By JOHN P. TRETBAR
U.S. crude prices are holding steady at their highest levels in a year. By midday Monday, the benchmark Nymex futures contract was down three pennies to $52.24 per barrel. London Brent was up six cents to $55.47.
Kansas crude prices dropped a dollar on Friday but remain above $40 a barrel for a second straight week. Kansas Common crude at CHS in McPherson is fetching $42.50 per barrel, unchanged from a week ago but nearly four dollars higher than at the first of the year.
Independent Oil & Gas Service reported a slight dip in its Kansas Rig Count last week. There were four active drilling rigs in eastern Kansas, down one, and seven west of Wichita, which is also down one. Baker Hughes reported a slight increase in the national rig count. Texas reported an increase of six rigs while New Mexico was down five.
Regulators across Kansas approved 12 new drilling permits last week. There were 14 newly-completed wells last week including a development well in Stafford County.
U.S. crude inventories increased 4.4 million barrels in the latest weekly government report. The Energy Information Administration says inventories are about nine percent above the five-year average.
Crude oil in storage at the Cushing hub dropped two percent. For the week ending January 8th, the latest week available, Cushing was at 73% of capacity.
U.S. crude production dropped by about 5,000 barrels per day last week, but for the seventh week in a row remained above eleven million barrels per day. That's down from just below 13 million barrels per day a year ago.
EIA said U.S. crude-oil imports averaged six million barrels per day last week, down by 194,000 barrels per day from the previous week. The four week average is 11.8% less than average imports during the same four-week period last year.
U.S. oil-by-rail deliveries last week reached their highest level in about a year, at 12,437 tanker cars. That's down about two percent from a year ago, but up more than 1,000 rail cars from the week before.
President Joe Biden made good on a campaign promise and revoked the permit granted earlier to the Keystone pipeline expansion. The pipeline operator, TC Energy, said earlier it would eliminate more than 1,000 construction jobs and halt construction work. Coming as it does after more than a decade of legal battles and shifting fortunes, Reuters calls the President's announcement the death knell for the project. Analysis published by Bloomberg suggests the Keystone decision is the clearest sign yet that building a major new oil pipeline in the U.S. has become impossible.
The government is predicting a downturn in coming weeks in the nation's shale-oil production, even as it continues to predict near-term increases. In a report Tuesday, EIA estimated January shale production would reach 7.6 million barrels per day, slightly better than previous estimates. But the government still expects output to drop by 89,000 barrels per day from January to February, with all seven major shale plays posting declines. Shale production accounts for roughly two-thirds of U.S. output.
The world's largest fracking services provider has deployed the industry's first-ever fracking operation powered directly from the local electrical grid. The process has evolved over the last several years, beginning with pumps powered by diesel engines and more recently using electric motors powered by natural gas. Now Halliburton is plugging those motors directly into the grid, in an operation for Cimarex Energy. According to an announcement from the service company, the operation has completed nearly 340 fracking stages across multiple wells.
The world's 5th largest oil company is aggressively moving away from fossil fuels and toward carbon neutrality. Reuters calls the BP's transition under CEO Bernard Looney a "climate revolution." The company is cutting 10,000 jobs, about 15% of its workforce, and plans to cut crude output by one million barrels per day, or 40%, over the next decade. They hope to increase renewable energy output 20-fold.
The French oil giant Total has taken a hard-line pro-green stance on climate change, asserting climate change linked to human activity is, in their words, an "established fact." Earlier this month, Total, the seventh-largest oil company in the world, pulled out of the American Petroleum Institute. The oil company says it disagrees with the U.S. trade group on methane emissions, subsidies for electric vehicles, and other environmental issues.
The feds are investigating the way Exxon Mobil has valued its assets in the Permian Basin. The U.S. Securities and Exchange Commission is looking into a whistle-blower complaint asserting the West's largest oil company inflated the value of Texas assets, according to reporting in the Wall Street Journal. The probe comes after the commission has been largely silent on rosy industry projections, which left hundreds of billions of dollars in investor losses and write-downs. One analyst pegs the losses at $450 billion of invested capital and more than 190 bankruptcies between 2010 and 2020. The company denies the claims, but its stock fell as much as 6%.