US oil prices fell for the third time in four weeks on weak economic data out of China and Europe and on projections for less aggressive monetary easing by the Fed….after rising 6.1% to $71.29 a barrel last week as an Al Qaeda takeover in Syria raised the geopolitical instability premium on oil, more than offsetting weak fundamentals, the contract price for the benchmark US light sweet crude for January delivery slid on global markets on Monday, after Chinese retail sales data for November came in weaker-than-expected, then traded lower in New York as concerns over Chinese demand outweighed threats of tighter sanctions on Russia and Iran, and settled down 58 cents at $70.71 a barrel as traders paused buying ahead of the Fed's pending interest rate decision….oil prices were marginally lower in early Asian trading on Tuesday, hit by concerns over China's economy and caution ahead of the last Fed policy meeting of the year, and remained under pressure in New York on demand concerns ahead of the Fed meeting, and settled 63 cents lower at $70.08 a barrel following the release of negative economic news from Germany and China….oil prices moved higher Wednesday morning after the API's overnight report signaled a sizable drawdown in US commercial crude inventories, and Kazakhstan pledged to comply with OPEC+ production quotas, and retraced some of their recent losses in light of the weekly petroleum stocks reports showing draws from crude supplies, but pared some of their gains and settled 50 cents higher at $70.58 a barrel after the Fed cut its main policy interest-rate target by 25 basis points, as was expected, but signaled a much slower pace of rate cuts for next year than had been expected...January oil traded lower in Asia on Thursday morning after the US Fed projected a slower pace of interest rate cuts in 2025, thus boosting the dollar, and turned bearish in New York as the Fed’s expectations that the range for the federal funds rate would be around 4.25%-4.50% was not well received by traders, as inflationary pressures would continue to affect the U.S. economy, and settled 67 cents, or 1% lower at $69.91 a barrel at the January contract's expiration, while the more actively traded contract for US light sweet crude for February delivery settled 64 cents lower at 69.38 a barrel….with markets now quoting oil's contract price for February delivery, that price declined in Asia on Friday on worries over demand growth, particularly in China, and on a stronger dollar, but reversed their morning losses to settle 8 cents higher at $69.46 a barrel after Trump warned that his administration would impose trade tariffs on European Union countries if they didn’t buy more U.S. oil and gas…oil prices thus finished the week 2.6% lower, while the the February oil contract, which had finished the prior week priced at $70.82 a barrel, ended 1.9% lower…
meanwhile, natural gas prices rose for the sixth time in seven weeks and ended at a 23 month high on a second straight abnormally large withdrawal of natural gas from storage. and on forecasts for below normal temperatures in early January….after rising 6.6% to $3.280 per mmBTU last week on a bullish shift in the short term weather forecasts and on the largest withdrawal of natural gas from storage this early in the heating season on record, the price of the benchmark contract for natural gas for January delivery opened 7 cents lower on Monday, amid strong production and warmer weather forecasts that sapped the wind out of the market, and then traded in a tight band near $3.210 throughout the afternoon to settle 6.6 cents lower at $3.214 per mmBTU, as traders continued to weigh steady production and above average temperatures against strong LNG exports…natural gas prices started trading 3.9 cents lower on Tuesday, but recovered from intraday lows early in the afternoon, as traders weighed mild near-term forecasts against strengthening LNG demand, and settled 9.4 cents higher at $3.308 per mmBTU on short-covering following the slightest bullish shift in weather forecasts…natural gas opened 9.2 cents higher on Wednesday on continued short-covering and expected below-average temperatures in early January, but pulled back to $3.329 by 1:30 PM before settling 6.6 cent higher at $3.374 per mmBTU on rising flows to liquefied natural gas export plants, and on expectations that utilities pulled more gas out of storage than usual for a second week in a row.…natural gas prices opened 11.7 higher on Thursday, following overnight gains attributed to forecasts for below-average temperatures to arrive mid-January, then rallied after the storage report to settle 21 cents or about 6% higher at a 23-month high of $3.584 per mmBTU on an 11-month high in the amount of gas flowing to LNG export plants, and on early forecasts for more cold weather in January…..natural gas prices swelled further in early trading on Friday on short-covering ahead of a potentially cold January, as a near-term cold snap was expected to boost heating demand over the weekend, and settled 16.4 cents higher at a 23 month high of $3.748 per mmBTU, as the potential for freeze-offs and stronger LNG exports outweighed a slightly warmer reading in weather forecasts, leaving natural gas prices 14.3% higher for the week.
The EIA’s natural gas storage report for the week ending December 13th indicated that the amount of working natural gas held in underground storage fell by 125 billion cubic feet to 3,622 billion cubic feet by the end of the week, which left our natural gas supplies 20 billion cubic feet, or 0.6% above the 3,602 billion cubic feet of gas that were in storage on December 13th of last year, and 132 billion cubic feet, or 3.8% more than the five-year average of 3,490 billion cubic feet of natural gas that had typically been in working storage as of the 13th of December over the most recent five years….the 125 billion cubic foot withdrawal from US natural gas storage for the cited week was in line with the 126 billion cubic foot withdraw from storage that was forecast in a Reuters poll of analysts ahead of the report, but was quite a bit more than the 92 billion cubic feet that were pulled out of natural gas storage during the corresponding week in December of 2023, and also much more than the average 78 billion cubic foot withdrawal from natural gas storage that had been typical for the same late December 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 December 13th indicated that after a big jump in our oil exports, we needed to pull oil out of our stored commercial crude supplies for the 17th time in twenty-five weeks, and for the 30th time in the last 54 weeks, despite a big increase in domestic supplies of oil that the EIA could not account for ...Our imports of crude oil rose by an average of 665,000 barrels per day to average 6,649,000 barrels per day, after falling by an average of 1,306,000 barrels per day over the prior week, while our exports of crude oil jumped by an average of 1,796,000 barrels per day to average 4,895,000 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 1,754,000 barrels of oil per day during the week ending December 13th, 1,131,000 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 supplies from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils averaged 563,000 barrels per day, while during the same week, production of crude from US wells was 27,000 barrels per day lower at 13,604,000 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 15,921,000 barrels per day during the December 13th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,611,000 barrels of crude per day during the week ending December 13th, an average of 48,000 fewer barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that a net average of 59,000 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 net imports, from transfers, from oilfield production, and from storage during the week ending December 13th averaged a rounded 631,000 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 [ +631,000 ] barrel per day figure onto line 16 of the weekly U.S. Petroleum Balance Sheet, in order to make the reported data for the supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus indicating there must have been an error or omission of that magnitude in the week’s oil supply & demand figures that we have just transcribed…Moreover, since 537,000 barrels per day of demand for oil could not be accounted for in the prior week’s EIA data, that means there was a 1,168,000 barrel per day difference between this week’s oil balance sheet error and the EIA’s crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week’s report are off by that much, making the week over week changes we have just cited nonsense….However, since most oil traders react to these weekly EIA reports as if they were accurate, and since these weekly figures therefore often drive oil pricing 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 once hoped to do about it)
This week’s net average 59,000 barrel per day decrease in our overall crude oil inventories came as an rounded average of 133,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while an average of 74,000 barrels per day were being added to our Strategic Petroleum Reserve, the fifty-third SPR increase in the past sixty 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 6,501,000 barrels per day last week, which was 2.1% less than the 6,652,000 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 27,000 barrels per day lower at 13,604,000 barrels per day because the EIA’s estimate of the output from wells in the lower 48 states was 18,000 barrels per day lower at 13,190,000 barrels per day, while Alaska’s oil production was 9,000 barrels per day lower at 441,000 barrels per day, all of which was included in the national total.….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 3.8% higher than that of our pre-pandemic production peak, and was also 40.2% 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 91.8% of their capacity while processing those 16,611,000 barrels of crude per day during the week ending December 13th, down from their 92.4% utilization rate of a week earlier, not an unusual fluctuation at the end of the annual Autumn slowdown, when refineries typically schedule maintenance and seasonally change to producing winter fuel blends…the 16,611,000 barrels of oil per day that were refined this week were 0.7% more than the 16,500,000 barrels of crude that were being processed daily during week ending December 15th of 2023, and 0.3% more than the 16,562,000 barrels that were being refined during the prepandemic week ending December 13th, 2019, when our refinery utilization rate was at a fairly low 90.6% for this time of year…
With the decrease in the amount of oil being refined this week, gasoline output from our refineries was also lower, decreasing by 173,000 barrels per day to 9,872,000 barrels per day during the week ending December 13th, after our refineries’ gasoline output had increased by 549,000 barrels per day during the prior week.. This week’s gasoline production was 1.7% less than the 10,038,000 barrels of gasoline that were being produced daily over week ending December 15th of last year, but 0.3% more than the gasoline production of 9,840,000 barrels per day during the prepandemic week ending December 13th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 135,000 barrels per day to 5,094,000 barrels per day, after our distillates output had decreased by 86,000 barrels per day during the prior week. But even after those production decreases, our distillates output was 4.5% more than the 4,873,000 barrels of distillates that were being produced daily during the week ending December 15th of 2023, and 0.4 % more than the 5,072,000 barrels of distillates that were being produced daily during the pre-pandemic week ending December 13th, 2019…
Even after this week’s decrease in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the eleventh time in sixteen weeks, increasing by 2,348,000 barrels to 222 037,000 barrels during the week ending December 13th, after our gasoline inventories had increased by 5,086,000 barrels during the prior week. Our gasoline supplies rose by less this week because the amount of gasoline supplied to US users rose by 127,000 barrels per day to 8,927,000 barrels per day, and even as our imports of gasoline rose by 291,000 barrels per day to 755,000 barrels per day, while our exports of gasoline fell by 27,000 barrels per day to 1,012,000 barrels per day.…After twenty-five gasoline inventory withdrawals over the past forty-five weeks, our gasoline supplies were 2.1% below last December 15th’s gasoline inventories of 226,723,000 barrels, and were also about 3% below the five year average of our gasoline supplies for this time of the year…
With this week’s decrease in our distillates production, our supplies of distillate fuels fell for the ninth time in thirteen weeks, decreasing by 3,180,000 barrels to 118,155,000 barrels over the week ending December 13th, after our distillates supplies had increased by 3,235,000 barrels during the prior week.. Our distillates supplies fell this week because the amount of distillates supplied to US markets, an indicator of domestic demand, rose by 1,048,000 barrels per day, the most in 3 years, to a 33 month high of 4,498,000 barrels per day, even as our exports of distillates fell by 257,000 barrels per day to 1,214,000 barrels per day, while our imports of distillates rose by 10,000 barrels per day to 164,000 barrels per day.. After 27 inventory withdrawals over the past 47 weeks, our distillates supplies at the end of the week were still 2.7% above the 115,024,000 barrels of distillates that we had in storage on December 15th of 2023, even as they are now about 7% below the five year average of our distillates inventories for this time of the year…
Finally, after the big increase in our oil exports, our commercial supplies of crude oil in storage fell for the 17th time in twenty-six weeks, and for the 29th time over the past year, decreasing by 934,000 barrels over the week, from 421,950,000 barrels on December 6th to 421,016,000 barrels on December 13th, after our commercial crude supplies had decreased by 1,425,000 barrels over the prior week… With this week’s relatively small decrease, our commercial crude oil inventories remained about 6% below the most recent five-year average of commercial oil supplies for this time of year, but were also still about 25% above the average of our available crude oil stocks as of the second weekend of December 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 increased exports to Europe following the onset of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze offs, our commercial crude supplies have somewhat leveled off since, and as of this December 13th were 5.1% less than the 443,682,000 barrels of oil left in commercial storage on December 15th of 2023, but 0.7% more than the 418,234,000 barrels of oil that we had in storage on December 16th of 2022, while 1.7% less than the 428,286,000 barrels of oil we had left in commercial storage on December 10th of 2021…
This Week’s Rig Count
for a quick snapshot of this week's rig count, we are again including below a screenshot of the rig count summary pdf from Baker Hughes…in the table below, the first column shows the active rig count as of December 20th, the second column shows the change in the number of working rigs between last week’s count (December 13th) and this week’s (December 20th) count, the third column shows last week’s December 13th 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 22nd of December, 2023…
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Antis Pressure OH Gov. to Veto Bill Extending Fracking of State Land -- One week ago, MDN told you that Ohio House Bill (HB) 308 had passed votes by both the full House and Senate and was heading to the desk of RINO Gov. Mike DeWine for his signature (see OH Senate Passes Bill Extending Time Drillers Can Frack State Land). HB 308 extends the standard lease terms for drillers who want to drill under (not on) state-owned land from three to five years. The bill also extends the total amount of time fracking operations can last from six to eight years. Sensible increases in both cases. This morning, the radicals of Save Ohio Parks (and their friends) issued a press release demanding (notice the left always demands) that Gov. DeWine veto the bill. Because they say so.
Huge Majorities in Ohio Oppose Fracking Our State Parks, but State Leaders Just Ignore All Concerns... By Marilou Johanek, Ohio Capital Journal -- Who do Ohio lawmakers represent in the fracking free-for-all carving up acres of our state parks and public land for oil and gas money? They sure as heck don’t represent the people. Public resistance to fracking in Ohio state parks is almost universal. Ever since a Republican-facilitated law went into effect last spring thatrequired a state commission to lease huge tracts of state parks and wildlife areas for fracking for natural gas, opposition from park-loving Ohioans has only grown. Recently, the Oil and Gas Land Management Commission fielded public comments from nearly 600 citizens about pending oil and gas company bids to frack under almost 900 acres of Salt Fork State Park. The vast majority — about 98% — opposed more fossil fuel drilling in the state’s largest park, a rural recreational magnet for tens of thousands of yearly visitors. People know that the risks and harms of fracking for public health and the climate are real and growing. Besides a history of leaking loads of planet-warming methane into the atmosphere and eroding local air quality, fracking industrial zones and wells threaten groundwater — including drinking water. The drilling process involves injecting enormous quantities of fluid (mixed with a cocktail of chemicals) deep into the earth at super-high pressure to fracture rock formations and extract methane gas or oil.Evidence of a correlation between those fracking operations and an array of reported health problems by those who live near a fracked oil or gas well is building — all of which explains the negative feedback from thousands of Ohioans on more fracking where they live and play. Their dissent is fortified by hundreds of scientific studies and countless expert witnesses who document how fracking can go wrong, poison water, contaminate the air and emit massive amounts of greenhouse gas pollution. But last week, the state’s oil and gas commissioners ignored the alarms and dismissed the pleadings of people to protect their parks. Panel members, most of whom have close oil and gas associations, sided with the fracking industry again. One of the few pro-fracking voices in favor of more oil and gas extraction in Salk Fork and other public land was surprisingly the director of the Ohio Department of Natural Resources. But before Mary Mertz endorsed further destruction of our state parks and pristine wildlife sanctuaries for short-term profit, she at least asked that the winning out-of-state drillers use their “best efforts” to catch water contamination in local wells and to minimize other polluting impacts of industrialized fracking on the surrounding community. How reassuring to the people who inhabit fracked regions of the state — or to the millions who retreat to them every year to fish, hunt, hike, kayak or camp. Surely, state lawmakers have taken measure of the enduring public protest against fracking and the defilement of Ohio’s natural playgrounds. Surely, they responded accordingly as elected representatives of the people. Surely, visions of sugar plums dance in your head because only two days after the commissioners awarded hundreds of acres in Salt Fork to the “highest and best” Big Energy bidders and parceled out more acreage in state wildlife areas for fracking, statehouse Republicans also awarded the polluters of parks a Christmas bonus.They tucked a last-minute gift to the fracking industry into an unrelated bill (on nuclear energy) with a sneaky provision to extend the standard lease terms of contracts to frack under state parks from three years to five. That stretched thetotal amount of time drillers from Texas, West Virginia, Colorado, etc., can spoil Salt Fork and other Ohio natural resources from six to eight years. The lame-duck measure quickly sailed through the legislature to the governor’s desk. Republicans voted to expand fracking in state parks despite the recent groundswell of constituent objection to that very expansion. In doing so, the GOP-gerrymandered supermajorities in the General Assembly made clear who they represent when oil and gas money is on the table and state parks are cash cows to be milked for all they’re worth. Human and environmental consequences be damned.These politicians didn’t listen to, care about, or even feign representation of Ohioans fighting valiantly to save our beloved parks. They just green-lit constant fracking in those parks. More well pads, pipelines, gas flares, industry accidents, leaks, chemical runoff, contaminated water, fracking truck traffic, 24/7 noise, transient workers, decimated wildlife, destroyed ponds, streams, roads, property values and public health. That is not a representative government that serves the people. That is unaccountable autocrats, cocooned in safe districts, doing whatever the hell serves them. Republican Gov. Mike DeWine could, of course, block the lawmakers’ sellout of citizens and veto the bill to enrich big oil and gas companies — who are also big GOP donors. But the guy solely responsible for the fracking free-for-all under Ohio state parks and protected wildlife terrain won’t.DeWine infamously caved to the fracking industry over the clamor of outraged Ohioans in 2023 when he signed another last-minute, industry-friendly Republican bill that forced state agencies to grant lease applications to oil and gas drillers in state parks. That is his sorry legacy. DeWine will quietly cave again because money talks in Ohio and tragically plunders the peoples’ parks for cheap gas.
Infinity Natural Resources Picks Up Another 7 Banks for Utica IPO - Marcellus Drilling News - MDN reported that in early October that Infinity Natural Resources (INR) filed an IPO with the Securities and Exchange Commission (SEC) hoping to raise $100 million (seeM-U Driller Infinity Natural Resources Files for $100 Million IPO). Citigroup, Raymond James, and RBC Capital Markets were the original Big Bank underwriters. At the end of November, INR added another seven Big Banks to the list as underwriters.
Ohio Utica Shale Attracted $108 Billion Investment by End of 2023 - Marcellus Drilling News -- JobsOhio, a private, nonprofit corporation that works on behalf of the state to drive job creation and new capital investment in Ohio by attracting business, contracts out economic research to Cleveland State University (CSU) to keep tabs on the Utica Shale industry. JobsOhio released the latest CSU updated report yesterday (full copy below), showing that more than $108 billion has been invested in Ohio across natural gas, natural gas liquids, and petrochemical supply chain industries since 2011. Massive! Read More
Encino CEO Says Ohio Utica Oil Boundaries Likely to Expand | Marcellus Drilling News - We've brought you the news (a number of times) of how Encino Energy was the first driller to figure out how to coax large quantities of oil from the Ohio Utica Shale (see Oil Prod. in Northern Utica Comes Alive – Encino Cracks Oil Code). According to Encino founder and CEO Hardy Murchison, the oil window could extend well beyond its current geography. Murchison says, "It could be years or even a decade before we know the full extent of the [Ohio Utica oil] play."
Return of the Wildcatters – Utica Oil Drillers Grow Organically - Marcellus Drilling News -- Oil wildcatting is the process of drilling exploratory wells in areas with little to no history of oil and gas production. Wildcatting is a high-risk activity that involves drilling in unproven or fully depleted areas. Wildcat wells are often drilled far from other wells and without the use of well logs or other geological data. Wildcatting can be profitable—or spectacularly unprofitable. A recent Hart Energy article reports that “wildcatting is back.” The very first part of the article focuses on wildcatting that is happening in the Ohio Utica Shale.
Ohio Court of Appeal Addresses Whether Gathering and Transportation Are Separate and Distinct Post-Production Activities - As we approach the 20th anniversary of the Marcellus Shale play, one issue remains constant: the ongoing debate over the deduction of post-production costs. Landowners all across Pennsylvania have spent countless hours negotiating royalty clauses that they believed prohibited or, in some cases, limited such deductions. Despite those efforts, drillers keep deducting post-production costs regardless of the actual language in the parties’ oil and gas lease. See, Federal District Court Injects Confusion into Definition of Gross Royalty Under Pennsylvania Law (June 2021). For example, let’s assume you own 150 acres in Butler County. In 2020, you negotiate a new oil and gas lease with ABC Drilling. Your goal was to negotiate a cost-free royalty. ABC Drilling pushed back on your language but agreed to limit deductions to certain enumerated costs. The landman from ABC Drilling inserts language into the addendum that says only “transportation, compression and dehydration costs” may be deducted. He assures you that only the costs incurred moving the gas on the interstate pipeline network will be deducted. You reluctantly agree and sign the lease. Last week you receive your first royalty statement. The statement shows deductions for “gathering” and “fuel”. This must be a mistake. You call ABC Drilling. They inform you that there is no mistake: the costs to gather and collect the raw gas falls within the transportation deduction authorized by the lease. You politely explain to the ABC Drilling representative that only costs incurred on the interstate pipeline network should be deducted and that “gathering” costs are incurred prior to those interstate pipelines. ABC Drilling ignores your plea and continues to deduct gathering costs from your royalty. You are shocked, angry and confused. Are gathering costs separate and distinct from transportation costs? Does one necessarily include the other? And how can ABC Drilling unilaterally re-write your lease and expand the scope of permissible deductions? See, Texas Supreme Court Issues Troubling Decision in Royalty Dispute (March 2022). A recent decision from the Ohio Court of Appeals addressed the thorny question of whether gathering and transportation costs should be considered one in the same for deduction purposes. At issue in EAP Ohio LLC v. Sunnydale Farms LLC, et al. (24-CA-0974 Seventh Appellate District, September 11, 2024) were thirteen (13) oil and gas leases that were executed in 2008 and 2009 in Carroll County, Ohio (the “2008 Leases”). The 2008 Leases contained an identical royalty clause which provided as follows: To pay the Lessor, as royalty for the gas marketed and used off the premises and produced from each well drilled thereon, the sum of one-eighth (1/8) of such gas so marketed and used at the price paid to the Lessee per thousand cubic feet, measured in accordance with Boyles Law for the measurement of gas at varying pressures, on the basis for 10 ounces 14.73 pounds atmospheric pressure at a standard base temperature of 60 degree Fahrenheit without allowance for temperature and barometric variations less any changes for transportation, compression and/or dehydration to deliver the gas for sale. Payment of royalty for gas marketed during any calendar month to be on or about the 30th day after receipt of such funds by Lessee. EAP Ohio LLC (“EAP”) acquired the 2008 Leases, drilled several shale wells and thereafter paid royalties to the Plaintiffs pursuant to the 2008 Leases. Despite the limitations set forth in the royalty clause, the royalty statements issued by EAP contained multiple “deduct codes” identifying specific post-production costs being charged against the Plaintiffs’ royalty. These “deduct codes” included: compression, dehydration, processing, treating, transportation, fuel and gathering. In July 2021, the Plaintiffs filed suit alleging a breach of the 2008 Leases. The Plaintiffs averred that the 2008 Leases only authorized three types of deductions: transportation, compression and dehydration. No more, no less. The Plaintiffs argued that the purported “gathering” costs were improper and unauthorized since gathering and transportation are separate and distinct post-production activities. According to the Plaintiffs, the costs incurred to collect the raw gas and move it though the gathering system to the central processing facility could not be deducted as a separate cost. The Plaintiffs argued that the mere movement of gas through any pipeline did not automatically authorize the deduction of that cost. On the contrary, the reference to the transportation in the 2008 Leases referred to a specific mid-stream operation that was differentfrom gathering. Transportation, the Plaintiffs argued, arises out of the movement of gas on the interstate pipeline network, which is an entirely separate and distinct pipeline system than the local gathering pipeline. The Plaintiffs’ theory urged the court to recognize gathering and transportation as separate and distinct costs that are unique to specific pipeline networks and operations. In addition, even if the gathering costs could be considered a form of transportation, the Plaintiffs nonetheless argued that such costs could not be deducted because they were not incurred “to deliver the gas for the sale.” The Plaintiffs contended that the gathering costs were incurred while moving the gas to the processing plant, not to the eventual point-of-sale. Conversely, the movement of the gas through the interstate pipeline network was delivering the “gas” for sale as most, if not all, gas sales occur on the interstate pipeline network. See, Kansas Court Rules That Gas Is Not Marketable Until It Reaches Interstate Pipeline (August 2020). As such, since there were no buyers or sales points on the gathering pipeline itself, the Plaintiffs argued that the alleged gathering costs were not incurred for the purpose of delivering the gas “for sale”. The deduction code for the gathering costs was therefore improper and a material breach of the 2008 Leases.In response, EAP argued that the granting clause and the royalty clause in the 2008 Leases both authorized the deduction of gathering expenses as another transportation cost. First, EAP argued that the plain meaning of the term “transportation” encompassed the movement of all gas, regardless of the physical location of the pipeline. According to EAP, the collection of gas and moving it through the gathering network was a form of transportation and, therefore, the costs could be deducted simply as another transportation cost. Second, EAP argued that Ohio regulations define a “gas gathering pipeline” as being “a pipeline used to collect and transport raw natural gas. . .” and further define “transportation of gas” as including the “gathering, transmission or distribution of gas by pipeline. . .” See, R.C. § 4905.90 (D) and Ohio Admin Code § 4901:1-16. Given these statutory definitions, EAP argued that Ohio law recognizes that gathering gas is a form of transportation. Third, EAP argued that Paragraph 1 of the 2008 Lease explicitly granted the lessee the right to construct, install and operate pipelines across the surface for the purpose of gathering the raw gas. Because Paragraph 1 deliberately used the term “transport”, EAP argued that the authors of the 2008 Leases intended that term to have a same meaning in the royalty clause. (i.e. transportation includes gathering). Finally, EAP argued that the Plaintiffs’ reading of the “deliver the gas for sale” clause was misplaced. EAP noted that gathering is simply the first stage of the delivery of gas for sale. And EAP further argued that since “compression” and “dehydration” often occur in connection with the gathering of the gas, the use of the term “transportation” in the royalty clause must be referring toany movement of gas. In essence, EAP urged the trial court to reject any physical limitation on the deduction of transportation costs: any cost incurred while moving the gas can be deducted, regardless of where or when it is incurred.Both parties moved for summary judgment. The trial court, relying on Webster’s Dictionary, observed that the definition of “transportation” is “an act, process or instance of transporting or being transported. . .” And that the term “transport” means “to transfer or convey from one place to another”. Given these definitions, the statutory definitions under Ohio law and the pipeline rights granted in Paragraph 1 of the 2008 Leases, the trial court opined that the 2008 Leases allowed EAP to pay royalties “less any changes for transportation, including transportation associated with gas gathering.” The trial court granted EAP’s motion and entered judgment in its favor. Plaintiffs promptly appealed to the Seventh Appellate District (the “Seventh District”). The Seventh District reversed. First and foremost, the panel concluded that the trial court erred by relying on the purported statutory definitions set forth in R.C. §4905.90 and Ohio Admin Code § 4901:1-16. These statutory definitions were not expressly adopted or referenced in the 2008 Leases and, therefore, they could not be relied upon as evidence of what the parties intended in the royalty clause. In addition, the panel further concluded that because the terms “gathering” and “transportation” were not defined in the 2008 Leases, the royalty clause itself was ambiguous and the issue could not be resolved at summary judgment. The panel found two ambiguities that precluded summary judgment. First, the Seventh District observed that gathering typically describes the collection of gas from multiple wells and funneling it into pipelines “from the wellhead meters directly to central processing or delivery facilities. . .” Conversely, transportation involves “the movement of gas through a pipeline’s principal transmission system.” The panel implicitly concluded that gathering and transportation are functionally and geographically distinct operations. And because of this difference, it was unclear, based on the actual language in the royalty clause, what expenses the lessee could deduct as “transportation”. As such, a genuine issue of fact existed which precluded the entry of summary judgment. The panel also concluded that the proper application and scope of the phrase “to deliver the gas for sale” was unclear and therefore ambiguous. The Seventh District noted that both parties had proffered two different interpretations of this critical phrase. The panel opined that resolution of the competing factual interpretations is the job for the fact-finder at trial: The Seventh District remanded the matter back to the trial court for further proceedings.
DEP To Review Shell Petrochemical Plant Title V Air Quality Permit Under Environmental Justice Policy Enhanced Public Participation Process - On December 18, the Department of Environmental Protection said the agency will review the Shell Petrochemical Plant Title V Air Quality Permit application under the “enhanced public participation process” established in its Interim Final Environmental Justice Policy holding local stakeholder meetings, one or more public meetings and a hearing. DEP made the comments in response to an inquiry about the agency’s public participation plan for the application.Shell submitted the Title V Air Quality application for the Beaver County facility on June 19 and DEP accepted the application as administratively complete on July 2. Read more here.DEP spokesperson Lauren Camarda said, “While DEP will consider the public’s feedback on an operating permit application at any time,” the first step in the enhanced public participation process will be for the DEP Office of Environmental Justice to hold stakeholder meetings in the area.“DEP will hold initial stakeholder meetings this winter with community organizations that have been active in the area and with Shell's permit applications,” said Camarda. “These meetings are to allow individuals and groups to share concerns and comments with DEP and for DEP to answer questions and gain insight to improve our broader public participation process.”Camarda said the formal public comment period on the application would start “if/when DEP” publishes notice in the PA Bulletin, other media and its website announcing the availability of a draft Title V operating permit for comment.“If/when DEP notices a draft Title V Operating Permit, DEP intends to hold at least one public meeting followed by a public hearing at a later date on the draft Title V Operating Permit,” said Camarda. “DEP will prepare plain language summaries for the public on the application and [review] process and will ensure that paper copies of the application are available at a location in the community in addition to DEP's community information webpage,” she explained.“These public events will be led by DEP's Office of Environmental Justice which has been engaging with community groups and area residents regarding the facility and the Title V Operating Permit application review process,” said Camarda.She added, “DEP's review of Shell's Title V Operating Permit application is ongoing.” A copy of the Title V permit application and information on any public meetings and a hearing will be available on DEP’s Shell Petrochemical Complex webpage.
Conventional Oil & Gas Well Owners Now Operate As Many As 95% Of Conventional Wells To Vent Methane Gas Making It Too Expensive To Comply With New EPA Methane Emission Reduction Regulations - On December 12, conventional oil and gas well owners said they now build and operate as many as 95% of conventional wells to vent methane that could trigger quarterly methane monitoring and capture requirements under the new US EPA methane reduction regulations making it too expensive for owners to comply.Conventional well owners made these comments at a meeting of DCED’s PA Grade Crude [Oil] Development Advisory Council in a response to a DEP presentation on what conventional well owners will be required to do to meet requirements under the new EPA methane rule.Conventional well owners said, “A very large proportion, perhaps as high as 95% of Pennsylvania conventional gas wells and Pennsylvania conventional oil wells and oil/gas wells which are constructed with a production string of casing, are purposely constructed as to allow the release of methane which methane may not be a steady flow and are constructed that way by regulation.“Further, the Pennsylvania mechanical integrity process contemplates this construction.”During the discussion, members of CDAC noted “while it may be technically possible to install a compressor and piping to collect the natural gas, the amount of gas gathered would be very small. The combined revenue of the oil and gas would not be sufficient to justify the capital expenditure of the collection.”[In addition, DEP’s oil and gas inspection reports show all newly drilled conventional wells are left to vent gas for days or weeks as part of what is now the normal process used now to develop a well in Pennsylvania.[As part of adopting state oil and gas methane reduction regulations in 2022, DEP has estimated conventional oil and gas facilities account for 80% of methane emissions from the oil and gas industry in Pennsylvania because they have done little or nothing to control them. Read more here.[Three industry groups representing the conventional oil and gas industry filed a lawsuit in Commonwealth Court December 5, 2022 in an attempt to block implementation of DEP’s first VOC/methane limits regulation on conventional oil and gas facilities. [Read more here.]]EPA’s new methane rule makes no distinction between conventional and unconventional shale gas wells and related facilities covered by its regulation because all the wells and infrastructure are significant sources of methane, a potent greenhouse gas.But it is a distinction in Pennsylvania’s Oil and Gas Act and regulatory program.At its meeting, the PA Grade Crude [Oil] Development Advisory Council adopted a motion to send an initial set of comments and questions to DEP on the EPA methane rule that asked about the statutory authority for the regulation in Pennsylvania, whether DEP was planning to adopt separate requirements for conventional and shale gas wells, how DEP would assess the cost of compliance on conventional well owners and Pennsylvania’s two oil refineries and others.DEP agreed further discussions on these and other questions would be helpful in developing the plan to implement EPA’s methane rule in Pennsylvania.In November 2023, Gov. Shapiro instructed DEP to take action to adopt oil and gas emission reduction measures aligned with federal policy as part of his administration’s work to address climate change and protect Pennsylvania’s Constitutional right to clean air and pure water. Read more here.DEP has a deadline of March 8, 2026 to submit a plan to EPA to implement the new methane reduction rule and well owners have a deadline of March 2029 to comply with its requirements.DEP does not plan to adopt new regulations incorporating the EPA rule because state regulations automatically adopt federal requirements.DEP does have to develop a plan and an amendment to the State Air Quality Implementation Plan to implement the methane rule that must go through a public development and comment process.In addition to the PA Grade Crude [Oil] Development Advisory Council, DEP has solicited comments from the Air Quality Technical Advisory Committee, Small Business Compliance Advisory Committee, Citizens Advisory Council, Environmental Justice Advisory Board and the Oil and Gas Technical Advisory Board.
Climate-warming gas leaks must be fixed by utilities in a new proposed rule - Ideastream— Melissa Ostroff finds gas leaks for a living, so it was surprising to hear someone say they smelled gas in her own home.As part of her job with the environmental group Earthworks, Ostroff searches gas drilling and production sites in Pennsylvania for plumes of methane, a big driver of climate change. A few years back, her family visited her south Philadelphia row home for the holidays."When my sister entered the house, she told me she smelled gas," Ostroff says. Knowing that gas utility meters are a big source of leaks, that was the first place she examined with a device she uses for her job. "There was a small but very continuous leak coming from a pipe fitting around the gas meter."Ostroff figures she had become accustomed to the odorant gas companies put in natural gas so customers will detect leaks. She called her utility, which fixed it right away. Aside from the safety concern, Ostroff knows that gas leaks are a problem for the climate. Methane is the main component of natural gas and, as one of the greenhouse gasses heating the planet, it is 80 times more potent than carbon dioxide.Now, under proposed federal regulations, gas utilities would have to find and fix more leaks like this. At the end of his first term in office, President-elect Donald Trump signed an appropriations bill that included the new requirement. The Biden administration is finishing the rules to implement the law. In the past, utilities focused this work on safety and preventing explosions that hurt people and damage property. Under the new rules, they'll also have to consider environmental harm when searching for methane leaks.You can't see methane, but a special infrared camera can. These costs thousands of dollars. Ostroff had one in her home because that's what she uses to find plumes at drilling sites. Now, she periodically checks the meter for leaks and says the problem appears to be fixed.Customer gas meters are the largest source of methane that escapes in the atmosphere from gas distribution systems. But leaks like this are not common. An industry study from GTI Energy showed less than 1% of indoor meters leak. But there are a lot of meters in the country, and it's easy to find customers online who say they've experienced leaks. Outdoor meters are less of a risk for causing explosions because the methane disperses into the atmosphere. But there, methane becomes a problem for the climate.The new gas leak rules have been drafted by federal Pipeline and Hazardous Materials Safety Administration (PHMSA), which regulates gas utility pipelines and other infrastructure, all the way up to and including customer meters. Because safety was the focus in the past, utilities detected some leaks, but they didn't reach the top of the repair list for years."I've found like 10-year-old leaks," says Erin Murphy, an attorney with the Environmental Defense Fund. "So they've known about this pipeline leak for 10 years and haven't fixed it because they're not required to." PHMSA's proposed regulations that apply to gas meters are part of a larger group of regulations intended to reduce methane pollution from natural gas pipelines. The new rules are not as strict as Murphy would like, but she says they're an improvement.
What The Shale Gas Industry Is Leaving Behind: DEP: Nucomer Energy LLC Fails To Restore Shale Gas Well Pad, Water Impoundment In Forest County For More Than 12 Years After Drilling Was Completed - A December 11 Department of Environmental Protection inspection of a shale gas well pad and water impoundment owned by Nucomer Energy LLC in Hickory Township, Forest County found they have still not been restored more than 12 years after the wells were completed and 33 months after DEP issued the original violations for failure to restore the site.An April 27, 2022 DEP inspection report said the last well on the pad was completed in September 2012 and violations were issued on that date for failing to restore the well pad and related impoundment nine months after the last well was fracked as DEP regulations require.DEP also issued violations for spills from wastewater storage tanks and failure to submit monthly production reports in that same inspection report.Faced with no action by the well owner, DEP issued an administrative order to Nucomer Energy on December 6, 2023 requiring the well owner to restore the well site and impoundment and address other violations. DEP December 11 inspection reportDuring a May 1, 2024 inspection, DEP found Nucomer had addressed only one of the requirements in the order-- “violations associated with the deficient secondary containment liner.”On December 11, 2024, DEP did a follow-up inspection and found Nucomer had failed to comply with the December 6, 2023 order requiring the restoration of the well site and impoundment.“The Impoundment remains filled with water. There is no earth moving equipment on site. There has been no observable attempt made to restore the Well Site or the Well Development Impoundment prior to this inspection.”DEP requested a response by the well owner by December 27 on how the site will be brought into compliance. DEP December 11 inspection report Nucomer Energy holds permits for 49 conventional and shale gas wells, including one abandoned well.
CMS Energy's Arm Announces Plans to Upgrade Natural Gas System - CMS Energy Corporation CMS recently revealed that its primary subsidiary, Consumer Energy, has introduced a plan to upgrade its natural gas system, which provides gas to more than 1.8 million homes and businesses in Michigan. Details of CMS’ Plan Per the plan, the company will replace up to 10,000 old gas lines and add valves that can be operated remotely to handle emergencies faster. These improvements will make the system safer, more reliable and better for the environment while keeping it affordable for customers. Rate Hike – A Dire Need The existing natural gas supply system and infrastructure are getting old and the company needs to invest regularly to upgrade and replace its existing systems to enhance safety and reliability. The natural gas rate hike at regular intervals will help CMS to continue with infrastructure development and ensure uninterrupted services to its customers. To support its latest modernization efforts, CMS Energy has filed a $248 million natural gas rate request with the Michigan Public Service Commission, aiming to secure the necessary resources for long-term infrastructure development. Investments in Natural Gas Infrastructure The U.S. natural gas infrastructure is getting old and requires immediate replacement. A substantial investment is the need of the hour to improve the natural gas infrastructure. Many companies in the oil and gas industry are investing in upgrading infrastructure to ensure safe and efficient operations. They recoup the same through rate hike filling to continue making upgrades to the infrastructure. The demand for natural gas, a cleaner burning fuel, is likely to continue to grow in the United States, driven by the growth of natural gas-fired power plants and the rising exports of LNG. Some other companies that have also been investing in U.S. natural gas infrastructure are discussed below.
Power Co. Proposes NatGas Plants Near Texas Haynesville Shale -An American Electric Power (AEP) subsidiary plans to develop two natural gas-fired power plants near the prolific Haynesville shale play. Southwestern Electric Power Co. (SWEPCO), a subsidiary of publicly traded AEP, proposed several new generation projects that are pending regulatory approval, the company said Dec. 18. SWEPCO’s plans include a 450-megawatt (MW) natural gas plant—the Hallsville Natural Gas Plant—to be sited at the retired H.W. Pirkey coal plant in Harrison County, Texas. The project is expected to begin operations in 2027, following approvals from utility regulators in Arkansas, Louisiana and Texas. The Hallsville plant will feature two General Electric combustion gas turbine generators. The project will use existing water intake systems and other site infrastructure to reduce costs. SWEPCO also submitted filings for a fuel conversion project at the Welsh Power Plant, northwest of Cason, Texas. The 1,053-MW project will convert existing coal-fired boilers for Units 1 and 3 to burn natural gas. The conversion of Unit 3 is expected in 2027; Unit 1 in 2028. SWEPCO said it anticipates a need for more capacity in the region due to evolving reserve requirements set by the Southwest Power Pool (SPP). Natural gas generation makes up 48% of SWEPCO’s existing asset portfolio.
U.S. Shale Nears Limits of Productivity Gains | OilPrice.com U.S. shale is the biggest source of oil and gas output growth on a global scale. It’s in every forecast and projection that sees continued depression in oil prices. But that role as a growth driver might be coming to an end due to natural processes.Well productivity and efficiency improvements have been in the spotlight of U.S. shale oil and gas discourse ever since the industry served up a massive surprise to analysts by reducing the total rig count but boosting production by 1 million bpd last year.The unexpected jump in output was attributed to efficiency gains that made it possible for drillers to extract more oil at lower cost, driving the substantial increase in 2023 overall production of hydrocarbons. Now, the Energy Information Administration has predicted that productivity improvements and efficiency gains would continue driving output higher. The question, as usual, is just how high. In its latest Shot-Term Energy Outlook, the EIA forecast that total U.S. oil production next year would hit 13.5 million barrels daily. That would be up from an estimated 13.2 million barrels daily this year. The estimated 2024 average itself was an increase from 12.9 million bpd for 2023. In other words, over the past two years, total U.S. production of crude oil has increased at a rate of 300,000 barrels daily. Yet shale specifically boomed—but this is about to end. Well productivity in the Permian, the star shale play in the U.S. unconventional oil and gas industry, has declined by 15% since 2020, according to data from Enverus. However, at the same time, producers are drilling longer wells, and they are doing it more efficiently than before, squeezing ever more oil and creating a perception that there are no limits to the technological advancements that can keep that oil flowing. As usual, there is a “but”. In this case, it goes like this: U.S. shale drillers—and, more specifically, drilling service providers—have done wonders of efficiency, but there are limits to all technological advancements. More importantly, there are also natural limits to shale reservoirs. “We’ve tripled oil production in the last 15 years and we have doubled natural gas production.” But “there’s not a lot of gas left in the tank,” the chief executive of Quantum Energy Partners, Wil VanLoh, told Bloomberg back in September. “The US shale revolution has run its course,” VanLoh also said at the time, echoing warnings that some investors have been voicing for years, namely, that the pace of production growth that the U.S. shale industry has been keeping is unsustainable over a longer term.
Venture Global Cleared to Load First Commissioning Cargo at Plaquemines LNG -Federal regulators on Friday authorized Venture Global LNG Inc. to load the first commissioning cargo from its Plaquemines export terminal in Louisiana just days after the facility first produced the super-chilled fuel. Map and charts by Natural Gas Intelligence (NGI) showing U.S. LNG export terminals' feed gas demand. FERC approved the company’s request to load the cargo on or after Saturday (Dec. 21). Regulators signed off on the commissioning cargo the same day as Venture Global made the request. The 20 million ton/year Plaquemines terminal produced its first LNG on Dec. 14. The first of 18 liquefaction blocks has started production 30 months after the project reached a final investment decision. That pace is on par with the company’s first facility, Calcasieu Pass LNG, which broke an industry record for fastest development with its first production in January 2022.
Chevron Inks 20-Year, 2 Mt/y Offtake Contract for Energy Transfer’s Lake Charles LNG - Chevron Corp. has inked a long-term sales and purchase agreement (SPA) for offtake from Energy Transfer LP’s proposed Lake Charles LNG project, marking the first contract disclosed since the U.S. Department of Energy (DOE) dropped its long-awaited export analysis earlier in the week. Graph showing global LNG supply and demand balance through 2050. Energy Transfer agreed to supply Chevron with 2 million tons/year (Mt/y) for 20 years from the still unsanctioned Louisiana project on a free-on-board basis. Terms included a fixed liquefaction fee and gas supply indexed to Henry Hub. With Chevron on board, the 12 Mt/y project now has more than 80% of its capacity under long-term contracts. The majority of those contracts were expected to begin in 2026, when Lake Charles LNG was expected to enter operations. NGI’s Forward Look data show fixed prices at the U.S. benchmark averaging $3.796/MMBtu that year.
Chevron Places 20-Year, 2 MMtpa Offtake from Lake Charles LNG - Energy Transfer LP has signed an agreement to supply Chevron Corp. two million tonnes per annum (MMtpa) of liquefied natural gas (LNG) over 20 years from the planned Lake Charles LNG in Louisiana. Midstream oil and gas player Energy Transfer announced the deal Thursday, after the Department of Energy (DOE) launched a review of LNG export permitting considerations by releasing a new study and opening a public comment period. Last year the DOE denied Energy Transfer’s request to extend for a second time the deadline for Lake Charles LNG to start export. The deal was signed between Energy Transfer LNG Export LLC and Chevron USA Inc. “The LNG will be supplied on a free-on-board basis and the purchase price will consist of a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark”, Dallas, Texas-based Energy Transfer said in an online statement. Energy Transfer LNG president Tom Mason said, “We are pleased that one of the most prominent LNG industry participants has selected Lake Charles LNG as a supplier”. “We believe that Lake Charles is the most compelling LNG project on the Gulf Coast and we continue to make significant progress towards full commercialization of this project”, Mason added. Planned to have an export capacity of 16.45 MMtpa, Lake Charles LNG is fully permitted and would be built as a conversion from an existing brownfield regasification site with four existing LNG storage tanks, according to Energy Transfer. The developer, though, has yet to reach a final investment decision. And last year the DOE denied Energy Transfer’s application to extend to 2028 the 2025 deadline for the project to start export. In a decision published April 21, 2023, the DOE said that challenges from the coronavirus pandemic cited by Energy Transfer did not warrant the extension request as the application was filed “after the primary, acute effect of the COVID-19 pandemic had largely subsided”. The DOE was not convinced Energy Transfer had done enough to bring the project to startup. “All authorization holders currently exporting from the seven large-scale export facilities in the United States commenced exports within their original seven-year commencement period—some while weathering the challenging delays and uncertainties associated with the COVID-19 pandemic and related market repercussions”, the DOE said. On August 18, 2023, Energy Transfer re-filed for an extension, seeking seven more years from the date of the new requested authorization. “In early to mid-2022, as the effects of COVID-19 began to lessen and worldwide demand for LNG began to increase following Russia’s invasion of Ukraine, LCE ramped up its development activities. This process included the commencement of discussions with the two EPC contractors who previously submitted EPC bids in the summer of 2022”, Energy Transfer insisted in its new application, accessible on the DOE website. It was referring to Lake Charles Exports LLC (LCE), a wholly-owned subsidiary. “The COVID-19 pandemic caused significant supply chain issues that resulted in severe shortages of LNG critical equipment, particularly electrical components, heat exchangers, turbines and compressors, as well as substantial increases in the cost of materials”, Energy Transfer added. “These issues ultimately led to the determination by EPC [engineering, procurement and construction] contractors that they could not honor prior EPC bids but would need to commence a 9-month process in early Fall of 2022 to solicit updated bids from every supplier of materials and parts for the Liquefaction Project”. Energy Transfer also said that exporting LNG is in the American public interest. “In granting LCE’s prior request for export authorization to non-FTA [free trade agreement] countries, DOE/FECM [Office of Fossil Energy and Carbon Management] concluded that the exports proposed from the Lake Charles Terminal ‘are likely to generate net economic benefits to the United States’”, the new application stated. Energy Transfer had hoped to obtain a decision by February 2024. However, on January 26, 2024, the Biden administration announced pending decisions on LNG exports were being paused. The DOE said the moratorium would give it time to review permitting considerations involving greenhouse gas emissions, environmental impact, energy prices and domestic gas supply. On Tuesday the DOE released a new study on such considerations. “The study, released today, will have a 60-day comment period that will begin once published in the Federal Register”, it said in a statement. “The public is encouraged to submit comments, which will inform how DOE may apply the study’s findings to its public interest analysis of export applications going forward”.
US natgas slides 2% as less cold weather keeps demand low — (Reuters) - U.S. natural gas futures slipped 2% to a near one-week low on Monday as weather forecasts suggested less cold conditions in the coming weeks, which is expected to lower heating demand. Front-month gas futures for January delivery on the New York Mercantile Exchange settled 6.6 cents, or 2%, lower at $3.214 per million British thermal units (mmBtu) by 03:11 p.m. EST (2011 GMT) . "Natgas is pulling back as the U.S. is seeing a warm up and disagreements from weather models on how cold January is going to be," LSEG estimated 323 heating degree days over the next two weeks, lower than the forecast for 376 HDDs on Friday. It also forecast average gas demand in the Lower 48, including exports, dropping from 129.8 bcfd last week to 125.0 bcfd this week. Meteorologists projected weather in the Lower 48 states would remain mostly warmer than normal through Dec. 28, except for a few colder-than-normal days from Dec. 21-23. "We saw a pretty big increase in wind output and that has ultimately displaced some natural gas and coal generation, so power burns are adjusting on a week-over-week basis, which is a good indication that demand is waning in the short term," Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 103.0 billion cubic feet per day (bcfd) so far in December, up from 101.5 bcfd in November. That compares with a record 105.3 bcfd in December 2023. The amount of gas flowing to the eight big LNG export plants operating in the U.S. rose to an average of 14.4 bcfd so far in December, up from 13.6 bcfd in November. That compares with a monthly record high of 14.7 bcfd in December 2023. Dutch and British wholesale gas prices fell on Monday morning as forecasts for warmer-than-usual temperatures curbed demand for gas. Also weighing on the market was news on Friday that Hungary had found a solution to enable it to pay for Russian gas.
US natgas prices climb 2% on rising flows to LNG export plants -- U.S. natural gas futures climbed about 2% on Wednesday on rising flows to the nation's liquefied natural gas export plants and expectations utilities pulled more gas out of storage than usual for a second week in a row last week. Analysts, however, projected rising output and forecasts for mild weather and low heating demand through the start of the new year should keep storage withdrawals smaller than normal in coming weeks. There was currently about 4% more gas in storage than usual for this time of year. Front-month gas futures for January delivery on the New York Mercantile Exchange rose 6.6 cents, or 2.0%, to settle at $3.374 per million British thermal units (mmBtu). Some analysts have said that winter, and the high prices it usually brings, could be over before the season officially starts since the heavily traded March-April "widow-maker" spread started trading in unusual contango in early December. That means the April contract is priced higher than the March contract. March is the last month of the winter storage withdrawal season, and April is the first month of the summer storage injection season. Because gas is primarily a winter heating fuel, summer prices typically do not trade above winter ones. It is also possible that gas prices have already hit their 2024 peak when they reached an intraday high of $3.56 per mmBtu in November. Over the past five years, prices hit their yearly highs in January 2023, August 2022, October 2021 and 2020, and January 2019. Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 103.1 billion cubic feet per day so far in December, up from 101.5 bcfd in November. That compares with a record 105.3 bcfd in December 2023. Meteorologists projected weather in the Lower 48 would remain mostly warmer than normal through at least Jan. 2. But with seasonally colder weather coming - it is usually colder in January than December - LSEG forecast average gas demand in the Lower 48, including exports, would rise from 123.9 bcfd this week to 128.2 bcfd next week. The forecast for next week was lower than LSEG's outlook on Tuesday. The amount of gas flowing to the eight big LNG export plants operating in the U.S. rose to an average of 14.1 bcfd so far in December, up from 13.6 bcfd in November. That compares with a monthly record high of 14.7 bcfd in December 2023. Some of that LNG feedgas increase came from rising flows to the first 1.8-bcfd phase of Venture Global LNG's Plaquemines export plant under construction in Louisiana. Plaquemines was on track to pull in about 0.3 bcfd of gas on Wednesday, according to LSEG data, the same as Tuesday and up from an average of 0.1 bcfd over the prior seven days.
US natgas prices jump 6% to 23-month high on lower output, rising LNG feedgas — U.S. natural gas futures jumped about 6% to a 23-month high on Thursday on lower output in recent days, an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants to an 11-month high, and early forecasts for more cold weather in January. Front-month gas futures for January delivery on the New York Mercantile Exchange rose 21.0 cents, or 6.2%, to settle at $3.584 per million British thermal units, their highest since January 2023. That price increase also came ahead of a report from the U.S. Energy Information Administration (EIA) that showed utilities pulled a bigger-than-usual 125 billion cubic feet (bcf) of gas out of storage during the week ended Dec. 13. That was in line with the 126-bcf withdrawal analysts forecast in a Reuters poll and compares with a decrease of 92 bcf during the same week last year and a five-year average draw of 78 bcf for this time of year. "The big draw did chop away at the storage surplus ... Gas is now closer to switching from a storage surplus to a storage deficit than at any point since the start of injection season," Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 103.0 billion cubic feet per day (bcfd) so far in December, up from 101.5 bcfd in November. That compares with a record 105.3 bcfd in December 2023. On a daily basis, however, output was on track to drop by 2.2 bcfd over the past six days to a preliminary four-week low of 101.9 bcfd on Thursday. Meteorologists projected weather in the Lower 48 would remain mostly warmer than normal through at least Jan. 3. But with seasonally colder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 124.6 bcfd this week to 127.7 bcfd next week. The forecast for this week was higher than LSEG's outlook on Wednesday, while its forecast for next week was lower. In other LNG news, the Seapeak Catalunya LNG vessel anchored outside Boston with what will likely be New England's first LNG cargo of the winter - this one from Trinidad and Tobago. Last winter, Constellation Energy's CEG Everett LNG terminal in Massachusetts received six cargoes from December 2023-March 2024 - five from Trinidad and one from Norway, according to LSEG data. New England power generators often switch from relatively cheap pipeline gas to more expensive oil and gas from LNG imports because gas pipelines into the six-state region cannot carry enough supply to heat the region's homes and businesses and fuel its power plants on the coldest winter days.
US natgas prices jump 5% to 23-month high on cold forecasts, rising LNG feedgas U.S. natural gas futures jumped about 5% to a 23-month high on Friday on early forecasts for much colder weather in mid-January that could freeze oil and gas wells and lift spot prices by reducing output as in past years. Also supporting prices was an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants and forecasts for slightly cooler weather than previously expected that should boost heating demand next week. Front-month gas futures for January delivery on the New York Mercantile Exchange rose 16.4 cents, or 4.6%, to settle at $3.748 per million British thermal units (mmBtu), their highest close since January 2023 for a second day in a row. With the front-month up about 16% over the past four days and in technically overbought territory for the first time since November, the premium of futures for January over February climbed to a record high of 34 cents per mmBtu. For the week, the contract was up about 14% after gaining 7% last week. Recent increases in gas prices coupled with a decline in oil prices, but the oil-to-gas ratio, or the level at which oil trades compared with gas, to 19-to-1 on Friday, the lowest since January 2023. On an energy equivalent basis, oil should only trade six times over gas. So far in 2024, crude prices have traded about 34 times over gas. That compares with 30 times over gas in 2023 and 20 times over gas during the prior five years (2018-2022). In other news, U.S. President-elect Donald Trump said the European Union, already the biggest buyer of U.S. energy, should step up U.S. oil and gas imports or face tariffs on the bloc’s exports. Financial firm LSEG forecast average gas demand in the Lower 48, including exports, would rise from 124.4 bcfd this week to 130.2 bcfd with cooler weather next week before falling to 119.4 bcfd with milder weather in two weeks. The forecast for next week was higher than LSEG’s outlook on Thursday. The use of gas to produce LNG for export – the fastest growing source of U.S. gas demand growth in recent years – was headed for its first annual decline in 2024 since the country started exporting the super-chilled fuel from the Lower 48 states in 2016. The amount of gas flowing to the eight big U.S. LNG export plants rose to an average of 14.1 bcfd so far in December, up from 13.6 bcfd in November. That compares with a monthly record high of 14.7 bcfd in December 2023. On a daily basis, a drop in LNG feedgas to Cheniere Energy’s 2.4-bcfd Corpus Christi plant in Texas to a three-month low of 1.6 bcfd offset a rise in flows to Cheniere’s 4.5-bcfd Sabine Pass in Louisiana to an eight-month high of 5.2 bcfd and a rise in flows at Venture Global LNG’s 2.6-bcfd Plaquemines plant under construction in Louisiana to a record 0.4 bcfd this week.
DOE Cautions Against ‘Unfettered’ U.S. LNG, Says Prices, Emissions Would Skyrocket if Left Unchecked - The Department of Energy’s (DOE) long-awaited study of U.S. LNG exports concluded more project authorizations could increase domestic prices and derail global climate goals without policy changes, potentially creating speed bumps for the Trump administration. Graph from Natural Gas Intelligence (NGI) showing commercially advanced North American LNG projects that were impacted by the U.S. Department of Energy's permit pause. DOE officials published more than 600 pages of material Tuesday reviewing the environmental and economic impacts of the country’s natural gas export industry. New permit considerations for non-free trade agreement (NFTA) permits were frozen for around six months this year while researchers at various DOE national laboratories conducted the first policy update since 2018. In the report, researchers suggested the current pace of long-term worldwide LNG exports from the U.S. would increase volatility within the U.S. gas market. Surging prices could cost the average household an extra $100/year or more by 2050, according to estimates in the study.
Expanding Natural Gas Exports Will Increase Prices, Pollution, Report Says - — A long-awaitedEnergy Department report says increasing exports of liquefied natural gas will raise prices and pollution, and isn't needed to keep up with demand — even as incoming President Donald Trump has pledged to increase fossil fuel production that has been blamed for contributing to climate change.“A business-as-usual approach is neither sustainable nor advisable,” Energy Secretary Jennifer Granholm said Tuesday. Environmentalists seized on the report as a call to block additional LNG exports.“The DOE’s latest analysis further proves what climate advocates, health organizations and others have said for years: LNG exports are not in the best interests of Americans,” said Ashlei Tracy, deputy executive director of the Pennsylvania Bipartisan Climate Initiative.But American Petroleum Institute President Mike Sommers called for more export permits.“It’s time to lift the pause on new LNG export permits and restore American energy leadership around the world,” Mr. Sommers said. “After nearly a year of a politically motivated pause that has only weakened global energy security, it’s never been clearer that U.S. LNG is critical for meeting growing demand for affordable, reliable energy while supporting our allies overseas.”The report was commissioned after President Joe Biden in Januaryannounced a pause in approving new LNG export terminals, a step applauded by environmentalists butcriticized by Pennsylvania politicians of both parties. There are eight such terminals operating in the U.S. currently and five more under construction. Last year, about 11% of U.S. gas was liquefied and sent abroad. The next step is for a public comment period on the report.The Keystone State is second only to Texas in natural gas production. While it’s not known how much of Pennsylvania’s gas gets exported abroad, the majority of it does not get consumed in the state and operators have looked to secure space in pipelines that supply LNG terminals on the Gulf Coast. The moratorium was an issue in last month’s election when Trump carried the Keystone State as he defeated Vice President Kamala Harris for president.Trump has pledged to issue new permits for LNG exports along with expanding oil and gas drilling, even as Mr. Biden sought to move the nation to clean energy and reduce the greenhouse gas emissions contributing to climate change.The U.S. has become the world’s largest exporter of LNG — accelerated by the Ukraine war as American gas replaced Russian gas in Western Europe.The report said that the current rate of growth in U.S. natural gas exports will exceed global demand. In fact, there are more than enough facilities already approved for construction to handle the demand, the report said.A dramatic increase in LNG exports will be felt domestically in the form of higher prices — costing the average U.S. household as much as $100 more a year by 2050, the report said.“We have recently lived through the real-world ripple effects of increased energy prices domestically and globally since the pandemic,” Ms. Granholm said. “Middle- and low-income households already face energy bills that are too high.”In addition, LNG facilities, which primarily are located on the Gulf Coast, pollute the air and, along with the existing oil industry, have “left a legacy of pollution and public health impacts,” the report said, adding that climate change has hurt local industries such as shrimping and fishing.“There is no longer any debate,” said Greenpeace USA Deputy Climate Program Director John Noël. “LNG exports drive up prices, devastate communities, and increase climate pollution. It is time for the Biden administration to act decisively and deny all the pending LNG export applications. The Department of Energy’s final report serves as a wake-up call to international buyers — U.S. LNG is not clean energy.”The oil and gas industry had signaled that it would not accept the findings of the report before it was released and followed through with swiftly issued statements denouncing it on Tuesday.“It’s time to end this blatant political charade from the Biden administration and start processing LNG export permits,” said David Callahan, the outgoing president of the Marcellus Shale Coalition, an industry trade group that represents shale gas producers and service firms in the Appalachian region.In a statement, Mr. Callahan said that “abroad, U.S. LNG exports enhance energy security and environmental advancement,” although DOE’s report said unfettered exports would increase greenhouse gas emissions.LNG supporters in the industry long have claimed that U.S. gas can be used to displace dirtier-burning coal abroad, thereby helping to lower climate warming gasses in the atmosphere. Chris Wright, who Trump nominated to be the next energy secretary, has been a proponent of increasing gas exports, in part because they would displace dirty cooking and heating fuels such as wood and dung, he said.Environmental advocates and lawmakers during a press call Tuesday said the report’s findings gave them ammunition as they continued to fight approval for LNG projects.The advocates urged the federal government to seek alternatives to oil and gas and to invest in renewable energy. They said the Biden administration’s LNG export approval pause was not politically motivated; instead, it gave officials more time to consider the full impacts of LNG facilities in American communities, the advocates said.Rep. Sean Casten, D-Ill., warned that approving more export terminals would wind up raising domestic gas prices and undercut national security.“There is 100 years of law that says the U.S., when they approve these facilities, have to put the national interest first,” he said.Energy producers, he argued, aim to “figure out how to export this overseas and make more money. We’re sitting here in a world where we’ve invented cellphone technology and are arguing whether we should export rotary phones to the rest of the world.”The only criticism he had of the report is that it was “too conservative” about the climate change impacts caused by the additional distribution and shipment of natural gas.
US DOE Releases LNG Gas Export Study: Facilities Already Approved Will Meet Global Demand For Decades; Unfettered Exports Would Increase Domestic Natural Gas Prices; Electricity Prices; Costs To Manufacturers – On December 17, the U.S. Department of Energy released an updated study of U.S. liquefied natural gas (LNG) exports required by Congress under the federal Natural Gas Act to evaluate the public interest of proposed exports to countries with which the United States does not have a Free Trade Agreement. The study will have a 60-day comment period that will begin once published in the Federal Register. The public is encouraged to submit comments, which will inform how DOE may apply the study’s findings to its public interest analysis of export applications going forward.In addition to the study, U.S. Energy Secretary Jennifer M. Granholm released a Secretarial Statement outlining departmental leadership’s perspective on the final study. Here are some key findings from the Secretary’s statement--
- -- Already Approved Facilities Will Meet Demand For Decades: LNG gas export facilities already approved “will be more than sufficient to meet global demand for U.S. LNG for decades to come.” “U.S. LNG exports have already tripled over the past five years, will double again by 2030, and could double yet again under existing authorizations.”
- -- Energy Consumers, Manufacturers Will Face Higher Energy Costs: "Unfettered exports of LNG would increase wholesale domestic natural gas prices by over 30%;" increases in electricity prices because natural gas dominates generation. [In Pennsylvania it accounts for 59% of generation capacity. Read more here.]; and increased costs for manufacturers that use natural gas as feedstock.
- -- LNG Gas Export Facilities Burden Already Polluted Communities: LNG facilities tend to be concentrated in communities that are being asked to shoulder the additional burden of pollution from increased natural gas production and liquefaction. This comes on top of existing environmental burdens from refining, petrochemical, and other industries already concentrated near these communities. [The proposal to build an LNG export facility in Chester, Delaware County is just one example. Read more here.]
- -- Climate Impact Merits Close, Rigorous Analysis: While some tout LNG as a means to reduce the use of coal overseas (and to date that has been the case with some importing countries), the study put forward today shows a world in which additional U.S. LNG exports displace more renewables than coal globally.
- -- We Need To Know Where Those Exports Are Headed: “Based on current global demand for LNG, the People’s Republic of China is already the world’s largest importer. Looking ahead, China's LNG exports are expected to nearly double between now and 2030, and China's LNG imports are expected to be the highest of any country through 2050.
PRC entities have already signed several contracts with operating or proposed U.S. LNG projects. Future authorization decisions of what is in the “public interest” need not be made solely on a binary – yes or no – basis but could be undertaken using a broader framework of requirements for all authorizations.[Pennsylvania shale gas producers have already said they have a “duty” to supply China-- our economic and military competitor-- with natural gas to reduce greenhouse gas emissions. Read more here.]“Regardless of what happens in each cycle of elections, the effect of increased energy prices for domestic consumers combined with the negative impacts to local communities and the climate will continue to grow as exports increase.”“In the decade to come, we will see strong and mounting pressure within our democratic system to ensure that the United States uses its market position in a way that truly advances our national interest and energy security, which must include the needs of American workers, American families, and our responsibility to address the climate crisis. “In our view, the question is not whether U.S. export policy will be forced to respond to those interests, but when and what that response is.”
Industry Confronts DOE LNG Study, Braces for Further Project Hurdles Even as Trump’s Second Term Nears A massive study released by the federal government on Tuesday that suggested further increasing U.S. LNG exports is unsustainable was widely dismissed by the industry as a political stunt. But it’s still likely to complicate President-elect Trump’s plans to fast-track export project approvals. Graph showing commercially advanced U.S. LNG projects impacted by the DOE's permit review. The U.S. Department of Energy (DOE) released more than 600 pages of material after nearly a year of studying whether more exports are in the public interest. The study is final, but it is to be opened to a 60-day public comment period that would help inform how DOE applies the findings to its public interest analysis of export applications going forward.The Biden administration paused the approval of new export projects in January while it conducted the study. Trump has said he plans to lift the pause on his first day in office and fast-track some projects as part of a broader agenda to solid
Analysts: DOE’s LNG Study Will Result in Few Policy Changes - - Scores of energy industry representatives criticized the Department of Energy’sfindings on the LNG sector, released on Dec. 17, even though the report’s recommendations are unlikely to become policy.The report—a government-funded scientific study—is likely to come up in the courtroom even after the Donald Trump administration takes power and presumably disregards the DOE’s proposals, according to Arbo, a firm that tracks government issues for the energy industry.The Dec. 17 “release of DOE's long-anticipated export study officially ends the pause but potentially complicates the path forward,” Arbo wrote in a newsletter.The DOE report forecasted unrestricted LNG exports could increase domestic natural gas prices by 30%. The increased use of LNG could also increase global greenhouse gas emissions by delaying the transition from a hydrocarbon-based energy infrastructure to one based on solar and wind. A strong supply of LNG on the global market could also potentially help America’s opponents, especially China, the report said.Energy Secretary Jennifer Granholm's “emphasis on these findings, along with environmental justice concerns and public interest considerations, sets up potential hurdles for the incoming administration,” Arbo wrote.The study now has a 60-day comment period, which extends past the date when Trump moves into the White House. At that time, the DOE is expected to shift its LNG analysis to a more economically focused approach.However, the expected shift from the Trump administration could result in legal challenges. Future plaintiffs against LNG expansion could potentially cite the study when making a case against the government, Arbo said.Recent LNG projects—even already permitted facilities—are facing legal action. In August, a federal appeals court vacated the federal permits for two LNG facilities located in South Texas —Texas LNG and Rio Grande LNG. In its reasoning, the court cited environmental justice arguments that the DOE included in the just-released report. Arbo also noted that the recent U.S. Supreme Court Chevron decision will further complicate legal matters because the ruling took away some of the executive branch’s power to create regulations, meaning rules implemented under the Trump administration will be under greater legal scrutiny than prior administrations. There is some optimism for the LNG industry, however. Under the Natural Gas Act, the DOE retains “considerable discretion” to determine the public interest for LNG permit authorizations, Arbo said. The flexibility could mean the DOE may have fewer problems changing its current policies. The White House implemented the LNG permitting pause in February. After a year, the concrete effects of the move appear to be minimal against the larger backdrop of expanding LNG export capacity, said Jack Weixel, senior director at East Daley Analytics. According to the DOE, five LNG projects are currently waiting for permits: Calcasieu Pass 2 (3.96 Bcf/d); Commonwealth (1.21 Bcf/d); Port Arthur Phase II (1.91 Bcf/d); Lake Charles (2.33 Bcf/d); and Magnolia LNG (1.23 Bcf/d). “The fact of the matter is that through the new administration’s first and only remaining term, the DOE pause only really ever impacted Venture Global’s CP2 project and Kimmeridge-backed Commonwealth LNG,” Weixel told Hart Energy. Combined, the two facilities had a capacity of 3.9 Bcf/d of incremental demand. The DOE had already permitted about 15 Bcf/d of capacity for development, Weixel said. With or without the pause, the U.S. export capacity for LNG is expected to double between now and 2028, from about 14 Bcf/d to more than 28 Bcf/d. One project, Venture Global’s Plaquemines LNG, began production on Dec. 13. Cheniere Energy’s Corpus Christi LNG expansion is expected to start production within the next few weeks. Weixel also noted the DOE is partially correct in that domestic natural gas prices will rise, but such an increase was expected, regardless of whether any new export capacity is approved. Producers likely plan to increase supply once LNG demand kicks in. Natural gas prices have remained low over the past two years thanks to abundant supplies, especially out of the Permian Basin, where natural gas has been priced below $0 for much of 2024. Many of the LNG facilities are also adjacent to the Haynesville Shale, located in Texas and Louisiana. “The point is that there is plenty of natural gas to produce into another 3.9 Bcf/d of feedgas demand,” Weixel said. “It’s just a matter of putting in the infrastructure to move that gas to the Gulf Coast.”
Trump’s Energy Pick, Chris Wright, Argues Fossil Fuels Are Virtuous - The New York Times - Chris Wright, the fracking magnate and likely next U.S. energy secretary, makes a moral case for fossil fuels. His position, laid out in speeches and podcasts, is that the world’s poorest people need oil, gas and coal to realize the benefits of modern life that Americans and others in rich nations take for granted. Only fossil fuels, he says, can bring prosperity to millions who still burn wood, dung or charcoal for basic needs like cooking food and heating homes.“It’s just, I think, naïve or evil, or some combination of the two, to believe they should never have washing machines, they should never have access to electricity, they should never have modern medicine,” Mr. Wright said on the “Mission Zero” podcast last year. “We don’t want that to happen. And we simply don’t have meaningful substitutes for oil, gas and coal today.”The argument offered by Mr. Wright, who has been chosen by President-elect Donald J. Trump to run the Energy Department, ignores the fact that wind, solar and other renewable energy are cleaner and increasingly cheaper than fossil fuels. The International Energy Agency says clean energy is coming online globally at an “unprecedented rate” and will play a significant role in the future. In some places, renewable energy has been able todisplace fossil fuels.Mr. Wright also skates past the climate impacts from burning more fossil fuels. Climate change is already having a disproportionate impact on poor nations, which are less able than rich countries to handle the rising seas, extreme weather, drought and other consequences of global warming.“It’s pretty self-serving by the fossil fuel industry to assume the future is going to look exactly like the past,” said Joseph Curtin, a managing director on the power and climate team at the Rockefeller Foundation, which is working on expanding clean energy access in poor countries.
Trump Administration Builds Options for Unleashing U.S. LNG, but Obstacles Could Remain, Experts Say - The incoming administration could be planning to use a novel set of tools to grant a wave of LNG export permits, according to energy experts, but the pending U.S. Department of Energy (DOE) study could still complicate the process. Natural Gas Intelligence's (NGI) chart showing global LNG futures settle prices through 2027. As inauguration day approaches, President-elect Trump and his transition team have indicated they plan to target the Biden administration’s pause on new non-free trade agreement (NFTA) permits that have kept developers and long-term customers on edge since January. On Tuesday, Trump also made an overture on Truth Social, his social media network, to the business community, promising to streamline “all environmental approvals” for “any person or company investing [$1 billion]” or more in the United States.
Enbridge pipeline spills 70,000 gallons of oil in Wisconsin - Roughly 70,000 gallons (264,978 litres) of oil from a pipeline spilled into the ground in Wisconsin, officials said. The problem was discovered Nov. 11 in Jefferson County, 60 miles (96.5 kilometers) west of Milwaukee, by an Enbridge Energy technician, the Milwaukee Journal Sentinel reported, citing a federal accident report. Enbridge said the spill on the company’s Line 6 was caused by a faulty connection on a pump transfer pipe at the Enbridge Cambridge Station. It was an estimated 1,650 barrels, which is equivalent to about 70,000 gallons. “Investigation and remediation began immediately upon discovery and continues. Removal of impacted soils is continuing,” spokesperson Juli Kellner said Saturday, adding that 60% of the spill has been removed through excavation. Kellner said the spill was immediately reported to regulators, though the report by a federal pipeline safety agency said the line likely was leaking for an “extended period of time.” “We are working with the Wisconsin Department of Natural Resources as cleanup and restoration proceed,” Kellner said. Line 6 is a 465-mile (748.3-kilometer) pipeline carrying crude oil from Superior, Wisconsin, to a terminal near Griffith, Indiana, according to a company map. Critics noted the spill was discovered during the same week that Wisconsin regulators approved the first permits for Enbridge’s plan to move the aging Line 5 pipeline around the Bad River Band of Lake Superior Chippewa reservation. Opponents said it would still threaten the region’s watershed and perpetuate the use of fossil fuels.
Enbridge pipeline oil spill in Wisconsin larger than all of the company's spills combined in 2023 | Interlochen Public Radio -- Wisconsin state and federal officials are reporting an oil spill from an Enbridge pipeline, Line 6. The spill is about 60 miles west of Milwaukee near the small town of Oakland.The Wisconsin Department of Natural Resources said in a release that Enbridge first reported a two-gallon oil spill. Later it was revised to 126 gallons. Now, it’s past 69,000 gallons. That’s 15 times more than what Enbridge reported spilling in all of North America in all of last year. The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration report indicated that the oil spill is limited to soil contamination on Enbridge-owned land. It’s considered a High Consequence Area because of its proximity to nearby homes. Estimates indicate the cleanup costs and the loss of product will amount to a little more than $1 million. The spill occurs as Enbridge faces opposition to replacing Line 3 in Minnesota, rerouting Line 5 around tribal land in Wisconsin, and building a tunnel in the Straits of Mackinac to replace part of Line 5 in Michigan. Opponents of the projects point to this latest spill as further evidence that the crude oil and natural gas liquids pipelines are a risk to sensitive environmental areas and the Great Lakes.
Canadian Natural Gas Production Sets Another Record as Prices Rebound Natural gas producers in Canada, already prolific this year, bolstered output to another all-time high this month in response to winter’s arrival and rising prices. Natural Gas Intelligence's (NGI) Canada Border Tracker displaying a map and key natural gas hubs with prices. Depicts flow data key for market analyses. Western Canadian gas production clocked in at 19.38 Bcf on Dec. 6, eclipsing the prior record of 19.30 Bcf set just a month earlier, according to analyses by RBN Energy LLC. The rise this month “continues what has been a strong upward trend for production that has been underway since the beginning of October,” RBN analyst Martin King said. He noted that, because of revisions, the November record figure was lower than a prior estimate, though it was still a single-day peak at the time.
Extension of U.S. LNG Pause Could Benefit Mexico Projects, Expert Says -If the United States were to continue to hold back the approval of new LNG export projects, then Mexico could get a leg up developing its export market, according to Ramón Antonio Massieu Arrojo, an attorney at Toeppich and Associates. None “There are several ongoing and planned projects in Mexico, and I think if the pause continues, investors and developers will look there for development opportunities,” he told NGI’s Mexico GPI. A recent study by the U.S. Department of Energy (DOE) suggested that new LNG projects in the United States could mean higher natural gas prices domestically, as well as with rising emissions. Massieu Arrojo is an attorney at Houston-based Toeppich and Associates where he specializes in the development of energy projects, regulation, mergers and acquisitions and market competition issues.
LNG Re-exporters Weigh Trump Effect Ahead of Inauguration — Mexico Spotlight - This week, the North American natural gas market turned its focus to the U.S. Department of Energy (DOE) and its more than 600-page report assessing whether more LNG exports are in the public interest. The study, released on Tuesday (Dec. 17) is important to Mexican markets too, because Mexico has some 42 million tons/year (Mt/y) worth of LNG projects in the planning stages. These projects would source U.S. gas and thus would be subject to DOE regulations. Beyond those being planned, there is also one LNG project in operation in Mexico. Meanwhile, Sempra’s Baja California export terminal is set to come online in 2026. Both rely on U.S. feed gas.
Natural Gas Storage, Pipelines, LNG, Drilling Crews – Mexico Needs it All, Study Finds -Developers and the Mexican state need to work together to take advantage of an energy mix increasingly reliant on natural gas, according to a new study. Compiled by the Instituto Mexicano para la Competitividad (IMCO) think tank and Mexican gas association Asociación Mexicana de Gas Natural (AMGN), the 50-page report highlighted the rapid expansion of natural gas in Mexico over recent years. The aim of the paper, according to the authors, was to underline the natural gas opportunities that exist in Mexico so the fuel can “become a strategic ally in the economic and social development of the entire country.”
YPF, Shell Agree to Partner on Argentina Export Project — Three Things to Know About the LNG Market --Russian President Vladimir Putin said Thursday the contract that allows the country to ship natural gas through Ukraine would expire at the end of the year. Chart from Natural Gas Intelligence (NGI) showing LNG direct ex-ship prices in Latin America. Putin reportedly said during his annual press conference that Ukraine has refused to extend it, but said Gazprom PJSC would “survive.” The European Commission has also said it is prepared for the end of the transit deal in keeping with a plan it rolled out weeks after Russia invaded Ukraine in 2022. The continent is working to phase out Russian energy imports by 2030.
Trump Threatens Tariffs If EU Doesn't Buy More USA Oil and Gas - President-elect Donald Trump warned the European Union that its exports will get hit with US tariffs if its member states don’t buy more American oil and gas. “I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!,” he said on Truth Social. The US is the world’s largest producer of crude oil and the biggest exporter of liquefied natural gas. LNG buyers — including the EU and Vietnam — have already talked about purchasing more fuel from the US, in part to deter the threat of tariffs. The euro traded 0.3% stronger at $1.0398 Friday in a sign investors believe the bloc will be able to meet his demands and avoid punitive measures. The US goods and services trade deficit with the EU was $131.3 billion in 2022, according to the office of the US Trade Representative, and the EU has been bracing for a trade offensive ever since Trump’s election victory last month. The bloc was largely caught off-guard in 2017 when Trump, citing national security concerns in his previous term as president, levied tariffs on European steel and aluminum. Since then, the EU has reinvented its trade doctrine and expanded its toolbox, giving it a range of options to counter coercive practices. “We are well-prepared for the possibility that things will become different with a new US administration,” German Foreign Minister Annalena Baerbock said after a Group of Seven meeting in Italy in late November. “If the new US administration pursues an ‘America first’ policy in the sectors of climate or trade, then our response will be ‘Europe united.’” European Commission President Ursula von der Leyen floated the idea last month that imports from the US could replace the bloc’s consumption of Russian LNG. LNG “is one of the topics that we touched upon,” von der Leyen said after a phone call with Trump. “We still get a whole lot of LNG via Russia, from Russia. And why not replace it with American LNG, which is cheaper, and brings down our energy prices.” The US is already Europe’s biggest provider of LNG, but imports from Russia remain solidly in the second spot. EU officials are looking for ways to curb Moscow’s role as the war in Ukraine continues, even while Russian pipeline gas and LNG are largely outside of the scope of sanctions. The bloc will explore potential measures when they discuss a new sanctions package next month but stringent restrictions remain difficult, according to a person familiar with the matter, who spoke on the condition of anonymity. In the short-term, the US doesn’t have much more capacity to increase shipments. And since LNG is sold through long-term contracts, adding shipments to Europe would require original buyers of the gas to agree to divert its shipments to Europe — but that wouldn’t boost the amount being exported by the US. Over the longer term, more capacity will come on line with dozens of projects in the US currently in the works. The US has already assumed a critically important role as an oil supplier to Europe, especially in the wake of Russia’s invasion of Ukraine. Shipments are now holding steadily up around the 2 million-barrels a day mark, exceeding flows from countries including Saudi Arabia, west Africa and elsewhere. US barrels have also become increasingly important in setting Dated Brent, the world’s key price for determining physical market transactions. Those flows have largely been a function of free-market trading and it’s hard to know what difference any kind of government-level intervention could make to them. Asia also competes for the barrels. Refineries are optimized to make the right fuels from the right crudes. But the EU has still prepared for the possibility that it will end up in a trade war with Washington. The EU’s new anti-coercion instrument strengthens trade defenses and enables the commission, the bloc’s executive arm, to impose tariffs or other punitive measures in response to such politically motivated restrictions. The EU also adopted a so-called foreign subsidies regulation, which allows the commission to prevent foreign companies that receive unfair state handouts from participating in public tenders or merger-and-acquisition deals in the bloc, among other measures. Trump has multiple grievances against the EU and has criticized Europe for not spending enough on defense and for the US-EU trade deficit. He once referred to Brussels, the seat of the EU institutions, as a hellhole, and more recently he said he’d once told a NATO member that he’d let Russia do “whatever the hell they want” to it if it didn’t hit defense spending targets. Trump has threatened tariffs against countries from China to Canada, and is particularly focused on nations that have trade deficits with the US. Europe is already the top destination for American LNG, with more than half of the deliveries going to the continent last year.
European Natural Gas Prices Continue Sinking as Supply Outlook Strengthens — LNG Recap European natural gas prices continued to trade at their lowest price in over a month as supply concerns have eased and temperatures are expected to stay above normal into next week. (a chart showing European natural gas storage levels) The prompt Title Transfer Facility (TTF) contract shed another 29 cents on Monday to finish at $12.40/MMBtu. The European Union assessed LNG prices a bit higher at $13.01 as the Japan-Korea Marker continued to trade at a premium of around $15. But LNG supplies are strong in both regions, while Norwegian exports to Europe were also healthy at 11.5 Bcf on Monday, according to pipeline grid operator Gassco AS.
EU Court Ends Years-Long Challenge to Natural Gas Pipeline Regulations for Nord Stream 2 -The European Court of Justice dismissed the Nord Stream 2 AG (NS2) pipeline contest case against the European Union (EU), strengthening the bloc’s petition to use regulations to protect domestic markets from import volatility. The case, which had been ongoing since 2019, centered around the EU’s move to extend market rules for internal pipeline systems to third-party lines that bring exported energy products to member states. The original complaint from NS2, a Switzerland-based unit of Russia's state-owned gas company Gazprom PJSC, was dismissed in 2020, but the firm was allowed to continue its argument after a 2022 appeal. The European Commission (EC) welcomed the court’s judgement in the case brought by NS2 concerning the EU Gas Directive, an EC spokesperson told NGI.
Russia Could Lose Its Largest European LNG Import Loophole in Latest Natural Gas Crackdown -- French LNG terminal operator Elengy, the top European importer of Russian gas, has agreed to ban Russian transhipments of the super-chilled fuel through its infrastructure starting next spring. Bar graph showing Europe's natural gas import source over four years. Elengy disclosed it is planning to fully comply with the 14th package of European Union (EU) sanctions on Russia, including participation in a mandatory reporting program to track deliveries of LNG volumes.Despite discussions of an EU-wide ban of Russian LNG, France has received a record volume of Russian LNG this year. Europe has imported 16.37 million tons (Mt) of Russian LNG since the beginning of the year, including 5.9 Mt via French terminals, according to Kpler data.
Moldova declares state of emergency over expected halt to Russian gas -- Moldova's parliament on Friday voted to approve a 60-day state of emergency, citing fears of an immediate threat to the security of its citizens ahead of an expected halt in Russian gas flows. Russian gas currently reaches Moldova, a landlocked country in the northeastern corner of Europe's Balkan region, via its neighbor of Ukraine.However, a gas transit deal between Russia's Gazprom and Ukraine's Naftogaz is set to expire on Dec. 31 and Kyiv has repeatedly said it has no intention to extend the contract.A total of 56 lawmakers of Moldova's 101-seat parliamentvoted in favor of a nationwide state of emergency, which the government said would allow the country to apply a series of measures to prevent and mitigate the threat of insufficient energy resources.The cessation of Russian gas to Moldova's Transnistrian regioncould generate "a humanitarian crisis" as well as "risks to the functioning and stability" of the country's energy sector, according to a press release from Moldova's parliament.Moldova Prime Minister Dorin Recean said this winter must be the last in the country's history that it can be held hostage over energy supplies.Russia, which launched a full-scale invasion of Ukraine nearly three years ago, has previously said it stands ready to continue to supply gas to Europe via Ukraine.Russia launched a massive aerial strike against Ukraine's energy infrastructure on Friday morning. Ukrainian President Volodymyr Zelenskyy said Moscow used 93 missiles and nearly 200 drones in the attack.
BP, Adnoc Launch Middle Eastern Natural Gas Platform with Initial Focus in Egypt -Arcius Energy, created by BP plc and Abu Dhabi National Oil Co., aka Adnoc, is looking to build a regional natural gas platform to serve markets in the Middle East, initially in Egypt. Map showing Arcius southern Mediterranean concessions. Expand The joint venture (JV) has a mission to “responsibly contribute to the transformation of considerable natural gas assets to meet growing domestic energy demand – and to contribute to energy security and economic development in the region,” the partners said. “We believe that lower carbon natural gas can support the energy transition and provide customers with the energy they need to thrive.”
Chevron, Woodside Swap LNG Assets as Majors Look to Trim Focus, Boost Earnings -Chevron Corp. and Woodside Energy Group Ltd. have agreed to a swap of Australian assets aimed at boosting core earning power for both companies and progressing the North West Shelf (NWS) LNG project. Map showing Australia and nearby LNG export and liquefaction facilities. Under the agreement, Woodside plans to acquire Chevron’s equity stakes in the NWS natural gas, the NWS oil and the Angel Carbon Capture and Storage projects. In exchange, the Australian energy giant will transfer its interest in the Wheatstone LNG facility and the Julimar-Brunello gas fields to Chevron. “This transaction simplifies our portfolio, improving our focus and efficiency by consolidating our position in our operated LNG assets,” Woodside CEO Meg O’Neill said. “It is immediately cash flow accretive and includes a cash payment upon both execution and completion.”
Two Russian oil tankers wrecked in Black Sea's Kerch Strait -Two Russian oil tankers have been badly damaged in the Black Sea, causing an oil spill, authorities in Russia have said. Footage released by Russia's Southern Transport Prosecutor's Office showed the bow of one tanker completely broken off, with streaks of oil visible in the water. Both tankers are believed to have drifted before running aground offshore. At least one crew member was reportedly killed. The incident took place in the Kerch Strait, which separates Russia from Crimea - the Ukrainian peninsula illegally annexed by Moscow in 2014. A rescue operation involving tugboats, helicopters and more than 50 personnel saw 13 crew members rescued from one tanker, before being suspended due to bad weather. Fourteen crew members who had been stranded aboard a second tanker were also rescued, the Russian emergencies ministry said on Monday. President Vladimir Putin has ordered a working group to be set up to deal with the incident, headed by Deputy Prime Minister Vitaly Savelyev - and authorities are investigating for criminal negligence. Michelle Bockmann, an analyst at shipping industry journal Lloyd's List, told the BBC the two vessels are owned by the company Volgatanker and were relatively small. They had been carrying around 4,300 dead weight tonnes of oil each, according to Russian officials quoted by Tass news agency. A tanker used for trading Russian crude oil internationally generally has a much larger carrying capacity of around 120,000 dead weight tonnes, Bockmann said, meaning it is likely these tankers were used for transporting oil through Russia's rivers or in coastal waters. The Kerch Strait is a key route for exports of Russian grain and it is also used for exports of crude oil, fuel oil and liquefied natural gas. In 2007, another oil tanker - Volgoneft-139 - split in half during a storm while anchored off the Kerch Strait, spilling more than 1,000 tonnes of oil. Russian oil imports have been heavily sanctioned by allies of Ukraine since the Kremlin ordered the full-scale invasion of the country in February 2022. In recent years, Russia has been accused of using a so-called ghost fleet of tankers, which are often poorly maintained and lack proper insurance, to move oil and circumvent sanctions - though Bockmann said it did not appear the tankers involved in Sunday's incident were part of that fleet.
Oil Spill Devastates Russian Coastline After Tanker Accident -- Dozens of kilometers of Black Sea coastline in Russia's Krasnodar region have been covered in heavy fuel oil, local authorities and residentsreported on December 17, after two oil tankers were heavily damaged during a storm in the Kerch Strait.Regional Governor Veniamin Kondratyev said cleanup crews were being dispatched to the area as high winds helped spread large amounts of spilled oil along the coastline, raising concerns of an impending environmental disaster in the Black Sea.Social media photos and video showed wildlife covered in dark liquid, the result of the December 15 incident involving two Volgoneft tankers that were carrying thousands of tons of mazut -- low-quality heavy fuel oil.The vessels reportedly ran aground in the ecologically sensitive waters off Ukraine's Moscow-annexed Crimean coastline. One of the tankers reportedly capsized and split into two during a severe storm. Waves as high as 3-4 meters, considered dangerous for such vessels, are believed to have caused the accident.Reports of environmental degradation are mounting as more and more oil spreads across the sea and onto shores that are summer havens for families.Local residents painted a dire picture of the shoreline, noting oil-covered birds that cannotfly and stray dogs covered in fuel oil roaming the shore.They also noted the strong scent of oil in the air with many residents complaining of nausea and skin and eye irritations.Almost 300 people, including volunteers and heavy equipment, are working to minimize the consequences of the accident, officials said.Two municipalities have organized operational headquarters for cleaning. Environmentalists, however, warn that the spill's size may already be too big to handle.The chairman of the region's maritime trade unions, Leonid Glushak, told the Kedr website that the overwhelming majority of the fuel oil has already seeped into the sea, exacerbating the eco-catastrophe.According to Glushak, Volgoneft tankers, intended for river voyages, are inadequate for open sea water such as the Kerch Strait.Moscow has been using a so-called shadow fleet of tankers -- a group of old, uninsured oil vessels -- to bypass Western sanctions imposed over its full-scale invasion of Ukraine. The poor condition of these ships has raised concerns about environmental disasters.Authorities have started criminal investigations into the accident, which Ukrainian President Volodymyr Zelenskiy warned could be repeated in other areas of Europe."Our sea is facing yet another environmental disaster caused by Russia. But there are even larger and more dangerous Russian tankers operating in your seas. Stopping this fleet is not just about cutting off Russia’s war funding -- it’s about protecting nature," he said in a post on X on December 17.
Ukraine calls for sanctions against Russia oil tankers over Black Sea spill - Ukraine has called on the international community to take action against Russia’s sanctions-busting oil fleet, after an ageing tanker sank in the Black Sea, causing a major environmental disaster. The Russian cargo ship, Volgoneft-212, broke in half during a heavy storm off the coast of occupied Crimea on Sunday. A second tanker, Volgoneft-239, got into difficulties in the same area. It eventually ran aground near the port of Taman at the south end of the Kerch strait. The two boats were carrying more than 9,000 tonnes of heavy fuel oil. According to satellite data, about 3,000 tonnes had leaked out. “Unfortunately some tanks were damaged. The remaining ones are sealed,” a marine scientist, Sergei Stanichny, told the Russian news agency Tass, confirming the spill. A rescue operation involving tug boats and two helicopters was launched on Sunday. Video footage showed the bow of the snapped boat sticking vertically out of the water. Crew members stood on the bridge wearing lifejackets. One sailor died and 11 were taken to hospital with hypothermia. Ukraine accused the Kremlin of recklessness and of violating basic operating rules. On Monday, Mykhailo Podolyak, an adviser to the head of the office of President Volodymyr Zelenskyy, said on social media that the pollution was the worst this century in the Black Sea region, and the second worst ever. “It is now obvious that any sanctions against the Russian tanker fleet are always useful, but they are all too late,” he posted.“The accidents on two rusty vessels in the #Kerch Strait resulted in another large-scale environmental disaster of our war. Thousands of tons of fuel oil spilled ... causing tragic damage to the natural systems of the #Azov and Black Seas.”Podolyak said the tankers were built more than 50 years ago and should never have been used in winter storms. He added that they belonged to a 1,000-strong shadow fleet used by Russia to export oil and to dodge western sanctions since its full-scale invasion in 2022.Most boats were “hopelessly outdated”, Podalyak said, alleging that they had “fictitious insurance policies”, hid their real owners and “overloaded” oil at sea. Further large-scale accidents were “statistically inevitable”, and the cost of clean-up operations would fall on affected neighbouring countries. The adviser called for “the most stringent sanctions” against the vessels and people associated with them. He said states should prohibit their entry into territorial and international waters and outlaw “the transhipment of Russian oil”. Tankers should be required to have proper protection and indemnity insurance, he said.
Third Tanker Sends Distress Signal as Russia Deals With Black Sea Oil Spill - The Moscow Times -- A third Russian-flagged tanker has issued a distress signal two days after a storm badly damaged two other vessels and caused a major oil spill, the Interfax news agency reported Tuesday, citing authorities and emergency services. The Volgoneft 109 tanker was anchored in the waters of Port Kavkaz in the Kerch Strait when its captain reported a damaged cargo tank, federal shipping agency Rosmorrechflot said. The Kerch Strait connects the Black and Azov seas, as well as annexed Crimea and mainland Russia. “The water tightness of the hull itself is not compromised, there is no leakage into the sea,” Interfax quoted a Rosmorrechflot spokesperson as saying. Volgoneft 109 was carrying fuel oil known as mazut when it issued the distress signal due to a crack on board, an emergency source was quoted as saying. The press service of the Krasnodar region branch of Russia’s Emergency Situations Ministry said the incident with Volgoneft 109 was “not critical.” Volgoneft 109 is carrying some 4,000 metric tons of fuel oil and has 14 crew members, according to the Baza Telegram news channel, which is believed to have ties to Russian law enforcement. Baza said the ship issued a distress signal shortly after midnight Tuesday.On Sunday, a storm ripped the Volgoneft 212 tanker in half and ran Volgoneft 239 aground in the Kerch Strait, spilling an estimated 3,000 metric tons of oil products that washed up on the Black Sea coast by Tuesday morning. Greenpeace Ukraine warned of an environmental catastrophe.The spillage extended to more than 23 kilometers across the resort of Anapa, regional emergency chief Sergei Shtrikov said. Anapa and two other Krasnodar region villages declared a state of emergency due to the oil spill.One crew member of Volgoneft 212 was killed and 26 others were rescued from both tankers after Sunday’s storm. Media reported that the vessels were more than 50 years old.
What The Largest-Ever Oil Deal Between India and Russia Really Means - The new Trump Administration may target Russia's recent oil deals as part of its sanctions discussions. Russia's Rosneft has signed a $13 billion annual crude oil supply agreement with Indian downstream giant Reliance Industries, committing to supply 500,000 barrels per day (bpd) for 10 years. This deal constitutes 0.5% of the global oil supply and is the largest-ever commercial agreement between Russia and India. Facing Western sanctions on its oil sector, Russia is actively seeking alternative clients. India has become its largest oil importer since the 2022 invasion of Ukraine, benefiting from discounted crude prices of $3-4 per barrel. This deal solidifies Russian-Indian cooperation and could cause friction among OPEC+ members as Russia encroaches on Gulf producers’ market share in India, a key growth market. Saudi Arabia and the UAE face heightened competition, particularly since the deal supplies a substantial portion of India’s oil demand. Reliance will receive approximately 20-21 Aframax-sized cargoes of crude and three fuel oil cargoes per month at its Jamnagar refinery. The pricing will be market-driven for the first year. Reliance will now account for around 50% of Rosneft's seaborne exports, increasing its intake from an average of 405,000 bpd in 2024 to 388,500 bpd in 2023. However, the partnership faces risks from growing U.S., UK, and EU sanctions, which are intensifying against Russian clients like India and China. This comes amid declining Russian oil exports, which dropped by 120,000 bpd to 7.33 million bpd in November. Despite a 7% decline in revenue, Russian oil revenues remain higher than anticipated at $14.56 billion. Western sanctions also significantly impact Russia’s Arctic LNG operations. For example, the ice-capable LNG carrier Christophe de Margerie faces operational issues due to limited access to European shipyards and spare parts. The vessel has been out of service since the fall and unable to transport Yamal LNG cargoes.
Venezuela Sends Crude to India in New Deal --A high-seas oil tango is back on between Venezuela's state oil company PDVSA and India’s Reliance Industries, rekindling a swap arrangement paused by U.S. sanctions. This revival, greenlit by a U.S. license in July, signals a cautious step forward for both players. But onlookers shouldn't break out the champagne just yet.Earlier this month, a supertanker brimming with 1.9 million barrels of Venezuela’s Merey heavy crude set sail for India’s Sikka port. In return, Reliance delivered 500,000 barrels of heavy naphtha to PDVSA—a cocktail Venezuelan refineries desperately need to process their sludgy crude. The document detailing this exchange, seen Thursday, suggests a delicate dance of compliance and opportunism. For Reliance, this isn’t its first diplomatic oil shuffle. India paused its Venezuelan oil purchases back in March, spooked by whispers that U.S. sanctions might boomerang. That pause didn’t just reflect regulatory jitters—it underscored the global high stakes of keeping Washington happy. But now, with the ink barely dry on that U.S. license, Reliance appears ready to wade back in, albeit carefully.Venezuela, for its part, is riding a tricky wave. Its sanctions-hit oil sector has relied on barter-style deals to survive, trading crude for much-needed diluents and other essentials. Reliance's return is a lifeline, but it’s a tenuous one—dependent on staying within the narrow lines of U.S. approval.Looking at the oil trade globally, the swaps are but a flash in the pan.However, the swaps do offer a glimpse into the power behind U.S. policy tweaks.While India was out of the mix, Russia and China were the main destinations for Venezuelan crude oil.
QatarEnergy Joins Joint Venture Offshore Namibia - QatarEnergy has acquired a 27.5% stake in a drilling license offshore Namibia, with drilling expected to start this month, Sintana Energy said in a Dec. 16 press release. PEL 90 (petroleum exploration license) is about 200 km offshore in Namibia’s Orange Basin operated by Harmattan Energy Ltd., an indirect subsidiary of Chevron Corp. Chevron Harmattan, the operator, will own 52.5% of the joint venture. Namibia’s state-owned oil company and Trago Energy will each own 10%. Trago is a wholly owned subsidiary of Custos Energy Ltd. Sintana has a 49% indirect interest in Custos. The joint venture contracted Northern Ocean’s semi-submersible drilling rig Deepsea Bollsta for its first exploration campaign in PEL 90. The rig is setting up to drill the Kapana-1X well in December, Sintana said.
Oil spill occurs in Nigeria due to pipeline rupture - An oil spill occurred at the Shell loading terminal in Nigeria’s Delta region after a pipeline ruptured, Nigeria’s maritime agency said on 15 November.The Nigerian Maritime Administration and Safety Agency (NIMASA) stated that the spill occurred on 14 November at the Bonny terminal and has reached shoreline. NIMASA says that it is actively monitoring the situation. Additionally, the agency added that it was also working with Shell Petroleum Development Company (SPDC) and other stakeholders to assess the extent of the spill and follow-up actions.The maritime agency said SPDC has shut down the affected pipeline and deployed containment booms to protect neighbouring communities.
Oil spill occurs at Shell terminal in Nigeria (Reuters) - An oil spill has occurred at the Shell loading terminal in Nigeria's Delta region after a pipeline ruptured, Nigeria's maritime agency said on Sunday. The Nigerian Maritime Administration and Safety Agency (NIMASA) said the spill which occurred on Saturday at the Bonny terminal has reached shoreline and that it was actively monitoring the situation. NIMASA added that it was also working with Shell Petroleum Development Company (SPDC) and other stakeholders to assess the extent of the spill and follow-up actions. The maritime agency said SPDC has shut down the affected pipeline and deployed containment booms to protect neighbouring communities.
Shell Closes Pipeline Temporarily Due to Oil Spill at Bonny Terminal, Nigeria | Pipeline Technology Journal -- Shell Petroleum Development Company (SPDC) of Nigeria Limited has temporarily shut one of its oil pipelines in Nigeria following a rapture at a loading terminal in Bonny, Rivers State, which led to an oil spill over the weekend. The Nigerian Maritime Administration and Safety Agency (NIMASA) confirmed that the spill had reached the shoreline. The agency said SPDC immediately shut down the pipeline and deployed containment booms to protect nearby communities. “NIMASA is actively monitoring the situation from an emergency operations center and collaborating with SPDC and other relevant stakeholders to assess the extent of the spill and determine necessary follow-up actions,” said Osagie Edward, head of public relations at NIMASA. The agency urged the public to remain calm, assuring them that it is committed to mitigating the impact of the spill and restoring affected areas.
Saudi Crude Oil Exports Jumped to Three-Month High in October - Saudi Arabia’s crude oil exports rose to a three-month high in October, the latest data from the Joint Organizations Data Initiative (JODI)showed on Wednesday.Saudi Arabia, the world’s largest crude oil exporter, shipped 5.92 million bpd of crude to customers in October, up by 174,000 bpd compared to September. This was the highest average export volume from Saudi Arabia for three months, according to the JODI database which compiles self-reported figures from individual countries. Meanwhile, Saudi Arabia continues to stick to its pledge to pump “around 9 million bpd”. Crude oil production inched down by 3,000 bpd to average 8.972 million bpd in October, per the data the Kingdom has reported to JODI. Refinery runs fell slightly to 2.737 million bpd, while direct crude burning for power generation continued to drop as the hottest months in the desert Kingdom ended. Direct crude burn slumped by 156,000 bpd to 362,000 bpd, according to the data in JODI. Saudi Arabia and its partners in the OPEC+ group earlier this month decided to delay the start of the easing of the 2.2 million bpd cuts to April 2025, from January 2025. The group also extended the period in which it would unwind all these cuts into the following year, until September 2026. Saudi Arabia is not only shouldering the largest volume of the OPEC+-wide cuts as a top producer, but it is also cutting production by another 1 million bpd in a unilateral move. All these cuts have failed to boost oil prices this year, due to weaker-than-expected oil demand, especially in China. Oil demand growth is expected to remain fairly modest next year, which could further complicate the exit strategy of Saudi Arabia and the OPEC+ alliance, analysts say. At the same time, supply from non-OPEC+ producers, including the U.S., Brazil, and Guyana, is set to increase and further erode OPEC’s market share.
Opec+ wary of rise in US oil output under Trump Opec+ members are contemplating a renewed rise in US oil output when Donald Trump returns to the White House, delegates from the group said.More US oil would further erode Opec+ market share and hamper the producer group’s efforts to support prices. Opec+ pumps about half of the world’s oil and earlier this month delayed a plan to raise output until April.The group extended some of its supply cuts until the end of 2026 due to weak demand and booming production from the US and some other non-Opec+ producers.Opec has a history of underestimating US output gains going back to the start of the shale oil boom, which resulted in the US becoming the world’s top oil producer. It now pumps a fifth of world supply.Some delegates are more bullish on US oil and say the reason behind this is Trump. Following an election centred on the economy and the cost of living, Trump’s transition team put together a wide-ranging package to deregulate the energy sector.“I think the return of Trump is good news for the oil industry, with possibly less stringent environmental policies,” a delegate from a US ally Opec+ member said.“But we may see higher production in the United States, which is not good for us.” Vienna-based Opec did not respond to a request for comment.
Oil Futures Fell on Disappointing China Retail Sales Data --- A bearish sentiment dominated the futures oil market to start the week Monday after last week's gains due to mixed data from China confirming weaker consumption activity continues. China's retail sales dropped to 3.0% in November, year-over-year, below 4.8% reported in October, according to China's National Bureau of Statistics on Monday. Ethanol RINs were mixed, and ethanol cash prices were higher on Friday. March corn closed up 5 1/2 cents at $4.46 1/4, and May corn was up 5 1/2 cents at... Oil futures prices reversed their losses recorded this morning to settle higher on Friday, despite expectations that abundant supplies and weak demand will... "This was the big disappointment of the month, as retail sales failed to build upon the momentum and came in well softer than both consensus and our forecasts", said Lynn Song, chief economist at ING, in a report Monday. In contrast, China's Consumer Price Index in November rose by 0.2%, year-on-year, down from 0.3% the previous month. â?¯ Last week at the Central Economic Work Conference, China's top leaders pledged to implement a loose monetary policy for the first time in over a decade, by increasing government spending to boost consumption and incentivizing more domestic private sector investments. But until those measures are put into practice, the outlook of a sluggish demand from China, the largest crude importer of the world, caused OPEC to reduce its forecast of global oil demand for 2025 last week.â?¯The oil cartel expects 1.45 million barrels per day (bpd) of international demand for 2025, below 1.54 million bpd previously forecasted. Meanwhile, in the U.S. market participants are awaiting the Federal Open Committee meeting on Dec. 18, where the Federal Reserve is expected to cut interest rates by 25 basis points after the 0.7% hike of the Consumer Price Index in November raised concerns about inflationary pressures on the U.S. economy. At 7:55 a.m. EST, January NYMEX WTI futures edged down by $0.47 to $70.82 and February Brent future dropped $0.40 to $74.09 barrel (bbl). The front-month ULSD futures contract fell $0.0041 to $2.2659 gallon, while January RBOB for January delivery edged $0.0111 to $1.9907 gallon.
Crude Oil Dips as Chinese Demand Weaken and Fed Decision Looms - The oil market on Monday traded lower as concerns over Chinese demand outweighed threats of tighter sanctions on Russia and Iran. Last week, the market was well supported by expectations that supply would tighten with additional sanctions on Russia and Iran. However, the market’s gains were limited by economic reports showing that China’s retail sales in November increased less than expected, with an increase of 3.0% in November, down from a 4.8% increase in October. The oil market opened at a high of $71.44 before it started to retrace some of its recent gains. The market posted a low of $70.37 early in the morning before it settled in a sideways trading range during the remainder of the session. The crude market also saw some profit taking ahead of the Federal Reserve’s decision on interest rates on Wednesday. The January WTI contract ended the session down 58 cents at $70.71, while the February Brent contract settled down 58 cents at $73.91. The product markets ended the session lower, with the heating oil market settling down 60 points at $2.2640 and the RB market settling down 2.61 cents at $1.9757.Barclays lowered its 2025 fair value estimate for Brent to $83/barrel. It stated that a 500,000 bpd deviation in demand relative to their estimates would imply a $10/barrel swing in the $80/barrel fair value estimate for Brent in the fourth quarter of 2025. It said its 2024 global oil demand growth forecast is down 140,000 bpd to 900,000 bpd. It said that for 2025, its aggregate oil demand estimate is little changed at 104.3 million bpd but its growth forecast is 210,000 bpd higher. The bank stated that its estimate for growth in OPEC crude fell 540,000 bpd due largely to the group’s recent decision.Crude demand in China has weakened and is a bearish factor for oil prices. According to data compiled by Bloomberg, China’s Nov apparent oil demand fell -2.14% y/y to 14.013 million bpd, and Jan-Nov apparent oil demand was down -3.26% y/y to 13.996 million bpd. China is the world’s second-largest crude consumer.IIREnergy said U.S. oil refiners are expected to shut in about 265,000 bpd of capacity in the week ending December 20th, decreasing available refining capacity by 171,000 bpd. Offline capacity is expected to fall to 25,000 bpd in the week ending December 27th.The U.S. Climate Prediction Center reported Monday morning that for the week ending December 14thit estimated the U.S. saw some 207 HDDs on an oil home weighted basis. While this was some 10.6% more than estimated a week ago it was still expected to be 5% less than normal but was still 6.7% colder than the same week a year ago. For the current week ending December 21st, the CPC is forecasting just 191 HDDs, some 18% less than normal and nearly equal to the same week a year ago.
Oil sags on soft Chinese spending, investor pause before US Fed rate move (Reuters) - Oil futures slipped from the highest levels in several weeks on Monday on weakness in consumer spending in China, the world's largest oil importer, and as investors paused buying ahead of the U.S. Federal Reserve's interest rate decision. Brent crude futures settled at $73.91 a barrel, down 58 cents, or 0.8% lower, after settling on Friday at their highest since Nov. 22. U.S. West Texas Intermediate crude settled at $70.71 a barrel, shedding 58 cents, and also down 0.8% the session after it registered its highest close since Nov. 7. Last week, oil benefited from the expectation that supply would tighten with additional sanctions on crude producers Russia and Iran, while possible lower interest rates in the U.S. and Europe would spur demand. "We feel that last week’s events have been appropriately priced and that this week will be bringing fewer items capable of supporting oil prices," Chinese retail sales were slower than expected, keeping pressure on Beijing to ramp up stimulus for a fragile economy facing U.S. trade tariffs under a second Trump administration. "It's just a very bearish scenario where there's not a lot hope of demand growth for crude oil," The Chinese outlook contributed the decision by oil producer group OPEC+ to postpone plans for higher output until April. "Whatever stimulus is being deployed, consumers are not buying into it; and without a serious sea-change in personal spending behaviour, China's economic fortunes will be stunted," Traders also took profits while awaiting the U.S. Central Bank's decision on interest rates this week. IG market analyst Tony Sycamore said that light profit-taking was to be expected after prices jumped more than 6% last week. He noted that many banks and funds are likely to have closed their books given reduced appetite for positions during the holiday season. The Fed is expected to cut interest rates by a quarter of a percentage point at its Dec. 17-18 meeting, which will also provide an updated look at how much further Fed officials think they will reduce rates in 2025 and perhaps into 2026. Lower interest rates can stimulate economic growth and increase oil demand. Oil prices were further pressured by the U.S. dollar, which briefly hovered close to a three-week high versus other major currencies, ahead of the week of central bank meetings. The U.S. dollar and commodities like crude oil tend to trade inversely. Investors were also looking to U.S. oil inventory reports coming up this week for guidance. U.S. crude oil and distillate inventories were expected to have fallen last week, while gasoline stocks likely rose, a preliminary Reuters poll showed ahead of a report from the American Petroleum Institute at 4:30 p.m. EST (2130 GMT) on Tuesday and one from the Energy Information Administration at 10:30 a.m. EST (1530 GMT) on Wednesday Four analysts polled by Reuters estimated on average that crude inventories fell by about 1.9 million barrels in the week to Dec. 13.
Demand Concerns Continue to Weigh on Oil Ahead of Fed Meeting - Oil prices are under pressure ahead of the next Federal Reserve meeting, with demand concerns continuing to weigh on both WTI and Brent.
- - The huge price volatility of the past couple of months has made European natural gas futures one of the favorite trading instruments of hedge funds as TTF futures continue to trade above €40 per MWh.
- - The combination of rapidly depleting European gas inventories and a still unclear outlook for Russian pipeline gas into Europe next year have lifted total long positions of institutional investors to almost 500 million MWh equivalent.
- - Whilst the short-term outlook of European gas remains bullish, the risk remains that after the winter scare prices could collapse as hedge funds start to unwind their positions, particularly on the back of new LNG supply into 2026.
- - For comparison, net positioning in Henry Hub US gas futures remains overwhelmingly bearish, with the net shortcoming in just below 80,000 contracts in the week to December 10, the 22nd consecutive week of hedge funds shorting gas.
- - US oil firm Kosmos Energy has reportedly withdrawn from making an offer for fellow Africa-focused producer Tullow Oil, aggravating the latter’s decline as its shares fell 44% this year.
- - US refining giant Phillips66 announced it would sell its 25% stake in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $865 million, setting it on course to exceed its asset sale target.
- - QatarEnergy has boosted its presence in Namibia by farming into Chevron’s (NYSE:CVX) operated license PEL90, acquiring a 27.5% non-operated stake as it already co-owns blocks containing the giant Venus and Graff discoveries.
ICE Brent continues to trade within a narrow range of $72-74 per barrel as the previous week’s slightly bullish sentiment, coming mostly from US and EU sanctions on Russia, has hit another roadblock. It’s China again souring the demand outlook, with November data for industrial output and retail sales both coming in below expectations, so it’s only the Fed that can add some upside now. According to a Reuters report, the incoming administration of Donald Trump is suggesting the elimination of Biden’s $7,500 tax credit on EVs, easing tailpipe pollution mandates and imposing tariffs on all battery materials globally to kickstart US production. China’s coal production rose to an average daily rate of 14.27 million tonnes in November, the highest pace on record a whopping 7% month-over-month increase, as state-controlled producers ramped up output ahead of winter heating demand. Global trading house Trafigura saw a steep decline in its 2024 earnings on the heels of its billion-dollar fraud scheme in Mongolia, posting a 60% year-over-year decline to $2.8 billion even as its traded oil and fuel oil volumes rose to 6.8 million b/d. As November data for Chinese imports and refinery runs trickled in, China has imported and produced 1.77 million b/d more than itconsumed last month, and even accounting for some lacking information this seems to suggest a huge stock build across the country. In line with OPEC+’s push for stronger discipline in meeting joint production targets, the UAE’s state oil firm ADNOC has pledged to cut exported volumes by up to 230,000 b/d in Q1 2025, mostly cutting flows of light Murban and medium sour Upper Zakum.
Oil prices ease 1% to one-week low on weak Chinese, German economic data (Reuters) - Oil prices eased about 1% to a one-week low on Tuesday on demand worries following the release of negative economic news from Germany and China, while investors remained cautious ahead of a U.S. Federal Reserve decision on interest rates.Brent futures fell 72 cents, or 1.0%, to settle at $73.19 a barrel, while U.S. West Texas Intermediate crude slipped 63 cents, or 0.9%, to settle at $70.08.That was the lowest close for Brent since Dec. 10 and cut the premium of Brent over WTI to a 12-week low of $3.54 a barrel, based on the February contracts.Analysts have said when Brent's premium over WTI falls below $4 a barrel, it does not make as much economic sense for energy firms to send ships to pick up U.S. crude, which should result in lower U.S. exports.In China, the world's second-biggest economy, industrial output growth quickened slightly in November, while retail sales disappointed, keeping alive calls for Beijing to ramp up consumer-focused stimulus as policymakers brace for more U.S. trade tariffs once President-elect Donald Trump takes office for a second time.In Germany, business morale worsened more than expected in December, according to a survey by the Ifo Institute, weighed down by companies' pessimistic assessment of the coming months amid geopolitical uncertainty and an industrial slump in Europe's largest economy. "The only good thing about Germany's just-released Ifo index is that it is the final major macro indicator released this year. Time to ... end a year that will go down as the second consecutive year of economic stagnation," analysts at ING, a bank, said in a note.In the world's biggest economy, meanwhile, U.S. retail sales increased more than expected in November amid an acceleration in motor vehicle and online purchases.The report from the U.S. Commerce Department had no impact on expectations that the Fed would cut interest rates on Wednesday for the third time since the U.S. central bank initiated its policy easing cycle.Investors, however, will watch U.S. policymakers' forecasts for signals on whether the Fed will be more cautious in 2025, as economic indicators, such as the retail sales data, point to continued resilience and inflation remains persistent.After hiking rates aggressively in 2022 and 2023 to tame a surge in inflation, the Fed started to lower rates in September.Lower rates decrease borrowing costs, which can boost economic growth and demand for oil. In Kazakhstan, a member of the OPEC+ group of countries, oil and gas condensate output is now expected to be 87.8 million metric tons in 2024, down from the previously expected figure of more than 88 million tons (1.76 million barrels per day), Energy Minister Almasadam Satkaliyev said.The European Union adopted a 15th package of sanctions against Russia, another member of OPEC+, over its invasion of Ukraine, including tougher measures against Chinese entities and more vessels from Moscow's so-called shadow fleet.Britain also sanctioned ships it alleged were carrying illicit Russian oil.OPEC+ includes the Organization of the Petroleum Exporting Countries and allies like Kazakhstan and Russia that have agreed to curtail output to support oil prices.
Oil prices tally back-to-back losses as concerns over the outlook for demand prevail - Oil prices on Tuesday tallied back-to-back losses, pulling global benchmark Brent crude to its lowest finish in a week, as recent downbeat Chinese economic data raised concerns over the prospects for energy demand. Traders also looked toward news due out Wednesday, with the Federal Reserve's decision on interest rates expected to impact demand for oil, and the Energy Information Administration set to provide updates on U.S. petroleum supplies and production.
- -- West Texas Intermediate crude CL.1 for January delivery CLF25 was off 63 cents, or 0.9%, to settle at at $70.08 a barrel on the New York Mercantile Exchange, down a second straight session.
- -- February Brent crude BRN00 BRNG25, the global benchmark, lost 72 cents, or 1%, to $73.19 a barrel on ICE Futures Europe, with prices settling at their lowest since Dec. 10, FactSet data show.
- -- January gasoline RBF25 declined 1.6% to $1.94 a gallon, while January heating oil HOF25 fell 1.6% to $2.23 a gallon.
- -- Natural gas for January delivery NGF25 climbed by 2.9%, to $3.31 per million British thermal units.
Oil prices flashed red for a second day after disappointing data from China "fanned concerns about slowing demand in the world's largest energy consumer," Oil's declines so far this week follow gains last week, when prices were supported by China's recent economic stimulus measures. WTI crude-oil futures fell Monday as the "combination of soft retail sales and fixed-asset investment numbers out of China overshadowed the solid composite PMI reports in Europe and the U.S.," analysts at Sevens Report Research wrote in Tuesday's newsletter. The downbeat Chinese economic data also proved to "more than offset" further escalations in geopolitical tensions between Russia and Ukraine over the weekend, as the latter launched a drone strike that reportedly successfully hit an important fuel-storage depot in central Russia, they said. Providing some support for prices, the European Commission on Monday announced a 15th package of EU sanctions against Russia over its invasion of Ukraine, this one targeting non-EU tankers that are part of Moscow's so-called shadow fleet carrying Russian oil.In the U.S., traders also awaited the Federal Open Market Committee's policy decision, set to be announced Wednesday afternoon at the conclusion of the central bank's two-day meeting. Policy makers are widely expected to lower the benchmark interest rate by 25 basis points, according to the CME FedWatch Tool. "If the Fed can move ahead with deeper cuts, a weaker dollar may boost oil, which is priced in dollars," said Otunuga. Over in the Middle East, a cease-fire agreement to halt the Gaza war could be signed in the coming days, according to a report from Reuters. Easing tensions in the oil-rich Middle East could help tone down worries about global oil supplies.Meanwhile, the Energy Information Administration will release its weekly data on U.S. petroleum supplies Wednesday morning.On average, analysts forecast a decline in domestic commercial crude inventory of 1.8 million barrels for the week that ended Dec. 13, according to a survey conducted by S&P Global Commodity Insights. They also forecast weekly supply gains of 2.1 million for gasoline and 600,000 barrels for distillates. Looking ahead to 2025, the oil market "could be rocked if [President-elect Donald] Trump's proposed tariffs hit China's economy" despite the decision by the group of major oil producers known as OPEC+ to delay intended output hikes until April 2025, "Alternatively, a recovery in China, Iran sanctions and geopolitical risk could lead to a significant rally,"
WTI Holds Gains As 'Tank Bottoms' Loom At Cushing Hub; Crude Stocks Drop For 4th Straight Week -Oil prices are higher this morning after API's overnight report signaled a sizable drawdown in US commercial crude inventories and Kazakhstan pledged to comply with OPEC+ production quotas. The cartel member had earlier unsettled markets by signaling that it would adhere to its original plan of raising oil output by 190,000 barrels a day, according to Rebecca Babin, senior energy trader at CIBC Private Wealth Group, despite OPEC’s decision to delay production hikes. Still,“the rally remains fragile, with broader macroeconomic factors continuing to dominate price movements,” Babin said. “The upcoming Federal Reserve statement and potential shifts in China’s economic policy are key factors that will likely shape the medium-term direction for crude prices.” in the even shorter-term, this morning's official inventory and supply data will be the focus. API
- Crude -4.7MM
- Gasoline +2.4MM
- Distillates -0.7MM
- Cushing +0.8MM
Crude stocks declined for the 4th straight week, according to official data (but last week saw a far smaller drawdown than API reported). Gasoline stocks rose for the 5th straight week... Source: Bloomberg Despite a 519k barrel addition to the SPR, total crude stocks fell for the 4th week in a row.
Crude Oil Gains Limited after Federal Reserve Signals Interest Rate Cuts Next Year -- The oil market retraced some of its recent losses in light of the weekly petroleum stocks reports showing draws in crude stocks. However, its gains were limited after the Federal Reserve signaled that it would slow the pace of interest rates cuts next year. The crude market posted a low of $70.05 in overnight trading and gradually traded higher after the EIA reported a draw in crude stocks of 934,000 barrels. This followed a draw of 4.69 million barrels reported by the API late Tuesday. The market posted a high of $71.38 by mid-day before it settled in a sideways trading range ahead of the Federal Reserve interest rate decision. The market later found some selling pressure ahead of the close after the Fed cut rates by the expected 25 basis points but cut the pace of rate cuts for next year due to expectations of higher inflation. The January WTI contract settled up 50 cents at $70.58 and the February Brent contract settled up 20 cents at $73.39. The product markets ended the session mixed, with the heating oil market settling up 2.71 cents at $2.255 and the RB market settling down 11 points at $1.9428. The EIA reported that U.S. crude and distillate inventories fell in the week ending December 13th as exports increased. Crude inventories fell by 934,000 barrels to 421 million barrels in the week. U.S. crude exports increased by 1.8 million bpd to 4.89 million bpd. Distillate stocks fell by 3.2 million barrels on the week to 118.2 million barrels as total U.S. distillate demand increased to about 4.5 million bpd, the highest level since March 2022. Distillate demand increased by more than 1 million bpd last week, the highest weekly increase since December 2021.The U.S. EPA said it has approved California’s landmark plan to end the sale of gasoline –only vehicles by 2035. EPA Administrator Michael Regan granted a waiver under the Clean Air Act to California to implement its plan to require that by 2035 at least 80% of new cars sold be electric and up to 20% plug-in hybrid models.Bloomberg News is reporting that the transition team for the incoming Trump administration is recommending potential policy changes during the first 100 days in office that will seek to cut federal subsidies to boost electric vehicles. But the group is also looking to encourage relaxing environmental reviews and speeding up permitting for federally funded EV and infrastructure projects, including the development of batteries and critical minerals. IIR Energy said U.S. oil refiners are expected to shut in about 265,000 bpd of capacity in the week ending December 20th, cutting available refining capacity by 171,000 bpd. Offline capacity is expected to fall to 25,000 bpd in the week ending December 27th.The U.S. Federal Reserve cut interest rates on Wednesday by 25 basis points and signaled it will slow the pace at which borrowing costs fall any further given a relatively stable unemployment rate and little recent improvement in inflation. U.S. central bankers now project they will make just two quarter-percentage-point rate reductions by the end of 2025. That is half a percentage point less in policy easing next year than officials anticipated as of September, with Fed projections of inflation for the first year of the new Trump administration increasing from 2.1% in their prior projections to 2.5% in the current ones, well above the central bank’s 2% target. With Wednesday’s rate cut, the Fed has now cut rates a full percentage point this year. Fed officials also increased their estimate of the long -run neutral rate of interest to 3%.
Oil prices settle higher with U.S. crude supplies down a 4th straight week -Oil futures on Wednesday posted their first gain in three sessions, with prices getting a lift from official U.S. data showing a fourth consecutive weekly decline in domestic crude inventories.Prices, however, pared some of their gains after the Federal Reserve on Wednesday afternoon cut its main policy interest-rate target by 25 basis points as expected, but signaled a much slower pace of rate cuts than previously expected for next year.
- -- West Texas Intermediate crude for January delivery CL.1 CLF25 rose 50 cents, or 0.7%, to settle at $70.58 a barrel on the New York Mercantile Exchange, ahead of the contract's expiration at the end of Thursday's session. The more actively traded February contract CL00 CLG25 added 37 cents, or 0.5%, at $70.02 a barrel.
- -- February Brent crude BRN00 BRNG25, the global benchmark, gained 20 cents, or 0.3%, to $73.39 a barrel on ICE Futures Europe.
- -- January gasoline RBF25 lost nearly 0.1% to $1.94 a gallon, while January heating oil HOF25 added 1.2% to $2.26 a gallon.
- -- Natural gas for January delivery NGF25 settled at $3.37 per million British thermal units, up 2%.
Oil futures ended higher but well below the session's highs, with the Fed's projection of fewer rate cuts next year offsetting some of the bullishness from four straight weeks of declines in U.S. crude supplies.The Federal Reserve cut its policy rate by 25 basis points Wednesday afternoon, but also said it sees just 50 basis points of cuts next year, down from 100 basis points in cuts projected in September. It also lifted its forecast for inflation next year to show a slight increase in prices compared to the end of this year."Oil pared gains in the aftermarket as the Fed seemed to raise the rate forecast dot plot," The surge in the U.S. dollar did not help, he said. The ICE U.S. Dollar Index DXY touched new highs for the session, weighing on dollar-denominated oil prices. That "overshadowed a fairly bullish" EIA report. The U.S. Energy Information Administration reported that domestic, commercial crude inventories edged down 900,000 barrels for the week ended Dec. 13.The report was expected to show a fall of 1.8 million barrels on average, according to a survey of analysts conducted by S&P Global Commodity Insights. Late Tuesday, the American Petroleum Institute reported a crude inventory drop of 4.7 million barrels, according to a source citing the data.The EIA also reported a weekly supply climb of 2.3 million barrels for gasoline, while distillate inventories decreased by 3.2 million barrels. The S&P Global Commodity Insights survey forecast inventory gains of 2.1 million barrels for gasoline and 600,000 barrels for distillates.U.S. oil production was down by 27,000 barrels at 13.604 million barrels per day (bpd) in the latest week, the EIA said, while crude stocks at the Cushing, Okla., Nymex delivery hub edged up by 100,000 barrels to 23 million barrels.Demand for gasoline rose, with total motor gasoline supplied, a proxy for demand, at 8.927 million bpd in the latest week, from 8.810 million bpd from a week earlier. Distillate fuel oil supplied was also up at 4.498 million bpd, from 3.450 million bpd. "The most supportive element of the report was a solid draw to distillate inventories amid an apparent preholiday jump in implied demand," Matt Smith, head analyst, U.S., at Kpler, told MarketWatch.Wednesday's rise in oil prices followed back-to-back losses that traders attributed in part to disappointing data from China, the world's largest crude importer, and reports that a cease-fire in Gaza may be near.Last week, oil prices climbed on "tighter Russian sanctions risk, the fall of the Assad regime in Syria, Chinese stimulus efforts, and a potential short squeeze in the physical market," wrote strategists at Macquarie in a recent note.However, "the uncertainty on the impact and duration of the drivers listed above limited the upside, especially given the heavy balances anticipated for 2025," they said. The International Energy Agency last week forecast a sizable global supply surplus for next year.
QatarEnergy raises price of Al Shaheen crude for February 2025 futures contracts -- QatarEnergy has increased the price of Al Shaheen crude for February 2025 futures contracts, setting it at a premium of USD1.05 per barrel to Dubai prices, according to oil trading sources cited by a news agency on Wednesday. This marks a USD0.32 increase from the January loading price, which had been set at a USD0.73 per barrel premium to Dubai prices. The price adjustment reflects changing market dynamics as QatarEnergy continues to refine its pricing strategy for crude exports.
The February price was established following Qatar's sale of three cargoes of Al Shaheen crude. Two of these cargoes were sold to Glencore, while one was sold to Tutsa, with premiums ranging between USD0.9 and USD1.05 per barrel over Dubai crude prices. These transactions highlight robust demand for Al Shaheen crude, which is recognized for its quality and relevance in the regional oil market. In addition to Al Shaheen crude, QatarEnergy also finalized sales of other crude grades. The company sold a cargo of its marine crude at a premium of USD0.3 per barrel over Dubai prices and another cargo of land crude at a premium of USD0.1 per barrel over Dubai prices. Both cargoes were purchased by PTT, reflecting continued buyer interest across Qatar’s diverse crude offerings. In the broader oil market, Brent crude futures for February 2025 delivery edged up by USD0.1, or 0.07 percent, reaching USD73.26 per barrel as of 5:10 a.m. GMT. Similarly, US West Texas Intermediate (WTI) crude futures for January 2025 delivery rose by USD0.14, or 0.1 percent, to USD70.2 per barrel. The market also received a boost from preliminary data by the American Petroleum Institute, showing a decline of 4.7 million barrels in US inventories last week, signaling strengthening demand and tighter supply conditions.
Oil Futures Bearish on Expectations of High Inflation - The futures market remained lower on Thursday, reacting to expectations of high inflation levels for 2025, as the Federal Reserve announced Wednesday that there will be a lower number of interest rate cuts next year. â?¯ The Federal Reserve cut interest rates by 25 basis points (bp) Wednesday, in a move that was much anticipated by the market. The Federal Reserve's expectations that the range for the federal funds rate will be around 4.25%-4.50%, above its 2% target, was not well received by market participants as inflationary pressures will continue affecting the U.S. economy. Oil futures prices reversed their losses recorded this morning to settle higher on Friday, despite expectations that abundant supplies and weak demand will... The Fed kept its projection of 4.4% inflation for this year but revised it downward for 2024 to 3.9% from 4.3%, projected in September.â?¯ On Wednesday, the Energy Information Administration data showed a drop in crude inventories, lower than expected, despite a hike in exports on the week ended Dec. 13, which also contributed to the bearish mood in the oil markets. Commercial crude oil inventories in the U.S. fell by 900,000 barrel (bbl) to 421 million bbl in the week ended Dec. 13, according to EIA. Meanwhile, crude exports rose by 1.8 million bpd to 4.9 million bpd, from last week. However, gasoline stocks climbed by 2.3 million bbl to reach 222 million bbl, indicating a soft demand despite low seasonal prices.â?¯Distillate fuel inventory declined 3.2 million bbl compared to last week, reaching 118.2 million bbl, the same EIA data showed. But the perspective of sluggish global oil demand for next year, driven by China, have also added pressure to the crude benchmarks in recent days, despite the OPEC+ extending its production cuts until March, China's pledge to implement a loose monetary policy, and the announcement of additional sanctions on Russia last week. At 8:23 a.m. EST, NYMEX January WTI futures fell $0.02 to $70.56 bbl. The February Brent contract dropped $0.06 to $73.33. Downstream, NYMEX January ULSD futures rose $0.0082 to $2.2468 gallon while NYMEX January RBOB futures were at $1.9410 gallon up $0.0018.
Oil Settles Below $70 on Stronger Dollar | Rigzone -- Oil fell by almost 1% to settle below $70 a barrel as expectations for fewer interest-rate cuts by the US Federal Reserve boosted the dollar. Fed officials lowered borrowing costs as expected on Wednesday, but reined in the number of reductions they expect to make in 2025. The greenback rallied to a two-year high, making commodities priced in the currency less appealing. Also weighing on the market: China’s biggest oil refiner said gasoline demand in the nation likely peaked, even as strong petrochemical growth continues. Crude has been rangebound since the middle of October, and is set for the narrowest annual price band since 2020. Heading into 2025, traders are weighing a looming supply glut and lackluster Chinese demand with geopolitical risks, such as the chance President-elect Donald Trump moves to restrict Iranian supply. “Oil oversupply is looming, but no one wants to be short” in case there’s a supply shock or escalation in the Middle East. “But there’s not enough of a demand slowdown or economic crash pricing-in to get Brent into the low $60s yet.” WTI for January delivery, which expires Thursday, dipped 1% to $69.91 a barrel in New York. The more-active February contract fell 0.9% at $69.38 a barrel. Brent edged lower 0.7% to settle at $72.88 a barrel.
Oil prices settle at lowest in over a week after Fed rattles markets - Oil futures declined on Thursday, pulling prices for U.S. and global crude benchmarks to their lowest settlement in over a week, a day after the Federal Reserve signaled it would go much slower in cutting interest rates next year.Natural-gas futures, meanwhile, rallied to their highest price since January 2023 as winter weather forecasts lifted demand prospects for the heating fuel.
- -- West Texas Intermediate crude for January delivery CL.1 CLF25 fell 67 cents, or 1%, to end at $69.91 a barrel on the New York Mercantile Exchange on the contract's expiration day, marking the lowest front-month finish since Dec. 10, according to Dow Jones Market Data. The February contract CLG25, the new front-month, shed 64 cents, or 0.9%, to settle at $69.38 a barrel.
- -- February Brent crude BRN00 BRNG25, the global benchmark, lost 51 cents, or 0.7%, at $72.88 a barrel on ICE Futures Europe, also the lowest finish since Dec. 10.
- -- January gasoline RBF25 fell 1% to $1.92 a gallon, while January heating oil HOF25 declined by 0.8% to $2.24 a gallon.
- -- Natural gas for January delivery NGF25 ended up 6.2% at $3.58 per million British thermal units, the highest since Jan. 17, 2023.
The Fed on Wednesday delivered a widely expected interest-rate cut of 25 basis points, or a quarter of a percentage point, but the central bank signaled it was on track to deliver just two more rate cuts of the same size in 2025 and forecast that inflation will remain sticky. "A less accommodative Fed in 2025 than initially expected has markets adjusting their expectations," Treasury yields jumped following the decision, with the 10-year rate BX:TMUBMUSD10Y pushing back above 4.5%. Stocks sold off sharply Wednesday but moved higher in Thursday dealings, with the Dow Jones Industrial Average DJIA up by more than 160 points after dropping by over 1,100 points Wednesday, while the S&P 500 SPX was trading 0.4% higher after falling 3%.Oil prices had been dragged lower along with equities after Wednesday's settlement as "traders reacted negatively to the Fed's 'hawkish cut' and as such, it was natural for oil to participate" in Thursday morning's modest relief rally in stocks, said Tyler Richey, co-editor at Sevens Report Research.The "discord" among Bank of England policy makers at their December meeting, meanwhile, "was seen as a dovish-leaning development ... and contributed to the premarket relief rally in risk assets," he told MarketWatch.However, the relief rally in equities lost some steam in Thursday dealings and oil turned lower "as the economic implications of the Fed's considerably less dovish tone coming out of the December meeting continue to be assessed," Richey said.In a newsletter posted early Thursday, he noted that with the "risk of restrictive high interest rates lasting well into 2025, an imminent economic recession looming, the thesis that oil is more likely to fall to trade with a $50/barrel handle remains much more realistic than $80-$90/barrel oil prices in the months ahead."Still, some analysts were upbeat about the outlook for oil prices in the new year."All ducks are in a row for a beautiful oil market in 2025, with the Trump administration certain to throttle Iranian exports and OPEC dead set to support prices," said Manish Raj, managing partner at Velandera Energy Partners. "Shale players have upped their orders of champagne this holiday season, with profit opportunity looking good," he said.Supporting oil prices is the "noticeable slowdown in U.S. production growth, with current oil production up only 2.9% over 2023," Raj said, adding that production growth is "constrained by permitting delays, well declines, and oilfield service cost inflation." That said, domestic output was at a record high of 13.6 million barrels a day for the week that ended Dec. 13, according to the Energy Information Administration.In other energy news Thursday, natural-gas prices rallied as predictions of an Arctic blast reaching the eastern U.S. have "heightened expectations for increased heating demand, driving near-term bullish sentiment" in the natural-gas market, said Brian Swan, senior commodity analyst at Schneider Electric, in a daily note.The EIA on Thursday, meanwhile, reported that U.S. supplies of the fuel declined by 125 billion cubic feet for the week that ended Dec. 13. Analysts surveyed by S&P Global Commodity Insights expected a fall of 122 bcf, on average.
Oil Futures Rose, Despite Sluggish Demand and Strong USD -- Oil futures prices reversed their losses recorded this morning to settle higher on Friday, despite expectations that abundant supplies and weak demand will continue putting downward pressure on the two main crude benchmarks next year. But a new statement from President-elect Trump warning that his administration will impose trade tariffs to European Union countries if they do not buy more U.S. oil and gas, changed the bearish sentiment Friday that dominated the market since Thursday. "I told the European Unionâ?¯that they must make up their tremendous deficit with the United States by the large-scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!," Trump said in a post on his social media site Truth Social, The Guardian reported Friday. The second term of the Trump administration is expected to further ignite the trade war between the U.S. and China by imposing more tariffs to the Asian country. Trump has also threatened to set 25% trade tariffs on all imports from its main trade partners, Mexico and Canada, starting next year as well. However, those measures are expected to have a big impact on U.S. consumers and consequently on inflation, which the Federal Reserve confirmed this week that it will remain around a range of 4.25% to 4.50%. Additionally, the perception that oil global demand willâ?¯remain sluggish next year has been reflected in the recent volatility of the crude markets as China keeps failing to boost its domestic consumption. â?¯ Crude prices this week were alsoâ?¯affected by a stronger dollar. Friday, the greenback rose 0.79% to 108.29 against a basket of foreign currencies, which include the euro, yen, Canadian dollar and Swiss franc, among others. At 3:21 p.m. EST, NYMEX WTI futures contract for February delivery rose $0.17 to $69.85 bbl and the February Brent crude contract edged up $0.09 to $73.29.â?¯ January RBOB futures rose $0.0186 to $1.9414 gallon while ULSD futures for January delivery fell $0.0011 to $2.2366 gallon.
Oil steady as markets weigh Fed rate cut expectations, Chinese demand (Reuters) - Oil prices settled little changed on Friday as markets weighed Chinese demand and interest rate-cut expectations after data showed cooling U.S. inflation. Brent crude futures closed up 6 cents, or 0.08%, at $72.94 a barrel. U.S. West Texas Intermediate crude futures rose 8 cents, or 0.12%, at $69.46 per barrel. Both benchmarks ended the week down about 2.5%. The U.S. dollar retreated from a two-year high, but was heading for a third consecutive week of gains, after data showed cooling U.S. inflation two days after the Federal Reserve cut interest rates but trimmed its outlook for rate cuts next year. A weaker dollar makes oil cheaper for holders of other currencies, while rate cuts could boost oil demand. Inflation slowed in November, pushing Wall Street's main indexes higher in volatile trading. "The fears over the Fed abandoning support for the market with its interest rate schemes have gone out the window," "There were concerns around the market about the demand outlook, especially as it relates to China, and then if we were going to lose the monetary support from the Fed, it was sort of a one-two punch," Chinese state-owned refiner Sinopec said in its annual energy outlook on Thursday that China's crude imports could peak as soon as 2025 and the country's oil consumption would peak by 2027, as demand for diesel and gasoline weakens. OPEC+ needed supply discipline to perk up prices and soothe jittery market nerves over continuous revisions of its demand outlook. OPEC+, the Organization of the Petroleum Exporting Countries and allied producers, recently cut its growth forecast for 2024 global oil demand for a fifth straight month. JPMorgan sees the oil market moving from balance in 2024 to a surplus of 1.2 million barrels per day in 2025, as the bank forecasts non-OPEC+ supply increasing by 1.8 million barrels per day in 2025 and OPEC output remaining at current levels. U.S. President-elect Donald Trump said the European Union may face tariffs if the bloc does not cut its growing deficit with the U.S. by making large oil and gas trades with the world's largest economy. In a move that could pare supply, G7 countries are considering ways to tighten the price cap on Russian oil, such as with an outright ban or by lowering the price threshold, Bloomberg reported on Thursday. Russia has circumvented the $60 per barrel cap imposed in 2022 following the invasion of Ukraine through the use of its "shadow fleet" of ships, which the EU and Britain have targeted with further sanctions in recent days. Money managers raised their net long U.S. crude futures and options positions in the week to Dec. 17, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Revolutionary Guards Tighten Grip on Iran’s Oil Exports -The Islamic Revolutionary Guard Corps (IRGC), Iran’s most powerful armed force defending the regime, has increased their influence over Iranian oil exports and is estimated to control half of these, Western officials and Iranian insiders have told Reuters. Despite U.S. sanctions on the Iranian oil industry and exports, the Islamic Republic continues to export an estimated more than 1 million barrels per day (bpd) of oil, mostly to China. During his first term in office, U.S. President-elect Donald Trump tore up the so-called Iran nuclear agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA), and re-imposed sanctions on Iran’s oil industry and exports in 2018. President Joe Biden and his Administration, while keeping all sanctions on Iran in place, haven’t monitored strictly the compliance of the sanctions as they were keen to keep oil flowing amidst crises elsewhere such as the Russian invasion of Ukraine. In the meantime, the Revolutionary Guard Corps has expanded its influence over Iranian oil exports, including in logistics, front companies, and the shadow fleet shipping the crude under the radar, according to numerous sources who spoke to Reuters.Three years ago, the Revolutionary Guards controlled about 20% of Iran’s oil exports—now that share has surged to up to 50%, Western security experts and officials told Reuters.Earlier this year, Iran boosted its oil exports to six-year highs.However, exports are estimated to have slowed in recent weeks, as Iran’s crude oil going to China has been priced at its narrowest discount to Brent in five years as Iranian cargo loadings slumped in October due to the heightened regional tensions in the Middle East. Over the weekend, Iranian media reported that Iran’s oil exports to China slumped in November by 524,000 bpd from October. At 1.31 million bpd, the Islamic Republic’s exports to its main buyer were the lowest in four months in November. Iran is ready to face possible additional sanctions on its oil exports when President-elect Trump takes office early next year, Iranian Oil Minister Mohsen Paknejad was quoted as saying last month.
Trump And Israel Can't Wait To Start Bombing Iran - Caitlin Johnstone = Both Israel and the incoming Trump administration are reportedly eager to start bombing Iran ASAP now that Assad’s out of the way.Israeli media reports that the IDF now sees airstrikes on Iran as much easier to execute now that its pilots don’t have to worry about Syrian air defenses along the way, while The Wall Street Journal reports that the Trump team is weighing its options for airstrikes on Iran to prevent it from obtaining a nuclear weapon (which there’s no evidence Iran is currently trying to do).A new article from The Washington Post titled “Syria’s collapse and Israeli attacks leave Iran exposed” reports that “Israeli Prime Minister Benjamin Netanyahu has signaled a desire to capitalize on gains against Hamas and Hezbollah and take on Tehran more aggressively under a new U.S. administration.” The article notes that Trump has expressed openness to war with Iran, saying that “anything can happen”.This comes as the al-Qaeda affiliates who captured Damascus assure the worldthat Syria will no longer allow itself to be used as a launchpad for attacks against Israel. After Assad was ousted I got a bunch of weirdos in my comments claiming that Israel was somehow sad about this development, because Israel and Assad were secretly on the same side. This is one of the dumbest conspiracy theories I’ve been asked to believe in a long time, and I was asked to believe it not by crazy QAnoners or the liberal mass media but by a sector of pro-Palestine leftoids who also love NATO.
US Says It Launched Airstrike on Houthi 'Command and Control Facility' in Yemen - -US Central Command said Monday that it launched an airstrike on Yemen, claiming to target a Houthi “command and control” facility in the capital Sanaa.“On Dec. 16 Yemen time, US Central Command (CENTCOM) forces conducted a precision airstrike against a key command and control facility operated by Iran-backed Houthis within Houthi-controlled territory in Sanaa, Yemen,” CENTCOM said in a press release.“The targeted facility was a hub for coordinating Houthi operations, such as attacks against US Navy warships and merchant vessels in the Southern Red Sea and Gulf of Aden,” the press release added.A correspondent for Al Mayadeen in Yemen said the strike targeted the Ministry of Defense in Sanna and described it as “American-British aggression,” although the US gave no indication the UK was involved. A day earlier, Yemeni media reported joint US-British strikes in Yemen’s northern Hajjah province.The latest US attack on Yemen comes amid reports that Israel isconsidering launching significant strikes against the Houthis, who have continued to launch attacks against Israel and Israel-linked shipping despite a nearly year-long US bombing campaign.The Houthis, officially known as Ansar Allah, said on Monday that Yemeni forces launched a missile at Israel. “[In] response to the ongoing massacres against our brothers in Gaza … The missile force carried out a military operation targeting a military target of the Israeli enemy in the occupied Yaffa area, using a Palestine 2 hypersonic ballistic missile,” the group said in a statement, according to The Cradle.In January 2024, President Biden launched a new bombing campaign against the Houthis in defense of Israeli shipping. The UK joined the US for several rounds of significant strikes on Yemen, but the bombings only escalated the situation in the Red Sea as the Houthis began targeting American and British shipping in response.
Turkey, Allies Violate Extended Ceasefire With Syrian Kurds, Dozens Killed - On Tuesday, the US State Department announced the extension of the ceasefire between Syria’s Kurdish SDF and Turkey’s allies. The initial ceasefire expired, but the new one was supposed to continue to the end of the week.It doesn’t seem to have lasted even a whole day, however, with Turkey and their allies carrying out multiple attacks against Kurdish forces in and around the northern city of Kobani and the town of Manbij. Heavy fighting has been reported around Manbij, with at least 21 pro-Turkish fighters reported killed, and an unspecified number of SDF members and affiliates with the Manbij Military Council also killed in the clashes.Turkey was said to have provided air support for the Manbij attack, andartillery fire was also reported across the Aleppo Province. With Turkey also reported amassing troops along the Aleppo border in recent days, a broader military operation is seen as very likely.Turkey’s direct involvement in violating the ceasefire has been substantial today. In addition to backing and participating in the Manbij fighting with air support, Turkish drones reportedly attacked Kobani FM, a Kurdish radio station in Kobani. The radio station was damaged, but there were no casualties in that strike.Turkey and their allies, collectively known as the Syrian National Army (SNA), hold territory in Syria’s northeast, but have gained considerable influence having backed the Islamist Hayat Tahrir al-Sham (HTS) in the takeover of most of the country. HTS officials are already suggesting thatstamping out Kurdish separatists is a near-term goal, and that Turkish involvement in Syria’s reconstruction is a priority.US officials have been trying to reassure the Kurds that they don’t face any immediate threats to existence from Turkey’s allies, despite Turkish officials saying the “elimination” of the SDF’s largest faction, the YPG, is their strategic goal.
Israel Continues to Flaunt Ceasefire, Military Demolishes Homes in Southern Lebanon - Now into the third week of the Israeli ceasefire with Lebanon, the situation seems no more settled than it had been. Israeli forces continue to operate across southern Lebanon, their drones carry out attacks, and Israeli military bulldozers are now conducting operations to demolish civilian homes in southern towns and villages.The 60-day ceasefire is supposed to see Israel withdraw its troops from Lebanon by the end of that time. Though some Israeli troops have been redeployed, others remain, and are continuing operations. The reports from the coastal town of Naqoura are that Israeli troops have fired bursts of machine gun fire, and the bulldozers have destroyed multiple homes.Naqoura is in the Tyre District, and only about 4 km from the border crossing into Israel. Israel has been keen to establish a “buffer zone” inside southern Lebanon and those efforts seem not to have stopped even though the war is supposed to be over.Other demolitions of homes were reported in the village of Kfarkila, where what few homes were left standing during the war are being leveled. Kfarkila is also extremely close to the border.Much of Israel’s military operations in southern Lebanon during the war appeared to also be designed around the creation of this buffer zone.Reports are that Israel fired around 200 white phosphorus bombs in the south during the past year.White phosphorus would be legal if used as a smokescreen for troops, but it’s use as an incendiary weapon would violate international law. There is significant evidence that Israel was using the phosphorus bombs to clear out populated areas. Indeed, many of those white phosphorus strikes were against Lebanese towns and villages also in this desired buffer zone.
Haaretz: Israeli Soldiers Kill Civilians and Count Them as Terrorists - Israeli soldiers stationed in the Netzarim Corridor in the Gaza Strip regularly shoot and kill Palestinian civilians but count them as “terrorists,” Haaretz reported on Wednesday, citing testimony from Israeli commanders and other soldiers.The Netzarim Corridor is a strip of land that separates northern Gaza from central and southern Gaza, where Israeli troops have demolished virtually every building and established military outposts. The Haaretzreport says the IDF has designated the area a “kill zone,” meaning any Palestinians who try to cross a certain line are shot and killed even if they’re unarmed.“The forces in the field call it ‘the line of dead bodies,'” a commander in the IDF’s Division 252 told Haaretz. “After shootings, bodies are not collected, attracting packs of dogs who come to eat them. In Gaza, people know that wherever you see these dogs, that’s where you must not go.”A recently discharged Division 252 officer said, “For the division, the kill zone extends as far as a sniper can see. We’re killing civilians there who are then counted as terrorists.”The officer said Israeli units compete to see how many people they can kill. “The IDF spokesperson’s announcements about casualty numbers have turned this into a competition between units. If Division 99 kills 150 [people], the next unit aims for 200,” he said. In one instance, Israeli troops massacred 200 Palestinians, and only 10 were confirmed as being “known Hamas operatives.” But the IDF announced they were all militants. “No one questioned the public announcement about killing hundreds of militants,” a Division 252 officer said.
HRW: Israel Is Committing Crime of Extermination and Acts of Genocide - Human Rights Watch said in a report published on Thursday that Israel is committing the crime of extermination and acts of genocide by depriving the civilian population of Gaza of the necessary amount of water to survive. HRW said in a press release that its 179-page report found “that Israeli authorities have intentionally deprived Palestinians in Gaza of access to safe water for drinking and sanitation needed for basic human survival.”“Israeli authorities and forces cut off and later restricted piped water to Gaza; rendered most of Gaza’s water and sanitation infrastructure useless by cutting electricity and restricting fuel; deliberately destroyed and damaged water and sanitation infrastructure and water repair materials; and blocked the entry of critical water supplies,” HRW said.The report found the restrictions on water have likely caused thousands of deaths. “Doctors and nurses told Human Rights Watch that they had seen numerous infants, children, and adults die from a combination of malnutrition, dehydration, and disease,” the report reads.HRW said it spoke with 66 Palestinians in Gaza, who discussed the near-impossibility of securing water for themselves and their families. “If we can’t find drinkable water, we drink the seawater,” one father displaced in Rafah told the organization in December 2023. “It happened to me many times when I had to drink the seawater. You don’t understand how much we are suffering.”The report found that, on average, Palestinians in Gaza live with 2-9 liters of water per day for their drinking, cooking, and personal washing needs, far below the 50-100 liters per day the World Health Organization (WHO) says in the minimum people need to meet their most basic needs. In protracted emergency situations, the WHO says a minimum amount of 15 liters of water per person per day for drinking and washing is needed.HRW said Israeli authorities have “deliberately inflicted conditions of life calculated to bring about the destruction of part of the population in Gaza.” By doing so, Israeli officials are “responsible for the crime against humanity of extermination and for acts of genocide.”HRW said this “pattern of conduct, coupled with statements suggesting that some Israeli officials wished to destroy Palestinians in Gaza, may amount to the crime of genocide. “The HRW report comes after Amnesty International released a 296-page report that concluded Israel is committing genocide in Gaza. The US government, which is implicated in Israel’s crimes due to the huge amount of US military aid to Israel, denied Amnesty’s conclusion and said on Thursday that it “disagreed” with HRW’s report.“When it comes to a determination of something like genocide, the legal standard is just incredibly high, and so the finding in this scenario we just disagree with,” State Department spokesman Vedant Patel told reporters.
Israel sets fire to intensive care unit at Kamal Adwan Hospital in Gaza – Middle East Monitor Israeli military vehicles targeted Kamal Adwan Hospital in northern Gaza igniting a fire in its intensive care unit (ICU), according to the hospital’s Director, Hussam Abu Safiya. Abu Safiya said: “We were surprised by the entry of vehicles and bulldozers into the vicinity of the hospital, which was preceded by a terrifying targeting of citizens’ homes in the vicinity. We heard gunfire and shells without being able to do anything.” In a video recorded outside the smoke-filled ICU, he detailed the attack: “Sudden and crazy gunfire was fired at the hospital with all kinds of weapons, and the occupation deliberately targeted the intensive care unit by firing at it clearly.” Abu Safiya revealed that patients on ventilators were evacuated just moments before the fire caused by Israel engulfed the ICU. “We miraculously evacuated the patients who were on ventilators from the intensive care unit and the fire broke out inside it,” he said, noting that it is “the only department in the northern Gaza Strip.” He described the situation at Kamal Adwan Hospital, particularly in the ICU, as “catastrophic and still dangerous,” with fires still raging as there is little by way of equipment to stop them. He described how the fires were brought under control using the blankets and the little drinking water that remained in the hospital. Israeli occupation forces had already targeted the hospital’s water tanks and network. “The intensive care unit is out of service and the situation is catastrophic. We have appealed to the world for more than 75 days to provide protection for the health system and its workers, but there is no response.” The hospital faces daily attacks by Israeli occupation forces. On Monday, Israeli quadcopter drones struck the hospital’s generators, cutting power and causing further damage to the ICU, putting patients’ lives at risk. Since 5 October, Israel has launched a large-scale ground operation in northern Gaza, tightening its siege on the area. Palestinians accuse Israel of seeking to occupy the area and forcibly displace its residents. Since then, insufficient humanitarian aid, including food, medicine and fuel, has been allowed into the area, leaving the remaining population there on the verge of imminent famine.
Report: Netanyahu Orders IDF To Occupy Syria's Mount Hermon Until End of 2025 - Israeli Prime Minister Benjamin Netanyahu has ordered the Israeli military to occupy territory it captured on Mount Hermon in Syria following the downfall of Bashar al-Assad until at least the end of 2025,Israel’s Channel 12 has reported.After Assad fled Syria on December 8, Israel invaded southern Syria, taking control of a buffer zone that separated the Israeli-occupied Golan Heights from the rest of Syria’s territory. The Israeli military has also captured territory beyond the buffer zone.The Channel 12 report said the at least year-long occupation of southern Syria is significant because it essentially opens up a “new front” for the Israeli Defense Forces.Netanyahu visited Israeli troops on Mount Hermon on Tuesday and made it clear they weren’t going anywhere anytime soon, saying the occupation would continue until a “new arrangement” is made.
Ukraine assassinates Russian chemical weapons chief in Moscow bombing – — Ukrainian operatives on Tuesday killed a leading Russian military official in a daring bomb attack in Moscow.Lieutenant-General Igor Kirillov, commander of the nuclear, biological and chemical forces of the Russian army, died in a blast as he was heading out of a residential block in Moscow, the Russian Investigative Committee said in a statement.An explosive device was hidden in an electric scooter parked nearby. Kirillov’s aide also died in the attack, the investigative committee said, announcing a criminal investigation. Video footage obtained by POLITICO corroborates that version of events.Ukraine's Security Service (SBU) claimed responsibility for Kirillov's murder, a Ukrainian law enforcement official told POLITICO after being granted anonymity to discuss the sensitive topic."Kirillov was a war criminal and an absolutely legitimate target since he gave orders to use banned chemical weapons against the Ukrainian military. Such an inglorious end awaits all who kill Ukrainians. Retribution for war crimes is inevitable," the official said.Dmitry Medvedev, deputy head of Russia's Security Council, said later on Tuesday that Russia will retaliate for Kirillov's assassination."Everything must be done to destroy those who ordered the murder of General Kirillov, this military-political leadership of Ukraine," Medvedev said during the Russian state defense procurement meeting.A few hours before the attack, the SBU charged Kirillov in absentia for ordering the massive use of banned chemical weapons against the Ukrainian army on the eastern and southern fronts of the battlefield.“Since the beginning of the full-scale war, following Kirillov’s orders, the Russian army used different types of banned chemical munitions against Ukraine more than 4,800 times,” the SBU said in a statement Monday.
Moscow Vows Response After Ukraine Fires More US and British Missiles Into Russia - Ukrainian forces fired six US-provided Army Tactical Missile Systems(ATACMS) and four British Storm Shadow missiles into Russia’s Rostov Oblast on Wednesday, and Moscow is vowing it will respond.According to Russian media, the NATO-supported attack targeted a large chemical plant in Rostov. “These actions by the Kiev regime supported by Western handlers won’t be left unanswered,” the Russian Defense Ministry said.The ministry said that all of the ATACMS were shot down by Russian air defenses, and three out of four of the Storm Shadows were intercepted. One of the missiles fell and caused damage on the grounds of the chemical plant.President Biden gave Ukraine the greenlight to use US and British missiles in long-range strikes on Russian territory despite Moscow making it clear the move would risk nuclear escalation. Since then, Ukraine has launched several attacks on Russian territory using Western-provided missiles.President-elect Donald Trump has called Biden’s decision to sign off on the long-range strikes “stupid” and suggested he could reverse the move.The advanced missiles require intelligence from the US or its allies to be fired, meaning the attacks are directly supported by NATO countries. Earlier this year, a German military leak revealed British soldiers are “on the ground” in Ukraine helping fire Storm Shadows.In response to previous ATACMS and Storm Shadow strikes in Russia, the Russian military launched a new intermediate-range ballistic missile into Ukraine known as the Oreshnik. The missile was believed not to be carrying explosives since little damage was done, and Putin referred to it as a “test launch.” A strike with a conventionally armed Oreshnik could do major damage, as Putin has suggested the missile could replace nuclear weapons as Russia’s deterrent.
Zelensky Admits Ukraine Cannot Drive Russia Out of Crimea and Donbas - -- Ukrainian President Volodymyr Zelensky has conceded that Ukraine does not have the ability to drive Russian forces out of the territory Russia has captured since the 2022 invasion, as well as Crimea, which Russia has controlled since 2014.“We cannot give up our territories. The Ukrainian constitution forbids us to do so. De facto, these territories are now controlled by the Russians. We do not have the strength to recover them,” Zelensky told the French newspaper Le Parisien.“We can only count on diplomatic pressure from the international community to force Putin to sit down at the negotiating table,” the Ukrainian leader added. Military situation in Ukraine on December 18, 2024 (SouthFront.press) Zelensky has long maintained that his war goals include driving Russian troops out of Russian-controlled Ukraine, which includes about 80% of the eastern Donbas region and parts of the Kherson and Zaporizhzhia oblasts. A “peace formula” pushed by Zelensky called for a full Russian withdrawal before peace talks could even happen.A potential peace deal that was on the table in March and April of 2022 would have involved a Russian withdrawal from the territory it had captured following the invasion in exchange for Ukrainian neutrality. But the deal was discouraged by the US and its allies and fell apart. Later that year, Moscow formally annexed Donetsk, Luhansk, Kherson, and Zaporizhzhia, and it now considers all of the oblasts, even the Ukrainian-controlled areas, a part of Russia.Back in June, Russian President Vladimir Putin laid out Moscow’s conditions for peace, which included a Ukrainian withdrawal from the Russian speaking oblasts he considers part of Russia. British Defense Minister Says UK Forces Could Be Sent to Ukraine for Training - British Defense Minister John Healey has suggested that the UK could send troops to Ukraine for a training mission.During a visit to Ukraine, Healey told The Times that the UK would work to improve its training of Ukrainian troops and wouldn’t rule out sending trainers to Ukraine.“We [need to] make it easier to the Ukrainians to access and we [need to] work with the Ukrainians to help them motivate and mobilize more recruits,” Healey said.When asked if that could involve sending troops to Ukraine, Healey said, “We will look wherever we can to respond to what the Ukrainians want. They are the ones fighting.” Russia has repeatedly warned against Western countries sending troops to Ukraine for training purposes, saying any NATO soldiers would be legitimate targets of the Russian military. Leaks have revealed that British soldiers have been on the ground in Ukraine throughout the war, but they have been unofficial, covert deployments. Earlier this year, a German military leak revealed that British soldiers are in Ukraine helping fire Storm Shadow missiles, which recently began striking targets inside the Russian mainland, marking a major escalation of the proxy war. The Discord leaks revealed that as of March 2023, 97 NATO special operations soldiers were inside Ukraine, including 50 British soldiers. In April 2022, The Times reported that British Special Air Service soldiers were in Ukraine training Ukrainians on anti-tank weapons.
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