By JOHN P. TRETBAR
Eagle Media
A weekend of military action atop the world's largest proven oil reserves is having little impact on prices. Amid what's approaching a global oil glut, US actions in Venezuela are not expected to disrupt prices much, according to widespread analysis online. At just over $57 a barrel, NYMEX near-month crude settled Friday a dime lower than the pre-holiday close on Wednesday. Offers on Monday dropped as low as $56 in the morning. Prices were nearly a dollar higher by lunchtime, with New York crude topping $58 per barrel and London Brent rising toward $62.
Kansas prices dropped 25 cents on Friday (1/5) and starts the week at $47.50 per barrel. The monthly average price in McPherson dips to its lowest level in nearly five years. CHS reports the average for December is a fraction over $48.11 per barrel for Kansas Common, the lowest monthly average since January of 2021.
Year-end analysis by The Energy Information Administration shows Brent crude prices dropping from a monthly average of $79 per barrel in January to a low of $63 per barrel in December. That's the lowest monthly average for the global benchmark since early 2021. The annual average last year was just $69 a barrel, which is the lowest since 2020. EIA estimates global production outpaced consumption all year, prompting one of the biggest inventory build-ups in 25 years.
Commercial crude inventories dropped nearly two million barrels and are about three percent below the five-year seasonal average. The government adds another 200,000 barrels to the Strategic Petroleum Reserve, which now tops 413 million barrels.
The Energy Information Administration reported a slight increase US crude production, which remains over 13.8 million barrels per day. The four-week average and cumulative output this year remain at record highs, with both about two percent higher than last year at this time.
Total statewide intent-to-drill notices drop by 500 for the year. The Kansas Corporation Commission reports 52 new intents in December, or 749 for the year. That's down from over 1,252 last year. Ellis County reports two new intent-to-drill notices, for a year-end total of 18. There are no new intents in Barton County, which winds up the year with 13. Russell County adds one; that's three for the year. Stafford County also adds one new intent notice in December, for a year-to-date total of 13. Finney County shows two new intents in December, 24 for the year. Gove County ends the year unchanged at 28 intents. Haskell County shows 14 for the year, which is also unchanged for December.
Crude imports from Canada drop to 3.1 million barrels a day, the lowest weekly tally since June. For the year, Canada crude imports have topped four million barrels a day eleven times, with the best weekly tally ever in the first week in January: 4.4 million barrels a day. Canadian crude imports came into the cross-hairs, and declined, early on in the Administration's tariff program.
US Crude exports this week drop to their lowest level in three months, 3.4 million barrels a day. That's still more than last year at this time, when exports averaged just over three million barrels a day.
The government announced details from the first of many new offshore lease auctions, under the Administration's expanded drilling proposals. To encourage participation, the government offered some 80 million acres at the lowest royalty rate since 2007, 12.5%. The government says they drew more than 200 bids from 30 companies for 15,000 previously-unreleased blocks. The blocks are situated in what are called the Western, Central and Eastern Gulf planning areas.
Baker Hughes reports 546 active drilling rigs nationwide as of December 30th. That final Rotary Rig Report of the year shows Texas down one rig, but holding firm with 231 active rigs, 42 percent of the national tally. New Mexico was steady with 101 rigs, Oklahoma and Louisiana each had 43, and North Dakota had 27.
Year-to-date oil-by-rail shipments surpassed half a million tanker carloads in the latest report from the Association of America Railroads. The last weekly tally of the year is just under 10,400 carloads. The average weekly tally this year is down nearly two percent from last year, and is also just under 10,400 carloads. The industry group reports total freight traffic by rail is up nearly two percent compared to last year.