By JOHN P. TRETBAR
Eagle Communications
Kansas Common crude starts the week at $67.25 per barrel at CHS in McPherson after rising a dollar and a half on Friday. That's up more than six dollars a barrel from the first of the month but down about three dollars a barrel from the first of the year. Crude futures are on a roll, gaining a dollar and a half on Friday and another dollar Monday. WTI for September delivery was fetching $78.07 per barrel in Nymex trading Monday morning. London Brent was a few cents shy of $82 a barrel.
The Rotary Rig Count from Baker Hughes is down seven oil rigs and two gas rigs from last week. Another seven rigs dropped off the roster in Texas. The Lone Star State has shown declines in six of the last seven weekly reports, dropping from 353 to 322 active rigs during that period. New Mexico is down four rigs from last week. Louisiana is down three.
Independent Oil & Gas Service says there are eight drilling contractors in western Kansas moving in and rigging up drilling tools, eight are about to start drilling, and another six are on site awaiting orders. That's 22 active drilling rigs, down one rig from a week ago, down seven percent from a month ago and 32% lower than a year ago. The count east of Wichita was unchanged at 16 active rigs. Drilling was underway Friday on a lease in Stafford County.
Kansas regulators okayed 32 new drilling locations in Kansas last week, with ten in western Kansas. That's 720 new permits so far this year, compared to 910 by this time last year. Operators completed 27 new wells in Kansas last week, with 15 west of Wichita, including two in Ellis County. Independent Oil & Gas Service reports 959 newly-completed wells so far this year, compared to 875 a year ago.
A coalition of government officials and ranchers are once again seeking a way around new protections for the lesser prairie chicken.
The Kansas Natural Resource Coalition and several Kansas landowners filed a federal lawsuit last week. They argue implementing new Fish and Wildlife Service rules under the Endangered Species Act would restrict land use, and force expensive changes that hurt business. The protections appear to block nearly any land-use changes for the bird's prairie habitat in four states, including oil drilling and even row-grow cultivation.
The Energy Information Administration reports U.S. crude inventories dropped by 700-thousand barrels last week to just over 457 million as of July 14th. Energy Information Administration said stockpiles are about one percent above the five-year average for this time of year.
The government on Wednesday said U.S. crude production remains a few barrels above 12.3 million per day, down 11,000 barrels per day from a week ago, and about 300,000 barrels per day ahead of last year at this time.
U.S. crude imports increased by more than a million barrels a day last week to 7.2 million barrels per day. Over the last four weeks, imports averaged about 2.5% more than during the same four weeks last year.
The operator of Kansas' third-largest refinery reported quarterly net earnings of more than $547 million, down slightly from the record quarter announced a year ago. But pretax earnings in the energy sector at CHS rose to $199 million for the quarter ending May 31st, a $35 million increase compared to a year ago. A company news release notes the increase was fueled by strong margins at its refineries, along with favorable pricing of heavy Canadian crude oil. The CHS facility in McPherson is the number-three refinery out of three in the state when ranked by capacity, but they historically lead the state in purchases of Kansas crude.
Revised numbers from North Dakota's Department of Mineral Resources show they did not in fact set their all-time record with April's gas-capture rate as they had reported a month earlier. Revisions from DMR show they fell short of the record statistics reported last fall. They're still close, capturing 95% of the gas coming out of their oil wells. May crude output rose to more than 35 million barrels in North Dakota.
The Financial Times cites customs data showing China imports for the first half of the year were up nearly 12% over a year ago to more than 11 million barrels per day. Despite a faltering recovery in the world's second-largest economy, economists say China is taking advantage of low Russian crude prices to build up crude stockpiles with record imports.