By JOHN P. TRETBAR
Eagle Media
Domestic operators set another weekly all-time crude-production record last week, topping 13.5 million barrels per day. Cumulative production so far this year reached an average of just under 13.2 million barrels, more than six percent higher than a year ago.
The Energy Information Administration reported a big drop in US crude inventories. As of October 11, stockpiles dropped to just over 420 million barrels, down 2.2 million barrels from a week ago and five percent below the five-year seasonal average.
The Energy Department took delivery on another million barrels of crude oil at the Strategic Petroleum Reserve. SPR stockpiles now total nearly 384 million barrels, down from 618 million three years ago. Since April, the Energy Department has added nearly 20 million barrels, at prices twenty to twenty-five dollars cheaper than what we sold it for.
The US imports more crude then we export by more than a million barrels a day. But according to the latest weekly numbers from the government, petroleum product exports outpace imports by nearly five million daily barrels. That makes us a net petroleum exporter. According to EIA, US crude-oil imports averaged 5.5 million barrels a day, down from 6.2 million last week. The four-week average is down 3.4 percent from the same four-week period last year. Operators exported 4.1 million barrels of crude per day last week, up from 3.8 million a week ago. The four week average is up nearly 100-thousand barrels a day from a year ago.
Rig Counts for natural gas in the US are down slightly, but the tally for oil rigs is slightly higher. Baker Hughes reports 585 rigs nationwide. The breakouts show an unusual increase in active vertical drilling rigs, offset by declines in both directional and horizontal rigs. The statewide total for Texas was down two while Oklahoma and Colorado were each up one rig.
The Kansas Rig Count from Independent Oil & Gas Service is up two rigs in the eastern half of the state at 14 rigs, and up two in Western Kansas at 19. The tally is up 50 percent from last month but down about 13 percent from a year ago. Drilling was underway on two leases in Barton County and another in Ellis County.
Regulators in The Sunflower State approved 55 new drilling locations, the biggest weekly total since June of 2022. There are 45 new drilling permits in eastern Kansas, and ten west of Wichita, including one in Barton County and one in Ellis County.
Operators in Kansas completed 25 new wells last week, with 12 in Western Kansas and 13 east of Wichita. Independent Oil and Gas Service reports 1,069 completions so far this year, down more than 300 wells from a year ago.
Hurricane Milton prompted a brief scare in the energy sector, but gasoline prices in Florida have remained stable since landfall on October 9. A report from the EIA asserts that despite some areas with major disruptions, statewide pump prices have remained steady at $3.04 per gallon as the supply chain recovers. Florida is particularly vulnerable to price spikes brought on by weather events. The state does not have refineries or pipelines, relying instead on gasoline deliveries by ship. Several ports were closed briefly, but others remained open with restrictions. At Port Tampa Bay, where nearly half of Florida’s petroleum product supply is brought in, authorities report no significant damage to docks, but they did note some infrastructure damage, power outages, and road closures that might disrupt supply in the short term.
The U.S. broadened economic sanctions in hopes of forestalling or softening military ones. The Treasury Department announced a flurry of sanctions against terrorism broadly and some enablers in the industry specifically. They're targeting everything from the "ghost fleet" of oil tankers currently evading Iran sanctions to Syria's drug-trafficking activity. It appears the collective effort may have stopped Israel from attacking energy installations in Iran. But they have not yet responded to Iran's missile attack earlier this month.
The US used a Trump-era executive order to allow for sanctions against anyone linked to Iran’s petroleum and petrochemical sector. They've designated ten companies and 17 vessels as “blocked property” over their involvement with the Islamic Republic. Such tankers have been detained in the past, their oil cargoes offloaded and sold. Up until now the tankers themselves have been released. The West has been less successful enforcing sanctions against Russia.
Big Oil has big plans for some big acreage. ExxonMobil hopes to increase output from its offshore holdings near Guyana by 18,000 barrels per day once it has completed risk assessments and received approval from local authorities. That's according to a top government official in the South American Country, where many big players are shuffling to drill in the latest international hot spot. The company currently produces more than 660-thousand barrels a day in the region.
The month of September and the first nine months of the year have posted declines in total rail traffic, but oil by rail is holding steady. Weekly oil by rail shipments are up slightly over a year ago, but down from a week ago. According to the Association of America Railroads, rail traffic hauling petroleum and petroleum products was up six-tenths of a percent in the week through October 12. AAR reports 10,639 tanker carloads hit the rails, down from 10,814 tankers a week earlier. For the first nine months of 2024, total U.S. carloads of all commodities were down 3.3% from the same period in 2023. This year's oil by rail tallies have noted slight increases over last year. The trade group says grain and chemicals saw year-to-date increases and some record highs, but says coal and crushed stone posted notable declines.