By JOHN P. TRETBAR
Crude prices are holding steady, despite some ups and downs within a ten dollar trading range. Futures prices jumped two and a half dollars on Friday to settle at $88.96 per barrel in New York. By lunchtime Monday those prices were down two and a half dollars. WTI in New York was trading over $86. London Brent was over $94 per barrel.
Kansas prices are down from a week ago, but up from the first of the month. Kansas Common crude started the week at $79.25 per barrel after gaining $2.50 on Friday. But on Monday, CHS in McPherson dropped its price to $76 per barrel.
Oilfield activity in Kansas remains about 50% ahead of last year. So far this year, 247 operators have spudded 1,372 wells. Total footage drilled is estimated at 3.8 million feet compared to 2.8 million feet a year ago. Independent Oil & Gas Service is scouting 522 wells current in various stages of drilling and completion. The Kansas Rig Count east of Wichita was up two at 19 active rigs. Western Kansas dropped by three to 30 rigs either scheduled, moving to, or currently on drill sites. Operators were drilling one well and about to spud another in Ellis County on Friday.
Kansas regulators gave the green light to 36 new drilling locations across the state, with 12 in eastern Kansas and 24 west of Wichita, including two in Barton county and one in Ellis County. That's 1,436 new drilling permits so far this year, compared to 991 a year ago.
Independent Oil & Gas Service reports 40 new well-completions in the week through November 10th. That's 1,398 completed wells so far this year, compared to 778 by this time last year. There are two wells in Barton County, one in Ellis County, and two in Russell County among the 28 wells completed in Western Kansas last week.
Baker Hughes reported 779 active rotary drilling rigs across the U.S. Friday, an increase of nine oil rigs. The count in Louisiana was up six rigs; Texas gained four.
The Energy Information Administration reports a big increase in U.S. crude-oil inventories for the week through November 4th. Stockpiles increased nearly four million barrels, after dropping by three million barrels the week before. EIA says domestic inventories are about three percent below the five-year average for this time of year.
Gasoline inventories dropped by nearly a million barrels, and are about six percent below the five year average. Diesel Stockpiles dropped by half a million barrels last week and remain about 17% below the five-year seasonal average.
U.S. crude-oil production increased by 200,000 barrels per day last week, once again rising above 12 million barrels per day.
U.S. oil-by-rail traffic is up three percent over last year. The Association of American Railroads reports 10,323 carloads, up 201 tankers from a week ago and a 3.3% increase over the same week last year. Canadian traffic is down 500 carloads for the week and 8.6% lower than last year.
Diesel prices remain at near-record highs while inventories hold steady at historic lows. A report from the Energy Information Administration cites the benchmark New York Harbor spot prices for ultra-low sulfur diesel fuel. In October, that price averaged $4.36 per gallon, the highest monthly average prices since May of 2022 and the second-highest monthly average on record. Increasing demand and reduced production of diesel fuel contribute to this, but the report primarily blames low inventories both in the U.S. and around the world. U.S. inventories of distillate fuel oil have been below the five-year low since January. Total U.S. diesel inventories have been below the five-year low and more than 20% below the five-year average since April. Another barometer used by analysts is the so-called "crack spread," the difference between the price of crude and the equivalent amount of diesel fuel. October's crack spread marked an all-time high at $2.14 per gallon in October, compared to $1.61/gallon in October last year.
Russia has started swapping oil products with Iran, the latest sign of deepening ties between the two sanctioned countries pushed closer by Russia’s war in Ukraine. Bloomberg cites an Interfax report attributed to the Russian Deputy Prime Minister, who said the range of swapped products will be expanded. The news came after a meeting with Iran's Oil Minister. The talks also covered potential Russian participation to increase Iran's oil production, the development of ports, and an international north-south freight corridor connecting Russia to India via Iran.
Saudi Arabia has established a carbon-capture sequestration center, as the state oil giant seeks to reach its goal of net-zero emissions by the year 2060. The center will be located on the east coast of Saudi Arabia. Bloomberg reports the hub could store up to 9 million metric tons of CO2 every year within the next five years.