Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 11 July 2020. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
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Grim Day for Pipelines Shows They’re Almost Impossible to Build – In the span of less than 24 hours, a court ordered the Dakota Access crude oil pipeline to shut down and the developers of the Atlantic Coast gas conduit said they were canceling the project. It was a deluge of bad news for an industry that’s increasingly finding that the mega-projects of the past are no longer feasible in the face of unprecedented opposition to fossil fuels and the infrastructure that supports them.Armed with experienced lawyers and record funding, environmental groups are finding enormous success blocking key pipeline permits in court. The challenges come despite support from President Donald Trump, who so far has failed to ensure big projects like Keystone XL get built.“I would expect this to be a turning point for new investment,” said Katie Bays, co-founder of Washington-based Sandhill Strategy LLC. “There is real investor fatigue around this parade of legal and regulatory headwinds to energy projects.”Dominion Energy Inc. and its partner Duke Energy Corp. said Sunday they’ll no longer pursue their $8 billion Atlantic Coast natural gas pipeline after years of delays and ballooning costs, becoming the third such project this year to be sidelined or canceled altogether amid mounting opposition to development of oil and gas.Then on Monday, a U.S. district court ordered Energy Transfer LP’s Dakota Access crude oil pipeline to shut down by Aug. 5. It ruled that a crucial federal permit for the project fell too far short of National Environmental Policy Act requirements to allow the pipeline to continue operating while regulators conduct a broader analysis ordered in a previous decision.The keep-it-in-the-ground movement has increasingly turned its attention to the pipes, rather than the wells themselves, because they require various federal and state permits, which, for the most part, can be more easily litigated. Dakota Access entered service but remained embattled. Keystone XL still hasn’t been built. In February, Williams Cos. scrapped its Constitution natural gas pipeline after failing repeatedly to gain a water permit from New York. “The Dakota Access and Atlantic Coast pipes encapsulate the last few years of a trend we’ve watched: the dramatic expansion of using regulatory obligations to hurt infrastructure projects in the courts,”
Revealed: legislators’ pro-pipeline letters ghostwritten by fossil fuel company This March, North Dakota’s governor, Doug Burgum, sent a letter to the Federal Energy Regulatory Commission (Ferc) emphatically supporting the North Bakken Expansion Project, a 61.9-mile natural gas pipeline that has angered environmentalists and Native American nations alike. Building pipelines, the 8 March letter stated, “ensures the long-term viability of our state’s oil and gas industry, preserves the quality of our environment, and allows our state’s producers to capitalize on this valuable commodity while supplying markets in need”. Yet Burgum’s letter omitted a key detail: it was based on a template provided by Justin Dever, a senior public affairs officer for MDU Resources. The line that claimed the pipeline would bolster both the oil and gas industry and “the quality of our environment”, was lifted verbatim from the template letter sent by Dever, email correspondence obtained through a public records request shows. The letter sent by Burgum was one part of a broader ghostwriting campaign that saw several key legislators send pro-pipeline support letters ghostwritten by officials of MDU Resources – a subsidiary of the fossil fuel giant WBI Energy – to key regulatory agencies. The records, obtained by the watchdog group the Energy and Policy Institute and provided to the Guardian, show that three North Dakota state legislators and a Williams county, North Dakota, commissioner signed and mailed letters to Ferc and the US army corps of engineers that reproduced word-for-word letters sent to them by MDU Resources’ political strategists. Although the fossil fuel industry’s dominance of North Dakota politics is well-known, the records shed new light on the extent of the industry’s role in shaping what the public – and federal regulators – hear about these industries from supportive state and local officials. The North Bakken Expansion Project pipeline would deliver natural gas from Bakken shale production sites in western North Dakota to an interconnection point with the Northern Border pipeline, which extends from western Canada to a terminus near Hayden, Indiana, and is owned by TC Energy – best known as the builder of the Keystone XL tar sands pipeline. Ferc is scheduled to rule on the project this coming November, with MDU Resources aiming to put it in operation by late 2021.
US Supreme Court deals blow to Keystone oil pipeline project – – The U.S. Supreme Court handed another setback to the Keystone XL oil sands pipeline from Canada on Monday by keeping in place a lower court ruling that blocked a key environmental permit for the project. Canadian company TC Energy needs the permit to continue building the long-disputed pipeline across U.S. rivers and streams. Without it, the project that has been heavily promoted by President Donald Trump faces more delay just as work on it had finally begun this year following years of courtroom battles. Monday’s Supreme Court order also put on hold an earlier court ruling out of Montana as it pertains to other oil and gas pipelines across the nation. That’s a sliver of good news for an industry that just suffered two other blows – Sunday’s cancellation of the $8 billion Atlantic Coast gas pipeline in the Southeast and a Monday ruling that shut down the Dakota Access oil pipeline in North Dakota. In the Keystone case, an April ruling from U.S. District Judge Brian Morris in Montana had threatened to delay not just Keystone but more than 70 pipeline projects across the U.S., and add as much as $2 billion in costs, according to industry representatives. Morris agreed with environmentalists who contended a U.S. Army Corps of Engineers construction permit program was allowing companies to skirt responsibility for damage done to water bodies. But the Trump administration and industry attorneys argued the permit, in place since the 1970s, was functioning properly when it was cancelled by Morris over concerns about endangered species being harmed during pipeline construction. Monday’s one-paragraph order did not provide any rationale for the high court’s decision.
Supreme Court Rejects Trump Effort to Greenlight Keystone XL Construction – The Supreme Court late Monday upheld a federal judge’s rejection of a crucial permit for Keystone XL and blocked the Trump administration’s attempt to greenlight construction of the 1,200-mile crude oil project, the third such blow to the fossil fuel industry in a day – coming just hours after the cancellation of the Atlantic Coast Pipeline and the court-ordered shutdown of the Dakota Access Pipeline.While the ruling was not a total victory for the climate – the high court said other pipeline projects can proceed as environmental reviews are conducted – green groups applauded the delay of Keystone XL construction as further confirmation of their view that the Canada-owned pipeline will never be built thanks to legal obstacles and fierce grassroots opposition.”Three dangerous pipelines delayed within 24 hours should serve as a clear warning to any companies hoping to double down on dirty fossil fuel projects,” said Greenpeace USA climate campaign director Janet Redman. “For more than a decade now, a powerful movement has been taking on reckless oil and gas pipelines and fighting to put Indigenous rights, a just economy, and our environment before oil company profits.””It is past time to leave fossil fuels in the ground,” Redman added, “and begin a just transition to a Green New Deal and 100 percent renewable energy.” The Supreme Court’s decision upheld a Montana judge’s April ruling that the Trump administration violated the Endangered Species Act by issuing a water-crossing permit for Keystone XL without fully assessing the damage the pipeline could inflict on wildlife along its planned route from Alberta, Canada to Nebraska.As Bloomberg reported, the Supreme Court’s ruling “means almost all Keystone XL construction is delayed until 2021.”Kendall Mackey, Keep It in the Ground campaigner with 350.org, celebrated the high court’s decision to stall construction of Keystone XL “despite the Trump administration’s desperate pleas and corporate pandering.””This pipeline continues to be an epic boondoggle for Big Oil,” said Mackey. “Tribal nations, farmers and ranchers, and allies across the country in solidarity with resistance to Keystone XL are not going anywhere – we will continue fighting to protect our climate from fossil fuel corporations at every turn.”
Rulings on KXL Permit Cloud Other Oil and Gas Pipeline Projects -The demand destruction caused by COVID-19 hasn’t only hurt producers and refiners; it’s also slowed the development of a number of planned midstream projects. In fact, the only multibillion-dollar crude-related project to reach a final investment decision (FID) during the pandemic is TC Energy’s Keystone XL, which in late March won financial backing from Alberta’s provincial government. But Keystone XL soon hit another snag, this time in the form of U.S. district and appellate court rulings that vacated the project’s Nationwide Permit 12 for construction in and around hundreds of streams and wetlands along the U.S. portion of the pipeline’s route in the U.S. More important, the courts also put on ice – at least for now – the use of the general water-crossing permit for other new oil and natural gas pipelines as well. As we discuss in today’s blog, that could result in delays and legal challenges to dozens of projects that midstreamers and their counterparties have been counting on. For midstream companies, the process of advancing a pipeline, an export terminal, or another major project is often fraught with challenges. For one, there’s the competition among midstreamers to line up the long-term commitments generally needed to secure financing – a factor that has always been a hurdle for large new midstream projects. Then there’s the matter of locking down the various regulatory approvals and permits that the project will need – again, always a stumbling block that has only increased in significance over the years. Today, environmental, landowner, and stakeholder challenges to pipeline projects, even from the states they traverse, have become very difficult. For example, Williams has failed to convince New York regulators that its Constitution Pipeline project passes environmental muster. And even when midstream developers do get the approvals and permits they need from administrative agencies, there’s always the very real possibility that there will be court challenges that could drag on for years.
Setbacks hamper pipeline industry backed by Trump (AP) – After a U.S. energy boom and strong backing from President Donald Trump propelled a major expansion of the nation’s sprawling oil and gas pipeline network, mounting political pressures and legal setbacks have put its future growth in doubt even as the pandemic saps demand for fuel. Two major oil pipeline projects suffered courtroom blows this week: The U.S. Supreme Court upheld the cancellation of a key permit for the Keystone XL oil sands pipeline from Canada, and a federal judge ordered the Dakota Access Pipeline shut down more than three years after it started moving oil across the U.S. Northern Plains. The rulings came a day after utilities cancelled an $8 billion natural gas pipeline through West Virginia, Virginia and North Carolina amid mounting delays and bitter opposition from environmentalists. Industry representatives took consolation from the Supreme Court’s decision that the permit it denied for Keystone XL can once again be used for other projects. That would allow more than 70 pipeline projects that faced potentially billions of dollars of delays to proceed. But that outcome may be “too little too late” for some companies already making changes to their plans, said Ben Cowan, who represents pipeline companies as an attorney with Locke Lord LLP. The recent blows against the industry have emboldened environmentalists and Native American activists, who routinely oppose fossil fuel pipelines because of potential spills and their contribution to climate change. Montana farmer Dena Hoff, a Keystone opponent, witnessed the environmental damage that pipelines can cause in 2015 when a pipeline broke beneath the Yellowstone river adjacent to her farm and spilled 31,000 gallons (117,000 liters) of crude that fouled downstream water supplies serving 6,000 people. She said the years of protests against Keystone and other lines have made the public listen. “There’s more to this argument than jobs and tax dollars,” Hoff said Thursday. Industry executives acknowledged pipeline opponents have found some success in the courts, but insist that continued demand for oil and gas means new lines will be needed. “We will meet them at the courthouse and fight these battles out legally at every opportunity,” said American Petroleum Institute President Mike Sommers. “The activist community doesn’t want to build anything, anywhere.”
Is This the End of Oil and Gas Pipelines? – The New York Times – They are among the nation’s most significant infrastructure projects: More than 9,000 miles of oil and gas pipelines in the United States are currently being built or expanded, and another 12,500 miles have been approved or announced – together, almost enough to circle the Earth.Between 2008 and 2019, oil production in the United States more than doubled and gas production increased by more than 60 percent as a result of new drilling techniques known as hydraulic fracturing, or fracking. Electric utilities have built hundreds of new natural gas power plants, and the United States has transformed itself from a gas importer to an energy superpower looking to build export terminals to ship oil and gas overseas. Now, however, pipeline projects are being challenged as never before as protests spread, economics shift, environmentalists mount increasingly sophisticated legal attacks and more states seek to reduce their use of fossil fuels to address climate change.On Monday, a federal judge ruled that the Dakota Access Pipeline, an oil route from North Dakota to Illinois that has triggered intense protests from Native American groups, must shut down pending a new environmental review. That same day, the Supreme Court rejected a request by the Trump administration to allow construction of the long-delayed Keystone XL oil pipeline, which would carry crude from Canada to Nebraska and has faced challenges by environmentalists for nearly a decade. The day before, two of the nation’s largest utilities announced they had canceled the Atlantic Coast Pipeline, which would have transported natural gas across the Appalachian Trail and into Virginia and North Carolina, after environmental lawsuits and delays had increased the estimated price tag of the project to $8 billion from $5 billion. And earlier this year, New York State, which is aiming to drastically reduce its greenhouse gas emissions,blocked two different proposed natural gas lines into the state by withholding water permits. The roughly 3,000 miles of affected pipelines represent just a fraction of the planned build-out nationwide. Still, the setbacks underscore the increasing obstacles that pipeline construction faces, particularly in regions like the Northeast where local governments have pushed for a quicker transition to renewable energy. Many of the biggest remaining pipeline projects are in fossil-fuel-friendly states along the Gulf Coast, and even a few there – like the Permian Highway Pipeline in Texas – are now facing backlash.“You cannot build anything big in energy infrastructure in the United States outside of specific areas like Texas and Louisiana, and you’re not even safe in those jurisdictions,” said Brandon Barnes, a senior litigation analyst with Bloomberg Intelligence. The growing opposition represents a break from the past decade, when energy companies laid down tens of thousands of miles of new pipelines to transport oil and gas from newly accessible shale formations in North Dakota, Texas and the Appalachian region.
Microsoft, striving for zero CO2, steers millions into oil — Friday, July 10, 2020 — Microsoft Corp. made a bold promise earlier this year when the technology giant vowed to remove more carbon dioxide from the atmosphere than it emits within a decade. That climate commitment, however, doesn’t extend to the company’s retirement program, which has pumped hundreds of millions of dollars into the fossil fuel industry. A group of Microsoft employees has been pushing the company to change that. The internal effort, being reported here for the first time, includes more than 1,200 employees who want Microsoft executives to create an investment fund focused on companies with strong environmental, social and governance records. That’s hard to do, and the Trump administration is trying to make it even harder. But Microsoft risks undermining its aggressive climate goals if it doesn’t try, according to employees involved in the initiative. “It’s just such an obvious blind spot in its aspirations to go carbon negative,” said an engineer at Microsoft who asked to remain anonymous to avoid putting his job at risk. “The inconsistencies are brought into sharp relief by the legitimately impressive commitments to improving our carbon footprint.” The company is only “willing to throw its weight around where it doesn’t interfere with their customers, like the oil and gas companies,” the engineer said. Earlier this year, the environmental advocacy group Greenpeace determined that the Redmond, Wash.-based company was likely “the biggest tech partner to the oil and gas industry.” Microsoft has cloud computing and data analysis contracts with fossil fuel producers such as Chevron Corp., a subsidiary of Exxon Mobil Corp. and several oil field services firms (Greenwire, May 19). Microsoft’s $27.5 billion retirement program – one of the nation’s largest by value – is heavily invested in fossil fuels. At the end of last year, its 401(k) plan owned stock worth more than $84 million in oil, gas and coal companies or businesses that rely on them, according to an E&E News analysis of holdings disclosed last month.
Alaska at center of Trump administration’s drive to drill public lands during pandemic – Traditional subsistence hunting has always been a pillar of life along Alaska’s remote North Slope. Dependable migrations of bowhead whales, Arctic grayling fish, and the country’s last remaining caribou herds have provided for generations of indigenous Alaskans who make their home on America’s northernmost edge.”We depend on a clean environment to feed our families during the year,” Rosemary Ahtuangaruak, a 66-year-old resident of the village of Nuiqsut, told ABC News. The grandmother of twenty says she owns a harpoon and still participates in the whale hunt on Cross Island each fall.Rosemary’s village is among the few largely indigenous communities scattered throughout the region’s vast Arctic oil fields. A small grid of homes located at the limits of most modern transportation routes with just one grocery store, more than three-quarters of the Inupiat Eskimo village relies on traditional subsistence hunting as their primary source of food. With the arrival of COVID-19, residents of Nuiqsut say it’s been decades since their ancestral ways have been this important. The global pandemic forced roads to close and the region’s only airline to declare bankruptcy, cutting off an already isolated village from outside supply lines. With the nearest hospital hundreds of miles away and the virus pushing northward, some fear the village — with a population of just 500 — would be wiped off the map if community spread took hold.”It’s life or death,” Siqiniq Maupin, a community advocate based in Fairbanks whose family lives in Nuiqsut, told ABC News. “We have people that need to hunt and be out on the land right now because we just don’t know what’s going to happen this winter.”But in the midst of the crisis, as the tribal government frantically moved to obtain medical supplies and shut down non-essential services, residents learned their community was being asked to confront yet another challenge — the federal government’s controversial plan to massively expand oil and gas drilling in the area. In April, the Bureau of Land Management — the agency within the United States Department of the Interior responsible for the administration of public lands — moved forward with “virtual public comment hearings” on revised plans for the controversial ConocoPhillips Willow Oil Project.The Willow project aims to add a gravel mine and up to 250 oil and gas wells to the existing energy extraction sites already surrounding Nuiqsut on nearly all sides. First proposed in 2018, the project has long beenopposed by some tribal leaders and environmental groups for its potential impacts on wildlife and public health.
Ninth Circuit Greenlights Drilling in Alaska Reserve – Drilling can proceed in a sensitive Alaskan reserve without an update to the government’s 2012 assessment of whether the oil and gas development would speed up climate change, and despite the fact that the assessment was completed four years before the oil at issue was discovered, the Ninth Circuit ruled Thursday. The National Petroleum Reserve-Alaska is 23.4 million acres of pristine wilderness named as a source of oil for the U.S. Navy in 1923. The vast area is important habitat for millions of migratory birds, marine mammals like beluga whales and home to the Teshekpuk Lake caribou herd – critical for Nuiqsut subsistence hunters. Congress handed management of the reserve to the Department of the Interior in 1976 with the mandate to provide “maximum protection” to the area’s fish and wildlife habitat. The BLM’s own analysis found that developing the project would be bad for subsistence hunters in the village of Nuiqsut. “The BLM expects that limitations to subsistence access and the reduced resource availability attributable to development of the project would result in an extensive interference with Nuiqsut hunter access,” the agency’s draft analysis states. ConocoPhillips Alaska is currently running one drill site in the reserve, is constructing a second site and has proposed a third. Environmental groups had claimed the new discovery meant the government had to perform “site-specific analysis” to consider the harm that would be caused by that specific project. But U.S. District Judge Sharon L. Gleason, a Barack Obama appointee, found the government couldn’t have known which parts of the vast area they opened for drilling would actually be drilled, so it’s more generalized assessment was sufficient. The Ninth Circuit affirmed that ruling on Thursday, finding that the 2012 document had contemplated future oil and gas leases, and the judges said that was enough. Writing for the panel, U.S. Circuit Judge Milan D. Smith Jr. found that previous case law allows the government to prepare just one document as both an overarching management plan and as a detailed, site-specific consideration of individual projects within a large reserve – even in cases like this one, where the government can’t back out once oil companies lease sites. Here, the BLM’s 2017 lease sale “irretrievably committed” the agency to allowing drilling in the sites it leased. “We disagree with plaintiffs’ suggestion that a programmatic EIS prepared for a broad-scale land use plan categorically cannot provide the site-specific analysis required for irretrievable commitments of resources,” Smith wrote. But Suzanne Bostrom, arguing before the panel in February on behalf of Trustees of Alaska, said that approach equaled a foregone conclusion – one where specific oil and gas leases and their environmental consequences were no longer optional. “The problem is here is that when the agency is getting down the line to deciding development decisions, it’s saying that it has already tied its hands,” Bostrom said at the hearing in February. “It’s saying that it can no longer adopt the ‘no action’ alternative.”
Polar Bear Moms Stick to Their Dens Even Faced With Life-Threatening Dangers Like Oil Exploration –As a warming climate melts sea ice in the Arctic, female polar bears have increasingly been forced to make their dens on land. But a new study has found that mother bears are unlikely to abandon their dens when they are disturbed – for example, by fossil fuel companies’ exploration for new sources of oil – even if the disturbance is life-threatening.As the Trump administration works toward allowing oil drilling in the Coastal Plain of the Arctic National Wildlife Refuge (ANWR), which counts polar bears among the many species that live there, that reluctance to flee could pose a danger to the bears. Scientists have found signs that polar bears are at risk from climate change, including changes in reproductive rates, physical condition and size, some of which have been linked to sea ice loss. Published Tuesday in the journal Arctic, the study found that a one-mile buffer to protect polar bear dens from industrial activity is adequate to keep pregnant bears and new mothers safe – but, according to the study’s authors, that’s only if those dens can be located.While the oil and gas industry’s attempts to identify polar bear dens before exploring for fossil fuel resources, the technology it uses to detect the dens – a type of thermal imaging camera called forward looking infrared – misses about 55 percent of the enclosures.”It presents this problem where if [the oil and gas industry] can’t locate all these dens and they’re just doing business as usual up there, there’s a decent chance that at some point they’re going to kill bears with their cubs or make the mom run off and leave her cubs,” said lead author Wesley Larson, who was a graduate student at Brigham Young University during the study.
Who’s Insuring the Trans Mountain Pipeline? – Rainforest Action Network recently uncovered a document that lists the 11 companies that are currently insuring the controversial Trans Mountain tar sands pipeline in Canada. These global insurance giants are providing more than USD$500 million in coverage for the massive risks of the existing Trans Mountain pipeline, and they’re also lined up to cover the expansion project.The existing Trans Mountain pipeline is a major environmental and public health hazard with a long history of disastrous spills. Earlier this month, 50,000 gallons of crude oil spilled from a pump station located above an aquifer that supplies the Sumas First Nation with drinking water.The Trans Mountain Expansion Project would multiply these risks tremendously. Though it is officially called an “expansion,” this is no minor renovation. The Canadian government, which owns Trans Mountain, is attempting to build a parallel pipeline that would ship more than 890,000 barrels per year of highly-polluting tar sands crude oil to the coast of British Columbia.For more than a decade, the expansion of Trans Mountain has been delayed in the face of powerful, Indigenous-led resistance on the ground and in the courts. It has not secured the Free, Prior, and Informed Consent of Indigenous communities that are directly in the pipeline’s route. Right now, the Tsleil-Waututh Nation, Squamish Nation, and Coldwater Indian Band are actively engaged in legal challenges on the project, and land defenders are asserting their rights and title along the route. In the midst of the COVID-19 crisis, the government and corporations are doubling down on their destructive plans to build new fossil fuel projects. Bulldozers that are laying the initial pipe on Trans Mountain have not quieted, even though this construction poses major risks to Indigenous and rural communities in its path, as well as workers that are housed together in close quarters. In Alberta, viral outbreaks have been linked to man camps at tar sands extraction sites, and yet the province’s energy minister proclaimed that now is a great time to construct a pipeline, due to social distancing protocols that limit public protest.
Oil spill in Khimki water basin to be cleaned up by end of week – water regulator -TASS . Consequences of the oil spill in the Khimki water basin in the Moscow Region are planned to be eliminated by July 12, press service of the Federal Agency for Water Resources told TASS on Monday. “Head of the Moscow-Oka Basin Water Department Vakhtang Astakhov reported to head of the Federal Agency for Water Resources Dmitry Kirillov at the working meeting that the oil spill in the Butakovsky Bay of the Khimki water basin will be cleaned up by July 12, 2020,” the press service said. Activities are at the closing phase now. The pollution source was detected and plugged back.
Norilsk Nickel fined US$2.1bn for Arctic oil spill – NORILSK Nickel has been fined US$2.1bn by Russian environmental watchdog Rosprirodnadzor for the damage done to waterways and soil following an oil spill in May.Around 21,000 t of diesel leaked into the Ambarnaya and Daldykan rivers near Norilsk, Russia, on 29 May following the collapse of a storage tank at a power plant. It is believed that melting permafrost is the most likely cause of the collapse of the tank due to abnormally warm conditions in the Arctic.Norilsk Nickel has been engaged in the cleanup, and reported that as of 6 July, 33,237 m3 of contaminated water and 185,102 t of contaminated soil had been removed in the area. Sergey Dyachenko, First Vice President and Chief Operating Officer, said: “We are working as part of an interregional commission set up by the government and staying in close touch with Rosprirodnadzor to develop and implement relevant site rehabilitation plans.”However, Rosprirodnadzor has fined the company almost 148bn roubles (US$2.1bn) as “voluntary compensation” for the damages. According to The Financial Times, the fine is equivalent to around a third of Norilsk Nickel’s net profit for 2019. According to The Financial Times, Dmitry Kobylkin, Ecology Minister, said: “The scale of the damage to Arctic waterways is unprecedented. The fine is proportional to it. If you recall the Exxon Valdez disaster off the coast of Alaska, the fine for the damage was more than US$5bn.”Norilsk Nickel contests the severity of the fine, saying that the figure had been calculated at the assumption of maximum damage and didn’t take into account the cleanup already occurring. The company also emphasised its commitment to fully cover the environmental cost. The spill is reported by local media to have reached Lake Pyasino, which is fed by the Ambarnaya and Daldykan rivers, after booms installed to contain the spill were broken by drifting ice. Greenpeace Russia has raised concerns that the true scale of the disaster is being covered up, after samples that it took from the Pyasina river – which flows out of the lake – to determine if the diesel will reach the Arctic ocean were confiscated before they could be tested by an independent laboratory.Dmitry Groshkov, Director of WWF-Russia, wrote an open letter to Vladimir Potanin, President of Norilsk Nickel. “We expect a maximally open position and informing both about the causes and consequences of the accident, and about the measures taken. In the first days after the accident, we observed an attempt to hide what had happened. WWF-Russia experts, having received information about the scale of the accident from social networks, had to intervene and inform the Marine Rescue Service.”“Such secrecy, as well as the provision of false information is unacceptable. Any delay in responding to a spill leads to significantly greater damage and complicates the management of the consequences. We suggest that you develop corporate regulations to inform all interested parties about incidents that have occurred.”
Russian mining giant contests fine for massive Arctic spill – Moscow: Mining giant Norilsk Nickel on Wednesdy said it was contesting a fine imposed by the Russian authorites over a massive oil spill in the Arctic that sparked a state of emergency.Norilsk Nickel “disputes the amount of environmental damage caused by the diesel leak” calculated by the Russian environmental watchdog, Rosprirodnadzor, the company said in a statement. The watchdog this week requested a subsidiary of Norilsk Nickel pay “voluntary compensation” totaling 147.8 billion rubles ($2.05 billion), or one third of the group’s net profit last year. Norilsk Nickel reiterated, however, that it would financially support “the consequences of the accident at its own expense”.Russia’s Environment Minister Dmitri Kobylkin said the company had “every right” to contest the fine in court.But “we saw the consequences of the accident and saw the damage done there”, he added. Kobylkin also said the company was liable for environmental damage, saying those responsibile are “required to pay full compensation”. “Damage to the environment and compensation for the consequences of the accident are two different things,” he added. President Vladimir Putin declared a state of emergency after 21,000 tonnes of diesel leaked from a fuel storage tank at one of the company’s subsidiary plants near the Arctic city of Norilsk in late May.
The fuel seeped into the soil and dyed nearby waterways bright red in a spill that was visible from space. A massive clean up effort involved trapping floating diesel with booms on the water surface to prevent it from flowing into crucial waterways and fresh water lakes.Russia’s natural resources minister said the fine reflected the huge damages caused by the spill.”The scale of the damage to Arctic water resources is unprecedented,” Kobylkin said earlier this week. He drew comparisons to one of the worst oil spills in US history — the 1989 Exxon Valdez oil spill off Alaska which, he pointed out, cost Exxon Mobil more than $5 billion in punitive damages. Putin has said he expected Norilsk Nickel to fully restore the environment.Russia’s richest man Vladimir Potanin who owns the company earlier estimated that the clean-up would cost about 10 billion rubles, on top of any fines, and vowed to spend “whatever is needed”.
Hundreds evacuated after oil spill in central Philippines(AP) More than 400 people have been evacuated from a coastal village in the central Philippines after some 250,000 liters (66,000 gallons) of bunker fuel spilled from a power-generating barge into the sea, an official said Monday. “The stench was so bad we have to move people away to two schools and last night there was a request for a third evacuation site,” Iloilo City Mayor Jerry Trenas told the Associated Press by telephone. The spill began Friday when an accidental explosion on the barge blasted a hole in it hull. There were no reported injuries. The accident has not affected the power supply to the commercial city of about half a million people because it has other power sources, Trenas said. The coast guard said it was investigating and charges may be filed against the owners of the barge if needed. (AP) RS RS
Nearly 48,000 liters of oil spill into Iloilo City waters after power barge explosion – Around 48,000 liters of oil spilled into waters off Iloilo City on Friday after an explosion at a power barge, local officials said. Authorities estimated an area of 1,200 square meters was affected by the spillage. The Coast Guard also pegged that about 40,000 liters were spilled. Courtesy: Leo Solinap “Current efforts involve scooping and skimming of spilt oil in order to contain the spill led by the [Philippine Coast Guard],” said the city’s city’s emergency operation center. According to reports from the Coast Guard Saturday, one of the tanks exploded due to hot work as acetylene was used to open rusted compartments. The explosion took place at 2:24 p.m. at AC Energy’s Power Barge 102 in Lapuz district’s Barrio Obrero, officials reported. The fire was declared out by 3 p.m. The barge’s estimated capacity is 200,000 liters. AC Energy said that the oil spill was initially blocked by a structure surrounding the barge but high waves caused it to spill out. The PCG added that approximately one hectare of mangrove area has become a “proximate sensitive area” to the oil spill, as revealed by environment scanning. The Marine Environment Protection Unit of Western Visayas has already installed five segments of oil spill booms to the water ingress point to prevent damage to the mangrove, the PCG said.
Coast Guard to probe Iloilo City oil spill, may file charges vs. power barge owner ‘if warranted’ – The Philippine Coast Guard said Sunday it will investigate the oil spill incident in Iloilo City, adding it will look into possible legal action against the owner of the power barge if necessary. In a statement, PCG said its legal affairs team will be flying to Iloilo to assist in the ongoing probe on Friday’s incident, wherein over 40,000 liters of oil spilled into the waters following a barge explosion in Lapuz district. “The PCG will file criminal charges against the owner of Power Barge Number 102, if warranted,” it said in a statement. PCG Marine Environmental Command Rear Admiral Art Abu, however, told CNN Philippines that the agency will still have to study possible complaints that may be filed against the company, with officials still awaiting the final results of the investigation. “Pinag-aaralan pa dahil (We’re still studying it because) right now we are busy on containing the oil,” Abu said in an interview with Newsroom Weekend. Officials from the Coast Guard as well as personnel and management from the AC Energy Corporation – owner of the power barge – have started a coastal cleanup in the area to contain further damage brought by the oil spill pegged at around 48,000 liters. Authorities have likewise placed multilayered spill booms from the tank to prevent the further spread of oil in the waters. Initial reports from the PCG said one of the tanks exploded due to hot work as acetylene was used to open rusted compartments. AC Energy meanwhile said that the oil spill was initially blocked by a structure surrounding the barge but high waves caused it to spill out. Meanwhile, PCG reported that around 100 families composed of over 300 individuals living in the vicinity were affected by the incident. They were evacuated to a nearby school, it added.
Iloilo oil spill cleanup likely to last for 15 days says AC Energy – AC Energy said Monday initial investigations showed that the Iloilo oil spill from its power barge was likely due to an explosion in its fuel oil storage that raptured the tank. Cleanup efforts will likely last for 15 days. The firm’s power barge 102 in Barrio Obrero, Iloilo City discharged fuel at around 3 p.m. on July 3, AC Energy said in a disclosure to the stock exchange. The leakage was contained at 10 p.m. the same day, it said. “The root cause is yet to be determined, but initial findings reveal that the discharge is attributable to ignition of fuel oil in storage which ruptured the barge’s fuel tank,” the Ayala-led unit said. The company has tapped Harbor Star, a maritime service provider, to finish the cleanup for both the waters and the coastline, AC Energy said. Cleanup is estimated to last up to 15 days, it said. Some 120 households have been relocated while the cleanup is ongoing. AC Energy said it would continue to coordinate with officials in the containment efforts. It will also tap third-party experts to determine the root cause of the explosion, it added.
Guimaras govt demands total cleanup of oil spill – The Guimaras provincial government has called on the operator of a damaged power barge that triggered an oil spill to ensure the swift and complete cleanup of areas on the island that have been dirtied by bunker fuel. “I would like to be clear that there should be no bunker fuel left in Guimaras,” said Gov. Samuel Gumarin in a statement. He said the Ayala-owned AC Power Corp., which operates the power barge, has the responsibility to clean up the bunker fuel that leaked from Power Barge 102 docked off the coast of Iloilo City last July 3. As of July 6, black oil sludge had reached at least 23 coastal villages in the towns of Buenavista and Jordan and Guimaras province. Senior Supt. Jerry Candido, officer-in-charge of the Bureau of Fire Protection (BFP) in Western Visayas, said investigators have “established that there was negligence” leading to the explosion on the barge. The BFP is preparing to file a complaint for reckless imprudence resulting in damage to property and reckless imprudence resulting in slight physical injuries in relation to the explosion and the injury it caused one of the workers on the barge. Candido, citing investigation results, said workers were using acetylene torch to cut bolts and nuts on an air vent as part of maintenance work on Power Barge 102. The air vent, which was outside the hull of the power barge, leads directly to one of the tanks that store bunker fuel. Investigators said they believed the cutting work, using acetylene torches, triggered the explosion that tore five holes on the hull of the barge including a hole less than a meter in diameter on the side where the bunker fuel leaked. “It should have been common sense that work using open fire should not have been done near the fuel tank,” Candido told the Inquirer.
CEO, directors held for Visakhapatnam gas leak – Police on Tuesday night arrested the CEO and two directors besides eight other officials of LG Polymers in connection with the styrene vapour leak at its plant in Visakhapatnam on May 7, which killed 12 people. Visakhapatnam commissioner of police R.K. Meena confirmed the arrests to PTI. The arrests were made a day after the high-powered committee, appointed by the state government to probe the vapour leak, submitted its report to chief minister Y.S. Jagan Mohan Reddy, which blamed multiple inadequacies on the part of LG and slackness of management over poor safety protocols and breakdown of emergency response procedures in the plant.
Lost in Oil Rally: $2 Trillion-a-Year Refining Industry Pain – Crude oil is the world’s most important commodity, but it’s worthless without a refinery turning it into the products that people actually use: gasoline, diesel, jet-fuel and petrochemicals for plastics. And the world’s refining industry today is in pain like never before. “Refining margins are absolutely catastrophic,” Patrick Pouyanne, the head of Europe’s top oil refining group Total SA, told investors last month, echoing a widely held view among executives, traders and analysts. What happens to the oil refining industry at this juncture will have ripple effects across the rest of the energy industry. The multi-billion-dollar plants employ thousands of people and a wave of closures and bankruptcies looms. “We believe we are entering into an ‘age of consolidation’ for the refining industry,” said Nikhil Bhandari, refining analyst at Goldman Sachs Inc. The top names of the industry, which collectively processed well over $2 trillion worth of oil last year, are giants such as Exxon Mobil Corp. and Royal Dutch Shell Plc. There are also Asian behemoths like Sinopec of China and Indian Oil Corp., as well as large independents like Marathon Petroleum Corp. and Valero Energy Corp. with their ubiquitous fuel stations. The problem for the refiners is that what’s killing them is the medicine that’s saving the wider petroleum industry. When U.S. President Donald Trump engineered record oil production cuts between Saudi Arabia, Russia and the rest of the OPEC+ alliance in April, he may have saved the U.S. shale industry in Texas, Oklahoma and North Dakota, but he squeezed refiners. A refinery’s economics are ultimately simple: it thrives on the price difference between crude oil and fuels like gasoline, earning a profit that’s known in the industry as a cracking margin. . But with demand still in the doldrums, gasoline and other refined products prices haven’t recovered as strongly, hurting the refiners. The industry’s most rudimentary measure of refining profit, known as a 3-2-1 crack spread (it assumes three barrels of crude makes two of gasoline and one of diesel-like fuels), has slumped to its lowest level for the time of the year since 2010.
IEA raises 2020 oil demand forecast but warns COVID-19 clouds outlook – (Reuters) – The International Energy Agency (IEA) bumped up its 2020 oil demand forecast on Friday but warned that the spread of COVID-19 posed a risk to the outlook. The Paris-based IEA raised its forecast to 92.1 million barrels per day (bpd), up 400,000 bpd from its outlook last month, citing a smaller-than-expected second-quarter decline. “While the oil market has undoubtedly made progress … the large, and in some countries, accelerating number of COVID-19 cases is a disturbing reminder that the pandemic is not under control and the risk to our market outlook is almost certainly to the downside,” the IEA said in its monthly report. (Graphic: Lockdown versus new cases, here) The easing of lockdown measures in many countries caused a strong rebound to fuel deliveries in May, June and likely also July, the IEA said. But oil refining activity in 2020 is set to fall by more than the IEA anticipated last month and to grow less in 2021, it said. Demand in 2021 will likely be 2.6 million bpd below 2019 levels, with kerosene and jet fuel due to a drop in air travel accounting for three-quarters of the shortfall. (Graphic: Oil demand change by product, here) “For refiners, any benefit from improving demand is likely to be offset by expectations of much tighter feedstock markets ahead. Refining margins will also be challenged by a major product stocks overhang from the very weak second quarter of 2020,” the IEA said. (Graphic: Global oil supply and demand, here) On the supply front, the IEA said the Organization of the Petroleum Exporting Countries and other producers including Russia, a grouping known as OPEC+, had shown 108% compliance with their pact to rein in output. Market driven cuts had also affected other producers, especially the United States, though U.S. supply was expected to slowly recover in the second half of 2020 while the lifting of force majeure on exports of Libyan crude could add another 900,000 bpd to global markets by the end of the year.
Angola resists OPEC pressure to comply fully with oil cuts- sources – (Reuters) – Angola is resisting pressure by OPEC for a steeper oil output cut to comply fully with record supply curbs, OPEC and industry sources said. The Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, have been cutting oil output since May by a record 9.7 million barrels per day after the coronavirus crisis destroyed a third of global demand. After July, the cuts are due to taper to 7.7 million bpd until December. Saudi Arabia, which chairs a panel that monitors adherence with the oil cuts, has been heading efforts to press laggards such as Iraq, Kazakhstan, Nigeria and Angola to improve compliance with the reductions and compensate for May overproduction in July-September. “Angola is saying they would not compensate for its overproduction in July-September like the rest of the countries but would be able to compensate only in October-December,” said one OPEC source. “We are still trying to convince them.” Another OPEC source said that Nigeria and Algeria are now reaching out to Angola to convince it to execute the agreement. “The whole (OPEC+) group is adding pressure on Angola and others who are not complying to adhere to what they have agreed to,” said the source. Angola’s Ministry of Mineral Resources and Petroleum and state oil company Sonangol did not respond to Reuters requests for comment. In May, Angola pumped 1.28 million bpd, according to OPEC data, or 100,000 bpd more than its target. It trimmed production to 1.24 million bpd in June, based on a Reuters survey, 60,000 bpd above its target. “Angola argues they did cut quickly despite the pain and difficulty it put them in with regard to long-term supply contracts,” said one source familiar with Angolan oil plans.
Yemeni government calls on immediate UN Intervention for Derelict Oil Tanker – Yemen’s government has urged the UN Security Council to intervene to prevent a rundown oil tanker, Safer, from leaking more than a million barrels of oil into the Red Sea. Foreign Minister Mohammed al-Hadhrami called on the UNSC to hold a special session following the Iran-backed Houthi militia’s refusal to allow UN experts to conduct their five-year maintenance on the ship. Al-Hadhrami, in a letter, urged the Council to undertake its responsibilities to avoid an environmental catastrophe. An oil leak from the Safer’s tanks would be “one of the biggest environmental disasters in the region and the world,” he told Christoph Heusgen, Germany’s Permanent Representative to the UN and President of UNSC. The Houthis have rejected all independent international requests to board the vessel, including the latest one from UN Yemen envoy Martin Griffiths, who demanded access for an international technical team. Al-Hadhrami, in his letter, briefed the UNSC about all government and international efforts, including the government approving a separate proposal to resolve the Safer oil tanker crisis presented recently by Griffiths. Houthis have rejected the proposal. Al-Hadhrami quoted previous government letters and statements to the UN which showcase the oil tanker’s deteriorating situation. The tanker, which has been floating near the port city of Hodeidah since 1989 following an oil spill, is at risk of exploding and causing a massive environmental disaster. Safer – often described by officials as a ticking time bomb – has not docked since 2014 and is currently in waters controlled by the Houthis. The minister called on the Council to address the situation immediately and separate the issue from Yemen’s ongoing crisis. An environmental catastrophe would pose a more immediate threat to Yemen and the region, he added.
Oil Went Below $0. Some Think It Will Rebound to $150 One Day. – WSJ Oil markets began the 2020s by nosediving below $0 a barrel for the first time. Investors and analysts are now trying to work out what the rest of the decade holds in store.Some think the bust will set in motion a boom, predicting that investment in oil-and-gas production will dry up and propel crude prices back above $100 a barrel.“That funding pressure is going to be massive. It’s going to be really difficult for some of the producers to produce,” said Trevor Woods, chief investment officer of Ohio-based hedge fund Northern Trace Capital. “We could hit $150 pretty easily by 2025.”Others say the pandemic will sap fuel demand after the threat of contracting coronavirus has faded, cementing an era of cheap oil.The debate over the long-term direction of the world’s most important energy source is thorny. Oil markets have dozens of moving parts, making them hard to forecast.In the long run, most analysts agree prices should gravitate to a level at which energy producers profit from making just enough crude to match demand. Covid-19 has made that calculation more complex. Investors are unsure whether the pandemic will permanently alter transport and consumption patterns, or expedite the move toward cleaner energy sources.Oil prices staged a quick recovery after turning negative in late April, boosted by a pickup in China’s economy as well as output cuts by the Organization of the Petroleum Exporting Countries, Russia and producers in North America. The rally has stalled since new coronavirus cases threatened to hit fuel demand in Southern and Western U.S. states. West Texas Intermediate futures, the benchmark in U.S. oil markets, have traded at around $40 a barrel since late June.The case for soaring prices rests on asset managers and banks declining to bankroll necessary investments in new and existing oil wells, leading to a shortfall of crude.Oil companies have already slashed spending plans, seeking to shore up their balance sheets in response to the drop in revenue caused by the pandemic. Exxon Mobil Corp., which last weekwarned of big losses in its second-quarter earnings, has said it plans to reduce capital spending in 2020 by $10 billion, or 30%.European majors are also responding to pressure from investors to reduce their carbon footprint. BP PLC cut its investment plans by 25% to $12 billion and is reviewing whether to develop oil-and-gas fields it hasn’t fully tapped.
Oil prices mixed as coronavirus spike casts shadow over U.S. demand – Oil prices offered up a mixed market snapshot on Monday, with Brent crude edging higher, supported by tighter supplies, while U.S. benchmark WTI futures dropped on concern that a spike in coronavirus cases could curb oil demand in the United States. Brent crude rose 18 cents, or 0.4%, to $42.98 a barrel by 0252 GMT after a 4.3% gain last week, while U.S. West Texas Intermediate crude was at $40.42, down 23 cents, or 0.6%, from its previous settlement on Thursday. U.S. markets were closed on Friday to mark July 4 holiday celebrations. Amid rising numbers of coronavirus cases in 39 U.S. states, a Reuters tally showed that in the first four days of July alone, 15 states reported record increases in new COVID-19 infections with parties over the holiday weekend possibly leading to another spike. “There will be some kind of decline in demand if cases were to increase as people will stay at home,” said Howie Lee, an economist at Singapore’s OCBC Bank. “The pace of U.S. demand recovery will not be as steep as expected.” For now, analysts at ING bank said data for several cities in affected states show no significant reduction in road traffic week-on-week. “We will get a better idea of what impact tighter restrictions in several states have had on gasoline demand with the EIA (Energy Information Administration) report this week,” ING said in a note. The implied volatility for Brent crude has dropped to the lowest since prices started collapsing in March as some in the market remain focused on tightening supplies as production by the Organization of the Petroleum Exporting Countries (OPEC) fell to its lowest in decades with Russian output dropped to near targeted cuts. OPEC and allies including Russia, collectively known as OPEC+, have pledged to slash production by a record 9.7 million barrels per day (bpd) for a third month in July. After July, the cuts are due to taper to 7.7 million bpd until December. U.S. production, the world’s largest, is also falling. The number of operating U.S. oil and natural gas rigs fell to an all-time low for a ninth week, although the reductions have slowed as higher oil prices prompt some producers to start drilling again.
Oil steady as hopeful economic data face spike in virus cases – (Reuters) – Oil futures ended largely steady on Monday as positive economic data supported prices, while a spike in coronavirus cases in the United States that could curb fuel demand pressured prices. Brent crude LCOc1 settled at $43.10 a barrel, up 30 cents. U.S. West Texas Intermediate (WTI) crude CLc1 settled at $40.63 a barrel, down 2 cents. “The competing forces in the oil market right now are the reopening of economies around the world, increasing oil demand, countered by concerns about economies closing around the world due to a resurgence in the number of virus cases,” Andy Lipow, president of consultants Lipow Oil Associates. In the first five days of July, 16 states reported record increases in new cases of COVID-19, which has infected nearly 3 million Americans and killed more than 130,000, according to a Reuters tally. U.S. services industry activity rebounded sharply in June, almost returning to its pre-COVID-19 pandemic levels, while China’s economy was recovering and its capital markets attracting money, setting the scene for a healthy bull market, the official China Securities Journal said in an editorial. German data, however, showed that the recovery from COVID-19 will be slow and painful. Germany’s industrial orders rebounded moderately in May and a fifth of firms in Europe’s biggest economy said in a survey published on Monday they feared insolvency.
Oil slips as traders eye demand amid rise in coronavirus cases but U.S. supplies seen falling – – Oil futures ended with a modest loss on Tuesday, with the increase in coronavirus cases in parts of the world continuing to pressure prospects for energy demand.Expectations for a decline in U.S. crude inventories for a second week in a row, however, provided some support for prices.On Tuesday, West Texas Intermediate crude for August fell by a penny, 0.02%, to settle at $40.62 a barrel on the New York Mercantile Exchange, after also ending marginally lower on Monday.Global benchmark Brent oil for September declined by 2 cents, or 0.05%, to $43.08 a barrel on the ICE Futures Europe exchange, following a gain of 0.7% in the previous session.On the demand side, the Energy Information Administration’s report Wednesday, which covers data for the week ended July 3, “may capture a small piece of early 4th of July holiday driving, though next week’s report will be the one to watch,” said Robbie Fraser, senior commodity analyst at Schneider Electric.On average, the EIA is expected to report a decline of 3.7 million barrels in crude stockpiles for last week, according to analysts polled by S&P Global Platts. That would mark a second-straight weekly fall. They also forecast supply declines of 1.2 million barrels for gasoline and 500,000 barrels for distillates.
Oil steadies as economic data overshadows coronavirus worries – Oil prices settled little changed on Tuesday as demand concerns due to a new surge in coronavirus cases overshadowed U.S. government forecasts for lower production. Brent crude futures settled at US$43.08 a barrel, down 2 cents in the session. U.S. West Texas Intermediate settled down 1 cent at $40.62 a barrel. Early in the session, the market popped because of the higher forecast demand, and more bullish jobs data, said Phil Flynn, senior analyst at Price Futures Group in Chicago. But the market gave up the gains as focus returned to rising coronavirus cases. The U.S. Energy Information Administration (EIA), forecast that global oil demand would recover through the end of 2021, predicting demand of 101.1 million barrels per day (bpd) by the fourth quarter of next year. “Global oil demand continues to recover faster than previously estimated,” Linda Capuano, EIA administrator, said, noting that global liquid fuels consumption in the second quarter was down an average 16.3 million bpd from a year earlier. Oil prices also got a boost as equities edged higher after the U.S. Labor Department’s Job Openings and Labor Turnover (JOLTS) survey for May showed the largest-ever monthly gain for hirings. Still, 16 U.S. states have reported record increases in new COVID-19 cases in the first five days of July, according to a Reuters tally. Florida is reintroducing some limits on economic reopenings. California and Texas also reported high infection rates.
Oil dips as U.S. inventory build stokes supply fears – Oil prices eased in early trade on Wednesday as industry data showing a build in U.S. crude stockpiles and a forecast for U.S. crude output to fall less than anticipated in 2020 added to worries about oversupply. Brent crude futures fell 13 cents, or 0.3%, to $42.95 a barrel by 0019 GMT. U.S. West Texas Intermediate (WTI) crude futures dropped 10 cents, or 0.3%, to $40.52 a barrel. Prices were little changed in the previous session and have been held in a narrow band over the past two weeks as concerns about a spike in coronavirus cases globally tempers optimism about a recovery in fuel demand. U.S. crude oil stockpiles rose last week, against expectations for a draw, although gasoline and distillate inventories fell more than expected, data from industry group the American Petroleum Institute showed on Tuesday. The U.S. Energy Information Administration’s (EIA) said on Tuesday U.S. crude oil production is expected to fall by 600,000 barrels per day (bpd) in 2020, a smaller decline than the 670,000 bpd it forecast previously. However, it also expected global oil demand would recover through the end of 2021, predicting demand of 101.1 million bpd by the fourth quarter of next year. “The EIA’s forecast of a lower decline in U.S. output was partially offset by its outlook for firm demand recovery, which limited losses in oil markets,” Hiroyuki Kikukawa, general manager of research at Nissan Securities said. “Still, expectations that the Organization of the Petroleum Exporting Countries (OPEC) and allies would taper oil output cuts from August and softer U.S. equities added to pressure,” he said. Abu Dhabi National Oil Co (ADNOC) plans to boost oil exports in August, the first signal that OPEC and its allies, together known as OPEC+, are preparing to ease record oil output cuts next month, three sources familiar with the development told Reuters. Key ministers of the OPEC+ are due to hold talks next week.
Oil rises on improving U.S. gasoline demand – Oil prices edged up on Wednesday on signs of a recovery in gasoline consumption in the United States, but rising U.S. crude inventories and an increase in coronavirus infections limited gains. Brent crude futures rose 25 cents to $43.37 a barrel. West Texas Intermediate crude futures settled 28 cents, or 0.69%, higher at $40.90 per barrel. Both benchmarks were on track for a fourth session of daily percentage changes of less 1% in either direction, shrugging off news that OPEC member Libya was adding to global supplies by reopening its Es Sider oil terminal for exports. U.S. gasoline inventories decreased sharply by 4.8 million barrels as demand climbed to 8.8 million barrels per day, the highest since March 20, according to data from the Energy Information Administration released Wednesday. Refinery utilization increased by 2% but is still hovering approximately 17% lower than in the same period last year. “While a big draw on gasoline in the summertime is healthy, the U.S. is really close to all time record highs in crude oil and distillate storage, which is not as healthy,” said Bob Yawger, director of energy futures at Mizuho. U.S. Gulf Coast crude oil stockpiles rose by 5 million barrels to a record high last week, the data showed. “The reduction of crude storage held on sea is simply shifting to land at this point which is not necessarily a bearish omen,” said Tony Headrick, energy markets analyst at CHS Hedging. The latest surge in U.S. coronavirus cases, taking the U.S. total above 3 million, has reduced hopes for a swift recovery in oil demand which has been hammered by the global lockdowns to prevent the virus spreading. Key ministers in OPEC+, which includes OPEC, Russia and other producers, were due to hold talks next week about their deal on record output cuts that will run to the end of July and then start tapering.
Oil falls $1/bbl as resurgent pandemic prompts worries about U.S. demand – (Reuters) – Oil prices fell about $1 a barrel on Thursday as investors worried that renewed lockdowns to contain the spread of coronavirus in the United States would again sink fuel consumption. Brent crude LCOc1 futures fell 94 cents, or 2.2%, to settle at $42.35 a barrel, after gaining 0.5% on Wednesday. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $1.28, or 3.1%, to settle at $39.62 a barrel. “As the U.S., Brazil and other countries continue to get hammered by COVID-19, demand is at stake,” said Louise Dickson, oil markets analyst at Rystad Energy. The United States reported more than 60,000 new COVID-19 cases on Wednesday, the biggest increase reported by a country in a single day. Coronavirus cases have been on the rise in 42 of the 50 U.S. states over the past two weeks, according to a Reuters analysis. The fresh surge has prompted states such as California and Texas to reimpose some restrictions. The renewed orders are likely to dent any sustained recovery in fuel demand. Data from the U.S. Energy Information Administration showed U.S. gasoline stockpiles fell by 4.8 million barrels last week, much more than analysts expected, as demand hit its highest level since March 20. [EIA/S] In storage hub Cushing, Oklahoma, crude stockpiles rose around 2 million barrels in the week to Tuesday, traders said, citing a Thursday report from Genscape. In India, fuel demand fell 7.9 percent in June compared with the same month last year, denting market sentiment further on Thursday. “The Indian demand numbers were disappointing,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “That didn’t fit the narrative we were hearing that India’s economy was bouncing back.” Still, futures have held around $40 a barrel and some analysts expect prices to hold in a range ahead of a meeting on July 15 of the market monitoring panel of the Organization of the Petroleum Exporting Countries (OPEC) and its allies. Meanwhile, oil supply from Libya remains uncertain. The country, whose ports have been blockaded since January, is trying to resume exports after the state oil firm lifted force majeure at its Es Sider oil terminal on Wednesday. However, a tanker was prevented from loading. A second tanker is currently heading toward the port.
Oil falls, with U.S. benchmark settling back under $40 as coronavirus concerns swirl – Oil futures fell on Thursday, with U.S. benchmark prices settling back below $40 a barrel, as commodity traders contended with rising cases of coronavirus in the U.S. and some other countries that may threaten to unsettle demand for crude. U.S. prices on Wednesday “remained resilient” to the surprise 5.7-million-barrel rise in domestic inventories last week, said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a recent note. However, “the short-term direction is unclear, as investors hesitate whether it is a good idea to carry the rally further while the combination of lower demand prospects and higher supply tilts the balance to the opposite direction.” “Inability to extend gains above the $40 mark hints that a downside correction could be around the corner,” he said. August West Texas Intermediate crude fell by $1.28, or 3.1%, to settle at $39.62 a barrel on the New York Mercantile Exchange, after climbing 0.7% on Wednesday. Prices finished Thursday at the lowest since for a front-month contract June 30, according to Dow Jones Market Data. Global benchmark Brent oil for September lost 94 cents, or 2.2%, at $42.35 a barrel on the ICE Futures Europe exchange. It settled at the lowest since July 1. Prices for both WTI and Brent on Wednesday marked their highest settlements since March 6. “Oil seems ripe for a pullback here and if the demand outlook shows further signs of faltering, WTI could settle back towards the mid-$30s,” Meanwhile, feeding expectations for a slowdown in economic recovery and weakness in energy demand, the U.S. reported more than 58,000 new coronavirus cases on Wednesday, according to data compiled by Johns Hopkins University. Infections have topped 3 million in the country, with world-wide cases exceeding 12 million. India reported 24,879 new cases, taking its total to 767,296, The Wall Street Journal reported, citing data from the country’s Ministry of Health and Family Welfare. On Wednesday, the Energy Information Administration reported that U.S. crude inventories rose by 5.7 million barrels for the week ended July 3, but gasoline stockpiles decreased by 4.8 million barrels. On Thursday, August gasoline fell 3.1% to $1.2505 a gallon, on the heels of a nearly 1.3% gain a day earlier. August heating oil HOQ20, +0.14% edged down by nearly 0.9% to $1.2239 a gallon. Natural-gas futures turned lower by the settlement on Thursday, following losses among their energy peers. The EIA reported Thursday that domestic supplies of natural gas rose by 56 billion cubic feet for the week ended July 3. That was generally in line the average increase of 55 billion forecast by analysts polled by S&P Global Platts.
Oil Gets Rare, Late Week Boost From IEA Demand Outlook – The global energy agency that rarely helps the positive case in oil has given a friendly boost to those long crude, just as the week comes to an end. Crude prices jumped more than 1% on Friday after the International Energy Agency bumped up its 2020 forecast for global oil demand, lifting a market that took its worst hammering in six weeks in the previous session. The IEA’s outlook on oil has typically been dour over the past few years, putting it at odds with the Saudi-dominated OPEC – or Organization of the Petroleum Exporting Countries – whose members are determined to keep crude prices supported under any condition. The Paris-based IEA raised its demand forecast to 92.1 million barrels per day, up 400,000 bpd from its outlook last month, citing a smaller-than-expected second-quarter decline. New York-traded West Texas Intermediate, the benchmark for U.S. crude futures, was up 97 cents, or 2.4%, at $40.59 per barrel by 2:00 PM ET (18:00 GMT. London-traded Brent, the global benchmark for oil, also gained 97 cents, or 2.2%, to trade at $43.32. For the week, WTI was flat while Brent rose more than 1%. Aiding the IEA’s outlook on crude was a slight weekly drop in the U.S. oil rig count and positive news on Covid-19 vaccine development. The weekly survey of rigs actively-drilling for oil in the United States fell by four to 181, indicating that crude production was still somewhat under control despite recent trends indicating higher output.
Oil climbs, but U.S. benchmark ends lower for the week as IEA warns of coronavirus risk – Oil futures climbed on Friday, buoyed by positive results tied to a COVID-19 treatment, but U.S. prices ended lower for the week as a report from the International Energy Agency cautioned that weaker demand caused by the coronavirus pandemic will linger, even if the worst of the hit to economies has subsided. The global oil market has “reached a sort of stasis,” with Brent crude-oil prices having stabilized around $40 a barrel for much of June and early July, “as oil majors try to align their output levels with the fragile pace of the economic recovery,” said Cailin Birch, global economist at The Economist Intelligence Unit. “Stronger growth in oil demand is needed to change this dynamic and drive sustained price growth,” she told MarketWatch. “This is unlikely to happen until a coronavirus vaccine is widely available, which we only expect around end-2021.” Still, oil prices did get a boost after Gilead Sciences said clinical trial data show its antiviral drug remdesivir reduced the risk of death for coronavirus patients by 62%. The news also provided support to the U.S. stock market. “Oil futures have been trading with a high degree of correlation to the equity markets this week as the resurgence in coronavirus cases is continuing to be offset by further hopes for a swift global economic recovery,” said Richey. The IEA in a monthly report, however, raised its annual forecast for crude demand to 92.1 million barrels per day, up 400,000 barrels a day from its outlook last month, citing a smaller-than-expected second-quarter decline as lockdowns eased in many countries. However, the Paris-based agency said that a resurgence of cases of COVID-19 could pose problems for oil demand going foward.The monthly report said “the large, and in some countries, accelerating number of COVID-19 cases is a disturbing reminder that the pandemic is not under control and the risk to our market outlook is almost certainly to the downside.”There were more than 63,000 new cases of COVID-19 in the U.S. on Thursday, setting a fresh daily record, as cases and hospitalizations in California and Texas rose, The Wall Street Journal wrote. Investors were also watching the relaunch of the Messla oil field and Sarir refinery in Libya, closed since January due to civil unrest in the country. Libya coming back on line could add more pressure to an energy market that has been attempting to find its footing amid the economic damage wrought by the coronavirus pandemic.
Who Will Get Full Control Of Libya’s Oil Riches? – We are now at a crossroads in Libya where a military solution is temporarily off the table, as factions and their external allies wrangle over oil revenues–the distribution of which will now decide when the pumps are turned back on and force majeure lifted. For the first time in seven years, there is a light at the end of the Libyan tunnel, but with open and backdoor talks being brokered by various external allies, sorting rumor from fact and wishful thinking is tricky. What we know for sure is this: It’s all about leverage, and the Turkish-backed GNA doesn’t have nearly enough to call the shots on this one despite recent territorial gains in and around Tripoli against General Haftar. Now, with Egypt stepping up to the plate and drawing a red line in Sirte, the strategic gateway to the Libyan oil facilities, the potential for oil revenue negotiations is emerging. Haftar controls the oil, but not the revenues, and if everyone now has the right balance of leverage for talks to proceed, he could turn the pumps back on in return for a different setup for the distribution of oil revenues. Right now, all the revenues go to the central bank in Tripoli, where Haftar has no access. Depending on the source, talks are going on behind the scenes that would split up these revenues before they hit the central bank in Tripoli.According to the Guardian, “proposals in the talks include that the revenues be split between as many as three banks representing different regions, with an agreement not to use them for military purposes. Eastern tribal leaders are being consulted on the plans.”This version of events is also being spread about through various other media, and the National Oil Company (NOC)–a neutral source in all of this–takes issue with the scenario as presented. While the NOC confirms that talks are in progress and that it is optimistic that the result will be to turn on the taps and remove the force majeure on exports from the Hariga, Brega, Zueitina, Es Sider and Ras Lanuf ports, it denies there is any talk of splitting revenues in the manner described above.
Bombing of Turkey’s Watiya base escalates Franco-Italian proxy war in Libya – The decade-long civil war between rival imperialist-backed warlords triggered by the 2011 NATO war in Libya is spiraling out of control.On July 5, unidentified warplanes bombed al-Watiya airbase, which Italian-backed Government of National Accord (GNA) forces recently retook from French-backed Libyan National Army (LNA) forces of Khalifa Haftar. The attack damaged hangars and destroyed military equipment from Turkey, which is coordinating its support for the GNA with Italy. LNA official Khaled al Mahjoub told Al Arabiya that “other attacks similar to the one on the base will soon be carried out. … We are in a real war with Turkey, which has oil ambitions in Libya.”Turkish military sources told Spanish news site Atalayar the raid included “nine precision air strikes against Turkish air defense systems,” which wounded several Turkish intelligence officials. They added that the attacks were “successful” and left “three radars completely destroyed.” However, Atalayar refuted reports that MiG-29 or Su-24 jets Moscow has given the LNA carried out the strikes, saying that it was the work of French-made Rafale jets.Egypt, the United Arab Emirates (UAE), and France itself all field Rafales, support the LNA, and could have bombed al-Watiya. On June 21, Egyptian dictator General Abdel Fattah al-Sisi threatened to intervene in Libya against Turkey.Turkish President Recep Tayyip Erdoğan’s office reacted to the strike by tweeting that Turkey would escalate operations in Libya, attacking the coastal city of Sirte and Al Jufra, Libya’s largest airbase, both located in central Libya and held by LNA forces. It cited control of oil supply lines and Russian support for the LNA to justify its intervention.The bombing of al-Watiya, barely 150km from Tripoli, followed visits by Turkish and Italian officials. It came only a few hours after Turkish Defense Minister Hulusi Akar concluded a trip to Tripoli, during which he proclaimed, “Turkish sovereignty and our return, after the withdrawal of our ancestors, to return forever in Libya.” This apparently referred to the Turkish Ottoman Empire’s control over Libya, until Italy seized Libya and held it as a colony from 1911 until 1943 and its defeat during World War II.
Turkey To Hold Massive Naval Exercise Off Libyan Coast In ‘Message To Egypt’ – In a noticeable step in terms of timing and location, the Turkish Navy announced that it would soon conduct massive naval exercises off the Libyan coast. Turkish media quoted the navy as saying that the expected maneuvers would be called “Naftex”, and would take place off the Libyan coast in 3 different regions, and each would bear a special name, which is “Barbaros”, “Targot Rais” and “Chaka Bay”. Furthermore, the Turkey-based Yeni Safak newspaper revealed that the military exercises will take place imminently, and that they are training in anticipation of any war in the eastern Mediterranean, in addition to what has been described as escalating tensions in Libya between Egypt and Turkey. Commenting on the Turkish military maneuvers off the coast of Libya, Egyptian military expert Major General Samir Ragheb said that it is a dangerous diplomatic message called “battleship diplomacy”. Ragheb said in an interview with RT Arabic this week that the Turkish military maneuvers are sending a stern warning to Ankara’s enemies that they are willing to use its armed forces to combat any threat. The Egyptian military expert considered that these maneuvers came in response to the destruction of the Turkish air defense system at the Al-Watiyah military base south of the Libyan capital, Tripoli last week. In particular, Ragheb believes Turkey is sending a message to Egypt, who is currently watching the events in Libya very closely, especially at the Sirte front in the north-central part of the country.
Israel to begin construction of 164 new settlement units in Bethlehem – Head of the Wall and Settlement Resistance Committee in Bethlehem, Hassan Brejiyah said that the Settlement Council the West Bank announced the start of work for building 164 new settlement units in the “Neve Daniel” settlement, south of Bethlehem. Brejiyah added that, according to Hebrew sources, this settlement expansion aims to create a new neighborhood in the “Neve Daniel” settlement at the expense of the citizens’ lands in the towns of Al-Khader and Nahhalin, which will put hand on dozens of agricultural dunums. He pointed out that this settlement expansion falls within the policy of fitting the settlements within the project of the so-called “Greater Jerusalem”, and taking advantage of the current situation of the spread of Coronavirus, where the settlers and under the protection of the occupation forces are taking over large areas of land, in light of the new policy of delivering notices Evacuation and deportation.
Israel’s annexation of Palestinian lands could trigger 3rd intifada: Abbas’ aide –An adviser to Palestinian President Mahmoud Abbas has warned that a third intifada (uprising) could be just around the corner if Israel goes ahead with its highly-contentious plan to annex parts of the occupied Palestinian territories. Speaking to France 24 Arabic , Nabil Shaath said that the two major Palestinian groups Hamas and Fatah, which are based in the Gaza Strip and the West Bank respectively, are in agreement about a new intifada if Israel annexes the West Bank. “When things flare up and it becomes a fully-fledged intifada, we will see a combination of forces between Gaza and the West Bank,” he said. Shaath also noted that he expected the potential Palestinian uprising to be funded by the Arab world. The first intifada, which took place in 1987-1993, involved Palestinian demonstrations, mass boycotts and general strikes as well as attacks on Israeli forces using rocks, Molotov cocktails, and firearms. Donate our fundraising campaign, If you want to continue to read our work and help us produce more news and reports from Palestine The second intifada featured many more pitched gun battles and bombings. It began in 2000 and lasted until 2005, leaving 3,200 Palestinians and about 1,000 Israelis dead. Israel’s ruling coalition, led by prime minister Benjamin Netanyahu, had announced July 1 as the date to begin moving forward with the scheme to impose “sovereignty” over about a third of the West Bank, including settlements and the fertile Jordan Valley. Israel, however, failed to launch the land grab bid on the set date amid widening differences between Netanyahu and his coalition partner, minister of military affairs Benny Gantz. Israeli labor, social affairs and services minister Ofir Akunis stressed that officials were still working out the details of the plan with their American counterparts.
China Inks Military Deal With Iran Under Secretive 25-Year Plan –Last August, Iran’s Foreign Minister, Mohammad Zarif, paid a visit to his China counterpart, Wang Li, to present a roadmap on a comprehensive 25-year China-Iran strategic partnership that built upon a previous agreement signed in 2016. Many of the key specifics of the updated agreement were not released to the public at the time but were uncovered by OilPrice.com at the time. Last week, at a meeting in Gilan province, former Iran President Mahmoud Ahmadinejad alluded to some of the secret parts of this deal in public for the first time, stating that: “It is not valid to enter into a secret agreement with foreign parties without considering the will of the Iranian nation and against the interests of the country and the nation, and the Iranian nation will not recognize it.” According to the same senior sources closely connected to Iran’s Petroleum Ministry who originally outlined the secret element of the 25-year deal, not only is the secret element of that deal going ahead but China has also added in a new military element, with enormous global security implications. One of the secret elements of the deal signed last year is that China will invest US$280 billion in developing Iran’s oil, gas, and petrochemicals sectors. This amount will be front-loaded into the first five-year period of the new 25-year deal, and the understanding is that further amounts will be available in each subsequent five year period, provided that both parties agree. There will be another US$120 billion of investment, which again can be front-loaded into the first five-year period, for upgrading Iran’s transport and manufacturing infrastructure, and again subject to increase in each subsequent period should both parties agree. In exchange for this, to begin with, Chinese companies will be given the first option to bid on any new – or stalled or uncompleted – oil, gas, and petrochemicals projects in Iran. China will also be able to buy any and all oil, gas, and petchems products at a minimum guaranteed discount of 12 per cent to the six-month rolling mean average price of comparable benchmark products, plus another 6 to 8 per cent of that metric for risk-adjusted compensation. Additionally, China will be granted the right to delay payment for up to two years and, significantly, it will be able to pay in soft currencies that it has accrued from doing business in Africa and the Former Soviet Union states. “Given the exchange rates involved in converting these soft currencies into hard currencies that Iran can obtain from its friendly Western banks, China is looking at another 8 to 12 per cent discount, which means a total discount of around 32 per cent for China on all oil gas, and petchems purchases,” one of the Iran sources underlined.
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