The Rockies Express (REX) natural gas pipeline, originally designed to transport gas from production centers located in the western US, has reversed some of its flow capacity in the opposite direction as a result of booming gas production from eastern shale resources like the Marcellus. Initially, a lateral pipeline extension will ship moderate gas volumes north to the main trunkline. “The 14-mile lateral runs from the MarkWest Seneca gas processing plant in Noble County, OH, to the REX mainline, where a new compressor station will allow gas to be delivered westward to Ohio, Indiana and Illinois. When fully operational, the lateral will have capacity of 0.6 Bcf/d, according to EIA.” [Natural Gas Intelligence]

ExxonMobil and BP reportedly evacuated some of their personnel from oil production operations in southern Iraq, but the country’s workhorse fields continue to produce unabated thus far. Brent oil futures price volatility has been limited to this point. Prices increased slightly on Wednesday, but remain below $115 per barrel. Reports conflict regarding the degree to which Iraq’s Baiji refinery has been compromised by insurgents. Inasmuch as the plant supplies the domestic market – and refined products can be imported – that highly-publicized situation has limited impact on global oil supply and prices. “Exxon has removed some workers from the West Qurna oil field as operations continue, according to a person familiar with the company’s Iraq operations. BP Plc has removed non-essential workers, Chief Executive Officer Bob Dudley said yesterday.” [Business Week]

Warm summer weather and ample European natural gas storage levels appear adequate to alleviate supply shortages that could otherwise occur as a result of Gazprom’s supply cut off to Ukraine for the next several months at least. Additionally, reasonably accurate storage data for countries including Ukraine have helped keep a lid on European natural gas prices by giving traders and analysts greater visibility into supply balances and fundamentals. These data were not available during previous Gazprom-induced supply shocks in 2006 and 2009. The winter is another story however, and if price disputes between Gazprom and Naftogaz have not been resolved before heating demand picks up, gas markets could experience upward price pressure.