By JOHN P TRETBAR
News from the Oil Patch
Loosening the rules for ships traveling port-to-port in the United States has led to a spike in petroleum shipments between those ports.
Since March, the government has waived enforcement of the Jones Act, which requires commerce between US ports be conducted on US-flagged ships owned and crewed by US citizens. According to the Energy Information Administration, April and May petroleum shipments from the Gulf Coast to the West Coast more than quadrupled, from 30,000 to 190,000 barrels per day.
That's more than double the previous, pre-waiver record. Shipments from the Gulf Coast to the East Coast set a record 1.2 million barrels per day, which is 11% higher than the pre-waiver record. Prices averaged $82 a barrel when we started, rose over $108 in May, and they closed Monday a penny over $85.
After swapping more than 121 million barrels from the Strategic Petroleum Reserve into the marketplace, our contribution to hold down war-related price spikes has had mixed results. The latest swap of 5.3 million barrels leaves about 55 million barrels in the US commitment to the International Energy Agency.
The Strategic Petroleum Reserve is now down to 293 million barrels, less than half it's full authorized capacity over 727 million barrels.Stockpiles at Cushing remain above the minimum operational capacity, or tank bottom, for a third week, after dropping below that level for several weeks.
Cushing inventories drop to 21.3 million barrels. The Energy Information Administration reports commercial stockpiles nationwide rise four million barrels to 429 million as of August 14.US crude-oil production rises slightly to the seventh best weekly average ever, 13,830,000 barrels per day.
That's up nearly half a million barrels from a year ago. The four-week average remains over 13.8 million, up nearly four percent from a year ago.Baker Hughes this week reports 588 active drilling rigs, reflecting a drop of three oil rigs and one gas rig.
The Rotary Rig Count shows Texas up four rigs from last week, and up 41 rigs from a year ago. New Mexico and Louisiana are each down three rigs this week. Wyoming is down one.The Kansas Rig Count is up one rig in Western Kansas. With 22 active rigs this week the tally is up 22 percent from a month ago and 46 percent from a year ago. Independent Oil and Gas Service reports drilling underway or about to begin Friday on two new wells in Ellis County, along with new wells in Finney, Stafford and Ness counties.
Operators in Kansas Complete 18 wells this week. Independent Oil and Gas reports 13 new well-completions in eastern Kansas, and five west of Wichita, including one new disposal well in Russell County. That's 533 wells so far this year, down from nearly 800 a year ago. New drilling permits in Kansas continue to outpace last year, among the only improving drilling metrics in the oil patch.
Regulators add 22 drilling locations this week, or 497 so far this year. A year ago the running tally was 458 permits. There are 13 new permits east of Wichita this week, and nine in Western Kansas, including two in Finney County, one in Gove County and one in Stafford County.US crude-oil exports surpass four million barrels a day for the first time in a month. The tally is up from three million barrels a day last week, but down 400,000 barrels from a year ago.
Total petroleum exports surpass 12 million barrels a day for the first time in two months. US crude imports drop three-quarters of a million barrels to 6.6 million barrels per day. The four-week average is 6.5 million barrels a day, slightly higher than the same four weeks last year. Crude imports from Canada drop 13 percent from a week ago to just over 3.8 million barrels a day. Shipments from Brazil rise 50 percent to surpass 300-thousand barrels a day for the first time since May and only the third time this year.
Colombian crude shipments to the US drop from nearly 200,000 barrels per day to zero, as that country deals with widespread earthquake damage.Crude production in North Dakota rises 2.5 percent in June to more than 1.15 million barrels per day.
The total number of producing wells in the number-three producing state jumps to an all time high, again, to 19,961 wells, up 129 wells from the last record the month before. The Department of Mineral Resources reports natural-gas production is up one-point-six percent. North Dakota flared less gas at its oil wells, raising the gas-capture rate to 95.5 percent.