By JOHN P. TRETBAR
The benchmark crude contract for June delivery expired last week at $113.23 per barrel, up more than a dollar Friday. The July contract in New York was a little cheaper, fetching just over $110. London Brent rose over $113 per barrel by lunchtime Monday.
The national average for a gallon of gas has not fallen for nearly a month and has set a new record price each day since May 10th. It's now up to $4.59, more than a dime higher on the week and nearly half a dollar higher than a month ago. All 50 states were over $4 for the first time ever on May 17th. At $4.04 per gallon, the average price in Kansas was half a cent lower on the day Monday, but still nearly thirty cents higher on the month. Prices reached $4.09 in Great Bend and $4.19 in Hays.
The London crude-oil benchmark is once again slightly more expensive than its New York counterpart, but for two trading sessions last week West Texas Intermediate crude was selling for more than London Brent for the first time ever. Some analysts say the shrinking spread between prices for the two benchmarks is caused by reduced purchases of Russian crude due to international sanctions.
US crude production is up 100,000 barrels per day from a week ago. The Energy Information Administration reports output rose during the week through May 13th to 11.947 million barrels per day.
EIA said US crude stockpiles dropped 3.4 million barrels to just over 420 million barrels. US inventories are about 14% below the five-year average for this time of year. Gasoline inventories are down 4.8 million barrels and are eight percent below the five-year seasonal average.
EIA reported average imports for the week of 6.6 million barrels per day, an increase of nearly 300,000 barrels. The four-week average is nearly five percent higher than during the same four weeks a year ago.
Baker Hughes reported 728 active drilling rigs nationwide, marking an increase of 13 oil rigs. and one seeking natural gas. The count in Texas was up 12 rigs. Oklahoma was up one.
The Rig Count in Kansas was unchanged in the eastern half of the state at 21 active drilling rigs. In Western Kansas there are 30 active rigs, up one for the week. Operators were about to spud new wells on two leases in Barton County. Independent Oil & Gas Service reports 138 active operators in Kansas, and is scouting 376 wells in various stages of drilling and completion, up more than 95% from a year ago.
Kansas Operators have completed 582 wells so far this year including 43 last week. Of those 24 were located east of Wichita and 19 were in Western Kansas, including one in Barton County and two in Stafford County. Regulators okayed 20 new Kansas drilling locations last week, including one new permit in Russell County and two in Stafford County.
US oil-by-rail traffic was up for the week but lagged 19% behind last year's tally. The Association of American Railroads reports 9,103 tanker carloads carrying petroleum and petroleum products across the US for the week through May 14th. That's up 167 tankers from the week before. Canadian oil-by-rail gained nearly 300 tanker carloads week-over-week, and was up 15% over last year.
It could be several years before the oil patch workforce returns to pre-pandemic levels. Analyst Rystad Energy expects job numbers in the patch to jump more than 12 percent this year to 971,000. But it could take another five years to reach employment levels enjoyed as recently as 2018. Wages are expected to rise 2.9% this year. Bloomberg reports slow wage growth and rampant inflation in the patch are sending energy workers to other industries for work. Workers in the Permian Basin are now living in the number one spot for inflation in the country.
Crude oil output in North Dakota increased by more than four million barrels in March. The Department of Mineral Resources in the third-biggest producing state says operators pumped 1.12 million barrels per day, an increase of 2.8% over the month before. The state's gas capture rate improved to 95%, which is the best on record. This is good news for a state that at one time flared 36% of its produced natural gas, a phenomenon that was visible from space.
Turning a profit on offshore energy exploration in Brazil is proving both expensive and elusive. Bloomberg says Shell and Exxon have each come up dry after spending billions on offshore exploration wells there. Analysts said Shell drilled three wells without finding any commercial volumes. They spent one billion dollars doing it. Exxon Mobil spent $1.6 billion for three wells which provided the same disappointment.
Operators in the nation's top seven crude-oil plays continue to take advantage of a large inventory of uncompleted wells to quickly increase production. The government reports another 70 so-called drilled but uncompleted wells were brought on line in April, with more than half of those in the Permian Basin of Texas and New Mexico.