week's oil prices drop by most in a year, US crude production at a new record high of 13,500,000 barrels per day with oil imports at a seven month low; US gasoline supplies at a 99 week low despite largest drop in gasoline demand this year; distillates demand at a 49 week high leave distillates supplies at a 26 week low after largest drop in 30 weeks
US oil prices fell first time in three weeks on a slew of weak economic data from China, and after Israel agreed not to target Iranian oil facilities…after rising 1.6% to $75.56 a barrel last week as the oil markets awaited an Israeli retaliation against Iran, the contract price for the benchmark US light sweet crude for November delivery opened lower and fell over 1% in global markets early Monday, after China’s policy briefing over the weekend failed to offer new incentives to boost consumption, then was further pressured by news that China’s oil imports fell from a year ago for a fifth consecutive month, and settled the New York session $1.73 or more than 2% lower at $73.83 per barrel after OPEC cut its global oil demand growth forecast for 2024 and 2025 for the third month in a row...oil prices tumbled more than five percent in overseas markets on Tuesday on a report that Israel was not going to strike Iran's oil facilities. and continued to sell off in New York after the IEA also cut its 2024 world oil demand growth forecast by 40,000 bpd to 860,000 bpd, and settled $3.25 or 4.4% lower at $70.58 a barrel, due to the weaker demand outlook and because a media report said Israel would not strike Iranian nuclear and oil sites, easing fears of a supply disruption…oil prices steadied on global markets on Wednesday, supported by OPEC+’s cuts and uncertainty over what might happen next in the Middle East conflict, but again traded in negative territory for much of the New York session, pressured by the lessened fears of a disruptive attack and the recent forecasts of less oil demand growth, and settled 19 cents lower at $70.39 a barrel, thus giving up most of the geopolitcal premium added in the wake of Iran's Oct. 1 ballistic missile attack on Israel, as fears of an oil supply disruption in the Middle East had eased….oil prices rallied in after hours trading after the American Petroleum Institute reported major oil product draws and a surprise crude inventory drawdown, then traded in a very narrow band between $70 and $71 on Thursday after the EIA reported that US crude production had surged to a new record high of 13.5 mm b/d last week, while crude supplies fell more than expected and product inventories also saw significant drawdowns, and settled 28 cents higher at $70.67 a barrel after the European Central Bank cut interest rates for the third time this year, indicating that inflation in the euro zone was under control and that the economic outlook has worsened…oil prices stabilized in global commodity markets on Friday, on the drop in crude and fuel inventories in the United States and the emergence of more fiscal stimulus to boost China's economy, but then turned south again as the US revived a push to end the conflict in the Middle East and China’s crude demand slipped again, and settled $1.45 lower at $69.22 a barrel, thus finishing down 8.4% for the week, the biggest weekly drop in a year, as demand concerns persisted..
meanwhile, natural gas prices fell for a third consecutive week on forecasts for a warm Autumn and hence a delayed start to the winter heating season…after falling 7.8% to $2.632 per mmBTU last week as traders anticipated anther storm related hit to demand from Hurricane Milton, the price of the benchmark contract for natural gas for November delivery opened nearly 8 cents lower on Monday and continued to slide thoughout the day, as the aftermath from Hurricane Milton and comfortable conditions in other parts of the country dampened demand, and settled 13.8 cents lower at a three-week low of $2.494 per mmBTU, as production picked up even with little near-term weather-driven demand seen…natural gas prices opened higher on Tuesday and fluctuated around $2.52 throughout the session, as traders analyzed the latest bearish forecast shift, but settled just four-tenths of a cent higher at $2.498 per mmBTU on expectations that mild weather over the next two weeks would keep demand low….natural gas prices opened 5.4 cents lower on Wednesday and slid even lower throughout the session, as more comfortable temperatures were forecast to return in the coming week, and settled down 13.1 cents at $2.367 per mmBTU, as traders contemplated the effects of mild weather on demand, and as the National Hurricane Center monitored two areas for potential cyclone development that could impact both supply and demand….natural gas prices seesawed a few cents higher early Thursday, then jumped to an intraday high of $2.417 as the storage report hit the wire, but backed off that high and settled 2.0 cents lower at $2.347 per mmBTU, as the latest weekly storage injection met expectations but pointed to loosening balances ahead of milder weather….natural gas prices traded between gains and losses early Friday, as traders assessed pre-winter market balances on the heels of an in-line government storage report and warmer forecasts for the rest of October, but fell through midday trading as mild weather outlooks for the rest of October and for winter had bears in control for a third day and settled 8.9 cents lower at a five week low of $2.258 per mmBTU, as forecasts for mild weather were expected to keep heating demand low through early November, leaving the November natural gas contract 14.2% lower for the week...
The EIA’s natural gas storage report for the week ending October 11th indicated that the amount of working natural gas held in underground storage rose by 76 billion cubic feet to 3,705 billion cubic feet by the end of that week, which left our natural gas supplies 107 billion cubic feet, or 3.0% above the 3,598 billion cubic feet that were in storage on October 11th of last year, and 163 billion cubic feet, or 4.6% more than the five-year average of 3,542 billion cubic feet of natural gas that had typically been in working storage as of the 11th of October over the most recent five years….the 76 billion cubic foot injection into US natural gas storage for the cited week was a bit less than the 79 billion cubic foot addition to storage that analysts were forecasting ahead of the report, and less than the 93 billion cubic feet that were added to natural gas storage during the corresponding week in October of 2023, and also less the average 89 billion cubic foot injection into natural gas storage that had been typical for the same early autumn 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 October 11th indicated that after a decrease in our oil imports and an increase in our oil exports, we had to pull oil out of our stored commercial crude supplies for the twelfth time in sixteen weeks, and for the 25th time in the past 45 weeks, despite an increase in oil supply that the EIA could not account for ..Our imports of crude oil fell by an average of 710,000 barrels per day to a seven month low of 5,529,000 barrels per day, after falling by an average of 389,000 barrels per day over the prior week, while our exports of crude oil rose by an average of 329,000 barrels per day to 4,123,000 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 1,406,000 barrels of oil per day during the week ending October 11th, 1,039,000 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 410,000 barrels per day, while during the same week, production of crude from US wells was 100,000 barrels per day higher at a record high of 13,500,000 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 total of 15,316,000 barrels per day during the October 11th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 15,755,000 barrels of crude per day during the week ending October 11th, an average of 165,000 more barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that a net average of 177,000 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 October 11th averaged a rounded 262,000 barrels per day less than what our oil refineries reported they used during the week. To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a [+262,000 ] 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 size 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 supply, see this EIA explainer….there is also an old twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had hoped to do about it)
This week’s net average 177,000 barrel per day decrease in our overall crude oil inventories came as an average of 313 barrels per day were being pulled out of our commercially available stocks of crude oil, while an average of 136,000 barrels per day were being added to our Strategic Petroleum Reserve, the forty-fourth SPR increase in the past fifty-one weeks, following nearly continuous SPR withdrawals over the 39 months prior to that… Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to 6,213,000 barrels per day last week, which was 3.4% less than the 6,428,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day higher at a record high of 13,500,000 barrels per day because the EIA’s rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 13,100,000 barrels per day, while Alaska’s oil production was 1,000 barrels per day lower at 431,000 barrels per day, but still added the same 400,000 barrels per day to the EIA’s rounded national total as it did every week this year….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 3.1% higher than that of our pre-pandemic production peak, and was also 39.2% 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 87.7% of their capacity while processing those 15,755,000 barrels of crude per day during the week ending October 11th, up from from their 86.7% utilization rate of a week earlier, but not an unusual fluctuation during early Autumn, when refineries typically schedule maintenance and seasonally change fuel blends…the 15,755,000 barrels of oil per day that were refined this week were 2.3% more than the 15,396,000 barrels of crude that were being processed daily during week ending October 13th of 2023, and 2.1% more than the 15,436,000 barrels that were being refined during the prepandemic week ending October 11th, 2019, a week when our refinery utilization rate was at a prepandemic below normal 83.1% for early October…
Even with the increase in the amount of oil being refined this week, gasoline output from our refineries was lower, decreasing by 941,000 barrels per day to 9,288,000 barrels per day during the week ending October 11th, after our refineries’ gasoline output had increased by 627,000 barrels per day during the prior week.. This week’s gasoline production was 4.8% less than the 9,761,000 barrels of gasoline that were being produced daily over week ending October 13th of last year, and was 7.1% less than the gasoline production of 9,998,000 barrels per day during the prepandemic week ending October 11th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 234,000 barrels per day to 4,754,000 barrels per day, after our distillates output had increased by 194,000 barrels per day during the prior week. After twenty-two production increases in the past thirty-three weeks, our distillates output was 1.3% more than the 4,694,000 barrels of distillates that were being produced daily during the week ending October 13th of 2023, and 1.4% more than the 4,688,000 barrels of distillates that were being produced daily during the pre-pandemic week ending October 11th, 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 23rd time in thirty-seven weeks, decreasing by 2,201,000 barrels to a 99 week low of 212,697,000 barrels during the week ending October 11th, after our gasoline inventories had decreased by 6,304,000 barrels during the prior week. Our gasoline supplies fell by less this week because the amount of gasoline supplied to US users fell by 1,034,000 barrels per day to 8,620,000 barrels per day, the largest drop this year, and because our imports of gasoline rose by 98,000 barrels per day to 526,000 barrels per day, and because our exports of gasoline fell by 43,000 barrels per day to 899,000 barrels per day.…After twenty-three gasoline inventory withdrawals over the past thirty-seven weeks, our gasoline supplies were 4.7% below last October 13th’s gasoline inventories of 223,301,000 barrels, and were about 4% below the five year average of our gasoline supplies for this time of the year…
Despite this week’s increase in our distillates production, our supplies of distillate fuels fell for the 22nd time in the past thirty-eight weeks, decreasing by 3,534,000 barrels to a twenty-six week low of 114,979,000 barrels over the week ending October 11th, after our distillates supplies had decreased by 3,124,000 barrels during the prior week. Our distillates supplies fell sharply again this week because the amount of distillates supplied to US markets, an indicator of domestic demand, rose by 181,000 barrels per day to a 49 week high of 4,212,000 barrels per day, even as our imports of distillates rose by 280,000 barrels per day to 132,000 barrels per day, and a our exports of distillates fell by 228,000 barrels per day to 1,179,000 barrels per day....Even after 23 inventory withdrawals over the past 39 weeks, our distillates supplies at the end of the week were 4.2% above the 113,773,000 barrels of distillates that we had in storage on October 13th of 2023, while they are now about 10% below the five year average of our distillates inventories for this time of the year…
Finally, with the decrease in our oil imports and the increase in our oil exports, our commercial supplies of crude oil in storage fell for the 17th time in twenty-six weeks, and for the 27th time in the past year, decreasing by 2,191,000 barrels over the week, from 422,741,000 barrels on October 4th to 420,550,000 barrels on October 11th, after our commercial crude supplies had increased by 5,810,000 barrels over the prior week… Even with this week’s decrease, our commercial crude oil inventories remained about 4% below the most recent five-year average of commercial oil supplies for this time of year, but were 25.3% above the average of our available crude oil stocks as of the second weekend of October 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 October 11th were 0.2% more than the 419,748,000 barrels of oil left in commercial storage on October 13th of 2023, while 3.8% less than the 437,357,000 barrels of oil that we had in storage on October 14th of 2022, and 1.5% less than the 426,975,000 barrels of oil we had left in commercial storage on October 8th of 2021…
This Week’s Rig Count
Once again, we are including below a screenshot of the rig count summary from Baker Hughes…in the table below, the first column shows the active rig count as of October 18th, the second column shows the change in the number of working rigs between last week’s count (October 11th) and this week’s (October 18th) count, the third column shows last Friday’s October 11th 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 20th of October, 2023…
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Utica-Focused Tiburon Secures Investment from Post Oak | Rigzone - Houston-based Tiburon Oil & Gas Partners LLC has secured an equity commitment from private equity firm Post Oak Energy Capital, L.P., alongside commitments from management and additional investors. "Our well-defined lease and drill strategy, paired with a strong management and execution team, positions us to effectively access the region's resources while making a positive contribution to the local economy. We look forward to partnering with the Post Oak team to execute on our growth plans,” Tiburon President and CEO Scott Hudson said. “With a solid foundation already established in the region, our focus will be on efficiently drilling and developing our leasehold, while continuing to grow our position”. According to a news release from Post Oak, Tiburon also closed on an initial acquisition of leasehold in the liquids rich portion of the Utica Shale play in Ohio. Tiburon has received its initial unitization permit to develop a portion of its existing Utica position and is in the process of aggregating additional leasehold to move forward with its first phase of development. “The Tiburon team has organically generated an attractive position in the Utica, and we are pleased to formalize the investment and partner with this incredibly talented team,” Henry May, Post Oak Director, said. “The liquids rich window of the Utica is experiencing a developmental renaissance, and we appreciate the opportunity to provide capital and insights alongside Tiburon to responsibly develop an asset that will provide both decades of critical energy supply to consumers and attractive returns to our investors.” Tiburon describes itself as an exploration and production company dedicated to responsibly acquiring, developing, and operating upstream oil and gas assets in the Appalachian Basin. According to the release, the Tiburon leadership team “played an instrumental role” in executing growth at Carrizo Oil & Gas, Inc. and has a successful track record of working together in Appalachia and other key U.S. unconventional basins. Post Oak, which was established in 2006, is a Houston-based private equity firm primarily focused on making domestic investments in the upstream, midstream and oilfield services sectors of the energy industry. Post Oak said it “seeks to identify outstanding oil and gas entrepreneurs and management teams with well-defined business plans that also possess a demonstrated track record of creating accretive value for shareholders”. Last month, newly formed Quantent Energy Partners, LLC completed its initial acquisition of natural gas assets in the Haynesville Shale. Oklahoma City-based Quantent Energy Partners was formed this year with an equity commitment from Post Oak Energy Partners V, LP. The initial acquisition includes over 7,000 net acres located in North Louisiana, “underpinned by an attractive combination of producing wellbores and operated development inventory,” Quantent said in an earlier news release. The financial details were not disclosed. Quantent said it has cultivated a deep pipeline of opportunities and is actively engaged in pursuing assets and development projects across the region. The company is aiming to further grow its footprint in the Haynesville, targeting upstream development opportunities in the Haynesville and Bossier shale formations across North Louisiana and East Texas.
Fitch Assigns EMG Utica Midstream Holdings, LLC First-Time 'BB-' Long-Term IDR; Outlook Stable -- Fitch Ratings -- The ratings reflect EMG CV's strong credit metrics and benefits from the strategic location of its complementary assets in the core of the Utica Shale ..
Former Carrizo O&G Team Forms New Company to Drill in Ohio Utica - Marcellus Drilling News - We always get a small thrill when we notice a new company working in the Marcellus/Utica. This is one of those occasions. Tiburon Oil & Gas Partners, LLC, headquartered in Houston, TX, is headed by four former Carrizo Oil & Gas executives. Tiburon was formed in 2022 “to responsibly acquire, develop, and operate upstream oil and gas assets in the Appalachian Basin.” In a press release issued yesterday, Post Oak Energy Capital announced it is giving buckets of money to Tiburon to close a deal to lease land in the liquids-rich portion of the Utica Shale play in Ohio. Have money, will drill.
Junior high classes underway at Utica Shale Academy - — The Utica Shale Academy has welcomed more students into the fold for the 2024-25 school term with the addition of its junior high program.About 25 students in grades 7-9 are enrolled this year, making the community school’s overall total around 130. The program includes blended learning for grades 7-12 with the underclassmen focusing on career exploration before obtaining a more hands-on education as sophomores. The seventh- and eighth-grades are lodged at the Williams Collaboration Center in Salineville, which includes classrooms, administrative offices and more programming in partnership with Youngstown State University to expose the junior high students to career-tech opportunities. It also provides medical services with certified health workers and licensed therapeutic behavior support counselors from organizations such as COMPASS 247, Avis Drug-Free World and Alta. Grades 9-12 are housed nearby at the Hutson Building and all students undergo a blend of online education through the Virtual Learning Academy by the Jefferson County Educational Service Center with hands-on learning in various trades. Courses include megatronics, hydraulics, pneumatics, AC/DC electric, Programmable Logic Controllers (PLC’s), diesel mechanics and horticulture to train both students and adults. Additionally, the campus features an outdoor welding site along East Main Street as well as the Utica Shale Academy Community Center on Church Street that includes a gym and community services.Assistant Superintendent Laura Krulik said the change has been relatively smooth and students appear to be acclimating well to their new environment.“The junior high kids are excited about some of the flexibility and freedom they have here and they are working with career-tech teacher Matt Gates and classroom teacher Mariah Hart. They hope to get through the exploration and safety procedures, so once they get to [high school level] they can get ready for the workforce.”The students follow a structured schedule similar to a traditional school, plus they learn time management and split classes with Gates on career exploration and National Coalition of Certification Centers (NC3) certification and Hart, who facilitates online lessons through the Jefferson County Educational Service Center’s Virtual Learning Academy and also teaches employability skills. Furthermore, Hart is a certified health worker and tutor and provides further assistance to meet the pupils’ needs. Students may work in groups or one-on-one with an adult to complete their academic lessons and also focus on living skills.Gates said there has been a lot of interest among junior high students in specific trades and they complete introductory assignments into all of the career paths to see if any others appeal to them.“We have received mostly good feedback, and they love the virtual welding machines and the special projects they partake in with me to see where they are at with their hands-on skills,”he continued. “With regards to all of the students, they ask why they have to learn about safety, so I try to make it as fun as possible show them some videos on workplace safety and what can happen if you’re not safe. The junior high classes consist of first completing the NC3 safety modules where they learn about head, eye, face, hearing and respiratory protection. The students are all assigned to a virtual welder and complete a course to learn how to setup a welding machine for the specific process they are using and how to read a tape measure, which seems to be a lost art today. While they are working in the classroom, we are also teaching soft skills to get them prepared for the workforce. I think we have a great group of junior high students coming out of the gate. I think it’s going to be a great year of opening their eyes to what all career-tech has to offer. Some will stick with the trade they were interested in, while others will end up switching to a new trade they just learned about.”“I think it’s going very well,” added Hart. “With the new opportunities come new challenges, and they are adjusting very well to the online curriculum and the new setting. I have had several kids successfully complete their career-based credentials. They have really enjoyed working on the virtual welders as well as the online learning.”Students also dine in a cafeteria in the lower level of the Williams Building with food prepared by Nutrition, Inc., and students in grades 10-12 work at the Hutson Building, the Energy Training Center or welding facility down the street. Finally, Positive Behavior Interventions and Supports (PBIS) sessions occur at the end of the day. Krulik said they also learn relationship-building skills and socialization, creating relationships with each other in the classroom, while other ideas are to integrate Junior Achievement programs with free lessons on business and entrepreneurship.“Our goal is when kids go to [the high school] program, they have already had the prerequisites. When they get into 10th grade, they are ready to step into labs and do hands-on work and later we can get help them obtain jobs,” she noted. “If they can get a job before they graduate, the career-tech teachers can act as job coaches so they are prepared to go to work.”Seventy-five percent of the graduates leave with competitive employment or are enrolled in a career-tech program, college or are in the military. She said recent graduates have even visited and shared their experience, not only about what they’ve learned at USA but also the ability they’ve gotten to land employment.“These moments where the kids come back and show their appreciation is really awesome to see. It’s nice for kids in school to see the ones who graduated and are finding success,” Krulik said. “USA gives kids the opportunity to get a job and make a living wage and the staff should be recognized for the work they’ve done to help. They’re really doing a lot for the kids.”Meanwhile, Dean of Students Carter Hill said feedback from parents and students alike has been positive.“Enrollment is continuing to increase and the kids are eager to get into a new atmosphere,” Hill added. “We hear often from parents that this is the first time their students are excited to go to school. That’s a credit to Mariah Hart, Michelle Hart and Matt Gates for making it an exciting place to come to.”Students said the transition has been relatively smooth and they were learning a lot at USA.“It’s really cool,” said eighth-grader Sylis Howell, who was interested in welding.“I like it,” added seventh-grader Ford Lally. “I like welding but want to go for diesel mechanics.”“I like that I can do welding or machines. It’s something different,” said freshman Jeff Fluharty. “I can be around people and have social interaction with students.”“It’s different and I like it a lot,” added freshman Matthew Brannon, adding that he gets to work at his own pace.
Utica Shale Academy preparing to start SkillsUSA welding team - The Herald Star — The Utica Shale Academy is looking for welding students to show off their knowledge as part of the SkillsUSA program.Superintendent Bill Watson and instructors Matt Gates and John Wright will advise the team and hopes are to enter competitions over the next year. Watson learned of the program while attending a National Coalition of Certification Centers Leadership Summit in Kenosha, Wisc., in July and believed it was the right fit for USA.“I heard a discussion on how it can showcase their skillsets,”he said. “I thought our students were putting in a lot of hard work and we should get them out there and have them be seen as much as possible.”According to its website, SkillsUSA is the No. 1 workforce development organization for students and empowers them to become skilled professionals, career-ready leaders and responsible community members. The organization represents more than 413,000 career and technical education students and teachers and has chapters in middle schools, high schools and college or post-secondary institutions across the country. The SkillsUSA framework incorporates personal skills, workplace skills and technical skills grounded in academics, which is integrated through a classroom curriculum. Students hone their hands-on skills against industry standards in more than 130 occupational areas, including 3-D animation and welding. SkillsUSA has served more than 14.6 million members since 1965 and its vision is to produce the most highly skilled workforce in the world, providing every member the opportunity for career success. Watson said officials were distributing information and seeking interest among the community school’s estimated 100 welding students in grades 9-12 to sign up for the program, after which they could take part in local competitions with chances to advance to state and even national contests. “The students have to complete their welding certificates to be allowed to compete for a spot in a local competition,” he added. “SkillsUSA is a competition platform to demonstrate capabilities and get kids engaged to do creative things that can be outside the box.” The shale academy is a dropout recovery-and-retention school focusing on career-tech education for at-risk students who have obtained more than 1,100 certifications and graduated 150 pupils since 2021. Students in grades 7-12 undergo a blend of online education through the Virtual Learning Academy by the Jefferson County Educational Service Center with hands-on learning in various trades. Courses include welding, megatronics, hydraulics, pneumatics, AC/DC electric, programmable logic controllers, diesel mechanics and horticulture.
10 New Shale Well Permits Issued for PA-OH-WV Oct 7 – 13 -- Marcellus Drilling News -- Ten permits were issued to drill new shale wells in Marcellus/Utica for the week of Oct. 7 – 13, half the number issued the prior week (see 20 New Shale Well Permits Issued for PA-OH-WV Sep 30 – Oct 6). The Keystone State (PA) had just six new permits, with three going to Range Resources in Washington County, two for EQT in Greene County, and one for Chesapeake Energy (now Expand Energy) in Sullivan County. Buckeye State (OH) had three new permits, and all three went to Encino Energy (EAP) for a single pad in Jefferson County. The Mountain State (WV) issued one new permit to EQT in Wetzel County. CHESAPEAKE ENERGY | ENCINO ENERGY | EQT CORP | GREENE COUNTY (PA) | JEFFERSON COUNTY (OH) | RANGE RESOURCES CORP | SULLIVAN COUNTY | WASHINGTON COUNTY | WEEKLY PERMITS | WETZEL COUNTY
Shell's Pennsylvania Petchem Complex Finally Firing On All Cylinders - RBN Energy - Shell’s petrochemical complex in Western Pennsylvania has had plenty of challenges on its way to startup and full operation. Announced a dozen years ago, the project was set back by COVID-related construction delays and a rougher-than-expected production ramp-up. But that’s all in the past now (fingers crossed) and the ethane-rich Northeast finally has its first big ethylene plant. In today’s RBN blog, we’ll examine Shell’s return to plastics and what it took to get there.
Pretend Evangelical Christians (Partisans in Disguise) Lobby PA Gov - Marcellus Drilling News - The environmental left continues to try and co-opt the term “Evangelical Christian,” defined as protestants who tend to be pro-life and conservative in their political views. We’re talking about the so-called Evangelical Environmental Network (EEN) and its political lobbying arm, EEN Action. The group continues to pressure Pennsylvania’s political leaders to adopt unreliable renewable energy (by government fiat) and to force residents to dump their use of fossil energy. We previously exposed them for who they really are (see Pretend Evangelical Christians Want PA to Dump Fossil Energy). The group is back with another press release to say 36,000 people who pretend to be “pro-life” signed a petition sent to Gov. Josh Shapiro asking him to adopt a methane rule so restrictive it will ban new gas-fired power plants and get rid of all existing coal-fired plants as a bonus.
Maintenance Done: M-U Gas Flows Restart to Cove Point, Maryland --- Marcellus Drilling News - Feedgas flowing from the Marcellus/Utica to the Cove Point LNG export facility located on the shore of Maryland fell to zero on Friday, Sept. 20, as the facility began its planned annual maintenance outage (see Flows Drop to Zero @ Cove Point LNG, Closed for Annual Maintenance). Most years, maintenance at Cove Point takes around three weeks. True to form, Cove Point came back online and restarted liquefying gas last Saturday, Oct 12, so the plant was out exactly three weeks (from Friday, Sept. 20 to Friday, Oct. 11).
Cove Point LNG in Maryland (U.S.) returns to production Berkshire Hathaway Energy's 0.8-Bft3d Cove Point LNG export plant in Lusby, Maryland, returned to production on Saturday, three weeks after it shut down for annual maintenance, according to data from financial firm LSEG. The plant is one of the smallest U.S. LNG export facilities, but with low gas prices since March this year, any loss of demand can negatively impact the Henry Hub price. On Saturday, Cove Point was on track to pull 844 MMft3 of gas, up from a mere 15 MMft3d since the plant shut down on Sept. 20, according to LSEG data. Gas flows to the seven big U.S. LNG export plants averaged 13.7 Bft3d on Saturday, up from Friday when they averaged 12.9 Bft3d, showing the impact of the restart of the Cove Point plant, according to LSEG data.
U.S. appeals court blocks Kinder Morgan’s Tennessee pipeline permits (Reuters)—A U.S. appeals court on Friday put on hold approvals and permits necessary to allow a Kinder Morgan subsidiary to construct a 32-mile gas pipeline in Tennessee, at the urging of environmental groups. The proposed Cumberland Project, set to be constructed by Kinder Morgan's Tennessee Gas Pipeline, could transport about 245,000 dekatherms per day of additional natural gas to power supplier Tennessee Valley Authority. On a 2-1 vote, Cincinnati-based 6th U.S. Circuit Court of Appeals put a hold on the Tennessee Department of Environment and Conservation's order issuing a water quality certification and the Army Corps of Engineers' issuance of a permit. The request for a stay was filed by environmental organizations Appalachian Voices and Sierra Club, which claimed the pipeline's construction could have detrimental impact on the environment. The court said a stay was appropriate for it to have the time to consider the merits of the environmental groups' case. It said further arguments in the case would be heard in December. A Kinder Morgan spokesperson said the company does not agree with the court's decision, which it will continue to review while evaluating its options. Appalachian Voices and Sierra Club did not immediately respond to Reuters' requests for comment.
Construction on Kinder Morgan's Tennessee Pipeline Delayed by Stay- Construction on a Kinder Morgan (KMI) pipeline for a power plant near Nashville, Tennessee is delayed after an appeals court put a hold on two permits necessary for construction. The 6th U.S. Circuit Court of Appeals in Cincinnati, Ohio, stayed the permits, which would have allowed construction on the Tennessee Valley Authority’s (TVA) Cumberland plant to begin as early as Oct. 22, the Associated Press reported. The judges ruled 2-1 that construction would be halted to consider the plaintiffs’ arguments based off the Clean Water Act. The stay may remain in place until oral arguments, scheduled for Dec. 10. Kinder Morgan had filed for a Federal Energy Regulatory Commission (FERC) permit for the Cumberland project in July 2022. The proposed line would be 32 miles long and terminate at the proposed plant in Stewart County, Tennessee. The Sierra Club and Appalachian Voices brought the suit, charging that the TVA’s plans to replace many of its current coal-fired power plant stations with gas-fired generation would harm the environment. The TVA should instead focus on solar, wind and other forms of generation that eliminate greenhouse gas emissions, the suit charges. Federal appeals courts have taken an active role in energy project permitting in 2024. In July and August, the D.C. Court of Appeals struck the FERC permits for two LNG liquefication facilities and a pipeline expansion project in the mid-Atlantic. Thomas Sharp, director of permitting intelligence at ARBO, said the Cumberland stay was “pretty factually narrow” and was unlikely to have a broad effect on other projects. However, the ruling exemplifies a tendency among energy infrastructure opponents to exhaust every legal avenue possible. “It is demonstrative of the macro trend we continue to see regarding litigation of proposed natural gas projects generally,” he said in an email to Hart Energy. “The Cumberland project now faces litigation on three fronts: this 6th Circuit Clean Water Act stay, a challenge to the FERC Certificate at the D.C. Circuit and a challenge to the NEPA review of the coal-to-gas conversion power generation facility itself at the Tennessee Middle District Court.” Sharp said the appeals court’s ruling is narrow and won’t generally apply to midstream projects because of the unique circumstances of the project: The pipeline project is going to fuel the TVA, a federally operated power utility. The court also noted that the stay was temporary and could be lifted if further information came to light before oral arguments.
Edison Joins BP, Shell and Others in Claiming Venture Global Breaching Calcasieu Pass LNG Supply Contract -- Italy’s Edison SpA LLC, which secured an agreement in 2017 to receive LNG from the Calcasieu Pass export project in Louisiana once it began commercial operations, has joined other customers in seeking international arbitration, claiming breach of contract by Venture Global LNG Inc. Virginia-based Venture has indicated that because of equipment issues, it would not begin delivering liquefied natural gas cargoes to Edison from Calcasieu Pass until next April at the earliest. In 2017, Edison signed a 20-year contract to receive 1 million tons/year on a free-on-board basis. Deliveries were to begin with the start-up of commercial operations. Related Tags
Golden Pass LNG Secures Permian Natural Gas Capacity with 2.8 Bcf/d KMI Pipeline Agreement - Golden Pass LNG Terminal LLC has signed on as an anchor customer for Kinder Morgan Inc.’s (KMI) proposed Trident intrastate pipeline project in Texas that would run from the Katy hub to an export site southeast of Houston. Golden Pass Chief Commercial Officer Jeff Hammad said the ability to draw supply from Katy, a massive gathering point for West Texas gas delivered from the Permian Basin, would help secure stable supply for the three-train liquefied natural gas facility underway on the upper Texas coast. “This agreement enhances Golden Pass LNG success and access to a reliable and diverse supply of natural gas for our LNG terminal, making us one of the largest buyers of natural gas in the United States once operational,” Hammad said at the Gulf Coast Energy Forum conference in New Orleans.
Cheniere Energy moves closer to starting new Texas LNG export operation - Cheniere Energy has moved one step closer to producing first liquefied natural gas (LNG) from a Corpus Christi, Texas, expansion project on Thursday after it received permission from federal regulators to put a supply line into operation. Cheniere is the largest U.S. LNG exporter and the world's second largest producer of the superchilled gas. The company has played a key role in helping the U.S. become the world's largest exporter of LNG. The U.S. Federal Energy Regulatory Commission (FERC) issued an order on Thursday allowing Cheniere to take liquefied gas from the plant to refrigerated liquid storage facilities and then onto an LNG tanker for export. Cheniere has said it wants to produce first LNG from its Corpus Christi Stage 3 facility by the end of the year, which will expand U.S. LNG export capacity. Stage 3 is comprised of seven gas-processing units with an expected capacity of approximately 10 metric MMtpy of LNG.
U.S. LNG Sector Facing Conundrum in High-Stakes Presidential Election -The U.S. LNG sector will face a series of challenges regardless of who wins the presidency in November, but the outcome is likely to factor heavily into how quickly a surging list of projects can advance, or whether some would even be approved altogether. Natural Gas Intelligence's (NGI) liquefied natural gas export flow tracker chart for the Lower 48. Chief among the industry’s concerns is how Vice President Harris or former President Trump’s administration would work through a backlog of nearly two dozen liquefied natural gas projects that are still waiting for a key license from the U.S. Department of Energy (DOE). The projects need approval to export to non-free trade agreement (NFTA) countries so they can advance. The list has grown since President Biden paused those authorizations in January so the DOE could study how increasing LNG exports impact the environment, energy security and domestic prices. Among the list are at least seven commercially advanced projects being developed by major players such as Cheniere Energy Inc. and Venture Global LNG Inc.
U.S. drives global natural gas demand to new highs in 2024 --Power producers in the United States have lifted natural gas-fired generation to new highs over the first nine months of 2024, sustaining the country's position as the leading driver of global natural gas consumption.Natural gas's share in the U.S. generation system also climbed to new highs this year. Gas supplied a record 46% of total power since June, LSEG data shows, as power firms boosted output from all sources to meet rising power demand.The fast growth pace of gas use in the U.S. undermines the country's credibility as a potential leader in energy transition efforts, and is at odds with stated ambitions to lower fossil fuel use in power generation by 2030. Yet most key power systems within the U.S. - which is also the world's largest natural gas producer - show no signs of reducing gas use over the near term, and look more likely to continue lifting gas-fired output for years to come.This widening discrepancy between international climate pledges and national-level power generation trends leaves the U.S. open to fresh criticism from climate advocates, who may attempt to ratchet up pressure on the U.S. to curb gas use.Through the first nine months of the year, total power generation from gas-fired power plants in the United States was 55.6 million megawatt hours (MWh), according to LSEG. That total was up nearly 5% from the same months in 2023, and the highest since at least 2021. And that growth pace was well above several other major gas-consuming nations, including China, South Korea, Japan, Iran, Italy and Russia, data from energy think tank Ember shows. Indeed, of the 10 largest gas-fired electricity producers, only Mexico, Qatar and Thailand grew gas consumption faster than the U.S. over the first half of 2024, Ember data shows.
USA 'Zombie Summer' Saps Energy Demand and Natural Gas Prices -The US is headed for weeks of abnormally warm weather through the rest of October, and it’s already shaken prices and demand for natural gas. Temperatures will start to rise this weekend and by next week will be pushing back into the 70sF or higher in many areas from the Great Plains to the Gulf of Mexico to the US East Coast. Chicago, which had an overnight low of 38F (3C) will be hitting 76F for a high on Sunday, the National Weather Service said. Weather-driven energy demand may drop to record low levels for the next two weeks, commercial-forecaster Commodity Weather Group said. October is usually when chillier temperatures begin to kick off the annual heating season. As people turn up thermostats in homes and businesses, demand for natural gas, heating oil, and electricity rises. US natural gas futures have been falling as forecasts for mild weather are expected to dent heating demand. Prices are more than 20% below where they were at this time last year. On Thursday, gas settled the lowest in a month. “Zombie Summer,” is how the environmental monitoring network Oklahoma Mesonet referred to the temperature outlook in a social media post Thursday. Highs are likely to reach into the 80sF and possibly 90sF. “It. Just. Won’t. Die.” The US Climate Prediction Center says above normal temperatures will dominate the entire country – except the Pacific Northwest – from Oct. 23 to 31. From Oct. 23 to 27 the southern Midwest, Central Plains and Ohio Valley – among other places – will have a 60% to 70% chance of above normal temperatures. Texas, New Mexico and the lower Mississippi River valley will have 70% to 80% chance, the agency said. This includes most of central and eastern Canada as well. By next week Toronto will be reaching 73F, according to Environment and Climate Change Canada. Some of the warmest temperatures will lock in across the US Southwest and southern plains from Tucson, Arizona to Dallas, said Frank Pereira, a senior branch forecaster with the US Weather Prediction Center. In addition to the warmth, a large part of the eastern US will remain dry as well. Abnormally dry conditions have dug in across the US Northeast from Maine to Maryland, including New York, according to the US Drought Monitor.
US natgas prices slide to 3-week low as mild weather keeps demand low (Reuters) -U.S. natural gas futures slid about 3% to a three-week low on Wednesday on expectations mild weather over the next two weeks will keep demand low. Front-month gas futures NGc1 for November delivery on the New York Mercantile Exchange fell 6.7 cents, or 2.7%, to $2.431 per million British thermal units by 8:07 a.m. EDT (1207 GMT), putting the contract on track for its lowest close since Sept. 19. One factor weighing on prices in recent weeks has been a reduction in the amount of gas power generators have burned after Hurricanes Milton and Helene knocked out electric service to millions of homes and businesses. There were still about 82,000 customers without power in Florida from Milton, which hit the state on Oct. 9, and 10,000 out in North Carolina from Helene, which hit Florida on Sept. 26 before moving inland. In total, Milton caused around 3.4 million customers to lose power, while Helene caused roughly 6 million outages. The U.S. National Hurricane Center, meanwhile, projected there was a 40% chance that a disturbance in the Atlantic Ocean would strengthen into a tropical cyclone over the next week as it moves toward Puerto Rico and the Bahamas. In the spot market, pipeline constraints caused next-day gas prices at the Waha hub in the Permian Shale in West Texas to turn negative for a record 37th time this year. Until now, Waha prices have remained in positive territory since mid September - just after the Matterhorn pipe from the Permian to the Houston area started receiving gas. Waha prices first averaged below zero in 2019. It happened 17 times in 2019, six times in 2020 and once in 2023. Financial firm LSEG said average gas output in the Lower 48 U.S. states slid to 101.3 billion cubic feet per day (bcfd) so far in October from 101.8 bcfd in September. That compares with a record 105.5 bcfd in December 2023. On a daily basis, output was on track to drop by 2.4 bcfd over the past two days to a preliminary five-month low of 99.6 bcfd on Wednesday. Analysts have noted that preliminary data is often revised later in the day. Energy analysts blamed part of the daily output decline on planned maintenance on Kinder Morgan's El Paso Natural Gas pipe, which transports gas from the San Juan, Permian and Anadarko basins to California. Meteorologists projected the weather in the Lower 48 states will turn from colder than normal on Oct. 16-17 to mostly warmer than normal from Oct. 18-31. With warmer weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will slide from 98.1 bcfd this week to 95.5 bcfd next week. The forecast for this week was higher than LSEG's outlook on Tuesday, while its forecast for next week was lower. The amount of gas flowing to the seven big U.S. LNG export plants rose to an average of 12.8 bcfd so far in October, up from 12.7 bcfd in September. That compares with a monthly record high of 14.7 bcfd in December 2023.
US natgas prices fall 4% to 5-week low on mild weather forecasts (Reuters) -U.S. natural gas futures fell about 4% to a five-week low on Friday with forecasts for mild weather expected to keep heating demand low through early November. Front-month gas futures NGc1 for November delivery on the New York Mercantile Exchange fell 8.9 cents, or 3.8%, to settle at $2.258 per million British thermal units (mmBtu), their lowest close since Sept. 10. For the week, the contract was down about 14%, its biggest weekly drop since early February.That also put the front-month down for a third week in a row, losing about 22% during that time. Looking ahead, the market is showing signs of giving up on thoughts that extreme cold could cause prices to spike this winter with futures for March 2025 trading at a record low premium over April 2025 NGH25-J25 of just 6 cents per mmBtu. March is the last month of the winter storage withdrawal season and April is the first month of the summer storage injection season. Since gas is primarily a winter heating fuel, traders have said summer prices should not trade above winter. If the March-April 2025 contract trades in contango, with the April contract priced higher than March, it could be the earliest switch from backwardation, with the March contract priced higher than April, in recent years. The March-April 2024 spread did not trade in contango until Dec. 13. That compares with Jan. 25 for the March-April 2023 spread, never for the March-April 2022 spread and Dec. 8 for the March-April 2021 spread, according to seasonality data from LSEG. The industry calls the March-April spread the "widow maker" because rapid price moves on changing weather forecasts have forced some speculators out of business, including the Amaranth hedge fund, which lost more than $6 billion in 2006. Financial group LSEG said average gas output in the Lower 48 U.S. states slipped to 101.4 billion cubic feet per day (bcfd) so far in October, down from 101.8 bcfd in September. That compares with a record 105.5 bcfd in December 2023. Analysts projected that 2024 would be the first time output declines since 2020, when the COVID-19 pandemic cut demand for the fuel. That's because many producers reduced their drilling activities earlier this year after average spot monthly prices at the U.S. Henry Hub benchmark in Louisiana fell to a 32-year low in March. Prices have remained relatively low since then. Meteorologists projected the weather in the Lower 48 states will remain mostly warmer than normal through Nov. 2. LSEG forecast that unseasonably warm weather would cause average gas demand in the Lower 48, including exports, to slide from 97.9 bcfd this week to 96.4 bcfd next week before rising to 99.9 bcfd in two weeks. The forecasts for this week and next were similar to LSEG's outlook on Thursday. The amount of gas flowing to the seven big U.S. LNG export plants rose to an average of 13.0 bcfd so far in October from 12.7 bcfd in September. That compares with a monthly record high of 14.7 bcfd in December 2023. On a daily basis, LNG feedgas hit an eight-month high of 14.4 bcfd on Thursday.
Two deaths and numerous injuries from chemical leaks in Texas and Louisiana A hydrogen sulfide leak at a Houston, Texas area oil refinery killed two workers, and left dozens injured on October 10. The day before, an ammonia leak at a Baton Rouge, Louisiana plastics plant sent four workers to the emergency room with serious injuries. Both facilities had been cited repeatedly for safety and environmental violations. The Texas refinery was the site of a massive fire in 2023 that raged for three days and resulted in nine hospitalizations. The oil refinery in Deer Park, Texas, a Houston suburb, is owned by Petróleos Mexicanos (Pemex), the Mexican state-owned petroleum company. It was originally operated as a 50-50 joint venture with Shell until it was bought outright by Pemex in 2021. The cause of the chemical leak is under investigation, and hazmat teams were not able to enter the facility for hours, due to the persistence of high concentrations of dangerous toxins. Hydrogen sulfide, a colorless gas recognized by its pungent “rotten egg” odor, is a highly toxic and flammable gas used in the petroleum refining process. Thirty five exposed workers were triaged on site by first responders and 13 transported to area hospitals for treatment. When emergency responders were allowed into the facility, they found the bodies of two dead contractors, whose identities have not been released. The US Occupational Safety and Health Administration (OSHA) notes that hydrogen sulfide gas lingers due to its higher density than air and in high concentrations “can quickly lead to death.” Harris County Sheriff Ed Gonzalez speculated that a flange may have been opened, releasing the deadly gas. Refinery workers commented on social media that this “suggests multiple critical failures in the LOTO [lockout tagout] procedure for this line of work.” In August an autoworker at the Tesla Gigafactory in Austin, Texas was killed due to similar lax enforcement of LOTO procedures. It took two-and-a-half hours for the city of Deer Park to issue a shelter-in-place order to its 34,000 residents, due to the risks of exposure to the toxic pollutants. Industrial disasters are common in the Houston area, the epicenter of oil refining in the western hemisphere, and cities like Deer Park have emergency warning systems, including sirens and text notifications. Residents of Deer Park reported to local news outlets, however, that they failed to receive notifications of the incident or shelter-in-place order. The previous day an ammonia leak at a petrochemical facility in Baton Rouge, Louisiana caused serious injuries to four workers, all of whom were hospitalized, with two in critical condition. Ammonia is a highly flammable gas with a pungent odor that reacts with the moisture in the eyes, skin, and upper respiratory tract causing painful chemical burns. OSHA notes that in high concentrations it is “immediately dangerous to life and health.” The facility is owned by Formosa Plastics, a Taiwanese petrochemical company that has been operating the plant since the 1980s. The facility was cited dozens of times by the US Environmental Protection Agency (EPA) since 2000 for releasing deadly vinyl chloride and other carcinogenic pollutants and has maintained an EPA “noncompliant” status since 2009. Baton Rouge Fire Department officials reported that a storage cylinder with a capacity of 150 lb (68 kg) broke, releasing the toxic gas. The ammonia quickly dissipated, injuring only the four nearby workers. In July, an ammonia leak at a commercial food plant in Sterling, Virginia affected up to 254 employees, 33 of whom were transported by a fleet of first responders to area hospitals, some with critical inhalation injuries. The employer, Cuisine Solutions, was cited by OSHA 22 times since 2015 for safety violations—14 of them serious—and fined over $160,000. These industrial disasters are the inevitable outcome of decades of bipartisan deregulation, the dismantling of basic safety measures by profit-mad shareholders, and the transformation of union bureaucrats into corporate shareholders tasked with policing their members. Speed-up, high turnover, lack of training, and lax safety enforcement lead time and again to disasters that are entirely preventable, impacting workers, their families, communities, and the environment. Pemex, the largest corporation in Mexico by net revenue and one of the world’s largest petrochemical companies, has the resources to support safe working environments. However, the so-called “left-wing” administrations of former Mexican president Andrés Manuel López Obrador and current president Claudia Sheinbaum have been solely focused on shoring up the state-owned company’s debts and returning it to the profitability of the last two years. Pemex made US$6.5 billion last year in net profits. The Pemex CEO made only a perfunctory statement about the deaths in Deer Park. US regulators have likewise created an environment where sacrificing workers to profit is the only financially sound strategy. When Pemex’s adjacent chemical plant exploded in 2023, billowing plumes of carcinogenic smoke across the Houston area for three days and leading to the hospitalization of nine workers, the State of Texas sued Pemex and partner Shell for just $1 million.
Hot Permian Pie: Birch's Scorching New Dean Wells In Dawson County - Birch Resources brought two giant Dean wells on in the oily northern Midland Basin’s Dawson County, producing more than 216,863 bbl combined in their first two months online. Hot Pie A #2DN made 118,973 bbl in June and July, the latest month the Texas Railroad Commission (RRC) reported production data. Its first-24-hour IP in April was 2,342 bbl from a 10,404-ft lateral landed in the Dean at about 8,700 ft, overlying Wolfcamp. Alongside it, Hot Pie C #6DN tested 2,768 bbl in its first 24 hours, also in April, from a 10,229-ft lateral. It made 97,890 bbl in its first two months online through July. The two-well pad is about 18 miles southeast of Lamesa, Texas, at southeastern Dawson’s intersection with Borden, Martin and Howard counties. Each lateral stretches from County Road 32 to County Road 34. The Dean is part of the Spraberry (Trend Area) Field. In the Hot Pie A, Birch Resources also took a look at the underlying Wolfcamp, Canyon, Pennsylvanian and Mississippian before turning horizontal uphole in Dean, according to the RRC’s well-completion file. Birch didn’t respond to a request for comment on its Dawson County development by press time. The two Hot Pie wells’ combined 103,093 bbl in July brought Birch’s Dawson-wide output to 414,620 bbl in that 31-day period, or 13,375 bbl/d, according to RRC data. Casinghead gas in July from the Hot Pie wells totaled 239 MMcf. Other Birch new-drills include Ghost 35-26 B #4DN, which IP’ed 1,890 bbl from a 10,400-ft lateral in Dean in late 2023, according to the RRC. A companion well, Ghost 35-26 A #2DN, tested 1,785 bbl in Dean from a 10,200-ft lateral. Both were brought online in January. The #4DN produced 227,902 bbl in its first seven months through July, while the #2DN surfaced 163,652 bbl.
North Dakota Oct. oil output estimated down by 500,000 barrels, state regulator (Reuters) -Oil output in North Dakota, the third-largest producing state in the U.S., is estimated to have fallen by around 500,000 barrels through October, after wildfires crossed into key producing counties earlier this month, a state regulator said on Thursday. Exxon Mobil was among operators that last week shut in some oil wells and production sites in the state in response to the fires. "My best estimate is around 500,000 total barrels removed from those October numbers," said Justin Kringstad, director of the North Dakota Pipeline Authority. There were around 100,000 barrels per day (bpd) affected in the immediate response to the fires, down to around 50-80,000 bpd in the week after, Kringstad added. The state currently has 18 frac crews operating, down from 20 last month, according to Mark Bohrer, assistant director of the oil and gas division at the North Dakota Department of Mineral Resources. "We have 40 rigs running today even with the mergers and acquisitions, our rig count has remained fairly steady," Bohrer added. Oil production in the state rose by 9,630 barrels per day (bpd) in August, to an estimated 1.179 million bpd, according to state regulators on Thursday. And the number of producing wells in North Dakota in August reached a record high, at 19,117 wells. The state has also permitted three to four four-mile lateral wells, which will help operators develop some of the tier two and three locations that were previously economically more challenging to drill, according to Bohrer
Huntington Beach settles for $5.25 million in 2021 oil spill - Huntington Beach officials announced Monday that the city would be receiving a $5.25-million settlement from Amplify Energy Corp. for the 2021 spill of 25,000 gallons of crude.The spill off the Orange County beach city damaged beaches and wetlands and killed scores of birds and fish. Houston-based Amplify owns the pipeline.Last year, Amplify settled a class-action lawsuit with businesses and residentsaffected by the oil spill for $50 million. Additionally, the shipping companies linked to the cargo ships accused of causing the pipeline damage agreed to pay out $45 million.Mayor Gracey Van Der Mark, Councilmembers Tony Strickland and Casey McKeon and City Atty. Michael Gates held a news conference at City Hall on Monday to herald their news of the latest settlement.“We want to thank Amplify for working with the city to properly resolve this dispute,” Van Der Mark said. “It is great news for the city that we can now move forward and put these conflicts to rest.”After they spoke, minority faction Councilmembers Dan Kalmick, Natalie Moser and Rhonda Bolton stepped to the lectern to make statements. The microphone was cut as they disputed some of the preceding comments.The conservative majority then came back to the lectern, and the microphone went back on as they wrapped up the 45-minute news conference.Huntington Beach’s council factions have a contentious relationship, and sparks have flown at a number of council meetings.City public affairs manager Jennifer Carey said that the news conference was over when the mayor stepped away from the lectern and that it is standard for the audio and video feeds to be shut down at that time.Asked why the microphone came back on later as Strickland and the conservative majority stepped back to the lectern, Carey had no comment.
Nearly 10 years after California oil spill, plan to reactivate pipeline sparks anger --Nine years ago, when an aging oil pipeline ruptured near the coast of Santa Barbara County, an inky darkness spread over the waters. The massive slick of oil engulfed and killed hundreds of marine animals, including, seals, dolphins and pelicans. And the acrid smell of petroleum polluted the coastline’s air.On May 19, 2015, a corroded section of an oil pipeline burst and released more than 140,000 gallons of oil near Refugio State Beach. The incident — which revived memories of a massive 3-million-gallon spill almost 50 years earlier — sullied some of the state’s most pristine beaches and a rare stretch of undeveloped coastline. Oil migrated as far away as Orange County, closing fisheries and costing hundreds of millions of dollars to clean up.Soon after the spill, Exxon Mobil halted operations at its three offshore oil platforms while Plains All American Pipeline idled the connected pipelines. This year, Sable Offshore Corp., a Houston-based energy company, purchased the mothballed equipment and announced plans to restart oil extraction by the end of the year — including the failed pipeline.Most recently, the California Coastal Commission has repeatedly admonished the company for performing unauthorized work on the pipeline in an attempt to ready the equipment for transporting oil. This week, environmentalists carrying homemade signs and a large banner reading “Fight Offshore Drilling” protested at a commission meeting in San Diego.The potential restart and accelerated pace of construction have heightened fears of another catastrophic oil spill.Environmental groups contend that federally mandated corrosion protection was not effective on the 30-year-old pipeline, and say it will never perform safely. Also, when Santa Barbara County considered a plan to build a new pipeline, an environmental report estimated that the existing line could suffer a spill every year, and a major rupture every four years. These releases, it concluded, could result in a disaster even larger than the 2015 spill.“It’s just old and corroded, so it feels like a ticking time bomb to continue letting this infrastructure operate and to restart it after such a severe spill without additional environmental review,” said Julie Teel Simmonds, senior counsel for the Center for Biological Diversity. “It seems too risky to even contemplate.”In the nine years since the spill, the damaged pipeline was “evacuated, cleaned and preserved with inert nitrogen to maintain a corrosion-free state,” according to Steve Rusch, Sable’s vice president of environmental and regulatory affairs. He said work crews have already started the process of repairing about 100 “anomalies” — areas of corrosion, cracks or other defects — to ensure that the pipeline will be in an “as-new” condition.Residents and environmental groups have complained the permitting process has moved ahead with little to no public involvement and insufficient environmental reviews.The project still needs to obtain clearance from several regulatory agencies before it can start. However, perhaps one of the most pivotal steps is a waiver and approvals from the Office of the State Fire Marshal, which oversees pipeline safety. Thirteen California lawmakers, including state Sen. Monique Limon (D-Santa Barbara), wrote a letter to the California Department of Forestry and Fire Protection to express concerns about the project and ask for more transparency about the decision-making process.
Gavin Newsom signs bill to prevent fuel shortages and price spikes: What to know about California’s controversial new law aimed at preventing gas price spikes California Gov. Gavin Newsom (D) on Monday signed into law a controversial slate of plans to tighten fuel refinery storage rules in an effort to prevent future fuel shortages and price spikes at the pump. The ABx2-1 bill, approved during a special legislative session by the California Assembly on Monday morning and by the state Senate on Friday, will allow state regulators to oversee the amounts of fuel that oil refiners keep in their inventories. The maintenance of these stocks will serve to avert deficits that end up raising gasoline prices, according to the governor’s office. Although ABx2-1 ultimately earned the Legislature’s favor to become state law, its advancement was neither unanimous nor without pushback — from oil companies, labor unions, Republican lawmakers and even some state Democrats. When the bill takes effect in 90 days, a state regulatory agency, the California Energy Commission, will have the authority to set constraints on storage levels for each refiner, each fuel and each blending component, per the bill. The agency will also be able to adjust inventory minimums, as well as establish conditions under which refiners can draw down or rebuild reserves. The legislation will also allow the regulator to ensure that refiners have resupply plans in place ahead of maintenance outages and to set criteria that must be met before such events occur. The Senate tally on Friday was 23-9, following a 44-18 Assembly floor vote on the initial version earlier in the month. Certain Democrats sided with Republicans in opposition, while many legislators chose to abstain from voting entirely. Debate has mounted over both the terms of the bill itself and the need for the rushed gathering of a special legislative session, just as the regular session was ending, in order to pass it. Per California’s constitution, the governor can call for a special session — although doing so doesn’t guarantee that the chambers will convene, according to CalMatters. Measures approved and signed into law during such a session take effect after 90 days. As a basis of comparison, if lawmakers had postponed this bill until the next regular session, the earliest it could have gone into force would have been Jan. 1, 2026. Newsom called for this session on Aug. 31, with his office explaining that “price spikes on consumers are profit spikes for oil companies, and they’re overwhelmingly caused by refiners not backfilling supplies when they go down for maintenance.”The day before Newsom made the official proclamation, Assembly Speaker Robert Rivas (D) signaled his chamber’s readiness to take on the legislation outside of the regular session.Unlike the Assembly, the state Senate was not immediately on board. Just after Newsom called for the session, state Senate President Pro Tempore Mike McGuire (D) declared that his chamber would not hold a special session. He said that the Senate worked on a related package “for the better part of a year” and had been ready with sufficient votes to get it “across the finish line this legislative year.”Ultimately, however, McGuire agreed to convene a special session following the Assembly’s Oct. 1 passage of the initial text — clarifying that the state Senate planned “to work quickly and efficiently” to bring Californians relief at the pump. The legislation faced opposition from both oil companies and labor unions. After ABx2-1 received Assembly approval but before it went to the Senate floor, Chevron sent a letter to lawmakers describing the bill as “inaccurate and flawed,” as first reported by local television station KRCA.The letter warned that “economic fundamentals force prices up when demand outstrips supply” and that imposing further constraints on inventory would only result in price increases.Another letter, sent from multiple labor unions last week, took issue with the fact that the California Energy Commission, an unelected, ratepayer-funded entity, would gain “unprecedented regulatory authority to bureaucratically dictate safety maintenance at in-state refineries.”The writers warned that “leaving out the workforce with direct knowledge and insight into refinery operations and maintenance” could jeopardize the safety of their members.State Sen. Brian Dahle (R) raised concerns last week that the plans would “create artificial shortages by limiting supply,” describing the legislation as “a scheme to collect money from oil refineries and consumers at the pump.”Assemblywoman Esmeralda Soria (D) voted against ABx2-1 during the initial Assembly floor hearing due to her unwillingness to “take a risk on new regulations that could result in higher gas prices.”Stressing that she is a daughter of farmworkers and is familiar with the everyday struggles Californians face firsthand, Soria described the bill’s measures as “unproven [and] risky,” adding that it “could ultimately hurt the communities that can least afford it.”
Mexico Pacific LNG, ‘Largest Foreign Investment Project,’ Touted in Presidential Meeting -There has been much talk about the kind of relationship new Mexico President Claudia Sheinbaum would form with the private sector. In a first meeting with hundreds of business executives in Mexico City, she gave a signal in support of LNG. The U.S.-Mexico CEO Dialogue on Tuesday convened business leaders from both the United States and Mexico. It included representatives of the U.S. Chamber of Commerce and Mexican counterpart Consejo Coordinador Empresarial (CCE). Also in attendance were high-ranking Mexican officials, including President Sheinbaum. The chair of the CEO Dialogue was Sarah Bairstow, CEO of Mexico Pacific Ltd. LLC. Her company is developing a liquefied natural gas project in Puerto Libertad, Sonora. The 15 million ton/year (Mt/y) Saguaro EnergÃa LNG export plant would source U.S. natural gas from the Permian Basin and would include a pipeline on both sides of the border.
Latin America Positioned to Become Force in LNG Export Market -As more countries seek to enter and expand their presence in the global LNG export market, Mexico and Argentina are the best positioned to do so in Latin America, according to research firm Rystad Energy. Rystad Energy chart showing global LNG demand by region. Expand In a recent report authored by W. Schreiner Parker, managing director for Latin America, Rystad examined the potential for Latin America to become a force in the liquefied natural gas export market, which, recently, has been powered in part by the Ukraine war that accelerated Europe’s efforts to reduce dependence on Russian natural gas. Global natural gas demand is forecast to break records in 2024 and 2025, with modest growth in LNG supply driving tightness in the market, according to the International Energy Agency. Given Mexico’s proximity and pipeline connectivity to natural gas produced in the Permian Basin in western Texas and southeastern New Mexico, the buildout of LNG export facilities in the country provides an outlet for surplus U.S. production to be shipped to European and Asian markets.
Canadian natural gas firms eager for LNG boom swamp market with excess supply A huge liquefied natural gas (LNG) export terminal led by Shell, called LNG Canada, may struggle to dramatically raise Canadian natural gas prices when it starts operating next year because a flood of pent-up supply is waiting to hit the market, analysts said. Gas prices at Alberta's AECO hub hit a 2-yr low of 5 Canadian cents per million British thermal units (MMBtu) in late September as storage filled up. The slump has hurt producers who boosted drilling activity this year in anticipation of new demand from LNG Canada and prompted some firms to curtail production. Company executives and analysts estimate firms have shut in between 800 MMft3d and 1 Bft3d, around 5% of total gas production from Canada, the world's sixth-largest producer. In addition to curtailments, some producers like Canadian Natural Resources Ltd. have delayed completing newly drilled wells until prices pick up. Advantage Energy became the latest producer to announce temporary curtailments on Tuesday. The Calgary-based company began shutting in up to 130 MMft3d of dry gas last month. Advantage CEO Michael Belenkie said he was disappointed some producers were continuing to sell gas at a loss, instead of curtailing production and allowing prices to recover until demand from LNG Canada kicked in. "Producers basically started to front-run the growth in demand," Belenkie said. "In three, six, nine months we will see substantial off-take from the system, but people have delivered early." The 14-MMtpy LNG Canada facility, a joint venture between five partners including Japan's Mitsubishi Corp and Malaysia's state energy firm Petronas, will be Canada's first major liquefied natural gas export terminal and require around 2.1 Bft3d of gas. Even with that huge demand boost, the AECO futures market indicates prices will reach only C$2.46 a gigajoule (Gj) (C$2.33/MMBtu) in September 2025, around C$1.20/Gj less than the forward strip was suggesting a year earlier. "Right now prices are not signaling there's going to be a big windfall in 2025, the forward strip has come down significantly," said Jean-Paul Lachance, CEO of Peyto Exploration, Canada's fifth-largest gas company. He said there was a growing consensus among producers that LNG Canada likely will not fully ramp up until the second half of 2025. Peyto hedges 70% of its production to protect against market volatility, and Lachance said he saw a risk companies could restart curtailed volumes too quickly once prices improve. "If everybody brings it all back on at once that will probably stress the market again," he said, adding that many Canadian producers sell into other North American markets to reduce their exposure to volatile AECO prices. LNG Canada said in a September update the facility is 95% complete and remains on track to deliver first cargos by mid-2025. LNG Canada should reduce volatility in the AECO market, which is prone to big price swings because of limited storage capacity, said BMO Capital Markets analyst Jeremy McCrea. A cold winter would also help draw gas out of storage and lift prices, and RBN Energy analyst Martin King said curtailed volumes could return to the market before the end of this year if prices strengthen much further. "If it's November 20 and prices are back up around C$2.25 all that gas that been temporarily shut in comes roaring back to the market," King said. "Is it going to end up being too much of a good thing and the market ends up short-circuiting itself?"
IEEFA: Canadian LNG will not boost Japan's energy security or Asia's decarbonization | With LNG Canada set to start up next year, liquefied natural gas (LNG) exporters in Canada are racing to build new projects along the country’s western coast. Many are enamored by the prospect of selling the fuel to Asian countries, particularly Japan. As one of the world’s largest LNG buyers, Japan has repeatedly emphasized the importance of Canadian LNG for its energy security, decarbonization and reducing reliance on Russian energy. In a January 2023 visit to Ottawa, former Japanese Prime Minister Fumio Kishida stressed the “crucial role” of Canadian LNG in Japan’s energy transition. Kishida, however, failed to mention that Japan’s LNG imports have fallen every year since 2014. Over the last decade, the country’s LNG demand has dropped by 25%, and its official energy plans envision it falling by an additional 25% to 2030, due to rising nuclear power and renewables replacing the need for gas, among other factors. Why, then, is Japan pressuring countries like Canada—as well as the U.S., Australia and other exporters—to ramp up production? One potential reason is that Japanese buyers of LNG are re-selling the fuel into other markets at a markup, rather than sending it directly to Japan. In FY2022 (the most recent year for which data is available), Japan resold almost 32 MM tonnes of LNG to other countries, according to official data. For perspective, this resales volume far exceeds the annual export capacity of the three Canadian LNG projects that have made final investment decisions and are undergoing construction—namely, Canada LNG, Woodfibre LNG and Cedar LNG—with a combined output of 19 metric MMtpy. Japan’s resales still exceed potential Canadian LNG export capacity when including another major proposed project, the 12-metric MMtpy Ksi Lisims LNG facility. FIG. 1. Japan’s LNG resales vs. Canadian LNG projects. Consider two of the largest LNG buyers in the world, Japan’s JERA and Tokyo Gas, which have both agreed to buy volumes from the Canada LNG project. An Institute for Energy Economics and Financial Analysis (IEEFA) report released this year found that both companies are likely to have a surplus of LNG supplies through 2030 to resell. And both have expressed intentions to pivot business growth toward LNG expansion in markets outside of Japan, due to declining domestic opportunities. The Japanese government, meanwhile, is playing a key role by lobbying foreign governments to increase LNG exports, while setting resale targets for domestic companies. In 2020, the country’s Ministry of Economy, Trade and Industry set a target for Japanese buyers to transact 100 MMtpy of LNG by 2030, well above the country’s own projected demand. As a result, these companies are actively seeking opportunities to resell LNG to other Asian markets. Japanese players have proposed at least 30 gas and LNG-related projects in South and Southeast Asia, which may come with commitments to buy LNG from Japanese project sponsors.
PetroChina ends its role as committed shipper on Trans Mountain pipeline -- PetroChina Canada will no longer be a committed shipper on the Trans Mountain oil pipeline after assigning its contracts to another party, the company said in a letter filed with the Canada Energy Regulator, dated Oct. 10. The recently expanded Trans Mountain pipeline has capacity to ship 890,000 bpd of crude from Alberta's oil sands to the Port of Vancouver in British Columbia. The company is a subsidiary of China's top oil-producing firm PetroChina and holds six assets in western Canada, including the MacKay River and Dover oil sands projects and a stake in the LNG Canada liquefied natural gas project, due to start operating next year. A spokesperson for PetroChina Canada did not immediately respond to a request for comment on why the company had given up its committed shipping agreements. PetroChina Canada wrote to regulators to say it was withdrawing as an intervenor in a long-running dispute between Trans Mountain and its committed shippers over pipeline tolls. "PCC has now assigned these agreements to another party and will not be a committed shipper going forward," the letter said. PetroChina did not name the other party.
Europe’s First LNG Cargo from Mexico Unloaded at Gate Terminal — Europe received its first LNG cargo from Mexico this week. The Energos Princess delivered the cargo to the Gate import terminal in the Netherlands. It was loaded at New Fortress Energy Inc.’s Fast liquefied natural gas facility offshore Altamira on Sept. 29. The 200 MMcf/d Altamira facility entered service earlier this year and sent its first cargo to an import terminal on Mexico’s Pacific Coast. Altamira, which utilizes U.S. feed gas, loaded the cargo after receiving a key permit from the U.S. government to export to non-free trade agreement countries.
Europe’s Natural Gas Demand Drops While Inventories Rise -- Natural gas demand in the EU and the UK fell by 0.7 bcm in August from July while inventories increased by 8.7 bcm, the Joint Organizations Data Initiative (JODI) said in its monthly oil and gas review on Thursday. Global natural gas demand also fell lightly, by 0.15 bcm month-on-month in August, according to the latest data in JODI, which compiles self-reported figures from individual countries.On a yearly basis, global natural gas demand rose by 2.3 bcm compared to August 2023, and gas production also increased globally, by 1.4 bcm in August 2024 from a year earlier.Global gas inventories were up by 22.3 bcm compared to the five-year average and rose by 11.9 bcm from July to August.In Europe, despite a slight uptick in industrial consumption of natural gas this year, the heavy industry is likely to return to curtailing gas use next year amid a tighter gas market and higher prices, analysts and industry officials have told Bloomberg.Since the 2022 energy crisis, European industry has been squeezed amid sky-high energy costs and weak industrial demand in weakening economies. European companies have been losing competitive advantage to firms outside the EU, especially in Asia, with its low labor costs, and the U.S., where gas prices are four times cheaper than in Europe.Europe’s industrial gas demand is recovering as prices normalized and is also contributing to demand growth, even though it remains well below its pre-crisis levels, the IEA said in its annual Global Gas Security Review.However, after this year’s uptick in European industrial gas demand, consumption is set to fall in the coming years, as companies will continue to struggle with higher energy costs compared to other regions, and weaker economies.Cefic, the European Chemical Industry Council, said in its September monthly report that “Energy is still more expensive than before the crisis and not competitive on a global scale.”
EU Has Storage Capacity to Survive End of Ukraine Gas Transit: Operators - Even if supply from Russia via Ukraine ends, the European Union can still meet its natural gas needs in next year’s winter by utilizing the bloc’s storage facilities and rolling back consumption before the peak season, according to a new industry analysis. The transit contract between the two warring countries ends December, leaving the Turkstream across the Black Sea to Türkiye the only pipeline route for Russian gas to reach the EU. The purportedly sabotaged Nord Stream, which links Russia and Germany, has been idle since 2022. However, current levels of underground storage (UGS) facilities across the EU and the addition of new gas infrastructure including liquefied natural gas (LNG) terminals give the region a fallback in the case of pipeline supply from Russia being cut off, the European Network for Transmission System Operators for Gas (ENTSOG) said in an outlook report. The 27-member bloc reached its storage target for 2024 about 10 weeks ahead of the deadline, according to the online gas storage monitoring database of industry association Gas Infrastructure Europe (GIE). Last year the EU also achieved its minimum required storage level over two months ahead of schedule. In June 2022, the EU passed a regulation mandating the region's gas storage facilities be filled to at least 90 percent of capacity by November 1 each year. This was in response to surges in energy prices that followed Russia's invasion of Ukraine. “On 1 October 2024, the EU’s UGS reached 94 percent on average which translates to 1,083 TWh [terawatt hours]”, ENTSOG said in the report on its website. “The high storage filling level (59 percent) at the beginning of the injection period, lower gas consumption over the years and dedicated measures introduced by the Member States contributed to a high volume of gas in storage at the beginning of the winter period. “The gas infrastructure, including the projects that have been commissioned during this year and the expansions to be commissioned over the upcoming winter, are boosting energy security in the EU and allow for a more efficient cooperation among the EU Member States”. For the next winter, even in the case of limited LNG availability, the EU can prepare for the loss of pipeline gas from Russia by keeping at least a 30 percent storage level at the end of the current winter season. This would allow the EU to use the 2025 summer to adequately restock for the winter that follows, according to ENTSOG. “In the high demand cases (i.e.,2-week cold spell and peak day demand in the Reference Winter scenario) no EU Member State is exposed to the risk of demand curtailment”, it added. However, “[i]n case of full disruption of Russian pipeline supplies during winter [October 2025 to March 2025, or the reference winter demand], additional measures might be needed to save adequate volumes of gas for the end of the season, and to avoid risk of demand curtailment in case of Cold Winter and peak demand situations”, ENTSOG said. “Simulation results showed that the introduction of possible measures, such as additional supplies, and a 15 percent decrease in gas demand, would avoid demand curtailment risks and allow for reaching an adequate storage level without any pipeline supplies from Russia. “Even in case of a full Russian pipeline supply disruption, cooperation between the countries and demand measures could allow for a more efficient injection during the summer 2025 in preparation for the next winter. “To achieve the 90 percent UGS stock level target by the end of summer 2025, it is necessary to maintain gas at the beginning of the injection season (between 30 and 40 percent) depending on the availability of LNG. “In the Low LNG supply scenarios, some demand response may be necessary to reach the 90 percent target. “EU UGS stock levels are considerably high on 1 October 2024 (94 percent). Additional UGS flexibility could be secured by storing additional volumes in Ukrainian UGS under the condition that this gas can be injected and later on withdrawn during the winter season and market participants would be willing to use it”. The European Commission said that the assessment “confirmed the EU is well prepared for winter 2024-2025 and the following summer months”. “Looking ahead to next summer, the report confirms the need to continue to prepare for subsequent winters by, for example, storing gas throughout the summer months and reducing gas demand”, it said in a statement on its website. “The EU continues to exceed its target of 90 percent gas storage filled across the EU by 1 November and 15 percent reduction in gas demand, reaching 18 percent last winter. “The report demonstrates the independence of the EU gas system from Russian pipeline supply and underlines the significant progress of the EU to phase out Russian fossil fuel imports in line with REPowerEU”. An analysis published Friday by economic think tank Bruegel was in consensus with ENTSOG’s outlook, saying the EU’s gas infrastructure buildout can answer for about 140 TWh of gas that the EU would need to replace after the end of the Russia-Ukraine transit agreement. “First, LNG terminals in Poland, Germany, Lithuania, Italy, Croatia and Greece, new floating storage regasification units in Germany and Italy and the potential expansion of the capacity of the Turkstream pipeline that runs across the Black Sea from Russia to Türkiye could replace the lost volume”, Bruegel said.
ExxonMobil Accuses Dutch Government of Breaking Groningen Natural Gas Field Agreement - ExxonMobil has filed a lawsuit against the Dutch government, alleging Netherlands leadership broke an agreement with production partners over the curtailment of natural gas from the Groningen field. ExxonMobil bar chart showing forecast natural gas supply by region. The supermajor disclosed that it filed a request for arbitration under the Energy Charter Treaty (ECT) against the Netherlands with the International Centre for Settlement of Investment Disputes (ICBI), based in the District of Columbia. In a LinkedIn post on Thursday, representatives of ExxonMobil’s Dutch subsidiary wrote the company has been working to secure a new agreement about curtailing gas volumes from the prolific field for several years, to no avail.
IEA predicts lower gas and oil prices, rising electricity demand in next 5 years -Natural gas and oil prices are likely to decline in the second half of the decade, but unexpectedly high worldwide demand for electricity will complicate efforts to reduce greenhouse gas emissions, the International Energy Agency (IEA) said Wednesday in its yearly World Energy Outlook. Between 2025 and 2030, the supply of oil and gas is expected to increase barring a significant escalation in conflicts in Ukraine or the Middle East, IEA said in the report. Energy supply and demand have whipsawed in the first half of the decade, first plunging in the first year of the coronavirus pandemic and then seeing supply shocks after Russia invaded Ukraine in early 2022. In the years ahead, the trend indicates a “very different energy world” that includes downward pressure on the prices of those commodities, according to Fatih Birol, executive director at IEA. Although oil prices have seen spikes amid tensions in the Middle East, record U.S. oil and gas production has offset much of the shock. IEA projected liquefied natural gas to flood world markets over the next five years, largely in the form of exports from the U.S. and Qatar. However, the report also found that demand for electricity is accelerating faster than earlier predictions, with the demand level now expected for 2035 6 percent higher than the figure the IEA projected in 2023. Much of the projected demand increase is due to data centers, as well as the increased proliferation of air conditioning in countries like India that only recently began to adopt it as heat becomes more extreme. The projected growth in annual electricity demand is equivalent to a year’s worth of demand from the entire nation of Japan. “In energy history, we’ve witnessed the Age of Coal and the Age of Oil — and we’re now moving at speed into the Age of Electricity, which will define the global energy system going forward and increasingly be based on clean sources of electricity,” Birol said. In addition to raising concerns around carbon emissions and climate change, this projected growth will also require significant upgrades to energy storage and grid resilience, according to IEA. The report cites the current vulnerabilities of electrical grids to extreme weather events, such as the winter storms that knocked out Texas’s self-contained Electric Reliability Council of Texas grid in 2021. Overall, worldwide carbon dioxide emissions are expected to peak in the near future, according to IEA, but the decline after the peak is currently projected to be too gradual to avert the 1.5 degrees of warming above preindustrial levels agreed to as a limit in the Paris Climate Agreement.
Overhang in Global LNG Capacity to Create ‘Competitive Market’ to 2035, Says IEA - A new energy market is taking shape across the globe, marked by continued geopolitical conflicts but tempered by an abundance of natural gas, oil and technologies, International Energy Agency (IEA) experts said Wednesday. Electricity demand, meanwhile, is rising at a faster clip than expected. Bar graph showing global LNG supply additions through 2030. In the annual World Energy Report (WEO-2024) published Wednesday, the global watchdog said an “ample supply” of oil and LNG is “coming into view during the second half of the 2020s,” with extracted natural gas and crude oil eclipsing demand. The prospect of surplus natural gas and oil could “move us into a very different energy world from the one we have experienced in recent years during the global energy crisis,” IEA executive director Fatih Birol said. “It implies downward pressure on prices, providing some relief for consumers that have been hit hard by price spikes.
Japan could boost LNG buys for emergency reserve to nearly 1 MMtpy Japan is considering stepping up purchases of liquefied natural gas (LNG) for emergency needs to at least 12 cargoes a year from three now, an official of its industry ministry said, to guard against unexpected supply shocks. The reserve-boosting plan entails additional purchases by the world's second biggest buyer of LNG after China, increasing its buys to at least 0.84 metric MMtpy of LNG from 210,000 tonnes now. Japan is expanding its role as an LNG trader at a time of falling domestic demand overall for the fuel—in a plan to boost energy security, it trades some cargoes that are not wanted at home during periods of weak demand. From last December, Japan's top power generator, JERA, has bought one LNG cargo for each of the winter months, or a total of three for the year, to add to a 'Strategic Buffer LNG' (SBL) run by the Ministry of Economy, Trade and Industry (METI). This winter, JERA will continue buying one cargo of 70,000 tonnes for each month from December to February, Yuya Hasegawa, Director of the ministry's energy resources development division, said. "From the mid- to late-2020s, we will try to secure at least one cargo per month throughout a year: that is, at least 12 cargoes per year," Hasegawa said, adding that JERA, also Japan's top LNG buyer, would continue handling cargoes for the reserve. Japan has no underground gas storage but has LNG storage capacity of around 12 Bm3, or just over a month of consumption, at its LNG receiving terminals, which number more than 30, the International Energy Agency says. To boost storage capacity, METI proposed financial support last month for companies to secure storage tanks at home and abroad, in a scheme separate from the SBL but which also aims to improve energy security. LNG makes up a third of the power generation mix in Japan, which sees it remaining as a transition energy source in the years to come. Japanese companies have recently also expanded LNG swap deals in efforts to boost flexibility.
Nigeria signs deal to supply gas to proposed $3.5-B petrochemical plant -Nigeria took a major step in its quest to earn revenue from its vast gas reserves, signing a deal with joint venture partners to supply gas to a proposed $3.5-B Brass fertilizer and petrochemical plant, an official said on Friday. Under the agreement, joint venture partners including Shell, TotalEnergies and Eni will deliver an estimated 270 MMft3d to the plant in Brass, in Nigeria's coastal Bayelsa state. Petroleum Ministry Permanent Secretary Nicholas Agbo Ella said the Gas Sale and Purchase Agreement is a part of the Brass Fertilizer and Petrochemical Project, which is expected to generate at least $1.5 B annually from exports of petrochemicals and other gas-based products. "This agreement represents a significant milestone in our ongoing efforts to monetize Nigeria's vast gas reserves," Ella said. Nigeria, Africa's top energy producer, holds the continent's largest gas reserves of more than 200 Tft3 and seeks to develop the commodity to boost supplies to industries, power plants and for exports, and to end routine flaring by 2030. "In addition to boosting exports, the project will reduce fertilizer imports by 30%, saving Nigeria approximately $200 MM in foreign exchange annually," Ella said.
Major Asian LNG Exporters Turn to Natural Gas Imports as Domestic Supply Balances Thin - Indonesia and Malaysia, major sources of LNG supply in the Pacific, are counting on additional natural gas imports from the United States and other countries to help meet rising domestic natural gas demand. Bar graph showing Malaysia's LNG exports. Among the top ten global liquefied natural gas exporters, Indonesia and Malaysia are currently unable to meet both local gas demand and fill long-term LNG export contracts without LNG imports. However, Energy Aspects forecast both countries will eventually be able to regain a supply balance between export commitments and domestic LNG import demand in the near future.
China On Track to Import Record Natural Gas Volumes as Storage Nears Capacity - China’s natural gas storage is nearing full capacity for the winter season thanks to rising domestic gas output, along with pipeline and LNG imports. Natural Gas Intelligence's (NGI) Asia LNG parity price chart showing historical market volatility. Expand “The increase in gas storage facilities is likely to ensure that China has sufficient natural gas supplies on hand to meet demand during peak periods such as the winter heating season,” Columbia University’s Erica Downes, a senior research scholar at the Center on Global Energy Policy (CGEP), told NGI. Downes said China is expected to consume 420-425 billion cubic meters (Bcm) of gas this year, about a 7% increase over 2023. Domestic gas production is expected to reach 246 Bcm, while liquefied natural gas and pipeline imports should rise to 174-179 Bcm.
Kutubdia Anchorage LPG Tanker Fire | Fire breaks out on LPG tanker at Kutubdia anchorage - Fire broke out at LPG tanker at Kutubdia anchorage early today. Zonal Commander of Bangladesh Coast Guard East Zone Captain Jahirul Hoque confirmed that fire broke out at the tanker B-LPG Sophia, owned by Bashundhara Group, which was engaged in ship-to-ship transfer of LPG from mother vessel, Captain Nikolas, at the Kutubdia anchorage after midnight. All 18 crewmen, two mooring men, three watchmen from the tanker, and eight port security guards from the mother vessel who jumped into the sea after the fire broke out, were rescued by a tugboat, Tufan Express, he said. The crew comprises of nine Bangladeshis, eight Indonesians, and one Indian. Immediately after hearing the news at 12:55am the Coast Guard, the vessel's firefighting tugboat Promotto, one patrol boat, and eight speed boats came to the rescue, said the Coast Guard official adding that navy also sent firefighting tugboats. He said the mother vessel remains safe as it teared off the ropes tied with the lighter vessel. However, the lighter vessel was not anchored and drifting freely with other tankers in its vicinity. B-LPG Sophia is a medium sized LPG tanker engaged in lightering LPG from mother tankers in the sea.
14 missing as another BSC oil tanker catches fire in Ctg port - Fire broke out on another oil tanker of Bangladesh Shipping Corporation (BSC), "Banglar Shourabh", at the outer anchorage of Chittagong Port today, five days after a deadly explosion and fire on "Banglar Jyoti". Coast Guard rescued 36 of the total 50 crewmen from the ship till the filing of this report as of 2:00am, reports our Chattogram staff correspondent. Coast Guard rescued 36 of the total 50 crewmen from the ship till the filing of this report as of 2:00am, reports our Chattogram staff correspondent. Captain Md Jahirul Hoque, zonal commander of Coast Guard East Zone, told The Daily Star that the fire broke out on the ship anchored at the C-Anchorage area around 12:50am. The lighter vessel was carrying crude oil from a bigger oil tanker at sea and was about to start for Chittagong port jetty to unload the fuel when the fire broke out, he said. Quoting crewmen, Zahirul said there were a total of 50 crewmen onboard the ship, of whom 14 jumped into sea after fire broke out. Several tugboats of the Coast Guard were conducting operations to rescue them, he said, adding that a firefighting tugboat was engaged in extinguishing the blaze. Several tugboats from the port authority were also sent to the spot. On September 30, three people were killed in an explosion on Banglar Jyoti anchored at the port's Dolphin Jetty 7.
Death Toll in Fiery Nigerian Tanker Explosion Mounts to 153 - Nigerian police said the death toll from an explosion involving a gasoline tanker in the country’s north has now increased to 153. Police spokesman Lawan Adam said 100 people had also been hospitalized after the tanker caught fire following a traffic accident, as people swarmed around it to collect escaping gasoline. The accident happened on Tuesday in Majiya, a town in Jigawa state 540 kilometers (338 miles) north of the capital, Abuja. President Bola Tinubu said the country will undertake a “comprehensive review of fuel transportation and safety protocols,” while offering his condolences to families of the victims. The tanker driver lost control of his vehicle causing a crash, and “on realizing what happened, the residents started trooping with their containers to tap from the spilling oil,” Adam said. Police tried to clear the scene and people who refused to leave were scooping up the fuel when the “tank exploded and caught them in the fire,” he added. The price of gasoline in the West African nation has soared since fuel subsidies were rolled back in a series of steps starting last year and now stands around 1,000 naira ($0.61) a liter, the highest price Nigerians have ever paid. Fatal incidents involving fuel theft aren’t uncommon in Nigeria. More than 1,000 people were burnt to death in Nigeria’s Delta State in 1998 when a punctured pipeline exploded.
Four tankers still at sea with unsold cargoes from Russia's Arctic LNG 2 - Four tankers loaded with Russian Arctic LNG 2 cargo are still out at sea, according to data from ship-tracking agency Kpler, highlighting the struggles of the U.S.-sanctioned project to sell the sea-borne gas. The agency said on Monday the tankers were seen traversing the sea without signaling a destination as the market continues to anticipate a potential delivery to a buyer. According to Kpler data, the tankers laden with liquefied natural gas (LNG) constitute 40% of a so-called "dark fleet" of 10 Russian LNG-ferrying vessels identified by the agency and which have been sanctioned by the West. The dark fleet, which Kpler and other ship-tracking agencies also refer to as a shadow fleet, consists of tankers that knowingly operate to circumvent Western sanctions to ship goods. They include the Pioneer with a capacity of 138,000 m3, the Asya Energy (137,200 m3), the Nova Energy (150,000 m3) and the Everest Energy (138,028 m3), according to Kpler. The Arctic LNG 2 project, 60% owned by Russia's Novatek, is subject to Western sanctions over Russia's conflict with Ukraine. Novatek has denied involvement in establishing and managing a "shadow fleet" for the Arctic LNG 2 project. It is not clear where the four loaded tankers are headed. "Pioneer is going full speed ahead while Asya Energy is in a holding pattern. It's a wait-and-see situation if these cargoes are discharged to end users," said Ana Subasic, Kpler Insight market analyst for LNG and natural gas. "We believe certain players, like China, will be looking to make use of the heavily discounted spot volumes on offer." The project had been set to become one of Russia's largest LNG plants with eventual output of 19.8 metric MMtpy, but its prospects have been clouded by the sanctions. It started to export in August, but there is still no information about the end user. Nevertheless, ship-tracking data has recently shown several cargoes being picked up from the project. Some of the vessels have discharged at two storage facilities, near the Arctic port of Murmansk and in Russia's Pacific peninsular of Kamchatka. Kpler also said four more tankers were seen congregating offshore the Kolguyev Island in the Barents Sea. These include the North Air, the La Perouse, the North Sky and North Way, which each has a capacity of 174,000 m3.
Fewer tankers transit the Red Sea in 2024 - The amount of crude oil and oil products flowing through the Bab el-Mandeb, the southern chokepoint at the mouth of the Red Sea, decreased by more than 50% in the first eight months of 2024. Chokepoints are narrow channels along widely used global sea routes, and they are critical to global energy security. The inability of oil to transit a major chokepoint, even temporarily, can lead to substantial supply delays and higher shipping costs, resulting in higher world energy prices. After Yemen-based Houthi militia attacks on commercial ships transiting the Red Sea started in November 2023, some vessels began opting to avoid the Bab el-Mandeb chokepoint—a narrow strait that borders the Yemeni coast and is the southern entrance to the Red Sea. Instead, they’re choosing to take longer, more costly routes around the Cape of Good Hope at the southern tip of Africa. Oil trade flows in the Red Sea have decreased significantly over the past year. Oil trade flows through the Bab el-Mandeb Strait averaged 4 MMbpd in 2024 through August compared with 8.7 MMbpd in full-year 2023, according to Vortexa data. The Suez Canal, the SUMED pipeline and the Bab el-Mandeb Strait are strategic routes for Persian Gulf oil and natural gas shipments to Europe and North America. The Suez Canal and SUMED pipeline are located in Egypt and connect the Red Sea with the Mediterranean Sea. The volume of crude oil and oil products flowing around the Cape of Good Hope increased to 9.2 MMbpd in the first eight months of 2024 from an average of 6 MMbpd in 2023, according to Vortexa data. The Strait of Hormuz, located between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The Strait of Hormuz is the world's most important oil chokepoint because large volumes of oil flow through the strait. In 2023, oil flows through Hormuz averaged 20.9 MMbpd or the equivalent of about 20% of global petroleum liquids consumption. In addition, around one-fifth of global liquefied natural gas (LNG) trade also transited the Strait of Hormuz in 2023. Iran ranked as the world's third-largest oil and second-largest natural gas reserve holder in 2023, although international sanctions have constrained its production. Total petroleum and other liquids production in Iran rose from a recent annual low of less than 3 MMbpd in 2020 to an average of 4 MMbpd in 2023. Of this 4 MMbpd, almost 2.9 MMbpd was crude oil, and the remainder was condensate and hydrocarbon gas liquids. Saudi Arabia was the world’s third-largest crude oil and condensate producer, the world’s top crude oil exporter, and OPEC’s top crude oil producer in 2023, when its output averaged 9.5 MMbpd. Israel is the second-largest natural gas producer in the Eastern Mediterranean region, after Egypt. Natural gas production in Israel began growing in 2013 when the Tamar field began production. Since then, several more offshore natural gas fields have begun production and provided enough fuel to meet Israel's rising domestic natural gas needs as well as exports to Egypt and Jordan. In 2022, natural gas production in Israel totaled 808 Bft3.
Giant explosion at gas station in Chechnya, several dead - A gas station has exploded in the Russian republic of Chechnya, killing at least four people. Images show people fleeing the explosion. The police have started an investigation into the cause.
Oil leaks from NR pipeline in DHA – Karachi: An oil leak from National Refinery's (NR) pipeline in Defence Housing Authority (DHA) caused oil to spill onto adjacent roads and streets. Upon receiving the information, police immediately reached the scene and cordoned off the area, blocking roads to prevent further damage and accidents because of slippery streets. Relevant authorities were also informed.According to SHO Darakhshan police station Irfan Asif, the leak originated from National Refinery's central point near Street 25, Khayaban-e-Sehar. Later, additional police force was deployed who sealed off the entire area to prevent any untoward incident because of the oil spill. The National Refinery authorities shut down the pipeline to prevent more spillage.
OPEC Slashes Oil Demand Growth Forecast Again - OPEC on Monday cut its oil demand growth estimate for a third consecutive month, due to actual consumption data so far this year and expectations of slightly lower demand in some regions. OPEC now expects global oil demand to grow by 1.93 million barrels per day (bpd) in 2024, down by 106,000 bpd compared to last month’s assessment, the cartel’s Monthly Oil Market Report (MOMR) for October showed on Monday.The third consecutive downward revision of global oil demand growth largely reflected “actual data received combined with slightly lower expectations for the oil demand performance in some regions,” OPEC said.Chinese demand growth was cut again, and accounted for most of the downward revision of global oil demand growth in 2024. OPEC now expects China’s oil demand to grow by 580,000 bpd this year, down from the 650,000 bpd growth expected in the September report.China’s annual demand growth slowed in August from July, to just 83,000 bpd year-over-year, with the increase driven by strong petrochemical feedstock requirements, OPEC said.“Diesel consumption continued to be subdued by slowing economic activity, mostly a slowdown in building and housing construction, and the substitution of liquefied natural gas (LNG) for petroleum diesel fuel in heavy-duty trucks,” the organization’s economists wrote in the report.OPEC also slashed its forecast of global oil demand growth for 2025, lowering the expected growth by 102,000 bpd to 1.6 million bpd.Total global oil demand is thus expected to average 105.8 million bpd next year.Developing economies in Asia and the Middle East will lead the 1.6 million bpd growth in 2025, accounting for 1.5 million bpd of it, led by contributions from China, Other Asia, the Middle East, and India, OPEC said. Oil demand in developed economies is set to inch up only by about 100,000 bpd, led by the Americas.
OPEC Cuts 2024, 2025 Global Oil Demand Growth View Again - OPEC on Oct. 14 cut its forecast for global oil demand growth in 2024 reflecting data received so far this year and also lowered its projection for next year, marking the producer group's third consecutive downward revision. The weaker outlook highlights the dilemma faced by OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies such as Russia, which is planning to start raising output in December after earlier delaying the hike against a backdrop of falling prices. On Oct. 14, OPEC in a monthly report said world oil demand will rise by 1.93 MMbbl/d in 2024, down from growth of 2.03 MMbbl/d it expected last month. Until August, OPEC had kept the forecast unchanged since it was first made in July 2023. China accounted for the bulk of the 2024 downgrade. OPEC trimmed its Chinese growth forecast to 580,000 bbl/d from 650,000 bbl/d. While government stimulus measures will support fourth-quarter demand, oil use is facing headwinds from economic challenges and moves towards cleaner fuels, OPEC said. "Diesel consumption continued to be subdued by slowing economic activity, mostly a slowdown in building and housing construction, and the substitution of liquefied natural gas (LNG) for petroleum diesel fuel in heavy-duty trucks," OPEC said in reference to August. Oil held an earlier decline of about 2% after the report was issued, with Brent crude trading below $78/ bbl. There is a wide split between forecasters on the strength of demand growth in 2024, partly due to differences over China and over the pace of the world's switch to cleaner fuels. OPEC is still at the top of industry estimates and has a long way to go to match the International Energy Agency's far lower view. OPEC said this year's demand growth was still above the historical average of 1.4 MMbbl/d seen prior to the COVID-19 pandemic, which caused a plunge in oil use. For next year, OPEC cut its 2025 global demand growth estimate to 1.64 million bpd from 1.74 MMbbl/d. OPEC+ has implemented a series of output cuts since late 2022 to support the market, most of which are in place until the end of 2025. The group was due to start unwinding the most recent layer of cuts of 2.2 MMbbl/d from October, but decided to delay the plan for two months after oil prices slumped. OPEC's report showed production fell in September due to unrest in Libya and a cut by Iraq. OPEC+ pumped 40.1 MMbbl/d, down 557,000 bbl/d from August. Iraq pumped 4.11 MMbbl/d, down 155,000 bpd but still above its 4 MMbbl/d quota. As well as Iraq, OPEC has named Russia and Kazakhstan as among the OPEC+ countries which pumped above quotas. Russia cut output in September by 28,000 bbl/d to about 9 MMbbl/d, the report said, citing data from secondary sources such as consultancies. Kazakhstan, however, raised production by 75,000 bbl/d to 1.55 MMbbl/d. The OPEC report projects demand for OPEC+ crude, or crude from OPEC plus the allied countries working with it, at 43.7 MMbbl/d in the fourth quarter, in theory allowing it room for higher production. Other forecasts suggest less room. The IEA, which represents industrialized countries, sees much lower demand growth than OPEC of 900,000 bbl/d in 2024. The IEA is scheduled to update its figures on Oct 15.
IEA: Oil market to face sizeable surplus next year - The International Energy Agency (IEA) projected in its October Oil Market Monthly Report that, with weak demand growth and continued supply gains, the oil market will face a sizable surplus in the new year unless a major supply disruption occurs. Global oil demand is expected to increase by just under 900,000 b/d in 2024 and by around 1 million b/d in 2025, marking a sharp slowdown from the 2 million b/d growth seen during the 2022-2023 post-pandemic period. “Global oil demand rose by 680,000 b/d y-o-y in third-quarter 2024, lower than expected and at its slowest pace since fourth-quarter 2022 when China’s economy was in full lockdown. Accordingly, we see muted global demand growth of 860,000 b/d on average in 2024, down by 40,000 b/d from last month’s report,” IEA said. Chinese oil demand remains below expectations, significantly affecting overall growth. China's contribution is expected to account for about 20% of global growth in 2024 and 2025, compared with nearly 70% in 2023, according to IEA. “Following a surge of 1.4 million b/d in 2023, when the country emerged from stringent public health restrictions, growth is forecast to contract sharply this year on an annual basis, to a projected 150,000 b/d. Moreover, this slowdown shifted into an outright downturn in both second-quarter 2024 and third-quarter 2024. This culminated in a 500,000 b/d annual contraction in August,” IEA said. IEA expects a return to modest growth during the final quarter of the year and in 2025, when China’s annual demand will increase by 220,000 b/d. “Recently announced government stimulus packages for the economy are expected to support the resumption of an upward trajectory, but the overall impact is likely to be limited and we anticipate any increase in oil demand will be overwhelmingly dependent on growth in petrochemical feedstock products,” IEA added. Global oil supply plunged by 640,000 b/d in September to 102.8 million b/d, as Libya’s political quagmire disrupted the country’s oil production and exports, and as field maintenance work in Kazakhstan, Norway, and Canada lowered output. In early October, benchmark oil prices surged as escalating tensions between Israel and Iran raise fears of a broader Middle East conflict affecting Iranian exports. However, the resolution of Libya's political dispute, only modest production losses from hurricanes in the US Gulf Coast, and weak end-user demand have helped stabilize the markets. Barring any further unplanned disruptions, global oil supply growth is forecast to increase by 660,000 b/d to 102.9 million b/d in 2024, slightly lower than last month’s report. Assuming extra voluntary OPEC+ curbs are maintained, IEA forecasts global oil supply to rise by 2 million b/d in 2025 to 105 million b/d. Non-OPEC+ output, led by the Americas, is expected to expand by 1.5 million b/d in 2024, according to IEA. For 2024 as a whole, US output is forecast to rise by 630,000 b/d to 20.1 million b/d on average, with crude accounting for 270,000 b/d and NGLs for 360,000 b/d of the increase. Next year will see additional gains of 630,000 b/d, lifting total oil supplies to 20.8 million b/d. US crude production will increase by 390,000 b/d while NGL growth slows to 250,000 b/d. On Oct. 2, OPEC+’s top ministers decided to maintain the current oil output policy, which includes increasing output from December, while highlighting the need for some members to make additional cuts to offset overproduction. The OPEC+ alliance will see production contract by 820,000 b/d in 2024, according to IEA. Refining margins slumped further in September as gasoline, jet and diesel cracks deteriorated while crude prices improved on a relatively tighter market. Consequently, IEA's revised global crude run estimates have been reduced by 180,000 b/d to 82.8 million b/d for 2024 and by 210,000 b/d to 83.4 million b/d in 2025. These still reflect annual gains of 540,000 b/d and 610,000 b/d, respectively. Observed global oil inventories declined by 22.3 million bbl in August, led by a 16.5 million bbl draw in crude oil stocks. OECD industry stocks fell counter-seasonally by 13.4 million bbl to 2,811 million bbl, 102.7 million bbl below the 5-year average. Preliminary data suggest oil stocks fell further in September. Relatively robust refining activity and OPEC+ supply cuts have underpinned a 135 million bbl draw in crude stocks since May, while product stocks built by 35 million bbl over the same period.
WTI Sheds Over 2% On Weak Economic Data From China The oil price rally has reversed again thanks to a bearish economic report coming from China. China’s inflation data for September showed that consumer prices increased by a modest 0.4%, falling short of economist expectations of 0.6%. This marked the slowest price increase in three months, Reuters noted in its report. Whereas lower consumer prices are normally considered bullish for oil prices, the experts are interpreting China’s slowing inflation as a reflection of weaker demand that will continue to weaken as inflation slows.“China faces persistent deflationary pressure due to weak domestic demand. The change of fiscal policy stance as indicated by the press conference yesterday (Saturday) would help to deal with such problems,” the chief economist of Hong Kong-based Pinpoint Asset Management told Reuters. Brent crude futures for December delivery were trading at $77.24/barrel at 11.40 am ET, a 1.8% decline while WTI crude was changing hands at $74.02/barrel, down 2.1%. That marks a sharp fall from last Monday’s 2-month high of $81.12 for Brent and $77.91 for WTI crude. The rally was triggered by Washington’s indication that Israel could strike Iran’s oil facilities.Rampant short-selling is also to blame for falling oil prices. Short bets on Brent have exceeded long bets for the first time in history. According to commodity analysts at Standard Chartered, once the unwinding of the undershoot in prices is accounted for, the market response to events in the Middle East, and particularly the threats made against Iranian energy infrastructure, was very underwhelming. StanChart notes that Brent’s front-month settlement on 7 October was lower than the settlement for the equivalent days in 2021, 2022 and 2023 while prompt prices have merely returned to where they were as recently as late August. There’s been little change to the overwhelmingly bearish sentiment that has dominated the oil market over the past three months, with many traders still prepared to short oil aggressively if the daily news flow and market momentum allow for it.
China’s Oil Imports Fell for a Fifth Consecutive Month - The oil market on Monday continued to trade within Thursday’s trading range as it gave up some of last week’s gains. The market was pressured by news that China’s oil imports fell for a fifth consecutive month from a year ago, increasing concerns over fuel demand as OPEC cut its 2024 and 2025 global oil demand growth forecast. China’s crude oil imports in the first nine months of the year fell by nearly 3% on the year to 10.99 million bpd. OPEC cut its forecast for global oil demand in 2024 and cut its projection for next year, with China accounting for most of the 2024 downgrade. The market was also pressured as China’s stimulus plan announced over the weekend failed to inspire investor confidence in the country’s economic recovery. Another factor impacting the oil market was a report by Capital Economics, which stated that the possibility that Saudi Arabia will increase its oil production has increased in recent weeks. The oil market posted the day’s trading range in overnight trading, posting a high of $75.08 on the opening and trading to a low of $73.41 amid the bearish news. In choppy trading, the market later bounced off its low and held resistance at its high as it traded back towards its low later in the session. The November WTI contract settled down $1.73 at $73.83 and the December Brent contract settled down $1.58 at $77.46. The product markets ended in negative territory, with the heating oil market settling down 6.97 cents at $2.2742 and the RB market settling down 4.3 cents at $2.1086. The Red Cross said Israel expanded its targets in its war with Hezbollah militants in Lebanon on Monday, killing at least 18 people in an airstrike in the north, while millions of Israelis took shelter from projectiles fired back across the border. Israel ordered residents of 25 villages in southern Lebanon to evacuate to areas north of the Awali River, which flows 35 miles north of the Israeli frontier. The Israeli military said it had killed Muhammad Kamel Naim, commander of the anti-tank missile unit of Hezbollah’s elite Radwan Force, in a strike in the Nabatieh area of south Lebanon. The operations come amid tensions between Israel and the U.N. peacekeeping force UNIFIL in south Lebanon, as Israel keeps pushing forces through the area in an attempt to wipe out Hezbollah and its military infrastructure while it also fights Hamas in Gaza. The U.N. said Israeli tanks had burst into its base on Sunday, the latest allegations of Israeli violations against peacekeeping forces. Meanwhile, the entire Middle East remains on high alert for Israel to retaliate against Iran for an October 1st missile attack launched in response to Israel’s assaults on Lebanon. On Sunday, the Pentagon said it would send U.S. troops to Israel along with an advanced U.S. anti-missile system. OPEC cut its forecast for global oil demand growth in 2024 reflecting data received so far this year and also lowered its projection for next year, marking the producer group’s third consecutive downward revision. In its monthly report, OPEC said world oil demand will increase by 1.93 million bpd in 2024, down from growth of 2.03 million bpd it expected last month. OPEC said China accounted for the bulk of the 2024 downgrade as OPEC trimmed its Chinese growth forecast to 580,000 bpd from 650,000 bpd. While government stimulus measures will support fourth-quarter demand, oil use is facing headwinds from economic challenges and moves towards cleaner fuels. OPEC also cut its 2025 global demand growth estimate to 1.64 million bpd from 1.74 million bpd. production.
Oil falls 2% as OPEC cuts oil demand growth view, China concerns (Reuters) - Oil prices fell 2% on Monday as OPEC again lowered its outlook for 2024 and 2025 global oil demand growth while China's oil imports fell for the fifth straight month.China's stimulus plans failed to inspire investor confidence while markets kept watching for potential Israeli attacks on Iranian oil infrastructure.Brent crude futures settled $1.58, or 2%, lower at $77.46 per barrel. U.S. West Texas Intermediate crude futures fell $1.73, or 2.29%, to $73.83 per barrel. Brent had gained 99 cents last week, while WTI climbed $1.18.Brent fell 5%, or more than $4, in after-hours trading following a media report that Israeli Prime Minister Benjamin Netanyahu told the U.S. that Israel is willing to strike Iranian military targets and not nuclear or oil ones.U.S. heating oil futures fell 5% in late trading. U.S. gasoline futures eased over 4%.OPEC on Monday cut its forecast for global oil demand growth in 2024 and also lowered its projection for next year, marking the producer group's third consecutive downward revision.China, the world's largest crude oil importer, accounted for the bulk of the 2024 downgrade as OPEC trimmed its growth forecast for the country to 580,000 barrels per day (bpd) from 650,000 bpd.China's crude imports for the first nine months of the year fell nearly 3% from last year to 10.99 million bpd, data showed.Declining Chinese oil demand caused by the growing adoption of electric vehicles (EV), as well as slowing economic growth following the COVID-19 pandemic, has been a drag on global oil consumption and prices.China's deflationary pressures also worsened in September, according to official data released on Saturday. A press conference the same day left investors guessing about the overall size of a stimulus package to revive the fortunes of the world's second-largest economy. "The lack of a clear timeline and the absence of measures to address structural issues, such as weak consumption and reliance on infrastructure investments, have only increased ambiguity amongst market participants," noted Mukesh Sahdev, the global head of commodity markets-oil at Rystad Energy.The negative news from China outweighed market concerns over the lingering possibility that an Israeli response to Iran's Oct. 1 missile attack could disrupt oil production.The U.S. said on Sunday it would send troops to Israel along with an advanced anti-missile system in a highly unusual deployment meant to bolster the country's air defenses."While an attack by Israel into Iran is likely to happen, the latest reinforcing measures by the US military may have calmed the responses on both sides," "A nervous trade will remain with most fund managers remaining on the sidelines," Washington has been privately urging Israel to calibrate its response to avoid triggering a broader war in the Middle East, officials say, withPresident Joe Biden publicly voicing his opposition to an Israeli attack on Iran's nuclear sites and his concerns about a strike on Iran's energy infrastructure.The dollar also hit a nine-week high on Monday in thin trading. A firmer U.S. currency can hurt demand for dollar-denominated oil from buyers using other currencies. U.S. crude oil stockpiles were expected to have risen last week, while distillate and gasoline inventories likely fell, a preliminary Reuters poll showed on Monday.
Oil prices slide on Israel vow to avoid Iran refineries with retaliation -- Oil prices tumbled by over four per cent on Tuesday after soft economic readings from China and reports that Israel has assured the US it would avoid oil and nuclear facilities in its expected retaliation on Iran. The price of Brent crude dropped 4.4 per cent – or $3.42 (£2.61) a barrel – and WTI Crude fell nearly five per cent to $70.25.According to the Washington Post, Israeli Prime Minister Benjamin Netanyahu has assured the Biden administration he is willing restrict his armed forces’ response to Iran’s attack on October 4 to military – rather than oil or nuclear – targets.The reports calmed jitters among oil traders that Israel’s response would hit the supply of oil, pushing up on oil price and triggering a mirrored rise in the oil futures market.Traders’ fears were were also soothed by markets’ softening response to the fiscal and monetary stimulus announced by the People’s Bank of China (PBoC) last month.PBoC cut its benchmark interest rate by 50 basis points and the proportion that banks must hold as cash reserves by 20 basis points in late September, prompting Chinese equities to skyrocket by over 25 per cent in just two weeks. This, combined fiscal package that the Chinese government had promised would follow, lifted oil prices on expectations that demand from the world’s largest purchaser of oil would rise.But a lack of clarity around the fiscal stimulus from Chinese officials, and sluggish export and credit data, has led the initial spike to peter out, putting downward pressure on the price.“The price of oil has been volatile in recent weeks, as it gets jostled around by news flow surrounding the Middle East crisis,” said Kathleen Brooks, research director at FX broker XTB.“This could hit the FTSE 100’s oil companies, and the energy sector could extend its decline after it was one of the weakest performers [at the start of this week].”The fall in the oil price follows several weeks. which rose the likelihood of a regional conflict rose after Israel’s ground invasion in Lebanon and Iran’s decision to launch an air strike comprising 200 missiles into Israel.Brent crude peaked at $77.14 a barrel on 7 October, after Joe Biden said that the US was discussing with Israel whether it would support an Israeli retaliation that targeted oil refineries.Asked by reporters in early October whether the US would back Israel hitting Iran’s oil facilities in a strike, Biden said: “We’re in discussion of that.”Commenting on the fall off in oil prices, David Mirzai, energy analyst at corporate finance shop SP Angel, told City AM: “An Israeli attack on Iranian oil facilities might provoke an Iranian attack against Israeli gas production, which has the potential to create a new energy crisis.“Chinese stimulus news also disappointed those market participants looking for a boost to global oil demand.”
Oil Market Dips Amid Eased Supply Fears and Lower Demand Forecasts - The crude market continued to sell off on Tuesday on a report suggesting that Israel would not strike Iranian oil facilities, easing fears of a supply disruption. The market was also pressured by weaker demand forecasts. The Washington Post reported that Israel’s Prime Minister said Israel was willing to strike Iranian military targets and not its oil or nuclear facilities in retaliation for Iran’s October 1st missile attack. Also, the IEA was the latest agency to cut its 2024 world oil demand growth forecast, cutting its forecast by 40,000 bpd to 860,000 bpd. The oil market continued to sell off overnight following Monday’s steep decline in the post settlement period. It posted a high of $72.12 and sold off to a low of $69.71 early in the morning as it retraced more than 62% of its move from a low of $64.61 to a high of $78.46. However, it later retraced some of its losses and traded in a sideways trading range during the remainder of the session. The November WTI contract settled down $3.25 at $70.58 and the December Brent contract settled down $3.21 at $74.25. Meanwhile, the product markets ended the session in negative territory, with the heating oil market settling down 8.65 cents at $2.1877 and the RB market settling down 7.09 cents at $2.0377. The Washington Post reported that Israel’s Prime Minister Benjamin Netanyahu told the Biden administration that it was willing to strike military targets rather than oil or nuclear facilities in Iran. Later, Israel said it was weighing U.S. warnings against striking Iran’s energy sites but will act on its own assessments.The IEA further cut its global oil demand growth forecast for this year citing weakness in China and said the market was heading for a sizeable surplus in 2025 in the absence of a major supply disruption. The IEA cut its 2024 world oil demand growth forecast to 860,000 bpd from a previous forecast of 900,000 bpd. The agency now expects Chinese demand to grow by only 150,000 barrels per day in 2024, after consumption fell by 500,000 bpd in August compared with the same month last year, a fourth consecutive month of declines. The IEA however raised its 2025 world oil demand growth forecast to 1 million bpd compared with a previous forecast of 950,000 bpd. In regards to the Iran-Israel tension, it stands ready to act if needed. The IEA’s public oil stocks are over 1.2 billion barrels. It also added that OPEC+’s spare production capacity stands at historic highs.Axios reported that U.S. Secretary of State Antony Blinken and Defense Secretary Lloyd Austin said Israel must take urgent steps to improve the humanitarian situation in Gaza to avoid legal action involving U.S. military aid.Hezbollah’s deputy chief Naim Qassem said the group would inflict “pain” on Israel but he also called for a ceasefire as a conflict continues between them in south Lebanon. On Monday, Prime Minister Benjamin Netanyahu said Israel would continue to attack Hezbollah “without mercy, everywhere in Lebanon – including Beirut”.
Oil plunges 4% as Iran supply disruption concerns ease, demand outlook weakens (Reuters) - Oil prices tumbled more than 4% to a near two-week low on Tuesday due to a weaker demand outlook and after a media report said Israel would not strike Iranian nuclear and oil sites, easing fears of a supply disruption.Brent crude futures settled down $3.21, or 4.14%, at $74.25 a barrel. West Texas Intermediate futures finished down $3.25, or 4.4%, at $70.58 a barrel.Both benchmarks had earlier fallen by $4, reaching their lowest since the beginning of October, after settling about 2% lower on Monday."We're seeing an unwinding of the war premium we built up last week," . "What we're seeing, it's not really about supply, it's about the risk to supply and demand." Brent and WTI are down about $5 so far this week, nearly wiping out cumulative gains made after investors became concerned Israel could strike Iran's oil facilities in retaliation for Tehran's Oct. 1 missile attack. Israeli Prime Minister Benjamin Netanyahu told the United States that Israel was willing to strike Iranian military targets and not nuclear or oil ones, the Washington Post reported late on Monday. Both the Organization of the Petroleum Exporting Countries and the International Energy Agency this week cut their forecasts for global oil demand growth in 2024, with China accounting for the bulk of the downgrades. OPEC has projected a much stronger expansion of global demand for the year than the IEA. But its "run of lower adjustments is something of an admission of wishful thinking," said John Evans at oil broker PVM. OPEC and its allies, known as OPEC+, may change production plans for late this year, said Andrew Lipow, president of Lipow Oil Associates. "I think OPEC+ is going to defer raising production later this year," Current crude prices are below levels needed for many of those countries to meet their national budgets, Lipow added.
Recent Forecasts of Less Oil Demand Growth - The oil market on Wednesday traded in negative territory for much of the session as it remained pressured by an easing of fears of a supply disruption and recent forecasts of less oil demand growth. Oil prices remained lower in response to a Washington Post report that Israel would not strike Iranian oil and nuclear sites, although Israel later stated that it would make its decision according to its own national interest. The crude market posted a high of $71.31 in overnight trading before it sold off to a low of $69.64 by mid-day. The market later settled in a sideways trading pattern as it positioned itself ahead of the release of the weekly petroleum stocks reports later on Wednesday and Thursday morning. The November WTI contract ended the session down 19 cents at $70.39 and the December Brent contract ended the day down 3 cents at $74.22. The product market ended the session in mixed territory, with the heating oil market settling down 1.3 cents at $2.1747 and the RB market settling up 26 points at $2.0403. Iran’s state atomic energy agency spokesperson, Behrouz Kamalvandi, said the probability of an Israeli attack on Iran’s nuclear sites remains low but any potential damage would be “quickly compensated”. The Iranian spokesperson added that the U.N. nuclear watchdog and the international community should condemn any threat or attack on nuclear sites. In a statement on Tuesday, Israel’s Prime Minister Benjamin Netanyahu’s office said that Israel would listen to the United States but would decide its actions according to its own national interest. The statement was attached to a Washington Post article which said Israel’s Prime Minister had told President Joe Biden’s administration that Israel would strike Iranian military targets, not nuclear or oil targets.Iran’s IRNA news agency reported that Iranian authorities are working on controlling an oil spill that was first reported on Sunday four miles off Iran’s Kharg Island, its top export terminal in the Persian Gulf. Meanwhile, the Tasnim news agency reported that the leak happened on subsea pipelines.PDVSA reported lightning during a recent thunderstorm caused a fire that destroyed a crude oil storage tank at the Las Salinas terminal located on the eastern shore of Lake Maracaibo. The tank reportedly had a 75,000 barrel capacity.Trading sources and analysts said a resumption of Libyan crude output after a political crisis over the central bank cut the OPEC member’s exports to a four-year low, has led to a surplus in crude supplies in Europe, forcing competing sellers to cut their prices.IIR Energy said U.S. oil refiners are expected to shut in about 1.01 million bpd of capacity in the week ending October 18th, increasing available refining capacity by 77,000 bpd. Offline capacity is expected to fall to 819,000 bpd in the week ending October 25th.
U.S. crude oil falls below $71 per barrel, continuing sell-off - U.S. crude futures edged lower Wednesday to close below $71 per barrel, after selling off steeply in the previous session on reports that Israel will not attack Iran's oil facilities.The U.S. benchmark tumbled more than 4% on Tuesday after Israel told the U.S. that it will limit its retaliatory strikes to military targets in Iran, senior Biden administration officials told NBC News.Crude oil prices have given up most of the gains made in the wake of Iran's Oct. 1 ballistic missile attack on Israel, as fears of an oil supply disruption in the Middle East have eased. Here are Wednesday's closing energy prices:
- West Texas Intermediate November contract: $70.39 per barrel, down 19 cents, or 0.27%. Year to date, U.S. crude oil has fallen nearly 2%.
- Brent December contract: $74.22 per barrel, down 3 cents, or 0.04%. Year to date, the global benchmark has declined more than 3%.
- RBOB Gasoline November contract: $2.0403 per gallon, up 0.13%. Year to date, gasoline has decreased nearly 3%.
- Natural Gas November contract: $2.367 per thousand cubic feet, down 5.24%. Year to date, gas has pulled back nearly 6%
API Reports Across-The-Board Inventory Draws -Oil prices dipped very marginally today (with WTI holding above $70), down for the fourth day in a row as traders focused on an uncertain demand outlook - particularly from China, the world's largest crude importer.Additionally, traders have "largely priced in the Middle East tensions," and the base-case scenario for many of them is that there will be a limited attack on Iranian energy facilities, if any, from Israel, Naeem Aslam, chief investment officer at Zaye Capital Markets, told MarketWatch.However, "the fact is that we are looking at a situation where two countries are attacking each other directly," he added."[It] is a very serious situation because currently the U.S. is very much mediating the matter and tensions are incredibly high on both sides.""On the demand side, market participants are looking for clearer signals regarding China's fiscal policy, as uncertainties about its economic recovery affect oil-demand expectations," said Christopher Tahir, senior market strategist at Exness, in emailed comments. "Both the Organization of the Petroleum Exporting Countries and the International Energy Agency have lowered their forecasts for global oil-demand growth in 2024, mainly due to expected changes in China's consumption," he noted.For now, the recent hurricanes are playing havoc with any analysis of the real-time supply/demand regime based on API/DOE data.API
- Crude -1.58mm (+1.9mm exp)
- Cushing +410k
- Gasoline -5.93mm (-2.0mm exp)
- Distillates -2.67mm (-2.2mm exp)
After the large gasoline draw the prior week (and big crude build), the effect of Hurricanes Helene and Milton continue to ripple through physical energy markets. API reports major product draws and a surprise crude draw (build expected) last week...
WTI Holds Above $70 After Large Inventory Draws, Record US Production -- Oil prices continue to tread water, with WTI holding trading a very narrow band between $70 and $71 - unaffected by API's reported draws last night - as traders weigh uncertain demand outlook with potential supply disruptions.Additionally, traders have "largely priced in the Middle East tensions," and the base-case scenario for many of them is that there will be a limited attack on Iranian energy facilities, if any, from Israel, However, "the fact is that we are looking at a situation where two countries are attacking each other directly," he added."[It] is a very serious situation because currently the U.S. is very much mediating the matter and tensions are incredibly high on both sides.""On the demand side, market participants are looking for clearer signals regarding China's fiscal policy, as uncertainties about its economic recovery affect oil-demand expectations," ."Both the Organization of the Petroleum Exporting Countries and the International Energy Agency have lowered their forecasts for global oil-demand growth in 2024, mainly due to expected changes in China's consumption," he noted.For now, the recent hurricanes are playing havoc with any analysis of the real-time supply/demand regime based on API/DOE data. DOE:
- Crude -2.19mm (+1.9mm exp)
- Cushing +108k
- Gasoline -2.20mm (-2.0mm exp)
- Distillates -3.53mm (-2.2mm exp) - biggest draw since March 2024
Crude stocks fell more than expected according to the official data and products saw significant drawdowns (while stockpiles at the Cushing hub inched off tank bottoms)... (Graphics Source: Bloomberg) US gasoline inventories dropped to the lowest in about two years! That comes as weekly gasoline demand plummeted by the most this year. Demand surged ahead of Hurricane Milton’s arrival and it’s natural we see that normalizing now.
IEA Predicts End to Oil & Gas Demand Growth Before 2030 -Oil prices are little changed in Thursday’s intraday sessions after they tumbled more than 4% on Tuesday to a near two-week low on easing Iranian supply disruption fears. Brent crude for December delivery was down 0.3% to trade at $74.12/barrel at 12.50 pm ET while WTI crude for November delivery remained unchanged at $70.36/barrel. According to commodity analysts at Standard Chartered, the prevailing tone of market sentiment, particularly among the more speculative traders, remains overwhelmingly bearish, on par with that in late 2008 at the start of the Global Financial Crisis. A big part of the bearishness has been triggered by ongoing oversupply and weak demand concerns, with the leading energy agencies issuing widely divergent oil market predictions. For instance, the International Energy Agency (IEA) sees OPEC crude oil output 700kb/d higher in 2025, OPEC+ (also known as Declaration of Cooperation, DoC) crude oil output 967kb/d higher and total DoC liquids output 1.323mb/d higher. In contrast, OPEC Secretariat figures--the average of seven secondary-source assessments are closer to those by the U.S. Energy Information Administration (EIA) rather than the IEA estimates. And now the International Energy Agency (IEA) has stoked the flames further by predicting that global demand for all fossil fuels will stop growing this decade at a time when supplies of oil and LNG are poised to continue growing. Obviously, this is highly bearish for oil and gas prices. On a brighter note, the world’s leading energy watchdog says this development will come as a major boon for consumers because electricity prices will start declining as renewables play a bigger role in our generation mix.“The world is set to enter a new energy market context in the second half of this decade because underlying market balances for oil and gas are easing. Bar major geopolitical conflicts, we will be entering a period where prices will see significant downward pressures,” IEA Executive Director Fatih Birol said in an interview.According to IEA, electricity use will increase six times faster than total energy demand during the coming 10 years while electric vehicles will account for 50% of new car sales worldwide by 2030, up from 20% currently. IEA has predicted that in 2030, the levelized cost of electricity (LCOE) of solar PV with storage in the U.S. will clock in at $45/MWh, considerably lower than $70/MWh by natural gas.“In energy history, we’ve witnessed the Age of Coal and the Age of Oil – and we’re now moving at speed into the Age of Electricity,” said Birol.Other renewable energy bulls support IEA’s views. According to the International Renewable Energy Agency (IRENA), renewable energy reduces exposure to volatile fossil-fuel import bills; lowers average electricity system costs, and avoids the damaging impacts of high electricity prices on consumers and industry. Similar to IEA, IRENA has predicted that electricity generated by solar PV, concentrated solar power (CSP), onshore wind and offshore wind will be considerably cheaper than electricity generated using fossil fuels by 2030.
The Crude Market Trended Lower as it Waits for Developments in the Middle East - The crude market on Thursday continued to trend lower, posting yet another low as it continued to wait for further developments in the Middle East. The market was also pressured in light of some less than supportive news regarding China’s housing sector plan that is not expected to induce enough investment demand to support its economy. The oil market posted a high of $71.11 in overnight trading and traded mostly sideways in light of the APIs showing draws across the board. The EIA’s oil inventory report also showed draws in crude stocks of 2.2 million barrels, compared with expectations of a build. The crude market posted a low of $69.44 in afternoon trading after Israel said that Hamas leader Yahya Sinwar, the architect of the October 7th attack on Israel last year, has been killed in Gaza. The November WTI contract later bounced off that level and settled up 28 cents at $70.09, while the December Brent contract settled up 23 cents at $74.45. The product markets ended the session in positive territory amid the draws in stocks, with the heating oil market settling up 1.98 cents at $2.1945 and the RB market settling up 65 points at $2.0468. The EIA reported that U.S. weekly oil field production increased by 100,000 bpd to a record 13.5 million bpd during the week ending October 11th. It reported gasoline stocks fell by 2.2 million barrels on the week, with inventories in the Gulf Coast falling to the lowest level since March 2021JP Morgan forecast global oil consumption will increase by 7.1 million bpd or 7% between 2023 and 2035 to 108.5 million bpd.The U.S. Department of Defense said U.S. military forces, including U.S. Air Force B-2 bombers, conducted precision strikes against five underground weapons storage locations in Houthi-controlled areas of Yemen. It said the strike was designed to further degrade the Houthis’ capability to continue their destabilizing behavior and to protect and defend U.S. forces and personnel.The commander of Iran’s Revolutionary Guards, Hossein Salami, warned Israel against attacking the Islamic Republic in retaliation for its missile attack on October 1st, as the Israeli military stepped up its offensive in Lebanon against Tehran-backed Hezbollah. Meanwhile, Hezbollah member of parliament Hassan Fadlallah said the armed group would keep fighting, but he reiterated its leaders are carefully coordinating with Lebanon’s speaker of parliament in efforts to reach a ceasefire.Colonial Pipeline Co is allocating space for Cycle 61 shipments on Line 1, its main gasoline line from Houston, Texas to Greensboro, North Carolina. The current allocation is for the pipeline segment north of Collins, Mississippi. Colonial Pipeline Co is also allocating space for Cycle 61 shipments on Line 2, which carries distillates from Atlanta, Georgia to Nashville, Tennessee.The EPA reported that the U.S. generated fewer renewable blending credits in September versus the month prior. It reported that about 1.21 billion ethanol (D6) blending credits were generated last month, compared with about 1.32 billion in August. Credits generated from biodiesel (D4) blending fell to 671 million in September from 724 million in October.
Oil prices edge higher on US crude stockpiles draw (Reuters) - Oil prices inched up on Thursday, bouncing back from two-week lows, after data showed falling crude and fuel inventories in the United States. Brent crude futures settled at $74.45 a barrel, up 23 cents, or 0.31%. U.S. West Texas Intermediate crude futures settled up 28 cents, or 0.4%, at $70.67 a barrel.Both benchmarks had settled down on Wednesday, closing at their lowest levels since Oct. 2 for a second day in a row, after OPEC and the International Energy Agency cut demand forecasts for 2024 and 2025. U.S. crude inventories fell by 2.2 million barrels to 420.6 million barrels in the week ended Oct. 11, the Energy Information Administration said on Thursday, compared with analysts' expectations in a Reuters poll for a 1.8 million-barrel rise. Gasoline and distillate inventories also fell last week. " This tells me operational efficiencies are still improving," "Markets are normalizing." Oil output in North Dakota, the third-largest producing state in the U.S., fell by around 500,000 barrels through October, after wildfires crossed into key producing counties this month, a state regulator said.The European Central Bank cut interest rates for the third time this year on Thursday, indicating that inflation in the euro zone is now increasingly under control and the economic outlook has worsened.That decision is expected to boost oil prices as it makes borrowing cheaper, potentially boosting demand.But fears that a retaliatory attack by Israel on Iran for the latter's Oct. 1 missile strike could disrupt oil supplies kept prices steady, though uncertainty remains over how the conflict in the Middle East will develop."The country's forthcoming retaliatory measures against Iran are still not clear," Evans added that the Middle East "will certainly provide enough reason to move oil prices again soon enough and investors today will also be preoccupied with an abundance of financial data."The dollar jumped to an 11-week high on Thursday, also offsetting some gains. A firmer U.S. currency can hurt demand for dollar-denominated oil from buyers using other currencies.Investors are also waiting for further details from China on broad plans announced on Oct. 12 to revive its ailing economy, including efforts to shore upthe ailing property market.
Oil steadies, but on track for biggest weekly loss in over a month - Oil futures steadied on Friday after data showed a fall in crude and fuel inventories in the United States and the emergence of more fiscal stimulus to boost China's economy, though prices were headed for their biggest weekly loss in more than a month. Brent crude futures gained 23 cents, or 0.3%, to $74.68 a barrel by 0840 GMT, while U.S. West Texas Intermediate crude was at $70.96 a barrel, up 29 cents, or 0.4%. Brent and WTI are set to fall about 6% this week, their biggest weekly decline since Sept. 2, after OPEC and the International Energy Agency cut their forecasts for global oil demand in 2024 and 2025. Fears also eased about a potential retaliatory attack by Israel on Iran that could disrupt Tehran's oil exports. "Positive U.S. economic data has helped alleviate some growth concerns, but market participants continue to monitor potential demand recovery in China following recent stimulus measures," said Hani Abuagla, senior market analyst at XTB MENA. U.S. retail sales increased slightly more than expected in September, with investors still pricing in a 92% chance for a Federal Reserve rate cut in November. Elsewhere, Energy Information Administration (EIA) figures showed U.S. crude oil, gasoline and distillate inventories fell last week. Meanwhile, China's central bank rolled out two funding schemes that will initially pump 800 billion yuan ($112.38 billion) into the stock market through newly-created monetary policy tools. The latest policy news came at the same time that data showed slow third-quarter economic growth for the world's top oil importer, though consumption and industrial output figures for September beat forecasts. China's refinery output also declined for the third straight month as weak fuel consumption and thin refining margins curbed processing. Markets, however, remained concerned about possible price spikes given simmering Middle East tensions, with Lebanon's Hezbollah militant group saying on Friday it was moving to a new and escalating phase in its war against Israel after the killing of Hamas leader Yahya Sinwar. "Although the U.S. would like to believe that the killing of the leader is an opportunity to resume serious and meaningful peace talks, it seems more like a wishful thinking than a realistic alternative,"
U.S. oil prices log biggest weekly drop in a year as demand concerns persist - Crude futures finished with a loss on Friday, just a day after posting a gain for the first time in five days, with prices of the U.S.-traded benchmark ending below $70 a barrel and marking its worst weekly performance in about a year. Concerns about slowing demand out of China and some signs of easing geopolitical risks in the Middle East continued to weigh on the commodity, analysts said, leading U.S. and global benchmark crude futures to their lowest settlements of the month so far.
- -- West Texas Intermediate crude for November delivery CL.1 CLX24 fell by $1.45, or nearly 2.1%, to settle at $69.22 a barrel on the New York Mercantile Exchange. Front-month prices ended 8.4% lower for the week - the largest weekly loss since the week ended Oct. 6, 2023, according to Dow Jones Market Data.
- -- December Brent crude, the global benchmark, shed $1.39, or 1.9%, to $73.06 a barrel. It was down 7.6% for the week, marking its worst weekly performance since the week ended Sept. 6. Brent and WTI both settled at their lowest since Sept. 30.
- -- November gasoline fell 2.2% to $2 per gallon, ending down 7% for the week, while November heating oil fell by 1.9% to $2.15 a gallon, posting a weekly loss of 8.2%.
- -- Natural gas for November delivery declined by 3.8% to $2.26 per million British thermal units, for a weekly loss of 14.2%.
"The key driver for this week's decline in oil has been the geopolitical risk premium unwinding ... as the oil market waits to see if there is incremental escalation between Israel and Iran and tries to discount if oil production will be impacted," Going forward, the main focus for oil "will be Iranian-Israel dynamics, the U.S. election and [its] implications on Ukraine-Russia and [the] Middle Eastern risk premium, supply growth and demand outlook, especially as it pertains to China," Oil traders reacted to overnight news, including a report showing that China's economy grew by 4.6% during the third quarter, the slowest pace in 18 months. This helped revive fears that the slowdown in the world's second-largest economy might continue to weigh on oil demand, given that China is the world's largest importer of the commodity. " We will see what recent Chinese stimulus actions will do to drive demand improvement in the near term," . "I believe we won't see a recovery in demand in China" until the first quarter, he added, as global refining cracks are weak and will force refinery-run cuts in the near term in China, which could keep demand for crude lower. "That being said, with new stimulus measures, perhaps the worst of negative demand data points are behind us and we can see acceleration in the near term," he said. Meanwhile, confirmation by Israeli authorities that the IDF had killed Hamas leader Yahya Sinwar boosted some expectations that the conflict in Gaza might soon come to an end - potentially easing tensions in the Middle East, which continued to sap some of the risk premium that had boosted prices earlier this month. Polyak said, however, that any speculation on the killing of Sinwar in terms of whether it makes a cease-fire more or less likely is "just hearsay," with observers still waiting to see how Israel will respond to Iran's missile attack on Israel more than two weeks ago. Against that backdrop, oil prices have declined, although one strategist noted that the pace of that decline has slowed from earlier this week. "The good news for the bulls is that the selling appears to have lost some momentum," said David Morrison, senior market analyst at Trade Nation. However, technical indicators suggest momentum will likely continue to push prices lower, Morrison added. Prices of U.S.-traded crude fell around 8% this week, including a drop of roughly 4% on Tuesday, which followed reports that Israel wouldn't target Iranian oil infrastructure in a planned retaliatory strike.
Iran Says It Halted Indirect Talks With the US in Oman - Iranian Foreign Minister Abbas Araghchi said Monday that Iran had halted indirect talks with the US via Omani mediators amid anticipation of a US-supported Israeli attack on Iranian territory.“Currently, we do not see any ground for these talks, until we can get past the current crisis,” Araghchi said during a visit to Oman, according to Iran’s PressTV.When asked if he had sent any messages to the US while visiting Oman, Araghchi said, “During the trip, no message has been sent to other countries.”Earlier this year, Axios reported that the US and Iran held indirect talks in Oman to avoid regional escalations. “Oman has always contributed greatly to solving the regional problems, and regarding Iran and the US, it has always tried to play a positive role in conveying a message or preparing the ground for negotiations,” Araghchi said.On October 3, Al Jazeera reported that Iran did send one message to the US: that its phase of “self-restraint” is over and that any Israeli attack on its territory would provoke a major response.Earlier in the year, Iran was carefully working to avoid a direct clash with the US. In April, when Iran responded to the Israeli bombing of the Iranian consulate in Damascus, it gave a 72-hour notice before it fired missiles and drones at Israel.Iran did not provide any notice when it fired nearly 200 ballistic missiles at Israel on October 1, which came in retaliation for a string of Israeli escalations in the region, including the assassination of Hamas’s political chief, Ismail Haniyeh, in Tehran.Israel’s attack on Iran could provoke a major war that would involve the US, as the US is vowing to defend Israel and is deploying a THAAD missile system and about 100 troops to Israel for that purpose. The US may also support the expected Israeli attack, either through direct military action or by providing intelligence.
Report: Netanyahu Approves Set of Targets To Hit Inside Iran - -Israeli Prime Minister Benjamin Netanyahu has approved a set of targets for Israel to strike inside Iran, ABC News reported on Wednesday, citing an Israeli source.CNN also reported that Israel’s plans to attack Iran were “ready.” Neither report gave a timeline nor provided any details about what targets Israel plans to hit. Israel is expected to strike before the US presidential election on November 5.The US has been coordinating with Israel on its plans to strike Iran following the Iranian missile barrage that was fired at Israeli territory on October 1, which was retaliation for a string of Israeli escalations in the region.The Washington Post reported this week that Netanyahu told President Biden in a phone call last week that Israel would target military sites in Iran, not oil or nuclear facilities. However, in response to the report, Netanyahu’s office said in a statement, “We listen to the opinions of the United States, but we will make our final decisions based on our national interests.”US and Israeli officials believe an attack on Iran could lead to a full-blown war. Iran has warned that it will launch a “decisive” response if Israel attacks.“Iran, while making all-out efforts to protect the peace and security of the region, is fully prepared for a decisive and regretful response to any adventures,” Iranian Foreign Minister Abbas Araghchi told UN chief Antonio Guterres in a phone call on Wednesday.The US may support the Israeli attack on Iran, either through direct military action of its own or by providing intelligence. The US is vowing to defend Israel from any potential consequences of a strike on Iran anddeployed a THAAD missile defense system to Israel, making the battery, and the 100 US troops sent to operate it potential targets of Iranian missiles.
Report: Israel Plans To Strike Iran Before US Presidential Election - Israel is planning to launch its expected attack on Iran before the US presidential elections are held on November 5, The Washington Post reported on Monday.An unnamed official told the Post that waiting any longer could be perceived as weakness and that the planned strike “will be one in a series of responses” to the Iranian ballistic missile barrage that was fired at Israel on October 1, which came in response to a series of Israeli escalations.A source close to Israeli Prime Minister Benjamin Netanyahu told the Postthat while Israel was coordinating with the US to some extent on its plans to attack Iran, it wouldn’t wait for a green light from the US. “The person who will decide on the Israeli response to Iran will be [Netanyahu],” the official said.The report said that when Netanyahu spoke with President Biden last week, he said that Israel planned to hit military infrastructure inside Iran, not oil or nuclear facilities. The conversation was a factor in Biden’s decision to deploy a Terminal High-Altitude Area Defense (THAAD) missile battery to Israel.The Pentagon announced Sunday that it was deploying the THAAD and about 100 troops to operate it “to support the defense of Israel.” Iran has vowed that it would respond to any Israeli attack on its territory, and the US deployment makes US troops a potential target of Iranian missiles.The Post report noted how the Biden administration has been fully supportive of Israel’s invasion of Lebanon and its dramatic escalation of airstrikes against the country. A former Israeli official said the US was “giving Israel and the Netanyahu government a bear hug, but for Hezbollah.”“It is sending THAAD and promising all kinds of weapons that we need to finish off Hezbollah, saying that we can deal with Iran later,” the former official added. US military and diplomatic support for Israel over the past year has fueled the genocidal slaughter in Gaza and emboldened Israeli escalations across the Middle East, and has now brought the US and Iran to the brink of war. Brown University’s Costs of War project recently released a report that supporting Israel has cost the US $22.76 Billion in just one year.
Iran’s Oil Tankers Flee Biggest Export Terminal Fearing Israeli Attack - Iranian oil tankers have moved away from Kharg Island, Iran’s biggest oil export terminal, amid fears of an imminent Israeli attack on the most important crude export infrastructure in Iran. Satellite images and tanker tracking companies have detected the major exodus of Iranian tankers away from Kharg Island, which handles about 90% of Iran’s all oil exports, CNBC reports.“The National Iranian Tanker Company (NITC) appears to be fearing an imminent attack by Israel,” TankerTrackers.com posted on social media platform X late on Thursday.“Their empty VLCC supertankers vacated the country's largest oil terminal, Kharg Island, yesterday,” TankerTrackers.com said.The vessel-tracking service noted that “crude oil loadings continue, but all of the extra vacant shipping capacity has been removed from the anchorage of Kharg Island.” “This is the first time we see anything like this since the 2018 sanctions round,” TankerTrackers.com said.Satellite imagery captured two weeks ago by the European Space Agency’s Copernicus Sentinel-1 mission showed a number of very large crude carriers in the waters around Kharg Island, CNBC says.But satellite images of the same area from October 3 showed that no tankers can be seen around Iran’s most important oil export terminal, according to CNBC.The removal of vacant shipping capacity from Kharg Island suggests that Iran could be bracing for an Israeli attack on its oil infrastructure.The oil market is also awaiting the Israeli response to the Iranian missile attack on Israel earlier this week. Oil prices were up by 1.5% early on Friday and on track for a strong weekly gain amid reignited tensions in the Middle East.Most analysts say that the OPEC spare capacity, concentrated in Saudi Arabia and the UAE, would be enough to compensate for an Iranian loss of supply.An even more significant disruption to supply from the Middle East could lead to triple-digit oil prices. But analysts currently believe attacks on oil infrastructure in other producers in the region or the closure of the Strait of Hormuz are low-probability events.
Iran Reports New Oil Spill Near Kharg Island - A pipeline at Iran's key Kharg Island complex has suffered a leak at a position about four miles offshore, according to state news agency IRNA. IRNA reported that the pipeline leak was spotted over the weekend and that response assets have been deployed. A drone overflight survey identified two more slicks, the agency said, and these additional plumes are also being addressed. One response vessel, the Naji 23, was dispatched to the scene to use "side boom" cleanup technology. An image provided by IRNA appeared to show the vessel operating with dispersant sprayer booms on both sides. "All measures are being taken to prevent the spread of pollution and complete cleaning of the area, and the situation in the area is being continuously monitored," said regional director general of ports Mohamed Shakibi Nasab. The area sees frequent spills from the terminal's infrastructure and its transfer operations, which handle the overwhelming majority of Iranian oil exports. In a social media post, energy shipping consultancy TankerTrackers.com noted that these spills are routinely visible from space, even in outdated satellite imagery. The latest oil release is so routine that "it's called Wednesday," the company jested. The leak has drawn speculation about the possibility of covert action against Iranian energy interests. Israel is widely expected to strike Iran in retaliation for last month's Iranian missile attack, which Tehran launched in retaliation for Israeli operations against the Iranian proxy group Hezbollah. According to U.S. officials, the Israeli government has pledged not to attack Iran's oil infrastructure, which produces about three percent of global crude output.
Iran Rushes To Contain Oil Spill Near Key Oil Export Terminal In Persian Gulf - Iranian authorities have been working tirelessly to contain an oil spill caused by a subsea pipeline leak about four miles off the coast of Kharg Island, a crucial oil export terminal in the Persian Gulf. The spill was first detected over the weekend and was attended by local authorities who have initiated cleanup operations to prevent further environmental damage. Iran’s state-run IRNA news agency reports that the drones involved in the cleanup operation have detected two more oil slicks in the area, initiating an expanded cleanup effort. The Naji 23, a specialized vessel, has been dispatched to the location to contain and remove the oil using a side boom technology and dispersant sprayers. Mohamed Shakibi-Nasab, the regional director general of ports, confirmed that all necessary measures are being taken to prevent the spread of pollution and that the situation is being closely monitored. Kharg Island is a crucial hub for Iran’s oil exports, with the terminal handling over 90% of the country’s crude oil shipments. The country produces over 3.2 million barrels of oil daily, accounting for roughly 3% of global supply. While the exact cause of the oil leak is unknown, there has been no sign of any disruption to oil exports from the terminal. The incident has raised concerns about any possible sabotage or covert action against Iran’s oil infrastructure. Tensions in the region have escalated after an Iranian missile attack earlier this month. Israeli authorities are reportedly planning a retaliation strike, but U.S. sources say Israel has agreed not to target Iran’s oil facilities directly.
US expands sanctions against Iran's oil industry after attack on Israel— The United States hit Iran's oil and petrochemicals sectors with fresh sanctions Friday in response to Tehran's October 1 attack against Israel, designating dozens of new companies and firms. In a statement Friday, the Treasury Department said it was going after Iran's so-called "shadow fleet" of ships involved in selling Iranian oil in circumvention of existing sanctions, designating 10 companies and 17 vessels as "blocked property" over their involvement in "shipments of Iranian petroleum and petrochemical products." The State Department announced it was sanctioning an additional six firms and six ships for "knowingly engaging in a significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran." The sanctions form part of the U.S. response to Iran's attack, in which it launched some 200 ballistic missiles against Israel in retaliation for the killing of Tehran-backed militant leaders and a general from Iran's Revolutionary Guards. Israel has said its response to Iran's second direct attack against its territory this year would be "deadly, precise, and surprising." U.S. President Joe Biden told reporters last week that Israel should consider "other alternatives than striking oil fields," amid reports it was planning to do so. "In response to Iran's attack on Israel, the United States is taking decisive action to further disrupt the Iranian regime's ability to fund and carry out its destabilizing activity," Treasury Secretary Janet Yellen said in a statement. "Today's sanctions target Iranian efforts to channel revenues from its energy industry to finance deadly and disruptive activity — including development of its nuclear program, the proliferation of ballistic missiles and unmanned aerial vehicles," she added. Secretary of State Antony Blinken said Washington had made clear after the October 1 attack that Tehran would face consequences. "To that end, we are taking steps today to disrupt the flow of revenue the Iranian regime uses to fund its nuclear program and missile development, support terrorist proxies and partners, and perpetuate conflict throughout the Middle East," he said in a statement.
US expands sanctions to Iran's 'ghost fleet' of oil tankers (Reuters) - The United States expanded sanctions against Iran's petroleum and petrochemical sectors on Friday in response to an Iranian missile attack on Israel, the administration of President Joe Biden said. The U.S. move adds petroleum and petrochemicals to an executive order that targets key sectors of Iran's economy with the aim of denying the government funds to support its nuclear and missile programs. "The new designations today also include measures against the 'Ghost Fleet' that carries Iran’s illicit oil to buyers around the world," Jake Sullivan, the national security adviser, said in a statement. "These measures will help further deny Iran financial resources used to support its missile programs and provide support for terrorist groups that threaten the United States, its allies, and partners." Israel is vowing to respond to Iran's Oct. 1 missile attack, launched in retaliation for Israeli strikes in Lebanon and Gaza and the killing of a Hamas leader in Iran.The U.S. Treasury can now "impose sanctions on any person determined to operate in the petroleum and petrochemical sectors of the Iranian economy," it said in a statement.Biden has said Israel should seek alternatives to attacking Iran's oil fields. Gulf states are lobbying Washington to stop Israel from attacking oil sites because they are concerned their own facilities could come under fire from Tehran's proxies if the conflict escalates, three Gulf sources told Reuters.. The Treasury Department also said it was designating 16 entities and identifying 17 vessels as blocked property, citing their involvement in shipments of petroleum and petrochemical products in support of the National Iranian Oil Company. Concurrently, the State Department took steps to disrupt the money flow into Iran's weapons programs and support for "terrorist proxies and partners." It imposed sanctions on six entities involved in Tehran's petroleum trade and identified six ships as blocked property. Iran's oil exports have risen under Biden's tenure as Iran succeeds in evading sanctions and as China has become Iran's major oil buyer. The Eurasia Group risk consultancy said on Friday the U.S. could cut Iran's oil exports through tighter enforcement of previously imposed sanctions, for instance through satellite imaging for stricter monitoring of tankers that have turned off transponders. The U.S. could also pressure countries to support enforcement efforts such as Malaysia, Singapore and the United Arab Emirates, it said. But that approach "would require strong diplomatic pressure on two partners, Malaysia and UAE, which are both reluctant to support efforts favoring Israel," it said. Tougher enforcement of sanctions would likely require targeting Chinese firms shipping Iranian crude, it said, as China buys nearly 90% of Iran's crude-oil exports.
Iran asks OPEC not to fill the gap from sanctions - Iran has urged OPEC member countries not to take unilateral measures, warning they would undermine the organization's unity. This follows reports that Saudi Arabia has increased oil production to a record level this month. Meanwhile, Tehran is scrambling to find ways to fight US sanctions that limit oil exports and reduce market share for the country. Iranian Oil Minister Bijan Zanganeh called on his UAE counterpart Suhail al-Mazrouei, who holds the OPEC presidency for 2018, for member countries to respect the agreement reached last month. "Any increase in production by member countries that exceeds the level agreed in the OPEC decision, would break the agreement," said Zanganeh, Scan reports. OPEC agreed with Russia and other countries outside the cartel on June 23 to increase production starting in July, and Saudi Arabia promised a slight increase, without giving specific details. The countries agreed to increase production by 1 million barrels per day, after months of output cuts. But since then, sources have indicated that Saudi Arabia has increased production to record levels. According to Reuters sources, the Kingdom is expected to increase production to 11 million barrels per day during July. Iran has repeatedly called on other producers not to increase production, while US sanctions are expected to hit exports. However, Saudi Arabia, which is the Organization's largest producer, appears to have agreed to demands from the United States and major consumers such as India and China to increase production. Washington announced last week that it had asked consumers in Asia and Europe to cut purchases of Iranian oil to zero by November and warned it would not relent on sanctions.
OilRig Exploits Windows Kernel Flaw in Espionage Campaign Targeting UAE and Gulf - The Iranian threat actor known as OilRig has been observed exploiting a now-patched privilege escalation flaw impacting the Windows Kernel as part of a cyber espionage campaign targeting the U.A.E. and the broader Gulf region."The group utilizes sophisticated tactics that include deploying a backdoor that leverages Microsoft Exchange servers for credentials theft, and exploiting vulnerabilities like CVE-2024-30088 for privilege escalation," Trend Micro researchers Mohamed Fahmy, Bahaa Yamany, Ahmed Kamal, and Nick Daisaid in an analysis published on Friday.The cybersecurity company is tracking the threat actor under the monikerEarth Simnavaz, which is also referred to as APT34, Crambus, Cobalt Gypsy, GreenBug, Hazel Sandstorm (formerly EUROPIUM), and Helix Kitten.The attack chains entail the deployment of a previously undocumented implant that comes with capabilities to exfiltrate credentials through on-premises Microsoft Exchange servers, a tried-and-tested tactic adopted by the adversary in the past, while also incorporating recently disclosed vulnerabilities to its exploit arsenal.CVE-2024-30088, patched by Microsoft in June 2024, concerns a case of privilege escalation in the Windows kernel that could be exploited to gain SYSTEM privileges, assuming the attackers can win a race condition.Initial access to target networks is facilitated by means of infiltrating a vulnerable web server to drop a web shell, followed by dropping the ngrok remote management tool to maintain persistence and move to other endpoints in the network.The privilege escalation vulnerability subsequently serves as a conduit to deliver the backdoor, codenamed STEALHOOK, responsible for transmitting harvested data via the Exchange server to an email address controlled by the attacker in the form of attachments.A notable technique employed by OilRig in the latest set of attacks involves the abuse of the elevated privileges to drop the password filter policy DLL (psgfilter.dll) in order to extract sensitive credentials from domain users via domain controllers or local accounts on local machines."The malicious actor took great care in working with the plaintext passwords while implementing the password filter export functions," the researchers said. "The threat actor also utilized plaintext passwords to gain access and deploy tools remotely. The plaintext passwords were first encrypted before being exfiltrated when sent over networks." It's worth noting that the use of psgfilter.dll was observed back in December 2022 in a connection with a campaign targeting organizations in the Middle East using another backdoor dubbed MrPerfectionManager."Their recent activity suggests that Earth Simnavaz is focused on abusing vulnerabilities in key infrastructure of geopolitically sensitive regions," the researchers noted. "They also seek to establish a persistent foothold in compromised entities, so these can be weaponized to launch attacks on additional targets."
Saudi, UAE, Qatar Lobbying DC to Keep Gulf Oil Safe from Israel --As Iran visits Gulf states to scrounge up support in the face of what many believe is an impending strike by Israel, Reuters reports that Saudi Arabia, UAE and Qatar are lobbying Washington to thwart Israel. On Thursday, Iranian Foreign Minister Abbas Araghchi told the media that the country was seeking support from Gulf nations to de-escalate tensions.Diplomatic sources cited by The National described the visit as an attempt to defend Iran’s position in the war and to prevent a wider regional conflict. Speaking to Reuters three unnamed Gulf sources said Saudi Arabia, UAE and Qatar are concerned that Israel will target Iranian oil facilities and that other Gulf assets could also come under fire by Iran or its proxies. All three Gulf countries are refusing to let Israel use their airspace, with Reuters reporting that Tehran warned Riyadh earlier this week that it could not guarantee the safety of the Kingdom's oil facilities in the event of an Israeli attack. "The Iranians have stated: 'If the Gulf states open up their airspace to Israel, that would be an act of war,” Reuters quoted a Saui analyst close to the royal court as saying. On Monday, media reports citing Israeli officials appeared to indicate that a significant counter attack is still coming, and it is expected to target Iranian military sites. The fresh report also lists as likely targets Iranian intelligence sites and officials' offices or headquarters. President Biden has warned against striking Iran's nuclear sites, and even days ago backed off the idea of hitting energy and oil facilities. A full-scale conflict between Israel and Iran could upend the international energy supply and send shock waves throughout the global economy, experts warn.
Full Blown War Could Choke Strait of Hormuz - Tensions are persisting in the Middle East, Aditya Saraswat, Rystad Energy’s Middle East research director, said in a market update sent to Rigzone by the Rystad team on Thursday. “Energy market fundamentals have been largely unaffected to date, but this could change at a moment’s notice,” Saraswat warned in the update. “In a widespread regional war scenario, Iran and Israel’s conflict could severely impact gas exports and lead to delays in oil development projects,” the research director added. “Attacks on key facilities may threaten nearly 1.4 million barrels per day of Iranian production, causing significant supply disruptions,” Saraswat continued. “A full blown war could choke the Strait of Hormuz, risking up to 12 million barrels per day of oil, driving prices up sharply. Asian oil importing nations would face increased costs and disrupted supply chains, heightening market concerns,” the Rystad representative went on to state. Rystad warned in the update that predicting the outcome of rising tensions between Iran and Israel remains challenging. The company added that, if the status quo is maintained, with no direct attacks between the two nations, it expects the conflict to remain largely a proxy war, with no major assaults on critical oil and gas infrastructure such as pipelines, storage facilities, or refineries. Should a “war time scenario” occur, however, Rystad warned in the update that it expects Iran and Israel to engage in an active war, with attacks on upstream facilities, pipelines, and storage units. “Markets are increasingly concerned about such escalations, leading to a 10 percent surge in oil prices from the beginning of October to the $80 per barrel mark this week, although prices have since fallen below $75 per barrel as concerns look to gradually ease and demand outlook weakens,” Rystad said in the update. “Brent crude prices may further be impacted amid recent reports of Saudi Arabia rolling back its voluntary OPEC cuts and a reduction in Libya’s oil production due to internal disturbances,” it added. In a report sent to Rigzone last week, Ole R. Hvalbye, a commodities analyst at Skandinaviska Enskilda Banken AB (SEB), highlighted that the market was “holding its breath, awaiting Israel’s response to Iran’s missile attack”. “Israeli retaliation could range from a limited strike, which might not provoke severe Iranian retaliation, allowing Iran to continue its crude exports to China at approximately two million barrels per day, to more severe attacks potentially provoking Iran to target oil infrastructures in the UAE and Saudi Arabia and to attempt to block the Strait of Hormuz which transports 18 million barrels per day of crude to the global market (20 percent of global oil consumption),” he added. “This blockade could severely constrain supply, spiking oil prices given the already low U.S. crude inventories,” he warned. “Despite the low probability of a worst-case scenario, the global markets remain on edge following the unexpected events like Russia’s invasion of Ukraine,” Hvalbye continued. In a report sent to Rigzone by the Macquarie team last week, Thierry Wizman, Global FX & Rates Strategist at Macquarie Group, warned that “there’s the premise that Iran’s oil infrastructure may be attacked, of course, but there’s also the threat that Iran may deliberately blockade the Strait of Hormuz in response to Israel’s response”. “The prospect that oil prices rise to $100 per barrel is, no doubt, intended to put pressure on Israel to refrain from attacking Iran at all,” he added. In a separate report sent to Rigzone earlier this month, Bloomberg Intelligence analysts said oil prices could move sustainably north of $100 a barrel if Iran’s October 1 missile attack on Israel triggers a retaliatory cycle that targets energy infrastructure or closes the Strait of Hormuz. In a market analysis sent to Rigzone on October 4, Rania Gule, a Senior Market Analyst at XS.com, said “the recent events in the Middle East heighten fears of disruptions to global supply, and such a scenario could lead to a sharp rise in prices, especially if the Strait of Hormuz, a vital artery for global oil flows, is targeted”. “Should the situation escalate into open conflict, oil prices could exceed $100 per barrel in the medium term,” Gule warned.
Iran Readies New Oil Outlet To Bypass the Strait of Hormuz -- Iran is closer to finding a way to circumvent the crucial Strait of Hormuz when it comes to oil exports. The Jask oil terminal, officially opened a few years ago, has seen but limited activity so far. However, recent satellite imagery reveals it has partially filled the facility with crude oil in what is being construed as a significant development in Tehran's oil export strategy. The importance of Jask has increased as of late as tensions with Israel grow. During periods of unrest, Iran has routinely threatened to shut down the Strait of Hormuz, a vital artery for oil shipments for several Middle Eastern producers. Unfortunately for Iran, it also relies on the Strait for its oil exports—but perhaps its leanings on the Strait is about to lighten up. Jask could enable Iran to reduce its reliance on this narrow waterway, freeing up options for the country. Jask has filled to about half capacity, imagery shows, but the facility's challenges remain. The terminal was designed to load up to 1 million barrels per day and store 20 million barrels. However, only one of the three planned loading buoys has been installed, limiting its operational capacity. Kharg Island, Iran's primary oil export hub, has in the past handled three times that volume, maintaining its status as the dominant outlet since the 1960s. The most recent loading activity at Jask occurred from September 9 to 19, 2024, when the Iranian supertanker Dune loaded approximately 2 million barrels of crude. This marks the first significant loading at Jask since its initial trial runs in 2021, according to TankerTrackers.com, a firm specializing in monitoring Iran's oil shipments. The Jask terminal's partial activity may signal a shift in Iran's export strategies, aiming to bolster oil flows while mitigating the risks associated with the Strait of Hormuz.
Israeli Strikes in Lebanon Killed At Least 51 on Saturday - The Lebanese Health Ministry has said that Israeli strikes in Lebanon on Saturday killed at least 51 people and wounded 174.The ministry said that since last October, Israel has killed 2,306 people and wounded 10,698 in Lebanon. The breakdown isn’t clear, but the Israeli bombing campaign has killed many civilians, especially since itdramatically escalated attacks on September 23. Late Saturday, Israel targeted an Ottoman-era market in the southern Lebanese city of Nabatieh that was established in 1910. The attack obliterated the area, with Lebanese Civil Defense officials saying they battled fires in 12 residential buildings and 40 shops in the market.The Lebanese Health Ministry said a total of 10 people were killed by Israeli airstrikes in Nabatieh on Saturday. Elsewhere in southern Lebanon, 14 people were killed. In Mount Lebanon, an area to the north and east of Beirut, at least 22 people were killed.The Biden administration has expressed strong public support for Israel’s offensive in Lebanon, which includes a ground campaign. The administration is calling for Lebanon to hold a presidential election and wants to see Hezbollah’s political wing lose its seats in parliament.
Israeli Tanks Smash Into UN Peacekeeper Base in Southern Lebanon - As the Israeli invasion of Lebanon escalates, it has been reported that on Sunday morning Israeli tanks smashed their way into a UN peacekeeper base in southern Lebanon near Ramia. Exactly why they decided to force their way into a UNIFIL base, which is of course a violation of UN Security Council resolution 1701, is not at all clear. Reports from the ground are that the two Merkava tanks forced their way in while the UNIFIL personnel were in shelters. They demanded that the base shut off all lights. They remained inside the compound for around 45 minutes, and left after the UN filed a protest through liaisons. That wasn’t the end of it, either, as two hours after the Israeli tanks left, they fired an unidentified smoke munition just north of the UN position. The UNIFIL personnel were wearing gas masks, but 15 of them were still reported to have sustained skin irritation or gastrointestinal symptoms when the smoke reach their base. They are receiving medical treatment. This is in addition to around five UN peacekeepers who have been reported injured over the last week since the Israeli invasion of the area. Israeli Prime Minister Benjamin Netanyahu claimed that they are “doing everything in our power” to prevent UN injuries, but added this to demands that the UN immediately withdraw all their peacekeepers from the “danger zone.” The UNIFIL was established in 1978, and was meant to tamp down violence in southern Lebanon. They peacekeepers’ mandate was changed several times to adjust to Israeli invasions of the area, and its mandate was substantially increased to try to restore Lebanese sovereignty to southern Lebanon after the 2006 Israeli invasion. Lebanese PM Najib Mikati has issued a statement today condemning Israeli attacks on the UNIFIL forces, saying it represents a new chapter in Israel not complying with international norms.
Israeli Tank Attacks UN Peacekeepers Watchtower in Southern Lebanon - Adding to the ongoing tensions with the international community during the ongoing invasion of southern Lebanon, an Israeli Merkava tank was reported today to have attacked an observation tower belonging to UNIFIL peacekeepers near the town of Kfar Kela.There were no casualties reported in this particular Israeli attack on the peacekeepers, but the UNIFIL did report that two cameras on the site were destroyed by the tank fire and that the watchtower itself sustained damage.The official UNIFIL statement condemned the attack, warning that personnel and property of the peacekeeping forces need to be treated asinviolable at all times.On Sunday, Israeli tanks smashed into the peacekeeper base near Ramia. It was not clear why they did so, but it came amid Prime Minister Netanyahu’s demand that the UN withdraw all troops from Lebanon. Israel also fired smoke munitions near that base, and over a dozen peacekeepers were sickened by exposure to it.Today’s attack similarly comes with no obvious explanation, but did come shortly after comments from UNIFIL spokesman Andrea Tenenti reiterating that the peacekeepers would not evacuate because of Israeli demands, adding that the troops are there at the request of the UN Security Council, not the Israelis.Israel is facing growing international criticism from the attacks on UN personnel, though Netanyahu has been defiant on calls to respect the will of the international community, insisting it is a disgrace to criticize Israel’s wars, and vowing Israel will win those wars “with or without” the rest of the world’s support.
French President Macron Warns Netanyahu Against Disregarding UN Decisions - Israel’s international stance has become increasingly tenuous over the past year, with huge amounts of civilians killed in the Gaza Strip and wars expanding throughout the region. Their ties with specific nations are only worsening as well, exemplified by Prime Minister Benjamin Netanyahu’stesty conversation with French President Emmanuel Macron today.Macron has been deeply critical of Israel’s flouting on UN Security Council resolutions, as well as their recent attacks on UN peacekeepers in Lebanon.Noting that Israel was itself founded in 1947 by a UN resolution, Macron cautioned that it “is not the time to disregard the decisions of the UN.”As is so often the case, Netanyahu offered a dramatically different versionof history, insisting that it was not the 1947 UN General Assembly resolution on partition that created Israel, but rather the 1948-49 Arab-Israeli war, and that Israel was founded because that ended in a military victory.French Armed Forces Minister Sébastien Lecornu echoed Macron’s concerns, saying it is increasingly a “problem” that Israel does not respect UN resolutions. The exact number of resolutions that Israel is violating on a daily basis isn’t clear, but between occupations, annexations, and ongoing wars it is certainly in the scores of violations.Netanyahu appeared not to be prepared to even countenance a situation in which Israel does what the UN says, insisting he and Israel are entirely opposed to a ceasefire in their ongoing war in Lebanon and calling international opposition to their various wars a “disgrace.”He further dismissed French calls for an arms embargo to stop Israeli aggression, saying that Israel will wins the wars “with or without their support” and that international shame would remain after Israel is victorious.France is far from the only nation calling for an embargo, however, and that number is only growing as Israel expands its attacks into more regional nations and spurns UN calls to stop attacking UN peacekeepers deployed in southern Lebanon. Haaretz: Israeli Government Done With Ceasefire Talks, Seeks Annexation of Gaza - Israeli defense officials told Haaretz on Sunday that the Israeli government is not seeking to revive ceasefire talks with Hamas and is now pushing for the gradual annexation of large portions of the Gaza Strip. The report came about a week after Israel ordered Palestinians living in northern Gaza to evacuate to areas south of the Netzarim corridor, a strip of land controlled by the Israeli military. With the evacuation order came a major escalation in Israeli military operations in the north focused on the Jabalia refugee camp, which has been under complete siege The Israeli newspaper Yedioth Ahronoth has reported that Israeli forces in Jabalia are carrying out a “scaled-down” version of the “general’s plan,” an outline for the complete ethnic cleansing of northern Gaza and the killing of any Palestinians who choose to stay, whether by military action or starvation. The UN’s World Food Program said Saturday that no food aid has entered northern Gaza since October 1.Israeli Army commanders told Haaretz that the assault on northern Gaza was ordered without much preparation and that it appeared the primary purpose of the military operations was to pressure Palestinian residents to flee to the south. Many Palestinians have refused to leave northern Gaza since there’s nowhere they can go where their safety can be guaranteed. Israel has bombed so-called “safe zones” repeatedly over the past year.The Haaretz report said Israeli troops were ordered to launch the assault on Jabalia “even though there was no intelligence to justify the move” and that some members of the Israeli security establishment didn’t support the operation, saying it would endanger the lives of Israeli hostages.If Israel is successful in cleansing northern Gaza of its Palestinian population, it would pave the way for the establishment of Jewish-only settlements in the area, an idea openly supported by many Israeli ministers and Knesset members. The general’s plan calls for the tactics to be used in other parts of the Strip once the north is cleansed.
Israeli Forces Kill 62 Palestinians in Gaza Over 24 Hours - Gaza’s Health Ministry said Monday that Israeli forces killed 62 Palestinians in Gaza and injured 220 over the previous 24-hour period, bringing its recorded death toll since last October to 42,289 and the number of wounded to 98,684.The ministry’s numbers don’t account for Palestinians who are missing and presumed dead under the rubble, and bodies have been difficult for rescuers to reach in northern Gaza, where Israeli forces recently escalated attacks as part of an ethnic cleansing campaign. “There are still a number of victims under the rubble and on the streets, and ambulance and civil defense crews cannot reach them,” the ministry said.Early Monday morning, an Israeli strike targeted Palestinians sheltering in tents inside the grounds of the al-Aqsa Martyrs Hospital in central Gaza. The Israeli attack ignited fires in the camp, burning Palestinians alive. Hospital records show that at least four people were killed and 40 were injured, but many of the wounded are not expected to survive the burns.Mohammad Tahir, a volunteer surgeon, told Al Jazeera that many of the victims had burns on 60% to 80% of their body. “Patients with significant high percentage burns – unfortunately, their fate is sealed. They won’t even make it to the ICU. They will die,” Tahir said.“It’s a horror show here. Honestly, sometimes I feel like this is not real life, that this can go on, and this degree of suffering is allowed to happen in this world,” Tahir added. Israel confirmed that it targeted the hospital and claimed, as usual, that it hit a Hamas “command and control center” but offered no evidence.
Israeli Soldiers Say Ethnic Cleansing Plan in North Gaza Is Underway - Three Israeli reserve soldiers have told Haaretz that they believe an ethnic cleansing plan is already underway in northern Gaza, where the Israeli military is trying to forcibly displace hundreds of thousands of civilians.Known as the “general’s plan” because it’s being pushed by a retired Israeli general, Giora Eiland, the plan calls for the evacuation of all Palestinian civilians north of the Netzarim Corridor, a strip of land controlled by the Israeli military. Anyone who stays behind will be exterminated, either by military action or starvation.“The commanders say openly that the Eiland plan is being promoted by the IDF,” an Israeli soldier in the IDF’s 162nd Division told Haaretz.Another soldier who is stationed at the Netzarim Corridor said, “The goal is to give the residents who live north of the Netzarim area a deadline to move to the south of the Strip. After this date, whoever will remain in the north will be considered an enemy and will be killed.”The soldier added, “It doesn’t conform to any standard of international law. People sat and wrote a systematic order with charts and an operational concept, at the end of which you shoot whoever isn’t willing to leave. The very existence of this idea is unfathomable.”The Israeli assault on north Gaza is currently focused on the Jabalia refugee camp, which has been under complete siege for about 12 days. Israel has ordered an estimated 300,000 to 400,000 Palestinians to head south, but few have left since nowhere is safe in Gaza, and the tent camps in the south are extremely overcrowded.Israel did not let any aid into northern Gaza for about two weeks. The Israeli military claimed it allowed 50 aid trucks to enter the north on Wednesday, but according to Dropsite News, the aid did not reach the besieged areas of Jabalia, Beit Hanoon, and Beit Lahiya. Dropsite also reported that after 12 days of an ongoing siege, hospitals in northern Gaza have received 350 bodies.Haaretz previously reported that the Israeli government had no intention to restart ceasefire talks and is now focused on annexing parts of Gaza. If the general’s plan is completed in the north, it could pave the way for Jewish settlements, and then the ethnic cleansing campaign could be carried out in other parts of the Strip.
Israel intensifies genocide in Gaza and deepens killings in Lebanon - Armed to the teeth by the Biden-Harris administration in the US, the Israeli regime is re-intensifying its slaughter in refugee camps, schools and hospitals in northern and central Gaza, even as it expands its invasion and bombardments in Lebanon, including the centre of Beirut. In the most recent attacks in Gaza, at least 22 people were killed yesterday in an air strike in Jabalia—the largest of Gaza’s eight historic refugee camps—in northern Gaza. Dozens were injured, with some ambulances unable to help rescue efforts due to fuel shortages. The Israel Defense Forces (IDF) issued virtually impossible orders for residents, hospitals and healthcare centres across the area to evacuate, placing thousands of people, including healthcare workers and their maimed patients, directly in danger. A strike on a school sheltering displaced people in the central Gaza city of Deir al-Balah also killed at least 28 people, including a child and seven women, according to the Al-Aqsa Martyrs Hospital, where bodies were taken. It said several other people were wounded. Gaza’s Health Ministry said 61 Palestinians were killed and 231 were wounded in the latest 24-hour reporting period. Thousands of people are trapped in Jabalia as Israeli forces continue to attack the area, Doctors Without Borders (MSF) said. “Nobody is allowed to get in or out, anyone who tries is getting shot,” Sarah Vuylsteke, MSF project coordinator, said in a post on X. The Israeli army issued evacuation orders for residents in the camp on October 7, “while carrying out attacks at the same time, preventing people from leaving the area safely,” MSF said. Forced evacuations and bombing of neighbourhoods are turning Gaza’s north into “unhabitable ruins,” MSF added. Haydar, an MSF driver inside the camp, said: “We were staying at the Al-Yemen Al-Saeed Hospital, but they bombed it. About 20 people were killed. I don’t know what to do, at any moment we could die. People are starving. I am afraid to stay, and I am also afraid to leave.” United Nations officials voiced concerns yesterday that the Israeli offensive, as well as evacuation orders in northern Gaza, might affect the second phase of a polio vaccination campaign set to start next week. Aid groups carried out an initial round of vaccinations last month after a baby was partially paralysed by the Type 2 polio virus in August, the first such case in the territory in 25 years. “I am, of course, concerned about the developments in the north, and specifically with these evacuation orders,” the World Health Organization’s representative in occupied Palestinian territory, Rik Peeperkorn, told reporters in Geneva. Peeperkorn said three attempts by the UN health agency and its partners to assist and evacuate patients from northern Gaza hospitals under evacuation orders have been thwarted this week. This renewed Israeli offensive, combined with systematic starvation and denial of medical access, underscores the genocidal intent of the Netanyahu government. By the official Gaza health statistics, the IDF has killed more than 42,000 people, mostly women and children over the past 12 months, but the true toll may be closer to 200,000, counting the unrecovered bodies beneath the rubble.
What's Happening In Northern Gaza Proves Israel Lied About Everything -- Caitlin Johnstone- -Hamas leader Yahya Sinwar has been killed. He died not hiding behind civilians or disguised as a woman as Israel apologists have been claiming for a year, but alone and in uniform, fighting Israeli forces with one arm blown off by tank fire.Sinwar’s death will have no meaningful bearing on how Hamas or Israel conduct themselves, so it’s funny to see Israel supporters puffing their chests like this was some kind of achievement. Israel is going to keep bombing hospitals, shooting kids in the head, intentionally starving civilians, and working to steal Palestinian land just like it was doing yesterday, and Palestinians are going to keep resisting this just like they were doing yesterday.Nothing about anything has changed. If Israel were actually killing all these people with the goal of destroying Hamas then Sinwar’s death might be significant, but Israel’s goal is not destroying Hamas. Israel’s goal is the ethnic cleansing and annexation of Gaza. This is public knowledge at this point, and is not seriously debatable. The only victory Israel’s supporters can claim to have secured here is one of revenge, which is just empty ego fluff that only feels real to highly egocentric people.You’re even seeing Israel apologists trying to call Sinwar a “coward” for the way he died, which is absurd. He died fighting off soldiers, drones and a fucking tank with one goddamn arm. Western men jerk off fantasizing about dying like that and then go on to die in nursing homes from Parkinson’s complications with bellies full of vanilla custard. You don’t get to call him a coward. No Hamas propaganda will ever make Hamas look more badass than Israel’s footage of Sinwar throwing a stick at an IDF drone with his one remaining arm right before he died. I honestly can’t believe they released that video. They may as well have put a red triangle pointing at the drone camera.
Israel's Motto Is "We Can Have Peace Tomorrow If We Just Kill A Few More People Today" -- Caitlin Johnstone - Israel’s permanent national security doctrine is basically “We can have peace tomorrow if we just kill a few more people today.”But it’s always today. Tomorrow never comes.Israel never succeeds in killing its way to peace, because that’s not actually a thing.You can’t murder, oppress and tyrannize people into obedience. You can kill off the people who oppose you, but in doing so you just create more people who oppose you. You can scorch the earth killing off every member of Hamas and Hezbollah, but in so doing you just ensure the birth of more Hamases and Hezbollahs.The only way to murder a population into submission is to kill everyone. To turn the entire middle east into a barren wasteland of death and destruction, so there’s nobody left living to oppose you. That’s the only way “kill today to have peace tomorrow” can work.And in fairness it did work for other western settler-colonialist projects. In North America and Australia the white man just killed and killed and killed and killed until the opposition was exterminated and the few who remained were broken.But the indigenous population of historic Palestine is different, in that it doesn’t stand alone. They are surrounded by ancient civilizations who have a longstanding relationship with them, and a kinship of religion and culture. Any move to exterminate the indigenous population like other western settler-colonialist projects have done draws hostilities from surrounding nations, as we are seeing today.So in order for Israel to kill its way into peace, it needs to not just kill off the Palestinians but kill everyone in the surrounding region who would oppose its doing so. And the Israelis know this, which is why you hear some far right Zionists talking about the need for a “Greater Israel” whose territory extends far beyond Israel’s current borders.So Israel will always exist in a continuous state of war until it either (A) ceases to exist in its present tyrannical iteration or (B) kills or breaks all its enemies throughout west Asia. That’s the only way the dust can ever settle on the killing.And that’s why Israel cannot continue to exist in its present iteration. It was a very, very bad idea, just like all the many other very, very bad ideas throughout history, like slavery.In order for the killing to end, the murderous settler-colonialist project known as Israel must end. This is a big task, but so was freeing the slaves. The only alternative is to plunge further and further down along this trajectory toward more and more killing, drawing in more and more powerful military forces and exponentially expanding the death toll in the process.A massive war between Israel’s powerful western allies against Iran and its partners in the region would kill millions upon millions of people and devastate the world economy. But that’s precisely the trajectory that western support for Israel’s killing campaigns has us on.I find this an untenable prospect. It would be much less devastating to dismantle the apartheid state of Israel and make arrangements for the west to absorb anyone who wishes to flee from a state where everyone would have equal rights. It would be difficult, it would be inconvenient, but it would be much, much easier and more ethical than helping Israel continue enacting its “kill today to have peace tomorrow” doctrine.Nobody has ever presented an argument for why Israel should continue to exist in its present iteration that is both logically and morally defensible. It’s just a crazy, stupid thing we are doing, the same as all the other crazy, stupid things we’ve done throughout history. One day this will be seen clearly by everyone.
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