By JOHN P. TRETBAR
Crude prices are rising from 15-month lows. Friday's settlement price for near-month light sweet crude on the Nymex dropped 70 cents to $69.26 per barrel, $3 higher than a week earlier. In morning trading Monday that contract gained more than a dollar, trading over $70 per barrel. London Brent was over $76 per barrel. Kansas Common crude at CHS in McPherson starts the week at $59.50 per barrel.
US Crude inventories increased by 1.1 million barrels per day in the week through March 17. Stockpiles (not including the Strategic Petroleum Reserve) reached 481.2 million barrels. The government says inventories are about eight percent above the five-year average for this time of year.
The government has been underreporting supplies and overstating the final disposition of crude in the US. In a report last week, the Energy Information Administration said that in order to address growing differences between supply and disposition they are making some changes to their surveys and to their calculations. The agency said the problems stem from tallies of unfinished oils used for field blending.
A first-in-the-nation bill to investigate and punish oil companies for price gouging at the gas pump breezed through the California Senate, the first major vote in an effort to pass the law by the end of the month. The bill would let a five-member panel decide whether to impose civil penalties on oil companies for price gouging. The commission would rely on a new state agency with the power to subpoena oil executives and force companies to disclose financial information. The proposal is a response to price increases last summer, when a gallon of regular gasoline in California soared to a record high average price of $6.44. Drivers in some places paid as much as $8 per gallon, prompting widespread outrage.
US regulators last week approved Canadian Pacific's $31 billion purchase of US carrier Kansas City Southern, creating a North American rail network stretching from Canada to Mexico. The US Surface Transportation Board voted 4-1 in favor of the merger, enabling the two Class I railroads to combine into a new one, the Canadian Pacific Kansas City. The merger joins CP's operations in Canada, the US Midwest and the US northeast with KCS' operations in the south-central US and Mexico.
Total US railroad freight traffic is down more than seven percent in the US compared to a year ago. In the most recent tally from the Association of American Railroads, US operators moved 9,563 tanker carloads of petroleum and petroleum products. Canadian shippers added 8,196 carloads while Mexico notched 2,057.
Operators last week completed 12 new wells in eastern Kansas and 20 in the western half of the state, including two in Barton County, one in Ellis County and two in Stafford County. Independent Oil & Gas Service reports 471 well-completions so far this year, compared to 374 a year ago at this time.
Kansas regulators okayed 14 new drilling permits last week, with two east of Wichita and 12 in Western Kansas, including one in Russell County. That's 296 new drilling locations so far this year, compared to 336 a year ago.
The weekly Rotary Rig Count from Baker Hughes showed 758 active rigs nationwide on Friday, an increase of four oil rigs. The count in New Mexico was up two, Texas was up one and Oklahoma was down one rig.
A weekly government report shows US operators pumping more than 12.3 million barrels of crude oil per day. The Energy Information Administration reports output was 103,000 barrels per day higher than a week earlier, and more than 700,000 barrels per day higher than a year ago. US crude imports averaged 6.2 million barrels per day, down 45,000 barrels per day from the week before. The four-week average is down slightly from from a year earlier.
Russia tops Saudi Arabia as China’s top oil supplier for the second month in a row in February. Chinese government reports show arrivals from Russia were up 23 percent, while flows from Saudi Arabia dropped 29 percent to the lowest level since last June.
The Oil Minister of Venezuela resigned amid a growing corruption probe into the state-owned oil company. The government did not immediately name a replacement nor confirm it had accepted the resignation. Numerous public officials were arrested in weekend raids in the wake of claims that the country is missing between $3 billion and $5 billion in cryptocurrency.