Wednesday, July 31, 2019

Gold is set to surge no matter what the Fed does, traders say

Buy 1 oz Gold Bars, image 0

Gold is holding strong.

The yellow metal is on pace for its third month of gains and sitting at six-year highs as investors hold their breath ahead of the Federal Reserve’s pivotal meeting on Wednesday, in which the central bank’s leaders will decide whether to cut longer-term interest rates.

Regardless of the Fed’s decision, gold is set to surge either way, according to two longtime traders.

Whether the Fed succumbs to market expectations and cuts, or stays put and maintains its pledge of patience, “I look at gold as higher in both scenarios,” Anthony Grisanti, founder and president of GRZ Energy, said Tuesday on CNBC’s “Futures Now.”

If it cuts, Grisanti expects gold — which was trading around the $1,430 level on Tuesday — to slide to its 21-day moving average at $1,414.70.

“But if the Fed does nothing, you could get a surprise if the equities markets sell off and the buyers come into gold for protection,” the veteran futures trader said.

In some parts of the market, that process is already underway. Referencing recent Commitments of Traders reports from the Commodity Futures Trading Commission, Grisanti said some hedge funds have been making major moves into the precious metal.

“Hedge funds have added about 60,000 contracts over the last five weeks in gold, so they’re getting long at a terrific pace right now in gold,” he said. “Say the Fed doesn’t do anything tomorrow, as I expect, and you have a big sell-off in equities, which I expect — then I think people ... are going to look at gold and say, ‘Hey, maybe we need to own this for protection.’”

With things shaping up nicely for gold, Scott Nations, a historic gold bear and the president and chief investment officer of NationsShares, finally ceded to the bulls.

“People who have been watching the show for a long time are not going to believe their ears, but I want to buy the December contract at [$]1,440. My target to the upside’s going to be [$]1,475 ... with a stop that’s going to be [$]1,420,” Nations said in the same “Futures Now” segment.

Nations’ reasoning? “I think the Fed is going to cut. But, also, ... more importantly, interest rates in Europe are incredibly low, and we’re now [at] the point in Europe where there are corporate [bond]s that have negative yields,” he said.

“What does that do? It means that the opportunity cost from owning gold, or the penalty for storing and insuring it, disappears,” he said. “And I think as long as European rates go lower — and they’re already really low, but as long as they go lower — then gold can overcome the strength of the dollar. ”

Gold prices were nearly 1% higher

Tuesday, July 30, 2019

Anadarko Petroleum sheds new light on Occidental finances ahead of vote

  • Anadarko Petroleum releases new financial details of its proposed combination with Occidental Petroleum that revealed its acquirer did not expect to generate enough cash to cover its shareholder payments until 2022.
  • Activist investor Carl Icahn this month launched a campaign to unseat four Occidental directors.
  • An Anadarko spokesman did not immediately reply to Reuters requests for comment.

Anadarko Petroleum on Monday released new financial details of its proposed combination with Occidental Petroleum that revealed its acquirer did not expect to generate enough cash to cover its shareholder payments until 2022.

Activist investor Carl Icahn this month launched a campaign to unseat four Occidental directors, arguing its board entered into the $38 billion deal to preclude Occidental from becoming a takeover target. He has attacked the deal as too pricey and for the lack of an Occidental shareholder vote.

Anadarko said in a regulatory filing it amended its merger proxy in response to a lawsuit alleging it had failed to provide its shareholders with full details of the cash-and-stock sale. Its shareholders are due to vote on the sale Aug. 8.

An Anadarko spokesman did not immediately reply to requests for comment.

The revisions include projections that the filing said was provided by Occidental's management and adjusted by Anadarko's executives showing the standalone company's free cash flow would fall below dividend payments in each of the next three years. The shortfall increased each year through 2021, according to the proxy revision.

Companies that do not generate enough free cash flow to cover expenses such as dividends typically have to borrow or sell assets to cover the shortfall.

The new details also include an $8.4 billion estimate of the value of Anadarko's share in Western Gas Partners, a publicly-traded natural gas processing, storage and pipeline company. That stake is expected to be offered for sale after the combination takes place.

Monday, July 29, 2019

NNPC to Divert 10% of Production to India

Figure1. 1: Map showing the distribution of Depot in Nigeria (source: Pipeline product marketing company of Nigeria)

NNPC said it will divert 10% of its crude oil production to India to aid the country in resolving its energy crisis. Group Managing Director of the NNPC, Mele Kyari, said Nigeria will continue to support India’s energy security challenge in whatever way it can.

The NNPC spokesperson, Ndu Ughamadu, said in a statement that Kyari stated this during the visit of the Indian High Commissioner to Nigeria, Abhay Thakur, to the NNPC headquarters in Abuja.

According to Ughamadu, Kyari said the recent MoU in energy security between Nigeria and India would further strengthen the bilateral relations between the two countries.

“We are ready to have robust engagement with the Indian trade team to Nigeria, to provide a win-win energy scenario. Every trade opportunity that is available will be fully explored,” Kyari said.

Thursday, July 25, 2019

Historic horizontal well in Permian Basin completed

CARLSBAD, N.M. (AP) — Drilling of the longest horizontal oil and gas well in the history of the Permian Basin has been completed as booming oil production in the region continues to center around shale in southeast New Mexico and West Texas.

The Fort Worth, Texas-based Basic Energy Services recently announced the well was completed in the Wolfcamp, The Carlsbad Current-Argus reports. Wolfcamp is shale of the Delaware Basin, which sits below most of New Mexico's Eddy County and the southern half of the state's Lea County.

Records show the well also encompasses portions of Culberson, Reeves and Loving counties in Texas.

The job was completed for Houston-based Surge Energy, and frac plugs were drilled out to around 3.4 miles (5.4 kilometers).

"We are honored to partner with an innovative (exploration and production) company like Surge to deliver these record-setting results," said Brandon McGuire, vice president of Basic's Permian operations. "Reaching this milestone with our customer displays our leadership in well servicing for complex, long lateral completions in the Permian Basin."

The Surge pipeline was first announced in April, and was completed in 18 days, expected to go into service by the end of this year.

McGuire said Basic intends to continue working with operators in the Delaware Basin, as the Wolfcamp Shale recently saw the discovery of potentially the largest continuing oil and gas resource ever found in the U.S.

The U.S. Geological Survey said it found 46.3 billion barrels of oil and 20 billion barrels of natural gas liquids beneath the region.

Surge President and Chief Executive Officer Dexter Burleigh said the Permian Basin proved lucrative to pipeline development.

"This industry milestone in the Permian Basin is our latest example of the innovation and technical expertise being executed by the Surge energy team," Burleigh said. "We are extremely proud of our drilling team for this significant achievement."

Wednesday, July 24, 2019

Venezuela’s Oil Production Could Soon Fall Below 500,000 Bpd

Venezuela, the country sitting on the world’s largest oil reserves, could be pumping as little as below 500,000 bpd of crude oil next year amid the economic and political crisis, IHS Markit said in an analysis on Tuesday.

The sweeping sanctions that the United States imposed on Venezuela’s oil industry have failed to result in a regime change nearly six months after opposition leader Juan Guaidó declared himself interim president and won the support of the U.S. and many other western nations.
According to IHS Markit, Venezuela’s oil industry has deteriorated so much since 2014 that any recovery would be a long time coming.  

The protracted political crisis also means that the military and Maduro’s regime will intensify the stick-and-carrot approach to foreign investors, with whom Venezuela’s state oil firm PDVSA has joint ventures to produce heavy oil, Ford Tanner, a Principal Analyst at IHS Markit, says.

“The official use of hostility and inducement toward foreign E&P companies is expected to intensify amid a new phase of collapsing oil production,” Tanner said.

The U.S. sanctions on diluents that Venezuela needs to dilute its super heavy crude to make it flow for exports, as well as the U.S. pressure on buyers of Venezuelan oil, are expected to further constrain production, exports, and oil revenues in Venezuela, and crude oil production could drop below 500,000 bpd in 2020, according to Tanner. 
In the latest Monthly Oil Market Report, OPEC’s secondary sources—the ones the cartel considers the official production figures—point that Venezuela’s crude oil production in June dropped by 16,000 bpd from May to stand at 734,000 bpd. To compare, Venezuela’s crude oil production in 2017 averaged 1.911 million bpd.

Despite the economic collapse, Venezuela’s crude oil and refined oil products exports rose by 26 percent in June compared to May, thanks to higher shipments under oil-for-loan deals with China.  

Venezuela had to seriously reshuffle its crude and oil products export destinations earlier this year after the U.S. essentially prohibited Venezuelan oil imports to America. Unable to export its crude oil to the United States, Venezuela is now prioritizing shipments to Asia, especially to China, with which it has struck oil-for-loan agreements and has to repay those with oil to China National Petroleum Corporation (CNPC). 

By Tsvetana Paraskova for

Tuesday, July 23, 2019

Iran is squirrelling millions of barrels of crude oil in Chinese ports to avoid breaching US sanctions

A China Ocean Shipping Company (Cosco) vessel seen at a port in Zhoushan, Zhejiang province, China May 9, 2019. The Iranian tanker Marshal Z is said to have unloaded its cargo of fuel oil at the port. — Reuters pic
A China Ocean Shipping Company (Cosco) vessel seen at a port in Zhoushan, Zhejiang province, China May 9, 2019. The Iranian tanker Marshal Z is said to have unloaded its cargo of fuel oil at the port. — Reuters pic

  • Iran is squirreling away millions of barrels of oil in storage tanks at Chinese ports, avoiding a breach of US sanctions while providing its biggest buyer with a ready supply of crude.
  • The oil has been placed in "bonded storage," Bloomberg said, meaning it hasn't cleared customs so isn't subject to sanctions.
  • China received about 12 million barrels of Iranian oil from January through May, but only 10 million barrels cleared customs.
Iran is squirreling away millions of barrels of oil in storage tanks at Chinese ports, avoiding a breach of US sanctions while providing its biggest buyer with a ready supply of crude to tap if supply is disrupted or sanctions are lifted.

The Trump administration strengthened sanctions on purchases of Iranian oil in May when it ended exemptions for China, Japan, and other countries. The restrictions are intended to wipe out the Middle-Eastern nation's oil exports and force it to strike a deal that limits its nuclear activities and military actions.

However, Iran has continued to ship large amounts of crude oil to China, where they're placed in "bonded storage," according to people familiar with Chinese ports who were interviewed by Bloomberg. The fuel doesn't pass through Chinese customs, meaning it's not reflected in national import data and therefore avoids sanctions. 

China received about 12 million barrels of Iranian crude from January through May, significantly more than the 10 million barrels that cleared customs during that period, according to Bloomberg.

The secretive flow shows no sign of slowing. A dozen oil carriers and tankers owned by the state-run National Iranian Oil Company — with a combined capacity of more than 20 million barrels of oil — are traveling towards China or waiting off its coast, according to Bloomberg's ship-tracking data. Most of the oil already in the storage tanks is owned by Iran, but some of it represents payment to Chinese entities that have invested in Iran, Bloomberg said.

Both Iran and China benefit from the arrangement. Iran has a safe place to keep its crude, sparing it from having to use its tankers as floating storage and freeing them up for other shipments. Meanwhile, Chinese refiners have a stockpile they can quickly tap if global supply is disrupted or sanctions end.

Friday, July 19, 2019

Radical de-carbonisation implications for shipping - study

The de-carbonisation of global energy supplies to address climate change will have radical implications for the global shipping industry, said a new report.
If the Paris Agreement goals are met, the fossil fuel cargo base that shipping serves would undergo an aggressive and prolonged transformation, analyst MSI said.
The consequences for shipping markets of a major shift in energy consumption away from hydrocarbons and towards renewables and biofuels is the subject of a report prepared by MSI on behalf of the European Climate Foundation.
“Whilst some sectors of the shipping industry, such as containerships, would be virtually unscathed, those for which hydrocarbons comprise a significant proportion of - or all - the cargo mix would undergo decades of falling demand,” said MSI Director, Stuart Nicoll. “The results, detailed in the report, would be multi-decade declines in fleet capacity, earnings and asset prices across the affected sectors. Shipowners would be forced to slash new ordering and scrap uneconomic vessels.”
MSI’s shipping market modelling systems enable analysis of how changes in energy demand will affect inter-regional commodity trade flows, and the associated shift in required shipping capacity, industry earnings and asset prices, across all segments of the shipping industry.
The analysis projects two demand frameworks – ‘Reduction’ and ‘Reference’ – designed to provide broad narrative and structure to long-term global energy demand.
Global energy consumption in the ‘Reduction’ scenario is largely based on projections made for pathways consistent with limiting warming to 1.5 deg C above pre-industrial levels, as described in the IPCC SR1.5 report.
The ‘Reference’ scenario is designed to provide a comparison to ‘Reduction’. Although it describes a more limited change in the global energy consumption profile, ‘Reference’ still incorporates substantial restraints on future energy consumption.
The more extreme’ Reduction’ scenario is the focus of the report, under which fossil fuel demand sees radical decline over the next three decades. By 2050 world coal consumption falls by 80%, oil consumption halves, and gas demand drops by about a quarter.
“The energy transition from fossil fuels to renewables means that investors in shipping and ports are exposed to substantial financial risks, which have not been adequately assessed before,” co-author Tim Smith, MSI’s Director, Oil and Tanker Markets, added. “Those in the industry who believe that that global commitments to cut carbon emissions will be achieved need to prepare for radical transition that this implies. Vessel selection will be critical, and divestment from sectors with the greatest exposure to fossil fuels may prove the only way to profitably navigate the changing landscape.”
This report will be further analysed in the July/August issue of ‘Tanker Operator Magazine’.

Thursday, July 18, 2019

African Crude For This Ill-Fated Refinery Heads To Canada

Crude oil on its way from Africa to the United States, destined for an ill-fated refinery that plans to close its doors permanently in Pennsylvania, is being diverted to other places, according to Reuters sources.

The 335,000-barrel-per-day , which will close permanently on Monday, used 43.1 million barrels of African oil last year. Only the Phillips 66 refinery in New Jersey imported more oil from Africa.

The oil currently being diverted is a one-million-barrel shipment of Nigerian crude oil, which is now headed into storage in Canada, Reuters said, citing Kpler, which also shows a million barrels of crude idling in nearby waters.

But even more crude has been diverted away from the refinery and to new buyers, according to Refinitiv Eikon data, and at a “heavy” discount, Reuters added.

The United States purchased 4.1 million barrels of Nigerian crude oil in April, the last month for which the Energy Information Administration published data.

Pennsylvania decided not to pour money into saving the largest refinery on the Eastern seaboard after a couple of explosions in June took it offline. Pennsylvania’s decision to let the refinery wither on the vine was multifaceted, citing not just safety concerns but “competitive challenges against more modern refineries that would be extremely costly and difficult to overcome,” a spokesman for Pennsylvania’s governor said at the time.

The 1300-acre, 145-year-old refinery is a near dinosaur, went through bankruptcy proceedings in 2018, citing its financial failings due to the federal Renewable Fuels Standard Policy and a lack of access to cheap domestic crude oil, among other factors.

The closure of the Pennsylvania refinery will cut US refining capacity by 2% to 18.46 million bpd, according to Reuters calculations of government data.

By Julianne Geiger for

Iran Says Its Revolutionary Guard Seized Foreign Oil Tanker In Strait Of Hormuz

Iran says its military seized a foreign oil tanker in the Strait of Hormuz. In this 2018 photo, a boat from the Iranian Revolutionary Guard's naval force is seen in the Persian Gulf, near the strait.
Jon Gambrell/AP 
Iran says that its Islamic Revolutionary Guards Corps Navy has seized a foreign-flagged oil tanker in the Persian Gulf, alleging that the ship was smuggling 1 million liters (264,000 gallons) of fuel. Iranian state news outlets report that the ship had a crew of 12 aboard.

The vessel was seized south of Larak Island in the Strait of Hormuz, according to the state-run IRNA news agency. The island sits less than 20 miles off the Iranian mainland, south of Bandar Abbas.

As quoted by Iran's semiofficial Fars news outlet, the Iranian military said in a statement Thursday that the tanker was on its way "to deliver the smuggled fuel received from the Iranian dhows to foreign ships in farther areas but it failed thanks to the IRGC Naval forces' vigilance."

Without naming the tanker, the military says it has a cargo capacity of 2 million liters — making it a small vessel when compared to supertankers that can carry 2 million barrels of oil.

The elite military force's statement did not describe the condition or whereabouts of the crew, saying only that Iranian authorities are studying the case. It also added that the Revolutionary Guard Corps "denied claims that it has seized any other foreign ship as claimed by the foreign media in the last several days."

The ship was seized on Sunday, Iran says. While it did not name the vessel, U.S. media outlets and maritime news sites have identified it as the MT Riah, a small Panama-flagged tanker that went missing in the Strait of Hormuz around midnight Saturday, according to ship-tracking data. According to the Vesseltracker website, the tanker has been missing since it "turned off its AIS" — its automatic identification system transponders.

News of the at-sea seizure comes one day after another semiofficial Iranian news site, ISNA, quoted an Iranian Foreign Ministry spokesman saying that Iran had "rescued" a foreign oil tanker in the Persian Gulf, taking it to shore for repairs.

In recent months, the Riah frequently traveled between ports of the United Arab Emirates. As the Associated Press reports, "An Emirati official had told the AP the small oil tanker made no distress call before switching off its tracker."

The seizure adds another layer of complexity to Iran's standoff with the U.S. — and its insistence that European countries that signed a landmark nuclear deal in 2015 keep their promise to ease economic sanctions, despite U.S. withdrawal from the pact.

The Strait of Hormuz is the world's most important strategic chokepoint for oil transport, according to the U.S. Energy Information Administration. The agency says that last year, the strait was the conduit for 21% of the world's crude oil and other petroleum products.

In recent weeks, oil tankers have been the targets of attacks, tense standoffs and interdictions.
Two weeks ago, a British marine force helped seize an Iranian tanker in the Strait of Gibraltar, on the grounds that it was believed to be carrying oil from Iran to Syria — a violation of European sanctions.

In retaliation for that confiscation, a former Revolutionary Guard commander said, Iran should seize a British oil tanker. And last week, it seemed that Iran's navy tried to do just that, as the U.K.'s defense ministry announced it had foiled an attempt by three Iranian ships to divert a British oil tanker. Iran denied being involved.

That back-and-forth followed a claim last month by the U.S., which accused Iran of attacking two tankers in the Gulf of Oman using magnetic mines.

Wednesday, July 17, 2019

Chevron oil spill dumps nearly 800,000 gallons of crude, water in California canyon

800,000 Gallons of Oil and Water Spilled by Chevron in California 
 In this May 10, 2019 photo provided by the California Department of Fish and Wildlife's Office of Spill Prevention and Response, oil flows at a Chevron oil field in Kern County, Calif. Nearly 800,000 gallons of oil and water has seeped from the ground since May. (California Department of Fish and Wildlife's Office of Spill Prevention and Response via AP)

Chevron crews have begun to clean up a massive and ongoing oil spill in California after nearly 800,000 gallons of oil and water were dumped into a canyon near Bakersfield in May.

The company recently revealed that 794,000 gallons of water and oil have leaked out of the ground where Chevron uses steam injection to extract oil in the large Cymric Oil Field about 35 miles west of Bakersfield.

Spokeswoman Veronica Flores-Paniagua told The Associated Press on Friday that the latest flow has stopped and officials have now begun the process of cleaning up the affected areas.

According to the California Department of Fish and Wildlife’s Office of Spill Prevention, the cleanup and ultimate investigation into what caused the oil flow were somewhat delayed as officials had to ensure there were no dangerous fumes or sinkholes that could trap workers or heavy equipment.
It is not yet clear what caused the spill but officials say it is not near any waterway and has not significantly affected wildlife. Around 70 percent of the fluid is water, meaning that around 240,000 gallons of oil were spilling out.

The state has issued Chevron a notice of violation ordering it to stop steam injections around the spill. The company also increased its production of oil from wells in the area. Both actions are intended to relieve underground pressure that may be forcing the mix of oil and water to the surface.

The process of steam injection softens the thick crude so it can flow more readily.

Environmental groups said the Chevron spill is another sign of weakened regulations under an embattled California agency. Gov. Gavin Newsom this week fired the head of the state's oil and gas division over a recent increase in hydraulic fracturing permits and amid a conflict-of-interest investigation of other division employees.

Chevron will pay for the cleanup while California state officials will oversee the process.

The Associated Press contributed to this report.

Tuesday, July 16, 2019

JFK - We choose to go to the Moon, full length

UAE oil tanker missing in Strait of Hormuz after drifting into Iranian waters

, UAE oil tanker disappears in Persian Gulf near Iran, Buzz travel | eTurboNews |Travel News

An oil tanker traveling through the tiny strip of water located in the mouth of the Persian Gulf stopped transmitting its location more than two days ago when it drifted into Iranian waters.

It is not clear what happened to the Panamanian-flagged oil tanker – which is based in the United Arab Emirates – on Saturday night as it traveled through the Strait of Hormuz, but its apparent disappearance has raised concerns amid heightened tensions between Iran and several Western nations.

The Riah, a 190-foot oil tanker, typically made trips from Dubai and Sharjah on the UAE’s west coast before going through the strait and heading to Fujairah on the UAE’s east coast.

However, something happened to the vessel after 11 p.m. on Saturday when it stopped transmitting its location with tracking data shows its last position pointing toward Iran.

Capt. Ranjith Raja of the data firm Refinitiv told The Associated Press on Tuesday that the tanker hadn't switched off its tracking in three months of trips around the UAE.
"That is a red flag," Raja said.

Oil tankers have previously been targeted as the Persian Gulf region took center stage in a crisis over Iran’s unraveling nuclear deal with world powers.

Recently, Iran has inched its uranium production and enrichment over the limits of its 2015 nuclear deal, trying to put more pressure on Europe to offer it better terms and allow it to sell its crude oil abroad.

However, those tensions also have seen the U.S. send thousands of additional troops, nuclear-capable B-52 bombers and advanced fighter jets into the Mideast. Mysterious attacks on oil tankers and Iran shooting down a U.S. military surveillance drone has added to the fears of an armed conflict breaking out.

Iranian officials have not said anything publicly about the ship, nor have officials in the UAE. The U.S. Navy's 5th Fleet, which oversees Mideast waters, declined to immediately comment.

The ship's registered owner, Dubai-based Prime Tankers LLC, told the AP it had sold the ship to another company called Mouj Al-Bahar. A man who answered a telephone number registered to the firm told the AP it didn't own any ships.

Separately, Iran's Supreme Leader Ayatollah Ali Khamenei said Tuesday his country will retaliate over the seizure of an Iranian supertanker carrying 2.1 million barrels of light crude oil. The vessel was seized with the help of British Royal Marines earlier this month off Gibraltar.

Khamenei called the seizure of the ship "piracy" in a televised speech Tuesday.

"God willing, the Islamic Republic and its committed forces will not leave this evil without a response," he said.

British Foreign Secretary Jeremy Hunt said Saturday that Britain will facilitate the release of the ship if Iran can provide guarantees the vessel will not breach European sanctions on oil shipments to Syria.

 The Associated Press contributed to this report.

Monday, July 15, 2019

Chevron Phillips, Qatar Petroleum Sign $8 Billion Petrochemical Deal

President Donald Trump holds a bilateral meeting with Qatar's Emir Sheikh Tamim Bin Hamad Al-Thani, in Riyadh, Saudi Arabia on May 21.

 President Donald Trump and Qatar’s ruling emir, Sheikh Tamim bin Hamad al-Thani.

Chevron Phillips Chemical and Qatar Petroleum signed an agreement on Tuesday to develop an $8 billion petrochemical plant along the U.S. Gulf Coast, the second pact between the companies to build such plants in the last few weeks.

The U.S. Gulf Coast II Petrochemical Project will include a 2,000 kilotons per year (KTA) ethylene cracker and two 1,000 KTA polyethylene units. The plant will mostly make hard plastics for everything from pill bottles to coolers to kayaks.

Chevron Phillips Chemical, a joint venture of Chevron and Phillips 66, will be the majority owner with a 51 percent share, with Qatar Petroleum owning 49 percent of the project. The companies expect a final investment decision no later than 2021 for the project, which has a target of starting in 2024.

Mark Lashier, chief executive and president of Chevron Phillips Chemical, said the plants would help fill demand for plastics from an expanding global middle class, which is expected to grow by about 160 million people per year for at least the next decade.

Last month the companies announced they would build a petrochemical plant north of Doha in Ras Laffan Industrial City that will come on line by 2025 and tap Qatar’s North Field for natural gas feedstock.

Qatar, a tiny but wealthy country, is the world’s largest exporter of liquefied natural gas (LNG). Qatar is broadening its energy interests after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed ties with it in 2017, in one of the worst diplomatic disputes in the region in years. The countries accused Doha of support for Islamist militants and Iran, charges it denies.

In February, Qatar Petroleum and Exxon Mobil Corp said they are investing in a $10 billion project to expand an LNG export plant in Texas, as companies race to meet global demand for the fuel.

Tuesday’s deal was signed at the White House in the presence of

The two petrochemical plant deals spread the financial and trade risks for Chevron Phillips and Qatar Petroleum, Lashier said.

Friday, July 12, 2019

US calls for international effort to police Hormuz

The US has called for an international naval force to patrol the area around the Strait of Hormuz in the light of increased tensions in the area. 
For example, a BP Suezmax had been approached by three Iranian naval vessels earlier while sailing in the Arabian Gulf towards the Strait. 

“Three Iranian vessels attempted to impede the passage of a commercial vessel, ‘British Heritage’, through the Strait of Hormuz,” a UK Government spokesman confirmed. ‘HMS Montrose’, a UK Royal Navy frigate, positioned herself between the Iranian vessels and ‘British Heritage’ and issued verbal warnings to the Iranian vessels, which then turned away.

Iran’s Revolutionary Guard Corps have since denied any involvement in the incident.

The Suezmax, scheduled to load oil in Iraq for Europe, had remained inside the Gulf earlier in the week in ballast over concerns Iran could seize her in a tit-for-tat response to the arrest of the VLCC ‘Grace 1’ by British forces off Gilbraltar.

On Thursday, she was reported to be sailing off the coast of Oman, according to Marine Traffic.

‘HMS Montrose’ had also shadowed the Isle of Man registered, MOL controlled VLCC ’Pacific Voyager’ for part of her voyage towards Hormuz.

She had left Ras Tanura on 7th July loaded with Saudi crude.

‘Grace 1’ was stopped, as she was said to be loaded with Iranian crude allegedly bound for Syria, which is in breach of EU sanctions.

The Gibraltar authorities have since confirmed that the VLCC’s senior officers were taken ashore and arrested. The authorities also claimed that they could legitimately hold the vessel for at least 14 days. 

The VLCC was detained last week when it sailed into British Gibraltar Territorial Waters to a point two miles off the Eastern side of Gibraltar, having previously exited international waters of the Straits of Gibraltar, on a pre-arranged call for provisions and spare parts, the Gibraltar Government said.

Her detention related to the suspected destination of the cargo, the Banyas refinery in Syria, which is owned by the Banyas Oil Refinery Co. This company is the subject of European Union sanctions under EU Regulation 36/2012, which is directly applicable in Gibraltar.

Thursday, July 11, 2019

OPEC: This Is Where Most New Oil Will Come From In 2020

The OPEC flag on a desk ahead of a news conference at the 175th Organization Of Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria, on Dec. 6, 2018. Photo: Stefan Wermuth/Bloomberg / Bloomberg

Non-OPEC crude oil supply will rise by 2.4 million bpd next year, OPEC said in its latest Monthly Oil Market Report.

The cartel added that the rise would be driven by the addition of new pipeline capacity in North America, most likely meaning the United States as Canada’s pipeline woes continue and Mexico struggles to reverse declining production. In fact, OPEC mentioned the natural decline of production in Mexico would offset the effect of rising non-OPEC supply somewhat.
It’s not just the U.S. that will expand production, however. New projects in Norway, Brazil and Australia will also contribute to the increase in non-OPEC supply.

However, OPEC has revised downwards its non-OPEC supply growth projections for this year: it sees growth at 2.05 million bpd, down by 95,000 bpd from its previous monthly forecast. That would bring the total non-OPEC supply to a daily average of 64.43 million bpd.

In demand, OPEC expects the 2020 increase to remain unchanged from this year, at 1.4 million bpd. Non-OECD countries will account for most of this, at 1.05 million bpd while OECD countries will contribute about 900,000 bpd to global demand growth.

Somewhat surprisingly, China will not be the largest driver of new oil demand. That, according to OPEC, will be the rest of Asia, with China’s oil demand growing at a weaker pace than during this year.
The growth in demand for OPEC oil specifically is seen slowing down next year: OPEC has forecast that the total would average 29.3 million bpd in 2020, down by 1.3 million bpd from this year. The daily rate of demand decline is 100,000 bpd more than the cuts OPEC agreed to with its non-OPEC partners in December last year and suggests the deal might have to be extended further than the end of March 2020, which OPEC and its partners agreed on earlier this month.

By Irina Slav for

Wednesday, July 10, 2019

Iranian IRGC boats tried, failed to seize British oil tanker in Persian Gulf, senior US defense official says

The Grace 1 super tanker lies off the coast of Gibraltar on Thursday.
The Grace 1 super tanker lies off the coast of Gibraltar on Thursday.

Five Iranian Islamic Revolutionary Guard Corps gunboats tried to seize a British oil tanker in the Persian Gulf Wednesday but backed off after a British warship approached, a senior U.S. defense official told Fox News.

The British warship was said to have been less than 5 miles behind the tanker but soon intercepted the Iranian boats and threatened to open fire. A manned U.S. reconnaissance aircraft was above as well, the official said, adding that Iranian forces left without opening fire.

Navy Captain Bill Urban, spokesman for the U.S. Central Command (CENTCOM), said the military was aware of the reported actions. He added, “Threats to international freedom of navigation require an international solution. The world economy depends on the free flow of commerce, and it is incumbent on all nations to protect and preserve this lynchpin of global prosperity.”

The British frigate was identified as the HMS Monstrose, according to CNN, which was first to report the encounter.

The incident was the latest in a series of provocations between the Islamic Republic and the West. British forces last week seized an Iranian supertanker that officials believed was operating in violation of European Union sanctions. The British Royal Marines captured the vessel in Gibraltar after believing it was trying to provide crude oil to Syria, an ally of Iran.

Iranian President Hassan Rouhani warned that Britain would face repercussions over the seizure.

Last month, Iran shot down a U.S. drone over the Strait of Hormuz, a vital waterway separating Iran from the United Arab Emirates. Oil exporters transport around 22 million barrels of oil per day through the strait.

U.S. officials also blamed Iran for attacks on six oil tankers in the area. Secretary of State Mike Pompeo has accused the regime of trying to disrupt the flow of oil in the area.

Tensions between Iran and the U.S. have escalated in recent weeks and could spiral downward after Iran admitted Monday it surpassed uranium enrichment levels that were set by the Iran nuclear agreement in 2015.

President Trump pulled the U.S. out of the deal last year but several EU nations remained involved. Those countries -- Russia, China, Germany, France, Britain, and the European Union -- have called on Iran to stick to its commitments under the deal.

Iran has abandoned restraint in recent months as it seeks relief from U.S. sanctions. The republic has asked the deal's signatories to provide economic incentives in exchange for the de-escalation of its nuclear program.

Trump has indicated he will impose additional sanctions on Iran and urged those nations not to give in to its demands.

Monday, July 8, 2019

ITM Power Begins Construction on World’s Largest Hydrogen Refinery in Germany

Hydrogen, atomic structure

ITM Power, the energy storage and clean fuel company, is pleased to note the announcement by the REFHYNE consortium of the commencement of construction of the 10MW hydrogen electrolysis plant at the Shell Rheinland refinery in Wesseling, Germany, that will help contribute to a cleaner, lower-carbon energy future.

Construction of the new plant, which features advanced polymer electrolyte membrane (PEM) technology, is expected to be completed in the second half of 2020. The plant will produce up to 1,300 tons of hydrogen per year when operating at peak rates.
Hydrogen will be produced using electricity instead of natural gas. Producing hydrogen with electricity generated from renewable power sources could help significantly reduce CO2 emissions from the Shell Rheinland refinery.

Oil products will continue to play an important role in the decades ahead, and this project means we will be able to make more and cleaner fuels, bitumen and base chemicals.” explained Frans Dumoulin, Director of the Shell Rheinland Refinery. “At the same time, we want to contribute to accelerating the use of hydrogen in transport and other sectors.

Hydrogen can play an important role in the energy transition. Today, hydrogen is already being used in fuel cell vehicles and in industrial applications. In transport, hydrogen can help improve local air quality, as fuel cell vehicles only emit water vapor.

Renewable energy is becoming increasingly important for Shell”, said Dr Thomas Zengerly, Chairman of the Management Board of Shell Deutschland Oil. “Royal Dutch Shell has set up its own business unit specifically for this purpose: New Energies.

Shell expects a new hydrogen model region to be set up in the Cologne area, based on activities around filling stations, cars and buses. The project is based on the idea of a “hydrogen model region” that can jointly demonstrate the potential of hydrogen in the energy turnaround.”

On behalf of the state government of Northrhine-Westfalia, Christoph Dammermann, State Secretary in the Ministry of Economic Affairs, Innovation, Digitisation and Energy, NRW, welcomed the construction of the plant: “Hydrogen has great potential for a climate-neutral energy system of the future. Produced from renewable electricity, it can serve as an important energy carrier and long-term storage in the transport, heating and industrial sectors and thus become a key element for the energy and traffic transition.”

Bart Biebuyck, Executive Director, EU Fuel Cells and Hydrogen Joint Undertaking, said: “FCH-JU funded projects like REFHYNE give the opportunity to European electrolyser industry to build equipment that meets the strict standards of the European refining industry. They will help reducing the CO2 footprint of large industrial processes through the production of green hydrogen.

Simon Bourne, Chief Technical Officer of ITM Power, said: “This ground breaking of the world’s largest PEM electrolyser is an important moment for ITM Power and our partners. Working with Shell has been a real privilege for us and the process has transformed our market offering as a result. Large scale electrolysis is now seen as an important element in the decarbonization of key industrial processes and the REFHYNE project lays the first building block to 100MW industrial plants and beyond.

Friday, July 5, 2019

VLCC held in Gibraltar for alleged sanctions busting

Grace 1 oil tanker

Iran has demanded that the UK and in particular, the Gibraltar Government, hand back the seized 1997-built VLCC ‘Grace 1’. 
According to a Gibraltar Government statement, in the early hours of last Thursday morning, Gibraltar Port and Law Enforcement agencies, assisted by a detachment of UK Royal Marines, boarded the VLCC in the Gibraltar Anchorage, as it was alleged to be carrying crude oil to Syria.

“We have detained the vessel and its cargo,” the Chief Minister, Fabian Picardo, said. “This action arose from information giving the Gibraltar Government reasonable grounds to believe that the ‘Grace 1’, was acting in breach of European Union sanctions against Syria.

“In fact, we have reason to believe that the VLCC was carrying its shipment of crude oil to the Banyas Refinery in Syria.

“That refinery is the property of an entity that is subject to European Union sanctions against Syria,” he said.

As the sanctions being enforced are established by the EU, the Gibraltar Chief Minister wrote to the Presidents of the European Commission and Council, setting out the details of the sanctions, which Gibraltar has enforced.

In the meantime, Panama’s Maritime Authority said that ‘Grace 1’ was no longer listed in Panama’s international vessel registry as of 29th May.

The authority added that ‘Grace 1’ had been de-listed after it received an alert indicating that the ship had participated in or was linked to terrorism financing.

According to the Equasis database, the ISM and shipmanager is listed as IShips Management of Singapore.

Wednesday, July 3, 2019

Fourth of July gas prices: Here's why they're going up

HIV needle gas pump

Gas prices, which had been declining for weeks, turned around and rose again just before the Fourth of July.

The average price of regular-grade gas in the U.S. was $2.748 per gallon Wednesday, according to AAA. That’s up from $2.684 a week ago, but still down from $2.865 this time last year.

California had the highest average price, $3.776 per gallon, according to AAA. The lowest average prices were in Mississippi, at $2.347 per gallon.
AAA has predicted that a record-breaking number of Americans will travel for the holiday this year.

“For the more than 41 million motorists hitting the road this week to celebrate the Independence Day holiday, they will find gas prices cheaper than Memorial Day weekend, but more expensive than they’ve been paying the last few weeks,” said Jeanette Casselano, a AAA spokesperson.

Patrick DeHaan, head of petroleum analysis at GasBuddy, said oil prices, which have rebounded by $9 per barrel in recent weeks, contributed to drivers seeing higher prices at the pump.

“The stage was set for a nearly perfect holiday — gas prices hit their 7th straight weekly decline, oil prices had dropped as low as $51, every state had seen notable declines at the pump, it really couldn’t get a whole lot better as we approach July 4,” he said. “But then Iran attacked two oil tankers and shot down a U.S. drone and markets panicked, sending oil prices higher and now we’re suddenly under the threat of rising gas prices again amid escalating tensions with Iran and talks with China on trade, leading to higher gas prices just as millions hit the road to celebrate the holiday.”

AAA also pointed to issues like supply and demand contributing to the higher prices. The Energy Information Administration reported total U.S. stocks hit the lowest June stock level since 2015, while demand typically peaks in the summer as people travel on vacations.

Also, the owner of the largest refinery on the East Coast decided to close the facility late last month after a large fire burned there. It had produced 335,000 barrels of crude per day, according to AAA.

There also won’t be an increase in the amount of oil hitting the market from overseas. Members of OPEC and other countries agreed this week to continue oil production cuts into 2020.

That all means gas prices may continue rising after the Fourth of July, Casselano said.

“It’s typical to see increases at the pump ahead of the holiday, but we may see prices continue to jump throughout the month due to refinery interruptions on the East Coast, increasing demand and fluctuations in crude oil price,” Casselano said.

Tuesday, July 2, 2019

OPEC And Partners Officially Ratify New Deal


Russia and the other non-OPEC members of the production cut pact first sealed in 2016 have officially ratified an extension of the latest round of cuts agreed last December, Energy Minister Alexander Novak said at the OPEC meeting in Vienna today, after crafting the details of the deal a day earlier.

CNBC reported that OPEC had agreed to extend the cuts—of a total 1.2 million bpd—until the end of March 2020 as prices stubbornly refuse to rise much above the US$60-65 band.
The news comes on the heels of earlier reports that Russia, Saudi Arabia, and Iraq had declared their support for another extension of the cuts. Iran also agreed to the extension yesterday despite the growing internal divide in the oil-exporting cartel.

The decision to extend the cuts is not particularly surprising. With relentlessly rising U.S. oil production, OPEC has few good moves left, if any. Russia has repeatedly noted it would be happy with lower oil prices than its Middle Eastern partners but even so it has once again agreed to continue cutting. Some saw in this a deal, in which the Middle Eastern partners—notably Saudi Arabia—would compensate Moscow for the inconvenience of having to sell less oil with investment contracts in energy and other sectors.

This compensation may not, however, eliminate the risk of Rosneft demanding its own compensation for production restrictions: last month chief executive Igor Sechin said the company would be seeking such compensation from the Kremlin if it agreed to support an extension of the cuts.

What is perhaps more worrying for OPEC is that oil prices reacted weakly to the news: Reuters reported earlier today Brent and WTI had both retreated from the spike that followed the initial announcement of the cuts agreement, pressured by trader worry about the prospects of the global economy in the context of the U.S.-Chinese trade war.
At the time of writing, Brent crude was trading at US$64.87 a barrel and West Texas Intermediate was trading at US$58.91 a barrel, both down from opening.
By Irina Slav for