By JOHN P. TRETBAR
Eagle Communications
Cold weather cuts crude production in North Dakota by nearly one third. North Dakota oil production has fallen by up to 425,000 barrels per day, from typical output of about 1.2 million barrels per day. The North Dakota Pipeline Authority said extreme cold and related operational issues have also dramatically curtailed natural gas output. The authority says Canadian gas continued to flow to the U.S. mid-continent through the Northern Border pipeline, replacing lost volumes from North Dakota.
U.S. crude-oil production last week dropped below 13.2 million for the first time in four weeks. The Energy Information Administration reports production of 13,193,000 barrels per day in the week through January 5. The four-week average is still over 13.2 million, beating last year by more than one million barrels per day.
U.S. crude stockpiles increased more than a million barrels to more than 432 million as of January 5, according to the Energy Information Administration. That's about two percent below the five-year seasonal average.
Energy Information Administration said domestic crude exports fell back to 3.3 million barrels per day after reaching 5.3 million barrels per day the week before. Four-week average exports topped four million barrels per day. Average imports dropped by 654-thousand barrels from the prior week to 6.2 million barrels per day. The four week average is up eight percent over a year ago.
Kansas Common crude starts the week at $63 a barrel at CHS in McPherson, after posting a 75 cent increase on Friday. Friday's settlement price for February Nymex crude was $72.68 per barrel, down 66 cents on the day and more than a dollar lower on the week.
The boom continues in the Cheyenne County oil patch in northwestern Kansas. The Kansas Geological Society closed out the year 2023 with formal recognition and naming of seven new oil fields across the state, including two more in Cheyenne County. Murfin Drilling and Arcadian Resources have each landed a wildcat strike there since November. That's five new wildcats in the county this year, and at least six in the county for Murfin since 1988.The Kansas Corporation Commission okayed 29 new drilling permits last week across the state with ten in western Kansas. So far in January there are 32 new drilling locations in eastern Kansas and 14 west of Wichita. Independent Oil & Gas Service reports 26 new well completions across the state. There are 11 west of Wichita including one each in Barton, Ellis, and Stafford counties.
Weekly rig counts are up from a month ago but down from a year ago. The Kansas Rig Count from Independent Oil & Gas Service shows 17 active rigs in eastern Kansas, which is up one. The tally in western Kansas is unchanged from a week ago at 21 active drilling rigs. Drilling was underway Friday on a lease in Russell County. The totals are up 2.7% from a week ago, 8.6% higher than a month ago, but down 25.5% from a year ago. The Rotary Rig Count from Baker Hughes was down two oil rigs from a week ago, for a total of 619 active rigs nationwide. Wyoming was down two; North Dakota was up two. Oklahoma, Colorado and Utah were each down one.
Kansas gasoline prices are tied with Texas for sixth cheapest in the country. The auto club Triple-A does not expect prices to drop much lower, and warns of cold temperatures altering refinery operations and raising some regional pump prices. The statewide average is $2.67 per gallon. We spotted two-sixty-three a gallon in Hays and two-sixty-nine in Great Bend. A 15-gallon tank of gas will set you back nearly a dollar less than last week, two dollars less than a month ago and three dollars less than a year ago. Kansas diesel prices are down four cents from a week ago, and 40 cents from a year ago.
Some crude buyers, especially in Europe, are looking to the U.S. for alternatives to supplies that once voyaged through the Red Sea and Suez Canal. Recent attacks on commercial ships in the region are sparking chaos for the world's supply chains for other goods, but so far appeared to be good news for U.S. crude exporters. Exports increased by 35% to nearly 5.3 million barrels per day in the week through December 29th.
Iran says its keeping the oil tanker it seized in the Gulf of Oman last week in retaliation for the United States confiscating the same, now-renamed, vessel and its oil last year. That's according to the media arm of Iran's Revolutionary Guard and Navy, reporting on a post-holiday paradox. According to a statement, the tanker was rechristened the Saint Nikolas, and has been transferred to ports in the Islamic Republic to be delivered to the judicial authorities. It isn't clear how much crude is on board. So, technically, international tanker services are tracking Saint Nikolas in January in Iran.