By JOHN P. TRETBAR
Crude futures prices retreated Monday, dropping two percent from the seven-year highs reached last week. By lunchtime Monday, the benchmark US futures contract was down $2.01 to $83.13 per barrel.
Kansas Common crude at CHS in McPherson starts the week at $75.50 per barrel, after dropping nearly two dollars on Friday.
Independent Oil & Gas Service reports 21 newly-completed wells across Kansas, including one in Barton County. There are six new completions in the eastern half of the state and 15 west of Wichita. That's 75 new completions so far this year.
Kansas regulators OK'd 13 drilling permits last week including three in Ellis County and one in Russell County. There are two new permits in eastern Kansas and 11 west of Wichita, bringing the total for the year to 55 new drilling locations.
The Rig Count in Kansas was down slightly. Independent Oil & Gas Service found 16 active rigs in eastern Kansas either scheduled, moving to, or currently on drill sites. That's down two for the week. In Western Kansas, the count was unchanged at 25. Drilling was underway on one lease, and about to commence on another, in Russell County.
The weekly Rotary Rig county from Baker Hughes reported 604 active drilling rigs in the US, noting an increase of four gas rigs, but a decline of one oil rig. The count in Texas was down one. Oklahoma was up one.
The government last week said US crude-oil inventories rose half a million barrels. The tally on Jan. 14 was 413.8 million barrels, about eight percent below the five-year average seasonal average. EIA said domestic imports were up slightly to 6.7 million barrels per day. US crude production dropped 5,000 barrels per day to about 11.65 million barrels per day.
The auto club Triple-A predicts gasoline pump prices will continue to rise despite falling demand. The price of oil accounts for roughly half of what consumers pay at the gas pump. The average price for a gallon of regular rose one cent to $3.31 across the US, while the average in Kansas rose above three dollars for the first time in three months. Prices rose to $3.09 a gallon across Great Bend, while outlets in Hays ranged from $2.89 to $2.99 a gallon on Wednesday.
Oil-by-Rail shipments last week rose from the week before but remain more than 20% below the figures from a year ago. more than 21 percent from the same week a year ago. The Association of American Railroads reports 9,782 tanker carloads hauling petroleum during the week through January 15th, up from 8,894 the week before. Canadian oil-by-rail saw a dramatic increase, up more than 2,000 carloads for the week, and nearly two percent higher than a year ago.
The number of wells in the major US shale plays that have been drilled but not yet completed, so-called DUCs, dropped by more than four percent last month. Each of the major basins dropped, but nearly half of the total decline was in the Permian Basin. The government says the December total for DUCs was 4,616, compared to 4,830 the month before.
A suspected drone attack on an oil storage facility last week brought the ongoing Yemen war to the shores of the United Arab Emirates, the world's eighth-largest crude producer. Fears over new disruptions to global energy supplies helped prompt a brief spike in international crude prices.
Texas’ oil and gas industry contributed nearly $16 billion in state taxes and royalties last year. That's an increase of more than 20% over the year before. A report released last week by the Texas Oil & Gas Association shows the patch directly supported more than 420,000 jobs last year.
Regulators in the number-three crude producing state report an increase in production in November. The North Dakota Department of Mineral Resources reports output of just under 1.6 million barrels per day in November, the latest numbers available. That's an increase of 4.4% over the month before. Statewide gas flaring volumes increased slightly, but so did gas capture. The percentage of natural gas produced and flared at oil wells dropped to 5.8% across the state.
Regulators in Colorado begin taking public comment on what could be a very expensive new law for oil operators there. The Colorado Oil & Gas Conservation Commission, newly-branded to protect health and the environment, wants to require drillers to put up bonds for each new well they drill, rather than posting "blanket bonds" for up to 100 wells. The funds are intended to guarantee payment for possible future plugging or cleanup. At $78,000 per well, the current proposal would cost the state's oil and gas industry nearly four billion dollars. The hearings are being conducted online on Thursday and Friday.
The government says there are currently more than 130,000 documented oil and gas wells across the country for which no one is on the hook to pay for cleanup. The Department of the Interior recently more than doubled its tally of orphaned wells. The new infrastructure law includes $4.7 billion to plug and reclaim abandoned and orphaned wells, but the GAO says the full cleanup cost with the larger estimate could be closer to $19 billion.