Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 20 June 2020. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
Please share this article – Go to very top of page, right hand side, for social media buttons.
Ingleside’s quick rise to crude exports prominence, part 8. – Since last summer, the Corpus Christi area has emerged as the U.S.’s leading crude export venue. In the first five and a half months of 2020, it accounted for an astounding 45% of the barrels being shipped abroad – astounding because in the same period last year, the Corpus area held less than a 20% share. What is sometimes forgotten, though, is that little Ingleside, TX, located across Corpus Christi Bay from Corpus proper, is the area’s crude-export leader, with the Moda Midstream and Flint Hills Resources terminals responsible for just over half of Greater Corpus’s total export volumes. And, with the new South Texas Gateway Terminal nearing completion, Ingleside’s role will only increase in the coming months. Today, we conclude a series on Gulf Coast export terminals with a look at what has been going on in Ingleside. In Part 1 of this series, we looked at the Seaway Freeport and Seaway Texas City terminals, both of which are part of Enterprise Products Partners and Enbridge’s broader Seaway Crude Pipeline (SCP) system. Part 2 reviewed the Houston Fuel Oil Terminal (HFOT), now owned by Energy Transfer, and the Seabrook Logistics Marine Terminal, which is jointly owned by Magellan Midstream Partners and LBT Tank Terminals. In Part 3, we examined Enterprise Hydrocarbon Terminal, or EHT, which is one of the largest energy-related marine terminals on the Gulf Coast, and in Part 4, we focused on the three crude export terminals in the Beaumont/Nederland, TX, area. Next, in Part 5, we looked at the Louisiana Offshore Oil Port (LOOP), which is the only Gulf Coast terminal that can fully load 2-MMbbl Very Large Crude Carriers (VLCCs); LOOP is also a major crude import terminal. In Part 6, we turned our sights to the Corpus area and reviewed the three newest facilities along the Corpus Christi Ship Channel’s Inner Harbor area: Eagle Ford Terminals, the EPIC Midstream Terminal, and Pin Oak Corpus Christi. Lastly, Part 7 discussed Inner Harbor terminals owned by NuStar Energy, Valero Energy, and Buckeye Partners.
EPA fines Enbridge $6.7 million for safety violations – The Environmental Protection Agency has fined Enbridge Energy $6.7 million after it said the company “failed” to fix dents in pipelines and had numerous delays reporting issues along its mainline route of oil pipelines to the federal agency. The $6.7 million total was agreed upon by the EPA and Enbridge last month as a settlement to alleged violations of a consent decree it signed with the U.S. Department of Justice in 2017 after the company’s Line 6B pipeline spilled more than 800,000 gallons of oil into Michigan’s Kalamazoo River in 2010. Approximately $3 million of the fines came after Enbridge “failed to excavate and repair or mitigate shallow dents with indications of metal loss, cracking, or stress risers” along its Lakehead System across northern Minnesota and Wisconsin, according to a May 8 letter sent to Enbridge by Matthew Russo, assistant region council for the EPA office in Chicago. Most of the issues with dents were reported along Line 1, which was built in 1950, Enbridge said Thursday. Line 1 stretches from Edmonton to Superior and carries 237,000 barrels, or 9.95 million gallons, of oil per day. It is one of six pipelines following the same corridor across northern Minnesota. “EPA identified numerous instances in which Enbridge failed to comply in a timely manner with Consent Decree provisions relating to certain intersecting or interacting features on Lakehead System pipelines. More specifically, Enbridge failed to complete timely identification and evaluation of thousands of ‘shallow dent’ features on Lakehead System pipelines to determine whether such dents met dig selection criteria,” Russo wrote.
New ruling will impact Enbridge Line 3 project – Early last week, the Minnesota Pollution Control Agency announced it would grant a contested case hearing regarding the Enbridge Line 3 project. The hearing is to address the agency’s draft 401 water quality certification, and will focus on Enbridge’s water crossing methods to ensure protection of area streams and wetlands. To accomodate the hearing, the MPCA received approval from the U.S. Army Corps of Engineers to extend the deadline for the 401 certification from Aug. 15 to Nov. 14 of this year. advertisement “While a contested case hearing moves forward, the MPCA continues to review comments submitted for the draft air and NPDES (National Pollutant Discharge Elimination System) permits,” said the MPCA press release June 3. Enbridge’s Line 3 protect is to construct a new oil pipeline in Minnesota to replace the current Line 3. The line will follow the existing pipeline to the Clearbrook Terminal in Clearbrook, but then follow a new route south of the existing Line 3, ending at an existing terminal in Superior, Wis. The existing Line 3 would then be permanently deactivated and remain in place. Enbridge’s stance is to address pipeline integrity and safety concerns, as well as restore the original operating capacity of 760,00 barrels per day. The project has been in the works since 2014, and has gone through numerous certifications and court challenges. Enbridge filed plans to comply with the updated Environmental Protection Plan, Agricultural Protection Plan, Archaeological and Historic Resources Plan, Environmental Justice Communities Mitigation Plan and Human Trafficking Prevention Plan, among others. The Honor the Earth organization issued a statement June 3, saying that while it applauded the contested case hearing, it was “dismayed that the MPCA has formally decided to not analyze oil spill impacts and Enbridge’s plans to respond to an oil spill, despite the fact that it is the only Minnesota agency that has a duty under law to protect Minnesota from oil spill impacts.”
RRC considers recommendations to reduce flaring – Various stakeholders weighed in Tuesday as Texas’ three railroad commissioners considered Commission Chairman Wayne Christian’s Blue Ribbon Task Force for Oil Economic Recovery recommendations on the issue of flaring. At their open meeting, the commissioners heard from three panels, one comprised of the environmental community, one of producers and the third of industry associations that head up the task force. “One thing I hope the three panels have brought is certainty,” said Christian, such as the certainty the agency brought in May when it decided against enacting prorationing for the first time in 50 years.He expressed hope that highlighting the efforts to eliminate flaring and improve the industry’s environmental impact would draw investors back to the industry. Christian also suggested the state put together a “Shark Tank”-type program that reviews new technology and offers a combination of state and private funding to develop and commercialize that technology. Commissioner Christi Craddick said her office has been working on the issue for some time and said it should be a priority to find ways to improve data collection and make that data more transparent and usable — not just to regulators and the industry but also to the public. Christian called for the RRC staff to consider the recommendations and come back to the commissioners this fall with a plan of action.
Texas could tighten some natural gas flaring rules by fall – (Reuters) – Texas as early as this fall could tighten some rules for the controversial practice of natural gas flaring, the head of the state’s regulatory commission said on Tuesday. The practice of burning off unwanted natural gas produced alongside more profitable oil has become a top issue for both environmentalists and investors, who are focused on sustainability measures and are already frustrated by a decade of poor financial returns in oil and gas. Flaring has surged with U.S. oil output, but can worsen climate change by releasing carbon dioxide. Recommendations from an industry panel, provided to state regulators at a meeting on Tuesday, included reducing to 90 from 180 the number of days producers can routinely burn unwanted gas without going to the Texas Railroad Commission, the state’s regulator, for a hearing. Commission Chairman Wayne Christian directed agency staff to figure out which of the recommendations from the Texas Methane & Flaring Coalition, a group of producers and industry organizations, could be implemented by the fall. “This is now the opportune time to implement meaningful reforms to reduce flaring before oil and gas production climbs back to previous highs,” Christian said, adding that the issue has become well known on Wall Street and is hindering some producers’ access to capital.
New Mexico partners with oil and gas industry to curb flaring – New Mexico could be closer to a solution aimed at reducing the use of flaring in its oilfields through a partnership with one of the Permian Basin’s major operators.Flaring, or the burning of natural gas associated with oil extraction, became controversial as environmentalists argued it wasted a valuable resource and creates air pollution while industry leaders contended the practice was an essential activity in operations to safely pressurize wells and eliminate waste.It’s commonly used in southeast New Mexico’s Permian oilfields that also cross over into West Texas. EOG and New Mexico’s Oil Conservation Division (OCD) announced successful results of a pilot project aimed at reducing flaring in existing operations.The project addressed temporary shutdowns of third party pipelines at a time when operations throughout the industry were curtailed due to shrinking fuel demand and oil prices amid the COVID-19 pandemic. Gas was looped back into active wells during an outage instead of flaring it and reintroduced the gas back into the system when pipeline operations were restored. The project marked the first time any such technology was used in New Mexico and could not only reduce flaring but allow the captured gas to return to production and be sold instead of released into the atmosphere through flaring.
Special Report: Millions of abandoned oil wells are leaking methane, a climate menace – More than a century of oil and gas drilling has left behind millions of abandoned wells, many of which are leaching pollutants into the air and water. And drilling companies are likely to abandon many more wells due to bankruptcies, as oil prices struggle to recover from historic lows after the coronavirus pandemic crushed global fuel demand, according to bankruptcy lawyers, industry analysts and state regulators. Leaks from abandoned wells have long been recognized as an environmental problem, a health hazard and a public nuisance. They have been linked to dozens of instances of groundwater contamination by research commissioned by the Groundwater Protection Council, whose members include state ground water agencies. Orphaned wells have been blamed for a slew of public safety incidents over the years, including a methane blowout at the construction site of a waterfront hotel in California last year. They also pose a serious threat to the climate that researchers and world governments are only starting to understand, according to a Reuters review of government data and interviews with scientists, regulators, and United Nations officials. The Intergovernmental Panel on Climate Change last year recommended that U.N. member countries start tracking and publishing the amount of methane leaching from their abandoned oil and gas wells after scientists started flagging it as a global warming risk. So far, the United States and Canada are the only nations to do so. The U.S. figures are sobering: More than 3.2 million abandoned oil and gas wells together emitted 281 kilotons of methane in 2018, according to the data, which was included in the U.S. Environmental Protection Agency’s most recent report on April 14 to the United Nations Framework Convention on Climate Change. That’s the climate-damage equivalent of consuming about 16 million barrels of crude oil, according to an EPA calculation, or about as much as the United States, the world’s biggest oil consumer, uses in a typical day. ((For a graphic on the rise in abandoned oil wells, click tmsnrt.rs/2MsWInw )) The actual amount could be as much as three times higher, the EPA says, because of incomplete data. The agency believes most of the methane comes from the more than 2 million abandoned wells it estimates were never properly plugged.
Well Declines, COVID-19 Could Disrupt Gathering, Processing Tailwinds – While some oil and gas drillers are detailing plans to reverse production shut-ins amid stabilizing crude prices, North American midstream companies with gathering and processing operations are not necessarily out of the woods yet. Energy industry analysts told S&P Global Market Intelligence that even though production reached “trough” levels earlier than expected, natural well declines and a potential second COVID-19 outbreak could jeopardize those gathering and processing operators’ volumetric tailwinds. Many U.S. and Canadian pipeline firms were forced to cut spending and or investor payouts in the wake of Russia’s oil price war with Saudi Arabia and an increase in coronavirus shelter-at-home orders, but midstream stocks are recovering gradually alongside West Texas Intermediate crude prices, which have bounced back from historic lows to settle in the $35 to $40 per barrel range. That prompted drillers like Parsley Energy Inc., Concho Resources Inc. and EOG Resources Inc. to indicate in recent days that they are working to bring curtailed wells back online. According to Ryan Smith, a senior director of research at East Daley Capital Advisors Inc., drilling likely reached its lowest levels toward the end of May, whereas some pipeline companies had anticipated production bottoming out in June or July. “I think it’s fair to say we’ll be in the recovery stage in July and August, with June being a transition period,” East Daley’s Ryan Smith said in an interview. Targa Resources Corp. expects the shut-in volumes “to come back back and perform well,” CEO Matthew Meloy said May 7, while Energy Transfer LP Chief Commercial Officer Marshall McCrea said May 11 that the pipeline giant had already seen about a quarter of its volumes shuttered in the production basin around Midland, Texas, turn back on.
EIA’s liquids pipeline database provides detail on U.S. petroleum infrastructure changes — On June 4, the U.S. Energy Information Administration (EIA) updated its Liquids Pipeline Projects Database, which includes a summary of more than 225 liquids pipeline projects in the United States and pipeline projects that cross into Mexico and Canada that are planned, under construction, on hold, or have been completed since 2010. The pipelines included in the database carry crude oil, hydrocarbon gas liquids (HGL), and petroleum products. The database lists projects by categories, including new pipelines, expansions, and conversions from infrastructure that previously transported other liquids or natural gas. EIA’s database also includes detailed information about the projects such as capacity, project start date, and location. From January 2019 through April 2020, 15 projects carrying HGL were brought online. HGL pipeline project listings in the database include details on the types of products each pipeline carries, which can be one or more pure products (such as ethane or propane) or an unseparated mixture known as Y-grade. All HGL pipelines completed from January 2019 through April 2020 carry Y-grade, and most of these projects move the Y-grade from producing regions (primarily the Permian Basin in western Texas and eastern New Mexico) toward the Gulf Coast. At the destination, the unseparated Y-grade is fractionated – or refined – at a growing number of fractionation plants into pure products. The purity products are either stored, consumed locally by refineries and chemical plants, distributed around the country, or exported. New projects bringing HGL to the Gulf Coast include the Grand Prix pipeline, the Shin Oak pipeline, and the EPIC pipeline. In 2019, 14 crude oil pipeline projects were completed, compared with 11 in 2018. An additional three projects were completed as of the end of April in 2020. Nine of the crude oil projects completed in 2019 and all three of the 2020 projects were new pipeline projects. By comparison, only 4 of the 11 crude oil projects completed in 2018 were new pipelines; the rest were expansions of existing pipelines or conversions of existing pipelines to carry crude oil. Not all new pipelines are independent projects; some projects are connected to each other and carry the same liquid to its final destination. As a result, simply summing the capacity of all new projects would result in double-counting. Five pipeline projects that carry petroleum products were completed in 2019, and the Plantation Pipeline Roanoke expansion became operational in 2020. Petroleum products include gasoline, diesel, jet fuel, and other refinery products. Two projects that were finished in 2019, the Nuevo Laredo project and the expansion of the Burgos Pipeline, export refined products across the U.S.-Mexico border into the Mexican state of Tamaulipas. EIA updates its liquids pipeline database based on best available information from pipeline company websites; trade press reports; and government documents, such as U.S. Department of State permits for border crossings. EIA releases updates to the liquids pipeline projects database twice each year, near the end of May and of November. The liquids pipeline projects database complements EIA’s natural gas pipeline projects table.
The Cowboy State Is Hurting As Low Oil Prices Persist — COVID-19 has taken a major toll on the oil and gas industry as a whole, but Wyoming, a state highly dependent on its abundance of natural resources, is really feeling the sting. And the dominoes are already starting to fall. The rig count in Wyoming fell from 30 rigs in March to just two rigs in early June. Experts estimate that for every rig lost, around 100 oil and gas jobs cease to exist. And though oil prices have rebounded in recent weeks, a full recovery of Wyoming’s oil and gas industry appears unlikely in the short or even medium term. Even one of Wyoming’s top oil producers, Ultra Petroleum Corp., filed for Chapter 11 bankruptcy Thursday evening. This is the result of months of financial problems sparked by the COVID-19 fueled downturn in energy markets. Brad Johnson, Ultra Petroleum’s CEO explained, “After several months of liability management efforts and careful consideration of how best to navigate a challenging low commodity price environment and our debt levels, Ultra’s Board of Directors determined that a voluntarily filing for Chapter 11 reorganization provides the best outcome for the entity,” adding “This financial restructuring will result in an enterprise with very little debt, good liquidity and significant free cash flow that is underpinned by a large-scale, low-cost base of natural gas and condensate production.” And that’s bad news for Wyoming as a whole. As one of the top producers – and taxpayers – in the state, Ultra’s insolvency puts Wyoming’s entire revenue in additional jeopardy. Adding to the pain, Texas and New Mexico have had a significant advantage in this market. The nature of drilling in the south means that Permian producers are able to pull up natural gas as a free byproduct of oil production. This has made it difficult for producers in Wyoming who deal exclusively with gas. While most of the natural gas in the U.S. comes from oil drilling operations, the collapse in energy demand worldwide makes it even more difficult for producers who only pump gas because they have nothing else to fall back on.
When Will U.S. Shale Rebound To Pre-Pandemic Levels? – The rebalancing of the oil market has been possible, in part, due to the sharp cutbacks in U.S. shale production. But what happens next for the industry? The latest data from the EIA estimates that production plunged by a colossal 600,000 bpd in the week ending on June 12, a massive decline that puts output down more than 2.6 million barrels per day (mb/d) from the weekly peak hit in mid-March (to be sure, monthly EIA data shows the U.S. hit a slightly lower peak in November 2019).At the same time, the industry is bringing shuttered production back online. Reuters says that 500,000 bpd of shut-in production could be restored by the end of June. For instance, Devon Energy shut in about 10,000 bpd in recent weeks, but is “in the process of bringing all of that back on,” Devon Energy CEO David Hager said at a JPMorgan conference on Tuesday, according to Reuters. Analysts have varying perspectives on what happens next for shale drilling. According to Morgan Stanley, the industry will proceed in three phases. First, shut-in wells come back online. Then production stabilizes, but an average of $40 per barrel will be needed for that to occur. Finally, production growth resumes, assuming prices move back up to $50 per barrel. However, there is “little room for US production to grow this year or next,” Morgan Stanley cautioned, noting that if output began to rise, it would merely derail the oil price rally. The capex cuts announced to date should translate into production declines of 1.8-1.9 million barrels per day by the end of 2020, compared to the end of 2019. The bank said that the shale industry will need two years or so of WTI averaging at least $50 per barrel in order for shale output to rebound to pre-Covid 19 levels. “Some level of growth would likely come back quickly in the first year, and moderate thereafter without higher investment due to the reversal of temporary cost reductions, depletion of drilled-but-uncompleted (DUC) well inventory, and rising base declines,” the bank concluded. JBC Energy forecasts WTI averaging $40 per barrel for the rest of the year. “Under this assumption we see completed wells having reached their nadir of below 200 in May with a gradual recovery to 700 by the end of the year and 1,000 by end-2021,” the firm wrote in a note. If prices actually averaged between $45 and $50 per barrel, which would require better compliance from OPEC+ to their cuts, then it would be a “turning point” for U.S. shale, the firm argued. Shale output would reach an “inflection point” in November 2020, and see a “swift recovery thereafter,” JBC said. A year later, U.S. shale output would be back to pre-pandemic levels.
Trump administration takes Keystone dispute to Supreme Court (AP) – The Trump administration has asked the U.S. Supreme Court to revive a permit program that would allow the disputed Keystone XL pipeline and other new oil and gas pipelines to cross waterways with little review. Earlier this year, a Montana judge suspended the U.S. Army Corps of Engineers’ permit program when environmental groups seeking to block construction of the Keystone XL oil pipeline argued the permit process allows companies to skirt responsibility for damage done to water bodies. The permit program, known as Nationwide Permit 12, allows pipelines to be built across streams and wetlands with minimal review if they meet certain criteria. Canadian company TC Energy needs the permit to build the long-disputed pipeline from Canada across U.S. rivers and streams. Industry representatives said U.S. District Judge Brian Morris’ ruling blocking the program could also delay more than 70 pipeline projects across the U.S. and add as much as $2 billion in costs. Morris ruled that Army Corps officials in 2017 improperly reauthorized the program, which he said could harm protected wildlife and wildlife habitat. Last month, the 9th U.S. Circuit Court of Appeals denied an emergency request to block Morris’ ruling filed by the U.S. government, states and industry groups. On Monday, U.S. Solicitor General Noel Francisco asked the Supreme Court to do what the 9th Circuit court wouldn’t: block Morris’ ruling and let the permit program operate again while the lawsuit plays out in court.
Pipeline leaks nearly 34,000 gallons of brine near New Town (AP) – A pipeline leak caused nearly 34,000 gallons of brine to spill out near New Town, the North Dakota Oil and Gas Division said Monday. Officials said cleanup began on Sunday, when about half of the liquid was recovered on the BNN North Dakota, LLC tank battery. Brine is a byproduct of oil production. A state inspector has been sent to the location and will monitor cleanup.
More than 30,000 gallons of brine spilled in Mountrail County – An estimated 33,600 gallons of produced water spilled Sunday, June 14, at a saltwater disposal well in Mountrail County, N.D., according to a news release from the state Department of Environmental Quality.Produced water, or brine, is a mixture of saltwater, oil and sometimes drilling fluids that is created during oil and gas production.BNN North Dakota reported the spill about 13 miles north of New Town occurred due to a pipeline leak. By the time the spill was reported, about half of the brine had been recovered. Department officials will continue inspecting the site and monitoring remediation efforts, according to the release.
In Victory for Blackfeet Nation, Appeals Court Upholds Protection of Sacred Badger-Two Medicine | Earthjustice – Today, a federal appeals court in Washington, D.C., upheld the cancellation of the last remaining federal oil and gas lease in Montana’s Badger-Two Medicine region adjacent to Glacier National Park. The historic decision protects lands and waters sacred to the Blackfeet and critical for wildlife habitat. The 6,200-acre lease, held by Louisiana-based Solenex LLC, was one of many issued by the federal government in the early 1980s. Since then, with the leases under suspension for environmental and cultural review, other companies voluntarily retired all holdings in the Badger-Two Medicine, noting the area’s rich natural and cultural values. Solenex, however, filed a 2013 lawsuit demanding the right to begin drilling in the Badger-Two Medicine backcountry. In March 2016, federal officials responded to that Solenex demands by canceling the company’s holding, saying the lease had been improperly issued in violation of environmental law and without required tribal consultation. Solenex again sued, seeking to overturn that decision, and a federal district court ruled for the company in September 2018, reinstating Solenex’s lease. But today the U.S. Court of Appeals for the D.C. Circuit reversed that ruling, and restored the cancellation of the Solenex lease. In their ruling, the Appeals Court judges fully vacated the lower court’s judgment, writing that: “The district court erred when it entered summary judgment in Solenex’s favor,” and noted that the basis for the earlier judgement was flawed.
Canada – Trans Mountain pipeline temporarily shut down over oil spill – The Trans Mountain pipeline in Canada’s Abbotsford (British Columbia) temporarily suspended its operation over an oil spill, the operating company said in a statement. “On early morning Saturday, the control center received an emergency signal. The pipeline was shut down immediately, the workers were dispatched to investigate,” the statement said. Currently, the spill is localized, decontamination is in progress. There is no threat for people living nearby, the statement notes. The pipeline transports oil products from the Alberta province to the British Columbia.
Trans Mountain Pipeline Spills up to 50,000 Gallons of Oil on Indigenous Land in BC – Canada’s Trans Mountain pipeline spilled as many as 190,000 liters (approximately 50,193 gallons) of crude oil in Abbotsford, British Columbia (BC) Saturday, reinforcing concerns about the safety of the pipeline’s planned expansion. Chief Dalton Silver of the Sumas First Nation told CTV News that the spill occurred on his reserve on fields over an aquifer that supplies his nation with drinking water. It marks the fourth time in 15 years that the pipeline has spilled on his community’s land. “We cannot continue to have our land desecrated by oil spills,” he said in a statement issued by the Union of British Columbia Indian Chiefs (UBCIC) Sunday. The spill occurred early Saturday morning at the pipeline’s Sumas Pump Station, Trans Mountain told CBC News. The company said no construction work related to the pipeline’s expansion was being done at the time of the spill. Instead, the spill appeared to have been connected to a fitting on a smaller piece of pipe attached to the main line, the company said in a statement. “The cause of the incident is under investigation and that will continue,” company spokesperson Ali Hounsell told CTV News. “At this time, it’s believed to be a failure of a small-diametre, one-inch piece of pipe.” The company estimated that between 940 to 1,195 barrels (or 150,000 to 190,000 liters) was released and fully contained. “Clean-up is well underway with trucks and crews working around the clock,” the company said in a Sunday afternoon statement. “The free-standing oil has been recovered and is being transported to an approved facility for disposal. The site has permanent groundwater monitoring in place and air monitoring continues. Monitoring has not identified any risk to the public or community.” The pipeline was initially shut off in response to the spill, but restarted around 2 p.m. local time Sunday. The company said it was working with local authorities and Indigenous communities on the clean-up, but Silver told CityNews 1130 he had not received timely, accurate updates about the amount spilled or the company’s restarting plans. “That they’re up and running Sunday afternoon, my sister just read that to me off her phone. That was the first I heard of it, so there you go with the openness and transparency,” Silver said. “I would really rather hear it from those at the incident command post.”
Trans Mountain pipeline to resume operations after oil spill — The Trans Mountain pipeline in British Columbia resumed operation on Sunday after an oil spill occurred over the weekend. Workers from the state-owned pipeline responded to the spill at the Sumas Pump Station in Abbotsford, B.C., after an alarm went off at the pipeline control center early Saturday, the company said in a release posted on its website. The pipeline was restarted at about 2 p.m. local time on Sunday. The cleanup is taking place after 940 to 1,195 barrels of light crude were released and contained at the station. The company continues to work with local authorities, indigenous groups in the area and regulators, it said in the statement. The Trans Mountain pipeline carries about 300,000 barrels a day of crude oil and some fuels from Alberta to the Vancouver area, where it connects to a marine export terminal as well as to another line that supplies refineries in Washington state. The incident is related to a small, 1-inch diameter piece of pipe connected to the mainline, the company said. Trans Mountain has initiated an investigation, adding that “monitoring has not identified any risk to the public or community.” It comes at a sensitive time for Trans Mountain, as work on a planned expansion is under way amid fierce opposition from some residents of British Columbia, including indigenous communities, who say the pipeline is a threat to the environment. Canada’s federal government purchased the pipeline two years ago from Kinder Morgan Inc. after the company threatened to pull the plug on a planned expansion after years of regulatory and legal challenges.
Pirates Threaten Oil Operations In Gulf Of Mexico – The U.S. State Department warns of increased pirate activity in the southern Gulf of Mexico. According to a report from January 2019, there was a 310-percent increase in pirate activity in the southern Gulf of Mexico over the three years to end-2018. “Armed criminal groups have been known to target and rob commercial vessels, oil platforms, and offshore supply vessels in the Bay of Campeche area in the southern Gulf of Mexico,” the State Department said in an updated travel advisory as quoted by Reuters.There has been pirate activity in the Bay of Campeche for years, with the criminals posing as fishermen and attempting to board offshore platforms and vessels in the Gulf, according to reports in Mexican media. They were a headache for Mexico’s Pemex as they targeted its platforms, on several occasions succeeding in stealing things like pipes, electrical wiring, copper, and various equipment, as well as cash. According to a report from January 2019, there was a 310-percent increase in pirate activity in the southern Gulf of Mexico over the three years to end-2018, from 48 attacks in 2016 to as many as 197 in 2018.Witnesses said the pirates travelled in fast boats, boarded platforms, and threatened crews with guns before stealing whatever happened to be of value, from drilling equipment to screws. But, according to Mexico’s President, they also stole crude oil straight from the platforms. This oil theft, according to an October 2019 report, cost Pemex as much as $1 billion annually. Oil theft is not uncommon in Mexico, with most of it linked to local cartels using the services of crooked Pemex employees. Yet most of this theft takes place on land: over just two months in 2018, criminals drilled almost 2,300 illegal taps into Pemex pipelines in Mexico. According to Pemex’s own estimates, the losses from fuel theft over the past three years have reached $7.5 billion (147 billion Mexican pesos). A lot of the theft is conducted by gangs who are quick to resort to violence as they fight among themselves for greater access to state fuels and also engage in extortion of oil workers.
Specialists from Norway will participate in eliminating oil spill near Norilsk – Specialists from Norway will arrive at the site of liquidation of the fuel spill at a thermoelectric power plant in Norilsk. They will evaluate the work done at the emergency site and make their own suggestions for improving the situation, Nornickel First Vice President and Chief Operating Officer Sergey Dyachenko told reporters. “Three specialists will come from Norway. They would have been ready to sent a large team, but we agreed that they must first do reconnaissance at the site, see what they can really offer. We will discuss this situation and then determine the amount of aid,” Dyachenko said. According to him, arrival of foreign experts is complicated by the situation with the spread of coronavirus in the world, but they will arrive in a few days. Governor of the Krasnoyarsk Region Alexander Uss said earlier that the critical phase of eliminating the effects of the fuel spill at a thermoelectric power plant in Norilsk is over and the situation is under control. “The emergency group is large, some 700 people. There are specialists from the Emergencies Ministry and our own rescue service. The company’s own efforts play a major role. It has both specialists and financial resources. I won’t be wrong if I say that the most critical moment in eliminating the emergency is in the past already,” Uss said. The loss of containment of the diesel fuel tank occurred on the territory of the combined heat and power plant CHPP-3 in Norilsk on May 29. About 21,000 tonnes of fuel were spilled in total on the area of 180,000 square meters of soil and penetrated water objects, causing pollution and damage to the environment. According to the crisis management center more than 30,600 cubic meters of oil and water mixture has been skimmed. More than 84,000 tonnes of soil has been taken to the thermoelectric plant’s industrial dump. The area treated with sorbents has grown to 63,100 square meters. A force of 705 specialists and 303 vehicles are involved in eliminating the effects of the oil spill.
Oil spill taints Kremlin plan to sell euro 4bn of green bonds – Russia’s state development bank wants to start turning the world’s biggest energy exporter into a hub for green finance days after a 17,500-tonne diesel spill in the nation’s far north. VEB, which has been used in the past to help finance President Vladimir Putin’s infrastructure projects, plans to set up guidelines for green bonds by the end of the summer. The lender aims to help companies raise about 300bn rubbles (almost euro 4bn) for environmental projects, deputy chair Alexei Miroshnichenko said. Global green bond issuance grew by nearly 50pc to $271bn (euro 240bn) in 2019 and the movement has been embraced by other emerging markets. Russia’s bid follows years of foot-dragging from the Kremlin about climate change and a 17,500-tonne diesel spill at a power plant owned by MMC Norilsk Nickel PJSC in the Arctic last week. “In theory, it’s a tremendous opportunity for many Russian issuers to diversify their investor base,” said Sergey Dergachev, a money manager at Union Investment Privatfonds in Frankfurt. “But at the moment, especially for metals and mining companies, potential green bond issuance might be tougher to accomplish.” Green finance should provide a channel for Russia to raise money to help with a much-needed transition away from a heavy dependence on fossil fuels. But the leadership of the world’s fifth-biggest greenhouse-gas emitter has shown scant commitment to tackling climate change. A low-carbon development plan published in March envisages a small increase in emissions on current levels. Investigators said that the unit of Nornickel had broken safety rules, resulting in the fuel spill, which threatens extinction for many fish, birds and mammals unique to Siberia’s Taimyr Peninsula. Nornickel, which has pledged to fully fund the clean-up, has suggested the catastrophe may have been caused by climate change that led to permafrost melting.
BP to write down up to $17.5 billion in second quarter, lowers oil price expectations to 2050 – Energy giant BP announced Monday it had lowered its oil price expectations through to 2050, saying the aftermath of the coronavirus pandemic was likely to accelerate the transition to a lower carbon economy and energy system. The U.K.-headquartered oil and gas company said it had been reviewing its portfolio and capital development plans as part of its ambition to become a net-zero company by 2050 or sooner. It now expects international benchmark Brent crude futures to average around $55 a barrel from 2021 through to 2050, with Henry Hub gas prices forecast to average $2.90 over the same period. Henry Hub is a natural gas pipeline located in Louisianna and serves as the official delivery location for futures contracts on the New York Mercantile Exchange. BP’s forecasts for Brent futures and Henry Hub gas prices are down roughly 27% and 31%, respectively, when compared to those cited in the group’s annual report at the end of 2019. As a result of its long-term strategic planning and continued focus on capital discipline, BP said it expected to incur non-cash impairment charges and write-offs in the second quarter, estimated to be in an aggregate range of $13 billion to $17.5 billion after tax. The company said it was unable to precisely determine the impact of the revised impairment testing price assumptions on the group’s financial statements. Instead, further information would be provided in the firm’s second-quarter results, which are expected to be released on August 4. Shares of BP dipped around 4% during early morning deals. Brent crude futures traded at $38.11 a barrel on Monday morning, around 1.6% lower, while U.S. West Texas Intermediate crude futures stood at $35.20, down almost 3%. Earlier this month, BP said it would cut 10,000 jobs from the current 70,100 in response to the coronavirus crisis, with the majority of those affected leaving by the end of this year.
Exxon Forced To Curtail Production In Guyana – Exxon has reduced its crude oil production at the Liza offshore field in Guyana due to the risk of excessive flaring, according to the South American country’s regulator, as quoted by Reuters. Gas flaring has been a problem at the Liza field, prompting an environmentalist group to call on the supermajor in May to stop flaring as the emissions this caused exceeded the country’s total emissions produced over three months, according to Guyanese daily Stabroek News. “Flaring of 9 billion cubic feet of natural gas is more Co2 emissions than what the whole of Guyana would have used in three months – the entire country,” the president of the organization – the Center for International Environmental Law – told the daily. The same publication reported in May that Exxon had assured the Guyanese environmental protection agency it will stop flaring after those 2 billion cubic meters, which were flared at the startup phase of the Liza project. Instead, the company said, it will reinject the gas into the well. Now it seems there have been problems with the gas reinjection equipment, according to the Reuters report, which has prompted a production cut to 25,000 to 30,000 bpd last week. This is down from 75,000 to 80,000 bpd a month earlier. The June average was planned to be raised to 120,000 bpd, although how good an idea production growth would have been in the current price situation is an open question. During the second phase of development of the Liza discovery, production should rise to 220,000 bpd. By 2025, total production from the Stabroek Block, according to Exxon, should be some 750,000 bpd, according to pre-crisis plans.
Nigeria- Shell still failing to clean up pollution in Niger Delta – Nearly ten years after the UN called for a major clean-up of areas of the Niger Delta polluted by the oil giant Shell and other oil companies, decontamination work has begun on only 11% of planned sites while vast areas remain heavily contaminated, according to a new investigation by four NGOs published today.The findings come ahead of a UK Supreme Court hearing next week (23 June) in which arguments will be presented on behalf of more than 40,000 people from the Niger Delta’s Ogale and Bille communities that years of oil spills from pipelines owned and operated by Shell have caused them severe harm. Royal Dutch Shell is domiciled in London and should be legally responsible for the environmental failures of its subsidiary company, the Shell Petroleum Development Company of Nigeria. The one-day hearing is being heard via video link and will be live-streamed. In 2011, the UN Environment Programme documented the devastating long-term impact of the oil industry in Nigeria’s Ogoniland, setting out urgent recommendations for a clean-up. However, the systematic failure of oil companies and the Nigerian government to clean up has left hundreds of thousands of Ogoni people facing serious health risks, struggling to access safe drinking water and unable to earn a living. The new investigation – carried out by Amnesty International, Environmental Rights Action/Friends of the Earth Nigeria, Friends of the Earth Europe, and Milieudefensie – shows that clean-up work has begun on only 11% of polluted sites identified by the UN, with only a further 5% included in current clean-up efforts, while no site has been entirely decontaminated. The investigation comes as Shell is facing a series of European court battles over its business operations in Nigeria. Osai Ojigho, Amnesty International Nigeria, said: “The discovery of oil in Ogoniland has brought huge suffering for its people. Over many years, we have documented how Shell has failed to clean up contamination from spills and it’s a scandal that this has not yet happened. The pollution is leading to serious human rights impacts – on people’s health and ability to access food and clean water. Shell must not get away with this – we will continue to fight until every last trace of oil is removed from Ogoniland.” Godwin Ojo, Environmental Rights Action/Friends of the Earth Nigeria, said: “After nine years of promises without proper action and decades of pollution, the people of Ogoniland are not only sick of dirty drinking water, oil-contaminated fish and toxic fumes. They are sick of waiting for justice, they are dying by the day. The Nigerian government should acknowledge this project has been a failure and reinvigorate HYPREP with technical skills and strategic thinking, fully involving the community.”
OPEC+ delivers 85% compliance on oil output cuts in May – OPEC and its allies slashed almost one-fifth of their crude oil production in May, the first month of their landmark supply accord, according to the latest S&P Global Platts survey of the group’s output. Prodded by the coronavirus pandemic and oil market meltdown to implement an unprecedented 9.7 million b/d in collective cuts, the 23-country OPEC+ coalition mostly delivered. OPEC’s 13 members dropped their output to 24.32 million b/d, for a compliance rate of 82% with their prescribed cuts, the survey found. Russia and nine other partners performed better, pumping a combined 13.89 million b/d and making 91% of their cuts, bringing the whole OPEC+ group’s collective compliance to 85%, according to Platts calculations. The supply curbs are scheduled to run through July, the OPEC+ alliance announced at its June 6 meeting, as the bloc seeks to speed the market’s recovery from the pandemic. The compliance figures are being closely monitored by OPEC+ members, who agreed that any shortfalls in May and June compliance would be made whole with extra production cuts this summer. OPEC members Iraq, Nigeria and Angola, along with non-OPEC participant Kazakhstan have already been publicly called out by their counterparts for their overproduction. Iraq, whose history of quota flouting has long been a sore spot among the coalition, pumped 4.19 million b/d in May, nearly 600,000 b/d above its cap, making it the worst offender by far, the Platts survey found. Nigeria, also frequently out of compliance, produced nearly 300,000 b/d in excess of its quota, while Angola was 90,000 b/d above its target and Kazakhstan was 161,000 b/d over, according to the Platts figures. Ministers from all four countries have declared their allegiance to the OPEC+ agreement and pledged to improve their performance going forward.
UAE says low oil price unsustaible, warns of shocks – UAE Energy Minister Suheil al-Mazrouei said on Monday current low oil and gas prices are unsustainable and warned that if they last longer, it could lead to energy shocks. Mazrouei said that “very good signs” of rising demand for oil have been seen in China and India, two of the world’s biggest crude consumers, and to some degree in Europe. “This environment of low oil and gas prices, I don’t think it’s sustainable,” the minister said in a virtual interview hosted by the US-UAE Business Council. Mazrouei said that if low oil prices persist for a long period, some of the current high-cost producers will drop out leaving a supply gap, pushing prices higher. “We need someone to fill in that gap, otherwise we are going to have shocks in… prices and the last thing we want is to have shocks,” he said. “We need to have stability and to have a reasonable and fair price.”
Oil prices drop as rising U.S. coronavirus cases stoke fears of weak fuel demand – Oil fell more than 2% on Monday, extending losses from last week, as new coronavirus infections hit China and the United States, raising the prospect that renewed outbreaks of the virus could weigh on the recovery of fuel demand. Brent crude futures fell 89 cents, or 2.3%, to $37.84 a barrel by 0302 GMT, while U.S. West Texas Intermediate crude futures were down $1.18, or 3.3%, to $35.08 a barrel. A cluster of infections in Beijing has increased concern of a resurgence of the disease. The coronavirus pandemic started at the end of last year in the Chinese city of Wuhan. The oil benchmarks fell about 8% last week, their first weekly declines since April, as U.S. coronavirus cases started increasing. Over the weekend, more than 25,000 new U.S. cases were reported on Saturday alone as more states reported record new infections and hospitalizations. “The recovery in oil demand is already set to be a lengthy process, and a fresh wave of cases will certainly raise worries that a recovery in demand may take even longer than initially thought,” ING Economics said in a note. Industrial output in China, the world’s biggest crude oil importer, rose for a second consecutive month in May but the rise was smaller than expected, suggesting the world’s second-biggest economy is struggling to get back on track after containing the coronavirus. The country’s refineries increased their throughput in May by 8.2% more than the same period a year ago to about 13.6 million barrels per day (bpd), government data showed. An OPEC-led monitoring panel will meet on Thursday to discuss ongoing record production cuts and see whether countries have delivered their share of the reductions, but will not make any decision, according to five OPEC+ sources. Iraq, one of the laggards in complying with the curbs, agreed with its major oil companies to cut crude production further in June, Iraqi officials working at the fields told Reuters on Sunday. The country’s oil minister later said it would export an average of 2.8 million bpd in June.
IEA sees largest drop of oil demand in history this year, before biggest-ever one-year jump in 2021 – The International Energy Agency said on Tuesday that it expects the fall in oil demand this year to be the largest in history, but believes there are signs the market could reach “a more stable footing” over the coming months. International benchmark Brent crude futures traded at $40.53 on Tuesday afternoon, more than 2% higher, while U.S. West Texas Intermediate futures stood at $37.81, up around 1.8%. Oil prices have tumbled around 40% year-to-date, as lockdown measures designed to slow the spread of the coronavirus created an unparalleled demand shock in energy markets. The IEA said oil demand in the second quarter, which saw the greatest impact from lockdown measures, was 17.8 million barrels per day lower when compared to the same period last year. That level of demand reduction was slightly less than the group had previously expected, although still unprecedented. In its closely-watched oil market report, the Paris-based energy agency said on Tuesday that demand was expected to fall by 8.1 million barrels per day in 2020, before growing by 5.7 million barrels per day in 2021. It means the expected drop in oil demand this year amounts to the largest in history, the IEA said, with the demand rise in 2021 forecast to be the largest one-year jump ever recorded “as activity begins to return to normal across vast swathes of the economy.” Meanwhile, the IEA’s forecast for oil demand in 2020 is 91.7 million barrels per day, nearly 500,000 barrels higher per day than it expected in May, due to stronger-than-anticipated deliveries during the coronavirus lockdown. “If recent trends in production are maintained and demand does recover, the market will be on a more stable footing by the end of the second half. However, we should not underestimate the enormous uncertainties,” the group added. IEA Executive Director Fatih Birol told CNBC’s “Street Signs Europe” on Tuesday that a modest oil market recovery was being driven by three factors: China’s strong exit from lockdown measures; a “very good” compliance among OPEC+ members; and the decline of production in the U.S., Canada and other G-20 countries. “All these three things coming together tells us that the gradual recovery of the oil market continues,” he added.
Lower For Longer: A Nightmare Scenario For Oil Producers — It has been a busy few days for oil price spotters: first BP revised down its long-term oil price projection to $55 per barrel of Brent crude, and then the U.S. Energy Information Administration said it expected Brent to average $37 a barrel in the second half of this year and $48 a barrel in 2021. That is just bad news for the long term and bad news for the short term.It is worth noting early on that every oil price projection is nothing more than a prediction. Nobody knows where oil prices will be in a year, let alone in three decades. BP’s CEO himself has made a point of noting that in several interviews. Nevertheless, oil price projections are still being made, based on current demand and supply patterns and expectations of how these patterns will change over a certain time. And if these latest projections materialize, high-cost producers have much work ahead of them.The supply and demand pattern for oil in 2019, according to BP, was not particularly optimistic. That was before the oil price war in March and the pandemic that led to a collapse in demand. Last year, BP said, oil consumption globally grew by just 900,000 bpd. Supply, on the other hand, fell by a modest 60,000 bpd because – and this is important – strong growth in production in the United States offset the more than 2-million-bpd output decline in OPEC.That U.S. shale threw a wrench in the works of OPEC is a fact. It has captured a lot of higher demand over the past few years at the expense of OPEC members, most of whom depend on their oil revenues to break even fiscally. In fact, according to data cited by Reuters’ John Kemp, U.S. producers have captured most of that new demand.U.S. oil production, Kemp noted, has been growing a lot faster than consumption. “As a result, U.S. oil producers have captured between two-thirds and three-quarters of all the growth in global oil consumption over the last ten years, leaving little for other countries.” But U.S. shale is now in shambles because of the double shock from the Saudi-Russian price war and the coronavirus pandemic. Banks are growing increasingly unwilling to lend on a reserve-backed basis as they fear losses, and instead are cutting shale producers’ access to much-needed cash, the Wall Street Journal reported earlier this week. Bankruptcies are mounting, with the latest victim of the crisis none other than Chesapeake, one of the shale pioneers and biggest independent players in that field.
Oil prices rise as Wall Street rallies, demand improves – (Reuters) – Oil prices rose 3% in volatile trade on Tuesday as Wall Street surged and the International Energy Agency (IEA) increased its oil demand forecast for 2020, but gains were capped by worries about a second wave of coronavirus cases. Brent crude futures LCOc1 ended the session up $1.24, or 3.1%, at $40.96 a barrel while U.S. West Texas Intermediate crude (WTI) CLc1 rose $1.26, or 3.4% to settle at $38.38 a barrel. Oil gave up some gains in post-settlement trade after U.S. crude inventories rose by 3.9 million barrels last week, according to industry group the American Petroleum Institute, compared with analysts’ expectations for 152,000-barrel draw. Government data will be released on Wednesday. The market was bolstered earlier when Wall Street opened higher after a record increase in May retail sales revived hopes of a swift post-pandemic economic rebound, with sentiment also lifted by data showing reduced COVID-19 death rates in a trial of a generic steroid drug. In its monthly report, the IEA forecast oil demand at 91.7 million barrels per day (bpd) in 2020, 500,000 bpd higher than its estimate in May’s report, citing higher than expected consumption during coronavirus lockdowns. Still, the agency said a fall in flying because of the virus outbreak meant the world would not return to pre-pandemic demand levels before 2022.
Oil jumps 3% on supply cuts, improving demand — Oil prices rose on Tuesday, with Brent crude rising above $40 a barrel, as the IEA increased its oil demand forecast for 2020 and as record supply cuts supported. Brent crude rose $1.20, or 3%, to trade at $40.92 per barrel. West Texas Intermediate crude settled $1.26, or 3.39%, higher at $38.38 per barrel. In its monthly report on Tuesday, the International Energy Agency (IEA) forecast oil demand at 91.7 million barrels per day in 2020, 500,000 bpd higher than its estimate in May’s report, citing higher than expected consumption during the lockdowns. But the agency warned that a fall in flying due to the coronavirus means the world will not return to pre-pandemic demand levels before 2022. Oil supplies in May, the IEA said, plunged by nearly 12 million bpd, with the Organization of the Petroleum Exporting Countries and its allies including Russia – a grouping known as OPEC+ – reducing their output by 9.4 million bpd. This means OPEC+ hit 89% compliance with their agreed cuts in May, the IEA said. OPEC+, agreed this month to extend production cuts of 9.7 million barrels per day through July. They also called on members that have not been complying to make up their commitments with extra cuts later. Iraq, which had one of the worst compliance rates among the major producers, has already made deep cuts to its crude supplies to Asia in July. Elsewhere U.S. shale producers are also cutting back on drilling amid the collapse in demand for oil. Production from seven major U.S. shale formations is likely to drop to close to a two-year low of 7.63 million barrels per day by July, the U.S. Energy Information Administration said on Monday. But concerns about a second wave of lockdowns from rising infection rates weighed on the market. Coronavirus cases rose to more than 8 million worldwide by Monday, with infections surging in Latin America, while the United States and China are dealing with fresh outbreaks. “If the world treats a second COVID-19 wave like in the first half of the year, then we are in for a demand reduction that was not in the initial planning,”
Oil falls on rise in U.S. crude stocks, virus resurgence fears – Oil prices fell on Wednesday as data showed an increase in U.S. crude and fuel inventories, raising the prospect of oversupply as a potential second wave of the coronavirus pandemic threatened to halt any recovery of demand. Brent crude futures were down 89 cents, or 2.2%, at $40.07 a barrel as of 0348 GMT, and U.S. West Texas Intermediate (WTI) futures fell $1.13, or 2.9%, to $37.25 a barrel. Both benchmarks rose more than 3% on Tuesday, after the International Energy Agency (IEA) raised its 2020 oil demand forecast to 91.7 million barrels per day (bpd) and U.S. retail sales posted a record jump in May. The rise in U.S. crude and fuel inventories, however, stoked concerns about a surplus and pressured oil prices, as the number of coronavirus infections surpassed 8 million globally and several U.S. states saw their case numbers spike. “API data showed a build in crude inventories, and rising new coronavirus cases in the United States and China have dampened expectations of improving fuel demand in the world’s top two oil consumers,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul. U.S. crude oil inventories rose by 3.9 million barrels in the week to June 12 to 543.2 million barrels, according to data from industry group the American Petroleum Institute, countering expectations for a fall of 152,000 barrels. Gasoline stocks rose by 4.3 million barrels and distillate fuels, which include diesel and heating oil, rose 919,000 barrels. Official data from the U.S. Department of Energy’s Energy Information Administration is due later on Wednesday. An OPEC-led panel will meet on Thursday to further discuss ways to strengthen and review compliance with producers’ commitment to curb oil output. Iraq reduced its oil exports by 8%, or 300,000 bpd, so far in June, indicating OPEC’s second-largest producer is stepping up efforts to adhere to its pledged cut.
OPEC sees gradual oil demand recovery, makes 84% of cuts in May – (Reuters) – OPEC forecast on Wednesday a gradual recovery in global demand for oil, which has been hammered by the coronavirus crisis, and said record supply cuts by producers were already helping to rebalance the market. In a monthly report, the Organization of the Petroleum Exporting Countries said demand would decline by 6.4 million barrels per day (bpd) in the second half of 2020, less than the drop of 11.9 million bpd in the first six months of the year. Oil prices collapsed as government lockdowns to limit the spread of the virus curtailed travel and economic activity. While some places in Europe and Asia have eased restrictions, concern over new virus outbreaks has kept a lid on prices. To tackle the drop in demand, OPEC and its allies agreed to a record supply cut that started on May 1, while the United States and other nations said they would pump less. OPEC said these curbs were already helping. “The oil market was strongly supported by a reduction of the global crude oil surplus, thanks mainly to the historic voluntary production adjustment agreement,” OPEC said, adding it saw a “gradual recovery” in demand until the end of the year. A technical committee of OPEC and its allies, known as OPEC+, and an OPEC+ ministerial panel are meeting on Wednesday and Thursday to review the supply cut’s impact on the market. Brent crude LCOc1 was trading above $40 a barrel after the report’s release and is up from a 21-year low below $16 reached in April. In the report, OPEC did not further reduce its forecast for world oil demand in 2020, after steep cuts in earlier months. Still, downside risks remain for consumption in top consumer the United States, OPEC said.
OPEC Sticks to Global Oil-Demand Forecast Despite Signs of Rebound – WSJ – The global oil market is slowly starting to rebalance thanks to production cuts and relaxing coronavirus lockdowns, but the industry is still swimming in excess supply, the Organization of the Petroleum Exporting Countries said Wednesday. In its widely scrutinized monthly report, OPEC left unchanged its forecasts that the world’s demand for crude will fall by 9.1 million barrels a day in 2020 and plunge by 17.3 million barrels a day in the second quarter. “Following an unprecedented and highly turbulent [first half of 2020] due to the enormous impact of COVID-19 on the global economy and oil market fundamentals, the dust is starting to settle,” the cartel said in its report. The lifting of pandemic-motivated restrictions and monetary stimulus potentially amounting to a quarter of global gross domestic product will allow global growth to rebound in the second half of the year, and the oil sector with it, OPEC said. Oil prices swung between gains and losses Wednesday, with international benchmark Brent crude futures ending the day down 0.6% at $40.71 a barrel. U.S. crude fell 1.1% to $37.96 a barrel. But a return to the fundamentals of the pre-Covid-19 oil market is still some way off, with air travel and manufacturing likely to remain subdued through the rest of 2020, limiting demand for oil products such as jet fuel and diesel. The cartel echoed the International Energy Agency’s monthly report Tuesday in highlighting a sharp decline in refining margins. With refiners groaning under the weight of refined inventory, the world also has an enormous surplus of crude oil, with stocks in the developed world climbing 141 million barrels above the five-year average in April. Still, the cartel cited lower supply from the “OPEC plus” group of producers, as well as a forecast 3.8 million-barrel-a-day decline from North American producers in the second half of the year, as contributing to the forecast stabilization of markets.
Oil gains 2% on OPEC+ output cut compliance Oil prices rose on Thursday as a panel of OPEC and its allies met to review record oil supply cuts, even as the market remained concerned about additional coronavirus cases reported in parts of the United States and China. Brent crude futures were up 78 cents at $41.48 a barrel and West Texas Intermediate crude futures gained 88 cents, or 2.32%, to settle at $38.84 per barrel. “You’re going to see more OPEC compliance,” said Phil Flynn, senior oil analyst at Price Futures Group in Chicago. “I think we’d be a lot higher if it weren’t for these coronavirus fears.” An OPEC+ ministerial panel met on Thursday to review record oil supply cuts and plans by countries such as Iraq and Kazakhstan to improve compliance with quotas to support oil prices battered as demand plunged by up to a third during the pandemic. The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, have been cutting output by a record 9.7 million barrels per day (bpd) or 10% of global supply since May 1. Thursday’s discussion was unlikely to recommend an extension of record cuts into August, sources said. OPEC+ compliance with production cut commitments in May was 87%, two OPEC+ sources said on Wednesday. Worries about fuel demand rose after a surge in coronavirus cases led Beijing to cancel flights and shut schools while several U.S. states, including Texas, Florida and California, reported sharp increases in new cases. A second straight weekly rise in U.S. crude stockpiles to a record high also weighed on sentiment, but U.S. government data showed lower inventories of gasoline and distillates, indicating higher demand. OPEC warned in a monthly report that the market would remain in surplus in the second half even as demand improves, saying it now expects supply from outside the group to be about 300,000 bpd higher than previously thought.
Oil prices inch up on faith in supply cuts, demand recovery -Oil prices pushed higher in early trade on Friday, building on gains in the previous session, after OPEC producers and allies promised to meet their supply cut commitments and two major oil traders said demand was recovering well. U.S. West Texas Intermediate (WTI) crude futures climbed 14 cents, or 0.4%, to $38.98 a barrel at 0101 GMT, while Brent crude futures crawled up 7 cents, or 0.2%, to $41.58 a barrel. Both contracts rose around 2% on Thursday. Plans by Iraq and Kazakhstan to compensate for overproduction in May on their supply cut commitments supported the market. The promises came out of a meeting by a panel monitoring compliance by the Organization of Petroleum Exporting Countries and its allies, a grouping called OPEC+. If the laggard producers do compensate over the next three months for their overproduction, that will effectively take extra barrels out of the market, even if OPEC+ does not extend its record 9.7 million barrels per day supply cut beyond July. Comments from global oil traders Vitol and Trafigura on a rebound in oil demand in June, reported by Bloomberg, also buoyed the market, ANZ Research said. Trading volumes on Friday, however, were thin, which pointed to a lack of conviction behind any big push higher, said CMC Markets chief strategist Michael McCarthy. On the technical side, he pointed to strong resistance in the WTI contract between $40 and $41. Analysts see that level as the point at which more U.S. producers will revive shut-in wells.
Oil tallies a nearly 10% weekly gain as OPEC+ tightens reins on output cuts, global demand outlook improves – Oil futures on Friday settled higher for the session, with U.S. prices up nearly 10% for the week as OPEC members and allies tightened the reins on output cuts and some signs of improvement in the global economy brightened the outlook for energy demand. The Joint Ministerial Monitoring Committee, or JMMC, which monitors compliance with OPEC output quotas, held a gathering Thursday via videoconference, saying Iraq and Kazakhstan have already submitted “compensations schedules,” to make up for falling short of their pledges to reduce output. Other “underperforming participants” will have until June 22 to submit their plans to compensate for production above their targeted levels. The OPEC+ decision “helped renew confidence that members will further cut production to comply with the 9.7 million [barrel per day] agreement,” said Paola Rodriguez Masiu, senior oil markets analyst at Rystad Energy. The cuts officially kicked in at the start of May and were extended to run through July. “The compliance level has already been higher than most of the market participants expected and it seems that a better level is achievable,” she said in emailed commentary. OPEC+ pegged compliance with the cuts at 87% in May. Complying with the full 9.7 million barrels per day in cuts “means shutting another million barrels of daily production,” said Masiu. “That’s not negligible and it is definitely a boost factor for prices.” West Texas Intermediate crude for July delivery, the U.S. benchmark, climbed 91 cents, or 2.3%, to settle at $39.75 a barrel on the New York Mercantile Exchange after tapping a high of $40.50. Front-month contract prices logged their highest finish since March 6, according to Dow Jones Market Data. For the week, they rose 9.6%. Global benchmark Brent oil for August delivery added 68 cents, or 1.6%, at $42.19 a barrel on ICE Futures Europe, for a weekly advance of 8.9%.
Saudi Aramco completes $69 billion Sabic deal, extends payment window amid oil hit Saudi Aramco completed the purchase of its 70% stake in the kingdom’s petrochemical giant Sabic from the Saudi Public Investment Fund, it announced Wednesday, tying the knot on one of the largest ever deals in the global chemicals industry. The state oil company also announced an extension of its $69.1 billion payment plan – to be in staggered instalments between 2020 and 2028, an increase of three years from the previous plan – as lower oil prices hit by the coronavirus pandemic take a toll on its earnings. Aramco’s net income dropped by 25% in the first quarter of 2020. The initial deal would have seen payment completed in 2021, but was first extended late last year to 2025. The fall in oil prices since the initial deal announcement means that Aramco will be paying the Public Investment Fund a premium of nearly 30% on Sabic’s current price. When the acquisition was first announced in March 2019, shares of Sabic were trading at 123.4 riyals ($32.89) apiece. They’re now trading at 89 riyals per share. Sabic will retain its listing on the Tadawul, the kingdom’s stock exchange, and will continue working within in its legal regulatory framework, the company said. The purchase was described as strategic on multiple fronts: to expand and diversify Aramco’s downstream refining capacity, and to bolster the PIF’s balance sheet to enable it to push ahead with ambitious investments meant to help diversify the Saudi economy in line with Crown Prince Mohammed bin Salman’s Vision 2030. The transaction “is consistent with Aramco’s long-term downstream strategy to grow its integrated refining and petrochemicals capacity, and create value from integration across the hydrocarbon chain,” Aramco and the PIF said in a joint press release issued Wednesday. Last year, Aramco and Sabic registered a combined petrochemicals production volume of almost 90 million tons, the statement said. The new funds for the PIF should help it in its drive to purchase large stakes in international companies, which it’s been doing voraciously as so many companies’ shares sell at dramatic discounts globally due to the pandemic and economic shutdowns.
UN Report Finds Missiles In Last Year’s Aramco Attack Came From Iran – It feels like ages ago, but will no doubt become front and center the next time Washington inches toward war with Iran as happened last January in the wake of the Qassem Soleimani assassination.The contents of a high level United Nations investigative report was leaked days ago, which details that last year’s (Sept. 14) major attack on Saudi Aramco facilities in the country’s east included missiles of “Iranian origin”.Tehran officials promptly slammed the report as only too “convenient” given it curiously comes at a sensitive and crucial moment “when the United States is working to draft a dangerous resolution to extend an arms embargo against Iran,” according to an official Iranian statement. And yet UN Secretary-General Antonio Guterres’ statements the Security Council still made some interesting qualifications which brings Washington’s “Iran ordered the attack” narrative into question: Some have design characteristics similar to those also produced by a commercial entity in Iran, or bear Farsi markings, Guterres said, and some were delivered to the country between February 2016 and April 2018.He said that “these items may have been transferred in a manner inconsistent” with a 2015 Security Council resolution that enshrines Tehran’s deal with world powers to prevent it from developing nuclear weapons. Iran slammed the UN findings as ultimately put together “under political pressure from the U.S. and Saudi regimes,” according to Iran’s rebuttal by the foreign ministry.Last week Iran began urging Russia and China to reject US efforts at persuading the Security Council to extend a UN arms embargo set to expire in October. The end of the embargo had been negotiated as part of the 2015 nuclear deal (JCOPA), which the Trump administration has since pulled out of.
Iran Defiantly Touts Domestic ‘New Generation Cruise Missiles’ In Naval Drills Near Gulf – Amid crushing US sanctions aimed at strangling its defense, aviation and nuclear development sectors, Iran is increasingly focused on ramping up high tech domestic missile defense production.Ultimately it hopes to showcase its domestic military wares to signal the West that sanctions aren’t working. In its latest test Iran’s Navy displayed the abilities of newly developed land-to-sea and sea-to-sea cruise missiles.The drills were conducted in the Sea of Oman and Indian Ocean this week, and involved live-fire tests against targets nearly 300km away, which Iranian media said were successful. Iranian state media hailed what it called “new-generation cruise missiles” which officials confirmed were “designed and developed by experts at home.””The coast-to-sea and sea-to-sea missiles were produced by experts at Iran’s Ministry of Defense in cooperation with the Navy,” PressTV described further. Iran published photos and videos showing that a “dummy” ship had been successfully destroyed at ranges of up to 280km away.
Secretive CIA Blade-Wielding ‘Ninja Bomb’ Used In Another Syria Targeted Killing – A suspected U.S. drone strike on Idlib’s city center on Sunday has killed two senior commander of al-Qaeda-affiliated Horas al-Din, Qassam al-Urduni and Bilal al-Sanani. The strike targeted the commanders’ SUV as it was passing on a road in the western part of Idlib city. The SUV, a silver Hyundai Santa Fe, was struck with what appears to be two U.S.-made AGM-114R9X Hellfire missile. The AGM-114R9X Hellfire, dubbed “Ninja Bomb,” is armed with a kinetic warhead with pop-out blades. The missile has been deployed in secret since 2017, with its existence revealed in 2019. The below shows the aftermath of the strike by the weapon developed by the CIA (Warning: Graphic).Pro-militant sources revealed that Qassam al-Urduni was the general military commander of Horas al-Din. Bilal al-Sanani, on the other hand, was the commander of the group’s al-Badiya [desert] Army. Both terrorists were Jordanian citizens.In December of last year, a U.S. drone strike killed Abu Khadija al-Urduniyi, a senior Jordanian commander of Horas al-Din in northern Idlib. Abu Khadija’s SUV was also struck with an AGM-114R9X Hellfire missile. #Syria: the military commander of Horas Al-Din was killed today by a US drone, firing the Hellfire “AGM-114R9X” missile already used in the past. Nicknamed “Ninja missile” it has a kinetic warhead with blades (with tremendous effect on ppl inside the car) & doesn’t use explosives pic.twitter.com/LDQkxbfMgU – QalaatM (@QalaatM) June 14, 2020 The Wall Street Journal previously described of the secretive cutting edge weapon: Both the Central Intelligence Agency and the Pentagon have used the weapon while closely guarding its existence. A modified version of the well-known Hellfire missile, the weapon carries an inert warhead. Instead of exploding, it is designed to plunge more than 100 pounds of metal through the tops of cars and buildings to kill its target without harming individuals and property close by. To the targeted person, it is as if a speeding anvil fell from the sky, the officials said. But this variant of the Hellfire missile, designated as the R9X, also comes equipped with a different kind of payload: a halo of six long blades that are stowed inside and then deploy through the skin of the missile seconds before impact to ensure that it shreds anything in its tracks.
Turkey Launches ‘Largest Ever’ Air & Ground Assault Into Northern Iraq – NATO-member Turkey has controversially initiated a major bombing campaign over northern Iraq targeting Kurdish armed groups, specifically the outlawed PKK which Ankara has long said uses Iraqi territory to conduct a cross-border insurgency.The military incursion also involves ground troops. On Tuesday evening the Turkish Defense Ministry announced the start of “Operation Tiger Claw” with the following statement: “In order to neutralize the elements of the ‘Kurdistan Workers Party’ (PKK) and other terrorist elements that threaten the security of our people and our borders, victory has reached the heroes of the commando units who are currently in the Haftanin area.”Iraq’s Ministry of Foreign Affairs – outraged at yet another violation of Iraqi sovereignty – promptly summoned the Turkish ambassador to Baghdad and lodged a memorandum of protest. The Erdogan government, meanwhile, has claimed it’s acting in ‘defense’ after PKK insurgents have launched repeat attacks from Iraqi and Syrian soil over the past years. Multiple reports suggest that this particular operation is unprecedented in its scale:Special forces were airlifted and deployed overland to the border region of Haftanin in the early hours of Wednesday for Operation Claw-Tiger. The campaign targeted 150 suspected Kurdistan Workers’ party (PKK) positions and was supported by jets, helicopters, drones and artillery, the Turkish defense ministry said.The ongoing airstrikes included attacks in and around Sinjar Mountain, where it must be remembered tens of thousands of members of the ethno-religious group, the Yazidis, took refuge from ISIS in 2014, after which a US military rescue mission ensued to protect the group. It’s yet another example of local US allies coming under NATO member Turkey’s bombs.
Turkish army launches ground attacks into Iraqi Kurdistan to target PKK — Amid growing international conflicts over Libya, the eastern Mediterranean Sea and Syria between great powers and regional powers, the Turkish Armed Forces have invaded Iraqi Kurdistan. They reportedly aim to destroy Kurdistan Workers’ Party (PKK) militias in Shingal in Nineveh province, and Makhmour, Qarachogh, Mount Qandil, Khuakurk, and Zap across the Kurdistan region. After launching airstrikes on regions of northern Iraq controlled by the Kurdistan Regional Government (KRG), code-named “Operation Claw-Eagle,” on early Monday, the Turkish Defense Ministry announced on Wednesday on Twitter that a new “Operation Claw-Tiger” has begun. Commando forces are already in Iraq’s Haftanin region, it said, “to neutralize the PKK and other terrorist elements that threaten the security of Turkish people and borders.” Yesterday, according to Turkey’s state-owned Anadolu Agency, “Turkish forces hit over 500 targets of the PKK” with F-16 jets, howitzers and multiple rockets. The Turkish invasion of Iraq comes after a series of operations against the PKK in Turkey and against its Syrian section, People’s Protection Units (YPG) in Syria, since the Trump administration green-lighted a Turkish offensive targeting YPG last October. The Turkish Interior Ministry claimed that there are only 438 PKK militants in Turkey now, and that this number was around 2,780 in 2016. This month, the government accused the PKK of killing six road construction workers in two separate attacks in Van and Şırnak with roadside bombs. After the Turkish airstrikes, Baghdad summoned Turkey’s ambassador to Iraq, Fatih Yıldız and gave him a formal memorandum, asserting that “the airstrikes contravene international law and principles of mutual respect,” according to Iraqi Kurdistan’s Rudaw agency. However, Iranian forces have carried out their own air strikes into Iraq simultaneously. Yesterday Iraqi Foreign Ministry summoned both the Turkish and Iranian ambassadors in Baghdad over airstrikes. “We stress that Turkey must stop its bombardment and withdraw its attacking forces from Iraqi territory,” the ministry’s statement said on Thursday, calling the invasion a “provocative action.”
.
include(“/home/aleta/public_html/files/ad_openx.htm”); ?>