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US bans new oil and gas leasing around New Mexico cultural site

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The Biden administration said on Friday it would stop issuing new oil and gas drilling leases within 10 miles of the Chaco Culture National Historical Park, a region central to Pueblo ancestral heritage in northwest New Mexico.

Tribes, conservationists and state officials have long called on the federal government to ban drilling in the area. Structures in the area date back thousands of years, and the park is listed as a World Heritage Site by UNESCO, the United Nations’ cultural agency.

President Joe Biden first proposed protecting the area in November of 2021. It is aligned with his goal to conserve at least 30% of federal lands and waters by 2030.

But, the Interior Department ban on new leasing on federal lands around Chaco will last for just 20 years and does not extend to private, state or tribal lands.

“Today marks an important step in fulfilling President Biden’s commitments to Indian Country, by protecting Chaco Canyon, a sacred place that holds deep meaning for the Indigenous peoples whose ancestors have called this place home since time immemorial,” Interior Department Secretary Deb Haaland said in a statement.

Haaland, a New Mexican who is the nation’s first Native American cabinet secretary, is a member of the Pueblo of Laguna tribe. New Mexico’s Congressional delegation introduced a bill this year that would go a step further than the Interior order by permanently protecting the region.

Oil and gas industry groups have opposed withdrawing the lands around Chaco for leasing.

In addition, the Navajo Nation withdrew its support for the plan last month, saying its members could lose potential income tied to those resources.

The U.S. Bureau of Land Management last year estimated that protecting the lands would result in the long-term loss to the federal government of $4.8 million a year in royalties. It also said about 49 jobs would not be created.

Commodities

Oil prices steady as attacks on Russian energy facilities intensify

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Oil prices steady as attacks on Russian energy facilities intensify
© Reuters. An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS

By Natalie Grover

LONDON (Reuters) -Brent crude briefly moved above $86 per barrel on Monday for the time since November, before pulling back, as Ukraine stepped up its attacks on Russian energy infrastructure.

futures for May delivery were up 23 cents at $85.57 a barrel at 1239 GMT.

The April contract for U.S. West Texas Intermediate (WTI) crude was up 21 cents at $81.25, in slow trade with the contract set to expire in the coming days. The more active May delivery contract traded up 27 cents at $80.85.

“The strikes on Russian refineries added $2-$3 per barrel of risk premium to crude last week, which remains in place as we start this week with more attacks over the weekend,” said Vandana Hari, founder of oil market analysis provider Vanda (NASDAQ:) Insights.

Over the weekend, drone attacks caused fires at the Rosneft-owned Syzran oil refinery and at a private Slavyansky oil refinery in the Krasnodar region.

Overall, a Reuters analysis found the attacks have idled around 7% of Russian refining capacity in the first quarter.

Amid refinery outages, Russia is set to increase oil exports through its western ports in March by almost 200,000 barrels per day (bpd) against the monthly plan to 2.15 million bpd, market participants said.

The main focus this week is also on the fate of monetary policy in major economies, with many central banks having held on to high interest rates over a protracted period to quell sticky inflation.

The outcome of the U.S. Federal Reserve’s two-day meeting that ends on Wednesday should bring clarity on the timing of interest rate cuts, said Tony Sycamore, a market analyst with IG.

The Fed will likely keep rates unchanged this month, while the possibility of an interest rate cut at the June meeting “is now a coin flip,” Sycamore said.

Lower interest rates could stimulate demand in the U.S., the world’s biggest oil consumer, supporting oil prices.

Both oil contracts posted gains last week, with prices hitting their highest level since November, buoyed in part after the International Energy Agency strengthened its 2024 demand outlook for the fourth time since November.

On the supply side, Iraq said on Monday it planned to reduce its crude exports in the coming months by roughly 100,000 bpd from last month’s levels, to compensate for any rise above its OPEC+ quota in January and February.

Iraq has committed to voluntary cuts agreed with the OPEC+ group of oil-exporting countries, which were recently extended into the second quarter.

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Oil mergers, clean fuels vie for attention at Houston energy conference

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Oil mergers, clean fuels vie for attention at Houston energy conference
© Reuters. FILE PHOTO: Mike Wirth, the CEO of Chevron Corporation, speaks with Daniel Yergin, the vice chairman of S&P Global, as top energy executives and officials from around the world gather during the CERAWeek 2023 by S&P Global, energy conference in Houston, T

By Arathy Somasekhar

HOUSTON (Reuters) -Top oil executives and ministers descend on Houston this week for one of the world’s biggest energy conferences emboldened by blockbuster mergers, stable oil prices and less pressure for a large-scale move to clean fuels.

Global oil prices have remained in a range between $75 and $85 per barrel, a level fueling profits but not hurting economic growth, despite war in Eastern Europe and turmoil in the Middle East. Stock markets continue to spur deals, making Big Oil even bigger.

The annual CERAWeek conference comes as demand for oil and gas continues to rise alongside solar, wind and biofuels. Energy markets have accommodated a reordering of global flows as customers turn more to regional energy suppliers or live with longer seaborne supply chains.

“A remarkable thing is the (price) stability, given the geopolitical turmoil,” said Daniel Yergin, vice chairman of conference organizer S&P Global and a Pulitzer Prize-winning author on global energy.

Unlike past conferences where conversations were dominated by market-share battles between U.S. shale oil producers and the Organization of the Petroleum Exporting Countries, talk of price wars have been supplanted by energy security issues, Yergin said.

“When demand was down and prices were down, it was very easy to see a way towards energy transition, but with Russia/Ukraine (war) and price shocks, energy security is back on the table,” Yergin added.

More than 7,200 people are expected to hear the latest outlook on energy markets from the heads of top producers’ BP (NYSE:), Chevron (NYSE:), Exxon Mobil (NYSE:), Saudi Aramco (TADAWUL:), Sinopec (OTC:) and Petronas.

Global liquefied (LNG) developments and U.S. climate policies will be a major topic in separate sessions by big exporters Cheniere Energy (NYSE:) and Venture Global LNG, while U.S. Energy Secretary Jennifer Granholm and White House adviser John Podesta press the administration’s climate goals.

While oil prices are strong, natural gas has been overwhelmed by a production glut. But “this year will be a transition year to a much more bullish gas and power market next year,” said Vikas Dwivedi, an energy strategist at financial firm Macquarie Group (OTC:).

Notably absent this year, which occurs during the Islamic holy month of Ramadan, are top oil ministers from Saudi Arabia, Kuwait and Iraq. No officials from Russia are expected after they did not attend last year.

OPEC’s absence comes with global prices hovering around $85 a barrel, a level that Dwivedi said helps cover its members’ budgets, but does not accelerate transition to electric vehicles and renewable fuels.

OPEC forecasts relatively strong oil demand and economic growth, a view that encourages more oil and gas activity and mergers. Last year’s more than $250 billion in U.S. energy deals stirred fears of concentration and a slowing of regulatory approvals.

Climate concerns are reflected in the conference sessions on carbon sequestration technology and hydrogen fuels, which have become two of the oil industry’s favorite means of addressing global warming. The role of artificial intelligence in energy production and carbon emissions are prominent sessions this year.

Energy consumers’ willingness to pay up for clean fuels or for new technologies to address emissions “is a growing issue, as is the ability to generate adequate return on investment” by energy companies, said Joe Scalise, consultancy Bain & Co’s head of energy and natural resources.

A constant topic at the CERAWeek conference in the last decade has been the ups and downs of U.S. shale, which revolutionized energy markets and turned the United States into the world’s No. 1 crude producer and a top exporter.

This year, acquisitions by Chevron, ConocoPhillips (NYSE:) and Exxon Mobil will turn the trio into the largest producers in the top U.S. shale field. That shift promises to tame what was a wild card in global oil production. Big Oil’s investments and production methods may steady shale’s ultra boom-bust cycles.

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Oil prices settle lower, but notch 3% weekly gain on tighter supply optimism

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Oil prices settle lower, but notch 3% weekly gain on tighter supply optimism
© Reuters.

Investing.com– Oil prices notched a weekly gain Friday despite settling lower amid pressure from a rising dollar as a hotter-than-expected U.S. inflation data stoked fears of a more hawkish Federal Reserve at the central bank’s meeting next week.  

At 14:30 ET (13:30 GMT), fell 0.3% to $81.04 a barrel, while dropped 0.15% to $85.29 a barrel. 

Weekly gains likely on tighter supply outlook; oil rig counts continue to expand

Still, crude prices gained more than 3% this week, after earlier climbing to its highest levels since November last year, as signs of improving U.S. demand and tightening fuel markets spurred strong gains through the week.

A  bigger-than-expected draw in U.S. pointed to improving demand in the world’s largest fuel consumer, while the White House confirmed it was buying over 3 million barrels of oil to replenish the Strategic Petroleum Reserve.

In addition to the smaller U.S. inventories, debilitating Ukrainian attacks on a key Russian fuel refinery threatened to potentially disrupt fuel supplies in parts of Asia and Europe, presenting a tighter supply outlook for oil markets. 

On the demand front, the number of oil rigs operating in the U.S. rose by 6 to 510, the highest since Sept. 15, as refinery activity continues to recover. 

Strong dollar takes shine off wining week

Still, crude prices were pressured by a stronger , which rose sharply on Thursday after followed in coming in stronger than expected for February.

These reading, which came just days before a , ramped up fears that the central bank will keep interest rates higher for longer in 2024, boosting the greenback.

A strong dollar makes commodities, like crude, that are denominated in dollars more expensive for foreign buyers.  

Demand hopes buoyed by OPEC, IEA forecasts

Both the Organization of Petroleum Exporting Countries and the International Energy Administration forecast strong oil demand in 2024 and 2025, in separate monthly reports released this week.

The IEA in particular hiked its demand outlook for 2024 and said that fuel supplies were likely to tighten further, as disruptions in the Middle East continued.

But the IEA also warned that slowing economic growth across the globe still presented a headwind to oil demand, especially when factoring in concerns over higher for longer interest rates in 2024. 

(Peter Nurse, Ambar Warrick contributed to this article.)

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