Oil, Gas, And Fracking News Reads: 12January 2020 – Part 1

Written by rjs, MarketWatch 666

Here are some selected news articles from the week ended 11 January 2020.

This article is a feature every Monday evening on GEI.

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Smallest January NatGas draw in 21 years; Gasoline supplies rise most in 4 years as gasoline demand falls to a 3 year low

Oil prices fell for the first week in six and by the most in one week since July this past week, following the lack of any significant disruption to oil supplies in the wake of the latest U.S.-Iran missile exchange…after rising 2.2% to $63.05 a barrel last week following the US assassination of Iran’s top General, the benchmark price of US light sweet crude for February delivery opened higher on Monday and rose to as high as $64.72 as Trump and Tehran continued to trade bellicose rhetoric, but backed off that high to settle with an increase of just 22 cents at $63.27 a barrel on growing doubts that Iran would strike back in a way that would disrupt oil supplies…with oil supplies remaining uninterrupted, oil prices opened lower on Tuesday and continued falling to register their first loss in 4 days, ending down 57 cents as $62.70 a barrel, as oil traders reconsidered the likelihood of the feared supply disruptions and cashed in their profits…but then oil prices spiked nearly $3 higher to start trading on Wednesday, first because the API had reported a larger than expected drawdown of US crude supplies, and then because Iranian missiles had struck US military bases in Iraq…however prices turned around that afternoon and doubled that big early spike in a downward tumble, falling nearly 10% from the day’s high to end down $3.09 at $59.61 a barrel, after the EIA reported an increase in US crude supplies against the expected draw and Trump said Iran “appears to be standing down” following those overnight missile strikes…oil prices then fell for a third day on Thursday, drifting below the levels prevailing before the initial U.S. attack and ending down 5 cents at $59.56 a barrel as calm in the Mideast prevailed…with both countries appearing to take a step back from the brink on Friday, oil prices fell another 52 cents to close at $59.04 a barrel, leaving the front-month oil contract 6.4% lower on the week, it’s biggest weekly loss since July…

Natural gas prices, on the other hand, finished modestly higher, after bouncing off a life-of-contract low last week…after falling 4.5% to $2.130 per mmBTU on ‘exceptionally bearish’ weather forecasts last week, the price of natural gas for February delivery opened lower and fell to below $2.10 on Monday before recovering to close half a cent higher at $2.135 per mmBTU.. natural gas prices rose 2.7 cents to $2.162 per mmBTU on Tuesday as some models began to show an extended stretch of below-normal temperatures, but then gave 2.1 cents of that gain back on wednesday, as oversupply continued to weigh on prices …but despite widespread warmth on Thursday, prices rose 2.5 cents as natural gas traders “eyed an end to the blowtorch regime”…prices then rallied a bit on Friday on the prospect of a return to something resembling winter temperatures later this month and closed 3.6 cents higher at $2.202 per mmBTU, thus finishing this week 3.4% higher than last…

The natural gas storage report for the week ending January 3rd from the EIA indicated that the quantity of natural gas held in storage in the US decreased by 44 billion cubic feet to 3,148 billion cubic feet by the end of the week, which left our gas supplies 521 billion cubic feet, or 19.8% higher than the 2,627 billion cubic feet that were in storage on January 3rd of last year, and 74 billion cubic feet, or 2.4% above the five-year average of 3,074 billion cubic feet of natural gas that has been in storage as of the 3rd of January in recent years….the 44 billion cubic feet that were withdrawn from US natural gas storage this week was the smallest January gas draw since 1998, a bit below the average forecast for a 50 billion cubic feet withdrawal by analysts surveyed by S&P Global Platts, less than half of the 94 billion cubic feet withdrawal reported during the corresponding week in 2019, and less than a quarter of/ the average 184 billion cubic feet of natural gas that have been pulled from natural gas storage during New Year’s 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 January 3rd showed that because of a big drop in our oil exports, a sizable increase in our oil imports, and a decrease in demand for oil from our refineries, we were able to add to our stored commercial supplies of crude for the eleventh time in the past seventeen weeks…our imports of crude oil rose by an average of 379,000 barrels per day to an average of 6,730,000 barrels per day, after falling by an average of 457,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 1,398,000 barrels per day to 3,064,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,666,000 barrels of per day during the week ending January 3rd, 1,777,000 more barrels per day than the net of our imports minus our exports during the prior week…over the same period, the production of crude oil from US wells was unchanged at 12,900,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production totaled an average of 16,566,000 barrels per day during this reporting week..

US oil refineries were reportedly processing 16,897,000 barrels of crude per day during the week ending January 3rd, 387,000 fewer barrels per day than the amount of oil they used during the prior week, while over the same period the EIA’s surveys indicated that an average of 166,000 barrels of oil per day were being added to the supplies of oil stored in the US….hence, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports and from oilfield production was 497,000 barrels per day less than what what was added to storage plus what our oil refineries reported they used during the week….to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+497,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting an error or errors of that magnitude in the oil supply & demand figures we have just transcribed…however, since the media treats these figures as gospel and since they drive oil pricing and hence decisions to drill for oil, we’ll continue to report them, just as they’re watched & believed as accurate by most everyone else (for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

Further details from the weekly Petroleum Status Report (pdf) indicated that the 4 week average of our oil imports slipped to an average of 6,617,000 barrels per day last week, now 12.7% less than the 7,579,000 barrel per day average that we were importing over the same four-week period last year….the 166,000 barrel per day net addition to our total crude inventories was all added to our commercially available stocks of crude oil, while the quantity of oil stored in our Strategic Petroleum Reserve was unchanged….this week’s crude oil production was reported to be unchanged at 12,900,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was unchanged at 12,400,000 barrels per day, while oil production from Alaska was 4,000 barrels per day lower at 483,000 barrels per day but still added the same rounded 500,000 barrels per day to the rounded national total….last year’s US crude oil production for the week ending January 4th was rounded to 11,700,000 barrels per day, so this reporting week’s rounded oil production figure was 10.3% above that of a year ago, and 53.1% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016…

Meanwhile, US oil refineries were operating at 93.0% of their capacity in using 16,897,000 barrels of crude per day during the week ending January 3rd, down from 94.5% of capacity the prior week, and a bit below the recent average capacity utilization for the first week of January…as a result, the 16,897,000 barrels per day of oil that were refined this week were 3.8% below the 17,566,000 barrels of crude per day that were being processed during the week ending January 4th, 2018, when US refineries were operating at 96.1% of capacity….

With the decrease in the amount of oil being refined, gasoline output from our refineries was also lower, decreasing by 1,286,000 barrels per day to 8,887,000 barrels per day during the week ending January 3rd, after our refineries’ gasoline output had decreased by 96,000 barrels per day over the prior week…after this week’s big drop in gasoline output, our gasoline production was 5.4% lower than the 9,392,000 barrels of gasoline that were being produced daily over the same week of last year….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) slipped by 1,000 barrels per day to 5,310,000 barrels per day, after our distillates output had decreased by 83,000 barrels per day over the prior week…and after this week’s small decrease in distillates output, our distillates’ production for the week was 4.5% below the 5,563,000 barrels of distillates per day that were being produced during the week ending January 4th, 2018….

Even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the ninth week in a row and for the 15th time in 29 weeks, rising by 9,137,000 barrels to 251,609,000 barrels during the week to January 3rd, the largest increase in 4 years, after our gasoline supplies had increased by 3,212,000 barrels over the prior week….our gasoline supplies increased by much more this week because the amount of gasoline supplied to US markets decreased by 828,000 barrels per day to a three year low of 8,133,000 barrels per day, and because our exports of gasoline fell by 219,000 barrels per day to 806,000 barrels per day, while our imports of gasoline fell by 72,000 barrels per day to 401,000 barrels per day….after this week’s increase, our gasoline supplies were 1.4% higher than last January 4th’s gasoline inventory level of 248,062,000 barrels, while they remained roughly 5% above the five year average of our gasoline supplies for this time of the year…

Likewise, even with the decrease in our distillates production, our supplies of distillate fuels increased for the 5th time in 15 weeks and for 15th time in the past 40 weeks, rising by 5,330,000 barrels to 139,050,000 barrels during the week ending January 3rd, after our distillates supplies had increased by 8,776,000 barrels over the prior week….our distillates supplies increased by less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 318,000 barrels per day to 3,373,000 barrels per day, and because our exports of distillates rose by 243,000 barrels per day to 1,428,000 barrels per day, while our imports of distillates rose by 69,000 barrels per day to 252,000 barrels per day….but even after this week’s inventory increase, our distillate supplies were 0.7% less than the 140,042,000 barrels of distillates that we had stored on January 4th, 2018, and roughly 8% below the five year average of distillates stocks for this time of the year…

Finally, with this week’s big drop in oil exports, combined with higher oil imports and the decrease in the amount of oil used by refineries, our commercial supplies of crude oil in storage rose for the fourteenth time in twenty-nine weeks and for the twenty-ninth time in 49 weeks, increasing by 1,146,000 barrels, from 429,896,000 barrels on December 27th to 431,060,000 barrels on January 3rd….with that modest increase, our crude oil inventories remained near the five-year average of crude oil supplies for this time of year, but were still more than 35% higher than the prior 5 year (2009 – 2013) average of crude oil stocks as of the first weekend of January, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first rose above 400 million barrels….even though our crude oil inventories had generally been rising over this past year, except for during this past summer, after generally falling until then through most of the prior year and a half, our oil supplies as of January 4th were 2.0% below the 439,738,000 barrels of oil we had stored on January 4th of 2018, while remaining 2.8% above the 419,515,000 barrels of oil that we had in storage on January 5th of 2017, but at the same time were 10.8% below the 483,109,000 barrels of oil we had in commercial storage on January 6th of 2016…

This Week’s Rig Count

The US rig count decreased for the 18th time in the past 21 weeks during the week ending January 10th, and is now 27.9% lower than the last count of 2018…Baker Hughes reported that the total count of rotary rigs running in the US decreased by 15 rigs to a 34 month low of 781 rigs this past week, which was also down by 294 rigs from the 1075 rigs that were in use as of the January 11th report of 2019, and 1,148 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in an attempt to put US shale out of business…

The number of rigs drilling for oil decreased by 11 rigs to 659 oil rigs this week, which was a 33 month low for oil rigs, 214 fewer oil rigs than were running a year ago, and much less than the recent high of 1609 rigs that were drilling for oil on October 10th, 2014….at the same time, the number of drilling rigs targeting natural gas bearing formations fell by 4 to 119 natural gas rigs, the fewest natural gas rigs deployed since December 2nd 2016, and hence a 37 month low for natural gas drilling, down by 83 gas rigs from the 202 natural gas rigs that were drilling a year ago, and way down from the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008…in addition to those rigs drilling for oil & gas, three rigs classified as ‘miscellaneous’ continued to drill this week; one on the big island of Hawaii, one in Washoe County, Nevada, and one in Lake County, California, compared to a year ago, when there were no such “miscellaneous” rigs deployed..

Offshore drilling activity in the Gulf of Mexico decreased by one rig to 21 rigs this week, as another rig that had been drilling offshore from Louisiana was shut down this week…as a result, the 20 rigs that continued drilling in Louisiana waters plus the one that was drilling offshore from Texas matched the Gulf of Mexico rig count of 21 rigs a year ago, when 20 rigs were drilling offshore from Louisiana and one rig was drilling in Texas waters…since there are no rigs deployed off US shores elsewhere, nor were there a year ago, the Gulf of Mexico count for this year and last is equal to the national total in both cases..

The count of active horizontal drilling rigs was down by 3 rigs to 698 horizontal rigs this week, which was 250 fewer horizontal rigs than the 948 horizontal rigs that were in use in the US on January 11th of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014….at the same time, the vertical rig count was down by 6 rigs to 38 vertical rigs this week, and those were also down by 27 from the 65 vertical rigs that were operating during the same week of last year….in addition, the directional rig count was also down by 6 to 45 directional rigs this week, and those were down by 17 from the 62 directional rigs that were in use on January 11th of 2019…

The details on this week’s changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes…the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins…in both tables, the first column shows the active rig count as of January 10th, the second column shows the change in the number of working rigs between last week’s count (January 3rd) and this week’s (January 10th) count, the third column shows last week’s January 3rd active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running 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 week a year ago, which in this week’s case was the 11th of January, 2019…

In the Texas Permian basin, there was a three rig reduction in Texas Oil District 8, or the core Permian Delaware, and a one rig reduction in Texas Oil District 8A, or the northern Permian Midland, while one rig was added in Texas Oil District 7C, the southern Permian Midland…in addition, two rigs were pulled out of Texas Oil District 7B, often shown as east of the Permian but a region which nonetheless has accounted for Permian rig additions in recent weeks…with the New Mexico rig count also down by two, we have to figure either one of those, or one of the retired rigs from Texas District 7B, had not been targeting the Permian…meanwhile, most the other changes were pretty straightforward; oil rigs were pulled out of North Dakota’s Williston shale and Colorado’s Niobrara chalk, while rigs targeting oil were added in Oklahoma’s Ardmore Woodford and Cana Woodford…for rigs targeting natural gas, one was added in Pennsylvania’s Marcellus shale, one was shut down in Ohio’s Utica shale, and four were shut down in the Haynesville shale…for those, the northern Louisiana region that includes the Haynesville shale was down 2 rigs to 31, while the adjacent Texas Oil District 6 was down 3 rigs to 16, so with the Haynesville down four, one of those rigs was apparently not targeting that formation…

Natural gas company explains need for pipeline – While officials are objecting to a proposed gas line coming through Union County, Columbia Gas of Ohio says its plan meets the needs of the region. In December, Columbia Gas submitted a Letter of Notification, indicating it intended to construct a natural gas pipeline, known as the Marysville Connector. The 4.78-mile line would begin at Watkins-California Road, between U.S. 42 and Derio Road, and ending on Industrial Parkway near Veyance Technologies. “The Project will provide natural gas service to new industries and residential development along the route,” according to the letter. County officials say they are not opposed to the plan, but believe it does not go far enough to help customers outside of Marysville. If approved, Columbia Gas says it intends to begin the pipeline construction on Feb. 21, 2022, and have the project completed by the end of that year. Eric Hardgrove, manager for communications and community relations at Columbia Gas of Ohio, said the company looked at 30-year growth trends and predictions for the region. “We have done the studies and looked at a number of options,” Hardgrove said. “We have looked at how we can best meet the needs and we believe this plan will meet the needs of our current customers as well as future growth.”

Fracking explosion detailed – The Columbus Dispatch – For 20 days after workers lost control of a horizontal gas well in Belmont County, a raging fire released harmful methane emissions into the air around the eastern Ohio community. State records also show that during the February 2018 incident, fluid from the ExxonMobil-owned Schnegg well entered a tributary of Captina Creek, and residents as far as a mile away were evacuated.It was unknown how much natural gas was released, the Ohio Environmental Protection Agency said.However, a team of Dutch and American scientists were able to detect the blowout using an orbiting satellite to measure methane.It turns out there were 120 tons of methane released per hour. Overall, the blowout released an estimated 60,000 tons of methane, according to the researchers.That’s more methane than some countries release in a year.“In fact, annual oil and gas emissions from only three of the European Union’s 15 countries, plus Switzerland and Norway, are estimated to be higher than that of the blowout,” said Steven Hamburg, a chief scientist at the Environmental Defense Fund.Hamburg was one of several scientists who published the findings in the Proceedings of the National Academy of Sciences.The emissions in Belmont County were twice the peak emission rate of the Aliso Canyon event in California in 2015 – one of the worst natural gas leaks in the country.The methane emissions from the Belmont County blowout were a quarter of the reported annual methane emissions from the oil and gas sector for the entire state of Ohio. Methane is often described as a greenhouse gas and is considered a significant contributor to climate change. When there’s a leak, it absorbs the sun’s heat 80 times more readily than carbon dioxide and contributes to warming the atmosphere. Ohio’s temperatures, which are already warming, are expected to continue to rise by four to six degrees by mid-century if emissions aren’t lowered.

Low natural gas prices hurting producers – Booming natural gas production in eastern Ohio and other parts of Appalachia has been great for consumers and businesses. It’s a different story for oil and gas companies operating in the region, as they struggle to turn a profit because soaring gas production has crimped prices. Just last summer, seven large producers that operate in the region spent $500 billion more on drilling than they earned in selling oil and gas, according to a recent report from the Institute for Energy Economics and Financial Analysis. Other companies not included in the report also have struggled. The result: Producers are scaling back drilling, writing down the value of their investments and cutting workers. “It’s hard to see where this is going except more bankruptcies and debt defaults,” said Kathy Hipple, one of the institute analysts who prepared the report. Because of low natural gas prices, Chevron, for example, announced last month it will reduce funding for various gas-related projects, including in the Appalachian shale region, and take a noncash accounting charge of $10 billion to $11 billion to reflect lower gas prices. More than half of that charge is tied to Appalachian shale. Other producers are expected to wipe billion of dollars off the value of natural gas assets across the country in coming months because of gas prices hovering around 25-year lows, Reuters reported last month. Low prices over the long term would be a drag on the economy in Ohio, where production in the Utica and Marcellus shale regions in the eastern part of the state has taken off over the past several years. “Low prices are obviously very good for the downstream business for

Pa. shale gas fee revenue projected to drop 21% on low gas prices – Last year’s low natural gas prices are to blame for an expected $53.6 million drop in the amount of impact fees Pennsylvania will collect from shale gas companies this year, the state’s Independent Fiscal Office said. Pennsylvania is projected to raise $198.2 million for the calendar year from fees assessed on wells drawing gas from the state’s Marcellus and Utica shales, the office reported Thursday. Last year, the state collected a record $251.8 million. The 21% drop in expected fees is being driven by gas prices that averaged $2.63 per million British thermal units on the New York Mercantile Exchange in 2019 – the lowest level in three years. At that price, gas companies will have to pay $5,000 less for each horizontal well than they did last year. Impact fees also decrease as wells age, although new wells offset that decline. The 616 wells that were drilled in 2019, which will be subject to the fee for the first time, will each pay $45,700, the fiscal office said. The 7,800 wells that are four years old or older will each pay $15,200. The slump in fees was not unexpected. Growing gas production has outpaced demand, driving prices lower, with gas companies, shareholders and royalty owners feeling the squeeze. Last year’s record total was also boosted by a court decision in favor of the state that limited which low-producing wells do not have to pay the fees. Companies paid $9 million in overdue fees last year for wells they previously claimed to be exempt. Impact fees are paid by gas companies in April and distributed in July. Counties and municipalities that get payments for hosting shale wells will split a smaller pot of money, expected to be $108 million. Impact fee revenue is also allocated to state environmental, infrastructure, emergency management and housing programs.

DEP issues $30.6 million fine after 2018 landslide causes pipeline to rupture, catch fire – A 2018 fire that burned acres of forest, a single-family home, a barn and multiple vehicles was sparked by gas that ignited from a pipeline that had ruptured, according to emergency officials. A landslide caused the pipeline to break open, and now the Pennsylvania Department of Environmental Protection has fined the owner $30.6 million for the landslide, explosion and fire.On Sept. 10, 2018, the explosion, which occurred in a line owned and operated by ETC, a subsidiary of Energy Transfer Partners, led to the evacuation of people from 25 to 30 homes. Power was knocked out to the area after six high-voltage transmission towers collapsed, and schools were closed. The 24-inch gas pipeline was buried about 3 feet below the surface. The fire eventually burned itself out after an automated system shut down valves on the pipeline. DEP officials said their investigation found ETC failed to stabilize “a number of areas along the pipeline resulting in additional slides,” had failed to address stormwater runoff, and that the company “illegally impacted” streams and wetlands along the pipeline. The state agency said the money from the fine will go toward oversight of the oil and gas industry and projects improving Pennsylvania’s waterways. “Energy Transfer Partners has shown, time and again, that it prioritizes profits above the safety and well-being of Pennsylvania’s residents and the environment. Even before the announcement of this unprecedented civil penalty regarding the Revolution Pipeline, Energy Transfer had already incurred nearly 100 violations and more than $13 million in fines associated with its Mariner East 2 pipeline. This company has shown no respect for Pennsylvania’s laws or its people, and PennFuture applauds the DEP for holding this bad actor accountable for its environmental degradation and repeated violations.”

EXCLUSIVE: Family Believes Mariner East Pipeline Construction Led To Water Being Contaminated With Chemicals Found In Jet Fuel – (CBS) – What’s in the water? That’s what a Delaware County family wants to know after a problem turned their daughter’s bath water brown. An Edgmont Township homeowner says she fears their water system has been contaminated by disturbances from construction of the Mariner East Pipeline. Eyewitness News spoke exclusively with the family on Monday. This photo captures what Erica Tarr says has been a nightmare. It shows her 2-year-old daughter in what she quickly realized was a bathtub full of dirty water. “One day the water turned brown-orange-tinged while she was in the tub,” Tarr said. Not only was the tap water alarming, it wasn’t supposed to be happening again for this Glen Mills family. Tarr, a pediatric nurse, says she posted the photo on Facebook in a moment of anger and frustration. They had been living with contaminated water, according to tests, for months. “It worsened, really bad to the point that it smelled and tasted like gasoline. Some days it smelled like nail polish,” she said. Tens of thousands of dollars later, a complex filtration system was installed. A second well was even drilled. Even with all the equipment and remedies, the water in the bathtub suddenly looked discolored again. It wasn’t long before that well showed serious signs of contamination, including volatile compounds found in petroleum products, like jet fuel.

In wake of pipeline settlement, Dinniman says DEP fails to manage pipeline projects The Pennsylvania Department of Environmental Protection (DEP) has fined a subsidiary of Energy Transfer Partners more than $30 million, but appears to have green-lit resumption of construction on various ETP pipeline projects including Mariner East II – leaving one local state legislator, state Sen. Andy Dinniman (D-19), expressing anger at the state’s inability to manage pipeline projects and protect the safety of Chester County residents. DEP spokespeople announced Friday that it has issued a $30.6 million civil penalty to ETC Northeast Pipeline (ETC), a subsidiary of ETP, for violations related to the 2018 Revolution Pipeline explosion and fire. The penalty is one of the largest civil penalties collected in a single settlement, according to DEP. “ETC’s lack of oversight during construction of the Revolution Pipeline and their failure to comply with DEP’s October 2018 compliance order demanded serious accountability. Their inaction led directly to this unprecedented civil penalty,” said DEP Secretary Patrick McDonnell in a statement. “DEP is committed to holding permittees accountable for permit compliance and will continue to provide active and stringent oversight over the construction of their projects. Permittees are obligated to ensure that their projects are constructed without incident and in full compliance with permits. If a permittee fails to do so, they will be held accountable.” But Dinniman made it clear he is not buying it, saying DEP does not and cannot properly inspect and supervise pipelines currently under construction. “No amount of money, no matter how large, addresses the fundamental and ongoing problem with pipeline construction and siting in Pennsylvania and that is the complete lack of oversight and accountability,” Dinniman said in a statement, Friday. “There’s no independent inspection of pipeline construction. There’s no regulation of pipeline placement or siting. And there is no agency that is either willing or able to work to ensure pipeline construction and safety standards. Neither the DEP nor the PUC appears to want to get involved until something goes drastically wrong.

Lawmakers want pipeline opponents to be heard – State Rep. Danielle Friel Otten, D-Chester, and state Sen. Katie Muth are taking steps this week to ensure that residents affected by a proposed route modification to the Mariner East Pipeline in Upper Uwchlan Township have every opportunity to make their complaints heard. In the Dec. 14 PA Bulletin, the Department of Environmental Protection published notice of a 30-day public comment period concerning Energy Transfer/Sunoco’s proposed permit revisions for portions of the Mariner East Pipeline, including a segment along Meadow Creek Lane in Upper Uwchlan Township.On Jan. 3, DEP lifted a statewide permit bar after reaching a Consent Order and Agreement with ETC Northeast Pipeline, the Energy Transfer subsidiary responsible for the 2018 explosion in Beaver County that leveled a house and barn. Lifting the permit bar, which had been in place since February 2019, clears the way for permit approvals and new pipeline drilling and construction. ET/Sunoco is liable for a $30 million fine on the Revolution Pipeline. The planned and 98 percent complete Sunoco Mariner East Pipeline stretches 350 across the state. It runs 21 miles across high density portions of of Chester and 11 mile of Delaware counties. Residents have fought the pipeline during dozens of rallies and several residents have been arrested. “We knew it was inevitable that the permit bar would be lifted at some point,” Otten said. “It’s unfortunate that our lack of regulatory oversight has allowed this bad actor to continue to damage property, put people’s lives at risk, and impact the health and safety of Pennsylvania residents across the state.” The proposed route modification in Upper Uwchlan would bring the pipeline down the middle of Meadow Creek Lane, obstructing residents’ access to their driveways and homes during construction and raising concerns about impacts on ground water and public safety both during construction and once the pipeline is in operation. The public comment period, initially scheduled to close on Jan. 13, was extended at Otten’s request. Comments will now be accepted until Jan. 28.

Casey introduces legislation for chemical disclosure — Tuesday, January 7, 2020 — Sen. Bob Casey (D-Pa.) is backing legislation to force natural gas companies to disclose chemicals used in the hydraulic fracturing process.

Report: Pittsburgh’s fracking industry shed 400 jobs in 2019; More could be on the way for 2020 – The shale tax is Governor Wolf’s white whale. He’s been seeking one since taking office in 2015. He got close in 2017, when the GOP Senate included it in a revenue package that the House promptly sunk. The severance tax component of Restore PA ran into opposition from anti-tax Republicans and progressives who didn’t like the reliance on fossil fuels. And some reporting last week by Pittsburgh City Paper’s Ryan Deto may have made it that much harder for Wolf to argue the case for a tax to legislative Republicans and Democratic allies in western Pennsylvania who are concerned about hometown job growth. As Deto writes, Pittsburgh’s fracking industry cut 400 jobs in 2019. And there’s every reason to think that more reductions might be on the way on 2020. More, from Deto:“These job cuts have been blamed on an economic slowdown within the natural gas industry. According to Washington County’s Observer-Reporter, the number of drilling rigs operating in Pennsylvania has dropped from 47 to 24.“Analysts have noted that there is currently an oversupply of natural gas, meaning that more natural gas is being produced than demand requires, which leads to price drops. The prices have been dropping for the last four years, and the Wall Street Journal reported today that the slide is continuing into 2020.“Andy Brogan, head of the oil and gas global sector at accounting giant EY, recently told the Pittsburgh Business Times he doesn’t expect that slide to turnaround immediately but says it could bounce back.”And right there, friends, in three tidy paragraphs, is reinforcement for the arguments that severance tax opponents have been making for a decade-plus. Namely, that the industry is butterfly-wing fragile and that an extraction levy would almost certainly be a job-killer when gas prices are already at remarkable lows.As Deto writes, some of the Pittsburgh region’s biggest players: EQT, CNX and Range Resources, all cut positions, with the biggest share coming from EQT at 300 jobs. Industry giant Chevron announced in December that it planned to pull out of the Pittsburgh region entirely, leaving 400 jobs in doubt, the Post-Gazette reported at the time.

Oil and gas industry, leaning on Pittsburgh region, punches back against fracking ban in messaging campaign – The American Petroleum Institute used its annual policy event here to make clear it would punch back against calls for nationwide bans on fracking proposed by leading Democratic presidential candidates. The Pittsburgh region was among seven areas of the country that the industry trade association highlighted as places energy jobs are embedded into the fabric of the local economy. A ban on the drilling technique, an API report estimated, would mean 7.3 million lost jobs. “Here’s a glimpse at that vision: Millions of jobs lost, a spike in household energy costs, a manufacturing downturn, less energy security in the short run,” said Mike Sommers, the association’s president and CEO. “A fracking ban in America would quickly invite a global recession.” Mr. Sommers, in a conference call with reporters, said oil and gas companies have gradually lowered emissions, all while making the United States the top producer of oil and gas in the world. Energy independence has been the goal of the last seven American presidents, he pointed out. Mr. Sommers called fracking – which over the past two decades has unlocked pools of natural gas in Pennsylvania previously trapped by shale rock – “one of the most important environmental achievements in this country.” Natural gas burns cleaner than coal, and Pennsylvania’s shale drilling boom pushed down the cost of natural gas enough to replace coal as the country’s primary source of power generation. “We are stepping up to the plate to address the issue of climate change,” he said, by supporting “smart regulation” and laws to encourage carbon capture and storage technologies. Yet the group has pushed back against climate policies, drawing criticism from environmental advocates. The industry successfully pressed for a relaxation of Obama-era federal methane rules, which aimed to require natural gas operators to fix methane leaks and cut down on flaring. Methane is a significantly more potent greenhouse gas than carbon dioxide.

For sale: 1,300 acres in South Philly. Next 7 days could decide the fate of bankrupt refinery. – The next seven days could determine the fate of the bankrupt Philadelphia Energy Solutions (PES) refinery complex, which shut down following a catastrophic June 21 fire and explosion. Final bids from potential buyers of the refinery’s assets are due at noon on Friday. The bids will trigger a rapid series of events that could conclude a week later, on Jan. 17, with an auction conducted at a law office in New York. The 1,300-acre property, which is larger than all of Center City, could be sold to one buyer, or broken up into pieces and sold to several buyers. The site has been used for petroleum refining for more than 150 years. But the refinery’s shutdown, and its continued struggles with financial viability as a conventional oil processing plant, have also raised hopes among urban planners, environmentalists, and the refinery’s neighbors that a new, cleaner use can be found for a large property at the city’s southern gateway. “The site could be used for “just about anything,” though much depends upon remediation of more than a century of soil contamination. Still, because of the property’s installed infrastructure – one of two refineries in the complex was undamaged by the fire – and its transportation links to rail, road, water, and pipelines, many observers believe that the logical buyer would continue to use some of the land for energy production or fuel storage. Even if a new owner continues refining oil on the site, advocates for a clean-energy future view the bankruptcy process as part of a longer, inevitable transition as the nation shifts from fossil fuels.

Poughkeepsie common council opposes Danskammer – – The Poughkeepsie Common Council adopted its first resolution since being sworn in last week by opposing the construction of the new Danskammer power plant in the Town of Newburgh. In a 6-1 vote Monday night with two members absent, the council passed a non-binding memorialization asking the state to prohibit the proposed build-out of the new Danskammer. The project seeks to replace an antiquated power generation plant with a modern facility. The new Danskammer plant is poised to use natural gas derived from the controversial “fracking” process which has been outlawed by Governor Andrew Cuomo. The governor has prohibited the practice of fracking for fossil fuels in New York but has stopped short of prohibiting new power plants from using gas collected via fracking in other states.

FERC Approves Eastern Shore Natural Gas Company Expansion – Chesapeake Utilities Corporation (NYSE: CPK) announced today that the Federal Energy Regulatory Commission (FERC) has issued an order approving the Company’s proposed Del-Mar Energy Pathway Project (Docket No. CP18-548-000). The order, which was applied for in September of 2018 by Eastern Shore Natural Gas Company, Chesapeake Utilities’ interstate natural gas transmission subsidiary, approves the construction and operation of new infrastructure facilities in Kent and Sussex counties in Delaware, and Wicomico and Somerset counties in Maryland.The project will add approximately 12 miles of natural gas infrastructure in Kent and Sussex counties and nearly seven miles of infrastructure in Wicomico and Somerset counties. Construction of the Del-Mar Energy Pathway Project is expected to commence within the first quarter of 2020. The estimated completion date will be the fourth quarter of 2021.Once in service, the new natural gas infrastructure will provide approximately 11.8 million cubic feet per day of additional natural gas firm transportation service and 2.5 million cubic feet of off-peak transportation service to Chesapeake Utilities’ natural gas distribution subsidiaries on the Delmarva Peninsula and one industrial customer.The estimated cost of the project is approximately $37 million. The anticipated annual gross margin for the Del-Mar Energy Pathway Project is $5.1 million.

Enviros to Fight WV Bill to Fund Natural Gas Storage Hub — One of the first bills introduced in West Virginia’s 2020 legislative session, which opened Wednesday, is by Republican House Speaker Roger Hanshaw to create a state investment fund to kickstart new businesses.But environmental groups in the state oppose the bill because the fund’s first project would be a giant underground natural gas storage plant called the Appalachian Storage Hub, according to Jim Kotcon, political chair of the West Virginia chapter of the Sierra Club.Kotcon says the hub would store and transport natural gas liquids produced from fracking, such as ethane, which is used in making plastics. “This would dramatically expand the use of fossil fuels and, in particular, natural gas drilling in West Virginia,” he points out. “And we need to be reducing our dependence on fossil fuels, not increasing it.”The Appalachian Storage Hub has support from the state’s congressional delegations and Gov. Jim Justice, who says it will bring much needed jobs to the depressed Ohio Valley region and could turn West Virginia into a national economic center for the natural gas and plastics industries. In the works for nearly a decade, the mammoth project is expected to cost as much as $10 billion for a plant that can hold 10 million barrels of natural gas liquid byproducts.Kotcon says the nation has similar natural gas industrial centers, including one along the Mississippi River in Louisiana between Baton Rouge and New Orleans. He says that facility has emitted so much air and water pollution over the years that the surrounding area is called Cancer Valley. “West Virginia already has very high cancer rates, and we have not seen anything to suggest that our industry would develop in any way safer than what’s already being done elsewhere,” he states.

Federal court overturns Union Hill compressor station permit – Calling Virginia’s review of a controversial compressor station in the historic Buckingham County freedmen’s community of Union Hill “arbitrary and capricious,” a federal court on Tuesday stripped the facility of its permit and ordered the State Air Pollution Control Board to reconsider the case. The decision is the latest blow to the Atlantic Coast Pipeline being developed by a consortium of companies led by Dominion Energy. The proposed Union Hill station is one of three compressor facilities planned along the 600-mile route from West Virginia to North Carolina. “It’s the eighth permit that this pipeline has lost, either in federal court of having been withdrawn by a federal agency,” said Southern Environmental Law Center attorney David Neal, who represented the Friends of Buckingham group in opposition to the facility. One such permit revocation has been appealed to the U.S. Supreme Court, which will hear the case in February. Wednesday’s ruling by the 4th Circuit Court of Appeals in Richmond, penned by Judge Stephanie Thacker and joined by Chief Judge Roger Gregory and Judge James Wynn, offered harsh criticisms of both the Department of Environmental Quality and the air board, which issued a permit for the compressor station last year. The judges condemned the agency and the board for their failure both to consider the use of electric motors rather than gas-fired turbines at the proposed station and to evaluate the environmental justice impacts of the facility. Using motors, station opponents argued, “would eliminate almost all” of the site’s air pollution. According to the ACP’s permit application, 83 percent of the expected nitrogen oxide emissions and 95 percent of its particulate matter emissions would be due to its use of gas turbines.

‘Important Victory’ for Historic Black Community Over the Atlantic Coast Pipeline – A historic African American community in Virginia has dealt another blow to the embattled Atlantic Coast Pipeline.A federal court threw out a permit Tuesday that the pipeline‘s owners needed to build a natural gascompressor station in Union Hill, a community founded by freed slaves after the Civil War. In doing so, the judges sided with the community and their lawyers, who argued that the compressor would disproportionately harm the health of the mostly African American residents who would live near the station, The Associated Press reported.”Five years ago, Dominion told us that there was going to be a compressor station in Union Hill and there was nothing we could do about it. That’s not fair, and it’s not American. This is a win for a group of citizens who were committed to protecting their community and never ever gave up,” Chad Oba, a Union Hill resident and president of Friends of Buckingham, a community group that fought the pipeline, told The Hill. “Today we showed that our community, our community’s history, and our community’s future matters more than a pipeline.”Dominion Energy, the pipeline’s lead developer, argued that the compressor station would have fewer emissions and more air quality monitoring than any other station in the U.S., according to The Associated Press. The State Air Pollution Control Board accepted that argument when it granted the permit.The board’s Deputy Solicitor General Martine Cicconi said during a hearing in October that the board “absolutely grappled” with environmental justice issues when making the decision, but granted the permit because the station’s emissions would be much lower than other compressor stations in Virginia and would meet national air quality standards. However, the three judges from the 4th U.S. Circuit Court of Appeals rejected those arguments, ruling that the state did not consider the “unequal treatment” of people living near the compressor site. They also ruled that the state failed to consider zero-emission alternatives such as electric turbines.

Enbridge retrieves ½ of mechanical debris on Line 5 pipeline – but plans to leave the remainder in lakebed ⋆ Last month, Canadian oil pipeline company Enbridge released a statement announcing its successful retrieval of a 45-foot steel borehole rod segment that had been lost to the Straits of Mackinac in September. Left unsaid was the detail that the recovered segment was only about half of the original rod length, meaning that a steel rod segment measuring at least 40 feet long remains embedded in the lakebed, which Enbridge does not have plans to retrieve. “It originally was one long piece of drill rod. We had to cut it at the mudline and we retrieved the 45-foot section that was above the lakebed and the section that was stuck below the lakebed cannot be retrieved,” Enbridge spokesman Ryan Duffy said in an email on Monday. The drill rod became stuck on Sept. 12, when geological work for the company’s planned Line 5 tunnel project resulted in an equipment collapse. The incident was not reported to Michigan’s Department of Environment, Great Lakes and Energy (EGLE) until mid-November. Enbridge had originally planned to wait until the spring to retrieve the steel rod from the Straits, citing safety concerns. But “favorable weather conditions at the Straits in recent weeks prevented the water from icing over, providing Enbridge a window of opportunity to complete this work,” according to a Dec. 30 statement from the company. The statement announced that the rod had been successfully retrieved on the evening of Dec. 28. The statement also noted that when Enbridge’s remote underwater vehicle retrieved the 45-foot segment, it was discovered that it “had moved from its original position near the pipeline and was found resting on the west leg of the [Line 5] pipeline.” Nonetheless, Enbridge has continued to deny that the debris ever posed any safety or environmental risk to Line 5 and the Straits of Mackinac.

Editorial: Mother Nature is sending a message on Line 5 – record-eagle.com – Mother Nature’s statements often are directions, not suggestions. They’re written in wind, waves, rain and clouds. And not heeding her guidance often ends in disaster. That’s why last week’s news from the Straits of Mackinac was at once unsurprising and alarming. Officials with Michigan’s department of Environment, Great Lakes and Energy told reporters they were taken aback by the scene workers found during recent efforts to remove debris left behind on the lakebed by a summertime core sampling work by Enbridge Energy. The company used a remotely-operated vehicle last weekend to retrieve a 45-foot-long section of steel rod it dropped during earlier work to drill core samples from the bedrock beneath the Straits.The previous work was part of Enbridge’s effort to construct a tunnel beneath the Straits to house its proposed new Line 5 pipeline.The retrieval effort didn’t find a leak in the 66-year-old, twin Line 5 oil pipelines – most people’s biggest fear.No, instead it found an explicit statement from Mother Nature, a not-so-subtle piece of advice: stop underestimating the power of nature. “We just didn’t see it as a real urgency that it get out of there in an instantaneous or super-urgent manner,” he told LaFond. “In hindsight, (Enbridge) reported upon removal that that rod had migrated 150 feet and was leaning against the west leg of the pipeline. I don’t think anybody expected that such a low-profile, heavy, probably 250 pound piece of steel would have migrated 150 feet.” We probably shouldn’t be surprised at the overwhelming power of the Great Lakes, especially in an area where currents are notoriously strong. Such clear evidence also lends credence to an independent technical report authored in 2017 by retired Dow Chemical engineer Ed Timm. In his analysis, Timm supposed that bends in the twin Line 5 pipes, and long unsupported spans could be attributed to the force of strong currents that sweep through the lakebed where it pinches between the peninsulas.

Gulf of Mexico Hits Record Daily Production – The U.S. Gulf of Mexico (GOM) made history in August 2019 as it exceeded oil production of 2 million barrels per day (MMbopd), according to the U.S. Bureau of Safety and Environmental Enforcement (BSEE). The record average daily production from the GOM comes after the Outer Continental Shelf (OCS) experienced a record-setting 2018. This included oil production of more than 640 million barrels in federal waters. Production increases in 2019 paved the way for $2.34 billion more offshore royalty revenue for the Federal Treasury. In addition, GOM production will continue to set records through 2020, according to the U.S. Energy Information Administration. “This is incredible news for the nation,” said BSEE director Scott Angelle. “Under the Trump administration, BSEE is stressing safety and environmental sustainability while at the same time promoting robust energy production offshore, and it’s paying off.”

LNG, Plastics and Other Gas Industry Plans Would Add Climate Pollution Equal to 50 New Coal Plants – This week, plans to build one of the world’s largest plastics and petrochemical plants in St. James Parish, Lousiana – the heart of the state’s notorious Cancer Alley – inched forward as Louisiana approved air quality permits that could allow the plant to release 13.6 million tons per year of greenhouse gases – equal to three coal-fired power plants – and a host of other pollutants.The St. James plant would be the single most polluting facility of 157 planned new or expanding refineries, liquefied natural gas (LNG) export projects, and petrochemical plants that have sought or obtained air pollution permits in the U.S., according to a report published today by the Environmental Integrity Project (EIP).Within the next five years, these plants could create as much as 227 million tons of additional climate-changing greenhouse gas pollution, bringing the industry’s cumulative annual emissions to 990.5 million tons by 2025. Those planned facilities create an impact equal to adding 50 new coal-fired power plants to the U.S. electrical grid, the report concludes.“The U.S. is already struggling to meet climate commitments and transition to a low-carbon future,” Courtney Bernhardt, Research Director at the Environmental Integrity Project, said in a statement accompanying the report. “This analysis shows that we’re heading in the wrong direction and really need to slow emissions growth from the oil, gas, and petrochemical industries.” In addition to the climate impacts, the planned projects could have significant impacts on public health. “According to their permit documents, the facilities could emit every year up to 119,000 tons of volatile organic compounds, which are a component of smog; 11,100 tons of fine particles that contribute to asthma and heart attacks; 8,800 tons of sulfur dioxide, which damages the lungs; and 47,200 tons of nitrogen oxides, which feed fish-killing ‘dead zones’ in waterways,” EIP wrote.In 2019, actual coal-fired power plants were retired at a record-setting rate. Power generation in the U.S. from coal dropped 18 percent from 2018 to 2019, according to estimates released January 7 from the Rhodium Group. All told, the power sector reduced its carbon emissions by 150 million metric tons this past year. But the planned oil and gas expansion described in EIP’s report would move even more rapidly, undercutting the impacts of the power sector’s transition away from coal. A massive American oil and gas production boom, unleashed by fracking, has hit right as the impacts of climate change have become increasingly clear.

Louisiana appeals court hears arguments in pipeline lawsuit (AP) – A Louisiana appeal court heard arguments Wednesday on a lawsuit challenging state laws that let oil pipeline operators take private land for construction. The 3rd Circuit Court of Appeal in Lake Charles could take weeks or months to decide the case involving the 162-mile-long (260-kilometer) Bayou Bridge Pipeline, attorney Pamela Spees of the Center for Constitutional Rights said after the hearing. The pipeline began operating in March. “What a lot of people don’t realize is that oil companies have been granted power of eminent domain. … They don’t have to go through the courts” to take private property for pipelines in Louisiana, Spees said in a news conference livestreamed by the Louisiana Bucket Brigade, an environmental nonprofit. The Center for Constitutional Rights represents three owners of land in St. Martin Parish. Attorneys for Energy Transport Partners, the partnership which built the pipeline, said in their brief that pipeline opponents had failed to come up with any previous federal or state court rulings to back up their contention that the law is unconstitutional. But the landowners also argue that Judge Keith Comeaux made errors before ruling in May that Energy Transport Partners trespassed on the land, but that construction was legal. Energy Transport Partners released a brief statement Tuesday saying Wednesday’s hearing was part of the eminent domain process and the pipeline “has been safely operating since March of 2019.” Siblings Katherine and Peter Aaslestad and Theda Larson Wright, who is not related to the Aaslestads, are among nearly 900 owners of the 38-acre (15-hectare) tract in St. Martin Parish, pipeline attorneys said. Comeaux awarded them $150 each, finding that the land was seized for a legitimate public purpose and was of little value to the three out-of-state owners. “As a human, it’s really important to me that the wetlands are preserved,” Katherine Aaslestad said during the news conference. She said she grew up in Louisiana, though she now teaches history at West Virginia University.

Train 2 at Gulf Coast export terminal now producing LNG – The second liquefaction train at a Louisiana Gulf Coast liquefied natural gas facility is now producing LNG for future export to global power generation markets. EPC partners McDermott International and Chiyoda International announced that Train 2 of the Cameron LNG project in Hackberry, La., is in operation. Train 1 went into operation earlier in 2019. McDermott and Chiyoda have provided the engineering, procurement and construction for the Cameron LNG project since the project’s initial award in 2014. The project includes three liquefaction trains with a projected export of 12 million tonnes per annum of LNG, or approximately 1.7 billion cubic feet per day. Cameron LNG is jointly owned by affiliates of Sempra LNG, Total, Mitsui & Co., Ltd. and Japan LNG Investment, a company jointly owned by Mitsubishi Corp. and Nippon Yusen Kabushiki Kaisha (NYK). Sempra LNG is a subsidiary of San Diego-based Sempra Corp., which also own utilities San Diego Gas & Electric and Southern California Gas.

Saudi Aramco and Sempra Take Step Forward on Port Arthur LNG — American utility giant Sempra Energy and Saudi Aramco announced Monday that they have signed an interim agreement for their joint Port Arthur LNG export project, which is currently under development in Jefferson County, Texas. The deal remains subject to final review and authorization on both sides. The firms signed a heads of agreement last May, which calls for Aramco to purchase five million tonnes per annum (mtpa) of liquefied natural gas and make a 25 percent equity investment in the Port Arthur LNG project. The initial phase of the Port Arthur LNG project is fully permitted, and it is expected to include two liquefaction trains, up to three LNG storage tanks and the facilities to export up to 11 mtpa of LNG on a long-term basis. Earlier this year, Sempra LNG initiated the Federal Energy Regulatory Commission process for an expansion that would add two additional liquefaction trains, bringing the total export capacity to 22 mtpa. Aramco expects the global demand for LNG to increase by four percent per year, potentially exceeding 500 mtpa by 2035. Natural gas provides a natural complement to Saudi’s core oil business; it is the world’s most valuable oil company (and the most valuable company of any kind). Port Arthur LNG is one of Sempra’s five LNG development projects in North America; the firm ultimately aims to build out the export infrastructure for 45 mtpa. Its Cameron LNG plant in Louisiana is in commercial operation now, and all three liquefaction trains in the first phase of its development should be producing by the end of 2020.

Enterprise exports first ethylene cargo from Morgan’s Point – Houston pipeline operator Enterprise Products Partners and British liquefied gas shipping company Navigator Holdings have exported their first cargo of ethylene from their newly completed dock at Morgan’s Point. A Liberian-flagged tanker named the Navigator Europa left the Enteprise’s docks on Jan. 2 with a 25 million pound shipment of ethylene for the Marubeni Corporation in Japan. The liquefied petroleum gas tanker is currently waiting to move through the Panama Canal before heading to Asia. The cargo marks the first ethylene export shipment for Enteprise and its Morgan’s Point facility. “Because of abundant natural gas liquids thanks to the shale revolution, the U.S. is now a global leader in ethylene production, with an unprecedented buildout of mostly ethane crackers along the Texas and Louisiana Gulf Coast, providing hundreds of thousands of jobs to local economies,” Enterprise Products Partners CEO Jim Teague said in a statement. Capitalizing on that abundance of natural gas liquids from the Permian Basin of West Texas and other shale plays, Enterprise and Navigator entered into a 50-50 joint venture to build storage terminals and a dock for ethylene exports at Enterprise’s terminal in the town of Morgan’s Point. Located along the Houston Ship Channel, the Morgan’s Point export terminal receives ethylene and other products via pipeline from Enterprise’s salt dome storage terminal in Mont Belvieu, a town and natural gas liquids processing hub about 30 miles east of Houston.

Natural Gas Looks Awful Now That It’s 2020 – Massive discoveries of natural gas in the Marcellus and Utica shale regions of the US increased the supply side of the fundamental equation for the energy commodity. At the same time, technological advances in extracting the gas from the crust of the earth, together with a supportive energy policy under the Trump administration caused the cost of production to decline. Meanwhile, replacing coal with natural gas for power generation and the ability to send liquid natural gas around the globe by ocean vessels expanded the demand side of the natural gas market. In 2016, the price of nearby natural gas futures traded in a range from $1.611 to $3.994 per MMBtu. The following year, the trading band was from $2.522 to $3.568. In 2018, volatility returned, and the price was between $2.565 and $4.929 per MMBtu. In the year that ended last Tuesday, the range was from $2.029 to $3.722 per MMBtu. In 2015, natural gas traded below $2 for the first time since 2012, and the price action in December was a lot like what we witnessed last month. Natural gas began trading on the NYMEX futures exchange in 1990. In its first decade, the range was from $1.02 to $4.60. From 2000 through 2010, wild volatility took the price from $1.875 to $15.65 per MMBtu. In the decade that just came to a close, the range was narrower, as the energy commodity traded between $1.611 and $6.493. The fourth decade of natural gas futures trading began on Thursday, with the price below $2.20 per MMBtu. I had gone into the winter season looking for a rally to the $3 per MMBtu level, and I was wrong. It was warm across the United States during the holiday season this year. The demand for heating was well below average. The price of natural gas continued its decent over the past week and fell to a new low. In 2019, the price of the energy commodity fell by over 25.50%. During the fourth quarter, natural gas was over 6% lower during the time of the year when it tends to exhibit price strength.

Natural Gas Futures Rally as ‘Weekend Risk’ Expected From Forecasts – The prospect of a return to something resembling winter temperatures later this month provided enough impetus Friday to lift natural gas futures ahead of another potentially pivotal weekend of weather data. The February Nymex contract picked up 3.6 cents to settle at $2.202/MMBtu; March settled at $2.168, up 2.0 cents.

US working natural gas in underground storage decreases by 44 Bcf: EIA | S&P Global Platts – US working gas stocks fell at rate less than one-third the five-year average last week as NYMEX Henry Hub winter futures remain in the doldrums with more bearish draws likely in the weeks ahead. Storage inventories fell by 44 Bcf to 3.148 Tcf for the week ended January 3, the US Energy Information Administration reported Thursday morning. The pull was less than an S&P Global Platts’ survey of analysts calling for a 50 Bcf draw. Responses ranged from a draw of 41 Bcf to a draw of 63 Bcf. The withdrawal was much weaker than the 94 Bcf pull reported during the corresponding week in 2019, as well as the five-year average draw of 184 Bcf, according to EIA data. As a result, stocks were 521 Bcf, or 20%, more than the year-ago level of 2.627 Tcf and 74 Bcf, or 2.4%, more than the five-year average of 3.074 Tcf. The draw was weaker than the 58 Bcf pulled from working gas in storage reported for the week ended December 27. Total demand fell by 3.4 Bcf/d to average 100.9 Bcf/d, after a combined 5.5 Bcf/d drop in the Northeast and Southeast was partly offset by a notable 1 Bcf/d increase in the Rockies, an impressive jump of more than 30% for the relatively low-demand region, according to S&P Global Platts Analytics. Upstream, supplies were down 0.4 Bcf/d to an average 95.7 Bcf/d. Continuing the theme from the past several weeks, almost all of the change in the supply stack came from Canadian imports, which fell by 0.6 Bcf/d, while onshore production remained rigid, falling by only 42 MMcf/d, or less than 0.05%, week over week. Price weakness is by now seemingly locked-in at the fundamental level, and near-term NYMEX Henry Hub contracts have shown no signs of improving in recent weeks. The balance of winter February-March strip is trading at $2.12/MMBtu during Thursday trading, flat to yesterday’s close and flat to a week ago as well. The transition from an inventory deficit to a surplus this week no doubt does little to assuage concerns of a market in oversupply, though. With the first quarter just getting underway, producers are entering the new decade with a considerably more capital-disciplined approach and potentially a primed grip on the lever. A pullback in production growth, or even a decline in supplies outright, could help rebalance the market, and prices have plenty of room to increase. Looking ahead to the week ending January 10, total US demand is on the upswing, currently averaging close to 4.2 Bcf/d higher than the week prior, according to Platts Analytics. Also, lower production in the Northeast and Texas is affecting supplies, which are averaging roughly 400 MMcf/d lower week over week. A forecast by Platts Analytics’ supply and demand model calls for a draw of 79 Bcf for the week ending January 10, which would increase the surplus to the five-year average by more than 100 Bcf.

Enbridge withdraws application for Texas COLT offshore crude oil export terminal – Canadian pipeline operator Enbridge is setting aside plans to build an offshore crude oil export terminal that would have been able to receive supertankers in the Gulf of Mexico just southwest of Houston. In a filing over the holidays with the U.S. Department of Transportation’s Maritime Administration, or MARAD, Enbridge withdrew the company’s permit application to build the Texas Crude Offshore Loading Terminal, or Texas COLT project off the coast of Brazoria County. Enbridge’s decision to scrap the Texas COLT project came shortly after the company decided to join forces with Houston pipeline operator Enterprise Products Partners to build the Sea Port Oil Terminal, or SPOT terminal. The United States is currently exporting nearly 3.1 million barrels of crude oil per day. But with several companies vying to build export terminals that support Very Large Crude Carriers, the market can only support one or two of the projects. Known as VLCCs, the supertankers can haul 2 million barrels of crude oil in a single shipment.

Permian Pipeline Competition Heats Up — It’s gone from a dearth to a glut of oil pipeline projects competing to serve slowing production growth in the Permian Basin. Five new oil pipelines are set to open in the Permian Basin through 2021, expanding a gap between production and takeaway capacity that’s already forcing companies to cut fees and could mean lower profits and cutthroat competition ahead. Producers in the West Texas and New Mexico oilfield are pumping about 4.72 million barrels a day, according to Rystad Energy AS. That compares with nearly 6 million barrels of pipeline capacity that could rise by about 3.5 million barrels in the next two years as planned new conduits come online. Most of those planned projects were announced when the Permian was posting annual growth rates in excess of 1 million barrels a day. Now, some analysts see yearly growth slowing to as little as 650,000 barrels a day, with older wells producing less and oil companies preparing to curb spending this year to boost investor returns. Competition will heat up particularly among pipeline companies seeking to renew long-term shipper contracts that are set to expire, including those seeking to proceed with new pipeline projects, said Sandy Fielden, director of research for Morningstar Inc. “There is a chance that some of the projects would get canceled or consolidated and that would depend on shipper commitment.” Adding to this, the difference between the price of crude on the coast compared with Midland in the Permian has plummeted in the last year, making it more difficult for shippers to make money after paying the pipeline fees. Operators of legacy pipes in the oil patch already started cutting tariffs last year to retain or lure shippers to keep their systems fully loaded. In August, Energy Transfer Partners LP cut rates for users on portions of their Permian Express system, while Magellan Midstream LP issued incentive rates for large-volume shippers on its Bridgetex pipeline. Epic Pipeline Co LP halved its transportation rate prior to the line coming into service.

Texas oil and gas greenhouse pollution could negate progress on emissions, report says – Oil and gas industry expansions could add as much greenhouse gas pollution as the equivalent of 50 coal plants by 2025 – with much of that increase coming from Texas and Louisiana – at a time when pressure to slow down global warming rises, a new report found.Over the next five years, the industry plans to build or expand 157 plants, in addition to more drilling that could release up to 227 million tons of greenhouse gas emissions – up to 30 percent more more than 2018, according to the Environmental Integrity Project’s new report, “Greenhouse Gases from Oil, Gas, and Petrochemical Production.”Although greenhouse gas emissions in the United States fell about 2 percent last year, mostly as a result of a decrease in coal consumption, that modest progress is being undercut by the expansion in the oil and gas industry, said Eric Schaeffer, executive director of the Environmental Integrity Project, a Washington, D.C.-based nonprofit organization that advocates for enforcement of environmental laws. It was founded in 2002 by former Environmental Protection Agency attorneys. “We think this is the fastest growing source of greenhouse gas emissions and that the amount that’s already here and what is likely to be added into the atmosphere is pretty alarming,” Schaeffer said.Reid Porter, a spokesman for the American Petroleum Institute, said that the industry is improving in controlling emissions. “Industry initiatives, including efforts like The Environmental Partnership,” he said, “underscore the industry’s commitment to leveraging new technologies and innovative practices that reduce emissions and establish clear pathways for continuous environmental improvement.” For its analysis, EIP focused on companies that extract or refine oil and gas, export liquefied natural gas, or manufacture petrochemicals, plastics, or fertilizers. The group based its data on industry reports to the EPA, the Department of Energy’s estimate of future oil and gas production, and from permits that authorize increased emissions from proposed oil, gas, and chemical projects. It doesn’t include smaller projects that aren’t required to obtain permits that limit greenhouse gases.

Study warns of rise in greenhouse gas pollution from oil and gas firms by 2025 Oil, natural gas and petrochemical companies could release about 30 percent more greenhouse gas pollution by 2025 than they did in 2018, according to a new report. Expected growth from these companies could release about 227 million tons of additional greenhouse gas pollution by the end of 2025, with a projected total of 990.5 million tons of emissions, according to a report from the Environmental Integrity Project. In 2018, the companies reported emitting 764 million tons, the study said. It pointed in particular to possible increases from 157 projects that had not been operating by the end of 2018. It said the projects had the potential to increase emissions by up to 193.8 million tons of greenhouse gases per year. The report called for changes such as stronger emissions monitoring by the Environmental Protection Agency (EPA) and stronger permits by the states and the EPA that “include cost-effective measures to minimize greenhouse gas pollution.” “This glut of oil and gas is fueling growth in industries that release significant amounts of greenhouse gases, such as liquefied natural gas export terminals, plastics manufacturing and other petrochemical production,” the report said. “The U.S. is already struggling to meet climate commitments and transition to a low-carbon future. The industries responsible for driving fossil fuel extraction and production need to be held more fully accountable for their actions and the consequences of those actions,” it concluded. Spokespeople for the EPA did not immediately respond to The Hill’s request for comment.

Climate Watchdog Warns US Fracking Boom Leading to 30% Rise in Greenhouse Gas Emissions by 2025 – Planet-heating pollution from the U.S. oil, gas, and petrochemical industries could rise about 30% by 2025 compared with 2018 because of additional drilling and 157 new or expanded projects “fueled by the fracking boom,” an environmental watchdog group warned Wednesday.That estimated emissions increase is equal to “as much greenhouse gas pollution as 50 new coal-fired power plants,” the U.S.-based Environmental Integrity Project (EIP)explained in a statement announcing the new analysis. The EIP report – titled Greenhouse Gases from Oil, Gas, and Petrochemical Production(pdf) – details recent and potential future emissions from U.S. petroleum and natural gas systems, chemical manufacturing, and oil refineries based on data reported to the Environmental Protection Agency, fossil fuel production projections from the Department of Energy, and permits that companies are seeking or have acquired.”Facilities in these sectors reported emitting 764 million tons of greenhouse gases (carbon dioxide equivalent tons) in 2018, an eight percent increase since 2016,” the report says. “Expected growth in oil and gas production and large new and expanded oil, gas, and chemical plants have the potential to add up to 227 million additional tons of g reenhouse gases by 2025.””That could bring total emissions to nearly one billion tons, equivalent to the greenhouse gas output from more than 218 large coal-fired power plants operating around the clock at full capacity,” the report continues, noting that the estimates “likely understate emissions growth from the oil, gas, and petrochemical sectors.” Aided by both the Obama and Trump administrtions, the expansion of the oil, gas, and petrochemical industries in the United States continues despite repeated and increasingly urgent warnings from experts that the U.S. fracking boom is threathening ecosystems and making people sick.Scientists have called for all countries – but particularly the world’s wealthiest – to rapidly phase out fossil fuels in favor of 100% renewable energy to prevent the worst impacts of the global climate emergency.

Oil and gas group launches campaign touting its efforts as good for climate – The American Petroleum Institute (API) is launching an advertising campaign portraying oil and gas energy as a way to combat climate change, despite many environmental groups arguing that the industry hurts such efforts. In a seven-figure ad buy, API will call for “common ground” on the energy debate in 2020 and beyond, according to a spokesperson. The campaign touts oil and gas energy as a way to reduce climate change by lowering carbon levels. “The innovators in America’s natural gas and oil companies have teamed up with the country’s brightest minds and reduced carbon emissions levels to the lowest in a generation,” one ad says. During an event in Washington on Tuesday, API President and CEO Mike Sommers similarly stressed the industry’s commitment to fighting climate change while expressing opposition to a fracking ban endorsed by some Democratic presidential candidates. “The size and scope of the climate challenge requires a tremendous response and it requires innovation from everyone, including our members,” he said. Mitch Jones, the policy director at the environmental group Food & Water Watch, slammed the API campaign as “laughable.” “This is just more of the oil and gas industry’s attempt to greenwash their dirty, climate-change-forcing industry,” Jones told The Hill. “The science says very clearly we have to stop extracting fossil fuels and we have to stop burning fossil fuels and that includes not only coal, but also oil and fracked natural gas,” he added.

How the oil industry has spent billions to control the climate change conversation – America’s oil companies are trying to rebrand themselves as part of the solution to the climate crisis, launching a campaign to counter top Democrats’ proposals to rapidly cut pollution from the power plants and cars that run on the industry’s petroleum and natural gas. They say natural gas – a fossil fuel that emits heat-trapping carbon dioxide – is helping to slow climate disruption by providing an alternative to coal. “We’re taking our message of energy progress to every corner of the country to show just what’s at stake in Washington and in state capitols around the country,” said Mike Sommers, CEO of the oil trade group the American Petroleum Institute (API), on a press call announcing the plan. The campaign is part of a strategy in which the oil industry has funneled billions of dollars into its defense, threatening to outpace climate action advocates, say frustrated environmental activists who are increasingly calling on Democrats in Congress to take a tougher line on the sector. But Sommers depicted a dark future if a presidential candidate who wants to ban fracking for natural gas wins the 2020 election: millions of jobs lost, hundreds of billions of dollars more for household energy costs and a global recession. However, opponents of the industry say the only path to significant US climate action is through legislation and that lawmakers won’t be able to legislate unless they reveal how the industry has controlled the public dialogue around climate change and put a stop to its misdeeds. Geoffrey Supran, a research associate who studies global warming politics at Harvard University, is urging House committees to demand more information from oil companies about their influence over public policy. Supran said obtaining corporate documents is “one of the most important actions Congress could take to address the climate crisis”. Sign up to the Green Light email to get the planet’s most important stories Read more “The reality is that as much as we know about fossil fuel interests’ denial and delay, we’ve really found those skeletons in the closet just by looking through a tiny keyhole – everything we know is based on just a few hundred documents scrounged from various sources,” Supran said. “From my perspective every indication of this evidence is once that closet door gets blown open, the skeletons are going to come tumbling out.”

Apache, 2 other Houston oil companies cut nearly 600 jobs – Three Houston oil and gas companies Thursday said they would slash nearly 600 jobs in Texas, a day after Occidental Petroleum began a massive staff reduction. Oil and gas producer Apache Corp. announced the largest of the cutbacks, saying it would eliminate more than 270 positions as it closes its regional San Antonio office. Meanwhile, oil field services company Enterprise Offshore Drilling said it would lay off around 60 workers, part of a planned release of a Gulf of Mexico oil rig. A third company, Valerus Field Solutions, said it’s closing an oil and gas equipment plant in Sealy, west of Houston, in March and eliminating about 250 jobs. Valerus is a division of SNC-Lavalin Group, the Montreal-based company that bought it in 2014. Modest oil prices and spending cuts have contributed to the loss of nearly 5,000 oil and gas jobs in Texas from June through November, according to the Texas Workforce Commission. Thursday’s announcements followed news that Occidental began cutting workers in the wake of its August acquisition of The Woodlands-based Anadarko Petroleum. Houston-based Apache said it is reducing its global workforce by up to 15 percent – about 500 jobs – as part of a broader restructuring announced late last year. The job cuts include those eliminated through attrition, but some of the San Antonio jobs will be moved to Houston or other offices, an Apache spokesman said. The San Antonio closing and the 272 job cuts will be finalized in early March, according to a letter the company filed with the Texas Workforce Commission. Apache had a difficult 2019, reporting a larger-than-expected $170 million loss in the third quarter. Its stock price plunged more than 50 percent from late 2018 through a recent December low. The stock rebounded this week with the company’s discovery of oil off the coast of Suriname in South America. The stock fell nearly $1 early Thursday before rebounding to close down just 13 cents at $32.60 per share. The company expects to save $150 million per year in its reorganization. In addition, Apache aims to slash capital spending this year by up to 20 percent – a cutback of $250 million to $500 million.

Rick Perry Rejoins Pipeline Company After He Steps Down From Trump Admin Energy Department – Former Trump administration Energy Sec. Rick Perry, who resigned from his cabinet-level post effective last month, has joined the board of directors of the general partner of Energy Transfer LP, according to a filingmade today with the Securities and Exchange Commission by Energy Transfer. Before joining the Trump administration, Perry had served on the board of Energy Transfer, the pipeline company behind controversial projects including Dakota Access, Bayou Bridge, and Mariner East, but resigned to become Secretary of the Department of Energy. On January 1, 2020, Perry was appointed as a director of LE GP, LLC, the general partner of Energy Transfer LP, according to today’s SEC filing, made after the market closed. (“Energy Transfer is structured as a master limited partnership,” Bloomberg reports.) The news comes on the same day that Pennsylvania regulators announced a record $30.6 million fine for Energy Transfer over an explosion of the company’s Revolution pipeline. State regulators said they would resume permitting for the firm’s Mariner East project. Energy Transfer is currently seeking to roughly double the flow of fossil fuels along its Dakota Access project, raising the pipeline’s capacity to 1.1 million barrels a day, up from the 560,000 barrels of oil currently flowing through the Dakota Access system. Perry first joined the board of the company, then known as Energy Transfer Partners, in February 2015, as he was facing state-level felony charges, dismissed a year later, for abuse of power during his term as Governor of Texas. In 2017, after being chosen by President-elect Donald Trump to lead the Department of Energy, Perry said that he regretted his previous statements about eliminating the very department he would go on to lead. During his tenure in the Trump administration, Perry sent a proposed rule to the Federal Energy Regulatory Commission (FERC) to speed the approval of a proposal which would ensure that nuclear and coal plants received compensation for the “resilience” they give to the power grid, The Washington Examiner reported. The Trump administration has come under fire over revolving door concerns before – often involving the hiring of former corporate lobbyists for government roles. “At the halfway mark of President Donald Trump’s first term, his administration has hired a lobbyist for every 14 political appointments made, welcoming a total of281 lobbyists on board, a ProPublica and Columbia Journalism Investigations analysis shows,” ProPublica reported in October.

Energy Transfer Lays Off 108 Oklahoma Workers – Energy Transfer LP has laid off 108 employees at its Tulsa, Oklahoma office, according to a notice sent to the Oklahoma Office of Workforce Development. The layoffs come as a result of the Dallas-based pipeline company’s acquisition of SemGroup Corp., which was finalized in early December 2019. According to the notice, layoffs began Jan. 6. No further information surrounding the layoffs was provided in the notice. Representatives for Energy Transfer declined further comment, telling Rigzone the company “does not comment on personal matters.” Energy Transfer’s recent merger with SemGroup created a much larger pipeline network for the company by adding assets in Colorado, Oklahoma, Kansas and Canada. On Jan. 1, former U.S. Energy Secretary Rick Perry was appointed to the board of LE GP LLC, the general partner of Energy Transfer.

Dominion fires oilfield worker after he saved 50 waterfowl | WyoFile –Dominion Energy fired an oilfield worker in Rock Springs after the employee saved an estimated 50 waterfowl from wastewater ponds. Adam Roich said he’s rescued about that many waterfowl in the last five years after they landed in tainted ponds at his worksite about 50 miles south of Rock Springs. He would take the oil-slicked birds to a company facility, wash them with Dawn household soap, warm them in his truck, then set them free on clean water, he told WyoFile in an interview.“I got fired a couple days before Christmas for rescuing these guys throughout the years,” he posted recently on Facebook above many photographs of his avian patients. “I only did what I thought was right.” Dominion terminated Roich on Dec. 19 for violating company policy, according to a letter obtained by WyoFile. His firing followed an internal investigation, the seven-sentence letter read.Dominion wouldn’t say why it fired Roich, calling the issue “an internal matter.”“[T]he company has fully complied with the applicable laws and company policies with respect to the individual,” Dominion’s Don Porter, media relations manager, wrote WyoFile. “[W]e abide by federal regulations which direct us to notify the U.S. Fish & Wildlife Service only in the event of a bird fatality.”Roich described a sad scene at the water’s edge: “They’d get oil on their feathers,” he said. “They’d just go to the bank and sit there. They’d freeze to death if I didn’t grab them.”Four ponds, the largest about the size of a football field, dot the Canyon Creek energy field complex along the southern border of the state, Roich said. “It’s really toxic water,” he said. “Slicks of oil on them accumulate over time.”

Google and Amazon are now in the oil business – Google, Microsoft, and Amazon have been very vocal about their efforts to reduce the world’s dependence on fossil fuels. But as the Wall Street Journal and Gizmodo have reported, these same companies are currently teaming up with the fossil fuel industry to help them squeeze as much oil and gas out of the ground as possible.Oil has always been hard to find and hard to extract, and so the industry has teetered precariously on the edge of profitability several times throughout its history. Over and over again, experts have predicted that we’ll soon run out of accessible, affordable oil – but so far, they’ve been wrong. Just when things look bleakest for black gold, new technology swoops in to keep the industry afloat.In the early days, that technology came in the form of better drills and pumps. As we explain in the video above, today’s technological savior is artificial intelligence. Computer algorithms that perpetually improve themselves can automate the discovery of new reserves and streamline fossil fuel extraction – a big boost for companies that now have to compete with wind and solar.In 2018, the oil and gas industries spent an estimated $1.75 billion on AI – a sum that is projected to balloon to $4 billion by 2025. To get their piece of that pie, big tech companies are developing AI for oil companies, even as they publicly celebrate their sustainable initiatives.We reached out to Google, Amazon, Microsoft, and Total for comment on this piece. None of them responded. You can find this video and all of Vox’s videos on YouTube. And join the Open Sourced Reporting Network to help us report on the real consequences of data, privacy, algorithms, and AI.

Net US oil, gas rig count falls one to 835, gas rigs lowest since late 2016 – The net number of US oil and gas rigs decreased by one to 835 during the first full week of 2020, with total rigs chasing natural gas at the lowest level since December 2016, data consultants Enverus said Thursday. In an unusual twist this past week, oil rigs added to the US fleet rose by 10 to 680, while gas rigs dropped 10 to 153. The one-rig net loss domestic count came from neither oil nor gas-directed rigs, but rather other classifications. Two largely gas-prone basins – the Haynesville Shale of East Texas/Northwest Louisiana and Marcellus Shale largely sited in Pennsylvania – are each at their lowest rig tallies since early 2017. The Haynesville was down four to 44 while the Marcellus was down three to 34. The Haynesville’s rig count is the lowest since April 2017, while Marcellus rigs are the lowest since January 2017. This week’s three-rig loss came from the Dry Marcellus, leaving 15 rigs. The Wet Marcellus stood at 19 rigs this week, unchanged. US upstream operators have dropped rigs steadily in the past 14 months. From a recent peak of 1,237 in mid-November 2018, fully 402 rigs – about a third – have left the oil patch. Despite ongoing budget austerity, upstream companies produced 1.1 million b/d more oil in December 2019 than in the same month the year before. And, Lower 48 natural gas production was up by 6 Bcf/d to 95 Bcf/d. “[That] all happened in the face of continued infrastructure constraints – crude prices that fell from the mid-$60s/b in April to average $55/b from May through October and gas prices that in several months were crushed to the lowest level in 20 years,” RBN Energy analyst Nick Cacchione said in a recent report. In the past week, prices for both oil and gas prices improved a bit, according to S&P Global Platts Analytics. WTI averaged $61.96/b, up 43 cents on the week, while WTI Midland averaged $62.74/b, up 49 cents. The Bakken Composite price averaged $56.19/b, up 29 cents. Gas prices also rose slightly on the week. At Henry Hub, prices averaged $2.06/MMBtu, up 5 cents, and at Dominion South, the average was $1.70/MMBtu, up 3 cents. Experts project an overall 7% drop in US capital budgets this year but still think the rig count could climb some, owing to capex increases by some larger players. “The US land rig count is currently stalled out … due to continued capital discipline amid uncertain oil and gas prices headed into 2020,” Bob Williams, Enverus’ director of content, said. “The beneficiary will be the Permian Basin because it features the best economics, generally speaking,” Williams added. “And [nearly] half of the existing active fleet is already there.”

E&Ps Continuing to Pull Back as US Rig Count Plunges Further – Further signaling the significant headwinds facing exploration and production (E&P) companies going into 2020, the latest Baker Hughes Co. (BKR) rig count showed another steep drop in U.S. drilling activity for the week ended Friday (Jan. 10).The combined U.S. count tumbled 15 units — 11 oil-directed and four natural gas-directed — for the week to end at 781. That’s down nearly 300 units from the 1,075 U.S. rigs active in the year-ago period.Most of the declines occurred on land, with one rig departing in the Gulf of Mexico. Six directional units and six vertical units packed up shop, joined by three horizontal rigs, according to BKR.Canada’s rig count, meanwhile, bounced back during the week, jumping 118 units overall, including 93 oil rigs and 25 gas rigs. The Canadian count ended at 203, up from 184 in the year-ago period.Among the major plays, the Permian Basin (down six) and the Haynesville Shale (down four) posted the sharpest losses on the week. The Permian ended the week with 397 active rigs overall, down from 488 a year ago. The gassy Haynesville finished at 45, versus 53 at this time last year.Also among plays, the Ardmore Woodford, Cana Woodford and Marcellus Shale each added one rig, while the Denver Julesburg-Niobrara, Utica Shale and Williston Basin each dropped one.Among states, the week/week changes mirrored the shift in the plays, with Texas (down seven) and Louisiana (down three) accounting for the largest drops. New Mexico saw two rigs pack up during the week.Also among states, Oklahoma and Pennsylvania each added one rig, while Alaska, Colorado, North Dakota, Ohio and Wyoming each dropped one.The natural gas and oil sector is coming to grips with a bevy of uncertainties in 2020, as capital markets are drying up, investors are fleeing and the global community voices increasing concerns about fossil fuels.Energy industry prognosticators see a foggy 2020, potentially a repeat of sorts from 2019, with a mild increase in capital expenditures for the E&P sector and continued pain for oilfield services (OFS).The Evercore ISI analyst team led by James West recently compiled the 2020 Global E&P Spending Outlook, an annual sampling in which data was collected from more than 250 oil and gas operators of all stripes — publics, privates, domestic and internationally focused, from the smallest of the moms-and-pops to the supermajors.The “tale of two markets” is arriving this year, West said. The pain in North America “is being felt all around,” with more than 32 bankruptcy filings by North American E&Ps last year amounting to around $13 billion in debt.

This Isn’t Your Father’s Oil and Gas Rig Count – Every Friday, the Baker Hughes oil and natural gas rig count gets released. This is vital field information that energy analysts eagerly await. In essence, the count is supposed to convey the current thinking of the U.S. oil and gas industry. As it is supposed to go, higher oil prices mean higher rig counts which mean higher production. And in the opposite direction, lower prices mean less rigs and falling production. While it is true that more rigs usually enter the fields when prices go up, it can take months of higher prices before drillers are confident enough to bring additional rigs into service. And there is also a lag time with dropping prices, not immediately dragging the rig count lower. Many times lower prices just mean removing the less efficient rigs from the field. There is an evident connection between the U.S. oil-directed rig count and prices (see Figure 1). As measured from -1.0 to +1.0, the Correlation Coefficient for these two variables measures a strong +0.85, with both moving in the same direction up or down. Yet to be sure, incredible efficiency gains in the U.S. shale industry over the past five to seven years have changed things a bit. Burdened with a crushing low price environment from 2014 to 2017, the U.S oil and gas business faced a simple option: either improve operations and significantly cut costs or ready the bankruptcy papers. The innovations of shale companies continue to surpass anything thought possible.For production, the progress has been clear. The powerful combination of faster and better horizontal drilling and hydraulic fracturing has helped grow output even when the rig count falls (see Figure 2). Depending on the play, of course, numerous shale companies can at least breakeven when oil prices are in the $40 range, or when gas prices sit below $2.30. In fact, ongoing improvements for shale might be the most underestimated reality in our national energy-environment discussion. Renewable energy technologies like wind and solar will not be competing with oil and gas as they are now but as they will become.

Oxy to Cut $7.8B Debt With Pipeline Split – Occidental Petroleum Corp. plans to make the pipeline business it acquired as part of last year’s takeover of Anadarko Petroleum Corp. a stand-alone company, removing about $7.8 billion of debt from its balance sheet. Occidental plans to reduce its holdings in Western Midstream Partners to less than 50% by the end of this year but “expects to maintain a significant economic interest” in the company, the Houston-based oil explorer said in a statement Monday. The amount of debt taken off the balance sheet amounts to about 15% of Occidental’s total borrowings, according to data compiled by Bloomberg. Western is among the crown jewel assets that Occidental has sought to sell to reduce leverage incurred in the purchase of Anadarko, the biggest oil merger of the past four years. Monday’s announcement may signal Occidental hasn’t been able to attract a high enough price, or that potential suitors found the entangled management structure burdensome. Blackstone Group Inc., Apollo Global Management Inc., Global Infrastructure Partners and KKR & Co. were all said to be interested in bidding for Western as recently as late 2019. But it’s been a challenging environment for pipeline companies. In November, Western Chied Executive Officer Michael Ure said the company was seeking new customers in the Rockies and the western edge of the Permian Basin to reduce reliance on Occidental. Western fell 29% last year — its worst performance since 2015 — amid a slowdown in drilling and plunging prices for natural gas byproducts.

Exxon signals fourth quarter weakness in chemicals and refining, offset by asset sale – (Reuters) – Exxon Mobil Corp’s (XOM.N) fourth quarter operating results will decline from a year ago due to weakness in chemicals and refining, according to a regulatory filing and analyst comments on Friday. Some analysts slashed earnings projections to about 50 cents per share, down from the average earlier estimate of 71 cents, according to Refinitiv IBES. The estimates exclude gains from asset sales. Exxon on Friday provided its expectations for fourth-quarter results compared with the prior quarter. It will officially report results for the latest quarter on Jan. 31. Exxon in the filing projected a loss in chemicals and a sharply lower operating profit in refining, two of its three major businesses. The company earned about $1 billion per quarter in chemicals as recently as 2017. Operating profit in its largest business, oil and gas production, could be $2.3 billion based on the midpoint of its estimate, up from the third quarter but down from a year ago, according to the filing. Offsetting the weak results, Exxon will report a gain of as much as $3.6 billion from the sale of its Norwegian oil and gas production, part of a plan to divest about $15 billion in assets by 2021.“The asset sale proceeds will help cover the dividend, but that’s not a sustainable strategy,” Rowland said.

Core Labs’ latest move is a sign the oil market is not getting better anytime soon, Cramer says – Core Laboratories’ decision to cut its dividend in late December illustrates the oil market’s tough future, CNBC’s Jim Cramer said Wednesday. “Management wouldn’t cut it unless they had some serious long-term concerns that the oil industry just isn’t coming back the way it’s supposed to when the price of crude goes higher,” the “Mad Money” host said. Core Labs reduced its dividend from 55 cents to 25 cents, at a time when the oil business is “the worst I have ever seen it,” Cramer said, arguing it is even worse than January 2016, when oil traded below $30 per barrel. Core Labs – an oil services company – is thoughtful and makes decisions on traditional return on equity, not on a “drill-baby-drill” hypotheses, Cramer said. It would not make the decision to cut its dividend without thoughtful consideration, Cramer argued. This is especially true, he said, because the company also reduced its fourth-quarter earnings forecasts by roughly 15% yet slashed the dividend by 55%. “That doesn’t make any sense unless management has come to the conclusion that the oil business has fundamentally changed,” he said.

Carney Suggests Billions In Worthless Assets Plague The Oil & Gas Industry –Investors, pension funds and companies need to get ahead of the financial risk from climate change, as many fossil fuel assets risk becoming worthless. “We can’t have a financial sector that ignores an issue, and then all of a sudden has to deal with it,” Mark Carney, the outgoing Governor of the Bank of England, said in a recent interview with BBC. Carney is referring to the fact that current plans by fossil fuel companies, and investors who own assets in those companies, are to continue on a path that puts the world on a trajectory of 3.7-3.8 degrees of warming, “far above the 1.5 degrees that governments say they want and that people are demanding.” Government action to limit emissions, however, would obviously disrupt that trajectory. As a result, the valuation of so many assets will remain at a certain level, until all of a sudden there is a massive repricing of companies and entire sectors. “How many of those assets that exist today are actually going to be stranded?” Carney has lamented that the predicament amounts to a “tragedy of the horizon,” which refers to the fact that the problem of climate change is a long-term one, which makes it difficult to convince investors and companies to act. The problem is, once the real-world climate problem becomes impossible to ignore, there will be draconian policies put in place. And, in financial terms, once it becomes impossible to ignore, a sharp loss in value becomes impossible to avoid. That’s exactly why he is urging investors to get ahead of this issue. That means pension funds, banks and many other financial institutions need to put limits on their fossil fuel investments, and also to disclose more information about their exposure. Carney will soon be taking on a role of UN special envoy for climate action and finance. He has been sounding the alarm about stranded assets and the financial risk of climate change for years. “A question for every company, every financial institution, is ‘what’s your plan?’” Carney said. “If there is no action, we will be in a climate emergency.” Every pension fund and investor needs to justify their stakes in fossil fuels, he said.

Iran-Driven Oil Rally Boon to Struggling US Producers | Rigzone — The U.S. airstrike that killed a powerful Iranian general and heightened tensions in the oil-rich region could boost the fortunes of troubled North American energy companies. If the rally in oil prices persists, or if Middle Eastern supplies are cut off, deeply indebted producers like Whiting Petroleum Corp. and California Resources Corp. could lock in hedges above $60 a barrel, according to Spencer Cutter of Bloomberg Intelligence. That’s a potential cash-flow boost that they didn’t have two weeks ago, he said. Notes issued by some of the weakest energy companies led the biggest gainers in high-yield bond indexes on Friday after reports that Iranian General Qassem Soleimani was killed in a drone attack authorized by President Donald Trump. West Texas Intermediate oil reached its highest level since September at about $62 a barrel “That doesn’t mean that any of these companies that were distressed are going to be suddenly rolling in cash,” Cutter said in an interview. “But it does give them a bit of a lifeline.” Representatives for Whiting and California Resources didn’t immediately respond to requests for comment. Whiting’s unsecured 2023 notes rose 2.75 cents to 87.5 cents on the dollar, their best level since August, and second-priority notes due 2022 issued by California Resources soared above 50 cents for the first time since September. Energy companies are the largest cohort of the U.S. distressed-debt universe, according to Bloomberg Intelligence, and they were the biggest source of defaults in 2019, S&P Global Ratings reported. Companies in that sector went bankrupt in 2019 at the fastest pace since the 2015-2016 slump that claimed more than 200 producers and servicers. The sector never showed a meaningful recovery as record oil production kept prices muted, so any sign of reduced output from the Middle East could benefit U.S. producers and the balance sheets of the weakest companies. Even companies that already went bankrupt could be helped if rising prices boost assets and cash flow projections, giving creditors a bigger pie to divide up.

US Not Considering Immediate Oil Release in Response to Iran Crisis – The Trump administration isn’t actively considering an immediate release of oil from the national petroleum reserve in response to the Iran crisis that has sent oil prices higher, according to a person familiar with deliberations within the White House. Oil prices jumped almost 5% in New York and London after a U.S. airstrike killed General Qassem Soleimani, one of Iran’s most powerful generals. Although President Donald Trump has the Strategic Petroleum Reserve at his disposal to offset potential supply disruptions, no talks have taken place within the administration about selling some of the stockpiled crude, said the person who spoke on the condition of anonymity. “A persistent spike in oil prices will likely trigger verbal assurances that the SPR is available and may be tapped, but President Trump has had a high hurdle for actually drawing down strategic stocks,” said Bob McNally, a former energy adviser to President George W. Bush and president of the consulting firm Rapidan Energy Group. “Hence an actual drawdown is unlikely unless there was a real risk of disruption.” The Department of Energy, which operates the reserve, didn’t respond to an emailed request for comment. Trump authorized the release of oil from the reserve in September after a series of drone attacks in Saudi Arabia knocked out half of the kingdom’s crude output, or about 5% of world supplies, and sent prices surging. In the end, no oil was released as prices came down and the kingdom was gradually able to restore output.

U.S. energy consumption hit by economic slowdown: Kemp – (Reuters) – U.S. manufacturers and freight hauliers were hit last year by the sharpest slowdown since the 2008/09 recession and it filtered through into a noticeable dip in energy consumption. Use of electricity, natural gas and diesel by industrial customers all showed large declines, or at least sharp slowdowns, in the nine months ending in September 2019. In July to September, industrial users’ total energy consumption fell 1% compared with the same period a year earlier, according to statistics from the U.S. Energy Information Administration. That was the biggest decline since the mid-cycle manufacturing slowdown in 2015/16 and before that the recession of 2008/09 (“Monthly energy review”, EIA, Dec. 23). Within the total, industrial consumers’ electricity consumption fell by almost 5% in the third quarter from a year earlier, easily the biggest decline since the recession. Power consumption exhibits a lot of short-term variability based on both the weather (which affects heating and cooling demand) and the state of the economy, so the data must be interpreted with care. But industrial users’ consumption showed a much more pronounced third-quarter slowdown than for residential customers, which suggests most of the weakness was economic rather than weather-related. In contrast to electricity, industrial users’ gas consumption continued to grow, mostly because of the strong increase in demand from petrochemical producers (https://tmsnrt.rs/39H29K0). Even so, gas consumption rose by just 0.75% in July-September compared with a year earlier, down from a growth rate of 7% year on year in early 2018. The manufacturing and freight slowdown has also hit petroleum demand, especially consumption of the middle distillate fuel oils such as diesel used by manufacturers, railroads and trucking firms. Economy-wide distillate consumption was down almost 3.4% in August-October compared with a year earlier (“Petroleum supply monthly”, EIA, Dec. 31). Like electricity use, distillate consumption closely tracks industrial output and manufacturing surveys, so the slump in fuel use confirms the severe hit to manufacturing activity in the middle of last year. Slackening distillate demand has been reflected in a slowdown in refining activity and reduced profitability for many refining firms, including some of the oil majors. U.S. oil refineries processed 17.0 million barrels per day (bpd) of crude oil and other inputs during 2019, down 300,000 bpd (1.8%) compared with the previous year. U.S. refinery processing was below year-ago levels for 41 out of 52 weeks in 2019, a sign of tepid consumption (“Weekly petroleum status report”, EIA, Jan. 3). The manufacturing and freight recession was even worse across Europe and Asia, as rising tariffs and intensifying business uncertainty have taken their toll on investment and activity. The result has been a worldwide slump in distillate consumption that has hit refining throughput, margins and profits for refiners across North America, Europe and Asia.

White House aims to roll back bedrock environmental law to speed development – The White House on Thursday issued sweeping changes to one of the nation’s bedrock environmental laws, allowing greater industry involvement in environmental reviews of projects and diminishing the role climate change plays in those assessments.The changes target the 50-year-old National Environmental Policy Act (NEPA), which requires agencies to evaluate how pipelines, highways and some oil and gas development affects the environment and nearby communities.The law has been a repeated target of President Trump, who has vowed to speed the construction of fossil fuel infrastructure and eliminate barriers to construction projects.Flanked by industry leaders at Thursday morning press conference, Trump described the measure as a complete overhaul.“From Day One, my administration has made fixing this regulatory nightmare a top priority. And we want to build new roads, bridges, tunnels, highways bigger, better, faster, and we want to build them at less cost,” he said.The changes, which will be posted to the Federal Register on Friday, would limit the law’s scope, excluding some projects from undergoing NEPA review, like those that receive little federal funding. It also opens the door for more industry involvement in reviewing the environmental impacts of their projects.While NEPA serves a noble purpose, it has “paralyzed commonsense decisionmaking for a generation,” Interior Secretary David Bernhardt said on a call to present the proposal, listing a wide range of projects that have been delayed by environmental analyses.”This is a really, really big proposal. It affects virtually every big decision made by the federal government that affects the environment, and I think it will be the most significant deregulatory proposal you ultimately implement,” Bernhardt told Trump.The proposal from the White House Council on Environmental Quality (CEQ) would no longer require consideration of the “cumulative” effects of new projects. Courts have largely interpreted that as studying how a project might contribute to climate change, say by contributing heat-trapping greenhouse gases, or how it might be influenced by effects of climate change like extreme weather.Under the changes proposed by the Trump administration, officials would need to consider effects of a project that are “reasonably foreseeable” and show “a reasonably close causal relationship.” Environmentalists say those changes would allow the government to look the other way when projects contribute considerable amounts of greenhouse gases into the atmosphere.

White House unveils plan to speed big projects permits – (Reuters) – The Trump administration on Thursday unveiled a plan to speed permitting for major infrastructure projects like oil pipelines, road expansions and bridges, one of the biggest deregulatory actions of the president’s tenure. The plan, released by the White House Council on Environmental Quality (CEQ), would help the administration advance big energy and infrastructure projects like the Keystone XL oil pipeline or roads, bridges and federal buildings that President Donald Trump and industry groups complained have been hampered by red tape. “For the first time in over 40 years today we are issuing a new rule under the National Environmental Policy Act (NEPA) to completely overhaul the dysfunctional bureaucratic system that has created these massive obstructions,” Trump said at the White House on Thursday. The proposal to update the how NEPA, the 50-year bedrock federal environmental law, is implemented is part of Trump’s broader effort to cut regulations and oversight to boost industry. “This proposal affects virtually every significant decision made by the federal government that affects the environment,” Interior Secretary David Bernhardt said, adding that the NEPA reform would be the “most significant deregulatory proposal” of the Trump administration.

Trump Rule Would Exclude Climate Change in Infrastructure Planning – The New York Times – Federal agencies would no longer have to take climate change into account when they assess the environmental impacts of highways, pipelines and other major infrastructure projects, according to a Trump administration plan that would weaken the nation’s benchmark environmental law. The proposed changes to the 50-year-old National Environmental Policy Act could sharply reduce obstacles to the Keystone XL oil pipeline and other fossil fuel projects that have been stymied when courts ruled that the Trump administration did not properly consider climate change when analyzing the environmental effects of the projects. According to one government official who has seen the proposed regulation but was not authorized to speak about it publicly, the administration will also narrow the range of projects that require environmental review. That could make it likely that more projects will sail through the approval process without having to disclose plans to do things like discharge waste, cut trees or increase air pollution. The new rule would no longer require agencies to consider the “cumulative” consequences of new infrastructure. In recent years courts have interpreted that requirement as a mandate to study the effects of allowing more planet-warming greenhouse gas emissions into the atmosphere. It also has meant understanding the impacts of rising sea levels and other results of climate change on a given project. The act requires the federal government to prepare detailed analyses of projects that could have significant environmental effects, including long-term impacts that courts have said include climate change. Since 1970, when the law was enacted, it has undergone only one major change. That was in 1983, when the White House Council on Environmental Quality limited the use of worst-case scenarios in project reviews. But the Trump administration has been aggressive in its efforts to roll back environmental regulations. The 50 or so pages of revisions that the Council on Environmental Quality is expected to make public on Wednesday would not amend the act itself. Rather, they would revise the rules that guide the implementation of the law. Once the proposed rules are filed in the federal register, the public will have 60 days to comment on them, the official said. A final regulation is expected before the presidential election in November.

Crude oil, produced water spill reported in Dunn County– Three hundred seventy barrels of crude oil and 660 barrels of produced water spilled at a facility in Dunn County. The North Dakota Department of Environmental Quality says the incident occurred Sunday about 8 miles northwest of Halliday. The spill was caused by an equipment failure after high winds caused a power outage, leading to tanks overflowing. Most of the spill was contained on site, but high winds pushed some materials into nearby land.

Produced water & oil spill caused by equipment failure – A produced water and oil spill caused by equipment failure due to a power outage triggered by high winds occurred at a saltwater disposal facility near Halliday on Sunday.The incident in which multiple tanks overflowed occurred at the facility about 8 miles northwest of Halliday. It was reported the next day to the North Dakota Department of Environmental Quality.The saltwater disposal facility is operated by Hunt Oil Company.Initial estimates indicate approximately 660 barrels of produced water and 15,540 gallons of crude oil overflowed the tanks. Most of the released material was contained on site; however, the high winds resulted in some of the material being blown into adjacent pastureland. Personnel from the state are inspecting the site and will continue to monitor the investigation and remediation.

Gas plant slated for Williams County could ease flaring in northern North Dakota – A batural gas plant proposed west of Williston could help reduce wasteful flaring in the northern part of the Bakken oil patch. Denver-based Outrigger Energy II plans to build the facility in Williams County to process up to 250 million cubic feet of gas per day, with the option of expanding to handle up to 450 million cubic feet. The company also intends to build a 70-mile gathering pipeline that starts in eastern Williams County and ends at the processing plant. It has entered into an agreement with XTO Energy to transport gas from the producer’s wells. Keanini said XTO “is the big fish” in the area, but the line will be located near wells operated by other producers, too, and it has the potential to service them down the road. The Outrigger processing plant is the sixth facility of its kind in the works in North Dakota. Officials hope the investments will significantly curb the amount of excess gas that is flared in the state. Combined, the proposed facilities would have the capacity to process an additional 1.075 billion cubic feet per day of gas, according to the North Dakota Pipeline Authority. They follow four plants that came online in the latter half of 2019 and can accommodate up to 670 million cubic feet per day. The latest figures available show that more than 500 million cubic feet per day of gas is flared at oil wells in North Dakota. That accounts for 18% of gas produced in the state, which is above North Dakota’s 12% flaring target. The amount of gas flared gas flared peaked during the summer of 2019 amid a lack of pipelines and processing facilities as oil production climbed.

3 Arctic Wilderness Areas to Watch as Trump Tries to Expand Oil & Gas Drilling -When President Donald Trump entered the White House in 2017, his intention was clear: His would be an administration defined in part by a no-holds-barred effort to open lands for oil and gas drilling, and there was no place more appealing than the Alaskan Arctic.For three years, that effort has been carried out at break-neck speed on three fronts: the National Petroleum Reserve-Alaska, offshore Arctic waters, and the crown jewel of wilderness lands – the Arctic National Wildlife Refuge.”The Trump administration is going full speed ahead, and, if anything, accelerating the pace of trying to get as much of the public land in the Arctic under lease – to try to give as much away to the oil companies as it can – as it approaches the end of its first term,” said Erik Grafe, an attorney at Earthjustice.Once land is leased, it’s a complicated process to undo. That’s why environmental groups want to stop lease sales in sensitive areas before it’s too late.The dance that’s been underway between the Trump administration and environmental groups looks like this: The federal government races to put together environmental documents, working at such a fast pace it’s more likely to make errors; environmental groups pounce on those errors and sue; and then it’s up to the courts. Once a decision is handed down, the loser appeals – and the process continues.In the Arctic, that has resulted in many things happening at once – environmental reviews in each of the three frontiers, lawsuits for various aspects of those reviews, and then appeals.Here’s a breakdown of what happened in each targeted area in 2019, and what to expect during the final year of Trump’s first term in office.

The Quake Threat to Dams Posed by Fracking Was Long Warned – For years now BC Hydro and the Oil and Gas Commission have been reluctant to publicly talk about the risks earthquakes triggered by the oil and gas industry pose to critical dam infrastructure throughout northeastern B.C. But a freedom of information request by Parfitt at the Canadian Centre for Policy Alternatives has shed new light on what has been a long and often acrimonious internal debate.Hundreds of emails, letters, memos and meeting notes released by the utility in response to Parfitt’s request and his just publishedinvestigation make the following important revelations:Officials at BC Hydro have been concerned about the shale gas industry since 2007 when coal bed methane extraction resulted in seismic activity at the Peace Canyon Dam near Hudson Hope.The Peace Canyon Dam, which provides six per cent of the province’s electricity, is built on fragile shale rock and wasn’t built to withstand even modest earthquakes. BC Hydro officials warned numerous people in the provincial government, including senior bureaucrats and unidentified ministers, “that fracking near its dams could have grave consequences, including the worst possible outcome – an outright dam failure. Yet its repeated calls for firm no-frack zones near its dams continue to go unanswered,” reveals Parfitt.After CNRL triggered a 4.5 Magnitude earthquake in November of 2018 that forced the evacuation of the Site C Dam site, its engineers have begun to reassess seismic safety at the dam and to expand on previous studies done prior to its approval. The issues are dramatic and will become more significant as fracking and waste water disposal activity increases to support the province’s push for LNG exports to Asia.In the last decade, as The Tyee has reported in numerous articles since 2011, the petroleum industry has repeatedly broken seismic records in the vast Western Canadian Sedimentary Basin and has caused geologic changes, especially in the Montney shale basin in northeastern B.C. It has triggered thousands of earthquakes including dozens of significant felt events reaching a magnitude 3 or 4.6. Fracking blasts significant amounts of water, chemicals and additives into shale rock over short periods, while waste water disposal injects large amounts of water over long periods of time. Both technologies can change pressures along fault lines and cause earthquakes.

Keystone spill last fall depresses Canadian trade deficit – An 11-day flow halt following a spill on TC Energy Corp.’s Keystone oil pipeline to the United States depressed Canadian international trade into deficit territory last fall, according to Statistics Canada.“Energy products drove the overall export decrease, down 7.4% on lower exports of crude oil,” according to the monthly trade assessment issued Tuesday.“Export volumes were behind the crude oil decline in November, a month that was marked by disruptions in crude oil pipeline transportation following a rupture that occurred in late October,” said Statistics Canada, the government’s recordkeeping agency. The spill on the North Dakota leg of the 590,000 b/d Keystone pipeline shut in about 16% of Canada’s 3.8 million b/d exports to the United States from Oct. 29 to Nov. 9.Deliveries from Alberta to refineries on the Gulf of Mexico in Texas were cut off while a 200-strong emergency response crew repaired the leak and recovered about 6,540 bbl, or 72% of the 9,120 bbl spilled.The loss on oil was only offset partially by a 31% increase in the value of Canadian natural gas exports to the United States following severely depressed prices in late summer and early fall, according to the Statistics Canada data.TC subsidiary Nova Gas Transmission Ltd. last month said gas-related drilling and pipeline expansions in the United States had escalated rivalries across all destinations for Canada gas. Value gains on other export items such as metal products were also too small to eliminate Canada’s overall international merchandise trade deficit, which was C$1.1 billion ($825 million) for last November.The cause of the Keystone spill remains under investigation by TC, the U.S. Pipeline and Hazardous Materials Safety Administration and North Dakota’s Department of Environmental Quality. The mishap has become ammunition in continuing protest lawsuits against the hotly contested second stage of Keystone XL, TC Energy’s 830,000 b/d oilsands export pipeline.

Venezuelan oil exports fell by a third in 2019 as U.S. sanctions bit: data – (Reuters) – Venezuela’s oil exports plummeted 32% last year to 1.001 million barrels per day, according to Refinitiv Eikon data and state-run PDVSA’s reports, as a lack of staff and capital drove output to its lowest level in almost 75 years and U.S. sanctions shrank exports markets. The drop would have been steeper if some of PDVSA’s largest customers had not bought Venezuelan oil through intermediaries or trans-shipped cargoes off several ports around the world so the country of origin was blurred, according to industry sources, vessel trackers and Eikon data. In terms of customers, Russia’s Rosneft was the largest receiver and intermediary of Venezuelan oil with 33.5% of total exports, followed by state-run China National Petroleum Corp (CNPC) and its units with 11%, and Cuba’s state-run Cubametales with 7%, the data showed. PDVSA did not reply to a request for comment. China emerged as the first destination for Venezuelan oil in 2019 as sanctions deprived PDVSA of its primary market, the United States. That was despite CNPC and its units halting the loading of crude at Venezuelan ports in the second half.

Exclusive: Weakened by sanctions, Venezuela’s PDVSA cedes oilfield operations to foreign firms –(Reuters) – Venezuelan state company PDVSA is letting some joint venture partners take over the day-to-day operation of oilfields as its own capacity dwindles due to sanctions and a lack of cash and staff, according to a former oil minister, an opposition lawmaker and industry sources. Crude production by PDVSA and its joint ventures has fallen to about a third of its peak 20 years ago. The steepest fall has occurred since military officials with no oil industry experience took over PDVSA’s management in late 2017 and Washington imposed sanctions on the state-run company in early 2019 in a bid to oust socialist President Nicolas Maduro. Maduro’s government and the opposition last year discussed allowing partners in PDVSA-led joint ventures to operate the oilfields, which would reverse a legal requirement that PDVSA control the operations. That could give Maduro more breathing room by encouraging fresh investment in PDVSA’s operations, potentially boosting oil revenues. However, it would be controversial after late President Hugo Chavez, an iconic figure to many Venezuelans, made nationalization a flagship policy. Rafael Ramirez, a former oil minister and PDVSA president who left office after clashing with Maduro in 2014, said the company had already effectively handed control to joint venture partners even though an agreement had not yet been formally reached. Ramirez, an adviser to some international energy firms that have recently worked in Venezuela, said PDVSA had been reduced to little more than an administrator of contracts with oil companies. “PDVSA is no longer producing. It’s signing contracts for others to produce in a de facto privatization,” Ramirez told Reuters during an interview at a location he requested not be disclosed. Ramirez named Russia’s Rosneft (ROSN.MM) and China’s CNPC among the companies helping to keep PDVSA alive by operating joint oilfields or injecting cash to the state company by buying larger stakes in some ventures. CNPC and Rosneft did not respond to requests for comment. PDVSA and the Information Ministry, which handles media requests for Maduro’s government, did not respond to Reuters questions.

Mooring accident leads to spill off Danish petroleum terminal – On Saturday morning, the product tanker Stone 1 spilled vacuum oil into the water off Aabenraa, Denmark, a small town in Jutland near the German border. According to local media, the Stone 1 was moored at the Ensted Bulk Terminal and was unloading her cargo of vacuum oil. Due to foul weather, her mooring lines parted, and she had to leave the pier. “To avoid more accidents and to avoid crashing, the crew of the ship had to start the engine and sail from there,” said Defense Operations Center officer in charge Claus Rasmussen, speaking to DR. During this evolution, about 8,000 gallons (30 cubic meters) of her cargo of vacuum oil was accidentally discharged into the water. The pollution is not considered dangerous to humans, but it poses a risk to birds due to the possibility of oiling. Denmark’s defense ministry deployed vessels and helicopters from the Danish Navy and the Marine Home Guard to assist a cleanup effort, and the pollution control vessel Gunnar Seidenfaden is now under way to the scene. On Saturday, as an initial response, the pollution control team deployed floating containment booms to keep the oil contained to one area near Hostrupskov, just southeast of the terminal. On Sunday, a wind change led to the contamination spreading, and efforts to contain and control it continue. Two Danish Marine Home Guard patrol boats have used a length of containment boom to skim the surface of the bay, pair trawling for oil. As of early Monday morning, the Stone 1 was anchored off Aabenraa, away from the spill area. Local media reported that she will remain in port until authorities have completed an investigation.

Russia Halts Oil Supply To Key European Transit Hub – Russia has halted oil supplies to Belarus amid a disagreement over tariffs, according to officials at a Belarusian oil refinery in the northern city of Navapolatsak. The officials told RFE/RL that the shipments stopped on January 1 and the facility is currently processing only Russian oil delivered before that date.Belarus has been at odds with Russia over oil-transit prices for some time against a backdrop of increasing pressure by Moscow on Belarusian President Alyaksandr Lukashenka to deepen integration between the two countries.A two-month deal on natural-gas prices hours before a December 31 deadline helped the sides avoid a gas shutoff to start the year.Belarus is heavily reliant on Russia for fuel and funding and is a key transit route for Russian energy supplies to Europe. And now, Russia has just broken a new oil production record.Moscow and Minsk signed an agreement in 1999 to form a unified state, but little progress has been made in the ensuing two decades.Meetings between Russian President Vladimir Putin and Lukashenka last year failed to bring the two sides together as the Belarusian president complained he was merely seeking “equal” terms.Belarusian protests in December targeted the perceived secrecy of the talks and objected to closer ties to Russia.Mike Pompeo this week postponed a planned visit to Minsk to meet with Lukashenka in w hat would have been the first visit by a U.S. secretary of state to that post-Soviet country in a quarter century.

Turkey, Russia launch TurkStream pipeline carrying gas to Europe – (Reuters) – The presidents of Turkey and Russia on Wednesday formally launched the TurkStream pipeline which will carry Russian natural gas to southern Europe through Turkey, part of Moscow’s efforts to reduce shipments via Ukraine. The pipeline project, stretching 930 km (580 miles) across the Black Sea, reinforces strong energy ties between Moscow and Ankara, which have also increased defense cooperation after Turkey bought advanced Russian missile defenses last year. Russia and Turkey are also coordinating military deployments in northeast Syria, although they back opposing sides in the conflict in Syria’s northwestern Idlib region and also in the battle for control of Libya. Presidents Vladimir Putin and Tayyip Erdogan inaugurated the project at a ceremony in Istanbul also attended by the leaders of Serbia and Bulgaria. The pipeline was a sign of “interaction and cooperation for the benefit of our people and the people of all Europe, the whole world”, Putin said at the inauguration ceremony. Russia has already started European gas deliveries through the pipeline, gas operator Bulgartransgaz said on Sunday. The pipeline terminal is near the Turkish village of Kiyikoy, some 20 km (12 miles) from the Bulgarian border. Russia is also doubling the capacity of Nord Stream across the Baltic Sea to Germany as part of plans to bypass Ukraine, which is currently the main route of transit to Europe.

Greece, Israel & Cyprus Sign Landmark EastMed Gas Pipeline Deal Despite Turkey’s Wrath -Long in the works, but coming at a geopolitically sensitive moment for the region given expanding Turkish maritime claims, the East Med gas pipeline deal was signed this week between the countries of Greece, Cyprus and Israel. The three signed the deal on Thursday to build a 1,900 km (1,180 mile) subsea pipeline to transport supplies from the rapidly advancing gas fields of the eastern Mediterranean to Europe. A massive undertaking to supply energy-hungry Europe, the East Med pipeline project was first proposed by Greek energy minister Yannis Maniatis in 2014, and has since been hailed as “the longest and deepest gas pipeline in the world”. At an initial estimated cost of $6-7 billion, it will be financed by “private companies and institutional lenders,” according to prior Israeli Energy Ministry statements. The underground, sub-sea pipeline is proposed to connect Israel, via Cyprus, to Greece and Italy, in a massive construction project estimated to take five or six years to complete, and which once online is expected initially pump 10 billion cubic meters of gas per year.The energy ministers of Greece, Israel and Cyprus – Kostis Hatzidakis, Yuval Steinitz and Yiorgos Lakkotrypis – attended a signing ceremony in Athens which finalized the project’s moving forward, according to Reuters. Predictably, Turkey is actively opposing the project, given its own expanding oil and gas exploration claims which have now completely surrounded Cyprus (using the excuse of “rights” based on the contested so-called Turkish Republic of Northern Cyprus) and have even cut into Greece’s Exclusive Economic Zone as well. Per Reuters: Although Turkey opposes the project, the countries aim to reach a final investment decision by 2022 and have the pipeline completed by 2025 to help Europe diversify its energy resources. Last month a Turkish official said there was no need to build the EastMed pipeline because the trans-Anatolian pipeline already existed. Turkey’s Foreign Ministry complained this week that the East Med pipeline “ignored the rights of Turkey and Turkish Cypriots” and thus would be doomed to failure.

Pakistan to Auction 18 Oil, Gas Blocks: Press -The Pakistani government is likely to issue tender for 18 oil and gas exploration blocks on January 8, local media reported on January 7.Special assistant to prime minister on petroleum affairs Nadeem Babar said on January 6 that the government was working on giving incentives to E&P investors by halving the number of necessary approvals. “From field to production, the sector needed to take 28 different approvals we have brought them down to 14 now,” Babar was quoted as saying by The News.Pakistan is looking to develop more gas resources to overcome problems with supply security. With local production lagging behind demand, the country has relied on more costly imported LNG. Pakistan has two import terminals located at Port Qasim. The south Asian nation started importing LNG in 2015 with the commissioning of the Exquisite FSRU. Pakistan commissioned its second FSRU in late 2017.

PetroChina Offers Lowest Price in Pakistan LNG Tender – PetroChina International Singapore, a unit of Chinese state PetroChina, has offered the lowest price for an LNG cargo that would be delivered to state-run Pakistan LNG in February, a document on the Pakistani company’s website showed December 18. PetroChina’s offer was at 8.59% of Brent crude oil prices. Gunvor, Trafigura and Socar Trading were other bidders, the document showed.

China opens up oil and gas exploration, production for foreign, domestic firms – (Reuters) – For the first time, China will this year allow foreign companies to explore for and produce oil and gas in the country, opening up the industry to firms other than state-run energy giants, as Beijing looks to boost domestic energy supplies. The long-awaited opening accompanies a reshuffle of the so-called “midstream” pipeline business, but experts say it may not excite immediate interest from global drillers because of the poor overall asset quality of China’s hydrocarbon resources. From May 1, foreign firms registered in China with net assets of 300 million yuan ($43 million) will be allowed to take part in oil and gas exploration and production, the ministry of natural resources announced at a news conference. The change will also apply to domestic companies that meet the same condition. “China is accelerating the sector reform due to growing energy security concerns,” said Zhu Kunfeng, the Beijing-based associate director of upstream research at IHS Markit. “Vitalising the industry by diversifying the participants, including foreign and private investors, is the focus of that reform.” China now imports 70% of the crude oil it refines and nearly half its natural gas consumption, and state firms face an uphill battle boosting reserves and production outside the country amid growing geopolitical risks. Previously, international companies could enter the industry only via joint ventures or cooperation with Chinese firms, mainly state-owned majors such as China National Petroleum Company (CNPC), China Petrochemical Corp (Sinopec) or their listed vehicles.

Apache and Total Hit Oil Pay Offshore Suriname – Apache Corp. and Total. S.A. reported Tuesday that they have made a significant oil discovery at the Maka Central-1 well on Block 58 offshore Suriname – and adjacent to neighboring Guyana’s Stabroek Block.In a joint written statement the companies, which each own a 50-percent interest in the well, noted that Maka Central-1 encountered 240 feet (73 meters) of oil pay and 164 feet (50 meters) of light oil and gas condensate pay. The Noble Sam Croft drillship drilled the Apache-operated well, and the discovery owners stated that appraisal drilling is underway. “The well proves a working hydrocarbon system in the first two play types within Block 58 and confirms our geological model with oil and condensate in the shallower zones and oil in deeper zones. Preliminary formation evaluation data indicates the potential for prolific oil wells. Additionally, the size of the stratigraphic feature, as defined by 3-D seismic imaging, suggests a substantial resource.”Hydrocarbons in Maka Central-1 exist in multiple stacked targets in the upper Cretaceous-aged Campanian and Santonian intervals, Apache and Total continued. The firms stated the shallower Campanian interval contains 164 feet of net hydrocarbon-bearing reservoir, with preliminary fluid samples and test results showing light oil and gas condensate with API gravities ranging from 40 to 60 degrees. They added the deeper Santonian interval holds 240 feet of net oil-bearing reservoir, with preliminary fluid samples and tests showing API oil gravities from 35 to 45 degrees.Apache and Total stated that Maka Central-1 also targeted a third interval – the Turonian – that they describe as a geologic analogue to offshore West Africa oil discoveries. Before the well reached the Turonian, it encountered significantly over-pressured oil-bearing reservoirs in the lower Santonian, they noted. The firms added that drilling subsequently concluded at approximately 20,670 feet (6,300 meters) but that future drilling will test the Turonian interval.

Why Pirates Are Giving Up On Oil – Piracy in some of the world’s most critical oil chokepoints is on the rise–but now, pirates are resorting back to another method of income generation better suited to times of lower oil prices: taking human captives. Sometimes, black market oil prices just aren’t lucrative enough. In the days of $100 oil, oil theft was a hot commodity. Today, pirates are supplementing their stolen oil income with ransomed sailors, creating a whole new set of problems for the oil industry to tackle. Piracy is being dealt with fairly successfully in certain regions of the world. In others, efforts to shore up maritime security have failed. But the threat of pirates taking human captives is alive and well in all regions. Once a piracy hotspot, piracy off Somalia’s coast has fallen in recent years as the international community–including Iran–stepped up to tackle this pressing problem that disrupted the flow of goods, including oil, through the critical oil route. Somalia, too, has stepped up its ability to prosecute pirates. The East Africa area includes the Bab-el-Mandeb between Yemen and Djibouti, as well as the Gulf of Aden. Piracy incidents here hit a high of 54 in 2017, before falling back to just 9 in 2018, according to One Earth Future’s annual report The State of Maritime Piracy 2018. But while piracy off Somalia has toned down in recent years, the problem of using captive humans as an additional income stream has not gone away. One Iranian seafarer, for example, who was held captive by Somalia pirates was finally released after four years due to poor health. Three of his shipmates, however, are still being held to this day. While things appear to be cooling off in the pirate world off Africa’s east coast, the west side is seeing a disturbing rise in piracy. And not just any piracy–piracy with a human captive component. The area most subject to piracy here is off the coast of Nigeria and the Gulf of Guinea in general. So much so has this alarming shift risen from oil to persons over the course of the last year in West Africa, that India–the most prolific source of maritime sailors in the region–has banned all Indian seafarers from working on vessels in Nigerian waters and in the Gulf of Guinea. On the line here for Nigeria is $10 billion annually in crude oil sales to India, who purchases more than one-third of all Nigerian oil. Just last month, pirates in the Gulf of Guinea hijacked two Indian oil tankers in two separate instances. But they didn’t stop with the crude oil. They also took the Indian crewmembers hostage both times. While one set of hostages have since been released, the second batch is still being held in captivity, adding to the growing unrest in the region as shippers and sailors fear for their own safety and for the safety of their crew.

Expect Low Oil Prices In 2020; Tendency Toward Recession – by Gail Tverberg – Overall, I expect that oil and other commodity prices will remain low in 2020. These low oil prices will adversely affect oil production and several other parts of the economy. As a result, a strong tendency toward recession can be expected. The extent of recessionary influences will vary from country to country. Financial factors, not discussed in these forecasts, are likely also to play a role. The following are pieces of my energy forecast for 2020:

• [1] Oil prices can be expected to remain generally low in 2020. There may be an occasional spike to $80 or $90 per barrel, but average prices in 2020 are likely to be at or below the 2019 level.
  • Figure 1. Average annual inflation-adjusted Brent equivalent oil prices in 2018 US$. 2018 and prior are as shown in BP’s 2019 Statistical Review of World Energy. Value for 2019 estimated by author based on EIA Brent daily oil prices and 2% expected inflation.
  • Figure 2 shows in more detail how peaks in oil prices have been falling since 2008. While it doesn’t include early January 2020 oil prices, even these prices would be below the dotted line.
• [2] World oil production seems likely to fall by 1% or more in 2020 because of low oil prices. Quarterly oil production data of the US Energy Information Administration shows the following pattern: The highest single quarter of world oil production was the fourth quarter of 2018. Oil production has been falling since this peak quarter. To examine what is happening, the production shown in Figure 3 can be divided into that by the United States, OPEC, and “All Other.” Figure 4 shows that the production of All Other seems to be steady to slightly rising, more or less regardless of oil prices.
• [3] In theory, the 2019 and 2020 decreases in world oil production might be the beginning of “world peak oil.” –If oil prices cannot be brought back up again after 2020, world oil production is likely to drop precipitously. Even the “All Other” group in Figure 4 would be likely to reduce their production, if there is no chance of making a profit.The big question is whether the affordability of finished goods and services can be raised in the future. Such an increase would tend to raise the price of all commodities, including oil.
• [4] The implosion of the recycling business is part of what is causing today’s low oil prices. The effects of the recycling implosion can be expected to continue into 2020. With the rise in oil prices in the 2002-2008 period, there came the opportunity for a new growth industry: recycling. Unfortunately, as oil prices started to fall from their lofty heights, the business model behind recycling started to make less and less sense. Effective January 1, 2018, China stopped nearly all of its paper and plastic recycling. Other Asian nations, including India, have been following suit.
• [5] The growth of the electric car industry can be expected to slow substantially in 2020, as it becomes increasingly apparent that oil prices are likely to stay low for a long period. Electric cars are expensive in two ways:
  • In building the cars initially, and
  • In building and maintaining all of the charging stations required if more than a few elite workers with charging facilities in their garages are to use the vehicles.
• Once it is clear that oil prices cannot rise indefinitely, the need for all of the extra costs of electric vehicles becomes very iffy. In light of the changing view of the economics of the situation, China has discontinued its electric vehicle (EV) subsidies, as of January 1, 2020. Prior to the change, China was the world’s largest seller of electric vehicles. Year over year EV sales in China dropped by 45.6% in October 2019 and 45.7% in November 2019. The big drop in China’s EV sales has had a follow-on effect of sharply lower lithium prices.
• [5] Ocean going ships are required to use fuels that cause less pollution as of January 2020. This change will have a positive environmental impact, but it will lead to additional costs which are impossible to pass on to buyers of shipping services. The net impact will be to push the world economy in the direction of recession.

Oil Hits $70 as Supply Disruption Fear Deepens – Oil extended its dramatic surge above $70 a barrel as the fallout between the U.S. and Iran escalated after the assassination of one of the Islamic Republic’s most powerful generals. Futures jumped by another 3% on Monday as the U.S. State Department warned of a “heightened risk” of missile attacks near military bases and energy facilities in Saudi Arabia. Prices got a further boost as President Donald Trump reiterated threats of retaliation should Iran “do anything” and vowed heavy sanctions against Iraq if American troops are forced to leave OPEC’s second-biggest producer. The wild ride continues for oil as Washington and Tehran trade bellicose rhetoric, ratcheting up fears of a wider conflict that could disrupt supply from the world’s most important producing region. Crude was last this high when Saudi production facilities were attacked in September, knocking out about 5% of global output. Trump said he’s prepared to strike “in a disproportionate manner” and attack more than 50 sites if Tehran retaliates against the killing of General Qassem Soleimani. The Middle East nation said it has to “settle a score with the U.S.” and that it would no longer abide by limits on its enrichment of uranium. A vote by Iraq’s parliament to expel U.S. troops from the country deepened the fallout. “Crude has some more risk pricing to do,” said Bob McNally, president of Rapidan Energy Group in Bethesda, Maryland, adding that he expected Iran to attack oil vessels and facilities in response. “We are going to grind through the $70s up towards $80 Brent as Iran calibrates and executes its retaliation,” the former oil official at the White House under President George W. Bush said in a Bloomberg TV interview. Brent futures rose as much as 3.1%, or $2.14, to $70.74 on ICE Futures Europe and were at $69.99 at 8 a.m. in London. The contract surged 3.6% on Friday. West Texas Intermediate advanced 1.7% to $64.10 on the New York Mercantile Exchange. The deepening crisis continued to spill over into other markets. Asian equities from Japan to Hong Kong fell while U.S. and European stock futures retreated. Gold surged to the highest in more than six years and Treasury yields ticked lower as investors sought havens from the turmoil.

Crude briefly turns lower, giving up earlier gains despite fears of Iran retaliation against US interests – After rallying more than 2% during early trading on Monday, crude briefly turned lower in late morning trading despite ongoing fears of Iran’s retaliation against U.S. interests. Prices soon after re-entered positive territory, although were little changed for the day. U.S. West Texas Intermediate gained 18 cents, or 0.3%, to trade at $63.23. Earlier, WTI rose to $64.72, its highest level since April. International benchmark Brent crude gained 40 cents to trade at $69.00 per barrel, paring gains after hitting a more than three-month high of $70.74 earlier in the session. Following Thursday’s death of top Iranian commander Qasem Soleimani, on Sunday an Iranian state-run television broadcast said that the nation would no longer respect uranium enrichment restrictions set forth in 2015′s nuclear deal.. On Friday Brent gained 3.55%, with WTI gaining 3.06%. Both posted their fifth straight week of gains. Iran has vowed to retaliate against the U.S., and the form that this retaliation takes will determine oil’s next move, according to Wall Street analysts. For instance, if the nation targets production in Saudi Arabia or Iraq – OPEC’s two largest producers – prices could move higher for longer. On Friday, Citi global head of commodity research Ed Morse said that Brent prices will top $70 in short order, while Again Capital’s John Kilduff said that if Iraq production takes a hit “oil prices will spike higher.” Iraq is OPEC’s second largest oil producer, pumping around 4.6 million barrels per day in December. On Sunday the Iraqi parliament passed a resolution calling for an expulsion of foreign troops, which raises question about the future of the allied mission that has successfully fought the “Islamic State,” or ISIS, in recent years.

Oil up Slightly After Brent Blows Past $70 on U.S.-Iran Crisis – Oil prices remained in bull territory on Monday, with global crude benchmark Brent piercing the key psychological $70-per-barrel mark, before coming off that peak, as Washington and Tehran exchanged strike threats after the U.S. killing of an Iranian general. West Texas Intermediate, the U.S. crude benchmark, settled up 22 cents, or 0.3%, at $63.27 per barrel. WTI hit an eight-month high of $64.72 earlier. Brent, the global oil benchmark, settled up 31 cents, or 0.5%, at $68.91. It surged to $70.75 earlier. The last time Brent traded above $70 was in the aftermath of the September drones attacks on Saudi Arabia’s Abqaiq oil processing complex, which the United States accused Iran of masterminding. “The situation today is very different from the attack on Abqaiq,” said Olivier Jakob at oil risk consultancy PetroMatrix in Zug, Switzerland. “After the attack on Saudi Arabia, both the U.S. and Saudi Arabia rapidly toned down instead of escalating. The opposite is true today, with both Iran claiming revenge and President (Donald) Trump threatening to blow Iran apart.” Oil prices closed 2019 with their largest gains in three years. Brent rose 24% on the year while West Texas Intermediate gained 34%. A day after trading for 2020 began, the rally reached new heights as a U.S. drone attack near Baghdad airport killed Qassem Soleimani, commander of Iran’s Revolutionary Guards’ Quds force. Since Soleimani’s killing, Iran has said it was abandoning limits to uranium enrichment, a step required for making nuclear weapons. Iraq’s parliament, meanwhile, has voted to expel U.S. forces from the country, prompting Trump to threaten Baghdad with sanctions. Rockets also fell all over Iraq on Monday, with no human casualties reported. Separately, fighting has also broken out in Libya. Tehran and Washington have exchanged strike threats, with Iran’s Supreme Leader Ayatollah Ali Khameini vowing “harsh revenge” and Trump saying he has identified 52 targets in Iran, including sites of cultural prominence, in a counter attack that may be “disproportionate.” Iran, Iraq and Libya, along with Saudi Arabia, are among the largest oil producers in the Middle East, which accounts for 40% of the world’s crude supply. Oil traders fear a breakout of war will seriously hamper movement of crude from the region to the rest of the world. Middle East crude supplies are already expected to be tighter this year than in 2018 due to sharper production cut pledges by OPEC and its top ally Russia under the OPEC+ initiative. Oil up Slightly After Brent Blows Past $70 on U.S.-Iran Crisis Comments (1)

Oil Down on Uninterrupted Mideast Supplies— Oil retreated after its dramatic start to the year as the uninterrupted flow of Middle East supplies tempered fears over the fallout from the U.S. airstrike that killed a top Iranian general. Futures in London fell on Tuesday after two days of wild trading that pushed prices briefly above $70 a barrel for the first time since September. While Iran’s semi-official Fars news agency said the Islamic Republic is assessing 13 retaliation ‘scenarios’ against the U.S., and the White House ordered additional forces to the Middle East, immediate concerns that a deeper conflict could disrupt output or exports from the region are yet to materialize. It’s been a turbulent start to 2020 for the oil market after the U.S. airstrikes sparked an escalation in hostilities between Washington and Tehran, reigniting fears of conflict in the world’s most important producing region. Crude remains about 3% higher since the attack, but futures are pulling back as the likes of Goldman Sachs Group Inc. says it’ll take a major disruption to output to keep prices elevated. “The market is recovering from the initial shock and closely monitoring how Tehran will respond,” said Will Sungchil Yun, commodities analyst at VI Investment Corp. “As current signals indicate traders and investors don’t see a full-blown war coming, prices are likely to remain relatively steady without a significant development.” Brent crude dropped 48 cents, or 0.7%, to $68.43 a barrel on the ICE Futures Europe exchange as of 7:55 a.m. in London. The contract ended Monday just 0.5% higher after earlier rising as much as 3.1% in intraday trade. West Texas Intermediate futures lost 40 cents, or 0.6%, to $62.87 on the New York Mercantile Exchange. Goldman Sachs said this week there’s a greater risk of prices falling in coming weeks and being long gold is a better hedge than oil for geopolitical risks. Oil markets still have a comfortable supply cushion should there be a disruption. OPEC is sitting on huge amounts of spare capacity after reducing supplies for most of the past three years and the U.S. recently reported its first months as a net exporter of petroleum for the first time in roughly 75 years. Consuming countries from the U.S. to China also control millions of barrels stored in strategic petroleum reserves that can be deployed to offset any shortage.

Energy infrastructure attacks are ‘probable’: Oil traders fear supply disruptions in the Middle East – A dramatic escalation of geopolitical tensions will most likely result in an unplanned oil supply shortage in the Middle East, energy analysts told CNBC on Tuesday, elevating the likelihood of another spike in oil prices. International benchmark Brent crude rose to its highest level since September in the previous session, briefly climbing above $70 a barrel, as U.S. West Texas Intermediate (WTI) surged to its highest value since April.The gains follow intensifying fears about the prospect of retaliatory action from Tehran, after the U.S. killed a top Iranian general late last week.”The consequence one can draw from the latest chapter of the U.S.-Iran relationship is that the geopolitical risk premium is more likely to turn into unplanned supply shortage than disappear,” Tamas Varga, senior analyst at PVM Oil Associates, said in a research note published Tuesday.”The only questions are when and in what form,” Varga said. The death of Iranian military commander Qasem Soleimani has ratcheted upalready-high tensions between Washington and Tehran, with many investors increasingly anxious that a widening conflict could disrupt global oil supplies.Oil prices pared some of their recent gains on Tuesday afternoon, with Brent crude trading down almost 1% at $68.23 a barrel.U.S. WTI stood at $62.73 at 12:45 p.m. London time, around 0.9% lower. Analysts at Eurasia Group said an almost $10 price jump in Brent futures since the start of December highlighted a “significant increase in the geopolitical oil price premium” after the death of Soleimani last week.As a result, the political risk consultancy said its base case oil price for 2020 is a range of $65 to $75 a barrel, “with risks to the upside.””With Tehran promising retaliation for the U.S. strike and Washington also threatening more attacks, there is an elevated likelihood of substantial oil supply disruptions in the Middle East and resulting price spikes,” analysts at Eurasia Group said in a research note published Monday.”While an intensification to all-out war is unlikely, further lethal action between U.S. and Iranian forces and attacks against energy infrastructure are probable and will keep markets on edge.””It is not clear how the current crisis will end,” they added.

Is The Oil Price Rally Already Over? – Oil prices fell back late Monday and in early trading on Tuesday. Goldman Sachs had predicted that the rally following the prospect of war in the Middle East would be temporary unless oil supplies were actually disrupted. Traders apparently are taking note, selling off oil at the start of the week. However, events are fluid and developing quickly. Iran said that it would abandon limits on uranium enrichment following the assassination of General Qassem Soleimani. The U.S. withdrew from the 2015 nuclear agreement in 2018, and Iran has gradually ratcheted back its commitments in response. Iran said its moves were reversible upon U.S. returning to the nuclear deal. Some reports suggest the Trump administration is drawing up sanctions on Iraq as revenge for the Iraqi parliament pushing for a U.S. troop withdrawal. “A lasting conflict would have wide-ranging implications through broad economic and financial shock that significantly worsen operating and financing conditions,” Moody’s said Monday. “A protracted conflict would potentially have global repercussions, in particular through its effect on oil prices.” Chevron withdrew its expatriate staff from Kuridstan, the company said, but left behind local workers to keep operations uninterrupted. The oil majors are on edge, and BP and Royal Dutch Shell have not disclosed details yet. BP has created a subsidiary that aims to stand up five $1 billion businesses by 2025 that produce low-carbon energy. “We are trying to build unicorns in the energy business,” said Stephen Cook, managing partner of Launchpad and chief commercial officer in BP’s technology division, according to the FT. In a regulatory filing, ExxonMobil said that its fourth-quarter operating results would be hit by weakness in chemicals and refining, although that could be offset by asset sales. The update “is like Groundhog’s day – once again chemicals and downstream weakness will drag down overall earnings,” Jennifer Rowland, analyst at Edward Jones, told Reuters. “The asset sale proceeds will help cover the dividend, but that’s not a sustainable strategy,” she said.

Oil Down Most Since 2020 Start as Some Argue Market Overbought on US-Iran Conflict (Sputnik) – Global oil prices fell their most on Tuesday since the start of 2020 as some market participants argued that crude had risen too much, too fast on the US-Iran conflict, nearing four-month highs above $70 per barrel. Brent, the global benchmark for crude, was down 64 cents, or nearly 1 percent, at $68.27 per barrel by 9:50 a.m. ET (14:50 GMT). It had risen a cumulative 4.5 percent in three prior sessions, hitting $70.75 on Monday, its highest since mid-September. Brent’s run-up was largely driven by the US killing of Iran’s top general Qassem Soleimani on Friday that set the two countries on a collision course, putting the Middle East and the world on the edge.West Texas Intermediate (WTI), the US crude benchmark, slid 40 cents, or 0.6 percent, to $62.87. WTI had risen more than 3 percent net over the past three sessions, reaching a more than the eight-month high of $64.72 on Monday. “The ‘pain trade’ is not up for oil prices in the near term,” Scott Shelton, energy futures broker at the ICAP commodities brokerage in Durham, North Carolina, wrote in a market commentary. “While the outcome of the market could be explosive under the right scenario Iran retaliation, there is clearly more selling in the market than buying.” Oil prices have spiked in recent days on a rash of tensions following Soleimani’s killing last Friday on the outskirts of Baghdad. Iraq’s parliament voted to expel US forces from the country, prompting President Donald Trump to threaten Baghdad with sanctions. Rockets also fell all over Iraq on Monday, with no human casualties reported. Separately, fighting broke out in Libya. Tehran and Washington, meanwhile, exchanged strike threats. Iran’s Supreme Leader Ayatollah Ali Khamenei vowed “harsh revenge” for Soleimani’s death while Trump said he has identified 52 targets in Iran, including sites of cultural prominence, in a plan for a counter-attack that may be “disproportionate.”

Oil Algos Confused After Iraq Rocket Strike, Crude Draw, & Product Builds – Oil prices suffered their first loss of the year today as war premia were wrung out of WTI – despite the escalating verbal threats between Tehran and Washington.“It’s difficult for traders to keep buying on the promise of more geopolitical risk” after the Iranian incident, said Michael Loewen, director of commodity strategy at Scotiabank in Toronto. But, for a few brief minutes tonight, the algos will turn their attention to fundamentals… API:

• Crude -5.95mm (-3.6mm exp)
• Cushing -1.0mm (-660k exp)
• Gasoline +6.70mm (+2.7mm exp)
• Distillates +6.4mm (+3.9mm exp)

After the prior week’s huge crude draw and massive distillates build, the last week saw more of the same with a bigger than expected crude draw and bigger than expected product builds… WTI has erased most of the post-Soleimani spike… …but spiked ahead of the API print after 5 rockets hit Camp Taji, north of Baghdad, only to tumble, then pop, as algos went wild…

Oil prices will climb above $100 a barrel if Iran blocks the Strait of Hormuz, analysts predict – Oil prices would skyrocket if Iran moved to completely cut off the Strait of Hormuz, energy analysts told CNBC on Wednesday. Elevated geopolitical tensions have sparked fears of a widening conflict in the Middle East, with energy market participants increasingly concerned that the fallout could soon disrupt regional crude supplies. It has thrust the world’s most important oil chokepoint back into the global spotlight. Speaking to CNBC’s “Capital Connection” on Wednesday, James Eginton, investment analyst at Tribeca Investment Partners, said a move by Iran to completely shut off crude supplies in the Strait of Hormuz would send oil prices “through the roof.” Situated between Iran and Oman, the Strait of Hormuz is a narrow but strategically important waterway that links crude producers in the Middle East with key markets across the world. In 2018, daily oil flow in the channel – which is just 21 miles wide at its narrowest point – averaged at 21 million barrels per day. That’s the equivalent of about 21% of global petroleum liquids consumption. “If you block the Strait of Hormuz, you will send oil through $100,” Eginton said. “Over the next few days, if we start seeing the Iranians start trying to block the Strait of Hormuz then we should be set for much higher oil prices.”

‘Iran has been overplaying its hand’: Oil analysts weigh in on US killing of Iranian general – The U.S. airstrike that killed Iran’s top military general has escalated tensions between the two nations and injected fresh uncertainty Friday around geopolitics and financial markets.Analysts weighed in Friday on CNBC, offering their insights into how the death of Maj. Gen. Qasem Soleimani will impact the oil industry and the economy, as well as the potential for further conflict between the U.S. and Iran. While oil prices surged by up to 4% on Friday, Sadad al-Husseini, former executive vice president of exploration and production operations at Saudi Arabia’s state-owned oil company, Saudi Aramco, said he would not describe the uptick as substantial or sustainable.“I think the markets are pretty well saturated with supply, so we have to wait and see how the situation unfolds,” he said. “But currently I wouldn’t say that we’ve had a very strong move.”When asked about the threat of Iran retaliating against the U.S. or other actors in the Middle East, al-Husseini said he thought any response from Tehran would be narrowly focused. “I believe the problem is really between the U.S. and Iran at this point. It’s not about the oil fields or the other countries in the [Persian] Gulf,” he said on “Squawk Alley.” “I think Iran has been overplaying its hand … I don’t think they would want to do anything with the other countries in the region. That wouldn’t advance or affect their issue with the U.S.”

Oil rally is in its seventh or eighth inning, energy analyst Tom Kloza says – Energy expert Tom Kloza expects oil prices to resume rallying on renewed hostilities with Iran. But Kloza, who runs global energy analysis for the Oil Price Information Service, believes the bullish activity is temporary. “We’re in the seventh or eighth inning of a rally that’s sustainable,” he told CNBC’s “Trading Nation” on Tuesday. “I’m pretty confident that we’re going to exit the year at a much lower number.” WTI crude and Brent fell about 1% on Tuesday. The commodities returned to levels seen before last Thursday’s U.S. airstrike that killed a top Iranian commander. But that doesn’t mean there’s no gas left in the canister. He believes oil prices could rise another $5 a barrel this week. “We need to be on guard for attacks like [what] occurred in mid-September at Abqaiq which was the Saudi facility,” he said. “A $70 handle is always possible for a short period of time.” However, his biggest concern in connection to rising Mideast tensions would have the opposite effect on oil prices. “I’m a little bit more worried about if there are soft targets or targets that have to do with transportation,” added Kloza. “It doesn’t take much to spook Americans into not driving. It doesn’t take much to spook the Western world or even emerging markets to lay off of the transportation.”

Middle East tensions have put a floor under oil prices, says Marathon Oil CEO – Marathon Oil Chairman and CEO Lee Tillman said that while oil prices may not be spiking in response to Thursday’s airstrike in Iraq, ongoing tensions in the Middle East will support higher oil prices going forward. He attributed the lack of a stronger initial price reaction to the United States’ surge in production. “I think the dampening effect … is really the impact of the U.S. energy renaissance,” he said Tuesday on CNBC’s “Power Lunch” from the Goldman Sachs energy conference in Miami Beach, Florida. “We make up about 8% of the global supply today, and those are reliable, highly secure barrels that the market is counting on, and I do believe that’s reduced this risk premium from returning back into the market.” That said, he argued that U.S. West Texas Intermediate crude prices will “likely” end the year higher since tensions are “likely going to persist” which “creates a bit of a floor under oil and gas pricing.” Tillman’s comments come as oil prices spiked more than 3% on Friday following Thursday’s killing of Iran’s top commander Qasem Soleimani. But since then some of the enthusiasm has faded. On Monday oil settled little changed, and on Tuesday prices declined 1%.

Oil prices fall as alarm over Iran rocket strike fades – Oil futures fell on Wednesday from peaks hit in frenzied early trading after a rocket attack by Iran on American forces in Iraq raised the spectre of a spiralling Middle East conflict and disruption to crude flows. Prices gave up most of their early gains as oil production facilities remain unaffected by attacks. Tweets by U.S. President Donald Trump and Iran’s foreign minister also appeared to signal a period of calm – for now. Brent crude futures were down 49 cents, or 0.72 per cent, at 67.78 dollars by around 1254 GMT, after earlier rising to their highest since mid-September at 71.75 dollars. West Texas Intermediate crude futures were down 76 cents, or 1.21 per cent, at 61.94 dollars a barrel. WTI has seesawed through the day. The futures earlier hit 65.85 dollars, the highest since late April last year, before briefly being down by over 1 dollar from the previous close. Iran’s missile attack on U.S.-led forces in Iraq came early on Wednesday, hours after the funeral of Qassem Soleimani, the commander of the country’s elite Quds Force killed in a U.S. drone stroke on Jan. 3. Tehran fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting U.S.-led coalition personnel, the U.S. military said on Tuesday. Stock, currency and gold markets were also roiled by the attacks. Trump said in a tweet that an assessment of casualties and damage from the strikes was underway and that he would make a statement on Wednesday morning U.S. time. “All is well!” Trump said in the Twitter post.

Oil Crashes Back Below ‘Soleimani Dead’ Levels After Trump-Zarif De-Escalation – Well that all de-escalated quickly… thanks to a pair of tweets from Trump and Zarif that “all is well” and “operations are concluded,” all war premia has been removed from WYI… Echoing the price action after the attack on Saudi Arabia’s Abqaif refinery… Bears will be hoping that Trump doesn’t re-escalate the rhetoric in this speech due any second. Oil prices exploded overnight after the initial leg from API and then the Iranian missiles strikes, but thanks to a pair of tweets from Trump and Zarif that “all is well” and “operations are concluded,” prices reverted back to unchanged. “Not a single drop of oil supply has been lost due to the recent incidents and that is why the oil price so quickly has fallen back down again,” said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB. Last night’s API data did move the crude market, before the Iranian chaos started, so we suspect – after the overnight rollercoaster – that this morning’s official data will spark some notable reaction. DOE

• Crude +1.164mm (-3.6mm exp)
• Cushing -821k (-660k exp)
• Gasoline +9.137mm (+2.7mm exp) – biggest build since Jan 2016
• Distillates +5.33mm (+3.9mm exp)

A big draw in the prior week, and big draw reported by API, were blown away by a surprise crude inventory build and huge product builds… US Crude production was unchanged on the week, remaining near record highs… WTI was trading just below $62 ahead of the DOE data and dropped to the day’s lows on the surprise build…

Oil logs lowest finish since mid-December as Trump speech cools Iran war worries – Oil futures fell sharply on Wednesday, logging lowest settlement since mid-December, as comments from President Donald Trump calmed nerves surrounding a potential war with Iran. Prices had seen a sharp but brief spike late Tuesday, brought on by Iranian missile strikes at bases in Iraq where U.S. troops are stationed. In a speech Wednesday, Trump said Iran “appears to be standing down” following those strikes, and announced fresh sanctions on the Islamic Republic. Trump said the U.S. suffered no casualties. “Trump’s statement on Iran delivered more saber-rattling with hints of a premature victory lap,” said Edward Moya, senior market analyst at Oanda. “Risk assets extended their gains after it was clear this speech was de-escalating the US-Iran conflict.” Ahead of the Trump’s speech, perceptions that the assault could mark the end of the U.S.-Iran conflict rather than an escalation, as well as data showing an unexpected weekly climb in U.S. crude stockpiles, had combined to pull oil prices lower. West Texas Intermediate crude for February delivery on the New York Mercantile Exchange fell $3.09, or 4.9%, to settle at $59.61 a barrel. That was the lowest finish for a most-active contract since Dec. 12, according to Dow Jones Market Data. March Brent crude lost $2.83, or 4.2%, to $65.44 a barrel on ICE Futures Europe, for the lowest finish since Dec. 16. WTI jumped as high as $65.65 a barrel, its highest intraday mark since late April, while Brent soared to $71.75 a barrel, the highest in more than three months, shortly after Iran launched attacks on two bases used by the U.S. in Iraq.

Oil Prices Edge Up After Falling 5% On Trump’s Comments – Oil prices rebounded on Thursday in Asia after slumping as much as 5% overnight as U.S. President Donald Trump refrained from further military hostilities with Iran. U.S. Crude Oil WTI Futures rose 0.7% to $60.02 by 12:30 AM ET (04:30 GMT), while International Brent Oil Futures gained 0.6% to $65.83. Oil prices were highly volatile this week, with WTI hitting an April 2019 high of $65.65 on Wednesday amid news of the Iran attack on two U.S.-Iraqi airbases, but settled down 5% lower at $59.61 overnight after Trump offered Tehran chances for talks if it “changed its behaviour.” While the president said the U.S. will hit Iran with heavier sanctions. But he did not speak of a counterattack, easing concerns of further escalation of conflict between the two nations. Last week, Iran’s top general Qasem Soleimani was killed in a U.S. airstrike in Baghdad.Iran has vowed to retaliate following the attack. Meanwhile, the Energy Information Administration (EIA) reported that U.S. crude stockpiles rose by 1.2 million barrels for the week ended Jan. 3. The market was looking for a decline of 3.6 million barrels, according to analyst forecasts compiled by Investing.com. Gasoline inventories soared by 9.1 million barrels, compared with expectations for a rise of 2.7 million barrels, the EIA said. Distillate stockpiles climbed by 5.3 million barrels, versus forecasts for a build of 3.9 million barrels.

Trump’s press conference points to the big reason oil prices are low – and why that gives America a big advantage – Past turmoil in the Middle East has often been a sure-fire way of bidding oil prices sharply higher. For example. after Iraq invaded Kuwait in the summer of 1990, West Texas Intermediate (WTI) quickly jumped from $42 to $76 on an inflation-adjusted basis, a spike of about 80%. But when news broke last week that Iranian General Qassem Soleimani had been killed in an American-ordered drone strike, markets responded far more modestly: Brent crude climbed $2 to $68, with West Texas Intermediate moving in similar fashion, up about $2 to $63. Even after events of the last 24 hours – Iranian missile attacks on American bases in Iraq – prices have been muted: Brent gained another dollar, but WTI has actually slipped a bit. President Trump has threatened to bomb dozens of targets in Iran, which would undoubtedly bring a nasty reaction – perhaps an Iranian attack on an oil tanker or, say, another bombing of Saudi oil facilities, like the one in September. You’d think this these jitters would cause a spike in prices, but no. Why? It could be that no one really believes that Trump would start another Mideast war. Indeed, the president appeared to take the off ramp with his remarks made Wednesday – signaling that there will be more sanctions, but no military attack on Iran itself. But the smallish gains for oil could also be because of something else – the rise of fracking, which has dramatically lessened America’s dependence on imported oil, and with it, our sensitivity to supply disruption. In 2018, for example, about 11% of the oil the United States uses was imported – the lowest level since 1957. Of that, our biggest supplier, by far, is right next door: Canada. An OPEC embargo in 1973-74 and Iran’s revolution in 1979 led to sharply higher gasoline prices here, gas stations running out – and the U.S. economy falling into two nasty recessions. But – as Trump said – American policymakers today have far more wiggle room to decide how to best advance our country’s interests without worrying about oil prices. This is a strategic advantage, and a big one at that. It’s also supportive of one of the big themes Trump campaigned on four years ago: to reduce America’s footprint in the Middle East. We don’t need their oil, and other than supporting Israel and keeping shipping lanes open, there are fewer reasons for us to be there. Speaking of keeping shipping lanes open, perhaps countries that are more dependent on Mideast oil than we are – China and Japan, for example – could do more to help out.

Oil eases as focus shifts from Iran tensions to U.S. crude build –(Reuters) – Oil prices retreated further on Thursday, adding to sharp losses in the previous session as the market shifted focus toward rising U.S. crude stocks and away from worries about the conflict between the United States and Iran. Broadly, prices were moving back toward where they stood before a Jan. 3 U.S. drone strike killed a top Iranian general, prompting an Iranian rocket attack on Iraqi air bases hosting U.S. forces. These events pushed crude to its highest in four months. “The way the market gives a geopolitical risk premium and then takes it right back indicates that the market fundamentally isn’t very strong,” said Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut. “A lot of participants in the market think that there’s a lot of oil around the world that consumption doesn’t take care of.” After falling 4.1% on Wednesday, Brent crude futures settled down 5 cents at $65.37 a barrel. West Texas Intermediate fell 7 cents to $59.56 after sliding nearly 5% the previous day. During European trading hours Iranian media carried reports of military commanders speaking of further action aimed at expelling U.S. troops from the region. On Wednesday, U.S. President Donald Trump stepped back from further military action, depressing oil prices and diverting attention to a surprise weekly build of 1.2 million barrels in U.S. crude stockpiles. The build, reported on Wednesday by the Energy Information Administration, shocked the market after analysts forecast a drop of 3.6 million barrels.

Crude prices drop to lowest level since July – After spending almost three weeks above the $60 level, crude prices retreated about 6 percent to close just above $59 on Friday. Having briefly climbed above $65 a barrel in overnight trading early in the week as tensions rose between the U.S. and Iran, oil prices retreated to their lowest level since July as both countries appeared to take a step back. West Texas Intermediate on the New York Mercantile Exchange fell 52 cents to close at $59.04 a barrel Friday. The posted price dropped to $55.50 a barrel. Natural gas prices posted a gain for the week, adding 3.6 cents to close at $2.202 per Mcf on the NYMEX. Gas prices had started the week at $2.135 per Mcf.

U.S. oil futures post their biggest weekly loss since July – Oil futures settled lower on Friday, with U.S. benchmark prices down more than 6% for the week, marking their largest weekly percentage decline since July, according to FactSet data. Baker Hughes BKR, -0.72% reported a third weekly fall in the number of active U.S. rigs drilling for oil, but the news failed to support prices, which have now fallen for four consecutive sessions following a lack of significant developments in the U.S.-Iran conflict. February West Texas Intermediate oil declined by 52 cents, or 0.9%, to settle at $59.04 barrel on the New York Mercantile Exchange. For the week, the front-month contract fell 6.4%, marking the biggest weekly percentage decline since July.

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