Monday, Monday -- August 21, 2017 -- Libya Declares Force Majeure

Active rigs:

$48.65↑	8/21/2017	08/21/2016	08/21/2015	08/21/2014	08/21/2013
Active Rigs	53	32	76	193	185

RBN Energy: Supply/demand factors impacting the gas storage injection season.

Despite starting the 2017 injection season on April 1 with much less gas in storage than last year, U.S. natural gas prices in recent months have struggled to return to $3.00 levels.  The market has been dealing with a mixed bag of factors, with demand down significantly, mostly due to milder-than-normal weather and the rise of competing generation sources.  On the supply side, even though production has been flat and imports from Canada down, those developments combined with higher exports of LNG have not been enough to prevent larger injections into storage. Now, prospects for a price rally are waning as summer gives way to the more temperate shoulder season. Where does that leave the gas market heading into winter? Today, we begin a series looking at how gas market fundamentals have shaped up this summer as well as prospects for the winter.

This is the latest of our periodic updates on the fundamental factors influencing the U.S. natural gas market based on daily supply/demand data from our NATGAS Billboard report (RBN’s joint report with IAF Advisors).

When we last wrote about U.S. natural gas supply and demand in mid-June in our blog Can’t Stand Losing (Demand), the market was still feeling the bullish after-effects of the withdrawal season (November 2016–March 2017), which, despite an incredibly balmy winter, had concluded with a balance (total supply minus total demand) that was on average more than 3.0 Bcf/d tighter (net shorter supply) than the previous winter and with 400 Bcf less gas in storage than a year earlier.

Insanity. Earlier this morning -- yes, earlier this morning -- I saw a headline over at Rigzone or somewhere (I forget) that analysts felt Libyan oil exports had stabilized now that the government had things under (better?) control. That was about an hour ago that I saw the article that was probably written yesterday. Now over at Twitter, from Platts, we see that "Libya's National Oil Corp declares forcemajeure at key Sharara oil field."

Libya's National Oil Corp. declared a force majeure Sunday on crude deliveries from its key Sharara oil field after a blockade on its pipeline by a militant group on Saturday, a source close to the company said on Sunday.

The field has been offline since Saturday when the Zintan Brigade closed the Rayaina pipeline yet again, the source said.

NOC has not commented on the status of the field, and could not be reached for a comment. Spain's Repsol, NOC's biggest partner at Sharara could not be reached for comment either.

It was not immediately clear why the militant group, regarded as one of the most powerful in western Libya, closed the pipeline.