By JOHN P. TRETBAR
President Biden announced a ban on the import of Russian oil and natural gas into the United States, joining a chorus of other countries and large businesses cutting ties over the invasion of Ukraine. Biden has been under pressure from lawmakers in both parties to punish Russia for the Ukraine. He also announced another large coordinated release of crude from strategic reserves here and abroad. Britain announced it would phase out imports of Russian oil by the end of the year, giving oil importers more time to plan.
The French national firm Total is the only major Western energy company that does not plan to fully exit Russia. BP, Shell and Exxon all announced their intentions to withdraw. TotalEnergies has said it will halt all new spending in Russia. Shell apologized for buying a lot Russian crude after it said it wouldn't. The company formally cut all energy ties with Russia on Tuesday.
Crude prices have jumped nearly 25% since the first of March to their highest levels since August 2008. The benchmark Nymex futures contract gained nearly four dollars Monday to $119 and change. In midday trading Tuesday, prices jumped another six percent, rising $7.60 from the opening bell to $127 per barrel. London Brent was more than eight dollars higher at $131.24.
Gasoline prices are half a dollar higher than last week across the US, with the national average up 11 cents in one day Tuesday. The average in Kansas jumped another six cents Tuesday to nearly $3.74 a gallon. Locally it's up to a market high of $3.79 in Hays and $3.69 in Great Bend.
There's a sign of renewed production activity in Kansas. Regulators here report 123 new intent-to-drill notices last month across Kansas, up from 97 the month before. There are two new intents in Barton County, five in Ellis County, one in Russell County, and four in Stafford County.
Operators in Kansas completed 25 wells last week, 271 so far this year, including a newly-completed well in Barton County, two in Ellis County and one in Stafford County. Independent Oil & Gas Service reports 27 active drilling rigs in Western Kansas, one higher than last week. Operators were about to spud two new wells in Ellis county. Drilling got underway on leases in Ellis and Stafford counties. So far this year, Operators in Kansas have spudded 165 new wells, up 77% from a year ago. Regulators okayed 33 new drilling permits in Kansas, 223 so far this year, including two in Ellis County and one in Russell County.
The government reports an increase in domestic crude production. The Energy Information Administration said total US output averaged 11.64 million barrels per day in the week through February 25th. That's up 82,000 barrels per day from the week before.
Inventories were down 2.6 million barrels from a week earlier. Stockpiles are about 12 percent below the five-year average for this time of year. Imports dropped more than a million barrels per day to 5.8 million barrels per day.
Oil-by-rail shipments dropped last week. The Association of American Railroads reports 8,734 tankers hauling petroleum or petroleum products during the week through February 26th, that's down 523 carloads from the week before, and a nearly 16% drop from a year ago. Canadian traffic was down more than two percent last week. For the month of February, AAR says petroleum shipments were down eight percent compared to the same month a year ago.