BY JOHN P. TRETBAR
The benchmark Nymex crude futures contract settled Friday just over $85 a barrel, but by lunchtime Monday prices were down slightly. Midday prices were just over $84 a barrel in New York for the near-month contract. London Brent was just under $93.
Kansas crude prices dropped a dollar Friday. Prices are about half a dollar lower on the week, but $5.50 higher than on Oct. 1. Kansas Common crude starts the week at $75.25 per barrel at CHS in McPherson.
Diesel prices in Kansas average $5.14 per gallon Monday, up eleven cents from a week earlier, 46 cents from a month ago, and $1.76 more than last year at this time. Current diesel prices in Kansas are just 23 cents shy of the all-time high. Regular gasoline prices continued to drop. In Kansas, the average price for a gallon of regular was $3.42 according to AAA.
The Energy Information Administration last week reported an increase in diesel fuel inventories and deliveries. But, current diesel stockpiles remain 20% below the five-year seasonal average. Total gasoline stockpiles dropped by 100,000 barrels from the week before, and are about seven percent below the five-year average.
EIA reported a big drop in crude stockpiles, but an increase in U.S. production. Inventories were down 1.7 million barrels to 437.4 million barrels as of October 14th. EIA reports a 76,000 barrel-per-day increase in last week's domestic crude-oil production, which is once again over 12 million barrels per day. Imports were down 200,000 barrels per day to 5.9 million.
The Kansas Rig Count held steady at 27 active rigs east of Wichita and 32 in the western half of the state. Drilling was underway Friday on a well in Stafford County, and operators were about to spud new wells in Ellis and Russell counties. Kansas operators have spudded 1,261 wells so far this year, a 51% increase over last year at this time. Independent Oil & Gas Service is scouting 500 wells currently in various stages of drilling or completion.
Kansas regulators approved 27 new drilling permits over the last week, nine in eastern Kansas and 18 west of Wichita. That's 1,333 new drilling locations statewide so far this year, compared to 869 by this point last year. Independent Oil & Gas Service reports 37 newly completed wells for the week, 22 east of Wichita and 15 in Western Kansas. That's 1,293 so far this year compared to 697 a year ago.
Crude output from the #3 producing state held steady in August at 1.07 million barrels per day. The North Dakota Department of Mineral Resources reports operators continue to exceed the state's anti-flaring standards, capturing 94% of the natural gas produced at oil wells.
Texas became the first state in the nation to begin plugging abandoned oil and gas wells using federal grants from the Infrastructure Investment and Jobs Act. Plugging work began last week on an abandoned oil and gas well northeast of Corpus Christi in South Texas. The state's energy regulator, the Railroad Commission of Texas, announced they will used the initial grant to plug about 800 abandoned wells statewide. That's in addition to the 1,000 wells they plan to plug in their State Managed Plugging program, which is funded with industry fees and fines.
A government report shows the nation's shale producers are slowing down the completion of wells from their inventories of wells drilled but uncompleted (DUC). The Energy Information Administration says its tally of at 4,333 DUCs in the seven largest plays is down ten wells from the month before. The tally dropped in five regions. Increases were posted in the Haynesville Shale in Texas and Louisiana, and the Niobrara play in Colorado, Nebraska and Wyoming. Government analysts use the DUC inventory as a barometer of our ability to quickly raise crude production.
Exxon Mobil completes its exit from Russia, following what it calls "the expropriation." The company complains the Russians unilaterally terminated the company's interests in the Sakhalin-1 project and transferred them to a Russian operator. The project is a giant, complex operation that produced about 227,000 barrels a day last year. It has multiple records for the longest wells ever drilled, uses ice breakers to maintain exports when the sea freezes, and was regarded as an engineering marvel when it first started pumping in 2005. Exxon announced its intentions to withdraw shortly after Russia's invasion of Ukraine.