By JOHN P. TRETBAR
Kansas crude prices rose 75 cents a barrel Friday to start the week Monday at $31.25 per barrel, nearly $4 higher than a week ago, but $20 cheaper than at the beginning of the year. Kansas prices joined a rally last week in the national markets, but both are reversing course.
By lunchtime Monday, futures contracts were down five percent. Analysts blamed the price collapse on the return to the marketplace of Libyan oil, along with fears of more COVID-19 shutdowns. It's not entirely clear when Libya could actually resume significant production, but Reuters does report a tanker on its way to a Libyan export terminal for what would be that country's first crude exports in nine months.
The Kansas Independent Oil & Gas Association (KIOGA) announces another in its series of online seminars. On September 28, KIOGA will host a webinar on the basics of oil and gas leases during this period of shut-in production. The event is scheduled from 10-11 am on Monday September 28. Another Webinar, featuring Secretary of State Mike Pompeo, has been rescheduled September 24. For more information and to register for either event, contact Kelly at 316-263-7297 or by E-mail: [email protected].
U.S. weekly crude-oil production topped ten million barrels per day for the first time in three weeks. The Energy Information Administration reports output for the week ending September 11 increased by more than 900,000 barrels per day over the week before.
EIA says U.S. refineries imported five million barrels of crude last week, down 416,000 barrels from the week before. Average imports over the last four weeks are down more than 20% from the same period a year ago.
The government says U.S. crude stockpiles dropped by more than four million barrels last week. At 496 million barrels, domestic inventories are about 14% above the five-year average for this time of year.
Independent Oil & Gas Service reports four active drilling rigs in eastern Kansas, which is unchanged on the week, while the count west of Wichita was down one at six active drilling rigs. Baker Hughes reported 255 active drilling rigs across the U.S., an increase of two gas rigs, but a decline of one rig drilling for crude oil. The count in New Mexico was down three. Texas was up one.
There were six new drilling permits filed across Kansas last week, four of them east of Wichita, and two wildcat plays in Ellis County. So far this year, Kansas regulators have okayed just 304 permits for drilling at new locations, less than half the total last year at this time.
Operators completed eleven wells last week. Independent Oil & Gas says that makes 644 so far this year, down from nearly 1,000 completions at this time last year.
Production is bouncing back in the second biggest crude-producing state. North Dakota regulators this week report July output topped one million barrels per day for the first time since April. Output was up more than 116,000 barrels per day over the June report. The state's operators are also meeting their anti-flaring goals, capturing more than 91% of the natural gas produced at oil wells. That's just within the new, tougher standard which kicks in next month.
The Colorado oil-and-gas industry is ramping up its opposition to proposals that would dramatically increase so-called drilling setbacks. The state is considering raising to 2,000 feet the minimum distance between well sites and homes, schools and other public facilities. The state’s two largest trade groups say the proposal is driven by politics instead of data, science and facts. According to The Denver Post, more than 180 companies sent a letter Friday to the Governor saying the rule would significantly limit where operators can drill and could undermine the industry's economic recovery. The proposal is one of several being considered as the state implements a 2019 law that mandates revamping regulations to prioritize public health, safety and the environment.
Weekly oil-by-rail traffic in the U.S. is up by more than 300 rail cars, but remains more than eleven percent below the totals from a year ago. The Association of American Railroads reports 10,376 tanker cars hauling petroleum or petroleum products during the week ending September 12. The running year-to-date total is down more than 12 percent year-over-year.
Gasoline demand last week dropped for the second week in a row, and reached its lowest level since mid-June. Gasoline supply levels were also lower. Triple-A says the national average pump price for a gallon of regular was just over $2.18 Thursday. That's down two cents on the week and more than 40 cents a gallon cheaper than a year ago. With a statewide average at just over $1.98, Kansas is once again among just a dozen states nationwide with average prices below two dollars. Prices were down to $1.99 a gallon in Great Bend, and as low as $1.89 in Hays. filling up a 15-gallon tank will cost you nearly seven dollars less than it did a year ago at this time.