Derailed Canadian Crude Oil Train Still Burning

http://www.scientificamerican.com/article/derailed-canadian-crude-oil-train-still-burning/

By Jeffrey Hodgson

TORONTO, (Reuters) - A Canadian National Railway Co train carrying crude oil that derailed near the northern Ontario community of Gogama early on Saturday is still on fire, the company said late on Sunday.

The derailment is CN's second in the region in just three days and the third in less than a month. It was the latest in a series of North American derailments involving trains hauling crude oil, raising concerns about rail safety.

"Fire suppression activities are beginning, as is construction of the track diversion," CN spokesman Mark Hallman said in an email, adding that responders were working in shifts around the clock.

The railway said it confirmed that 38 cars were involved in the derailment. The train had 94 cars containing crude oil. CN did not yet have a definitive count of the number of cars that had caught fire.

The railway did not estimate when the fire will be extinguished and the line reopened.

The Ontario Provincial Police said earlier on Sunday on Twitter that the fire was burning at 80 percent of full size and posted a photo from the morning showing thick clouds of black smoke still coming from the site.

Hallman said air quality monitoring has indicated no air issues at either Gogama or a nearby aboriginal community.

The police force reopened a nearby highway closed after the derailment, but warned there would be delays for residents as CN moves equipment.

The railway said on Saturday that a bridge over a waterway had been damaged and that five tank cars had landed in the water. Oil had leaked into the water and booms were deployed to try to contain it.

CN said the crude oil on the train originated in Alberta and was destined for eastern Canada.

The incident comes after another derailment, on Thursday, blocked CN's main line in northern Ontario.

CN said the latest derailment occurred 2 miles (3.2 km) northwest of Gogama, which is some 373 miles (600 km) north of Toronto. It occurred just before 3 a.m. (0800 GMT) on Saturday and is affecting rail traffic running between Toronto and Winnipeg, Manitoba.

The Transportation Safety Board of Canada, which is investigating, noted on Saturday that the accident occurred about 23 miles (37 km) from the site of a Feb. 14 accident involving a CN crude oil train. (Editing by Leslie Adler and Chris Reese)

West African STS warning given

http://www.tankeroperator.com/ViewNews.aspx?NewsID=6450

West African countries have started to take a keener interest in ship to ship (STS) transfer operations.

       

Those being scrutinised are usually taking place in national waters (12 mile zone) or in the countries Exclusive Economic Zone (EEZ - 200 miles), warned leading insurance service provider Skuld.

The reasons for this involve a number of factors, including:

·         Concerns over smuggling and evasion of duties.

·         Security concerns with respect to piracy and other seaborne crime.

Skuld's correspondents in the Republic of Congo have advised that the local merchant marine authority must be given advance notification of any STS operation and provide approval, before it can go ahead. A fee of up to FCFA 5 mill (about €7,600) may be charged for this approval process.

A STS performed without an approval may result in significant fines and other legal action being taken.

Further information received indicated that the Angolan authorities also require advance clearance for an STS, which specifically means notifying the Angolan navy of any planned operation.

Information to be provided to the Angolan navy, includes -

·         Names and IMO numbers of involved vessels.

·         Likely date of the operation.

·         The location of the operation.

·         Identifying the name the cargo to be transferred and the quantity.

Upon completion of the operation, a statement of facts (SOF) should be submitted to the Angolan Navy.

A failure to comply with these requirements may lead to an arrest of the vessel, fines and/or other consequences.

The decision to agree to an STS, be it in advance of a voyage or on an ad hoc basis, should always follow a careful risk management analysis, Skuld said.

There are a number of physical STS issues that need to be addressed in order to ensure any such operation is done safely. Including a pre-STS assessment of the planned operation, as well as a careful monitoring throughout.

There is a continuing risk of piracy in certain areas along the West Coast of Africa. While most incidents appear to be in and around the Gulf of Guinea, there have been reports of incidents as far south as Angola.

Vessels that are stationary during a STS operation may be at particular risk, as they cannot seek to use navigation to fend off of an attack.

Furthermore there have been instances where a purported STS operation may have been a ruse to lure a vessel in to an ambush, Skuld warned.

Therefore it is advisable to seek to conduct operations in areas where protection can be afforded by authorised bodies of the local coastal state. It is important to note that it may not always be possible to have foreign security personnel on board a vessel, armed or unarmed.

**Skuld has also announced that the P&I club has added 10 mill gt following the mutual renewals, which were completed on 20th February.

Ståle Hansen, Skuld president and CEO, said: "The 2015 renewals demonstrate that we have a solid base of loyal members who not only renew their policies with Skuld but who also bring new tonnage into the club. On top of that, attracting new and high-quality members and welcoming some previous members back proves that Skuld is an attractive partner in the marine insurance market."

OPEC Maintains Production Levels Despite Price Plunge

Crude prices continue their downward spiral with OPEC hitting four year lows on its basket price last week. The organization saw its basket price hit $70.80 per barrel on November 27, almost a $3 drop from the previous day’s $73.70.

While the drop has allowed consumers in the US to enjoy lower gas prices at the pump, the dip is hurting share prices of energy companies as well as the currencies of some countries.

At its meeting last week OPEC decided to maintain its current production levels instead of cutting back on flows to help stabilize prices. Prior to the cartel’s meeting in Vienna there was speculation that the group would ease back on production but they could not come to a consensus on what to do, so decided to do nothing

On the US’ NYMEX light crude oil has fallen to lows not seen in years, trading at $66.15 per barrel on November 28. Across the pond in London, Brent crude fell below $75 per barrel for the first time since September 2010.

http://www.petroleumafrica.com/opec-maintains-production-levels-despite-price-plunge/

GOP-led Senate fails to override Obama's Keystone veto, lawmakers say fight not over

FILE: November 14, 2014: A depot used to store pipes for Transcanada Corp's planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota. (REUTERS)

http://www.foxnews.com/politics/2015/03/04/gop-senate-fails-to-get-enough-votes-to-override-obama-keystone-veto-says-fight/

The GOP-controlled Senate failed Wednesday to override President Obama’s veto of Keystone XL pipeline legislation but vowed to continue to fight to complete the project.

The vote was 62-37, five votes short of the 67-vote super-majority needed to override a presidential veto. The bill turned back by the president would have approved the controversial pipeline. 

“The Senate’s failure to override President Obama’s veto is a defeat for our economy and American workers," Indiana GOP Sen. Dan Coats said after the vote. "Obama and a majority of Senate Democrats have said no to creating new jobs and increasing our energy security. Despite support from the majority of Americans, this important pro-growth project remains in political paralysis.” 

But some lawmakers are looking at other ways to muscle the legislation through. 

“If we don’t win this battle today, we’ll attach [the legislation] to another bill and win the war,” North Dakota GOP Sen. John Hoeven, a major sponsor of the bill, said before the vote.

Hoeven is considering attaching the Keystone measure to a highway infrastructure bill. 

The completion of the Canada-to-Texas pipeline has been a contentious Washington issue for the past six years.

Republicans and other supporters argue the project would create tens of thousands of good-paying jobs and help the United States become less dependent on foreign oil.

Democrats and other opponents say that drilling for the oil in Canada’s tar sands will emit too much greenhouse gas and contribute to global warming.

The Senate passed the legislation Jan. 29 -- just weeks after Republicans officially took control of the chamber from Democrats, who for years had held up the effort.

Obama later vetoed the legislation, making good on his vow that no final decision could be made until the State Department completed its impact studies.

“By vetoing the bipartisan Keystone jobs bill, President Obama sided with [the] moneyed special interests over the middle class,” said Senate Majority Leader Mitch McConnell, R-Ky. 

But Sen. Barbara Boxer, D-Calif., earlier this week told The Hill newspaper that the effort to override the veto was a “ludicrous idea” and rejected the idea of attaching Keystone to the highway legislation.

"First, they hold the homeland security funding bill hostage to immigration,” Boxer said. “Now they want to hold the highway bill hostage to big polluting Canadian special interests.”

U.S. Running Out of Room to Store Oil; Price Collapse Seen

Michael Wyke/Tulsa World/APThe oil tanks in Cushing, Oklahoma, are reportedly two-thirds full.

http://www.dailyfinance.com/2015/03/03/america-lacks-room-store-oil/

By JONATHAN FAHEY

NEW YORK -- The U.S. has so much crude that it is running out of places to put it -- and that could drive oil and gasoline prices even lower in the coming months.

For the past seven weeks, the United States has been producing and importing an average of 1 million more barrels of oil every day than it is consuming. That extra crude is flowing into storage tanks, especially at the country's main trading hub in Cushing, Oklahoma, pushing U.S. supplies to their highest point in at least 80 years, the Energy Department reported last week. If this keeps up, storage tanks could approach their operational limits, known in the industry as "tank tops," by mid-April and send the price of crude -- and probably gasoline, too -- plummeting.

"The fact of the matter is we are running out of storage capacity in the U.S.," Ed Morse, head of commodities research at Citibank, said at a recent symposium at the Council on Foreign Relations in New York. Morse has suggested oil could fall all the way to $20 a barrel from the current $50. At that rock-bottom price, oil companies, faced with mounting losses, would stop pumping oil until the glut eased. Gasoline prices would fall along with crude, though lower refinery production, because of seasonal factors and unexpected outages, could prevent a sharp decline.

Multiple Factors Involved

The national average price of gasoline is $2.44 a gallon. That's $1.02 cheaper than last year at this time, but up 37 cents over the past month. Other analysts agree that crude is poised to fall sharply -- if not all the way to $20 -- because it continues to flood into storage for a number of reasons:

• U.S. oil production continues to rise. Companies are cutting back on new drilling, but that won't reduce supplies until later this year.
• The new oil being produced is light, sweet crude, which is a type many U.S. refineries are not designed to process. Oil companies can't just get rid of it by sending it abroad, because crude exports are restricted by federal law.
• Foreign oil continues to flow into the U.S., both because of economic weakness in other countries and to feed refineries designed to process heavy, sour crude.
• This is the slowest time of year for gasoline demand, so refiners typically reduce or stop production to perform maintenance. As refiners process less crude, supplies build up.
• Oil investors are making money buying and storing oil because of the difference between the current price of oil and the price for delivery in far-off months. An investor can buy oil at $50 today and enter into a contract to sell it for $59 in December, locking in a profit even after paying for storage during those months.

The delivery point for most of the oil traded in the U.S. is Cushing, a city of about 8,000 halfway between Oklahoma City and Tulsa at an intersection of several pipelines. The city is dotted with tanks that can, in theory, hold 85 million barrels of oil, according to the Energy Department, though some of those tanks are used for blending or feeding pipelines, not for storing oil.

There Are Other Numbers to Consider

The market data provider Genscape, which flies helicopters equipped with infrared cameras and other technology over Cushing twice a week to measure storage levels, estimates Cushing is two-thirds full. Hillary Stevenson, who manages storage, pipeline and refinery monitoring for Genscape, says Cushing could be full by mid-April. Supplies are increasing at "the highest rate we have ever seen at Cushing," she says.

Full tanks -- or super-low prices -- are not a sure thing. New storage is under construction at Cushing, and there are large storage terminals near Houston, in St. James, Louisiana, and elsewhere around the country that will probably begin to take in more oil as prices fall far enough to cover the cost of transporting the oil. Also, drillers are cutting back fast because oil prices have plummeted from $107 a barrel in June. And demand is showing signs of rising.

While the Energy Department reported another enormous rise in crude stocks last week, up 8.4 million barrels from the week earlier, it also reported that diesel and gasoline supplies fell more than expected. That leads some to conclude that demand for crude will soon pick up, easing the glut somewhat. But many analysts believe oil prices will fall through the spring, before summer drivers start to relieve the glut.

Netanyahu: Borders Must Reflect 'Dramatic' Changes From 1967

Brent Oil Retreats From 2015 High; WTI Gains on Cushing

https://www.yahoo.com/tech/these-are-samsungs-new-phones-the-galaxy-s6-and-112356481829.html

(Bloomberg) -- Crude retreated from its highest level this year in London on concern a global surplus will linger. U.S. oil futures rebounded after an industry survey was said to report a smaller increase in stockpiles at the main storage hub.

Brent dropped as much as 2.9 percent. Prices need to fall further before production is sufficiently curbed to balance the market, Goldman Sachs Group Inc. estimates. West Texas Intermediate gained after Genscape Inc. was said to report a smaller inventory increase at Cushing, Oklahoma, according to analysts including Phil Flynn, senior market analyst at the Price Futures Group in Chicago. Supplies have more than doubled in the past 12 weeks at Cushing.

“We still have a lot of bearish fundamentals and Brent is under a lot of pressure,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “The Cushing report is pushing up WTI but I think it may be short-lived.”

Brent for April settlement dropped $1.57, or 2.5 percent, to $61.01 a barrel at 10:50 a.m. New York time on the London-based ICE Futures Europe exchange. Prices rose 18 percent in February, the biggest monthly gain since May 2009. The European benchmark’s premium to WTI narrowed to $10.67 after widening to the most since January 2014.

WTI crude for April delivery gained 42 cents, or 0.8 percent, to $50.18 a barrel on the New York Mercantile Exchange after earlier falling 2.1 percent. Futures gained 3.2 percent last month. The volume of all futures traded was about 38 percent above the 100-day average for the time of day.

The Genscape report is “supporting WTI,” said Carl Larry, a Houston-based director of oil and gas at Frost & Sullivan. “Brent is under a lot more pressure here.”

Record Stockpiles

Crude stockpiles in the U.S., the world’s biggest oil consumer, increased by 8.43 million barrels to 434.1 million through Feb. 20, the most in EIA weekly data going back to 1982. The U.S. will produce 9.3 million barrels a day of oil this year, up from 8.63 million in 2014, according to the Energy Department’s statistical arm. Output will climb to 9.52 million in 2016.

“Prices will have to move lower first to create a meaningful impact on supply,” Miswin Mahesh, an analyst at Barclays Plc in London, said in a report. “We expect further weakness ahead” in prices.

Rigs targeting oil in the U.S. fell to 986 last week, the lowest since 2011, according to data from Baker Hughes Inc. last week.

Rig Count

The current rig count implies output growth of 385,000 barrels a day by the fourth quarter from a year earlier, down 55,000 barrels a day from last week’s estimate, Goldman Sachs said in an e-mailed report Monday. The slowdown points to growth decelerating close to levels needed to balance the market, it said.

The Organization of Petroleum Exporting Countries boosted output to 30.6 million barrels a day in February, above its target of 30 million, according to a Bloomberg survey.

Saudi Arabia’s output advanced last month by 130,000 barrels a day to 9.85 million a day, the highest level since September 2013, according to the survey. The country pumps the most crude among the 12 nations of OPEC, which supply about 40 percent of the world’s oil.

“The realization that the Saudis are not cutting production is weighing on prices internationally,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy.

Hedge funds raised bearish wagers on WTI by 17 percent to an all-time high of 117,646 contracts in the seven days ended Feb. 24, U.S. Commodity Futures Trading Commission data show. Net-long positions slid 3.1 percent to 202,609 lots, the lowest in seven weeks.

Money managers raised their net-long positions in Brent crude for a third week in the period to Feb. 24, data from ICE showed. Bullish wagers increased to 182,783 contracts, remaining at their highest level since July in futures and options combined.

To contact the reporters on this story: Moming Zhou in New York at mzhou29@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net

To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net Stephen Cunningham, David Marino