NORD STREAM NIGHTMARES U.S.
OGJ - A debate about the proposed Nord Stream 2 natural gas pipeline at the Atlantic Council on Mar. 12 quickly became heated as some participants argued that it would serve a broader Russian political purpose while others said it simply would increase available supplies for European customers. Speakers generally seemed to agree that the US should encourage an effective solution but keep its distance otherwise.
They also suggested that a solution will need to consider what role Ukraine would play as a transit country since its relationship with Russian gas giant Gazprom has continued to deteriorate. "Nord Stream 2 would give Gazprom the technical option to ignore Ukraine. It transmitted 93 bcf through the pipe there—a volume too big for it to ignore," said Vadym Glamazdin, special envoy on government relations at Naftagaz, Ukraine's state gas company.
Sandra Oudkirk, deputy assistant secretary for energy diplomacy at the US Department of State's Bureau of Energy Resources, said Nord Stream 2 matters to the US because it would cement a transportation system in place that could perpetuate dependence on Russian gas for some key US allies. "It would not increase the amount of gas coming into Europe, only replace volumes that now are being transported through Ukraine," she said. "Buying into a massive, expensive undersea project like this only fosters dependence on Gazprom."
Douglas Hengel, a senior fellow at the German Marshall Fund of the United States, noted, "I don't think it's unusual for us to talk about energy security and geopolitics. This particularly matters to Central and Eastern European countries. On projects like this, it's hard to separate the commercial and geopolitical aspects. This is part of a Russian plan to weaken Europe's Energy Union, which Germany depends on."
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U.S. FRB - Industrial production edged up 0.1 percent in July after rising at an average pace of 0.5 percent over the previous five months. Manufacturing production increased 0.3 percent, the output of utilities moved down 0.5 percent, and, after posting five consecutive months of growth, the index for mining declined 0.3 percent. At 108.0 percent of its 2012 average, total industrial production was 4.2 percent higher in July than it was a year earlier. Capacity utilization for the industrial sector was unchanged in July at 78.1 percent, a rate that is 1.7 percentage points below its long-run (1972–2017) average.
NPD - Preliminary production figures for July 2018 show an average daily production of 1 911 000 barrels of oil, NGL and condensate, which is an increase of 64 000 barrels per day compared to June.
GAZPROM NEFT - For the first six months of 2018 Gazprom Neft achieved revenue** growth of 24.4% year-on-year, at one trillion, 137.7 billion rubles (RUB1,137,700,000,000). The Company achieved a 49.8% year-on-year increase in adjusted EBITDA, to RUB368.2 billion. This performance reflected positive market conditions for oil and oil products, production growth at the Company’s new projects, and effective management initiatives. Net profit attributable to Gazprom Neft PJSC shareholders grew 49.6% year on year, to RUB166.4 billion. Growth in the Company’s operating cash flow, as well as the completion of key infrastructure investments at new upstream projects, delivered positive free cash flow of RUB47.5 billion for 1H 2018.
REUTERS - Front-month Brent crude oil futures LCOc1 were at $72.34 per barrel at 0648 GMT, down by 12 cents, or 0.2 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 23 cents, or 0.3 percent, at $66.81 per barrel.