German authorities have said that the damage to three of the four Nord Stream pipelines is beyond repair and those sections can never be used again, The Tagesspiegel reported on September 28. German security services said that the three tubes of the pipeline will be unable to be used again unless they are repaired quickly, as a lot of salt water will run in and corrode the pipelines, The Tagesspiegel learned from government circles. According to the Danish Energy Agency, more than half of the gas has already escaped from the affected lines. The lines will probably be empty by October 2, the head of the agency, Kristoffer Böttzauw, said at a press conference on September 28. The twin Nord Stream 1 & 2 pipelines, which are made up of two pipes each, were hit by an explosion at the weekend and sprang leaks that saw pressure in both sets of pipelines fall to nothing. After Sweden’s seismological services confirmed there was an explosion in the vicinity of the pipes during the evening of September 25, speculation has been rife over who was responsible for the attack on a major piece of European energy infrastructure. The explosions happened just outside Danish territorial waters at a depth of 80-90m, according to German reports, making an attack a technically difficult operation and suggesting either submarines or advanced underwater technology must have been involved. There is little doubt that this was an attack and not an accident, as there is a significant distance between the three holes in the three pipelines where the leaks originated and these all appeared within a few hours of each other. So far, pundits have suggested that Russia, the US, Ukrainian special forces and Poland could have been responsible. German Economics Minister Robert Habeck (Green Party) warned of the danger of further acts of sabotage. “Of course, the critical infrastructure is a potential target,” said the Vice Chancellor. “But Germany is a country that knows how to defend itself and Europe is a continent that can protect its energy infrastructure.” Norway, currently one of the most important suppliers of non-Russian gas to Europe, has massively strengthened the protection of its pipeline system. The European Union also considers sabotage to be the likely cause of the leaks in the Nord Stream 1 and 2 gas pipelines and has threatened to take countermeasures. “All available information indicates that these leaks are the result of a deliberate act,” said EU foreign policy chief Josep Borrell the same day, reported Tagesspiegel. Any intentional disruption to Europe’s energy infrastructure will “be met with a robust and collective response.” As expected, Ukraine was even more explicit: “The large-scale ‘gas leak’ at Nord Stream 1 is nothing more than a terrorist attack planned by Russia and an act of aggression towards the EU,” wrote Ukrainian presidential adviser Mykhailo Podoliak on Twitter. Moscow has blamed the US, pointing to explicit threats by US President Joe Biden and others ahead of the war that the US would shut down the pipeline if Russia invaded Ukraine, irrespective of its European partners’ wishes. Russia has called a UN emergency meeting where it will present its evidence. According to a Russian media report, a US helicopter that was loitering over that section of the pipeline could be involved in the leaks in the Nord Stream 1 and 2 gas pipelines. “The MH-60R Strike Hawk multi-role helicopter circled over the Baltic Sea for nine hours – from 19:30 Moscow time on Sunday, September 25 to 4:30 Moscow time on Monday, September 26; about 250 kilometres from the Danish island of Bornholm, where the gas leak was detected,” wrote the internet newspaper lenta.ru on Wednesday, citing data from Flightradar. However, others point out that the helicopters are also routinely used in anti-submarine operations. The leak of so much methane into the atmosphere will exact a heavy toll on the environment, as methane is fifty times more damaging than CO2, say experts. The Danes calculated that the climate impact of the gas leak corresponds to about a third of Denmark’s total climate impact in one year, but poses no health or other risk to the population. No gas was flowing through either of the pipelines. Nord Stream 2 was never certified and never went into operation; Nord Stream 1 has not been working for a month after Russian state-owned gas giant Gazprom shut it down for repairs. However, the removal of Nord Stream from the picture entirely has spooked markets, as it destroys the possibility of resuming deliveries of gas in the depth of winter if an energy crisis becomes acute and raises fresh questions about energy security in Germany and Europe. Gas prices jumped 20% a day after the attack on the pipeline was announced. In theory some gas deliveries could be restarted via the undamaged Nord Stream 2 string, but that would need the pipeline to be certified, which experts see to be politically impossible in the current climate.
Gazprom estimates volumes of LNG at time of gas leak
Russian energy giant PJSC Gazprom spokesman Sergey Kupriyanov revealed on Friday that around 800 million cubic meters of natural gas were inside the three lines of gas pipelines at the time of the leaks in the Baltic Sea. The volumes correspond to Denmark’s consumption for three months.
As gas spewed out under the Baltic Sea for a third day after first being detected, it remained far from clear who might be responsible for any sabotage of the Nord Stream pipelines that Russia and European partners spent billions of dollars building. Russia, which slashed gas deliveries to Europe after the West imposed sanctions over Moscow’s invasion of Ukraine, has also said sabotage was a possibility. “Any deliberate disruption of European energy infrastructure is utterly unacceptable and will be met with a robust and united response,” the EU foreign policy chief Josep Borrell said. Echoing the views of Germany, Denmark and Sweden, he said sabotage was likely, although the EU has not named a potential perpetrator or suggested a motive. Washington, which has led efforts to punish Moscow over the war, believes its too soon to conclude there was sabotage, a senior U.S. military official said. The embassy, in an early Thursday statement on its Telegram channel, also accused the United States of attempts to “squeeze out” Russia from the energy market through “non-market methods and sanctions.” The Nord Stream pipelines have been flashpoints in an escalating energy war between capitals in Europe and Moscow that has damaged major Western economies and sent gas prices soaring. Denmark’s defence minister said after a meeting with NATO General Secretary Jens Stoltenberg there was reason to be concerned about the security situation in the region. “Russia has a significant military presence in the Baltic Sea region and we expect them to continue their sabre-rattling,” Morten Bodskov said in a statement. Norway’s prime minister said on Wednesday that its military will be deployed near oil and gas installations, while Denmark is raising its level of preparedness. “The military will be more visible at Norwegian oil and gas installations,” Norway’s Jonas Gahr Stoere told a news briefing. In the Baltic Sea, gas was still bubbling from the Nord Stream 1 pipeline, the Swedish Coast Guard said in an email. The Danish Energy Agency said more than half the gas in the damaged pipelines had left the pipes and the remaining volume was expected to be gone by Sunday.
Gas bubbles from the Nord Stream 2 leak reaching surface of the Baltic Sea in the area shows disturbance of well over one kilometre diameter near Bornholm, Denmark, September 27, 2022. Danish Defence Command/Handout via REUTERS/File Photo
Jens Schumann, managing director of gas pipeline grid company Gasunie Deutschland, said he was “relatively optimistic” that the damage could be repaired. “There are good teams in place to handle pipeline accidents, there are emergency pipe inventories and experts for onshore and offshore,” Schuman said. But German security agencies fear that Nord Stream 1 will become unusable if large volumes of salt water flow into the pipes and cause corrosion, German newspaper Tagesspiegel reported, citing government sources. The Danish armed forces said the largest gas leak caused a surface disturbance of more than 1 kilometre (0.6 mile) in diameter, as agencies issued warnings to shipping. Sweden’s Prosecution Authority said it will review material from a police investigation and decide on further action, after Swedish Prime Minister Magdalena Andersson said on Tuesday that two blasts had been detected. Although this did not represent an attack on Sweden, Stockholm was in close contact with partners such as NATO and neighbours such as Denmark and Germany, Andersson said. Seismologists in Denmark and Sweden said they had registered two powerful blasts on Monday in the vicinity of the leaks and the explosions were in the water, not under the seabed. U.S. Defense Secretary Lloyd Austin offered Washington’s support in a call with his Danish counterpart on Wednesday, a senior U.S. defense official said. The State Department said it was sharing information on the blasts with its allies.
Operator Nord Stream has called the damage “unprecedented”, while Russian-controlled Gazprom (GAZP.MM), which has a monopoly on gas exports by pipeline, declined to comment. While neither pipeline was delivering gas to Europe at the time, the incidents scupper any remaining expectations that Europe could receive fuel via Nord Stream 1 before winter. “A development that could have a more immediate impact on gas supplies to Europe was a warning from Gazprom that Russia could impose sanctions on Ukraine’s Naftogaz due to ongoing arbitration,” analysts at ING Research said. Gazprom said earlier in the week that while rejecting all Naftogaz’s claims in arbitration, it may introduce sanctions against the company in case it presses ahead with the case. European gas prices rose following news of the leaks. The benchmark October Dutch price was up by 11% at 204.50 euros/megawatt hour on Wednesday. Although prices are still below this year’s peaks, they remain more than 200% higher than in early September 2021. The new Nord Stream 2 pipeline had yet to enter commercial operations. The plan to use it to supply gas was scrapped by Germany days before Russia began what it calls a “special military operation” in Ukraine in late February.
OPEC+ proposes a cut oil production…..
Oil prices are on track to notch their fourth monthly loss in a row, leading to speculation that major oil producers next week will make a fresh move to set a floor under prices — cutting production for a second consecutive month. The Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, will hold their monthly meeting on Oct. 5. The group will have to “decide how much firepower to deploy to staunch a sum-of-all-fears macro selloff that has caused crude to slide” below pre-Russian invasion of Ukraine levels, wrote Helima Croft, head of global commodity strategy and MENA research at RBC Capital Markets, in a Wednesday note. At a previous OPEC+ meeting on Sept. 5, members essentially agreed to reverse a 100,000 barrel-per-day oil production increase for September, cutting output for October by that same amount. “The shift from hiking production to announcing cuts reflected the deterioration of oil prices over the summer,” said Stacey Morris, head of energy research at investment research provider VettaFi. The cut for October “demonstrated that OPEC+ is willing to intervene if prices seem to overcorrect or markets seem distorted.” Weakness in prices made it important for OPEC+ to “set a floor under prices and send a message by cutting,” Oil prices look to end September with a loss — their fourth monthly decline in a row. On Thursday, U.S. benchmark West Texas Intermediate crude CLX22, -1.40% CL.1, -1.42% settled at $81.23 a barrel on the New York Mercantile Exchange, with front-month prices down more than 9% for the month, according to Dow Jones Market Data. November Brent crude BRNX22, -0.64% BRN00, -1.57% ended Thursday at $88.49 a barrel on ICE Futures Europe, down over 8% month to date. WTI and Brent are each down around 23% in the third quarter. NN: The pipelines that were strategized has completely changed the game for two reasons. the first being that no gas will be available for at least a year from these pipelines. But the second reason is the scary one. It means Putin is ready to do anything as in anything….
Oil Set For Another Sharp Rise
It’s been a rough couple of weeks in the energy market. Pretty near every negative sentiment-Recession, Fed tightening, Dollar strength, China demand, Inventory builds, or what amounts to the entire oil price Closet of Anxieties, came to pass this week. Oil-WTI took a tumble below $80 for the first time since Jan 11th of this year, closing Friday below its 200-day moving average of $89.00.This move has WTI nearing an important psychological level in the lower $ 70s, past which producers will sharply curtail capex to raise prices. The selling is WAY overdone and neglects one basic truth about the oil market. It is under-supplied, and it is only the SPR releases that have been masking that fact. We are on the verge of an energy calamity that will begin to manifest itself in the coming months. As the economy of the world begins to accelerate in 2023, the era of energy insecurity will begin. The important takeaway is that there is nothing that can be done to prevent this “train from barreling into the station.” A recent NY Times article put it succinctly-
“That’s because there’s just no extra supply out there today at all. There’s a very little extra supply that the Saudis and the Emiratis can put on the market. And that’s about it. We’ve used the strategic petroleum reserve, and that’s coming to an end in the next several months. There’s just no extra cushion in the oil market right now. The short answer is that for the period since 2014, producers have been disincentivized to explore for or sanction the mega-project that was the mainstay of the 2000-2013 era. Oil prices will rebound toward the end of the year and the beginging of next, as the SPR releases that have put excess oil on the market come to a halt. Since March when the government announced the SPR releases to bring down domestic gas prices, inventories have risen about 15 mm barrels. If you back out the 172 mm barrels withdrawn from the SPR over this time, inventories would have shrunk to ~248 mm bbls. That may sound like a lot, but in reality with our ~19 mm BOD habit, it’s a ~13-day supply. Not only are inventories being artificially inflated by SPR releases, the productivity of new wells as reported in the EIA-Drilling Productivity Report is on the decline. Across every key basin with the exception of the North Dakota and New Mexico basins, there is a pronounced decline in spite of steady growth in the rig count for most of this year. Drilled but Uncompleted well-DUC, count withdrawal that occurred from mid-2021 through January of this year was largely responsible for gains in production registered so far this year. There is certainly an observable trend that well performance in the shale basins began to fall off as DUCs declined.
Britain’s market rout stokes contagion fears around the globe
NEW YORK/LONDON (Reuters) – The scale and speed of the sell-off in British assets has jolted world markets, raising concern about contagion as chaos in a major developed economy adds to unease already generated by sharp interest rate rises from the United States and elsewhere. Following Friday’s UK mini-budget, which flagged 45 billion pounds’ ($48 billion) worth of unfunded tax cuts, sterling tumbled to record lows while British bond prices slid. Signs of dislocation were apparent on Wednesday before the Bank of England (BoE) stepped in to calm markets. Markets had already been unnerved by an energy shock that has fuelled inflation and a strong dollar that is creating headwinds globally and which prompted a rare Bank of Japan intervention in currency markets just last week. “It is like having a sand castle where bits and pieces start falling off all together,” Olivier Marciot, head of investments for multi assets and wealth management at Unigestion, said, referring to Britain contributing to global stress. “I think the UK is one of those pieces … It is just adding to the pain, adding to the stress.” Concern about the UK’s new economic policy has added to the already heightened volatility, with a rout in gilts spilling over into even safe-haven U.S. Treasuries and top-rated German bonds. NN: Do not let them shit you. The debt market seized up in England. This rescue is still in progress. They damn near lost the system…… This is a BIG AWH SHIT
Fed to ‘carefully’ navigate high inflation – Daly
Fed’s Daly: do not want to tip economy into downturn
(Reuters) -San Francisco Federal Reserve Bank President Mary Daly said on Tuesday that the U.S. central bank is “resolute” about bringing down high inflation but also wants to do so “as gently as possible” so as not to drive the economy into a downturn. It is important, Daly said at a symposium held jointly with the Monetary Authority of Singapore,
“to navigate through this high inflation environment as carefully as we can, so that we don’t leave longer term damage to our labor market.”
The Fed has been aggressively raising interest rates to bring down inflation that is more than three times its 2% target. Last week’s rate rise of 75 basis points was the central bank’s third straight increase of that size, and it signaled it would likely lift the policy rate — now in the 3%-3.25% range – to 4.4% by year-end and to 4.6% next year. Fed Chair Jerome Powell has said he expects that raising rates at that pace will push up unemployment and be painful for some households and businesses, but that ultimately it would be more painful to allow inflation to get entrenched. “Price stability is fundamental,” Daly said on Tuesday. U.S. inflation is about half due to excess demand, and about half due to constrained supply, she said, and the hope is that as the Fed raises rates to slow demand, the supply side will also heal, allowing the two to “meet in the middle.” But supply chains are still tangled and labor supply has not returned as quickly as had been hoped, she said, so the Fed may end up needing to do “a little more” on demand to make sure inflation does come down. NN: It is important you understand the FED has really Really REALLY fucked up big time. Like a new driver that pushes the gas petal to the metal then slams on the breaks FED policy is out of control. They have collapsed the bond market, stock market and brought dangerous instability to the world currency markets. As a direct result the Bank of England has to step in with emergency buying of long Guilds to prevent a GLOBAL market meltdown. Worldwide bankers are shitting bricks. The Fed has no choice but to back off interest rates increases for now. Global markets are in extreme distress. Hopefully we can navigate these troubled waters for profits…..
China opening back up…..China’s Chengdu to Lift Lockdown
China’s megacity of 21-million residents is set to exit lockdown.
Millions of people in the Chinese megacity of Chengdu emerged Monday from a Covid-19 lockdown that had closed schools, disrupted businesses and forced residents to stay home for over two weeks. With a population of 21 million, southwest China’s Chengdu is the largest Chinese city to shut down since global finance hub Shanghai imposed a strict two-month lockdown in April, leaving many residents scrambling for food. China is the last major economy welded to a zero-Covid strategy and officials are under pressure to curb virus flare-ups swiftly ahead of a key political meeting in mid-October. “With the joint efforts of the whole city, the epidemic has been effectively controlled,” the Chengdu government said in a statement Sunday. Government departments, public transport services and companies were able to resume work on Monday, the statement said, after shutting down on September 1. Chengdu will continue to conduct mass testing, and anyone who wants to enter a public area or take public transport will require a negative Covid test result within 72 hours — similar to the rules in other large cities including Beijing and Shanghai. Schools will re-open in an “orderly manner” and returning students will be strictly tested, the statement said. Gyms, swimming pools, mahjong clubs and other indoor entertainment venues must all check whether patrons have a negative test result within 48 hours. No new cases were reported in the city on Monday. During the strict lockdown some residents confined to their homes could not even flee when a strong earthquake in a nearby part of Sichuan province reverberated through the city earlier this month, locals told AFP. Chengdu will host the world team table tennis championships at the end of September in a “closed-loop” bubble that will be China’s first international sports event since the Beijing Winter Olympics and Paralympics in February and March. Several other cities including the southern tech hub of Shenzhen and Guiyang in south China, where Apple’s China data centre is located, have all had targeted lockdowns and travel restrictions in recent weeks as officials rushed to curb mini outbreaks. China reported 807 new domestic infections on Monday, the majority of which were asymptomatic, according to the National Health Commission. NN: You need to understand what is happening in China. The 20th National Congress of the Chinese Communist Party (commonly referred to as Èrshí Dà; Chinese: 二十大) will be held in Beijing, opening on 16 October 2022. 2,296 delegates will represent the Chinese Communist Party (CCP)’s estimated 90 million members. The Dictator of China leader Xi Jinping wants to get “reelected” and has kept a tight grip on the COVID situation. Making sure no one would cough on his parade. Now that he is certain a COVID breakout will not occur he is opening things back up. After all he has close to 3000 party deleciated that have to “vote” for him to give he a air of legitimacy. The story here is China is opening back up just in time for US and Europe high oil demand heating season. Add China demand which will shoot to the moon. and the explosions of key pipelines of gas that could supply Europe,,,, and you got the perfect storm
Gasoline Draw Strategic releases increase oil inventories
Warning boring video
The American Petroleum Institute (API) reported a build this week for crude oil of 4.150 million barrels, while analysts predicted a build of 333,000 barrels. According to API data, U.S. crude inventories have now gained 23 million barrels so far this year—a build made possible only by releasing 166 million barrels from the nation’s Strategic Petroleum Reserve.
The build comes as the Department of Energy released 4.6 million barrels from the Strategic Petroleum Reserves in the week ending September 23, leaving the SPR with 422.6 million barrels.
In the week prior, the API reported a build in crude oil inventories of 1.035 million barrels after analysts had predicted a build of 2.321 million barrels. WTI rose on Tuesday prior to the data release. At 12:17 p.m. ET, WTI was trading up $1.15 (+1.50%) on the day at $77.86 per barrel—down nearly $7 per barrel on the week. Brent crude was trading up $1.49 (+1.77%) on the day at $85.55—a $5 decrease on the week. Crude oil prices continued to rise throughout the afternoon, with producers cutting supply ahead of Hurricane Ian and rumors that OPEC+ could move to cut production targets for November at its next monthly meeting. U.S. crude oil production data for the week ending September 16 stayed at 12.1 million bpd for the fourth week in a row, according to the latest weekly EIA data. The API reported a draw in gasoline inventories this week of 1.048 million barrels for the week ending September 23, compared to the previous week’s 3.225 million-barrel build. Distillate stocks saw a build of 1,438,000 barrels for the week, compared to last week’s 1.538-million-barrel increase. Cushing inventories were up by 357,000 barrels this week. Last week, the API saw a Cushing increase of 510,000 barrels. Official EIA Cushing inventory for the week ending September 16 was 24.991 million barrels, up from 24.648 million barrels in the prior week.
WTI was trading at $78.46 moments after the release, up 2.28% on the day. NN: Oil inventories numbers are being distorted by Biden strategic oil release timing… Just in time for the November elections. What the numbers are hiding is the coming oil shortages.
Sabotage Suspected At Russia’s Nord Stream Gas Pipelines
Danish and Swedish authorities are investigating unexplained leaks of gas in the sea from both Nord Stream 1 and Nord Stream 2 pipelines from Russia to Germany—leaks that Germany suspects could be the result of sabotage, while Russia says sabotage cannot be ruled out right now. Both Nord Stream 1 and 2 are currently offline. Russia shut down Nord Stream 1 indefinitely early this month, saying Western sanctions had prevented turbine repairs. Nord Stream 2, on the other hand, had its certification suspended by Germany when Russia invaded Ukraine. This week, Danish and Swedish authorities reported leaks from both pipelines – not operational but containing gas – in the Baltic Sea. European officials and analysts say the leaks cannot be coincidental, while a German official says evidence points to sabotage rather than a mere technical issue. On Monday, the Danish Energy Agency said that authorities were informed about a pressure drop in the Nord Stream 2 pipeline.
“The preliminary assessment indicates that a leak has occurred from one of the two Nord Stream 2 pipelines in the Danish area Southeast of Dueodde at Bornholm … from where natural gas is leaking,” Denmark said, while the Danish Maritime Authority released a navigational warning and established a prohibitive zone within 5 nautical miles of the pipeline, as it is dangerous for naval traffic.
The Swedish authorities also issued warnings for vessel navigation and aircraft after leaks were detected at Nord Stream 1 and Nord Stream 2, the Swedish Maritime Administration said on Tuesday. The Swedish agency has no information on the cause of the leaks, it said. Germany, the endpoint of Nord Stream and until recently the biggest gas buyer from Russia, suspects the leaks are the result of sabotage rather than technical issues, a German security official told Bloomberg on Tuesday. Russia, for its part, said that right now, nothing should be ruled out. “Obviously, there is some kind of damage to the pipeline. No option can be ruled out until the results of the investigation are released,” Kremlin spokesman Dmitry Peskov told Russian reporters on Tuesday when asked if the Kremlin thinks this could have been sabotage.
Crude prices slump to 9-month low, down over 2%…… Gas futures up by 5% as gas leaks hit two Russian pipelines……. German officials believe the Nord Stream Pipe Line was severely damaged in an ATTACK – report
Crude oil prices slipped to a nine-month low on Monday, as geopolitical uncertainties seemingly disrupt the supply of the commodity to the global markets. The prices of crude have dropped to their fresh lows since January of this year. West Texas Intermediate (WTI) for settlements in November dropped by 2.10% at 12:35 pm ET to sell for $77.15 per barrel. At the same time, for the same month’s settlements, Brent plummeted by 2.15%, selling for $84.50 per barrel. NN: We may have put in a bottom in several key markets including oil. As the gas from Russia stops flowing threw various pipelines (what ever the excuse) demand for oil will increase… See next story
Gas futures up by 5% as gas leaks hit two Russian pipelines
The prices of European gas futures rose over 5% on Tuesday as gas leaks hit two Russian pipelines that run under the Baltic Sea near Sweden and Denmark. The Swedish Maritime Authority issued a warning concerning the leaks in the Nord Stream 1 pipeline soon after discovering a leak in the nearby Nord Stream 2 pipeline that had led Denmark to restrict vessels to a five-nautical-mile radius. Denmark’s Ministry of Energy decided to put the energy sector on alert. UK natural gas futures for delivery in October rose 5.30% to 257.600 pence per therm at 11:29 am CET.
German officials believe Nord Stream was attacked – report
German authorities believe that crucial Nord Stream gas pipelines, severely damaged, were the target of an attack, Insider reported Tuesday, citing officials as saying. “We can’t imagine a scenario that isn’t a targeted attack. Everything speaks against a coincidence,” officials reportedly said. Moreover, multiple media reports from Politico, The Welt, and the Tagesspiegel have also suggested that the incidents in the Nordstream system have been intentional. Earlier, Kremlin spokesman Dmitry Peskov also said that he does not rule out “the possibility of sabotage” though this is “an exceptional situation that requires urgent investigation.” NN: I hate when this happens.. Oh by the way since winter is setting in repairs cannot begin till spring…… You remember the long COLD winter we have been talking about. Please note the bard new never used Nord Stream II and Nord Sea I pipelines are both out of commission……..