US rig count continued the slow growth pattern of the last three months, with total rigs at 765, up +1 vs. a week ago according to Baker Hughes. Rigs were added in Appalachia (+2) and Anadarko (+1), while All Other Basins (-2) declined. Total rigs are up 15 in the past 90 days and up 237 vs. a year ago.
U.S. crude oil exports soared by more than 1 MMb/d last week to 4.65 MMb/d, the second-highest volume ever. That helped take the sting out of a 600 Mb/d drop in refinery demand that happened due to planned and unplanned outages at refineries in Toledo, OH, Whiting, IN, San Francisco, CA, Lake Charles, LA, and Trainer, PA. Imports dropped to 500 Mb/d to 6.5 MMb/d, which cut net imports in half to only 1.8 MMb/d. For more on this read RBN's Crude Gusher.
Appalachian natural gas cash and October forward basis collapsed last week as demand dwindled and operational issues curtailed outbound pipeline capacity. Eastern Gas South (EGS) cash averaged $4.84, down $2.26 (32%) week-on-week, compared with a $1 drop in Henry Hub cash. As a result, EGS basis weakened by $1.26 to $2.36 below Henry Hub. After last week’s collapse, the monthly average widened to minus $1.42, down from about minus $1.07 prior to last week and converged with our forecast of minus $1.50 for September cash trading.
Refinery outages have helped lead to lower utilization and higher margins.
Overall refinery utilization dropped by 3 percentage points to 91%. PADD 2 and PADD 3 experienced significant drops in utilization during the prior week, with more moderate drops in PADD 1 and PADD 4. PADD 5 showed a slight rebound.
OPEC+ considering oil output cut decision at next week’s meeting (Bloomberg)
OPEC+ has begun discussions about lowering oil output when it meets next week, as a fragile global economy continues to weigh on crude prices.
The size of any supply reduction is still under consideration, said delegates, asking not to be identified as the talks are private. The Organization of Petroleum Exporting Countries and its allies will meet to decide November output levels on Oct. 5.
Spot LPG VLGC (Very Large Gas Carrier) freight rates have been volatile during 2022, surging to $132/MT on September 29 for the key Houston to Chiba, Japan route (via Panama Canal). As the chart below indicates, LPG VLGC freight rates can swing widely depending upon Arb economics and the demand for spot export carriers.
Nord Stream rupture may mark biggest single methane release ever recorded - UN (Reuters)
The ruptures on the Nord Stream natural gas pipeline system under the Baltic Sea has led to what is likely the biggest single release of climate-damaging methane ever recorded, the United Nations Environment Programme said on Friday.