By JOHN P. TRETBAR
Eagle Communications
Crude prices dropped nearly two dollars on the week, settling in New York on Friday a penny over $78 a barrel. Prices are up more than six dollars since the first of the year. By midday Monday prices were a few cents higher. London Brent was trading over $82 by lunchtime.
Kansas crude prices are down two dollars since the first of the month, but are more than eight dollars higher than at the first of the year. Kansas Common crude at CHS in McPherson starts the week at $68.25 per barrel, after dropping a dollar a barrel on Friday.
For the past six years, U.S. crude production has been the best anywhere, ever. Operators here set a worldwide record last year with an annual average of 12.9 million barrels per day. Monthly average production topped 13.3 million barrels per day in December, which is also an all-time record.
A new report from the U.S. Energy Information Administration suggests those records are not likely to be broken in any other country, at least not anytime soon, because no other country has reached production capacity of 13 million barrels a day.
The next two biggest producers, Russia and Saudi Arabia, have both reduced output under the OPEC-Plus group's efforts to prop up prices. Both are producing around ten million barrels a day. The Saudis recently scrapped plans to dramatically increase capacity.
Independent Oil & Gas Service reports what it calls a "sluggish start" to this year's drilling activity in Kansas, due in part to price uncertainty and the lack of new drilling applications. The weather has also played a dramatic role so far this year. Drilling was underway Friday on a lease in Stafford County, and was about to resume on leases in Barton and Ellis counties. The Kansas Rig Count shows eight drilling rigs in eastern Kansas that are either scheduled, moving to, or currently on a drilling site. That's up two from last week. There are 15 active rigs west of Wichita, which is also up two. The tally is up 44% from a month ago and 40% higher than last year at this time.
Independent Oil & Gas Service reports eight newly-completed wells for the week. That's 167 so far this year, compare to 416 by this time last year. Kansas regulators okayed 21 permits for drilling at new locations. Stafford County records its first new drilling permit of the year, among 15 in western Kansas.
Baker Hughes reported 622 active rigs nationwide, marking declines of two rigs seeking oil and four seeking natural gas. The tally in Texas dropped by eight rigs. New Mexico was up three.
Intent to drill notices are up slightly compared to a year ago, but the latest production figures are lagging. Kansas operators filed 70 intent-to-drill notices in February, 144 so far this year, which is up slightly compared to the 119 intents filed through February of last year. We spotted one new intent in Barton County, which makes two so far this year. Ellis County posted its first two intent notices of the year last month.
The latest tally from the Kansas Geological Survey shows the state's crude oil production last year lagging behind the year before by 500,000 barrels. All but two of the top ten producing counties saw declines in production in the first 11 months of the year, the latest totals available.
Ellis County remains at number one in the state rankings but was down more than 36-thousand barrels from the same total a year earlier. At number two, Haskell County was down nearly 60-thousand barrels. Barton County was up year over year, pumping 1.36 million barrels, which is an increase of nearly 38-thousand barrels. Finney County also posted an increase with 1.27 million barrels. Russell and Stafford counties each posted slight declines. Output in Russell County topped 1.2 million barrels through November '23 while Stafford County pumped over 800,000 barrels.
The government reported a slight dip in U.S. crude production last week. The Energy Information Administration said output averaged 13,236,000 barrel per day in the week ending March 1. That's down 96,000 barrels a day from the week before, but up nearly than a million barrels a day from a year ago.
Domestic crude inventories increased by 1.4 million barrels to more than 448 million barrels as of the first of March. Stockpiles are about one percent below the five-year average for this time of year.
Crude exports last week dropped to just over 4.6 million barrels a day. Energy Information Administration said crude imports increased by 837-thousand barrels to 7.2 million barrels per day. Four-week average imports are nearly seven percent higher than a year ago.