By JOHN P. TRETBAR
The benchmark Nymex crude futures contract gained another $4 Friday to settle at $92.64 per barrel. Prices are up nearly $16 a barrel in the last two weeks. In lunchtime trading Monday, prices were down slightly, but WTI was trading over $92 and London Brent was over $97 a barrel. Kansas prices were up more than $4 a barrel Friday.
The so-called OPEC+ crude exporters announced they would cut output by two million barrels per day, sounding alarm bells for inflation-hawks and poll-watchers worried about gasoline prices. Some analysts point out the cartel has been unable to reach its own production quotas since the pandemic. Some lawmakers are once again touting the so-called "NOPEC" Act and other efforts to rein in the cartel.
The auto club AAA says rising gasoline demand paired with diminishing supplies have fueled a big bump in pump prices. The national average is over $3.91 a gallon, up 12 cents from a week ago. Average prices Monday range from $6.33 in California, down a nickel from a week ago, to $3.25 in Mississippi, which is 20 cents higher. The average across Kansas is $3.51 a gallon, a jump of more than 11 cents in seven days. According to the Energy Information Administration, gasoline demand increased nationally from 8.83 million to 9.47 million barrels per day last week, and total domestic gasoline stocks decreased by 4.7 million barrels.
State regulators report slight increases in local and statewide crude output. Operators here have pumped more than 11.5 million barrels through May, the latest numbers available from the Kansas Geological Survey. That's over 76,000 barrels per day compared to just over 75,000 a year earlier. Barton County output is just under 4,000 barrels per day with production of 596,000 barrels through May. Ellis County pumped 905,000 barrels, or nearly 6,000 barrels per day. Russell County output through May stands at 545,000 barrels, or 3,600 barrels per day. The tally in Stafford County is 383,000 barrels or 2,500 barrels per day.
Kansas regulators report 161 new intent-to-drill notices across the state last month, including three in Barton County, five in Ellis County, one in Russell County and five in Stafford County. So far this year, the Kansas Corporation Commission reports 1,342 new intents, compared to 868 through September of last year.
Drilling activity in Kansas is up 55% compared to last year at this time but down slightly for the week. The Rig Count in Kansas is down one east of Wichita and down one in the western half of the state. Drilling was underway Friday on one lease in Stafford County, and was about to resume on one lease in Ellis County and one in Stafford County. Independent Oil & Gas Service reports 1,196 wells spudded so far this year, up 425 wells from last year. They're scouting 489 wells currently being drilled or completed.
Regulators okayed new drilling locations in Barton, Ellis and Stafford counties last week. Among the 48 new permits statewide, 39 are east of Wichita and ten in Western Kansas. Kansas operators completed 28 new wells last week, according to Independent Oil & Gas Service, with 13 in eastern Kansas and 15 west of Wichita. The list includes two new wells in Barton County and one each in Russell and Stafford counties.
State regulators in New Mexico and Texas reach common ground on wells that cross their common border. Officials are hailing a landmark development involving a landmark oil deposit, the Permian Basin. A Memorandum of Agreement will govern the development, operation, and maintenance of wells that cross their shared border and produce minerals from each state. The MOA will help them allocate millions of dollars in production from such wells, and will help enforce regulations in both state.
U.S. crude production last week reached 12.035 million barrels per day, an increase of 1,000 barrels per day from a week ago. The government reports current output is more than 600,000 barrels per day higher than for the same week last year.
U.S. Crude inventories dropped by 1.4 million barrels last week. The Energy Information Administration reported stockpiles of just over 429 million barrels as of September 30. That's three percent below the five-year seasonal average. Gasoline inventories dropped by nearly five million barrels and are about nine percent below the five-year average.
EIA reports domestic crude imports last week dropped nearly half a million barrels to 5.9 million barrels per day. The four week average is roughly 2.6 percent lower than a year ago.
Oil-by-rail traffic in the U.S. was up six percent in the week through October first. The Association of American Railroads reports 10,449 tanker carloads, up more than 1,000 tankers from the week before and more than six percent higher than the same week a year ago. Canadian traffic was is up two percent over last year, posting an increase of 42 carloads week over week.