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Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav

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https://oilprice.com/Energy/Energy-General/What-Happens-With-Oil-Prices-If-Cushing-Inventories-Fall-To-Zero.html

What Happens With Oil Prices If Cushing Inventories Fall To Zero?

By Tsvetana Paraskova - Oct 28, 2021, 7:00 PM CDT

https://www.zerohedge.com/energy/what-happens-oil-prices-if-cushing-inventories-fall-zero

What Happens To Oil Prices If Cushing Inventories Fall To Zero?

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by Tyler Durden
Friday, Oct 29, 2021 - 10:55 AM

Authored by Tsvetana Paraskova via OilPrice.com,

  • Stocks At Cushing Have Halved Since April 2020 Market Rout

  • Storage at Cushing alone has the potential to really rally the market to the moon

  • The WTI-Brent spread is now at the narrowest it has been in just over a year

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https://oilprice.com/Energy/Energy-General/Demand-For-LNG-Is-Only-Going-To-Rise.html

Demand For LNG Is Only Going To Rise

By Irina Slav - Oct 27, 2021, 7:00 PM CDT

  • The recent energy crunch in Europe and Asia has reemphasized the importance of natural gas and LNG
  • LNG producers around the world are investing billions in increasing capacity follower the recent surge in demand for the fuel
  • Another effect of the recent rally in natural gas prices will be a surge in long-term contracts 

https://www.zerohedge.com/energy/demand-lng-only-going-rise

Demand For LNG Is Only Going To Rise

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by Tyler Durden
Friday, Oct 29, 2021 - 03:30 AM

Submitted by Irina Slav for OilPrice.com,

Cheniere Energy recently announced plans for a $7-billion expansion of its Sabine Pass liquefaction plant in response to the surge in demand for the superchilled fuel in Asia. India's biggest gas importer said that this strong demand would lead to another surge - in long-term contracts. There may be doubts about long-term oil demand, but LNG's future seems to be bright.

2021-10-27_r1pcjkyz4f.jpg?itok=jA_YMgYV

 

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https://oilprice.com/Energy/Natural-Gas/Natural-Gas-Prices-Could-Soar-Even-Higher-As-Europe-Braces-For-A-Cold-Winter.html

Natural Gas Prices Could Soar Even Higher As Europe Braces For A Cold Winter

By Tsvetana Paraskova - Oct 30, 2021, 6:00 PM CDT

  • Europe has been struggling to fill gas storage sites to adequate levels in recent months as Asian buyers have been snapping up LNG cargoes. 
  • A colder winter could send Europe’s gas prices soaring to new record highs in the coming months.
  • Russia signaled this week it would start filling European storage sites once Gazprom completes the filling of the Russian storage

As Europe enters the heating season with natural gas inventories at the lowest level in a decade, policymakers, consumers, and industries are left at the mercy of the weather, hoping for a mild winter to avoid further tightening of the already tight European gas market.  Following the colder than usual 2020/2021 winter, Europe has been struggling to fill gas storage sites to adequate levels in recent months as Asian buyers have been snapping up LNG cargoes. Buyers prefer to ship LNG to Asia where the price of gas per million British thermal units is higher than the equivalent prices in Europe. 

Despite the fact that the global gas price surge originated from woefully low inventories in Europe and led to record Asian LNG spot prices, Asia is winning the bidding war for spot LNG supply, leaving Europe undersupplied. 

This winter, unlike last winter, major LNG buyers such as Japan and South Korea have moved to secure more supply and be prepared if this winter is as cold as the previous one. 

As a result, "Europe has had less free flowing supply to replenish gas storage, and now the region is heading into winter with storage only 71% full, BloombergNEF estimates, compared to the five-year seasonal norm of 92%," BNEF said in an analysis this week. 

In this situation of low gas inventories and an already tight gas market, a colder winter could send Europe's gas prices soaring to new record highs in coming months, accelerate the rush to coal and oil products, and leave Europe with no gas in storage at the end of the heating season. This would support high gas prices through 2022 as the continent will have to replenish supply before the next winter comes. 

"Europe could end up with almost no gas left in storage after a colder-than-normal winter, but above seasonal norms at the end of a warm one," BNEF analysts say. 

Related: Why Iraq Can, But Won’t, Reach 8 Million Bpd Of Oil Production

In case of a colder winter, Europe will need extra supply, and it's unlikely that this would come from too much additional LNG, especially in a similarly colder winter in Asia, which has the motivation and purchasing power to outbid cargoes away from Europe. 

"Barring an exceptionally mild winter, the low inventory level for gas and expected sustained demand are likely to keep gas prices in Europe and Asia at high levels until the second quarter 2022," TotalEnergies said in its Q3 results release this week. 

Norway, Europe's second-largest gas supplier after Russia, is boosting gas deliveries this winter season after Equinor was allowed to raise gas exports from the Oseberg and Troll fields. 

Yet, Equinor says that even a normal winter—let alone a colder one—would be a strain on European gas supply.

"But a normal winter and colder than normal winter would be a lot of strain on the gas supply, especially, if we see LNG (liquefied natural gas) continues going to Asia and we don't see a change in gas supplies from Russia," Equinor's CEO Anders Opedal told Reuters in an interview this week.  

Russia signaled this week it would start filling European storage sites once Gazprom completes the filling of the Russian storage. But Moscow also says that an immediate boost to supply for European customers would come as soon as German authorities approve the controversial Nord Stream 2 pipeline.

Russian President Vladimir Putin told Gazprom's CEO Alexei Miller on Wednesday that as soon as the Russian gas giant completes filling Russia's underground storage by or on November 8, "I would like you to start consistent and planned work on increasing the amount of gas in your underground depots in Europe – in Austria and Germany," per the English translation on the Kremlin website.

Europe may not have enough natural gas to meet demand in a cold winter, especially if Asia's winter is cold too, unless Russian gas deliveries rise, energy consultancy Wood Mackenzie said in early October.

Under normal winter weather conditions, Europe will not have a problem with meeting demand, despite the current low storage levels, said Massimo Di Odoardo, Vice President, Gas and LNG Research, at WoodMac.     

"The system creaks if there's a cold winter in both Europe and Asia. Higher demand for heating could add up to 20 Bcm in Europe and 10.5 Bcm in Asia, resulting in lower LNG imports available to Europe. That would suck up all the gas left in European storage, and gas prices could go much higher than we've seen so far," he said.   

"The sky could be the limit for European gas prices this winter," Di Odoardo added. 

By Tsvetana Paraskova for Oilprice.com

 

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https://oilprice.com/Energy/Oil-Prices/Why-Oil-Prices-Will-Rise-In-The-Short-Term.html

Why Oil Prices Will Rise In The Short Term

By Tsvetana Paraskova - Nov 01, 2021, 6:00 PM CDT

  • There is still plenty of upside for oil prices from here as demand is on course to outstrip supply throughout the rest of the year
  • Plenty of analysts are now preparing for $100 oil, with demand destruction unlikely to occur at current prices 
  • Despite the inflationary impact of rising oil prices, it is unlikely that markets will be driven into a recession

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Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

Latest articles from Tsvetana

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Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

Latest articles from Irina

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https://www.zerohedge.com/commodities/us-coal-miners-all-sold-out-coal-2022

US Coal Miners "All Sold Out" For 2022

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by Tyler Durden
Sunday, Oct 31, 2021 - 09:25 PM

Top U.S. coal miners are experiencing a massive surge in demand as power companies restart coal-fired power plants due to high natural gas prices to prevent electricity shortages ahead of the winter season. 

According to Bloomberg, Arch Resources, the second-largest U.S. coal miner, has sold every lump of coal it will extract out of the ground for 2022. The company has sold next year's coal for 20% over the current spot. Peabody Energy Corp., the top U.S. coal miner, has sold 90% of all its coal from the Powder River Basin area for 2022. 

Arch's CEO Paul Lang said the company's thermal coal output for 2022 is "fully committed." According to S&P Global Market Intelligence, Arch sold the coal for $16 per ton, well over last week's $13.25 spot price. ...

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https://www.zerohedge.com/markets/europe-edge-after-russia-halts-gas-shipments-yamal-pipeline

Europe On Edge After Russia Unexpectedly Halts Gas Shipments Via Key Pipeline

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by Tyler Durden
Sunday, Oct 31, 2021 - 08:35 PM

In the middle of last week, an increasingly cold Europe exhaled a collective breath of relief when Russian president Vladimir Putin told Gazprom CEO Alexey Miller to "start gradual and planned work to raise gas volumes in your inventories in Europe: in Austria and Germany." While markets were focused on the (latest) promise by the Kremlin to boost output to Europe, we said that this was just another chapter in Russia's "cat and mouse" game with a soon to be freezing Europe, that the key word here was "gradual", and that anyone expecting a sudden surge in Russian nat gas shipments to Europe should not hold their breath as "Putin has been very clear in laying out Russia's ask to save Europe: activate the Nord Stream 2 pipeline. As long as Europe's bureaucrats refuse to comply, any hope that electricity costs will slide in the coming weeks will be at best - pardon the pun - a pipe dream."

We didn't have long to wait to be once again proven right: on Saturday, Russian gas supplies through the Yamal - Europe pipeline via Poland to Germany had come to a sudden, unexpected, and screeching halt.

Russia%20nat%20gas%20to%20europe%2010.31

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https://www.zerohedge.com/covid-19/australia-confiscating-bank-accounts-property-licenses-and-businesses-non-compliance-covid

Australia Confiscating Bank Accounts, Property, Licenses, & Businesses For Non-Compliance With COVID Fines

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by Tyler Durden
Sunday, Oct 31, 2021 - 08:10 PM

Authored by Sundance via The Last Refuge (emphasis ours),

Of all the extreme measures carried out by various states in Australia, the collections and confiscations by the State Penalty and Enforcement Register (SPER) might just be the icing on the cake.

australia-covid-compliance-768x446.jpg?i

 

During the lengthy COVID lockdown in the state of Queensland, Australia (Brisbane area), most workers were not permitted to work or earn a living.

Several states stepped in to provide wage subsidies so people could purchase essential products and pay their living expenses.  However, during the lockdown if you were caught violating any of the lockdown rules, you were subject to a civil citation, a fine or ticket for your COVID violation.

Get caught too far from home, outside your permitted bubble, and you get a ticket.  Get caught spending more than the permitted 1 hour outside, get a ticket.  Get caught without a mask, even by yourself – and yep, ticket.  Enter a closed quarantine zone (park, venue, etc.) and you get a ticket.  Tickets were being handed out by police on the street as well as during random checkpoints on the roadways.

Additionally, people returning to Queensland were put into a system of involuntary quarantine.  The costs for that quarantine, mostly hotel rooms, were to be paid by the people being involuntarily captive and not allowed home.

Citizens were required to have their physical location scanned via a QR code on their phone. These checkpoints were to assist in controlling the COVID spread and were used for contact tracing throughout the past two years.  However, the checkpoints and gateway compliance scans also registered your physical location; the consequence was an increased ability for police and COVID compliance officers to catch people violating the COVID rules.  Ex: If you checked in at the grocery store, they knew how far from home you are, and the police could figure out if you violated your one hour of time outside the home at the next checkpoint.

The result of all this compliance monitoring was thousands of fines, civil citations for violating COVID rules.  Thousands of people given thousands of fines that would need to be paid.

Now the state is requiring all of those civil citations get paid, or else.  And the enforcement actions to collect these fines from the State Penalty and Enforcement Register are quite extreme.  Citizens who have outstanding tickets are finding their driver’s licenses suspended; bank accounts are being frozen and seized; homes and property are are being confiscated, as well as business licenses suspended for outstanding citations.

“Queenslanders who received fines for breaking Covid-19 rules risk having their homes seized and bank accounts frozen in a government crackdown to collect $5.2 million in repayments.” (LINK)

Brisbane Times – “SPER was undertaking “active enforcement” on another 18.4 per cent of fines, worth about $1 million, which a spokesman said “may include garnishing bank accounts or wages, registering charges over property, or suspending driver licences”.   The remaining 25.2 per cent of fines were either under investigation or still open to payment without further action being taken.

Outside SPER’s work, Queensland Health took the unusual step of calling in private debt collectors to chase up $5.7 million amounting from 2045 significantly overdue invoices for hotel quarantine.  (read more)

australia-lockdown.jpg?itok=jUkDqLH7

 

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https://www.zerohedge.com/technology/yahoo-becames-second-major-american-firm-pull-out-china-over-past-month

Yahoo Becomes Second Major American Firm To Pull Out Of China Over Past Month

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by Tyler Durden
Tuesday, Nov 02, 2021 - 08:07 AM

After a 20-year battle with the CCP, Yahoo, the one-time American tech giant that is now mostly owned by private equity giant Apollo (along with a small stake held by Verizon), has decided to pull out of its China business, becoming the second American firm to depart China over ethical considerations surrounding free speech in the span of a month....

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https://www.zerohedge.com/energy/europes-energy-crisis-better-wake-america

Europe's Energy Crisis Better Wake America Up

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by Tyler Durden
Tuesday, Nov 02, 2021 - 05:00 AM

Authored by Peter Driessen via WattsUpWithThat.com,

If it doesn’t, activists and governing classes will destroy middle class jobs, families and lives

2021-11-01_8-48-21.jpg?itok=LDJ139qA

 

COP-26, the twenty-sixth massive climate control “conference of parties,” goes live in Glasgow, Scotland on Halloween. That’s certainly appropriate, since its primary purpose is to further terrify humanity to “take action” to prevent the “existential threat” of “manmade climate cataclysms.”

Thousands of politicians and climate activists will take private jets and limos to the lecture and hector halls – to demand that “commoners” be restricted to one Basic Economy flight every three years, meatless diets, public transportation, and keeping 640-square-foot homes at 65 F all winter and 85 F all summer.

Otherwise, they say, countless people will die as our planet “overheats” by up to 4.1 degrees C (7.2 F) by 2100. Real-world science and data provide no support for temperature spikes of this magnitude. But just in time for COP-26, Columbia University concocted a “new study” and “new metric” on the “mortality cost of carbon,” based on these scary computer-modeled temperature forecasts.

Bloomberg News gave the death-by-global-warming fable prominent coverage. 83 million people (equivalent to the entire population of Germany) “could be killed” this century by rising planetary temperatures caused by fossil fuel use, it asserted. Nonsense.

Modern housing and energy systems enable people to adapt to and survive even the most extreme heat and cold – even in Antarctica, which just experienced the coldest average winter temperatures ever recorded: -61 C (-78 F).

Survival becomes far less likely, however, if climate treaties and energy policies prohibit efficient air conditioning and heating, ration them, subject them to recurrent blackouts, or make them harder to afford amid rising oil, natural gas, coal and electricity prices.

Yet that is exactly what’s being advocated and implemented. Britain and various US cities and states want to ban natural gas heating and cooking – and replace them with expensive heat pumps and other electric appliances, powered by expensive, weather-dependent wind turbines and solar panels. Meanwhile, energy prices have been skyrocketing in response to Covid recovery and anti-fossil-fuel policies.

Climate theory has long held that most 21st-century warming will occur in northern latitudes during winter months. But now we’re now told a warming Arctic could also be causing colder winters, which could endanger far more people than rising temperatures or more frequent heat waves.

Actually, far more people die in cold weather than in hot weather or heat waves. In the United States and Canada, cold causes 45 times more deaths per year than heat: 113,000 from cold versus 2,500 from heat. Worldwide, where air conditioning is far less available, some 1,700,000 people die annually from cold versus 300,000 from heat – a ratio of almost 6:1.

Energy policies that favor wind and solar over fossil fuels beget “fuel poverty” that can make adequate heating impossible, causing numerous health problems and deaths. Poor, minority, elderly and fixed-income families are most severely and inequitably affected, it found. 

Cold homes bring increased risks of respiratory and circulatory problems (including asthma, bronchitis, flu, cardiovascular disease and stroke) and exacerbate existing adverse health conditions. Cold household temperatures also increase depression, anxiety and other mental health problems. Already vulnerable groups – young children, older people and those with preexisting health issues – are especially susceptible to hypothermia, more illness and death.

Public Health England calculated that one-tenth of all “excess winter deaths” in England and Wales are directly attributable to fuel poverty, and 21.5% of excess winter deaths are attributable to the coldest 25% of homes. 30,000 to 40,000 people died each year in England and Wales since 1990 who would not have perished if their homes hadn’t been so cold, researchers estimated.

Adjusted for population, this is equivalent to 165,000 to 220,000 excess American winter deaths per year.

In 2017, Germany endured 172,000 localized blackouts; in 2019, 350,000 German families had their electricity cut off because they couldn’t pay their power bills.

Coal, oil, natural gas, electricity and home heating costs have risen significantly since those studies were prepared, likely increasing the excess winter death toll markedly. In fact, 2021 European gas prices skyrocketed nearly 600% over 2020 prices, and Rotterdam coal futures soared from $60/ton in October 2020 to $265/ton in September 2021. Energy prices are still rising, affecting jobs and living costs. 

Global demand for gas and coal has surged as the world recovers from Covid. British gas production has plunged by 60 % since 2000; Britain and Europe have banned fracking; Putin is playing politics over how much gas it will deliver to Europe; and President Biden has stymied leasing, drilling, fracking, pipelines, and oil and gas exports. Many coal and nuclear power plants have been shut down. Meanwhile, Europe’s heavily subsidized wind turbines generated far less electricity in 2021 due to unfavorable winds.

This perfect storm of misinformed policies could bring unprecedented excess deaths as winter sets in.

Schools, hospitals and clinics could also be much chillier – and deadlier. At 11¢ per kilowatt-hour (average US business rate), a 650,000-square-foot hospital would pay about $2.2 million annually for electricity. At 25¢ per kWh (UK), the annual cost jumps to $5 million; at 35¢ per kWh (Germany), to $7 million! Those soaring costs would likely result in employee layoffs, higher medical bills, reduced patient care, colder conditions, and more deaths. 

Adding to these woes, Citigroup says EU natural gas prices could hit $100 per mcf (per thousand cubic feet or million Btu) if this winter is particularly cold and more Gulf of Mexico hurricanes disrupt production. News outlets report that energy companies supplying six million UK homes face collapse, and several elder care homes have warned that crippling energy bills could force closures, leaving many old and infirm people homeless.

Britain’s energy minister has said a “very difficult winter” lies ahead, as gas prices soar amid fear of blackouts and food shortages. Many households “will not be able to cope.”

US energy prices remain well below Europe’s, but threats to American families are also rising. The average monthly Henry Hub spot price for natural gas has shot from $1.63 in June 2020 to $5.16 in September 2021. That’s well below the highest-ever price ($13.42 in October 2005) but still ominous.

One-third of American households already had difficulty six years ago adequately heating and cooling their homes – and one-fifth of households had to reduce or forego food, medicine and other necessities to pay energy bills. Even before Covid, low-income, Black, Hispanic and Native American families were spending a greater portion of their incomes on energy than average US households.

Nearly half of US households that heat with natural gas will spend 22-50% more  this winter than last year, depending on how cold it gets. Families that use electricity, propane or fuel oil to heat their homes will also pay significantly more. Energy-intensive factories may have to cut back hours and production, lay people off, and move operations overseas (where they will continue to burn fossil fuels and emit greenhouse gases).

Americans are also being impacted by gasoline prices that have risen more than a dollar a gallon for regular since the 2020 election and recently reached $5.00 per gallon in New York and $7.60 in one southern California town.

The overall effect of these anti-fossil-fuel policies on livelihoods, living standards, health and life spans will be profoundly negative. Countless people will perish, many of them cold and jobless in the dark.

Under Joe Biden, the United States is already on a trajectory to Europe’s real climate crisis: unaffordable, unreliable energy.

That crisis better wake America up. Otherwise, self-righteous activists and governing classes will destroy our American middle class jobs, families – and lives.

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https://oilprice.com/Energy/Natural-Gas/Louisiana-Is-Leading-Americas-LNG-Boom.html

Louisiana Is Leading America’s LNG Boom

By Haley Zaremba - Nov 02, 2021, 3:00 PM CDT

  • Louisiana has the highest LNG output of any state in the United States.
  • Louisiana’s governor is struggling to find a balance between its economically-dependent LNG output and climate ambitions.
  • Environmentalists point out that there is a particularly cruel irony in the fact that Louisiana has leaned so far into the LNG sector, as it is one of the U.S. states that has suffered the most from climate change.

 

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https://oilprice.com/Energy/Energy-General/Dont-Hold-You-Breath-For-A-Breakthrough-At-COP26.html

Don't Hold Your Breath For A Breakthrough At COP26

By Tom Kool - Nov 02, 2021, 2:00 PM CDT

The most noticeable theme to have come from COP26 so far has been the division between the Global North and the Global South and between energy producers and energy consumers. While some limited successes have been achieved, it is very doubtful that a major breakthrough will happen as the conference progresses.

Oil prices

Rigs

Rig count

Carbon

- One of the main pre-event soundbites of the COP26 summit was the call to ban coal, urged on by the conference’s president Alok Sharma as well as G20 countries, yet coal still has a bright future in Asia. 

- Asia’s largest coal consumers, China and India, have been resisting any stringent commitments from the summit as they see coal as a key part of their generation capacity. 

- In Asia alone, there are some 200 coal-fired plants currently under construction, 90% of global greenfield coal capacity, with China topping the list with 95 plants and India coming second with 28 projects. 

- As of today, of the more than 2,600 coal-powered plants operating globally, 71% are located in Asia. 

Market Movers

- UK major BP (NYSE:BP) has added more than a billion dollars to its 2021-2022 buyback scheme on the back of stronger-than-anticipated Q3 results, with net earnings surging to $3.3 billion.

- China’s national oil company Sinopec (SHA:600028) discovered a huge shale oil field at its Shengli play, with in-place reserves of heavy viscous crude amounting to 3.4 billion barrels. 

- Austria’s OMV (VIE:OMV), the largest oil and gas company in Central Europe, is considering splitting the company into separate energy and chemicals businesses in the upcoming years, mulling a potential buyback of Mubadala’s 25% share. 

Tuesday, November 02, 2021

The start of the two-week COP26 summit in Glasgow has demonstrated how unlikely a comprehensive global deal is, highlighting divergences between the global south and north and between net energy producers and importers. These differences have been exacerbated by the abstention of leading political figures from China, Russia, and Turkey. Whilst COP26 will most probably achieve some moderate goals, such as in curbing methane emissions or limiting deforestation, the chances for an overarching breakthrough are limited. At the same time, Iran seems increasingly supportive of finding a diplomatic settlement to the JCPOA stalemate, which would put a cap on crude prices going much higher. 

Methane Emissions in the Crosshairs of COP26. The first days of COP26 in Glasgow brought a rare glimpse of unity as more than 90 nations signed up to the Global Methane Pledge, committing to cut methane emissions by 30% from 2020 levels by 2030. 

India Commits to a 2070 Net Zero Target. In one of the early-phase disappointments of COP26, India pledged to bring its carbon emissions to net-zero by 2070, claiming fossil fuels will be around for quite some time in the world’s largest democracy and it would drop GHG emissions by 33% compared to 2005 levels. 

Halliburton May Take Over Exxon’s Stake in Iraqi Megafield. In a rare move for an oil services company, fracking giant Halliburton (NYSE:HAL) has expressed interest in taking over ExxonMobil’s 32% operator stake in Iraq’s giant West Qurna-1 field as the latter wants to quit Iraq altogether. 

China Taps into Strategic Products Stocks. Constrained by an energy crunch that is increasingly taking its toll on China’s downstream production, Beijing stated that it would release state gasoline and diesel reserves from strategic stocks, the first time that has ever been done.   

Australian Billionaire Eyes Argentinian Green Hydrogen Bonanza. Andrew Forrest, the owner of Australia’s mining giant Fortescue Metals (ASX:FMG), is planning to invest up to $8.4 billion into green hydrogen projects in Argentina, using wind energy to split water into hydrogen and oxygen. 

Iraq Seeks Billion-Dollar Deals with Saudi Arabia. Cash-strapped Iraq is planning to sign several deals worth tens of billions of dollars with Saudi Arabia, including natural gas production deals in the western desert as well as several solar and desalination plants across the country. 

US Carbon Capture Credit Well Received by Coal Burners. An important part of President Biden’s infrastructure bill, a proposed tax credit hike for carbon capture and sequestration projects (up to 85 per metric ton, from the current 50/mt) was received positively by utility firms using coal as it might provide a new revenue stream for the industry. 

TotalEnergies Wants More Libyan Exposure. Whilst Libya’s stability is continuously on the brink of collapse, French major TotalEnergies (NYSE:TTE) is reportedly nearing the purchase of Hess Energy’s 8.2% stake in the Waha Oil consortium, a deal that will probably be announced in late November when Total’s CEO visits Tripoli. 

European Gas Prices Surge on Gazprom Supply Halt. A major gas pipeline that brings Russian gas to Germany was switched to flow eastwards this Saturday, hindering EU-bound flows by Gazprom (MCX:GAZP) and sending day-ahead TTF prices above €70 per MWh again ($26 per mmBtu). 

Bolsonaro Maintains Heat with Petrobras Privatization. Brazil’s President Jair Bolsonaro keeps on lambasting Petrobras (NYSE:PBR) for surging transportation fuel prices in the Latin American country, saying that he sees the company’s privatization as an ‘ideal move’ with crude prices this high.  

EPA Dissuades Potential Limetree Refinery Buyers. The US Environmental Protection Agency warned potential bidders that the bankrupt 210,000 b/d Limetree Bay Refinery, scheduled to be auctioned this month, is at risk because of newly discovered groundwater contamination near the site.

Pakistan Panic Buying Strengthens LNG Upside. Pakistan issued an emergency tender for November-arrival LNG cargoes after its main suppliers Gunvor and ENI (BIT:ENI) canceled their deliveries amidst force majeure, creating a tangible upside risk for LNG prices in the upcoming days. 

Turkey Hikes Gas Prices for Power Plants and Industry by Almost 50%. Keeping consumer gas prices unchanged, Turkey has raised the price of natural gas to power plants and industry by 47% and 48%, respectively, the largest state-supervised price hike so far in Europe.

By Tom Kool for Oilprice.com

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Tom Kool

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations

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https://oilprice.com/Energy/Energy-General/OPEC-Ignores-Calls-For-More-Crude-Adds-Meagre-140000-Bpd-In-October.html

OPEC+ Ignores Calls For More Crude, Adds Meagre 140,000 Bpd In October

By Irina Slav - Nov 02, 2021, 12:00 PM CDT

  • OPEC+ added just 140,000 barrels daily of crude oil last month
  • Bloomberg: production constraints in Angola and Nigeria were part of the problem
  • Several OPEC members said in recent days they saw no need for additional production

OPEC+ added just 140,000 barrels daily of crude oil last month despite multiple calls for more supply amid soaring prices that are fueling inflation.

The calculation was made by Bloomberg, which also reported the reasons for the lower addition were continuing problems in Nigeria and Angola.

The report comes just as U.S. President Joe Biden pointed the finger at OPEC for rising retail fuel prices in the U.S. while Energy Secretary Jennifer Granholm blamed OPEC directly for the high U.S. prices at the pump.

Meanwhile, several OPEC members said in recent days they saw no need for additional production and were sticking with the original plan.

Reuters also reported that OPEC had undershot its own output increase target in October, with Saudi Arabia and Iraq delivering more than committed, but the problems of the African leaders nearly offset this amount. According to the Reuters calculations, OPEC increased its combined output by 190,000 bpd last month.

The news is a blow to large consumers, which are already struggling with their oil import bill. Calls for OPEC to boost production by more than the originally agreed 400,000 bpd are intensifying, and there were even reports that several large consumers were in talks on what alternative steps they could take should OPEC fail to acquiesce to their requests for more production.

Prices, meanwhile, are on the rise again following the latest OPEC news and reports from China that refiners are ramping up their run rates amid rising fuel demand.

“Crude prices still seemed poised to head higher, with some traders waiting for confirmation after both the EIA crude oil inventory shows demand for most products are headed in the right direction, while U.S. production is stable and with OPEC+ sticking to their gradual 400,000 bpd increase plan,” Reuters cited OANDA analyst Edward Moya as saying.

By Irina Slav for Oilprice.com

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https://www.zerohedge.com/markets/whack-mole-china-gas-prices-soar-record-just-coal-prices-tumble

Whack-A-Mole: China LNG Prices Soar To A New Record, Crushing Distributor Margins

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by Tyler Durden
Tuesday, Nov 02, 2021 - 09:25 PM

There is one recurring problem with central planning: the greater the level of intervention, the worse and more widespread the unexpected adverse consequences. Just last week, when we reported that Beijing had imposed price controls on its coal rationing, we said that the problem with such explicit subsidies which create an artificially low price, is that they don't address the underlying problem (too much demand, not enough supply), but instead accelerate hoarding and lead to a run on the artificially underpriced commodity, forcing spikes in another energy commodity while resulting in an even faster drain of the commodity in question, in this case coal. In essence, it's like a giant game of "whack a mole".

Just earlier today, we reported of precisely one such outcome when we discussed how China had inadvertently "sparked "Panic Buying" after telling households to stockpile food ahead of the winter." This comes days after we reported that China's coal and natgas energy crisis had quietly spread, with many gas stations across the country running out of diesel due to supply constraints caused by the surging demand for subsidized coal.

And now we have another example of central planning's unintended whack-a-mole consequences: Bloomberg reports that domestic liquefied natural gas prices in China are surging, driven by soaring prices in the international market, adding pressure on downstream city gas distributors....

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https://www.zerohedge.com/energy/oil-omen-first-large-us-shale-driller-pledges-flat-output-2022

The Oil Omen? First Large US Shale Driller Pledges Flat Output In 2022

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by Tyler Durden
Wednesday, Nov 03, 2021 - 09:21 AM

Authored by Irina Slav via OilPrice.com,

  • Diamondback said it planned to pump some 221,000 to 225,000 barrels of crude daily. For full 2021, Diamondback said production would come in at between 222,000 to 223,000 bpd

  • Most large shale drillers are adopting the same approach in order to keep their shareholders happy after years of burning cash to boost production to a maximum

https://oilprice.com/Energy/Crude-Oil/The-Oil-Omen-First-Large-US-Shale-Driller-To-Pledge-Flat-Output-In-2022.html

The Oil Omen: First Large U.S. Shale Driller To Pledge Flat Output In 2022

By Irina Slav - Nov 02, 2021, 11:00 AM CDT
  • Diamondback said it planned to pump some 221,000 to 225,000 barrels of crude daily. For full 2021, Diamondback said production would come in at between 222,000 to 223,000 bpd
  • Most large shale drillers are adopting the same approach in order to keep their shareholders happy after years of burning cash to boost production to a maximum

Diamondback Energy has said it will not increase its crude oil production next year despite the surge in prices.

In the release of its third-quarter results, Diamondback said it planned to pump some 221,000 to 225,000 barrels of crude daily. For full 2021, Diamondback said production would come in at between 222,000 to 223,000 bpd.

“As we move into 2022, we are still seeing excess oil supply and varying demand recovery profiles across the globe. As such, we remain committed to capital discipline and our plan to return excess Free Cash Flow to our stockholders,” said the company’s chief executive, Travis Stice, echoing a widely shared attitude in the shale oil and gas industry.

“Therefore, we are committing to maintaining our fourth quarter 2021 Permian oil volumes throughout next year and we believe this can be accomplished by spending the amount of capital implied by our fourth quarter 2021 guidance run-rate,” Stice also said, noting this approach would allow the company to return more cash to shareholders, pay down more debt, and maximize free cash flow.

Most large shale drillers are adopting the same approach in order to keep their shareholders happy after years of burning cash to boost production to a maximum. While this new approach of restraint is welcomed by shareholders, the general public—and drivers specifically—have no reason for joy.

The strict capital discipline of large shale players means that U.S. oil production will be slow to grow, and this means retail fuel prices will remain elevated for an extended period.

Diamondback reported adjusted profits of $536 million for the third quarter, which translated into earnings per share of $2.94, exceeding analyst expectations for EPS of $2.77. The company also announced an 11-percent increase in its annual dividend thanks to the robust financial results.

Irina Slav for Oilprice.com

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https://oilprice.com/Energy/Crude-Oil/OPEC-Meeting-Ends-Cartel-Wont-Produce-Extra-Crude.html

OPEC+ Meeting Ends: Cartel Won't Produce Extra Crude

By Tsvetana Paraskova - Nov 04, 2021, 10:50 AM CDT

  • OPEC+ decided on Thursday to continue easing their collective crude oil production cuts by just 400,000 barrels per day next month
  • OPEC+ meeting didn't address production constraints in Nigeria, Angola
  • OPEC+ ignores calls from U.S. and other major oil consumers to further boost production

The OPEC+ group decided on Thursday to continue easing their collective crude oil production cuts by just 400,000 barrels per day next month, ignoring calls from the United States and other major oil-consuming nations to open the taps and tame the price rally.

In a short and rather uneventful meeting, OPEC+ reaffirmed today its previous plans to increase supply by just 400,000 bpd, despite pressure from consuming nations who had called for a larger increase so as to halt the rally in energy and gasoline prices that could slow economic growth.

The alliance will boost total production by 400,000 bpd in December, OPEC said after the meeting, without addressing the issue of several African OPEC members such as Nigeria and Angola that have been struggling to raise their production up to their respective quotas, thus underperforming in increasing supply to the market.

The meeting reiterated the OPEC+ commitment “to ensure a stable and a balanced oil market, the efficient and secure supply to consumers and to provide clarity to the market at times when other parts of the energy complex outside the boundaries of oil markets are experiencing extreme volatility and instability, and to continue to adopt a proactive and transparent approach which has provided stability to oil markets,” OPEC said.  

The rationale for keeping a cautious approach to easing the cuts seems to be assessments from OPEC+ experts that Q4 would see a smaller market deficit than expected earlier and that the balance would tip into surplus next year.

As per the production table provided by OPEC, the group of OPEC+ producers will have a collective quota of required production of 40.094 million bpd in December, of which the 10 OPEC members bound by the pact should pump no more than 24.3 million bpd, and the non-OPEC producers led by Russia will have a ceiling of 15.794 million bpd.  

Saudi Arabia and Russia, the OPEC and non-OPEC groups leaders within OPEC+, respectively, will each have a production ceiling of just over 10 million bpd—at 10.018 million bpd each.  

Oil prices jumped by more than 2% after news first broke that OPEC+ would not change course, but retreated to trade lower later.

By Tsvetana Paraskova for Oilprice.com

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