RIGZONE
"Oil Continues to Fall on Recession Fears"
by Bloomberg | Julia Fanzeres and Alex Longley
Wednesday, July 06, 2022
Oil extended its drop for a second day as fears of a global slowdown outweighed continued supply disruptions and market tightness.
West Texas Intermediate settled below $100 after trading in a $7 range on Wednesday.
The two-day decline comes as concerns over an economic recession, as well as months of dwindling liquidity, undermine the idea of oil being used as a hedge against inflation.
Meanwhile, Citigroup Inc.’s Ed Morse said the outlook for oil demand will likely see further downward revisions amid higher fuel prices.
“Almost everybody has reduced their expectations of demand for the year,” Morse said in a Bloomberg Television interview Wednesday.
Oil has opened the third quarter on volatile footing.
With central banks, including the Federal Reserve, hiking interest rates to tame inflation, investors have been pricing in the consequences of a slowdown, even as physical crude markets continue to show signs of vigor and Russia’s war in Ukraine drags on.
While this week’s price weakness has been borne out of concern of a global recession and technical selling, there’s been little change to fundamentals.
Nearby Brent futures are trading at a giant premium to later months -- indicating market strength -- while disruption to global oil production has been mounting amid a risk to Kazkahstan’s crude exports.
Prices:
WTI for August delivery fell 97 cents to settle at $98.53 a barrel in New York.
Brent for September settlement dropped $2.08 to settle at $100.69 a barrel.
“While the odds of a recession are indeed rising, it’s premature for the oil market to be succumbing to such concerns,” Goldman Sachs & Co. analysts including Damien Courvalin said in a note.
“The global economy is still growing, with the rise in oil demand this year set to significantly outperform GDP growth.”
In China, there are signs of rising demand as the world’s biggest importer emerges from virus lockdowns.
Overall consumption of gasoline and diesel last month was at almost 90% of June 2019 levels, according to people with knowledge of the energy industry.
https://www.rigzone.com/news/wire/oil_c ... 3-article/
OIL, NATURAL GAS
Re: OIL, NATURAL GAS
RIGZONE
"Oil Rises as Tight Market Offsets Recession Fears"
by Bloomberg | Julia Fanzeres and Alex Longley
Thursday, July 07, 2022
Oil rose after a two-day decline as signs of tight physical markets outweighed concerns over a potential global slowdown.
West Texas Intermediate crude futures rallied 4.3% to settle above $102 a barrel.
Sparking fresh supply worries, Russia ordered a halt to a key Kazakh export terminal that had been expected to load 1.24 million barrels a day in July, according to a plan seen by Bloomberg.
Separately, China is considering a $220 billion stimulus that could potentially bolster demand in the world’s biggest oil importer.
Meanwhile, traders digested a mixed US government crude inventory report.
Gasoline inventories and refinery utilization rates fell, according to an Energy Information Administration report Wednesday.
US crude stockpiles saw a larger-than-expected gain, with inventories rising 8.23 million barrels last week.
The physical market tightness has resulted in a steep backwardation, and “although we’ve seen big moves in futures prices, the curve has stayed backwardated,” said Quinn Kiley, a portfolio manager at Tortoise Capital Advisors, a firm that manages roughly $8 billion in energy-related assets.
“There is a lot of noise, more so than a lot of news.”
Oil has given up the bulk of the gains seen in the wake of Russia’s invasion of Ukraine, which lifted the US benchmark above $130 a barrel in March.
Surging inflationary pressures have prompted the Federal Reserve to tighten policy aggressively, which in turn spurred expectations that a demand-sapping recession may lie ahead.
That has weighed on headline prices, but supply tightness lingers.
“While supply is constrained by structural underinvestment, demand remains resilient in the face of recessionary concerns,” JPMorgan Chase & Co. analysts, including Christyan Malek, said in a note to clients.
Prices:
WTI for August delivery rose $4.20 to settle at $102.73 a barrel in New York.
Brent for September settlement added $3.96 to settle at $104.65 a barrel.
Until recently, surging refined fuels prices had helped keep the market strong, boosting the incentive for refiners to process more crude.
Shell Plc said strong margins from fuel production have added more than $1 billion to earnings in the last quarter.
In recent days, however, some of the firmness in fuel markets dissipated.
(with assistance from Laura Hurst)
https://www.rigzone.com/news/wire/oil_r ... 8-article/
"Oil Rises as Tight Market Offsets Recession Fears"
by Bloomberg | Julia Fanzeres and Alex Longley
Thursday, July 07, 2022
Oil rose after a two-day decline as signs of tight physical markets outweighed concerns over a potential global slowdown.
West Texas Intermediate crude futures rallied 4.3% to settle above $102 a barrel.
Sparking fresh supply worries, Russia ordered a halt to a key Kazakh export terminal that had been expected to load 1.24 million barrels a day in July, according to a plan seen by Bloomberg.
Separately, China is considering a $220 billion stimulus that could potentially bolster demand in the world’s biggest oil importer.
Meanwhile, traders digested a mixed US government crude inventory report.
Gasoline inventories and refinery utilization rates fell, according to an Energy Information Administration report Wednesday.
US crude stockpiles saw a larger-than-expected gain, with inventories rising 8.23 million barrels last week.
The physical market tightness has resulted in a steep backwardation, and “although we’ve seen big moves in futures prices, the curve has stayed backwardated,” said Quinn Kiley, a portfolio manager at Tortoise Capital Advisors, a firm that manages roughly $8 billion in energy-related assets.
“There is a lot of noise, more so than a lot of news.”
Oil has given up the bulk of the gains seen in the wake of Russia’s invasion of Ukraine, which lifted the US benchmark above $130 a barrel in March.
Surging inflationary pressures have prompted the Federal Reserve to tighten policy aggressively, which in turn spurred expectations that a demand-sapping recession may lie ahead.
That has weighed on headline prices, but supply tightness lingers.
“While supply is constrained by structural underinvestment, demand remains resilient in the face of recessionary concerns,” JPMorgan Chase & Co. analysts, including Christyan Malek, said in a note to clients.
Prices:
WTI for August delivery rose $4.20 to settle at $102.73 a barrel in New York.
Brent for September settlement added $3.96 to settle at $104.65 a barrel.
Until recently, surging refined fuels prices had helped keep the market strong, boosting the incentive for refiners to process more crude.
Shell Plc said strong margins from fuel production have added more than $1 billion to earnings in the last quarter.
In recent days, however, some of the firmness in fuel markets dissipated.
(with assistance from Laura Hurst)
https://www.rigzone.com/news/wire/oil_r ... 8-article/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Traders in Panic After Russia CPC Terminal Order"
by Bloomberg | Sherry Su
Thursday, July 07, 2022
A Russian court order to halt oil loadings from a port in the Black Sea has unnerved European crude traders already reeling from the tightest regional market in years, sending prices for competing barrels spiraling.
On Tuesday, a Russian court ordered a 30-day stoppage of the CPC Terminal, through which more than 30 million barrels of mostly Kazakh crude gets exported each month.
It said the halt is because the facility violated its oil-spill prevention plan.
If it comes to pass, the stoppage would be another blow to a European oil market that’s lost large amounts of supply to unrest in Libya, and seen sharply reduced shipments from elsewhere.
For now the terminal is running as normal.
Azeri Light oil, popular among European refiners because of its low sulfur levels, jumped to a premium of more than $10 a barrel to benchmark Dated Brent, the highest level several traders were able to remember.
Further afield, Nigeria’s Forcados crude was offered at a premium of $14 a barrel.
Bailiff Requirement
The CPC stoppage is meant to begin after a bailiff arrives.
That hasn’t happened yet, and the terminal operator, Caspian Pipeline Consortium, has asked the higher regional court to delay the order suspending operations, arguing a sudden stop could cause permanent damage.
European refiners are now mostly keeping away from Russia’s Urals crude following the invasion into Ukraine, putting a greater emphasis on other sources of supply.
But Azerbaijan, Kazakhstan, Libya, the North Sea and West Africa -- all major suppliers to Europe -- already saw their combined monthly exports decline by a combined 1.04 million barrels a day in June, tanker tracking compiled by Bloomberg show.
Exports from Libya have fallen to about a third of last year’s level amid the worsening political crisis.
Should the court order go ahead, it would strip Europe of at least another 1 million barrels a day.
Several oil traders in the region expressed concerns over the possible shutdown, saying spot prices could go up even further because of an urgent need for alternative grades.
Some refineries that already bought CPC cargoes for August loading said they were worried whether their shipments will now be delayed.
CPC loadings are planned at about 1.24 million barrels a day in July, slightly less than 1.4 million to 1.5 million barrels a day in the first quarter, mainly due to planned maintenance at Kazakhstan’s giant Kashagan field.
The US and its allies are trying to punish Moscow in the oil market for the country’s invasion of Ukraine, prompting speculation the court order is a politically motivated response that may have less of an impact on supply in practice.
In late March, CPC had to shut two of three moorings for repairs for more than a month due to significant damage caused by bad weather.
Last month, the terminal operated from one of three moorings after World War II mines were found nearby.
Despite those setbacks, which also alarmed the market at the time, CPC managed to keep its exports largely in line with pre-planned loading levels.
Physical oil traders aren’t taking any chances though.
Dated to Frontline Brent swaps, which reflect the premium of real-world North Sea crude supplies over ICE Brent futures, have surged to a premium of about $5 a barrel.
--With assistance from Alex Longley.
https://www.rigzone.com/news/wire/oil_t ... 5-article/
"Oil Traders in Panic After Russia CPC Terminal Order"
by Bloomberg | Sherry Su
Thursday, July 07, 2022
A Russian court order to halt oil loadings from a port in the Black Sea has unnerved European crude traders already reeling from the tightest regional market in years, sending prices for competing barrels spiraling.
On Tuesday, a Russian court ordered a 30-day stoppage of the CPC Terminal, through which more than 30 million barrels of mostly Kazakh crude gets exported each month.
It said the halt is because the facility violated its oil-spill prevention plan.
If it comes to pass, the stoppage would be another blow to a European oil market that’s lost large amounts of supply to unrest in Libya, and seen sharply reduced shipments from elsewhere.
For now the terminal is running as normal.
Azeri Light oil, popular among European refiners because of its low sulfur levels, jumped to a premium of more than $10 a barrel to benchmark Dated Brent, the highest level several traders were able to remember.
Further afield, Nigeria’s Forcados crude was offered at a premium of $14 a barrel.
Bailiff Requirement
The CPC stoppage is meant to begin after a bailiff arrives.
That hasn’t happened yet, and the terminal operator, Caspian Pipeline Consortium, has asked the higher regional court to delay the order suspending operations, arguing a sudden stop could cause permanent damage.
European refiners are now mostly keeping away from Russia’s Urals crude following the invasion into Ukraine, putting a greater emphasis on other sources of supply.
But Azerbaijan, Kazakhstan, Libya, the North Sea and West Africa -- all major suppliers to Europe -- already saw their combined monthly exports decline by a combined 1.04 million barrels a day in June, tanker tracking compiled by Bloomberg show.
Exports from Libya have fallen to about a third of last year’s level amid the worsening political crisis.
Should the court order go ahead, it would strip Europe of at least another 1 million barrels a day.
Several oil traders in the region expressed concerns over the possible shutdown, saying spot prices could go up even further because of an urgent need for alternative grades.
Some refineries that already bought CPC cargoes for August loading said they were worried whether their shipments will now be delayed.
CPC loadings are planned at about 1.24 million barrels a day in July, slightly less than 1.4 million to 1.5 million barrels a day in the first quarter, mainly due to planned maintenance at Kazakhstan’s giant Kashagan field.
The US and its allies are trying to punish Moscow in the oil market for the country’s invasion of Ukraine, prompting speculation the court order is a politically motivated response that may have less of an impact on supply in practice.
In late March, CPC had to shut two of three moorings for repairs for more than a month due to significant damage caused by bad weather.
Last month, the terminal operated from one of three moorings after World War II mines were found nearby.
Despite those setbacks, which also alarmed the market at the time, CPC managed to keep its exports largely in line with pre-planned loading levels.
Physical oil traders aren’t taking any chances though.
Dated to Frontline Brent swaps, which reflect the premium of real-world North Sea crude supplies over ICE Brent futures, have surged to a premium of about $5 a barrel.
--With assistance from Alex Longley.
https://www.rigzone.com/news/wire/oil_t ... 5-article/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Posts Weekly Loss after Choppy Trading"
by Bloomberg | Julia Fanzeres and Alex Longley
Friday, July 08, 2022
Oil posted a weekly decline as volatile trading and recession fears overshadowed a fundamentally tight supply picture.
West Texas Intermediate crude futures rose to settle over $104 a barrel on Friday but it wasn’t enough to stave off a weekly decline of 3.6%.
Investors remain concerned that restrictive US monetary policy could herald a recession.
Still, physical signals remain robust, especially in the US, where the prompt timespread, which closely reflects the supply and demand balances at the country’s biggest storage hub in Cushing, Oklahoma, surged to the highest level since March earlier in the week.
“We believe it is premature for commodities to succumb to recession concerns when the global economy is still growing and markets remain in deficit on strong demand,” said Goldman Sachs Group Inc. analysts, including Jeffrey Currie, in note to clients.
Crude’s volatile trading means that it’s well down from last month’s high but still up more than 35% this year following Russia’s invasion of Ukraine.
The complex market outlook has spurred banks to offer starkly different scenarios for prices, with Goldman Sachs Group Inc. remaining broadly bullish while Citigroup Inc. has said the commodity is at risk of a significant tumble.
Meanwhile, in the Permian Basin’s hub in Midland, Texas, inventories are about 600,000 barrels lower than last year, according to Geoffrey Craig, global energy analyst at Ursa Space.
Outside of the US, a key export route for Kazakh oil risks being suspended as it appeals a Russian court order for it to temporarily shut down.
Prices:
WTI for August delivery added $2.06 to settle at $104.79 a barrel.
The contract is down 3.4% this week.
Brent for September settlement gained $2.37 to settle at $107.02 a barrel.
In China, meanwhile, investors are tracking efforts by Beijing to buttress growth after anti-virus lockdowns hurt the economy and energy consumption in the first half.
The Ministry of Finance may allow local governments to sell 1.5 trillion yuan ($220 billion) of special bonds for infrastructure funding.
https://www.rigzone.com/news/wire/oil_p ... 2-article/
"Oil Posts Weekly Loss after Choppy Trading"
by Bloomberg | Julia Fanzeres and Alex Longley
Friday, July 08, 2022
Oil posted a weekly decline as volatile trading and recession fears overshadowed a fundamentally tight supply picture.
West Texas Intermediate crude futures rose to settle over $104 a barrel on Friday but it wasn’t enough to stave off a weekly decline of 3.6%.
Investors remain concerned that restrictive US monetary policy could herald a recession.
Still, physical signals remain robust, especially in the US, where the prompt timespread, which closely reflects the supply and demand balances at the country’s biggest storage hub in Cushing, Oklahoma, surged to the highest level since March earlier in the week.
“We believe it is premature for commodities to succumb to recession concerns when the global economy is still growing and markets remain in deficit on strong demand,” said Goldman Sachs Group Inc. analysts, including Jeffrey Currie, in note to clients.
Crude’s volatile trading means that it’s well down from last month’s high but still up more than 35% this year following Russia’s invasion of Ukraine.
The complex market outlook has spurred banks to offer starkly different scenarios for prices, with Goldman Sachs Group Inc. remaining broadly bullish while Citigroup Inc. has said the commodity is at risk of a significant tumble.
Meanwhile, in the Permian Basin’s hub in Midland, Texas, inventories are about 600,000 barrels lower than last year, according to Geoffrey Craig, global energy analyst at Ursa Space.
Outside of the US, a key export route for Kazakh oil risks being suspended as it appeals a Russian court order for it to temporarily shut down.
Prices:
WTI for August delivery added $2.06 to settle at $104.79 a barrel.
The contract is down 3.4% this week.
Brent for September settlement gained $2.37 to settle at $107.02 a barrel.
In China, meanwhile, investors are tracking efforts by Beijing to buttress growth after anti-virus lockdowns hurt the economy and energy consumption in the first half.
The Ministry of Finance may allow local governments to sell 1.5 trillion yuan ($220 billion) of special bonds for infrastructure funding.
https://www.rigzone.com/news/wire/oil_p ... 2-article/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Down as Increased China Virus Cases Weaken Markets"
by Bloomberg | Julia Fanzeres and Alex Longley
Monday, July 11, 2022
Oil declined as a renewed increase in China’s virus cases fed into weakness across global markets and the US awarded more crude from its reserves.
West Texas Intermediate crude futures slipped to settle at $104.09 a barrel.
Earlier in the session, prices dropped as much as 3.9% as Covid cases continued to climb in Shanghai, posing a challenge to the oil-consuming country’s Covid Zero strategy.
On the supply side, concerns eased after a court order allowed the crucial CPC terminal on Russia’s Black Sea coast to stay operational.
Meanwhile in the US, the Department of Energy awarded almost 39 million barrels of crude from the Strategic Petroleum Reserve to 14 companies.
“Crude is back under pressure as supply concerns from the CPC pipeline are eased and sentiment remains sour,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management.
Oil dipped below $100 last week, then rebounded as the market was whipsawed by competing supply and demand outlooks.
US President Joe Biden is scheduled to visit Saudi Arabia in the coming days during a tour of the Middle East as he seeks to tame rising energy prices that are weighing on the global economy.
Speculators also turned more bearish on the main oil benchmarks last week.
Money managers cut net-long positions in both Brent and WTI to the lowest level since 2020, according to data released Friday.
“CFTC data released Friday showed positioning was the least bullish in more than two years, highlighting the lack of conviction in holding commodity longs into an economic uncertainty,” Babin said.
There are some signs of relief for Biden.
Gasoline prices -- a major contributor to inflation and a central issue in US elections -- have fallen for 27 days, including the single biggest daily drop in more than a decade.
That’s the longest streak of declines since April 2020.
A court in the Krasnodar region on Monday canceled an instruction to suspend shipments from the CPC terminal on Russia’s Black Sea coast, which mainly exports Kazakh crude.
It’s due to ship 1.2 million barrels a day this month.
Prices:
WTI for August delivery fell 70 cents to settle at $104.09 a barrel in New York.
Brent for September settlement rose 8 cents to settle at $107.10 a barrel.
Shanghai recorded 69 new Covid infections Sunday, the most since late May.
China will unveil a raft of economic data this week, with the numbers set to be scrutinized for evidence of Covid Zero’s impact on the world’s No. 2 economy.
Despite Chinese demand concerns, the oil market is still supported by tight supply, in part due to upended trade flows from Russia following its invasion of Ukraine.
Time-spreads have firmed in a bullish backwardation structure, which indicates scarce volumes.
https://www.rigzone.com/news/wire/oil_d ... 5-article/
"Oil Down as Increased China Virus Cases Weaken Markets"
by Bloomberg | Julia Fanzeres and Alex Longley
Monday, July 11, 2022
Oil declined as a renewed increase in China’s virus cases fed into weakness across global markets and the US awarded more crude from its reserves.
West Texas Intermediate crude futures slipped to settle at $104.09 a barrel.
Earlier in the session, prices dropped as much as 3.9% as Covid cases continued to climb in Shanghai, posing a challenge to the oil-consuming country’s Covid Zero strategy.
On the supply side, concerns eased after a court order allowed the crucial CPC terminal on Russia’s Black Sea coast to stay operational.
Meanwhile in the US, the Department of Energy awarded almost 39 million barrels of crude from the Strategic Petroleum Reserve to 14 companies.
“Crude is back under pressure as supply concerns from the CPC pipeline are eased and sentiment remains sour,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management.
Oil dipped below $100 last week, then rebounded as the market was whipsawed by competing supply and demand outlooks.
US President Joe Biden is scheduled to visit Saudi Arabia in the coming days during a tour of the Middle East as he seeks to tame rising energy prices that are weighing on the global economy.
Speculators also turned more bearish on the main oil benchmarks last week.
Money managers cut net-long positions in both Brent and WTI to the lowest level since 2020, according to data released Friday.
“CFTC data released Friday showed positioning was the least bullish in more than two years, highlighting the lack of conviction in holding commodity longs into an economic uncertainty,” Babin said.
There are some signs of relief for Biden.
Gasoline prices -- a major contributor to inflation and a central issue in US elections -- have fallen for 27 days, including the single biggest daily drop in more than a decade.
That’s the longest streak of declines since April 2020.
A court in the Krasnodar region on Monday canceled an instruction to suspend shipments from the CPC terminal on Russia’s Black Sea coast, which mainly exports Kazakh crude.
It’s due to ship 1.2 million barrels a day this month.
Prices:
WTI for August delivery fell 70 cents to settle at $104.09 a barrel in New York.
Brent for September settlement rose 8 cents to settle at $107.10 a barrel.
Shanghai recorded 69 new Covid infections Sunday, the most since late May.
China will unveil a raft of economic data this week, with the numbers set to be scrutinized for evidence of Covid Zero’s impact on the world’s No. 2 economy.
Despite Chinese demand concerns, the oil market is still supported by tight supply, in part due to upended trade flows from Russia following its invasion of Ukraine.
Time-spreads have firmed in a bullish backwardation structure, which indicates scarce volumes.
https://www.rigzone.com/news/wire/oil_d ... 5-article/
Re: OIL, NATURAL GAS
REUTERS
"Fourteen firms to get oil from U.S. strategic reserve in latest sale"
Reuters
July 11, 2022
WASHINGTON, July 11 (Reuters) - The United States on Monday said 14 companies had been awarded contracts for the latest sale of oil from the Strategic Petroleum Reserve as part of the Biden administration's efforts to ease oil prices boosted by reactions to Russia's invasion of Ukraine.
The administration said in late March it would release a record 1 million barrels of oil per day of oil for six months from the SPR, held in hollowed-out salt caverns on the coasts of Louisiana and Texas.
Chevron Corp, ExxonMobil Corp and Valero Energy Corp will be among the firms to take delivery of crude oil between Aug. 16 and Sept. 30, the Energy Department said in a release.
The latest sale had offered up to 45 million barrels of oil, but companies bought only about 39 million barrels.
Despite the historic release, Western sanctions on Russia, one of the world's largest oil exporters, after its Feb. 24 invasion of Ukraine have helped keep crude prices stubbornly above $100 a barrel.
The high prices are a risk to President Joe Biden's fellow Democrats in the November elections as they seek to maintain control of both chambers of Congress.
Reporting by Costas Pitas in Los Angeles and Timothy Gardner in Washington; Editing by Tim Ahmann and Matthew Lewis
https://www.reuters.com/business/energy ... 022-07-11/
"Fourteen firms to get oil from U.S. strategic reserve in latest sale"
Reuters
July 11, 2022
WASHINGTON, July 11 (Reuters) - The United States on Monday said 14 companies had been awarded contracts for the latest sale of oil from the Strategic Petroleum Reserve as part of the Biden administration's efforts to ease oil prices boosted by reactions to Russia's invasion of Ukraine.
The administration said in late March it would release a record 1 million barrels of oil per day of oil for six months from the SPR, held in hollowed-out salt caverns on the coasts of Louisiana and Texas.
Chevron Corp, ExxonMobil Corp and Valero Energy Corp will be among the firms to take delivery of crude oil between Aug. 16 and Sept. 30, the Energy Department said in a release.
The latest sale had offered up to 45 million barrels of oil, but companies bought only about 39 million barrels.
Despite the historic release, Western sanctions on Russia, one of the world's largest oil exporters, after its Feb. 24 invasion of Ukraine have helped keep crude prices stubbornly above $100 a barrel.
The high prices are a risk to President Joe Biden's fellow Democrats in the November elections as they seek to maintain control of both chambers of Congress.
Reporting by Costas Pitas in Los Angeles and Timothy Gardner in Washington; Editing by Tim Ahmann and Matthew Lewis
https://www.reuters.com/business/energy ... 022-07-11/
Re: OIL, NATURAL GAS
REUTERS
"Factbox: Could the U.S. ship more LNG to Europe?"
By Scott Disavino
July 11, 2022
July 11 (Reuters) - The United States, the world's top natural gas producer, wants to send more liquefied natural gas (LNG) to Europe to help its allies break their dependence on Russian gas after Moscow invaded Ukraine on Feb. 24.
But U.S. exports are limited by the country's liquefaction capacity and an ongoing outage at Freeport LNG's plant after the second-biggest U.S. LNG export facility was hit by fire in June.
Russia, once Europe's biggest gas supplier, has already cut exports for various reasons this year, including the shutdown of pipelines near battle zones in Ukraine and disputes with customers refusing to pay for gas in roubles.
Data provider Refinitiv said Russia exported around 3.7 billion cubic feet per day (bcfd) of gas since mid June on the three main lines into Germany - Nord Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany) route.
That is down from around 6.5 bcfd in early June and more than halved from an average of 9.4 bcfd in July 2021.
Russian exports will likely fall further when Nord Stream 1 shuts for maintenance from July 11-21.
Some in the market worry the pipe may not return on time.
Russia, the world's second biggest gas supplier, produced about 67.9 bcfd in 2021 and exported 24.4 bcfd, most of which (about 15.0 bcfd) went to the European Union (EU).
Russian gas accounted for around 45% of EU's imports in 2021 and almost 40% of its total consumption of roughly 39 bcfd, according to the International Energy Agency.
One billion cubic feet is enough gas for about five million U.S. homes for a day.
HOW MUCH GAS DOES THE U.S. EXPORT?
The United States will produce about 96.5 bcfd of gas in 2022 and export about 11.9 bcfd as LNG, according to U.S. Energy Information Administration (EIA) projections.
But that EIA outlook was before the Freeport LNG plant in Texas shut on June 8.
Freeport LNG estimated the plant, which was consuming about 2 bcfd of gas before it shut, could resume operations by October.
Some analysts, however, think the outage will last longer.
In 2021, the United States exported a record 9.8 bcfd of gas as LNG with 3.3 bcfd, or 34%, going to Europe.
Most U.S. LNG went to Asia in 2021 because prices there averaged $18 per million British thermal units (mmBtu) versus $16 in Europe .
So far in 2022, the United States exported about 11.0 bcfd of gas as LNG with 7.5 bcfd, or 68%, going to Europe - where prices have averaged $33 per mmBtu versus $29 in Asia.
HOW MUCH MORE CAN THE U.S. EXPORT?
The United States will be able to export more gas, but it will take time.
The seven big U.S. LNG plants, including Freeport LNG, currently have the capacity to export about 13.6 bcfd.
That will rise to 13.8 bcfd later in 2022 when the last units at Venture Global LNG's Calcasieu Pass plant in Louisiana enter service.
In 2023, U.S. LNG export capacity could reach 14.2 bcfd if New Fortress Energy Inc's Fast LNG project in the Gulf of Mexico receives its permits and enters service as expected.
CAN OTHERS SUPPLANT RUSSIAN SUPPLIES?
Europe can boost gas supplies by increasing domestic production, importing more pipeline fuel from countries like Azerbaijan and Norway, and importing more LNG.
Europe has already boosted LNG imports from around 10.7 bcfd in 2021 to an average of 17.4 bcfd so far in 2022, according to Refinitiv data.
While most of that additional LNG came from the United States, several other countries boosted exports during the first half of 2022, including Equatorial Guinea, Egypt, Cameroon, Papua New Guinea, Malaysia, Australia, Norway, Oman and Peru.
Some of those LNG exports, however, did not go to Europe but went to other parts of the world to replace cargoes that were re-routed to Europe.
Reporting by Scott DiSavino; Editing by Marguerita Choy
https://www.reuters.com/business/energy ... 022-07-11/
"Factbox: Could the U.S. ship more LNG to Europe?"
By Scott Disavino
July 11, 2022
July 11 (Reuters) - The United States, the world's top natural gas producer, wants to send more liquefied natural gas (LNG) to Europe to help its allies break their dependence on Russian gas after Moscow invaded Ukraine on Feb. 24.
But U.S. exports are limited by the country's liquefaction capacity and an ongoing outage at Freeport LNG's plant after the second-biggest U.S. LNG export facility was hit by fire in June.
Russia, once Europe's biggest gas supplier, has already cut exports for various reasons this year, including the shutdown of pipelines near battle zones in Ukraine and disputes with customers refusing to pay for gas in roubles.
Data provider Refinitiv said Russia exported around 3.7 billion cubic feet per day (bcfd) of gas since mid June on the three main lines into Germany - Nord Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany) route.
That is down from around 6.5 bcfd in early June and more than halved from an average of 9.4 bcfd in July 2021.
Russian exports will likely fall further when Nord Stream 1 shuts for maintenance from July 11-21.
Some in the market worry the pipe may not return on time.
Russia, the world's second biggest gas supplier, produced about 67.9 bcfd in 2021 and exported 24.4 bcfd, most of which (about 15.0 bcfd) went to the European Union (EU).
Russian gas accounted for around 45% of EU's imports in 2021 and almost 40% of its total consumption of roughly 39 bcfd, according to the International Energy Agency.
One billion cubic feet is enough gas for about five million U.S. homes for a day.
HOW MUCH GAS DOES THE U.S. EXPORT?
The United States will produce about 96.5 bcfd of gas in 2022 and export about 11.9 bcfd as LNG, according to U.S. Energy Information Administration (EIA) projections.
But that EIA outlook was before the Freeport LNG plant in Texas shut on June 8.
Freeport LNG estimated the plant, which was consuming about 2 bcfd of gas before it shut, could resume operations by October.
Some analysts, however, think the outage will last longer.
In 2021, the United States exported a record 9.8 bcfd of gas as LNG with 3.3 bcfd, or 34%, going to Europe.
Most U.S. LNG went to Asia in 2021 because prices there averaged $18 per million British thermal units (mmBtu) versus $16 in Europe .
So far in 2022, the United States exported about 11.0 bcfd of gas as LNG with 7.5 bcfd, or 68%, going to Europe - where prices have averaged $33 per mmBtu versus $29 in Asia.
HOW MUCH MORE CAN THE U.S. EXPORT?
The United States will be able to export more gas, but it will take time.
The seven big U.S. LNG plants, including Freeport LNG, currently have the capacity to export about 13.6 bcfd.
That will rise to 13.8 bcfd later in 2022 when the last units at Venture Global LNG's Calcasieu Pass plant in Louisiana enter service.
In 2023, U.S. LNG export capacity could reach 14.2 bcfd if New Fortress Energy Inc's Fast LNG project in the Gulf of Mexico receives its permits and enters service as expected.
CAN OTHERS SUPPLANT RUSSIAN SUPPLIES?
Europe can boost gas supplies by increasing domestic production, importing more pipeline fuel from countries like Azerbaijan and Norway, and importing more LNG.
Europe has already boosted LNG imports from around 10.7 bcfd in 2021 to an average of 17.4 bcfd so far in 2022, according to Refinitiv data.
While most of that additional LNG came from the United States, several other countries boosted exports during the first half of 2022, including Equatorial Guinea, Egypt, Cameroon, Papua New Guinea, Malaysia, Australia, Norway, Oman and Peru.
Some of those LNG exports, however, did not go to Europe but went to other parts of the world to replace cargoes that were re-routed to Europe.
Reporting by Scott DiSavino; Editing by Marguerita Choy
https://www.reuters.com/business/energy ... 022-07-11/
Re: OIL, NATURAL GAS
RIGZONE
"Oil Plummets on Recession Fears"
by Bloomberg | Julia Fanzeres
Tuesday, July 12, 2022
Oil tumbled as concerns about a global economic slowdown and growing Covid-19 cases in China reduced traders’ appetite for risk.
West Texas Intermediate shed more than 8% to settle under $96 a barrel for the first time since early April.
Rising virus cases in China and looming US inflation data are stoking concerns about demand.
Meanwhile, dwindling liquidity is also exacerbating price moves.
Money managers have become more bearish on the main oil benchmarks, cutting their net-long positions last week to the lowest since 2020.
“The volatility in commodity markets increases the stakes for putting money to work,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management.
“The decimation of other commodities has also reduced risk appetite for crude even in a supply-constrained market.”
Despite recession fears, several energy administrations agree that supply tightness is set to worsen.
IEA’s Executive Director Fatih Birol said nations “might not have seen the worst” of a global energy crunch while OPEC’s first look at 2023 showed no relief from market tightness.
Underscoring supply constraints, the US lowered its growth forecast for oil production through 2023 citing inflation and labor shortages.
Crude has fallen since early June on escalating fears the US may be pushed into a recession as central banks hike rates to combat inflation.
Yet physical markets continue to show signs of strength.
Premiums for North Sea oil were bid at the highest since at least 2008.
The oil futures curve also remains backwardated, where near-term contracts are more expensive than those for later delivery.
Prices:
WTI for August delivery dropped $8.25 to settle at $95.84 a barrel in New York.
Brent for September settlement fell $7.61 to settle at $99.49 a barrel.
President Joe Biden is scheduled to visit Saudi Arabia this week during a tour to the Middle East as he seeks to tame high energy prices that have roiled the global economy.
The US believes OPEC has room to raise production should Biden’s upcoming visit to the region yield any agreements.
France’s President will meet with the leader of the UAE next week to discuss oil supplies.
(with assistance from Alex Longley)
https://www.rigzone.com/news/wire/oil_p ... 5-article/
"Oil Plummets on Recession Fears"
by Bloomberg | Julia Fanzeres
Tuesday, July 12, 2022
Oil tumbled as concerns about a global economic slowdown and growing Covid-19 cases in China reduced traders’ appetite for risk.
West Texas Intermediate shed more than 8% to settle under $96 a barrel for the first time since early April.
Rising virus cases in China and looming US inflation data are stoking concerns about demand.
Meanwhile, dwindling liquidity is also exacerbating price moves.
Money managers have become more bearish on the main oil benchmarks, cutting their net-long positions last week to the lowest since 2020.
“The volatility in commodity markets increases the stakes for putting money to work,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management.
“The decimation of other commodities has also reduced risk appetite for crude even in a supply-constrained market.”
Despite recession fears, several energy administrations agree that supply tightness is set to worsen.
IEA’s Executive Director Fatih Birol said nations “might not have seen the worst” of a global energy crunch while OPEC’s first look at 2023 showed no relief from market tightness.
Underscoring supply constraints, the US lowered its growth forecast for oil production through 2023 citing inflation and labor shortages.
Crude has fallen since early June on escalating fears the US may be pushed into a recession as central banks hike rates to combat inflation.
Yet physical markets continue to show signs of strength.
Premiums for North Sea oil were bid at the highest since at least 2008.
The oil futures curve also remains backwardated, where near-term contracts are more expensive than those for later delivery.
Prices:
WTI for August delivery dropped $8.25 to settle at $95.84 a barrel in New York.
Brent for September settlement fell $7.61 to settle at $99.49 a barrel.
President Joe Biden is scheduled to visit Saudi Arabia this week during a tour to the Middle East as he seeks to tame high energy prices that have roiled the global economy.
The US believes OPEC has room to raise production should Biden’s upcoming visit to the region yield any agreements.
France’s President will meet with the leader of the UAE next week to discuss oil supplies.
(with assistance from Alex Longley)
https://www.rigzone.com/news/wire/oil_p ... 5-article/
Re: OIL, NATURAL GAS
Investing.com
"Oil Inventories Jumped by 4.8M Barrels Last Week: API"
By Yasin Ebrahim
Jul 12, 2022
Investing.com -- U.S. crude oil inventories jumped sharply last week, API data showed Tuesday, exacerbating fears of a wobble in oil demand amid growing risk of an economic recession.
West Texas Intermediate, the U.S. benchmark, traded at $95.69 per barrel following the report after settling down $8.25 at $95.84 per barrel.
U.S. crude inventories increased by about 4.8 million barrels for the week ended July 1.
That compared with a build of 3.8 million barrels reported by the API for the previous week.
Economists were expecting a decrease of about 1.9 million barrels.
The API data also showed that gasoline inventories rose by 2.9 million barrels last week, while distillate stocks increased by about 3.3 million barrels.
The fresh signs that slowing economic growth spells demand destruction for energy come just as OPEC's latest report forecasts world oil demand to slow in 2023 to 2.7 million per day.
The oil-cartel kept its 2022 demand forecast unchanged, flagging significant downside risks including "ongoing geopolitical tensions, the continued pandemic, rising inflation, aggravated supply chain issues, high sovereign debt levels in many regions, and expected monetary tightening by central banks in the U.S., the U.K., Japan and the eurozone."
The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 154,000 barrels last week.
https://www.investing.com/news/commodit ... pi-2846515
"Oil Inventories Jumped by 4.8M Barrels Last Week: API"
By Yasin Ebrahim
Jul 12, 2022
Investing.com -- U.S. crude oil inventories jumped sharply last week, API data showed Tuesday, exacerbating fears of a wobble in oil demand amid growing risk of an economic recession.
West Texas Intermediate, the U.S. benchmark, traded at $95.69 per barrel following the report after settling down $8.25 at $95.84 per barrel.
U.S. crude inventories increased by about 4.8 million barrels for the week ended July 1.
That compared with a build of 3.8 million barrels reported by the API for the previous week.
Economists were expecting a decrease of about 1.9 million barrels.
The API data also showed that gasoline inventories rose by 2.9 million barrels last week, while distillate stocks increased by about 3.3 million barrels.
The fresh signs that slowing economic growth spells demand destruction for energy come just as OPEC's latest report forecasts world oil demand to slow in 2023 to 2.7 million per day.
The oil-cartel kept its 2022 demand forecast unchanged, flagging significant downside risks including "ongoing geopolitical tensions, the continued pandemic, rising inflation, aggravated supply chain issues, high sovereign debt levels in many regions, and expected monetary tightening by central banks in the U.S., the U.K., Japan and the eurozone."
The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 154,000 barrels last week.
https://www.investing.com/news/commodit ... pi-2846515
Re: OIL, NATURAL GAS
THE CAPE CHARLES MIRROR JULY 12, 2022 AT 9:06 PM
Paul Plante says:
First, let’s get up to date on the SPR releases:
Reuters
“Fourteen firms to get oil from U.S. strategic reserve in latest sale”
By Reuters staff
July 11, 2022
WASHINGTON, July 11 (Reuters) – The United States on Monday said 14 companies had been awarded contracts for the latest sale of oil from the Strategic Petroleum Reserve as part of the Biden administration’s efforts to ease oil prices boosted by reactions to Russia’s invasion of Ukraine.
The administration said in late March it would release a record 1 million barrels of oil per day of oil for six months from the SPR, held in hollowed-out salt caverns on the coasts of Louisiana and Texas.
Despite the historic release, Western sanctions on Russia, one of the world’s largest oil exporters, after its Feb. 24 invasion of Ukraine have helped keep crude prices stubbornly above $100 a barrel.
The high prices are a risk to President Joe Biden’s fellow Democrats in the November elections as they seek to maintain control of both chambers of Congress.
end quotes
So that article confirms what we all already know, that is that Joe Biden, whose approval rating in one liberal poll dropped below 30%, is releasing that oil in a vain attempt to save his failing presidency.
END OF QUOTE – REPEAT THE LINE!
So, looking at this as an engineer would look at it, are there ramifications and repercussions to Joe Biden removing 1 million barrels of oil per day for six months from the SPR, which oil is held in hollowed-out salt caverns on the coasts of Louisiana and Texas?
First of all, how do you remove any oil from the SPR?
And that answer, according to Energy.gov, is as follows:
The fact that oil floats on water is the underlying mechanism used to move oil in and out of the SPR caverns.
To withdraw crude oil, fresh water is pumped into the bottom of a cavern.
The water displaces the crude oil to the surface.
After the oil is removed from the SPR caverns, pipelines send it to various terminals and refineries around the nation.
end quotes
But, hey, all you grade school children out there – doesn’t fresh water dissolve salt?
So by continually pumping in fresh water to remove oil, won’t that damage the salt caverns?
For that answer, let’s go to a technical article from AAPG titled “The Good, the Bad and the Ugly – The Strategic Petroleum Reserve” in December 2016 by Barbara Kutchko, where we learn as follows:
The U.S. Strategic Petroleum Reserve (SPR) is facing significant challenges related to the storage and availability of its crude oil resources.
end quotes
Keep in mind that this is now six (6) years later.
Going back to that article, it continues as follows:
Approved for construction by the 1975 Energy Policy and Conservation Act (EPCA), the storage sites were envisioned to be needed for 25 years and are subject to an estimated five drawdown cycles (Shages, 2014).
In retrospect, the design has not matched actual use, and this has led to degradation of the SPR and impacted its ability to perform its function.
end quotes
Again, that is six (6) years ago.
Going back to the article:
The SPR stores crude oil (either sweet or sour) in 62 underground salt caverns located at four different sites in Texas and Louisiana.
The official storage capacity is 727 million barrels, based on sonic measurements.
A 2010 study concluded there was a significant mismatch in design and use of the storage caverns.
Instead of the initial estimated five large drawdown cycles, a large number of small drawdowns occurred over the previous 20 years.
From 1996 through 2014, there were 14 instances of oil removals less than 10 million barrels.
These multiple drawdowns have caused cavern deformation, salt falls and other damage to the cavern integrity.
end quotes
That was six (6) years ago, and this is six (6) years later, and now we have what are in actuality massive drawdowns compared to the past, which means massive injections of fresh water into the salt caverns, which again takes us back to the article, to wit:
In addition, these underground salt caverns are shrinking due to tectonic stresses.
The cavern shrinkage (aka closure) is estimated to be approximately two million barrels per year – but may be significantly higher.
Salt is a unique geologic material with complex mechanical properties.
It is often modeled as a non-Newtonian fluid.
At high temperatures and pressures salt behaves like a plastic.
It will behave more like a liquid in the sense that it flows even under small deviatoric stresses.
Salt domes make a perfect storage medium in that they do not react with the oil and are self-healing.
The plastic behavior of salt will cause it to naturally close fractures or gaps and prevent any leakage.
However, salt domes also are under constant geologic pressure (i.e. salt creep) and these stresses are causing the caverns to shrink (Shages, 2014).
The SPR attempts to manage the shrinkage by leaving a bed of salt brine at the bottom of each cavern and by keeping their caverns under a pressure of approximately 800 psi (personal communication, SPR personnel).
Salt leaching offsets some of the shrinkage.
Crude oil is extracted from the cavern by injecting fresh water or under-saturated brine down one well and produced in a secondary well.
The injection causes, for example, 15 barrels (2.38 m3) of salt to be dissolved for every 100 barrels of oil removed from a cavern.
end quotes
FOCUS ON THAT, people – FIFTEEN BARRELS OF SALT ARE DISSOLVED FOR EVERY 100 BARRELS OF OIL REMOVED FROM A CAVERN.
So by removing a million barrels of oil a day for six months, which was never envisioned in the original design of the SPR, isn’t Joe Biden going to cause some serious damage to the salt caverns?
Let’s go back to the article and see:
The mismatch between original design and actual utilization of the SPR’s caverns has led to the development of significant negative impacts to cavern integrity, wellbore integrity and the ability to maintain optimal mission readiness.
One operational limitation is that whenever work is done to the cavern or well, the caverns must be depressurized.
Removing cavern pressure causes the rate of shrinkage to increase rapidly.
Thus, the repeated removal of small volumes of oil over the life of a cavern has led to serious consequences on the shape and integrity of the caverns:
Dissolution of salt during a drawdown always begins at bottom of cavern.
If cavern is only partially emptied,the shape of cavern will become distorted with a bulge at the bottom.
Gravity puts stress on the overhanging salt formation.
Massive falls can occur and damage hanging steel tubulars.
Cavern deformation and shrinkage is damaging well casings and cement.
end quotes
So, people, to save his failing presidency by removing a million gallons of oil a day and replacing it with water, which dissolves the salt, is this moronic, knee-jerking idiot Joe Biden going to seriously **** up the salt caverns that hold the oil in the SPR?
Stay tuned is all I can say.
http://www.capecharlesmirror.com/news/b ... ent-643780
Paul Plante says:
First, let’s get up to date on the SPR releases:
Reuters
“Fourteen firms to get oil from U.S. strategic reserve in latest sale”
By Reuters staff
July 11, 2022
WASHINGTON, July 11 (Reuters) – The United States on Monday said 14 companies had been awarded contracts for the latest sale of oil from the Strategic Petroleum Reserve as part of the Biden administration’s efforts to ease oil prices boosted by reactions to Russia’s invasion of Ukraine.
The administration said in late March it would release a record 1 million barrels of oil per day of oil for six months from the SPR, held in hollowed-out salt caverns on the coasts of Louisiana and Texas.
Despite the historic release, Western sanctions on Russia, one of the world’s largest oil exporters, after its Feb. 24 invasion of Ukraine have helped keep crude prices stubbornly above $100 a barrel.
The high prices are a risk to President Joe Biden’s fellow Democrats in the November elections as they seek to maintain control of both chambers of Congress.
end quotes
So that article confirms what we all already know, that is that Joe Biden, whose approval rating in one liberal poll dropped below 30%, is releasing that oil in a vain attempt to save his failing presidency.
END OF QUOTE – REPEAT THE LINE!
So, looking at this as an engineer would look at it, are there ramifications and repercussions to Joe Biden removing 1 million barrels of oil per day for six months from the SPR, which oil is held in hollowed-out salt caverns on the coasts of Louisiana and Texas?
First of all, how do you remove any oil from the SPR?
And that answer, according to Energy.gov, is as follows:
The fact that oil floats on water is the underlying mechanism used to move oil in and out of the SPR caverns.
To withdraw crude oil, fresh water is pumped into the bottom of a cavern.
The water displaces the crude oil to the surface.
After the oil is removed from the SPR caverns, pipelines send it to various terminals and refineries around the nation.
end quotes
But, hey, all you grade school children out there – doesn’t fresh water dissolve salt?
So by continually pumping in fresh water to remove oil, won’t that damage the salt caverns?
For that answer, let’s go to a technical article from AAPG titled “The Good, the Bad and the Ugly – The Strategic Petroleum Reserve” in December 2016 by Barbara Kutchko, where we learn as follows:
The U.S. Strategic Petroleum Reserve (SPR) is facing significant challenges related to the storage and availability of its crude oil resources.
end quotes
Keep in mind that this is now six (6) years later.
Going back to that article, it continues as follows:
Approved for construction by the 1975 Energy Policy and Conservation Act (EPCA), the storage sites were envisioned to be needed for 25 years and are subject to an estimated five drawdown cycles (Shages, 2014).
In retrospect, the design has not matched actual use, and this has led to degradation of the SPR and impacted its ability to perform its function.
end quotes
Again, that is six (6) years ago.
Going back to the article:
The SPR stores crude oil (either sweet or sour) in 62 underground salt caverns located at four different sites in Texas and Louisiana.
The official storage capacity is 727 million barrels, based on sonic measurements.
A 2010 study concluded there was a significant mismatch in design and use of the storage caverns.
Instead of the initial estimated five large drawdown cycles, a large number of small drawdowns occurred over the previous 20 years.
From 1996 through 2014, there were 14 instances of oil removals less than 10 million barrels.
These multiple drawdowns have caused cavern deformation, salt falls and other damage to the cavern integrity.
end quotes
That was six (6) years ago, and this is six (6) years later, and now we have what are in actuality massive drawdowns compared to the past, which means massive injections of fresh water into the salt caverns, which again takes us back to the article, to wit:
In addition, these underground salt caverns are shrinking due to tectonic stresses.
The cavern shrinkage (aka closure) is estimated to be approximately two million barrels per year – but may be significantly higher.
Salt is a unique geologic material with complex mechanical properties.
It is often modeled as a non-Newtonian fluid.
At high temperatures and pressures salt behaves like a plastic.
It will behave more like a liquid in the sense that it flows even under small deviatoric stresses.
Salt domes make a perfect storage medium in that they do not react with the oil and are self-healing.
The plastic behavior of salt will cause it to naturally close fractures or gaps and prevent any leakage.
However, salt domes also are under constant geologic pressure (i.e. salt creep) and these stresses are causing the caverns to shrink (Shages, 2014).
The SPR attempts to manage the shrinkage by leaving a bed of salt brine at the bottom of each cavern and by keeping their caverns under a pressure of approximately 800 psi (personal communication, SPR personnel).
Salt leaching offsets some of the shrinkage.
Crude oil is extracted from the cavern by injecting fresh water or under-saturated brine down one well and produced in a secondary well.
The injection causes, for example, 15 barrels (2.38 m3) of salt to be dissolved for every 100 barrels of oil removed from a cavern.
end quotes
FOCUS ON THAT, people – FIFTEEN BARRELS OF SALT ARE DISSOLVED FOR EVERY 100 BARRELS OF OIL REMOVED FROM A CAVERN.
So by removing a million barrels of oil a day for six months, which was never envisioned in the original design of the SPR, isn’t Joe Biden going to cause some serious damage to the salt caverns?
Let’s go back to the article and see:
The mismatch between original design and actual utilization of the SPR’s caverns has led to the development of significant negative impacts to cavern integrity, wellbore integrity and the ability to maintain optimal mission readiness.
One operational limitation is that whenever work is done to the cavern or well, the caverns must be depressurized.
Removing cavern pressure causes the rate of shrinkage to increase rapidly.
Thus, the repeated removal of small volumes of oil over the life of a cavern has led to serious consequences on the shape and integrity of the caverns:
Dissolution of salt during a drawdown always begins at bottom of cavern.
If cavern is only partially emptied,the shape of cavern will become distorted with a bulge at the bottom.
Gravity puts stress on the overhanging salt formation.
Massive falls can occur and damage hanging steel tubulars.
Cavern deformation and shrinkage is damaging well casings and cement.
end quotes
So, people, to save his failing presidency by removing a million gallons of oil a day and replacing it with water, which dissolves the salt, is this moronic, knee-jerking idiot Joe Biden going to seriously **** up the salt caverns that hold the oil in the SPR?
Stay tuned is all I can say.
http://www.capecharlesmirror.com/news/b ... ent-643780