By JOHN P. TRETBAR
After their worst week in nine months crude prices rose five percent on Monday. Brent crude dropped to its lowest price since May on Monday, but later jumped five percent, recovering somewhat from a seven-day losing streak in which prices dropped 8 percent. Both benchmarks marked their biggest week of losses in more than nine months. WTI was nine percent lower, but posted 5 percent gains on Monday. Near-month light sweet crude on the Nymex settled Friday at $62.32 per barrel, the lowest settlement for the benchmark contract since May 21. In midday trading Monday that contract was up more than $3 to $65.54. Most analysts credit a rise in global stock prices and a weaker dollar for the rise in oil prices.
Kansas Common crude starts the week at $52.50 per barrel, down a dollar and a half from a week ago, and down $12 from the first of the month.
Gasoline prices are slightly lower across the U.S., and across Kansas. Triple-A says the national average was cent and a half lower than a week ago, a half cent higher than a month ago, and nearly a dollar per gallon higher than a year ago. On Monday, the U.S. average was just over $3.16 per gallon. The average across Kansas was just over $2.90 per gallon. On Monday, most stations in Hays were down to $2.83 per gallon. Prices in Great Bend were down to $2.79 per gallon.
The weekly Rig Count in Kansas from Independent Oil & Gas Service was largely unchanged with eight active rigs in eastern Kansas and 24 west of Wichita. Drilling was underway on one lease in Barton County.
Baker Hughes reported 503 active drilling rigs nationwide for the week, an increase of eight oil drilling rigs but a drop of five rigs seeking natural gas. The count in Texas was down one, but New Mexico, North Dakota, and Utah were each up one.
Kansas regulators last week okayed 22 permits for drilling at new locations across the state, five of them east of Wichita and 17 in Western Kansas, including one new drilling location in Ellis County.
Operators completed 16 new wells statewide last week. That makes 508 newly-completed wells so far this year. Independent Oil & Gas Service reports eleven new completions in eastern Kansas and five in the western half of the state, including one in Stafford County.
The latest report from the Kansas Geological Society shows drillers have discovered three new oil fields in Kansas, located in Lane and Rawlins counties, bringing the total so far this year to 13 new fields. That total includes three in Ellis county and one in Russell County.
A weekly report from the Energy Information Administration pegged U.S. stockpiles at 435.5 million barrels, down more than three million barrels, and about six percent below the five-year average for this time of year.
U.S. crude production topped 11 million barrels a day for the tenth straight week. The U.S. Energy Information Administration reports domestic output for the week through August 13th was up slightly over the week before, to just over 11.4 million barrels per day. U.S. crude imports were down last week to 6.4 million barrels per day. The four-week average for imports is up more than 14% over last year.
The Association of American Railroads says domestic oil-by-rail shipments last week were up slightly from the week before, but at 10,314 tankers, were down nearly five percent from a year ago.
A U.S. government watchdog report blames "preventable construction issues" for the most recent in a long string of oil spills from the Keystone Pipeline. The report from the Government Accountability Office showcases a review of the pipeline's history and construction. The GAO said Keystone's four largest spills were caused by design, manufacturing or construction issues. In a statement, GAO said those issues contributed to the spills more frequently than industry-wide trends. A statement from four Democratic congressional committee chairs labeled the operator TC Energy's record as being among the worst in the industry in terms of volume of oil spilled per mile transported. The GAO report was requested in 2019, before the expansion of the pipeline was canceled.
OPEC's Monthly Oil Market Report predicts a modest increase in economic growth worldwide this year, but not enough to improve the cartel's demand expectations. The cartel is standing by its earlier predictions that worldwide demand this year will grow by just six million barrels per day to an average of 96.6 million barrels per day. The cartel predicts global economic growth of 5.6% this year, an increasingly optimistic view.
Now that an international group has discovered nine billion barrels of recoverable oil and gas off its coast, the tiny South American nation of Guyana is shooting for better terms. Reuters quotes the vice president saying the Profit Sharing Agreement for future projects will be ready within about six months and will be tougher than the one negotiated with the consortium. The country expects to install an energy regulatory body and will soon name the winner of a one-year contract to market all that crude.
Carbon capture technology is red hot, even as climate warnings reach code red. A report from Bloomberg notes the market for sequestering greenhouse gases is expected to skyrocket, particularly in Europe, where industries are paying increasing prices for emissions and governments strive to reach net zero. A report from Credit Suisse Group says the market could reach $2 trillion. The process siphons off carbon dioxide, compresses it, transports it and then stores it in depleted oil reservoirs. The number of projects planned around the world has risen six-fold since 2019 to 300, according to analysts at Wood Mackenzie.