By JOHN P. TRETBAR
Crude futures prices inched upward from seven-year highs Monday. The settlement price on Friday for Nymex benchmark crude was $86.82 per barrel. That's up nearly two dollars on the week and about ten dollars a barrel higher than at the first of the year.
The last time the international crude-oil benchmark traded above $91 a barrel was in early October 2014, at the beginning of a long slide in prices. Monday morning on the ICE in London, Brent crude was fetching $91.14 per barrel.
Kansas Common crude is about $12 higher than at the first of the year and up more than $34 a barrel from a year ago. Prices at CHS in McPherson start the week at $77 a barrel.
Statewide drilling activity, based on spudded wells, is slightly ahead of last year in Kansas. Independent Oil & Gas Service says the 60 wells spudded thus far in 2022 outpace last year by 21 wells. There are 30 active operators in the state, compared with 26 at this time last year. The Rig Count in Kansas is up one rig in eastern Kansas to 17, and up one west of Wichita at 26. Operators were preparing to spud one well in Barton County and two in Ellis County. Drilling was underway on a lease in Russell County.
Kansas regulators approved 14 new drilling locations across the state last week. There are six new permits in eastern Kansas, and eight in the western half of the state, including one in Ellis County. Independent Oil & Gas Service reports 32 newly completed wells in Kansas, 17 east of Wichita, and 15 in western Kansas.
US crude inventories reached 416.2 million barrels as of January 21st, an increase of 2.4 million barrels. The Energy Information Administration said stockpiles are about eight percent below the five-year seasonal average. The government report contradicts weekly numbers from the American Petroleum Institute, which reported a drawdown in supplies.
US crude production declined last week for the third consecutive week. The government reported we pumped just short of 11.65 million barrels per day in the week through January 21st, which is down about 6,000 barrels per day from the week before. Output is more than one and a half million barrels per day higher than the same period last year.
Pump prices are on the rise nationally but dropping locally. The auto club AAA says the national average price for a gallon of regular rose three cents over the last a week to just over $3.36 per gallon. Prices in Kansas rose to an average just shy of $3.07. It dropped under $3.00 a gallon at several outlets across Hays and Great Bend. The average cost for a 15-gallon fill-up is nearly two dollars higher than a month ago.
Oil-by-rail traffic last week was down amid a ten percent drop in total rail traffic. The Association of American Railroads reports 9,608 carloads of petroleum rolling the rails in the week through January 22nd. That's down 174 cars from the week before and more than 23% lower than a year ago. Canadian traffic we\as down more than 1,000 carloads for the week, marking an 11% drop year-over-year.
Researchers at the University of Oklahoma are rolling out a project to repurpose abandoned oil and gas wells to provide geothermal energy to heat nearby public schools. Under the project funded by the Energy Department, they hope to bring hot, underground water to the surface to create steam to rotate turbines. The project still requires proof-of-concept and field work (about three years) before they can roll it out publicly. DOE awarded $1.7 million to fund the research.
OPEC and its Russia-led partners have promised to increase oil production to pre-pandemic levels this year. But The Wall Street Journal reports they are falling short of those public commitments, and that's stoking fast-rising global crude prices. Last month, the OPEC-Plus group increased output by just 60% of what they promised for the month. The International Energy Agency reports the group is pumping 790,000 barrels per day below its publicly-stated targets.