Bolstering that possibility is new data showing lower U.S. oil production. On August 31, the EIA revised downwards its estimates for U.S. oil production, due to more accurate survey-based reporting. The EIA estimates that the U.S. produced 9.3 million barrels of oil per day (mb/d) in June, a drop of 100,000 barrels per day from May. Moreover, May numbers were revised downwards. Most notable were the revisions for Texas for the first half of this year, which the EIA says produced 100,000 to 150,000 barrels per day less than previously expected. The U.S. averaged 9.4 mb/d in the first six months of 2015, the agency says. The revisions point to a slightly tighter oil market, as the U.S. oil industry is actually contracting faster than previously anticipated. Output peaked in April at 9.6 mb/d, and has declined every month since. The contraction should continue with fewer wells being drilled and depletion rates overwhelming new production. Related: Why So Much Oil Price Volatility? Blame The Speculators Eni (NYSE: ENI), the Italian oil major, announced a historic natural gas discovery off of the Egyptian coast in the Mediterranean Sea. The Zohr discovery could upend not only energy markets, but geopolitics in the region. The field could hold 30 trillion cubic feet of natural gas, the largest discovery ever reported in the Mediterranean and one of the world’s largest in recent memory. Eni believes the field could hold enough gas to meet Egypt’s energy needs for decades, no doubt a hugely welcome development for Cairo. Egypt has suffered through electricity blackouts as its domestic natural gas production has declined in recent years. The Egyptian government has even signed deals with Gazprom, among others, to import LNG to make up for the shortage of gas. The Eni discovery could solve a lot of these problems. But more intriguingly for the region is the impact that the Zohr could have on Egypt’s neighbors. Noble Energy (NYSE: NBL) and Delek Group (TLV: DLEKG) together made two massive discoveries in the Eastern Mediterranean – the Tamar field in 2009 and the Leviathan in 2010. These two gas fields were billed as game-changers for Israel. Together, the fields would produce well in excess of what Israel needs, allowing for large-scale exports to Jordan and Egypt. But the ambitions have ballooned to beyond even Israel’s neighbors. The European Union has looked at the Leviathan as a potential source of gas that could cut down on Europe’s dependence on Russian gas. The EU is exploring the idea of a major natural gas pipeline that would connect the Leviathan to Cyprus, then to Crete, and on to the European continent. Related: Could Oil Sink Below $40 Per Barrel Again? However, with Egypt now looking at the possibility of producing its own gas with Eni’s latest discovery, Israel’s hopes of becoming a regional energy power are in doubt. Companies in Egypt may no longer need the gas coming from Noble Energy’s Leviathan field. Noble’s stock sank by more than 2 percent on August 31 following Eni’s announcement. “It's a bit early to assess the quality of the data and their significance, but if they are accurate, the discovery off Egypt's coast is bad news for the Israeli economy and the companies holding the (gas) assets in particular,” Eldad Tamir, CEO of Tamir Fishman, an Israeli investment firm, told Reuters. On August 28, Nexen Energy ULC (NYSE: NXY), a subsidiary of China’s Cnooc (NYSE:CEO), was ordered by regulators in Alberta to shut down 95 pipelines because they don’t comply with safety rules. The pipelines carry crude oil, natural gas, salt water, fresh water, and emulsion. The orders came after an investigation of Nexen’s Long Lake pipeline failure, which spilled at least 31,000 barrels of bitumen emulsion six weeks ago. The company has not reported how the closure of 95 pipelines at its site would affect its production levels. Separately, Canadian Oil Sands (TSE: COS) was forced to shut down production at its Syncrude oil-sands project because of a fire. The fire was extinguished and no injuries were reported, but oil production was disrupted as the heavy oil upgrader was damaged. The accident comes just a few days after Moody’s downgraded the company’s credit rating to just one level above speculative grade. Other companies with stakes in the Syncrude project include ExxonMobil (NYSE: XOM), Imperial Oil (TSE: IMO), and Suncor Energy (NYSE: SU). Related: Global Demand Picture For Natural Gas Looks Increasingly Sour But wait, there’s more pain in store for Canada’s oil sector. The outages, along with the deep discounts that Canadian oil producers are forced to offer, are inflicting real pain on the entire industry. But U.S. President Barack Obama could deal another blow to Canada’s oil patch as news reports are hinting that the administration could reject the Keystone XL pipeline, perhaps before the Labor Day weekend. If that occurs, few would be surprised if there was a Friday news dump, reducing the outcry while so many people head out of town for the long weekend. There could be some surprising news on the horizon for Canada’s oil sands sector, however, as a new technological breakthrough could see the industry produce oil without the need for water and without creating any pollution during the extraction process. We sat down with former Exxon Mobil President Dr. Gerald Bailey to find out more about this potentially game-changing innovation for oil sands around the world. Meanwhile, President Obama is visiting Alaska to highlight the front line effects of climate change, and he called for much more aggressive action to reduce greenhouse gas emissions. The President’s trip to Alaska is seen as an attempt to galvanize domestic opinion for climate action, leading up to the international climate negotiations in Paris at the end of the year. The British government gave the go-ahead to a $4.5 billion plan by A.P. Moller-Maersk to develop the Culzean gas field in the North Sea. The field could start producing in 2019 and meet 5 percent of the U.K.’s gas demand in 2021. The field is expected to produce over 13 years, with plateau-production at 60,000 to 90,000 barrels of oil equivalent per day. By Evan Kelly of Oilprice.com More Top Reads From Oilprice.com:
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