By JOHN P. TRETBAR
The Kansas Corporation Commission reports just 29 new intent-to-drill notices for the month of April, including one in Ellis County. The April total is down from 37 intents from the month before, and down from 106 in April of last year. There are 200 new intents on file so far this year, compared to 334 by the end of April last year.
Kansas crude prices gained a dollar on Friday. Kansas Common crude at CHS in McPherson starts this week at $10 a barrel. The monthly average for Kansas Common crude in April was just over $10 a barrel, compared to nearly $21 a barrel in March and over $54 a barrel in April of last year.
Baker Hughes reported another big drop in its weekly Rotary Rig Count to 408 active rigs, down 53 oil rigs and four gas rigs. The count in Texas was down 30 rigs. Colorado dropped by seven rigs. Oklahoma was down five and New Mexico was down four. Independent Oil & Gas Service reports a slight uptick in the Rig Count in Kansas. There are seven active rigs in Western Kansas, up four from last week; and one active rig east of Wichita, up one.
Operators received six new drilling permits across the State of Kansas last week, three east of Wichita, and three in western Kansas. That's 177 permits for drilling at new locations so far this year, compared to 304 at this time last year. Independent Oil & Gas reports just three new well-completions last week, two of them dry holes.
We could find out this week if regulators will place legal limits on oil and gas production in the top-producing state in the country. The Railroad Commission of Texas held a lengthy hearing on the matter last month, but a two-member majority voted to consult with the state attorney general and put off any decision on "proration." The board could take up the matter again in its next scheduled meeting Tuesday.
U.S. crude production dropped 23 million barrels from February of last year, according to the latest numbers available from the government. According to the new government report, Kansas production in February was just over two and a half million barrels. That's an average of 88,000 barrels per day, about the same as the month before, but down from 92,000 barrels per day in February of last year.
The government on last week said U.S. crude-oil inventories increased by nine million barrels, significantly less than expected. Stockpiles are about ten percent above the five year average. The Energy Information Administration reported another decline in weekly crude-oil production. U.S. output last week dropped by about 100,000 barrels per day from the week before. EIA reports imports of 5.3 million barrels per day, up 365,000 barrels per day over the week before. The four-week average is still nearly 20% less than last year. U.S. gasoline stockpiles dropped by nearly four million barrels, but remain about ten percent above the five-year seasonal average.
The Association of American Railroads says U.S. oil-by-rail traffic as down more than 30% for the week ended April 25 compared to a year earlier. Total freight traffic dropped more than 22%.
The government reported total U.S. energy production last year exceeded consumption for the first time in 62 years. The Energy Information Administration compared production and use of oil, gas, coal, nuclear power and renewable energy. The Monthly Energy Review indicates we produced eight trillion BTUs of energy more than we consumed.
Commodity regulators are looking into possible insider futures trading by brokers with inside information on Russia's production negotiations with OPEC. The Commodity Futures Trading Commission is scrutinizing futures trades by market participants who may have had advanced word on the Russian strategy. The investigation reportedly does not involve any Americans or Russian officials. But, sources tell Bloomberg the trading entities involved do employ people with ties to the Kremlin.
The Interior Department is preparing to sell drilling rights in the 1.56-million-acre coastal plain of the Arctic National Wildlife Refuge, but that sale may already have gone bust. Morgan Stanley just ruled out financing for Arctic energy development. They join Citigroup, Goldman Sachs, JP Morgan Chase and Wells Fargo in ending support for drilling in the refuge. Bloomberg reports activists have shifted their focus to the flow of the huge sums of money needed to exploit the region. Lending restrictions now pose another obstacle to oil companies hunting for the next big U.S. discovery, particularly after an epic collapse in prices, declining demand tied to coronavirus and a mounting glut of crude. The Interior Department is preparing to sell drilling rights in the 1.56-million-acre coastal plain of the Arctic refuge.