By JOHN P. TRETBAR
Kansas crude prices remain at five-decade lows, but have rebounded somewhat from last week's low of $10.50 a barrel. Kansas Common crude at CHS in McPherson starts the week at $12.75 a barrel. According to statistics published by Independent Oil & Gas Service, Kansas crude hasn't gone this cheap since 1976.
Nymex benchmark crude nearly dropped below $20 Monday, but managed to recover somewhat. In mid-morning trading the near-month contract for WTI was up six cents at $22.69 a barrel. The low mark was $20.80 a barrel. London Brent was down $1.15, or nearly five percent, dropping to $25.83 per barrel.
Weekly statistics from the Kansas oil patch reflect the worst prices in nearly 50 years and a changing focus among Kansas operators. There's a 45% decline in rigs counts this week after a 57% increase last week. Permits are lagging behind last year's record-low performance by eight percent. Completions are down more than 30% year-on-year.
Rig counts in Kansas dropped 45% according to the latest numbers from Independent Oil & Gas Service. There's one active rig in the eastern half of the state, marking a drop of five rigs. The count in Western Kansas was also down five at eleven active rigs. The national rig count from Baker Hughes was down 19 oil rigs to a total of 772. The count in Texas was down 11 rigs. New Mexico was down five and Oklahoma was down three.
There are just five new drilling permits this week, all five west of Wichita including one in Barton County. At 157 permits so far this year, the state of Kansas is lagging behind last year's totals by 14 permits or about eight percent. Operators completed 21 wells last week across the state. Independent Oil & Gas reports seven newly-completed wells in eastern Kansas and 14 in the western half of the state including one completion in Ellis County. The year-to-date total is 274 new completions, compared to 401 a year ago at this time.
Kansans on average are paying just over $1.95 for a gallon of regular gasoline. That's nearly 25 cents a gallon cheaper than the national average, with only 10 other states offering cheaper pump prices. Your 15-gallon fill up will cost you three dollars less than last week, seven dollars less than last month, and eleven dollars less than six months ago.
The Energy Information Administration reported a two-million barrel increase in domestic crude stockpiles last week. At 453.7 million barrels, U.S. inventories are about 3 percent below the five year seasonal average.
Weekly crude-oil production in the U.S. topped 13 million barrels per day for only the second time in history last week. EIA reported production of 13.078 million barrels for the week ending Friday, March 13. That's an increase of 105,000 barrels per day over the week before and nearly a million barrels per day more than the same week a year ago
Domestic crude-oil imports averaged 6.5 million barrels per day last week. EIA says that's up 127,000 barrels per day from the week before. The four-week average is down nearly 5 percent from the same period a year ago.
Oil-by-rail traffic in the U.S. was up nearly ten percent last week compared to a year ago. The Association of American Railroads reports 13,294 rail tanker cars hauling petroleum and petroleum products during the week ending March 14. The running total so far this year is up more than five percent from a year ago. Canadian oil-by-rail continues to grow in response to dramatic shortfalls in pipeline capacity.
Expect producers in the Permian Basin of Texas and New Mexico to continue ramping up shale production next month, while the other six major shale plays in the U.S. reduce output. That prediction comes from the Energy Information Administration in it's monthly Drilling Productivity Report. EIA says total shale oil production in the United States will increase by 18,000 barrels per day in April to just over nine million barrels per day. That's nearly three-fourths of total U.S. production. Output in the Permian Basin is expected to increase by 38,000 barrels per day next month.
The government said the number of wells in U.S. shale plays that have been drilled but remain uncompleted dropped by 60 wells to 7,637 in February, the latest numbers available. Nearly half of those are in the Permian basin.
Two of the biggest oil producers in Texas are asking the state regulator to consider limiting the amount of oil Texas companies can pump. This attempt to stem the dramatic collapse in prices is something that has not been done since the 1970s. Reuters reports Parsley Energy and Pioneer Natural Resources are asking the Railroad Commission of Texas to consider setting output limits. Executives with the firms assert that not acting could lead to single-digit oil prices, which they say would decimate the oil and gas industry.