a few days after rocket attacks targeted US bases in Iraq and Syria for the first time in a few months, likely a response to the lack of a clear plan for a US withdrawal from Iraq.The US bombing in Iraq came just hours after Israel launched an airstrike on Beirut targeting a senior Hezbollah commander. If Hezbollah and the Iraqi Shia militias coordinate a response to the Israeli escalation, it could involve attacks on US bases in Iraq and Syria since the US has pledged it will intervene to defend Israel.
Israel-Hezbollah conflict risks spiraling after soccer field attack --Israeli officials are weighing how to respond to the Hezbollah attack over the weekend that killed 12 children as escalating tensions threaten to stymie U.S. efforts to bring stability and peace to the region. Israeli Prime Minister Benjamin Netanyahu has vowed Hezbollah will “pay the price” after a rocket struck a soccer field in Israel’s Golan Heights. In addition to the deaths, the attack wounded 20 people in a town dominated by the Druze minority Muslim group. The U.S. has tried to defuse tensions between the Iran-backed Hezbollah and Israel for months with little success as both sides teeter toward a larger war. Israel is already discussing whether a military operation is needed in Lebanon, and the weekend attack could boost the arguments of those advocating for war. While there has been a flurry of back-and-forth strikes across the Israel-Lebanon border, the Golan Heights attack struck a new nerve and created new pressure on Israel to respond with strength. It also signals just how far the conflict has spiraled out of control. “The problem with this conflict is that deterrence has disappeared [and] Hezbollah has been accustomed to hitting Israel without consequence,” said Michael Rubin, director of policy analysis at the Middle East Forum. Rubin predicted a war unless Lebanon and the United Nations take greater action to restrain Hezbollah. “The result is going to be war, and it’s going to look like Gaza, because the status quo hasn’t been able to deter Hezbollah.” Limited Israeli strikes on Hezbollah targets in Lebanon in the past two days are expected to be just the beginning of Israeli retaliation. The Lebanese militia group is quickly moving to defend against an Israeli attack, reportedly evacuating some areas in the south and preparing precision-guided missiles. Netanyahu, whose security Cabinet has authorized a retaliatory strike, doubled down on a harsh response to Hezbollah in a post on the social media platform X after visiting the site of the Golan Heights strike. “These children are our children, they are the children of all of us,” he wrote. “Our response will come, and it will be hard.”
Netanyahu Postpones the Evacuation of 150 Sick and Wounded Children from Gaza - Israeli Prime Minister Benjamin Netanyahu has delayed the evacuation of 150 sick and wounded Palestinian children from Gaza to the UAE, Israeli media reported on Sunday.A source told Haaretz that Netanyahu made the decision in response to the killing of 12 Arab Druze children in the Israeli-occupied Golan Heights. Israel blamed the massacre on Hezbollah, while Hezbollah denied the accusation and said the children were hit with an Israeli air defense rocket.Netanyahu’s decision to punish the sick and wounded children was denounced by the group Physicians for Human Rights, which called the move a “cruel game by the Israeli government with children’s lives.”Last week, Haaretz reported that Netanyahu instructed his government to arrange transport of sick and wounded Palestinians from Gaza to a third country for treatment. The first plane was due to take off on Monday, but the flight has been canceled.Netanyahu also previously canceled a plan to set up a field hospital inside Israel to treat Gaza’s children. Some children have been evacuated through Egypt for medical care, but the Israeli capture of the Rafah border crossing on May 7 cut off that vital lifeline.
IDF targets Beirut suburb in retaliation for attack that killed 12 in the Golan -- Israel’s military says it has killed a Hezbollah official who it says was “the commander responsible” for a deadly attack last week on the Israeli-controlled Golan Heights that killed 12 young people.The Israel Defense Forces said it killed Fuad Shukr on Tuesday in an airstrike in the area of Beirut in Lebanon.The IDF claimed that Shukr “was the commander responsible for the murder of the 12 children in Majdal Shams in northern Israel on Saturday evening, as well as the killing of numerous Israelis and foreign nationals over the years.”Israel was targeting Shukr, better known by his nickname, Hajj Mohsen, in the strike in a suburb of southern Beirut, an Israeli official told NBC News. Mohsen is a senior adviser to Hezbollah’s supreme leader, Hassan Nasrallah, and a member of the group’s military council, according to a U.S. government profile.Hezbollah has denied responsibility for the rocket attack Saturday, which struck a soccer field in the Golan Heights.Militants in Lebanon and Israel have been trading fire since Hamas' Oct. 7 terrorist attack on Israel and the start of the war in Gaza, raising fears that the fighting will spiral into a regional conflict.Al Manar, a satellite television station run by Hezbollah, reported that Israel had "launched an aerial aggression that targeted the southern suburb of Beirut.""Local sources reported that the raid in the Haret Hreik area was carried out by a drone and 3 missiles were fired," the report added.The television station also said a building Israel targeted in the Haret Hreik area, a Hezbollah stronghold, had collapsed.Al Manar reported that two people were killed and at least 10 were wounded in the strike. Personnel from the emergency room at Bahman Hospital in Beirut told NBC News that a woman was killed and 17 other people were wounded, including six children and two who were in critical condition. In a statement, the Lebanese Red Cross said more than one person had been killed and over 20 had been injured.The Lebanese Health Ministry said a woman was killed and up to 68 other people were injured, five of them critically.Photographs from the area also showed cars crushed and covered with rubble.Saturday's strike on Majdal Shams killed at least 12 people, most of them children and teenagers belonging to the minority Druze community.
Israel Bombs Beirut, Claims It Targeted a Senior Hezbollah Commander - An Israeli airstrike targeted the southern suburbs of the Lebanese capital of Beirut on Tuesday, a step that could escalate the Israel-Hezbollah conflict into a full-blown war.Israel said that it targeted a senior Hezbollah commander, Fuad Shukr. A Lebanese government official told CNN that Shukr survived the strike, while Israel is claiming he was killed. Lebanon’s Health Ministry is reporting that three civilians, including two children, were killed in the attack and 74 others have been wounded.The Israeli military claimed Shukr was responsible for the rocket that killed 12 Druze children in the Israeli-occupied Golan Heights on Saturday. Hezbollah denied responsibility for the killing of the children and has said they were hit by an Israeli air defense rocket.After the strike, the US expressed strong support for Israel against Hezbollah. “Our commitment to Israel’s security is ironclad and unwavering against all Iran-backed threats, including Lebanese Hezbollah,” said National Security Council spokeswoman Adrienne Watson.According to Al Jazeera, Hezbollah has warned that if Israel launched a strike deep into Lebanese territory, it would mean “all rules of war” are off. The last time Israel bombed Beirut was on January 2, when the Israeli military launched a drone strike that targeted a senior Hamas official.Media reports said the US was warning Israel against targeting Beirut, but the US is still providing unconditional military aid and not using any of its leverage to rein in Israel. The US has also previously ensured it would back Israel in a full-blown war in Lebanon.
Hezbollah Confirms Its Commander Killed in Israeli Airstrike on Beirut - Hezbollah on Wednesday confirmed that one of its most senior military commanders, Fuah Shukr, was killed by an Israeli airstrike that hit a residential building in the southern suburbs of Beirut on Tuesday.Lebanese sources told Reuters that Shukr’s body was found in the rubble on Wednesday evening, and at least two women and two children were also killed in the strike.Shukr, also known as Hajj Mohsen, was a founding member of Hezbollah. According to Lebanon’s Al Mayadeen, he was one of Hezbollah Secretary-General Hassan Nasrallah’s closest advisors.Hezbollah said that Nasrallah would respond to the Israeli attack in a speech at Shukr’s funeral on Thursday. “As for our political stance on this sinful aggression and great crime, it will be expressed by Hezbollah Secretary-General Sayyed Hassan Nasrallah tomorrow in the martyred leader’s funeral procession,” the Lebanese group said. Israel said it targeted Shukr in response to the rocket that killed 12 Druze children in the Israeli-occupied Golan Heights. Hezbollah denied responsibility for the strike and blamed it on an Israeli air defense rocket.Druze residents of the Golan Heights, who mostly consider themselves Syrian, rejected the idea of retaliation for the killing of the 12 children. “Based on our Arab, Islamic, monotheistic beliefs, we reject that a single drop of blood be shed in the name of revenge for our children,” said the Religious and Temporal Commission in the occupied Syrian Golan Heights, according to Middle East Eye.
Israeli soldiers demolish water system in Gaza -- The Israeli daily Haaretz reported Monday that over the weekend, in violation of humanitarian law, a unit of the Israel Defense Forces (IDF), the 401st Brigade of the Armored Corps, rigged a critical water reservoir in Gaza with explosives and then detonated them, destroying the facility known as the Canada Well. Palestinians inspect the damage at a site hit by an Israeli bombardment on Khan Younis, southern Gaza Strip, Saturday, July 13, 2024 [AP Photo/Jehad Alshrafi] The water facility, located in Tel Sultan neighborhood on the northwestern side of Rafah, the southernmost city in the Gaza Strip, was built in 1999 with funding provided by the Canadian International Development Agency. Equipped with solar panels, it enabled water services to continue for tens of thousands of people in the area despite the destruction of the entire electrical grid in the enclave. Following the destruction, the IDF soldiers celebrated by posting videos of the operation on their Instagram and X social media accounts, writing, “Destruction of the Tel Sultan water reservoir in honor of Shabbat.” The Israeli army admitted that its soldiers were responsible for the bombing of the Canada Well and said it was investigating if any international laws were violated. Monther Shoblaq, director general of the Coastal Municipalities Water Utility, speaking with Drop Site, said, “I was shocked when I saw the video. It’s not just that they targeted this water facility; it’s the fact that they planted explosives, celebrated the act on Instagram, and did so under the guise of honoring the Sabbath. It’s deeply cruel. This is the Canada Well in Tal al-Sultan—one of the most important water facilities in the city of Rafah.” What is being disputed in the Israeli press, however, is whether the brigade commander of the Combat Engineers obtained permission from senior officers of the IDF Southern Command to destroy the facility and not the obvious fact that the operation was typical of the conduct of the IDF throughout the war against the people of Gaza. The areas where the operation took place were considered humanitarian safe zones, which become killing zones whenever the IDF pleases. As is usual in these situations, the army told Haaretz it was going to look into the incident and consider if the military police needed to open an investigation. Given the international outcry over Israeli war crimes in Gaza, these reports from Rafah are one more embarrassment for the IDF and the Netanyahu government, which will try to manufacture yet another outrageous pretext, perhaps claiming that the operation was necessary to prevent Hamas from accessing potable water for their continued operations. A similar argument could be made for actions to deprive the population of breathable air as well. Throughout the now more than nine-month-long siege on the Gaza Strip, countless video clips posted on social media have exposed the barbarism of IDF in the killing and abuse of innocent Palestinians, as well as international aid workers who have risked their lives to help the beleaguered population. In each case, neither the Israeli army, Netanyahu, nor the US government has raised a finger to curb the savagery. On the contrary, they have commended and justified these actions. Placing context on the blowing up of the Canada Well water reservoir, Reuters reported yesterday that in July the Israeli army destroyed 30 water wells in Rafah and Khan Younis. And given the incessant bombing and drone attacks, the daily chore to seek water and sustenance has potentially lethal consequences. In May, the BBC reported that satellite data had revealed more than half of Gaza’s water sites had been damaged including four of the six wastewater treatment plants crucial to preventing the build-up of sewage. As the Reuters report noted, “People have dug wells in bleak areas near the sea where the bombing has pushed them or rely on salty tap water from Gaza’s only aquifer, now contaminated with seawater and sewage. Children walk long distances to line up at makeshift collection points. Often not strong enough to carry the filled containers, they drag them on wooden boards. Gaza city has lost nearly all its water production capacity, with 88 percent of its water wells and 100 percent of its desalination plants damaged or destroyed.”
Israel war on Gaza live: Hamas chief Ismail Haniyeh assassinated in Iran
- Hamas said its political chief Ismail Haniyeh was killed in “a treacherous Zionist raid on his residence in Tehran”. Iran’s president vows to make Israel ‘regret cowardly action’, as Supreme Leader Khamenei says avenging Haniyeh’s killing is Tehran’s duty.
- There was no immediate comment from Israel. The Israeli military said it was conducting a situational assessment.
Hamas Leader Haniyeh Assassinated In Iran By Israeli Strike - Iran’s Revolutionary Guards Corps has confirmed the death of Ismail Haniyeh, the top political leader of Hamas, during an inauguration event for Iran’s new president. Haniyeh, who is based in Qatar, and an Iranian security guard were reportedly killed at their place of residence.IRGC: Head of Hamas political bureau Ismail Haniyeh martyred in Tehran.#Hamas #Iran pic.twitter.com/HDQwlh3Xzv Israel had vowed to kill Hamas leaders soon after the group’s incursion on Oct. 7.The attack follows a strike by Israel on Beirut on Tuesday that targeted senior Hezbollah commander Fuad Shukr. Shukr, reportedly the mastermind behind a recent attack that killed 12 children in the Golan Heights, is believed to have died in the strike. The Lebanese health ministry reported that the strike killed three civilians, including two children, and injured 74 others.The death of the Hamas leader took place just hours after a significant portion of Israeli airspace was closed for unexplained reasons.NOTAMs have been issued in Israel, resulting in the closure of a significant portion of Israeli airspace.The NOTAMs were reportedly issued after a situational assessment.pic.twitter.com/FJjk3Xf5aj July 31, 2024 Israel’s Prime Minister Benjamin Netanyahu had vowed a stern response to the Golan Heights strike, which Hezbollah denied responsibility for. Lebanon’s current prime minister condemned the airstrike and plans to file a complaint with the U.N. Security Council.In Tehran, during the inauguration of President Masoud Pezeshkian, senior figures from groups within Iran’s “axis of resistance,” including Haniyeh, were present. Hamas leader Ismail Haniyeh is killed with one of his bodyguards in Tehran. pic.twitter.com/widFinIbnF Shortly after his speech asserting support for Palestinians, news of Haniyeh’s assassination broke. Immediately after the news of Haniyeh's death broke, multiple reports emerged that Hamas vengeance would be swift. Member of the Hamas Political Bureau, Musa Abu Marzouk said that the assassination of Haniyeh is a cowardly act and will not be in vain.
A 'Watershed Event': Five Takeaways From Israel's Assassination Of Hamas' Political Leader In Tehran - Hamas’ political leader Ismail Haniyeh was assassinated by Israel early Wednesday morning in the heart of the Iranian capital hours after attending President Masoud Pezeshkian’s inauguration. The details remain unclear, but it’s widely thought that he was killed by a precision drone strike at his residence. The world is watching to see whether Iran and/or its Resistance Axis allies will respond, what form it could take if so, and whether that would escalate tensions to a wider war. Here are five takeaways thus far:
- 1. Israel’s Intelligence & Tactics Are Top-Notch - Israel somehow or another obtained accurate intelligence about Haniyeh’s location despite it being top-secret and was then able to successfully assassinate him. Whatever air defenses (including electronic warfare ones) that Iran had deployed in its capital as part of the security measures to protect its high-profile guests failed to thwart this attack. This is a major embarrassment for the Islamic Republic and prompts speculation about whether it was due to utter incompetence or was partially an inside job.
- 2. Iran Is Caught In A Dilemma Over How To Respond. It’s unimaginable that Iran won’t respond to its Israeli enemy assassinating a high-profile allied guest in Tehran during the new president’s inauguration, but the dilemma is over the form that this response will take. Launching another drone and missile salvo against Israel like it did in the spring after the bombing of its consulate in Damascus is possible, though Israel could spin that as a failure if many of them are shot down like last time, the on-the-ground damage is minimal, and no high-profile targets are killed.
- 3. Mutually Assured Destruction Hangs Heavy Over Everyone’s Head. The response that Iran resorts to will be determined by its leadership’s understanding of how far they can go without triggering the “mutually assured destruction” (MAD) scenario, which both Israel and the Resistance Axis fear and is why they’ve thus far restrained themselves from waging all-out war. A repeat of spring’s salvo could remain below that threshold, but Iran might also respond in a different way that’s interpreted by Israel as an escalation, thus prompting its own escalation that could then lead to MAD.
- 4. A Choreographed Response Might Therefore Be The Most “Rational”… Duma member Dmitry Belik, whose claim to fame was helping Sevastopol reunify with Russia when he briefly served as the region’s acting head in spring 2014, described spring’s salvo as a “beautiful theatrical production”. If there’s any truth to his innuendo that Iran choreographed its response with the US and/or Israel to Israel’s bombing of its consulate in Syria, then it might also do the same after Haniyeh’s assassination, which could help Iran “save face” while averting an escalation towards MAD.
- 5. …But There’s No Guarantee That Iran’s Allies Will “Stand Down” ..Hamas and Hezbollah are Iran’s allies but operate independently of it despite their close ties. There’s accordingly no guarantee that they’ll “stand down” and not respond in their own way if Iran sends another salvo to Israel regardless of whether or not it’s choreographed. After all, Hamas’ political chief was just killed, while one of Hezbollah’s top commanders was assassinated by Israel in Beirut the day prior. This makes the MAD risk even less manageable since those two might not share Iran’s calculations.
Haniyeh’s assassination is a watershed event in the latest Israeli-Hamas War, which is now a regional Israeli-Iranian proxy war, since it greatly spikes the risk of everything spiraling into MAD. Iran’s response will be crucial in determining whether or not that happens, but so too will Hamas and Hezbollah’s. They’ll either “stand down” as Iran responds regardless of whether or not it’s choreographed, participate in a joint response that remains below the MAD threshold, or decide to cross that red line on their own.
Israeli Killing of Hamas Political Chief Expected To Derail Ceasefire Talks - The Israeli assassination of Hamas’s political chief, Ismail Haniyeh, in the Iranian capital of Tehran is expected to derail negotiations for a hostage and Gaza ceasefire deal. Qatari Prime Minister Mohammed Bin Abdul Rahman al-Thani, who has been mediating indirect talks between Israel and Hamas, expressed concern about the impact the assassination will have on the negotiations.“Political assassinations and continued targeting of civilians in Gaza while talks continue leads us to ask, how can mediation succeed when one party assassinates the negotiator on the other side? Peace needs serious partners and a global stance against the disregard for human life,” al-Thani wrote on X.Israeli Prime Minister Benjamin Netanyahu was doing everything he could to sabotage the chances of a deal before his big trip to Washington, something that’s been widely acknowledged by Israeli media and officials.Haniyeh was seen as Hamas’s leading proponent of reaching a ceasefire deal with Hamas. While Hamas’s top leader is Yahya Sinwar, who is believed to be hiding deep inside the tunnel system under Gaza, Haniyeh was the top official for the Palestinian group outside of Gaza and played a key role in the negotiations.Progress toward a deal is not expected to be made as the region is bracing for Iran’s retaliation for the assassination on its territory and Hezbollah’s response to the Israeli killing of one of its top military commanders in Beirut.US officials told Axios that they’re concerned the assassination of Haniyeh will derail negotiations and could lead to a major regional war. But the US is strongly backing Israel, as Secretary of Defense Lloyd Austin vowed the US would defend Israel from any retaliation.
NYT: Haniyeh Was Killed By A Bomb Israel Planted in Tehran Two Months Ago - Hamas’s political chief, Ismail Haniyeh, was killed by a bomb Israeli intelligence planted at an official guest residency in Tehran about two months ago, The New York Times reported on Thursday.Haniyeh was in Tehran for the inauguration of Iranian President Masoud Pezeshkian and had stayed at the guest residence on previous visits. TheTimes report, which cited five Middle East officials, two Iranian officials, and one American, said the bomb was detonated remotely when it was confirmed Haniyeh was in a room at the guest house.The explosion killed Haniyeh and his bodyguard at about 2:00 am local time. Hamas officials initially said a missile struck the building, but there was no sign of Israeli warplane activity in the area.Axios also reported Haniyeh was killed by a bomb planted at the guest house in advance by the Israeli spy agency Mossad. The residency was heavily guarded by Iran’s Islamic Revolutionary Guard Corp (IRGC), and the assassination demonstrates the Mossad’s deep reach within the Islamic Republic.. The Israeli killing of Haniyeh was likely designed to sabotage both ceasefire negotiations with Hamas and any chances of the US and Iran engaging in sanctions relief. Iranian President Masoud Pezeshkian, who is considered a moderate, pledged to work to get sanctions lifted in his inauguration speech.
Ayatollah Says 'Severe' Revenge Coming For Israel Killing Hamas Leader On Iranian Soil --The world just woke up to a new Middle East on Wednesday which stands on the precipice of major war between Iran and its proxies and Israel, following the overnight Israeli assassination of Ismail Haniyeh, the top political leader of Hamas, during an inauguration event for Iran’s new president. Haniyeh, who is based in Qatar, and an Iranian security guard were killed reportedly while in the Iranian capital. Hamas has since condemned the "treacherous Zionist raid on his residence in Tehran." Iran is vowing "severe" punishment, with the Islamic Republic's Supreme Leader, Ayatollah Khamenei, announcing in English and Farsi on X, "The criminal, terrorist Zionist regime martyred our dear guest in our territory and has caused our grief, but it has also prepared the ground for a severe punishment."And Iran's newly sworn-in president Masoud Pezeshkian in a statement cited in state media said the country will "defend its territorial integrity, dignity, honor, and pride, and will make the terrorist occupiers regret their cowardly act." Taking out Haniyeh was the second high-profile assassination attributed by Israel in a matter of hours, following the Tuesday airstrike in Beirut that killed Hezbollah’s top military leader and right-hand man to Secretary-General Hassan Nasrallah, Fuad Shukr. That attack was massive and on a neighborhood and buildings in the south of the capital, with Lebanon’s Health Ministry saying three people, including two children, have been killed, with at least 74 wounded. Emergency workers are still searching under the rubble, and thus the civilian death toll is likely to rise further. And now there are emerging reports of another Israeli air raid - this time on Syria's capital of Damascus (unconfirmed) - with likely casualties. A large cloud of smoke was seen rising over the Damascus suburb of Sayyidah Zaynab at around 3pm local time. It is an area which sees a constant influx of Iranian religious pilgrims, and Israel has bombed it frequently, saying each time it is targeting Iranian military assets and proxies. Adding to this volatile mix, the US military also overnight launched its first military action in Iraq in months, reportedly striking militia combatants who attempted to launch a drone attack. The Pentagon is calling the new military action a defensive airstrike.The US State Department and US administration have reportedly expressed confusion at the rapid series of Israeli actions in the last hours...
Iran seeks revenge on Israel, sparking fears of all-out war - Iran and its proxies are vowing to punish Israel for the apparent assassination of top Hamas political leader Ismail Haniyeh in Tehran, bringing the two countries closer to an all-out war in the Middle East. Israel, which has not acknowledged the strike in Iran, said one of its primary goals in the war against Hamas is the death of its top leaders, including Haniyeh. But Haniyeh’s death on Iranian soil, just more than three months after Iran directly fired at Israel with hundreds of missiles and drones in an unprecedented attack, is a major escalation in the already spiraling conflict across the Middle East. It also comes just one day after Israel killed the top military leader of the Iranian-backed Hezbollah militant group in Lebanon’s capital of Beirut, where war has been threatening to break out for months. Aaron David Miller, a senior fellow at the Carnegie Endowment for International Peace, said the risk of a regional war is growing, which he speculated would begin with a larger Israeli-Hezbollah conflict. “It would evolve into Iranian involvement because Iran could not stand by and see [Hezbollah] decimated by the Israelis,” he said of a wider war. “I don’t think we’re going there. I think where this is probably heading is a series of episodic confrontations, which could get pretty intense.” Asher Kaufman, professor of history and peace studies at the University of Notre Dame, said that “by targeting these two top leaders, the Israeli government demonstrated that it is willing to take the risk of a full war.” “We are certainly closer to a downward spiral today than we were yesterday,” Kaufman said in an email. “It seems like all parties, including Israel, are not interested in a full-scale war, but at the same time, all continue to inch forward toward that possibility. The Middle East is by far in a moment of extreme fragility and uncertainty about the future.” Iran’s Supreme Leader Ayatollah Ali Khamenei promised a “harsh punishment” for the Wednesday strike that killed Haniyeh and his bodyguard at his residence while he was in Tehran to attend the inauguration of the newly elected Iranian president. “Following this bitter, tragic event which has taken place within the borders of the Islamic Republic, it is our duty to take revenge,” Khamenei said on social platform X. Khamenei, later on Wednesday, ordered his forces to respond, according to The New York Times. Hamas and other Iranian-backed groups, including Hezbollah in Lebanon and the Houthis in Yemen, also quickly condemned Israel for the killing of Haniyeh and vowed retaliation for the attack. The Haniyeh strike showed the vast capabilities of Israeli intelligence and exposed a weakness in Tehran to defend the nation, putting pressure on Iran to respond with strength. But experts say Tehran does not likely have the resources or appetite for another massive attack on Israel like it did in April. That attack followed the death of several members of Tehran’s paramilitary group Islamic Revolutionary Guard Corps, which Israeli forces struck near the Iranian Embassy in Syria. Instead, Iran may respond through its proxies. The most likely attack will come from Lebanon, where Hezbollah has been firing artillery and rockets at Israel for nearly 10 months in a campaign tied to the Israeli war against Hamas in Gaza. Hezbollah may already be weighing a response after a Tuesday Israeli strike in Beirut killed Fuad Shukr, the right-hand man and principal military adviser to Hezbollah’s leader, Hassan Nasrallah. That Israeli strike came in response to a Hezbollah rocket attack on a soccer field in Israel that left 12 children and teenagers dead.
Israeli Police Detain Soldiers Suspected of Raping a Palestinian, Sparking Protests - On Monday, Israeli military police detained Israeli soldiers who were suspected of raping a Palestinian prisoner at the notorious Sde Teiman prison in southern Israel. Israeli media reported that the Palestinian prisoner was transferred from Sde Teiman to a hospital with an injury to his anus that was so severe he could not walk.When the Israeli military police went to Sde Teiman to detain soldiers suspected of forcibly sodomizing the Palestinian man, they were met with resistance. A security source told Haaretz that Israeli soldiers at the facility refused to leave and barricaded themselves in. They also reportedly used pepper spray on the military police.The police ended up detaining nine out of 10 of the Israeli Defense Forces (IDF) soldiers suspected of abusing the Palestinian detainee. The arrest of the suspected rapists sparked protests from far-right Israeli activists.Members of the Israeli Knesset joined protesters as they stormed Sde Teiman, including Zvi Sukkot of the Religious Zionism party. At least one member of Prime Minister Benjamin Netanyahu’s coalition was spotted among the protesters, Heritage Minister Amichai Eliyahu, a member of the Jewish Power party. Later in the day, protesters stormed Beit Lid, the base where the Israeli soldiers are being held. Israeli Minister of National Security Itamar Ben Gvir, leader of the Jewish Power party, praised the detained Israeli soldiers, calling them the “best heroes” and denouncing their arrest as “shameful.”
Israeli Lawmaker Says Raping Palestinian Prisoners Is 'Legitimate' - A member of the Israeli Knesset has defended the idea of raping Palestinian prisoners after Israeli soldiers suspected of sexually torturing a detainee at the Sde Teiman detention facility were arrested.The arrest took place on Monday, sparking protests from far-right activists, including several members of the Knesset and at least one minister in Prime Minister Benjamin Netanyahu’s governing coalition.In a meeting of lawmakers on the day of the arrest, Hanoch Milwidsky, a member of Netanyahu’s Likud party, was asked if it was legitimate “to insert a stick into a person’s rectum?”Milwidsky replied, “Yes! If he is a Nukhba [Hamas militant], everything is legitimate to do! Everything!”According to Haaretz, the Palestinian prisoner who was raped suffered from a ruptured bowel, a severe injury to his anus, lung damage, and broken ribs and was taken to the hospital for an operation.The Times of Israel reported that two out of the ten soldiers arrested for the rape were released on Wednesday and that they were not the main suspects. The report also said that Honenu, a legal aid organization representing four of the soldiers, claimed the soldiers were acting in self-defense when they forcibly sodomized the Palestinian prisoner.The condition of the prisoner confirms some of the worst allegations made by Palestinians who were previously held in Sde Teiman. Younis al-Hamlawi, a senior nurse who was detained by Israeli forces in Gaza after he left Al-Shifa Hospital over allegations that he was tied to Hamas,told The New York Times that Israeli soldiers penetrated his rectum with a metal stick, causing him to bleed and leaving him in “unbearable pain.”The Times report said a leaked report from the UN “cited a 41-year-old detainee who said that interrogators ‘made me sit on something like a hot metal stick and it felt like fire,’ and also said that another detainee ‘died after they put the electric stick up’ his anus.”
Erdogan Says Turkey Could 'Enter' Israel Like It Did in Libya and Nagorno-Karabakh - On Sunday, Turkish President Recep Tayyip Erdogan appeared to threaten military intervention against Israel, saying Turkey could “enter” Israel as it did in Libya and Nagorno-Karabakh.“We must be very strong so that Israel can’t do these ridiculous things to Palestine. Just like we entered Karabakh, just like we entered Libya, we might do similar to them,” Erdogan said in a televised address. “There is no reason why we cannot do this … We must be strong so that we can take these steps.”Starting in 2020, Turkey, a NATO member, began deploying military advisors and thousands of Syrian mercenaries to Libya to support the UN-backed Government of National Accord.Turkey also strongly backed Azerbaijan’s 2020 assault on Nagorno-Karabakh by providing weapons and political support. The conflict ended in 2023 with Azerbaijan completing the ethnic cleansing of the over 100,000 ethnic Armenians who lived in Nagorno-Karabakh.Turkey denied that it intervened directly in Nagorno-Karabakh, but during the 2020 war, there were allegations that Ankara sent mercenaries recruited from Syria to fight for Azerbaijan.In response to Erdogan’s comments about intervening in Israel, Israeli Foreign Minister Israel Katz warned the Turkish leader could be the next Saddam Hussein, who was toppled and later executed following the 2003 invasion of Iraq. “Erdogan follows in the footsteps of Saddam Hussein and threatens to attack Israel. Just let him remember what happened there and how it ended,” Katz wrote on X.
Erdogan threatens Turkish military intervention against Israel --President Recep Tayyip Erdoğan said in his hometown Rize on Sunday that Turkey could intervene militarily against Israel to “protect the Palestinians”. “We should be very strong, so that Israel cannot do this stuff to Palestine. Just like we entered Karabakh, just like we entered Libya, we can do similar to them. There is no reason not to do it. We must be strong to take these steps.” Israel’s Foreign Minister Israel Katz responded on X: “Erdogan is following in the footsteps of Saddam Hussein and threatening to attack Israel. He should remember what happened there and how it ended.” Former Iraqi President Saddam Hussein was executed in 2006 after the US invasion of Iraq. The Turkish Foreign Ministry responded to the Saddam Hüssein analogy with a Hitler analogy: “Just as the end of the genocidal Hitler came, so too will be the end of the genocidal Netanyahu. Just as the genocidal Nazis were held accountable, those who seek to destroy the Palestinians will also be held accountable. Humanity will stand with the Palestinians. You will not be able to destroy the Palestinians”. The dangerous escalation between the Israeli and Turkish bourgeoisies, two reactionary allies of US-NATO imperialism, is a warning that the US-NATO-backed Israeli genocide in Gaza could lead to a Middle East-wide war. As the US uses the Gaza genocide as a springboard to escalate a regional war against Iran and its allies, Israel is stepping up preparations for a counter-offensive in Lebanon. Erdogan’s statement follows Israeli Prime Minister Benjamin Netanyahu’s speech to the US Congress on July 24 and China’s hosting of an agreement between Palestinian organisations. In his statement on Netanyahu’s visit to Washington on Saturday, Erdoğan targeted both the US and Israel, saying: “The other day, we all watched those disgraceful scenes in the US House of Representatives. Frankly speaking, we were ashamed of what we have seen there in the name of humanity... Rolling out the red carpet for someone like Netanyahu, going even further and applauding his lies until their palms swell, is a major abdication of reason for America.” Last week, 14 Palestinian organisations, including Hamas and Fatah, met in Beijing and signed the ‘Beijing Declaration’. According to the agreement, in which Ankara played no role, all the organisations will be united under the umbrella of the Palestine Liberation Organisation (PLO), headed by Mahmoud Abbas, and a temporary government of national reconciliation will be formed. Palestinian Authority President Abbas was invited to Turkey to coincide with Netanyahu’s visit to the US. Erdoğan responded to Abbas’ refusal to accept this invitation by saying, “Mr Abbas, who did not come although we invited him, should first apologise to us”. In Turkey, which has NATO’s second largest army and hosts numerous US-NATO bases, the Erdoğan government’s response to the Gaza genocide has been marked by hypocrisy. The government’s first reaction after October 7 was one of caution and restraint. It called for a ceasefire and invited the Israeli state and Hamas to the table. The events of October 7 have undermined the process of normalisation with Israel that Turkey has been pursuing in recent years, based on interests in the natural gas resources of the eastern Mediterranean. Ankara also fears that it could be drawn into a war against Iran, which would damage the interests of the Turkish bourgeoisie, because of US imperialism’s drive to dominate the Middle East.
Italy To Restore Diplomatic Ties With Syria - Italian Foreign Minister Antonio Tajani has announced that Italy will appoint an ambassador to Syria for the first time in 12 years.According to The Associated Press, Tajani said one reason why Rome was restoring ties with Damascus was to “prevent Russia from monopolizing diplomatic efforts in the Middle Eastern country.”The step to normalize relations with the government of Syrian President Bashar al-Assad comes after Italy and seven other European Union members sent a letter to Josep Borrell, the EU’s foreign policy chief, urging a different approach toward Syria and a re-evaluation of sanctions on the country.Tajani said Italy received support to normalize with Syria from the other seven signatories to the letter, which include Austria, Croatia, Greece, the Czech Republic, Slovenia, Cyprus, and Slovakia.At least five EU countries have some sort of diplomatic ties with the Assad government, including the Czech Republic, which never cut ties with Damascus. Greece re-opened its embassy in Damascus in 2021.The US says that it’s strongly opposed to other countries restoring ties with the Assad government, but that has not stopped a growing trend of normalization. More and more countries are accepting the regime change effort against Assad has failed. Last year, Syria was re-admitted to the Arab League, and Saudi Arabia re-opened its embassy in Damascus.The US maintains crippling economic sanctions on Syria that are designed to prevent the reconstruction of the country, which naturally has adevastating impact on the civilian population. The US also keeps an occupying force of about 900 troops in eastern Syria and backs the Kurdish-led SDF.
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