By JOHN P. TRETBAR
Eagle Communications
Crude inventories dropped to their lowest level in seven months. The government reported a 6 million barrel drawdown in U.S. crude stockpiles, reducing inventories to 439.7 million barrels as of Aug. 11. That's about 1 percent below the five-year seasonal average.
Stockpiles rebounded somewhat last week after a historic drawdown of 17 million barrels the week before. The current tally is the lowest since Jan. 11.
EIA said crude imports last week rose nearly half a million barrels per day to 7.2 million barrels per day. The four-week average is about 4 percent higher than a year ago.
U.S. crude production rose 107,000 barrels per day. The average for the week through Aug. 11 is just short of 12.7 million barrels per day, about half a million barrels per day higher than a year ago.
The benchmark Nymex crude-oil contract settled Friday at $81.25 per barrel, posting its first weekly loss since the week of June 23. Prices were holding steady on Monday, with the September Nymex contract trading over $81. London Brent was just a few cents shy of $95 per barrel by midday. Kansas crude prices drop $2 in two weeks and now are equal to the price posted on Aug. 1. Kansas Common crude at CHS in McPherson starts the week at $71.50 per barrel.
The weekly Rotary Rig Count from Baker Hughes shows 642 active rigs, down five oil rigs and six gas rigs. Louisiana and West Virginia were each down three rigs. North Dakota, Ohio and Oklahoma each dropped by two rigs.
Independent Oil & Gas Service reports 17 active drilling rigs in eastern Kansas, which is up one from last week, and 26 rigs west of Wichita, which is unchanged. Kansas operators have spudded 176 wells so far this year, down 34 wells from last year. Total footage is down 27 percent.
Operators completed 33 new wells in Kansas, of which 22 are in western Kansas including one each in Barton, Ellis and Russell counties, and two in Stafford County. Kansas regulators approved 19 new drilling permits this week, 10 of them in western Kansas, including two in Ellis County.
An oil tanker suspected of carrying sanctioned crude oil from Iran offloaded its cargo near Texas over the weekend, three months after it was seized under the U.S. sanctions intended to limit Iran's nuclear program. Ship-tracking data analyzed by The Associated Press showed the crude was moved in an hours-long ship-to-ship transfer near Galveston. The ship is too large to enter the port, so it needs what are called "lightering agents" to transfer the oil to smaller ships. That process got underway Sunday. Iran has threatened retaliation against any company taking part in the transfer. It's still not clear exactly how much crude is involved. The government refuses to comment until they actually have the cargo.
An appeals court in Washington has derailed a plan to extend existing rail lines along Colorado's Interstate-70 corridor into Utah's booming Uinta Basin. The court ordered the Surface Transportation Board to reconsider what it called the "paltry discussion" of the potential environmental impact of the line.
The administration announced $3.5 billion in funding for two carbon removal projects, designed to suck carbon dioxide pollution out of the air. Occidental Petroleum is developing 100,000 acres on the famed King Ranch in South Texas in one project. Another project is underway near Lake Charles, La.
The Energy Information Administration predicts output from the seven major U.S. shale basins will average 9.44 million barrels per day in August and a little less, 9.41 million per day in September. The monthly Drilling Productivity Report predicts an average of 981 barrels per day for new shale wells in September. That's up 11 barrels per day from EIA's August forecast.