By JOHN P. TRETBAR
Eagle Media
US crude prices eked out a weekly gain of 14 cents a barrel, with the near-month NYMEX contract for light sweet crude closing the day Friday at $67.18 per barrel, up 63 cents on the day, but still down more than a dollar from the first of the month and nearly three dollars lower than at the first of the year.
Kansas Common crude at CHS in McPherson starts the week at $57.50 per barrel, after gaining 75 cents on Friday. Prices are down $2.50 a barrel from the first of the month, and down $4.50 per barrel from the first of the year.
US crude-oil production rose to the highest level this year and the third highest ever. The Energy Information Administration reports output averaged 13,575,000 barrels per day in the week through March 7. The all-time high over 13.6 million barrels a day was achieved in the first week of December last year. Cumulative production this year averages over 13.4 million daily barrels, up nearly three percent over the same period a year ago.
Annual US Production increased to 13.2 million barrels per day (bpd) in 2024, marking the first time the yearly average has topped 13 million. The government reports output jumped more than 300,000 bpd from the year before and more than two million bpd in the last five years. Texas accounted for 41% of US production, according to the Energy Information Administration report.
Montana surpasses Kansas in annual production for the first time, dropping the Sunflower State to number 13 in the state rankings. Texas tops the list at 5.4 million bpd, followed by New Mexico (2.03M), North Dakota (1.1M), Colorado (471k), and Alaska (420k). Oklahoma is number six (395k), ahead of Wyoming (292k), California (285k), Utah (179k) and Ohio (100k). Next come Louisiana (84k), Montana (74k) and Kansas (73k).
The Kansas Rig Count from Independent Oil and Gas Service rise to 18 active rigs. The tally in eastern Kansas is up one at five rigs, while the count west of Wichita is up one at 12 rigs. Rig counts are up 20 percent from a month ago but down nearly 38% from last year. Drilling was underway Friday on two leases in Stafford County. Operators are drilling two wells in Finney County and are about to spud a third. Drilling continues on a lease in Haskell County.
Friday's Rotary Rig Count from Baker Hughes shows 592 active rigs nationwide, an increase of one oil rig but a decrease of one seeking natural gas. The count in New Mexico was down three rigs from last week. Oklahoma was up two.
Kansas regulators okayed 12 new drilling permits in Kansas last week. That's 136 new drilling locations so far this year. All 12 permits are west of Wichita, including two in Barton County, one in Ellis County, and one in Haskell County.
Independent Oil and Gas Service reports 18 new well completions, with six in Western Kansas including one in Stafford County. That's 251 completions so far this year.
US crude imports are down 343,000 barrels a day from last week to 5.5 million daily barrels. The four-week average is down more than ten percent from a year ago. Product imports are down slightly. Crude and product exports each dropped last week. Crude exports dropped nearly 25 percent. The four-week average is down a million barrels a day from a year ago.
The Energy Department reports delivery of 300,000 barrels of crude for the Strategic Petroleum Reserve, the first such addition in four weeks. The total in the SPR is up to 395.3 million barrels, up 9.4 percent from a year ago.
Commercial crude inventories rose by 1.4 million barrels last week to just over 435 million as of March 7. The Energy Information Administration says stockpiles are about five percent below the five-year average for this time of year.
The government says two years of low natural gas prices and advanced completion techniques have prompted a dramatic reduction in drilling rigs targeting natural gas in the US. The Energy Information Administration and Baker Hughes report the number of active US gas rigs dropped by 32%, or 50 rigs, since December of 2022. The decline has been concentrated in the natural gas plays in Louisiana and the northeastern United States.
The state oil company in Mexico continues to expand operations from its new Olmeca refinery, causing new headaches in US import and export markets. Reuters reports that as refining operations expand, PEMEX is increasingly shifting barrels of heavy crude away from US Gulf Coast refineries. Mexico's government has been working for nearly a decade to wean the country off its longstanding dependence on imported motor fuels. Robust output from the new refinery has also begun to spike PEMEX product exports.