By JOHN P. TRETBAR
Crude futures at lunchtime Monday were down slightly from the opening. The near-month Nymex contract for light sweet crude was going for $71.66, down 41 cents per barrel. London Brent was down a dime at $74.01. Crude prices in Kansas are slightly higher than a week ago, but down from the first of the month. Kansas Common crude at CHS in McPherson starts the week at $62.25 per barrel.
A selloff followed the announcement of an OPEC-Plus compromise, sending crude-oil prices tumbling around the world. But by Friday prices were posting weekly gains. The settlement price last Monday (7/19) for the Nymex benchmark crude contract was down more than five dollars from the previous session and nearly eight dollars lower than a week earlier. But Friday's settlement (7/23) was over $72 per barrel, a gain of 26 cents per barrel over a week earlier.
Baker Hughes added seven oil rigs for a total of 491 active rigs on its weekly Rotary Rig Count. Texas was up six rigs; Utah was up two. The weekly Rig Count in Kansas from Independent Oil & Gas Service reported a slight uptick in eastern Kansas with eight active rigs, while the count west of Wichita was unchanged at 22. Drilling was underway Friday on one lease in Barton County, and drilling was about to commence on a lease in Ellis County and two in Stafford County.
Kansas regulators okayed 21 new drilling permits last week, with seven east of Wichita and 15 in Western Kansas, including one each in Barton and Ellis counties. That's 556 new permits so far this year, compared to just 245 by this time last year.
Add six new well-completions this week for a total of 421 so far this year. That's down from 564 last year at this time. Independent Oil & Gas Service reports new well-completions in Barton Ellis and Russell counties.
A government report showed the first increase in U.S. crude-oil stockpiles since May. The Energy Information Administration said during the week through July 16, inventories increased just over two million barrels to nearly 438 Million. Domestic stocks are still about seven percent below the five-year average for this time of year. Total motor gasoline inventories decreased by 100,000 barrels and are right at the five year seasonal average.
Crude production in the United States dropped last week compared to the week before by 56,000 barrels per day . EIA said current output is nearly 11.4 million barrels per day, more than a quarter-million barrels per day higher than the report from a year ago.
The government said U.S. crude imports rose by nearly one million barrels, to 7.1 million per day. Imports averaged 6.4 million barrels per day over the last four weeks, a nearly three percent increase over the same period last year.
Oil-by-rail shipments increased last week. The Association of American Railroads reports 10,518 petroleum tankers on the rails during the week through July 17. That's up more than 700 tankers from the week before, and a nearly two-percent increase over the same week last year. Canadian oil-by-rail is up more than 22% from a year ago.
North Dakota operators increased output in May by about 4,000 barrels per day over April. Regulators in the number-two crude producing state say they pumped nearly 35 million barrels for the month, or over 1.12 million barrels per day. As production continues to increase in North Dakota, so does the amount of natural gas being flared or vented. The Department of Mineral Resources reported a gas-capture rate of 92%, compared to 93% the month before. That means eight percent of the gas produced at oil wells was burned or vented into the air.
Colorado regulators have delayed public hearings on a very expensive new proposal for the oil patch. The Colorado Oil and Gas Conservation Commission will now hear from the public early next year on a new set of rules relating to the financial assurance, or bonding of each well. The state wants to require guarantees for the cost of plugging each new oil well, $78,000 each. That could cost the industry nearly $4 BILLION statewide. Such guarantees were mandated under the landmark law passed in Colorado over two years ago, requiring focus on health and environment by energy regulators. The Commission is now expected to consider several rounds of staff revisions for the rest of this year, before opening the process to the public in January. That means that if approved the effective date of the new rules would be pushed back to April. Under current rules, the state's operators can post a "blanket bond" of $60000 to cover up to 100 wells, and $100,000 for more than that.
A study produced for the American Petroleum Institute shows the oil and gas industry was responsible for more than 11 million jobs across the U.S., 2.5 million of them in Texas. That means oil-patch jobs made up more than five percent of total U.S. employment and pumped out labor income totaling more than $890 BILLION in 2019. The study, by Price Waterhouse Coopers, shows that the industry directly and indirectly supported at least 100,000 jobs in each of 31 states. The Kansas patch accounted for between five and eight percent of all jobs here.