Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 29 August 2020. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
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Bismarck company develops a new way to clean up oil spills using magnetic wood chips – A Bismarck-based company has reworked an old product — wood chips — to better clean up oil spills. Carbontec Energy Corp. has magnetized its chips, which attract and hold oil when placed atop a spill. Their magnetic nature enables them to more easily be removed to collect oil from land or water. Chairman John Simmons believes the chips could help with spills both large and small. Tribes and communities along the Missouri River concerned about major oil spills on the water could have them at the ready, he said. “If there’s a big spill on Lake Sakakawea for instance, you’d have skimmers with a magnetic head,” Simmons said, referring to a machine often used to clean up oil that spills into bodies of water. The wood chips would pull out more than 90% of the oil in the water, Simmons said. Magnetic booms placed in the water also could be used along with the chips to capture the oil and prevent it from flowing farther away from the site of the spill. Such a setup could be useful if the Dakota Access Pipeline were ever to leak at its Missouri River crossing upstream of the Standing Rock Sioux Reservation, Simmons said. Tribal members are concerned that a leak would devastate their water supply. The chips and other equipment could be staged near the Fort Yates water intake in case a leak ever happens, Simmons suggested.
U.S. Army Corps asks appeals court to reverse Dakota Access pipeline ruling –(Reuters) – The U.S. Army Corps of Engineers on Wednesday asked an appeals court to reverse a ruling which scrapped an environmental permit that allows the Dakota Access crude oil pipeline to operate on U.S. land. Earlier this month, a federal judge ordered the U.S. Army Corps of Engineers (ACE) to detail options by the end of the month for resolving the loss of the permit. On Wednesday, ACE and Dakota Access, controlled by Energy Transfer LP (ET.N), argued that the district court abused its discretion in vacating the permit and ordering a thorough environmental study to be conducted. They also argued the court’s ruling sets impossible standards that would discourage major infrastructure investment, waste government resources and pose economic and environmental harm. “The district court’s decision will create a new, heightened standard of judicial review that will be impossible for agencies to meet as they consider vital infrastructure projects,” ACE said in the brief. The loss of the permit could force the 570,000 barrel-per-day pipeline, the biggest out of North Dakota’s Bakken shale region, to be shut and drained.
Dakota Access Case Could Sour Future Pipeline Plans – The U.S. Army Corps of Engineers has asked an appeals court to reverse a lower court’s ruling vacating the permit of the Dakota Access oil pipeline to operate, arguing that such ruling creates “impossible” standards that could scupper future major infrastructure projects. A federal judge ruled on July 6 that the Dakota Access Pipeline, in operation since 2017, must be emptied and shut down by August 5, until a new comprehensive environmental review is complete. The United States District Court for the District of Columbia said that the Army Corps of Engineers had violated the National Environmental Policy Act (NEPA) when it gave a permit to the pipeline to build beneath Lake Oahe.Earlier this month, a U.S. appeals court ruled that the Dakota Access can stay open and should not be emptied of crude, but it did order an expedited schedule for the parties to submit briefs over whether a new environmental impact statement would be needed for the pipeline.In its brief to the U.S. Court of Appeals for the District of Columbia Circuit, lawyers for the Army Corps of Engineers said that “If not corrected, the district court’s decision will create a new, heightened standard of judicial review that will be impossible for agencies to meet as they consider vital infrastructure projects that excite opposition from some sector of society,” as carried by Bloomberg Law. According to the Army Corps, those impossible standards would not only discourage investment in major infrastructure, but they would also waste government resources. The Army Corps argues that the district court – which ordered Dakota Access shut down and the Army Corps to carry out a new, more comprehensive, environmental assessment review – applied the “wrong legal standard” in the precedent it used to vacate the permit for the 570,000-bpd oil pipeline that carries oil from the Bakken/Three Forks area in North Dakota to Patoka, Illinois.
North Dakota Approves Two In-State Pipelines — August 27, 2020 –Link here. –The North Dakota Public Service Commission approved two pipeline projects Wednesday: one for a new natural gas processing plant in Williams County and another for the Dickinson refinery. The Williams County project involves two new pipelines that will extend from OE2 North’s Bill Sanderson Gas Processing Plant, which is located west of Williston. Both will connect to larger pipelines. One of the proposed lines, with a length of 1.3 miles and a capacity of 80,000 barrels per day, is to carry natural gas liquids. The other is for residue gas, with a capacity of 250 million cubic feet per day and a length of 4.7 miles. The project is projected to cost $6 million, and the lines are expected to begin operating by the end of the year. Construction on the processing plant began this spring and has continued over the course of the summer.
‘People Are Still Putting Their Bodies on the Line to Stop this Pipeline’ – – Michael Markus, known as Rattler, had mixed emotions when he heard the news. A federal judge had ruled that the Dakota Access Pipeline was built unlawfully and ordered the pipeline to stop pumping oil pending an in-depth environmental review. “We have, and are, going through a lot, but this would heal,” Markus wrote to Rural America In These Times. At the same time, he wrote, “it’s hard not to be heartbroken.” Markus sent the message from Sandstone federal prison in Minnesota, where he is serving a three-year sentence for trying to stop the pipeline from being built in the first place. Markus, who is Oglalla Lakota, grew up on the Pine Ridge Reservation. He served in the U.S. Marine Corps and saw combat. In 2016, when the NoDAPL movement gained momentum and resistance camps formed near the Standing Rock Reservation, he made supply runs to the camps. When pipeline security guards unleashed attack dogs against water protectors in early September of that year, Markus moved into the camps to stay. “Well I have been around a few years… lol, and I have been on a search to where I belong and what I need to be doing,” Markus wrote. “When I first went to camp I knew that I have found where I need to be and what I need to be doing.” He took on the traditional Lakota role of akicita, which in camp meant keeping the peace between water protectors and on the front lines meant watching “for infiltrators and instigators to protect people from getting hurt.” In February 2017, as the pipeline neared completion and police prepared to clear the main Oceti Sakowin camp, Markus was one of a handful of people, all Native, hit with federal felony charges for crimes allegedly committed more than three months earlier. Markus was charged with Civil Disorder and Use of Fire to Commit a Federal Felony Offense, a charge that carries a mandatory minimum 10-year prison sentence. In 2018, he accepted a non-cooperating plea agreement in part because, as he wrote in to RAITT, “we were told we would not get a fair trial right from the get go.” In exchange for a guilty plea to the Civil Disorder charge, the prosecution agreed to drop the Use of Fire charge and recommend a 36-month sentence. This experience left Markus skeptical the court system can deliver justice. “I don’t think it will be stopped [immediately],” he wrote in his mid-July message of the pipeline and the court order to shut it down. “Because these people have so much money that they can pay the pocket change fines and keep making millions.” His words turned out to be prescient: Energy Transfer LP, the company behind the pipeline, challenged the ruling and on Aug. 5 a federal appeals court paused the shutdown order. The pipeline will continue to operate while the environmental review is conducted, pumping half a million barrels of oil per day out of North Dakota’s Bakken formation and under Lake Oahe on the Missouri River, just upstream from the Standing Rock Lakota (Sioux) reservation. Razor wire 4 Meanwhile, Markus remains in prison – an increasingly dangerous place to be as the pandemic rages on. Covid-19 outbreaks have already swept through many prisons and detention centers and a recent report revealed that U.S. Marshalls are shipping Covid-positive inmates all over the federal Bureau of Prisons (BOP) system. As of this writing, Sandstone prison had three confirmed cases.
PIPELINES: Biden win could spell the end for Dakota Access — Friday, August 28, 2020 — A President Joe Biden could shut down the Dakota Access pipeline. And if he’s elected, environmental groups and tribes will be pressuring him to do just that.
Bakken production pushes Canadian exports on Northern Border to 15-year low | S&P Global Platts – Resurging production in North Dakota’s Bakken Shale following a wave of spring shut-ins has pushed Canadian exports to the US Midwest on Northern Border Pipeline down to its lowest flow volumes in more than 15 years, increasing the AECO hub’s discount to Chicago pricing. However, Index of Customer data shows a year-over-year increase in Canadian Exports on Great Lakes Gas Transmission line this winter. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin. Sign Up Returning Bakken production and falling capacity have helped push West Canada flows to additional lows on Northern Border, while strengthening prices limit rerouting gas to the US Upper Midwest. West Canada flows have averaged just 524 MMcf/d in August on Northern Border, the lowest in at least 15 years, and hitting as low as 400 MMcf/d for three straight days early this month, according to data by S&P Global Platts Analytics. In contrast, month-to-date flows averaged 994 MMcf/d in 2019. Returning Bakken production is the primary reason behind reduced flows, as Platts Analytics production sample has averaged 2 Bcf/d this month, just 176 MMcf/d below samples seen from January through March. Coupled with this has been falling capacity along Northern Border. It has dropped 142 MMcf/d from the first three months to 2.5 Bcf/d this month at Glen Ullin. Bakken production has climbed back to 1.97 Bcf/d, according to the latest data from the North Dakota Industrial Commission. However, it still remains well below the 3.1 Bcf/d the state averaged in March when the crude oil price collapse struck, prompting a wave of shut-ins, limiting associated gas production. The lower volumes flowing from Western Canada to the US Midwest have lowered Chicago’s premium to AECO this month to 18 cents/MMbtu, which was down slightly from 21 cents/MMbtu in July. As Platts Analytics expects further production in the Bakken the next two months, this should further limit West Canada flows and increase AECO’s discount to Chicago. However, as Canadian exports dip on Norther Border, the Index of Customer data indicates Great Lakes pipeline is likely to see higher exports this coming winter than last. According to 3Q 2020 IOC data, there is 1.327 Bcf/d contracted to be exported into the US Midwest on Great Lakes at Emerson this winter. Q4 2019 data indicates there was 1.1 Bcf/d contracted at Emerson last winter, and the pipe actually exported 900 MMcf/d. Q2 2020 IOC data indicates there is 1.3 Bcf/d contracted for exports at Emerson this summer, and summer to date, and the pipe has flowed within about 150 MMcf/d of this contracted amount. If this relationship holds, then Western Canada as a whole would export about 1.1 to 1.2 Bcf/d this coming winter.
Oil and brine spills in McKenzie County after lightning sets tank on fire – An estimated 33,600 gallons of produced water and 1,700 gallons of oil spilled in McKenzie County, N.D., according to a news release from the state Department of Environmental Quality. The spilled materials were completely recovered.Produced water, or brine, is a mixture of saltwater, oil and sometimes, drilling fluids, that is created during oil and gas production.The spill occurred Wednesday, Aug. 26, at a saltwater disposal well about nine miles from Watford City after lightning set a storage tank on fire, according to the press release. E-Source Energy SWD reported the spill. Department officials will continue inspecting the site and monitoring remediation efforts.
Los Angeles natural gas plant has been leaking methane for years – (Reuters) – A Los Angeles-area natural gas plant has leaked planet-warming methane gas for years but work to fix the problem tracked by NASA has been delayed until November, a city power official said.Faulty natural gas compressors at the 690-megawatt Valley Generating Station have been leaking more than 10,000 cubic feet of methane per hour “for the last couple years,” Norm Cahill, the Los Angeles Department of Water and Power’s (LADWP) director of power supply operations, told the utility’s board of commissioners on Tuesday.Video of the meeting was posted online on Wednesday. A leak of that magnitude, over the course of a year, is roughly equivalent to the emissions of 30,000 cars, according to environmental group Sierra Club.In a statement, LADWP said the level was low in comparison to other emissions sources and dwarfed by the 2015 leak at the Aliso Canyon natural gas storage facility that lasted four months and forced evacuations of a suburban neighborhood.
Halliburton looks beyond US shale, charting a “fundamentally different course” – –Halliburton Co. is looking away from its traditional North American heartland for sales growth as the fracking behemoth works its way through an historic oil bust.Shares for one of the world’s biggest oilfield service providers surged more than 8% on Monday after it posted $456 million in second-quarter free cash flow — more than double expectations. Halliburton also told investors it’s charting a “fundamentally different course” after slashing jobs and the dividend in recent months.“As oil demand recovers, I expect the international business will continue to be a more meaningful contributor to our revenue going forward,” Chief Executive Officer Jeff Miller told analysts and investors during a conference call. “North America production is likely to remain structurally lower in the foreseeable future and has slower growth going forward.”Miller has let go of workers and clipped Halliburton’s dividend after tumbling oil prices brought on by a global pandemic wrecked fracking far more than expected. Rival Schlumberger Ltd. predicted in April that as much as 60% of pressure pumping demand would fall off by July 1. As much as 85% of frack crews have lost work this year, according to Primary Vision Inc.Halliburton “inked simply outstanding results vs. expectations,” analysts at Tudor Pickering Holt & Co. wrote in a note to investors. “Structural cost cuts are clearly bearing fruit.”With 75% of its planned cost cuts complete, Miller said the rest should be done by the end of September, largely focusing on international markets and real-estate holdings.
150+ North American Producers in Chapter 11 Risk – Unless prices strengthen further, about 150 more North American exploration and production (E&P) companies will need to seek Chapter 11 protection through 2022. That’s according to Rystad Energy, which estimated that, if WTI prices remained at $40 per barrel, 29 North American E&P Chapter 11 filings would take place this year, 68 in 2021 and 57 in 2022. Rystad Energy highlighted that if its Chapter 11 forecasts materialize, this would bring the total number of North American E&P filings for 2020-2022 to nearly 190, compared to 207 during the five-year period of 2015-2019. The company noted that this would also bring total Chapter 11 North American E&P debt for 2020-2022 to about $168 billion, which it stated is 36 percent higher than the $122 billion recorded in 2015-2019. The Covid-19 pandemic has added “severe financial strain” on a North American upstream industry that was already “reeling” under billions of dollars of debt, Rystad Energy outlined. “While an improvement in oil prices towards $40 per barrel WTI saved a significant number of E&Ps and prevented early Chapter 11 filings in June-July, the current price environment is in no way sufficient for a large number of E&Ps in the medium-term,” Rystad Energy’s head of shale research Artem Abramov said in a company statement sent to Rigzone. “As hedging programs set at WTI $50+ per barrel expire in the second half of this year, we anticipate greater financial pressure on the industry unless WTI prices recover further,” he added in the statement. Rystad Energy says its E&P Chapter 11 model is based on a cash flow analysis covering about 10,000 active North American oil and gas E&Ps. The model is designed to present a macro-level outlook rather than look at individual company insights, according to Rystad Energy. As of August 23, 12:48pm CEST, there have been 23 million confirmed cases of Covid-19, with 800,906 deaths, according to the latest data from the World Health Organization (WHO). The region most affected by the virus in terms of confirmed cases and deaths, as of August 23, has been the Americas, WHO data shows.
The End of Oil Is Near – The oil industry has turned the oceans into aquatic parking lots – floating storage facilities holding, at their highest levels in early May, some 390 million barrels of crude oil and refined products like gasoline. Between March and May, the amount of oil “stored” at sea nearly tripled, and it has yet to abate in many parts of the world. This tanker invasion is only one piece of a dangerous buildup in oil supply that is the result of an unprecedented global glut. The coronavirus pandemic has gutted demand, resulting in the current surplus, but it merely exacerbated a psychopathy that’s been plaguing the oil industry for years: the incessant overproduction of a product that the world is desperately trying to wean itself from, with growing success.Today, the global oil industry is in a tailspin. Demand has cratered, prices have collapsed, and profits are shrinking. The oil majors (giant global corporations including BP, Chevron, and Shell) are taking billions of dollars in losses while cutting tens of thousands of jobs. Smaller companies are declaring bankruptcy, and investors are looking elsewhere for returns. Significant changes to when, where, and how much oil will be produced, and by whom, are already underway. It is clear that the oil industry will not recover from COVID-19 and return to its former self. What form it ultimately takes, or whether it will even survive, is now very much an open question.Under President Donald Trump, the United States has joined other petroleum superpowers in efforts to maintain oil’s dominance. While government bailout programs and subsidies could provide the lifeline the industry needs to stay afloat, such policies will likely throw good money after bad. As Sarah Bloom Raskin, a former Federal Reserve governor and former deputy secretary of the Treasury, has written, “Even in the short term, fossil fuels are a terrible investment. . . . It also forestalls the inevitable decline of an industry that can no longer sustain itself.” In contrast to an agenda that doubles down on dirty fuels, a wealth of green recovery programs aim to keep fossil fuels in the ground as part of a just transition to a sustainable and equitable economy. If these policies prevail, the industry will rapidly shrink to a fraction of its former stature. Thus, as at no other time since the industry’s inception, the actions taken now by the public and by policymakers will determine oil’s fate. The Greenpeace activists are right. Whether the pandemic marks the end of oil “is up to you.”
Trump Greenlights Drilling in the Arctic National Wildlife Refuge, but Will Oil Companies Show Up? — The Trump administration has announced that it is opening up the Arctic National Wildlife Refuge to oil and gas development – the latest twist in a decades-long battle over the fate of this remote area. Its timing is truly terrible. Low oil prices, a pandemic-driven recession and looming elections add up to highly unfavorable conditions for launching expensive drilling operations. In the longer term, the climate crisis and an ongoing shift to a lower-carbon economy raise big questions about future oil demand. The motive for drilling in ANWR, I believe, is to score a major, precedent-setting victory over government policies that prioritize conservation over energy production and environmental advocacy groups that have fought for years to protect ANWR as “one of the finest examples of wilderness left on Earth.” Capturing ANWR and transforming it into a locus of fossil fuel extraction would be a massive physical and symbolic triumph for politicians who believe that resource extraction is the highest use of public lands.President Trump seems to understand this, based on his recent comment that “ANWR is a big deal that Ronald Reagan couldn’t get done and nobody could get done.” But global, national and oil industry circumstances are overwhelmingly arrayed against Trump getting it done. ANWR is inarguably an ecological treasure. With 45 species of mammals and over 200 species of birds from six continents, the refuge is more biodiverse than almost any area in the Arctic.Today the oil industry is facing its greatest set of challenges in modern history. They include:
- A collapse in oil demand and prices due to the global pandemic, with a sluggish and uncertain recovery
- Companies canceling and reducing activity worldwide, with bankruptcies in the U.S. shale industry and drilling rig counts falling back to 1940 levels
- New uncertainty about future global oil demand as climate concerns push public interest and government policy toward electric vehicles, and automakers respond with new EV designs
- The growing possibility of Democratic victories in the November 2020 elections, which would likely lead to policies reducing fossil fuel use
- Increasing investor pressure on banks and investment firms to reduce or eliminate support for fossil fuel projects.
All of these factors compound the challenges of leasing and drilling in ANWR. Well costs there would be among the highest anywhere onshore in the U.S. Only one well has ever been drilled in the area, so new drilling would be purely exploratory and have a lower chance of success than in better-studied areas. Under these conditions, it would make more sense for companies that are active on Alaska’s North Slope to pursue sites they currently have under lease, which pose much lower risk.
EPA Has Granted More Than 3,000 Pollution Monitoring Exemptions to Oil and Gas Industry Environmental regulators across the country granted more than 3,000 requests from polluting oil and gas operations, government facilities, chemical plants, and other facilities to stop pollution monitoring and other procedures intended to protect human health and the environment, an expansive two-month AP investigation revealed. The Trump administration, under pressure from the oil and gas industry, allowed for the exemptions in late March because of the coronavirus pandemic. “It’s like saying, ‘We’re going to remove the radar guns and remove speedometers, but you still have to comply with the speed limit,'” said Eric Schaeffer, now head of the Environmental Integrity Project advocacy group. “That doesn’t make sense.” While EPA claims the monitoring waivers do not constitute a license to pollute at will, without effective monitoring there is no way to know. As a whole, the skipped leak inspections could be endangering oil and gas workers and allowing thousands of tons of greenhouse pollution to be emitted into the atmosphere, a former oil and gas engineer told the AP. The investigation’s findings run counter to statements made by the EPA in June that the coronavirus was not impacting compliance and monitoring, and that the industry was not seeking relief. In fact, the industry actors aggressively sought and were granted exemptions, as early as March, to skip inspections of smokestacks, tank seals, flare stacks, and emissions monitoring systems, which could raise the risk of explosions. “As surely as night follows day there are going to be an increased number of deaths from those causes,” Philip J. Landrigan, director of the Program for Global Public Health and the Common Good at Boston College, told the AP.
Faulty heat exchangers spill Venezuelan oil -An estimated 25,000 bl of oil spilled along western Venezuela’s coastline in recent weeks came from faulty heat exchangers at state-owned PdV’s El Palito refinery, three officials at the plant told Argus.Heat exchanger systems that use seawater as coolant for crude processing units were contaminated with oil when PdV operators attempted to increase fuel production, according to a refinery manager and two repair crew supervisors.”The seawater discharged back into the Triste gulf by the heat exchanger systems are the source of the spills,” the manager said. “We’re doing everything possible to correct the problem.”PdV, which has not commented officially on the spills, has been trying for months to replenish the country’s depleted gasoline supplies by repairing its 140,000 b/d El Palito and 305,000 b/d Cardon refineries. Despite some technical support from Iran and China, fuel production has been limited and intermittent at best.At least three oil spills since early July have coincided with PdV attempts to boost gasoline and diesel production at El Palito. Higher pressures associated with increasing crude runs through the distillation tower and following through the 61,500 b/d fluid catalytic cracker (FCC) and other units are raising the volume of oil filtering into the heat exchangers through cracks in the systems. PdV crews are trying to patch up the cracks as they are detected, the supervisors said.Operators managed to raise gasoline output to about 16,000 b/d in July but every attempt to raise output further has opened more leaks that in turn force PdV to suspend operations pending more repairs.Currently El Palito is not producing any gasoline or diesel as the heat exchangers are repaired and cleaned, the manager said.Nearly all of PdV’s 1.3mn b/d refining system in Venezuela is out of service, and the company has been mostly locked out of the international market because of credit constraints and US sanctions.The acute fuel shortage, briefly alleviated by Iranian shipments in late May and early June, has worsened again, bringing informal market prices to as much as $4/l. Diesel is easier to find thanks to a sanctions exception on humanitarian grounds, but the US is working to cut off that supply as well by the end of October.
Mauritius calls for aid in race to contain catastrophic oil spill – The island nation of Mauritius has declared a “state of environmental emergency” in what appears to be the worst oil spill and ecological crisis in the country’s history.The freighter ship that ran aground on a coral reef late last month off the coast of Mauritius has leaked over 1,000 tonnes of oil into the Indian Ocean, with government leaders urging for help as the island nation prepares to brace for the “worst case scenario,” says Prime Minister Pravind Jugnauth.Now, the Japanese-owned MV Wakashio has split into two, spilling tonnes of additional oil from the ships’ remaining fuel tanks. Experts had previously predicted that with time and bad weather, the vessel would eventually fall apart and add to the current damage being done to the Mauritian coastline. Even though the size of the spill remains relatively low compared to big oil spills of the past, the location of this particular incident is of greater concern. The site of the vessel happens to lie at a famous coral reef in Pointe d’Esny, an internationally acclaimed sanctuary and conservation site known for its rare wildlife. Nature reserves and once-pristine lagoons near the area have reported an influx of oil leaking into their waters, posing life-threatening risks to thousands of precious marine species. “We are starting to see dead fish. We are starting to see animals like crabs covered in oil, we are starting to see seabirds covered in oil, including some which could not be rescued,” says Dr. Vikash Tatayah, conservation director at the Mauritian Wildlife Foundation. Despite warnings from local officials to stay away, thousands of residents have converged in a last-ditch effort to contain the spread of the spill. Images posted online showed volunteers making home made oil booms out of straw, sugarcane leaves and even human hair donated by residents of the island.
Japans Nagashiki says has scuttled part of Mauritius oil-spill ship (Reuters) – Japan’s Nagashiki Shipping, which owns the bulk carrier that ran aground on a reef in Mauritius and caused a large oil spill, said on Tuesday it has completed scuttling of the front part of the vessel on Monday as instructed by local authorities.The shipping company will continue planning with local authorities and specialists on the removal of the remaining part of the carrier from the reef, it said in a statement. Mauritius said last week it would scuttle the ship’s remains at sea in a way that would avoid further pollution or interfere with maritime routes, after taking in recommendations from various groups on how and where to sink the ship to conform with advice of French experts present on the island. Nagashiki said it has submerged the carrier in water designated by the local authorities. The MV Wakashio had about 3,800 tonnes of heavy oil and about 200 tonnes of light oil as fuel as of July 25 when it ran aground. Except for about 1,000 tons of oil that had spilled overboard almost all of the remaining oil on the ship was retrieved by August 12, and almost all lubricant and residues, which remained onboard, collected by August 23, the firm said. The company will continue to collect oil deposits on board and suspended matter while local authorities, people and an oil spill cleaning company are continuing to collect oil that has drifted to the coast, it said.
Japanese experts warn oil damage could kill mangroves in Mauritius(Kyodo) — A Japanese disaster relief team said Tuesday the oil spilled from a grounded Japanese freighter off Mauritius in the Indian Ocean could kill mangroves if it is not cleaned up soon. The team composed of seven members, including five environment experts, has been conducting an on-site probe of the damage to the environment, especially the mangrove forests and coral reefs, since Friday, while providing on-site environment assistance to the Mauritius government. “In the heavily polluted areas, oil adhesion to pneumatophores (or aerial roots) can suffocate mangroves to death. Also, if the oil stays for long, its toxic substances can kill mangroves,” Noriaki Sakaguchi, vice team leader and an ecosystem conservation expert at Japan International Cooperation Agency, said in an online briefing. While no dead or dying mangroves have been found so far, the team said oil coating on the pneumatophores of mangroves has been confirmed in all seven surveyed locations, with a wide area of damage found in two sites. Clearing oil from mangrove forests in a muddy environment, instead of a rocky one, is particularly difficult as the removal work may allow deeper penetration of the oil beneath the forests, according to the team. The group will start assessing the impact of oil spill on the Ramsar wetlands near the accident site on Thursday. Environment Minister Shinjiro Koizumi told a press conference Tuesday that the ministry is considering sending additional environment experts to the island nation. The second team has inspected 12 locations near the shipwreck, finding no apparent coral deaths caused by the oil spill and no evidence of oil on the seabed. However, ropes containing the spill and the wreck of the ship have destroyed corals, according to a team official, and the water near the accident site is murky as a result. The front section of the ship was towed to open water and sunk as instructed by local authorities after the wreckage was broken into two.
Oil spill in Mauritius calls for more efforts to safeguard coral reef ecosystems – On July 25, 2020, a Japanese cargo ship struck a reef on the southeast coast of Mauritius, leaking tons of oil into coral reefs, pristine turquoise water lagoons and unique ecosystems of the island nation. The grounded ship split up, releasing more oil in the sea that is home to some of the finest coral reefs and marine protected areas in the world. The oil spill has the potential of causing devastating and widespread impacts on the country that depends on her seas for food, livelihoods and tourism that accounts for 36% of Mauritius GDP and generates US$4.3 billion annually. Oil spill threatens the fishing industry as boats and fishing gear may be damaged. In the case of a massive spill, human health may be affected through direct contact, inhalation of the oil or consumption of contaminated seafood. While the country has declared a state of environmental emergency and disaster response is underway, the situation highlights the vulnerability of marine ecosystems and habitats such as mangroves, seagrasses and corals. Oil, a complex mixture of many chemicals, can kill corals, depending on species and exposure. Chronic oil toxicity impedes coral reproduction, growth, behavior, and development. The time of year when a spill happens is critical since coral reproduction and early life stages are particularly sensitive to oil. Efforts are already underway to better protect the underwater world. Just two months before the Mauritius oil spill; the International Coral Reef Initiative (ICRI), a long-standing partner of the United Nations Environment Programme (UNEP), adopted a Recommendation to safeguard the future of coral reefs. It recognizes the vulnerability of coral reefs to climate change, ocean acidification, land-based pollution such as nutrients and sediments from agriculture, sea-based pollution, overfishing, among other activities. Corals support a quarter of all marine life, provide at least half a billion people with food security and livelihoods; protect coastlines from damage by buffering shorelines against waves, storms and floods. Estimates indicate coral reefs account for $2.7 trillion per year in ecosystem service value. The Recommendation, adopted in May 2020, after more than 18 months of work and stakeholder consultations, aims to get coral reefs and related ecosystems prioritized and monitored with rigorous indicators within the Convention on Biological Diversity Post-2020 Global Biodiversity Framework being decided in May of 2021. It calls on countries to safeguard coral reef ecosystems, identifying a set of six coral related indicators for adoption and a further five indicators for priority development, to provide improved information on ecosystem integrity, function, intactness, and resilience
17 dead dolphins wash up on Mauritius beach near oil spill site (Reuters) – Seventeen dead dolphins washed up on Mauritius’s shore on Wednesday, a government official told Reuters, a month after an oil spill from a Japanese ship that ran aground caused a major ecological disaster in the area. “The dead dolphins had several wounds and blood around their jaws, no trace of oil however. The ones that survived, around ten, seemed very fatigued and could barely swim,” said Jasvin Sok Appadu from the fisheries ministry. The dead dolphins have been taken to the Albion Fisheries Research Centre for an autopsy, Appadu said. Results are expected on Wednesday night. A spokeswoman for local Mauritian environmental group Eco-Sud called for the autopsy results to be released publicly and said the group wanted to be present during the autopsy “to better understand why the dolphins died,” but was still waiting for a response from authorities. The spill came from the Japanese-owned MV Wakashio, which ran aground on July 25 and began to spill oil about a week later. The ship was scuttled Monday. The full impact of the spill is still unfolding, scientists say, and the damage could impact Mauritius and its tourism-dependent economy for decades. The wildlife at risk include the critically endangered Pink Pigeon, endemic to the island, the seagrasses, clownfish and mangrove forests, whose roots serve as nurseries for fish. The Mauritius Marine Conservation Society said 15 kilometers of coastline have been affected by the spill and it is moving towards the Blue Bay Marine park, home to 38 types of coral and 78 species of fish.
At least 40 dolphins die near oil spill in Mauritius – At least 40 dolphins have mysteriously died in an area of Mauritius affected by an oil spill from a Japanese boat, officials and witnesses said yesterday, as witnesses described the deaths of one mother dolphin and her baby. Environmentalists have demanded an investigation into whether the dolphins were killed as a result of the spill from a Japanese ship, which was scuttled on Monday after running aground in July and leaking oil. The death toll may rise: fisherman Yasfeen Heenaye said he saw between 25 and 30 apparently dead dolphins floating in the lagoon yesterday morning, among scores of the animals that fishermen were trying to herd away from the pollution. “There was a mother and her baby,” he said. “He was very tired, he didn’t swim well. “But the mum stayed alongside him, she didn’t leave her baby to go with the group. “All the way she stayed with him. She was trying to protect him.” He filmed as the calf wallowed on its side and died in front of them, floating on the waves. Heenaye, his boat running low on fuel, motioned to Reuben Pillay, who tracked the mother dolphin. She initially looked normal, he said. “But in a few minutes she went on her side, one fin in the water, and one out of the water and then she started flapping her tail really, really rapidly,” said Pillay, a professional drone operator and environmentalist who is providing video to Reuters. “She swam in circles in front of the boat, she moved her tail very violently and after about five minutes she just stopped moving, and she sunk. “We heard cries, I thought it was a woman on the boat – but they told me, no – it was the dolphin.” The mother dolphin stopped moving and eventually slowly sank, tail first, beneath the waves. The dead baby floated on the surface.
Thousands protest in Mauritius over dead dolphins, demand resignations – (Reuters) – Thousands of protesters demonstrated in the Mauritius capital Port Louis on Saturday to demand an investigation into an oil spill from a Japanese ship and the mysterious death of at least 40 dolphins that have been found near the site of the spill. Environmentalists have called for an investigation into whether the dolphins died as a result of the spill caused when the bulk carrier, the MV Wakashio, struck a coral reef last month. One protestor held a banner with a dolphin covered in oil reading “our lives matter” and another held one calling for the government to resign. Mauritian flags were waved across the packed square of St Louis Cathedral. “We do not trust the government and the diluted information they’ve been feeding us regarding the management and responses to the oil spill,” Fabiola Monty, 33 a Mauritian environmental scientist, told Reuters from the square. The government has said it will carry out autopsies on all the dead dolphins and has set up a commission to look into the oil spill. Two investigations are being carried out: one by the police on the crew’s responsibilities and one by a senior Shipping Ministry official on what happened to the ship. So far veterinarians have examined only two of the mammals’ carcasses, which bore signs of injury but no trace of oil in their bodies, according to preliminary autopsy results.
Bintulu MP calls for immediate clean up of ship’s oil spill on Igan River – Bintulu MP Dato Sri Tiong King Sing has called on the federal and state environmental protection authorities to take immediate steps to clean up an oil spill from a ship on Igan River on Aug 23. The Progressive Democratic Party president said the authorities not only need to rectify the issue seriously but also investigate its causes. “The oil spill incident had already been widely circulated on social media for several days And there should be no reason for the relevant departments to plead ignorance. Why allow the oil spill to spread uncontrollably to an extent of nine kilometres along the river,” he said in a statement last night. He took to task a sawmill, which is said to own the ship, for not acting alerting the authorities about the oil spill after it happened. “We need to question why the sawmill involved failed to immediately notify the relevant authorities when the incident occurred. They should have also taken the initiative to assist the authorities to quickly mitigate any further spread of the spilled oil.” Tiong, who is also Prime Minister’s Special Envoy to People’s Republic of China, said he received complaints from local residents that the Igan River had been severely polluted by the oil spill. “Not least, it has caused great hazard and inconvenience to the residents who rely on pumping the river for drinking water. The relevant departments must take this incident much more seriously.
Montara oil spill victims seek aid 11 years on – Friday marked the 11th anniversary of the Montara oil spill, in which hundreds and thousands of barrels of oil spilled into the Timor Sea following an explosion at an offshore rig. Despite more than a decade of suffering the impacts, the affected residents of Timor Island in Indonesia’s southernmost province East Nusa Tenggara (NTT) are still fighting for justice and demanding compensation from rig operator PTT Exploration and Production (PTTEP) Australasia and the Australian government. PTTEP Australasia is a wholly-owned subsidiary of Thai State-controlled PTTEP Pcl. Montara victim advocacy team head Ferdi Tanoni said on Friday in Kupang: “NTT residents, especially the ones living in West Timor, are demanding that the Australian government immediately compensate more than 200,000 residents that have suffered [from the oil spill]. Some have even passed away.” He added that his team demanded that President Joko “Jokowi” Widodo to write a letter to Australian Prime Minister Scott Morrison regarding the issue. The oil spill occurred on August 21, 2009, following an explosion at the Montara oil rig. For 74 days, gas and oil from the rig gushed in the Timor Sea, approximately 690km west of Darwin and 250km southeast of Rote Island, East Nusa Tenggara. Ferdi alleged that then-Australian minister for natural resources and energy, Martin Ferguson, had downplayed the environmental impacts of the oil spill. But, he said the Australian government’s Montara Commission of Inquiry “quoted a baseless statement from the rig operator that between 300 and 400 barrels of oil were spilled every day. “It is estimated that the total area affected by the spill was around 90,000sq km.”
Oil spill off UAEs east coast forces closure of Kalba beach – Black sludge has washed up across three kilometres of pristine Kalba coastline after a suspected oil spill at sea. The slick caused the suspension of fishing activities and the partial closure of Kalba beach. Tuesday’s spill is the fourth along the east coast of the UAE this year and the second in the Sharjah enclave of Kalba. The slick even threatened the protected Al Qurm Nature Reserve – a haven for sea turtles and rare birds – but barriers prevented any damage. “Our inspectors and investigation team were immediately dispatched to the location,” Shamsa Al Ketbi, director of the support services at the Sharjah Environment and Protected Areas Authority, told The National. “The team had to close parts of Kalba Corniche until the clean up process is finalised.” The cause of the spill has not been established and the clean-up is expected to take up to three days. Fishing remains suspended. It is believed most oil spills are caused by rogue tankers cleaning their hulls in international waters. The sludge then washes ashore. The authority is working on establishing a monitoring system to spot spills before they reach the coastline. Fishermen said they noticed the oil sludge at Kalba fishing port early on Tuesday. “The smell was terrible and the water colour was brown to black,” said Saeed Sultan, 35. “I called my father and told him not to go fishing as oil sludges can stick to the fishing net and ruin it completely.” Mr Sultan said he visited Kalba beach on Wednesday and found a dead turtle washed up on the shore.
Turkey’s Black Sea find shapes its potential role as an energy producer – Turkey says its natural gas find in the Black Sea will likely be followed by further discoveries, altering the geopolitics of energy trade in its region. “It’s just the beginning,” President Recep Tayyip Erdogan’s spokesman Ibrahim Kalin said of Friday’s announcement that Turkey struck gas deep under its territorial waters. “The work will continue for exploration as well as drilling at the same time. We’re very hopeful that it will lead to other fields in the same area.” Ankara’s state-oil arm TPAO will continue offshore exploration near the 320 billion cubic meter Sakarya field where officials see “much greater potential” for hydrocarbons, Kalin said in an interview at the presidential office in Istanbul on Saturday. The discovery announced by Erdogan is already the largest of its kind in the Black Sea and proved the existence of sizable deposits deep under the seabed. Kalin said it also gave fresh impetus to Turkey’s search for more energy resources to be able to function as more than just a massive consumer and a conduit for cross-border gas trade. “Turkey will be an energy producing country. That’s a new dimension, a very significant one,” Kalin said. “It puts Turkey at a different level in terms of its strategic location, relations, regional and global affairs.” “Turkey is a premium gas market, which has never been significant on a global scale. The discovery really reinforces the country’s potential role as an energy producer in the region,” said Ashley Sherman, principal analyst on Caspian and Europe upstream at Wood Mackenzie. Another prospective area nearby is the eastern Mediterranean Sea, where Turkey is conducting exploratory work with a seismic research ship. Kalin said the Oruc Reis vessel will continue its survey in waters disputed by Greece and Cyprus, a conflict that’s fueling the tensions with Athens. “Whatever we find in the eastern Mediterranean, we’d like it to be shared by all. We’d like it to benefit all neighboring countries which have a shore,” Kalin said. “We do not want to see this as a zero-sum game.” Turkey is mired in territorial disputes with Greece and Cyprus in the Mediterranean Sea as it searches for oil and gas. France has temporarily increased its military presence to ward off Turkish steps, and German Chancellor Angela Merkel on Wednesday said the European Union was concerned over the increased tensions.
Oil Steady as Virus Offsets Hurricane Threat — Oil was steady after a third straight weekly gain as the threat of back-to-back storms hitting the U.S. Gulf Coast and disrupting production was offset by signs of a coronavirus resurgence in parts of Asia and Europe. October futures traded near $42 a barrel in New York after falling 1.1% on Friday. Almost 60% of crude output in the U.S. Gulf of Mexico production was closed as of midday Sunday as the region prepared for two approaching hurricanes. The systems — Marco and Laura — are coming from different directions and have the potential to cause billions of dollars in damage. Governments around the world, meanwhile, continue to tread a fine line between trying to halt the spread of Covid-19 and efforts to re-open their economies. While the pandemic is showing signs of stabilization in the U.S., it appears to be staging a comeback in Europe and Asia. U.S. benchmark crude futures have been rising — albeit very gradually — this month amid a steady decline in domestic crude and gasoline supplies, and tentative signs that demand is returning. That’s starting to encourage the return of production, however, with drillers in the Permian Basin of West Texas and New Mexico putting an additional 10 rigs to work last week for the biggest jump in activity this year. “What’s going to keep the brakes on the price is what U.S. oil supply is going to do,” said Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia. While the hurricanes are positive for prices, they’re very temporary, but the rising U.S. oil rig count reaffirms that spare capacity can come back and is enough to meet any price increase, he said West Texas Intermediate for October settlement added 0.1% to $42.37 a barrel on the New York Mercantile Exchange at 7:24 a.m. in London. Brent for the same month was climbed 0.2% to $44.42 on the ICE Futures Europe exchange after declining 1.2% on Friday. The global benchmark crude’s premium over WTI was $2.04, the same as Friday, which was the least at the close since July 27. Brent’s prompt timespread suggests concerns about over-supply are increasing. It was 57 cents a barrel in contango — a market structure where prompt contracts are cheaper than later-dated ones — compared with a contango of 22 cents at the end of July. Libya’s National Oil Corp. said Friday that it welcomed the country’s new cease-fire agreement and the nation should be able to resume exports when all of its facilities are freed from military occupation, potentially unleashing even more new supply at a time when the OPEC+ alliance is easing output curbs.
Oil prices climb as two hurricanes shutter U.S. offshore production (8/24) –Oil edged higher as production was disrupted by two storms approaching the U.S. Gulf Coast.Futures rose 0.8% in New York. Almost 58% of crude output, or more than 1 million barrels a day, in the Gulf of Mexico was closed as of midday Sunday. The storms Marco and Laura — the latter of which is forecast to become a hurricane — are coming from different directions and have the potential to cause billions of dollars in damage. The weather systems could force refineries to shut and also hit demand when they near land.Crude, and other risk assets including equities, received a boost on Monday amid a thaw in U.S.-China relations. President Donald Trump’s team was said to be privately seeking to reassure American companies that they can still do business with the WeChat messaging app in China.U.S. benchmark crude futures have been rising — albeit very gradually — this month amid a steady decline in domestic crude and gasoline inventories, and tentative signs that demand is returning. That’s starting to encourage the return of production, however, with drillers in the Permian Basin putting an additional 10 rigs to work last week for the biggest jump in activity this year.“The situation on the oil market over the next three days is likely to be determined partly by news from the Gulf of Mexico,” “The psychological effect should not be underestimated,” Weinberg said of the impact of the two storms on refining activity and oil production in the U.S. West Texas Intermediate for October added 32 cents to $42.66 a barrel at 10:24 a.m. in London. Brent for the same month rose 34 cents, or 0.8%, to $44.69. The global benchmark’s premium over WTI closed at its narrowest since July 27 on Friday. he shape of the oil futures curve has suggested concerns about oversupply have grown in recent week. On Friday, Brent futures for October traded at their biggest discount to the November contract since May, a structure known as contango. Speculators have also turned less bullish on WTI, last week trimming their bets to the smallest since May
Muted oil reaction to dual storm threat is ‘remarkable,’ Kilduff says – Two storms are barreling toward the Gulf Coast forcing a shutdown in oil operations, but the muted reaction in oil prices demonstrates just how closely the market is tied to a global recovery from Covid-19. “Due to the moribund demand for gasoline and diesel fuels these days, due to the pandemic, it is hard to get a rally going off this remarkable dual-storm threat, which itself is remarkable,” Again Capital’s John Kilduff told CNBC. Marco, which is expected to make landfall first, has weakened as it approaches the coast and was downgraded to a tropical storm on Sunday night. The other storm Laura, however, is strengthening and “could be more menacing,” according to Kilduff. “Given that both storms appear modest based on current forecasts we see lower potential for a sustainable impact on crude … We expect the elevated storm activity to offer modest but short lived support for both oil prices and refining margins,” added Bank of America’s Doug Leggate. West Texas Intermediate crude, the U.S. oil benchmark, gained 28 cents, or 0.66%, to settle at $42.62 per barrel. International benchmark Brent crude advanced 78 cents, or 1.76%, to $45.13. As of Sunday, about 57.6% of offshore oil production in the Gulf of Mexico had been shut-in, or roughly 1.07 million barrels per day, according to the U.S. government. The primary driving force for oil prices continues to be the unprecedented fall-off in demand caused by the coronavirus pandemic, as well as worldwide producers’ response to the plunge in prices. “Today is more of an opportunity to see that even such a sudden event is weak to really put aside the concerns that Covid-19 has brought upon market participants,” said Bjornar Tonhaugen, Rystad Energy’s head of oil markets. “Yes, a dip in oil production provides a breath to traders, who have been seeing global output rising over the last weeks, amid a demand recovery lag. But what will really make a difference is news from the recovery front,”
Oil hits five-month highs as U.S. producers cut output ahead of hurricane – (Reuters) – Crude oil prices rose to a five-month high on Tuesday as U.S. producers shut most offshore output in the Gulf of Mexico ahead of Hurricane Laura even as rising coronavirus cases in Asia and Europe capped gains. Brent futures LCOc1 rose 73 cents, or 1.6%, to settle at $45.86 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 rose 73 cents, or 1.7%, to settle at $43.35. That was the highest closes for both benchmarks since March 5, the day before Saudi Arabia and Russia failed to agree on a new plan to cut output and about a week before the World Health Organization declared COVID-19 a pandemic. U.S. producers cut crude output ahead of Hurricane Laura at a rate approaching the level of 2005’s Hurricane Katrina and also halted most oil refining along the Texas/Louisiana coast. Laura is expected to strengthen into a major hurricane with 115 mile per hour (185 kph) winds before it strikes the coast near the Texas-Louisiana border early Thursday, according to the U.S. National Hurricane Center. On Tuesday, producers had evacuated 310 offshore facilities and shut 1.56 million barrels per day (bpd) of crude output, 84% of Gulf of Mexico’s offshore production, near the 90% outage that Katrina brought 15 years ago. “Today’s strength was again almost entirely attributable to storm concerns,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, noting the storm factor would likely overshadow the weekly storage report from the U.S. Energy Information Administration (EIA). Analysts forecast U.S. crude stockpiles fell for a fifth week in a row last week, according to a Reuters poll conducted ahead of reports from the American Petroleum Institute (API) at 4:30 p.m. (2030 GMT) on Tuesday and the government on Wednesday. “Overall, hurricanes may be limiting supply this week … but the market will soon again focus on the biggest hurricane of them all, COVID-19,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy. Europe is seeing a rise in coronavirus cases, including re-infection. Two re-infections were reported in Europe and one in Hong Kong. Elsewhere, U.S. and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal.
U.S. oil and gasoline futures tally highest finish since March as storms force output cuts in U.S. Gulf Coast – Oil and gasoline futures settled Tuesday at their highest since early March, as storms forced the shutdown of more than 80% of offshore crude-oil production in the Gulf of Mexico and prompted refinery cuts. Tropical Storm Marco made landfall Monday and was downgraded to a post-tropical cyclone Tuesday morning. Attention is focused on Laura, which was upgraded to a hurricane Tuesday morning and is expected to make landfall on the U.S. Gulf Coast later this week. “Markets know that the hurricane shut-ins are usually transient, and it’s a bit too early to know whether the current ones will have a prolonged bearish effect on prices or not,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy, in a daily note. “Refineries might need to shut-in more runs due to flooding than upstream operators shut in crude supply,” so weaker demand for crude at the refineries may help to offset price-bullish supply constraints. West Texas Intermediate crude for October delivery CL.1, -0.09% CL00, -0.09% rose 73 cents, or 1.7%, to settle at $43.35 a barrel on the New York Mercantile Exchange. October Brent crude BRNV20, +0.06%, the global benchmark, also gained 73 cents, or 1.6%, to $45.86 a barrel on ICE Futures Europe. Front-month prices for both benchmarks settled at their highest since March 5, according to Dow Jones Market Data. The Interior Department’s Bureau of Safety and Environmental Enforcement, citing operator reports, estimated Tuesday that 84.3% of offshore oil production in the Gulf of Mexico, or about 1.6 million barrels of oil a day, had been shut in, along with nearly 61% of natural-gas production. A number of refineries on the Gulf Coast, where almost half of the U.S. oil processing industry is located, have also suspended production ahead of Laura’s expected landfall, noted Eugen Weinberg, analyst at Commerzbank. While the refineries were reinforced following Hurricane Katrina in 2005, there is still the risk of flooding, which could prompt extended closures. Storms can also affect the transportation of crude oil and exports. It’s no surprise then that gasoline futures jumped 6.5% Monday in response to the storms, Weinberg said. A widening premium for October gasoline relative to November indicates market participants fear the potential of shortages, analysts said. On Tuesday, front-month September gasoline added 2.1% to $1.3959 a gallon – the highest finish since March 5. The most-active October contract gained 0.7% to $1.2685 a gallon. September heating oil , meanwhile, rose 1% to $1.2601 a gallon.
WTI Holds Near 6-Month Highs Amid Gulf Shut-Ins, Inventory Draws – Oil prices were higher today, driven in large part by significant shut-ins across the Gulf of Mexico. WTI traded back above $43.As Bloomberg’s Kriti Gupta details, the Gulf of Mexico is responsible for 17% of U.S. offshore oil production, 82% of which has been shut in preparation for the storm (up from 58% yesterday). So the simple explanation for rising crude is less production means less supply and higher prices.It gets even thornier when you consider that 45% of total U.S. petroleum refining capacity also is located along the Gulf Coast.This is unlikely to be reflected in any inventory/production data released this week. API
- Crude -4.524mm (-4.3mm exp)
- Cushing -646k
- Gasoline -6.392mm (-2.7mm exp) – biggest draw since April 2019
- Distillates +2.259mm (-700k exp)
Analysts expected a fifth weekly crude draw in a row and a continuing trend of draws in Gasoline stocks also… API reported bigger than expected draws for Crude and Gasoline (with the latter’s biggest drop in stocks since April 2019)… WTI closed at its highest for the front-month contract since early March…Graphics: BloombergOil was trading around $43.35 ahead of the print, and was little changed after the data.“Markets know that the hurricane shut-ins are usually transient, and it’s a bit too early to know whether the current ones will have a prolonged bearish effect on prices or not,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy, in a daily note. “Refineries might need to shut-in more runs due to flooding than upstream operators shut in crude supply,” so weaker demand for crude at the refineries may help to offset price-bullish supply constraints.
Oil steadies; virus concerns weigh as hurricane heads to U.S. – (Reuters) – Oil prices steadied on Wednesday, pressured by worries about the demand outlook during the coronavirus pandemic but buoyed as U.S. producers shut output in the Gulf of Mexico ahead of Hurricane Laura. Renewed worries over the pandemic, which has squeezed demand and sent prices to record lows in April, dampened market sentiment after reports this week of patients being re-infected, raising concerns about future immunity. Brent crude LCOc1 fell 22 cents to settle at $45.64 a barrel, while U.S. West Texas Intermediate crude CLc1 rose 4 cents to $43.39 a barrel. Both benchmarks settled at a five-month high on Tuesday. The U.S. energy industry was preparing for Hurricane Laura, forecast to become a Category 4 hurricane with heavy rains and catastrophic, 130 mile-per-hour (209 kph) winds that will drive ocean waters up to 30 miles (48 km) inland, forecasters said. Nine oil-processing plants that convert nearly 2.9 million barrels per day of oil into fuel, and account for about 15% of U.S. processing, were shutting down. Oil producers on Tuesday had evacuated 310 offshore oil facilities and shut 1.56 million barrels per day (bpd) of crude output, 84% of Gulf of Mexico’s offshore production. “Oil traders will be preoccupied with the hurricane today,” said Tamas Varga of broker PVM. “Once the danger passes, demand considerations will come into focus again.”
Oil Near 5-Month High as Laura Menaces Refineries— Oil held at a five-month high as the market braced for disruptions to production and refining from Hurricane Laura and after a further drop in U.S. crude stockpiles added to optimism that demand is recovering. Futures in New York were steady near $43 a barrel after closing at the highest since March 5 on Wednesday. Laura made landfall early Thursday at Cameron, Louisiana, near the border with Texas, as a Category 4 storm. While the hurricane’s path shifted away from refineries and ports in the Houston area, the stretch of coastline that will feel its full impact accounts for about a quarter of U.S. refining capacity. American crude inventories fell by 4.7 million barrels last week, according to an Energy Information Administration report, the fifth straight weekly decline. A drop in gasoline stockpiles to the lowest since December and an increase in refinery run rates provided more evidence that the energy demand recovery in the world’s largest economy is gathering pace. More than 80% of oil output in the Gulf of Mexico and almost 3 million barrels of a day of refining capacity has been shut ahead of Laura’s landfall, causing a spike in U.S. gasoline prices. It’s also disrupting energy flows, with trans-Atlantic shipping rates rising and more than 60 oil and refined product tankers in the western U.S. Gulf waiting for Laura to pass, according to ship-tracking data compiled by Bloomberg. The hurricane has helped oil break out of its narrow range, although “I would have anticipated a stronger move on prices,” said Edward Moya, senior market analyst at Oanda Corp. “That’s because of concern over the coronavirus and continued demand destruction.” Prices West Texas Intermediate for October delivery declined 0.2% to $43.30 a barrel on the New York Mercantile Exchange at 7:38 a.m. in London. The contract climbed 0.1% Wednesday following a 1.7% jump in the previous session. Brent for the same month added 0.1% to $45.64 a barrel on the ICE Futures Europe exchange after falling 0.5% on Wednesday. Still, Laura is likely to have only a temporary market impact, with Covid-19 continuing to cloud the prospects for a more sustainable recovery in oil prices. The market may have recovered from the shock that saw WTI plunge below zero in April, but the oil industry continues to consolidate with prices stuck in the low $40s a barrel. Norway’s Equinor ASA announced it would trim its workforce in the U.S., Canada and the U.K. by 20% on top of previously announced cuts.
Oil Prices Decline After Laura Moves Inland — Oil declined after Laura barreled into Louisiana, largely sparing the Texas Gulf Coast from widespread disruption to key energy infrastructure. Laura made landfall early Thursday near Cameron, Louisiana, as a Category 4 hurricane and has now weakened to a tropical storm. While the storm knocked out power to hundreds of thousands of people and impacted plants that produce chemicals and liquefied natural gas, southeast Texas ports and refineries — including the largest U.S. refinery — likely avoided the worst of it. Crude futures in New York fell less than 1% on Thursday, while gasoline futures dropped more than 5%. A stronger dollar also reduced the appeal for commodities priced in the greenback. “The damage is not as bad as anticipated, which is creating more sell pressure along the energy complex,” said Phil Flynn, senior market analyst at Price Futures Group. “The lower price of gasoline means worse refining margins potentially, meaning that there’s not going to be a lot of incentive to use a lot of crude quickly.” As the storm passes, traders are assessing the potential impact on both fuel production and consumption. Exxon Mobil Corp.’s Beaumont refinery in Texas will begin restarting Friday if an assessment shows no damage from Hurricane Laura, while its Baytown refinery on the Houston Ship Channel has already begun the restart process. Meanwhile, Magellan Midstream Partners LP’s East Houston terminal restored full operations at its refined products truck loading rack and the U.S. Coast Guard reopened the Port of Houston on Thursday. More than 80% of oil output in the Gulf of Mexico and almost 3 million barrels a day of refining capacity had been shut ahead of the storm, causing a spike in gasoline futures prices earlier this week. Since then, prices have retreated. Aside from the storm impact, a persistent inventory overhang as the coronavirus depresses demand continues to cloud the outlook for a sustained rebound in prices.
Oil prices slip as Hurricane Laura’s blow unlikely to have sustained impact – Oil prices eased on Thursday as the market expected a quick recovery for production platforms shuttered ahead of a hurricane that churned through the Gulf of Mexico and slammed Louisiana. Brent crude futures for October, which expire on Friday, fell US55 cents, or 1.2%, to settle at $45.09 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 35 cents or 0.8% to $43.04 a barrel. The storm hit Louisiana early Thursday with 150 mile-per-hour (240 kph) winds, damaging buildings, knocking down trees and cutting power to more than 400,000 people in Louisiana and Texas. Its storm surge was less than predicted, sparing inland plants from feared flooding. Oil producers on Tuesday had shut 1.56 million barrels per day (bpd) of crude output, or 84% of the Gulf of Mexico’s production, evacuating 310 offshore facilities. BP said Thursday it was already preparing to return to its company-operated facilities in the deepwater Gulf of Mexico to inspect for any potential damage from the storm. At the same time, refiners that convert nearly 2.33 million bpd of crude oil into fuel, and account for about 12% of U.S. processing, halted operations. “On the one hand refinery shutdowns reduced the demand for crude oil, but at the same time Gulf of Mexico production was shut in, nearly offsetting each other,”
Oil Gives Up Some Gains as Refiners Spared — Oil was steady — but still headed for a fourth weekly gain — after Hurricane Laura swept through Louisiana and Texas without appearing to inflict major damage on the region’s energy infrastructure. Futures in New York traded near $43 a barrel after closing down 0.8% on Thursday. Laura came ashore as one of the most powerful hurricanes to ever hit Louisiana but has since weakened to a tropical storm. While it knocked out power to hundreds of thousands of people and impacted plants that produce chemicals and liquefied natural gas, southeast Texas ports and crude facilities — including the largest U.S. refinery — likely avoided the worst of it. More than 80% of oil output in the U.S. Gulf of Mexico and almost 3 million barrels a day of refining capacity had been shut ahead of the storm, causing a spike in gasoline and oil prices earlier in the week. Crude was also buoyed by data showing a fifth straight weekly decline in American stockpiles. “With little oil infrastructure damage reported so far, and with shut-in production likely to return in the coming days, it looks as though oil will remain trading in this fairly narrow range that we’ve become accustomed to,” said Warren Patterson, head of commodities strategy at ING Bank NV. “Demand from refiners should recover fairly quickly.” With the passing of Laura, investor attention now turns back to the coronavirus and the pace of global energy demand recovery. About half of India’s trucking fleet is still idled, leading to a bleak outlook for diesel consumption there, while gasoline and diesel sales in the U.K. are still about 11% below pre-lockdown levels. In China, there’s only expected to be a small boost in energy demand from infrastructure projects and post-flood recovery efforts. West Texas Intermediate for October delivery was unchanged at $43.04 a barrel on the New York Mercantile Exchange at 7:27 a.m. in London. The contract has risen 1.7% so far this week. Brent for the same month added 0.1% to $45.14 a barrel on the ICE Futures Europe exchange after falling 1.2% on Thursday. The more active November contract climbed 0.1% to $45.66. Crude futures on the Shanghai International Energy Exchange fell 0.4% to 293.6 yuan a barrel, paring its advance this week to 2.6%. Brent’s three-month timespread was $1.28 a barrel in contango — where prompt contracts are cheaper than later-dated ones — from $1.41 in contango at the end of last week. The change in the market structure of the global crude benchmark suggests concerns about over-supply have eased slightly.
Oil prices dip as producers, refiners avoid worst of hurricane – Brent crude futures for October fell 4 cents to settle at $45.05 a barrel, before expiring on Friday. U.S. West Texas Intermediate (WTI) crude CLc1 fell 7 cents to $42.97 a barrel. Both benchmarks notched weekly gains of about 1.5%, with WTI rising for a fourth straight week. The benchmarks hit five-month highs during the week as U.S. producers cut crude output ahead of Laura at a rate close to the level of 2005’s Hurricane Katrina. “The oil trade has been featured by strong advances at the start of the week as a sizable amount of storm premium was pumped into the market ahead of Hurricane Laura, followed by a major erasure of hurricane premium following the storm’s arrival as limited impact on offshore crude production or refinery activity was indicated,” said Jim Ritterbusch, president of Ritterbusch and Associates. The oil market has had an unusually long spell of low volatility, analyst Eugen Weinberg at Commerzbank said, in contrast with stock markets. “It didn’t even react to a weaker dollar. There’s no impulse in either direction. It has seldom had so little volatility for such a long period, especially given the dynamic situation on the demand and supply sides,” Weinberg said. Laura, since downgraded to a tropical depression, hit Louisiana early on Thursday with winds of 150 miles per hour (240 km per hour). The storm killed at least six people, damaged buildings and felled trees. Power was cut to hundreds of thousands in Louisiana and Texas, but refineries were spared from massive flooding.
Oil prices edge lower, but tally a weekly gain after Hurricane Laura spares refineries – Oil futures ended modestly lower Friday, but tallied a weekly gain a day after Hurricane Laura made landfall on the Gulf Coast as a Category 4 storm but refineries were spared from extensive damage. Now the industry waits to see how traders respond on Monday. West Texas Intermediate crude for October delivery fell 7 cents, or 0.2%, to settle at $42.97 a barrel on the New York Mercantile Exchange. Based on the front-month contracts, prices saw a weekly climb of 1.5%, which represents their fourth weekly rise in a row according to Dow Jones Market Data reported MarketWatch. October Brent crude, the global benchmark, lost 4 cents, or 0.09%, at $45.05 a barrel on ICE Futures Europe, ahead of the contract’s expiration at Monday’s settlement. For the week, front-month contract prices climbed by 1.6%. “No reports of major damage to refineries or massive flooding should allow the industry to bounce back quickly,” said Phil Flynn, senior market analyst at The Price Futures Group, in a Friday note. “While refineries may stay shut for weeks, they will use this opportunity to do maintenance, and after some seasonal weakness in prices, petroleum should resume its longer-term upward trend.” Hurricane Laura was responsible for at least six deaths and caused extensive damage as it came ashore and moved inland Thursday. However, production from oil rigs in the Gulf of Mexico and activity at refiners in the Gulf Coast, the heart of the U.S. oil-processing industry, was expected to rebound quickly.
Oil Demand Recovering At Record Price — Rigzone — August 27, 2020 – World oil demand has grown at a record pace – by 13 million barrels per day (bpd) – in the past four months since the nadir of the COVID-induced collapse in April, IHS Markit reported Tuesday. Presently at 89 percent of pre-COVID levels, global oil demand has risen from 78 percent in April, the consultancy noted in a written statement emailed to Rigzone. The firm attributes the increase to relaxation of some COVID-19 restrictions. It predicts demand should continue to go up until leveling off at 92 to 95 million bpd through the first quarter of 2021. It pointed out the projection equates to roughly 92 to 95 percent of prior year levels. The anticipated plateau in demand will stem primarily from subdued air travel and commutes, IHS stated. “The meteoric rise of world oil demand from the lowest lows of the COVID crash is going to come up just short of a full comeback, at least for now,” remarked Jim Burkhard, IHS Markit’s vice president and head of oil markets. “For demand to fully return, travel – especially air travel and commuting to work – needs to get back to normal. And that won’t happen until there is containment of the virus and effective vaccines.” IHS Markit also stated the number of air flights globally is approximately 30 percent lower than February levels – a marked improvement from the 78-percent shortfall in April. However, it observed that actual jet fuel consumption remains 50 percent lower than prior-year levels because the number of long-haul flights has not recovered to the extent of short-haul flights. Burkhard also pointed out the expected plateau in oil demand growth does not mean a return of the supply overhang that caused prices to plunge in April. He explained that production restraint by the OPEC+ alliance as well as lower projected U.S. output should allow markets to continue rebalancing.
Aramco Shakes Up Top Management — Saudi Aramco reshuffled its senior management and created a division focused on “portfolio optimization,” as the world’s biggest oil producer adapts to low crude prices and seeks new ways to raise cash. The Saudi state energy company appointed senior vice president Abdulaziz Al Gudaimi to lead a new Corporate Development team that will “assess existing assets” and boost access to “growth markets,” it said in a statement on Sunday. He will report to Chief Executive Officer Amin Nasser and start on Sept. 13. “The organization will support rapid and effective decision-making on the company’s portfolio,” Aramco said. Aramco also named Nasir Al Naimi as acting head of the upstream business — the exploration and production arm — while Mohammed Al Qahtani will take over the downstream unit, according to people familiar with the situation, who asked not to be identified because they’re not authorized to speak to media. The downstream business involves refining, chemicals, pipelines and fuel retailing, and was previously led by Al Gudaimi. Aramo is adjusting to weaker energy prices as the coronavirus pandemic hammers the global economy, with Brent crude having fallen 32% this year to around $45 a barrel. The company is slashing investment so it can fulfill its pledge to pay a $75 billion dividend in 2020, even as its debt surges. Most of the dividend goes to the Saudi state, which needs the funds as it faces a major revenue squeeze. Earlier this year, Aramco hired advisers for a potential multi-billion dollar sale of a stake in its pipeline business. And Chairman Yasir Al-Rumayyan said in February there were non-core assets that could be monetized. In another potential sign of Aramco’s changing priorities, Bloomberg reported it suspended plans for a $10-billion refinery in China. The project was unveiled with great fanfare last year. Aramco said in a statement on Monday it was still working with its Chinese partners and committed to the Chinese market.
Pompeo in Middle East to cement Israel-Gulf alliance against Iran – US Secretary of State Mike Pompeo began a five-day visit to the Middle East in Israel before travelling on to Sudan, Bahrain and the United Arab Emirates (UAE). Pompeo met with Prime Minister Benjamin Netanyahu in Jerusalem on Monday, where, according to the US State Department, the two discussed “regional security issues related to Iran’s malicious influence, establishing and deepening Israel’s relationships in the region, as well as cooperation in protecting the US and Israeli economies from malign investors,” meaning China. In a brief press briefing after their meeting, Netanyahu praised Washington for its unilateral sanctions regime against Iran, which he wildly accused of “targeting countries with rockets, with terrorism, with pillage and plunder and murder – Murder – all over the Middle East.” He also boasted that the US would continue to “ensure Israel’s qualitative edge” in terms of military might in the Middle East, even as it steps up arms sales to the Persian Gulf oil sheikdoms. While Israel likes to promote itself as Washington’s key ally in the region, Pompeo made it very clear who was the master in this relationship and that China’s increasing trade and investment ties with Israel were unacceptable. The Secretary of State allowed that the two discussed “the challenge that the Chinese Communist Party presents to the entire world.”
Israel launches air attacks at Hezbollah posts on Lebanon border Israel said it carried out air attacks on Hezbollah observation posts in Lebanon on Wednesday after shots were fired from across the border towards its troops the previous evening. The country’s military had said earlier that a “security incident” was unfolding in the vicinity of Manara near the UN-demarcated Blue Line border between the two nations. “During operational activity in northern Israel last night, shots were fired from Lebanon toward IDF troops,” the Israeli army wrote on Twitter. “We responded with fire, & our aircraft struck Hezbollah observation posts near the border. This is a severe event & we remain ready to combat any threat to our borders.” No Israeli soldiers were wounded in the firing, the military added. Soldiers deployed illumination flares, smoke shells and live fire after the shots from the Lebanese side of the frontier, it said. In a televised statement later on Wednesday, Hezbollah leader Hassan Nasrallah described the border flare-up as an “important and sensitive” matter but refused “for now” to further comment on it. Israel and Lebanon are still technically at war, and United Nations force UNIFIL is tasked with monitoring the ceasefire. Hours earlier, Lebanon had rejected an Israeli call to reform a UN peacekeeping force patrolling the border ahead of a UN Security Council vote to renew its mandate. The incident also comes after Hezbollah announced on Saturday that it had brought down an Israeli drone flying over the Blue Line. Last September, Hezbollah vowed to shoot down Israeli drones flying over Lebanon, following an incident a month earlier when two drones packed with explosives targeted the group’s stronghold in south Beirut.
US stages military buildup to enforce deal to steal Syria’s oil – The US military over the past week has been sending convoys across the border from Iraq into Syria in what appears to be a significant escalation of the US military intervention in the war-ravaged country. According to sources in Syria, the convoys have come across at the al-Tanf crossing, where the US military maintains a garrison near the triple frontier between Iraq, Syria and Jordan. They have then traveled to US bases in the northeastern Syrian governorates of Deir ez-Zor and Al-Hasakah. Witnesses said that the convoys included tanks, armored vehicles, oil tankers and trucks bearing weapons and logistical equipment. The buildup of the US forces east of the Euphrates River follows the revelation that Washington has concocted a deal with a newly minted American oil company, Delta Crescent Energy LLC, which has been signed by the so-called Syrian Democratic Forces, the proxy ground troops employed by Washington in Syria, which consist mainly of the Syrian Kurdish YPG militia. Among the equipment being trucked in by the US military are believed to be components for two modular refineries to assist the company in exploiting and marketing Syrian oil. This agreement constitutes a war crime under the Geneva Conventions, which bar the exploitation of the natural resources of an occupied country for the benefit of the occupier. In the case of the US occupation of Syria, this constitutes an even more blatant act of international piracy, as the US military presence in the country has been authorized neither by the Syrian government nor the United Nations.
Libya calls for cease-fire following a failed rebel assault on Tripoli– Libya’s Turkish-backed government announced a cease-fire, months after inflicting a heavy defeat on Russian-supported military commander Khalifa Haftar, raising hopes for an end to a spiraling proxy war. The announcement on Friday and a reciprocal call for a truce from the head of the eastern-based legislature Aguileh Saleh come on the heels of United Nations-mediated talks in Geneva this week, and a phone call between the Russian and Turkish foreign ministers. Their countries have emerged as key power brokers in the North African nation that has the continent’s biggest oil reserves. Haftar, aided by Russian mercenaries, the United Arab Emirates and Egypt, had led a failed offensive to capture the capital, Tripoli, from the internationally recognized government. A Turkish military intervention helped rout his self-styled Libyan National Army earlier this year, and Haftar’s forces fell back to Sirte, the gateway to key oil assets. The truce announcement may bolster efforts to restart oil fields and terminals that have been closed under orders from Haftar since January, costing the country almost $8 billion in lost revenues. The National Oil Corp. welcomed calls from both sides to resume crude output, but said in a statement armed groups needed to leave oil installations before it could lift force majeure. The powerful interior minister in the Tripoli-based government, Fathi Bashagha, said in an interview that the cease-fire wouldn’t have happened without support from the U.S., Turkey, Egypt and Qatar. “It must be followed by a serious political dialogue that leads to a settlement,” he said. “Those steps must be taken quickly.” In some of the first international reaction, Egyptian President Abdel-Fattah El-Sisi welcomed the announcement as did the U.S. German Foreign Ministry spokeswoman Maria Adebahr said that from first reports it “could be an important step.” The UN, which also helped mediate the cease-fire, acclaimed the move. In his statement, Saleh, who has an uneasy alliance with Haftar, backed a proposal to resume oil production and freeze revenues in a foreign account held by the central bank while an arrangement is made to fairly distribute the money. But only Haftar can make that decision and he’s yet to comment on Friday’s developments. Earlier this week, a Haftar-aligned force said it would permit the export of stored fuel to make space for badly needed gas amid power shortages.
France & Italy Join Greece In Major Naval War Games ‘Show Of Force’ Against Turkey – President Recep Tayyip Erdogan has vowed to make “no concessions” with Greece amid the rapidly escalating eastern Mediterranian gas exploration dispute, declaring Turkey will “do whatever is necessary” to secure its territorial rights in Wednesday remarks commemorating an ancient battle which saw Seljuk Turks victorious during an engagement with the Byzantine empire in the 11th century. “We don’t have our eye on someone else’s territory, sovereignty and interests, but we will make no concessions on that which is ours,” Erdogan said, while urging that Greece must “avoid wrongs that will be the path to ruin”. He underscored “We will not compromise what is ours… We are determined to do whatever is necessary.”This even as Macron’s France has jumped fully onboard to defend Greece and Cyprus’ cause in preventing breach of their maritime territory and Exclusive Economic Zones (EEZ).France has since confirmed deployment of its ‘Lafayette’ frigate and three Rafale fighter jets to Cyprus, also as what’s being described as a “massive maritime exercise” is underway in the eastern Mediterranean on Wednesday involving Greece, Cyprus, France and Italy.Called the “Eunomia” military exercise, it’s a clear and firm signal to Turkey meant to – as Greece’s defense minister said, reinforce “the rule of law as part of the policy of de-escalating tensions.”Defense Minister Nikos Panagiotopoulos spelled out specifically that – “the initiative… aims to demonstrate the commitment of the four European Mediterranean countries to the rule of law as part of the policy of de-escalating tensions.”The drills are set to run from Wednesday through Friday of this week.
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