John P. Tretbar
News from the Oil Patch
Crude inventories reach historic lows just as production reaches historic highs. US Crude-oil production increases slightly to the highest level in five months, and the tenth highest weekly average ever. The Energy Information Administration reports weekly production over 13.8 million barrels a day for the first time since January 5th. The four-week average is up more than two percent to it's highest level since the last week in January.
EIA reports commercial crude inventories dropped by more than eight million barrels to just over 418 million, the lowest weekly report since last autumn. Stockpiles are about six percent below the five-year average for this time of year.
International price-dampening efforts continue, as US strategic crude inventories drop nine million barrels this week to 340-million. The US Strategic Petroleum Reserves are down 62 million barrels or 15 percent from a year ago.
The International Energy Agency is now warning of a possible supply glut should the Strait of Hormuz fully reopen soon. IEA suggests that would be a great time to refill strategic stockpiles.
Total US imports crude imports dropped nearly 13 percent to just over five million barrels a day. US crude oil exports drop by half a million barrels a day to just over 4.3 million.
The Rotary Rig Count across the US from Baker Hughes is up one gas rig to 563. The tallies at each of the major shale basins were unchanged. Compared to last year, the total is up nine rigs. The gas count rises by eleven and the oil rig count drops by five.
The Kansas Rig Count is up one in eastern Kansas at six rigs, but down three at eight rigs west of Wichita. Independent Oil and Gas Service on Friday reports drilling underway or about to get underway on leases in Ellis, Finney, Gove and Haskell counties.
Kansas regulators okay three permits for new drilling locations in Gove County, and two in Ness County, out of nine in Western Kansas this week. The 362 new drilling permits approved so far this year outpace last year by 14 percent.
Operators in Kansas have drilled 333 wells from spud to full depth so far this year. That's down 73 well or 18 percent from a year ago. Total footage drilled is down 32 percent. Add 29 newly completed wells this week. Independent Oil and Gas Service reports 20 new completions east of Wichita, including eleven in Franklin County. The nine wells in Western Kansas include service wells in Barton and Finney counties, and two oil wells in Rice County.
Kansas Common crude at CHS starts the week at sixty-six seventy-five ($66.75) a barrel. That's down from $75 a barrel a week earlier. and down from more than $82 per barrel on the first of June. The average in McPherson so far in June is just over $73, compared to just over $88 for all of May.
The latest reporting from the Kansas Geological Survey reflects statewide output of 66,000 barrels a day, compared to over 67-thousand by the end of February last year. Ellis County produced 5,395 barrels a day in January and February, which is up from a year earlier by 147 barrels a day. Haskell County, the number-two producer in the state, pumped 48-hundred daily barrels, up by nearly four hundred. Finney County at third drops 200 barrels a day to 38-hundred. Barton County drops about four-thousand barrels a day to just under 35-hundred. Russell County was down by 20 barrels a day to 2150. Stafford County also drops slightly year-over-year, to just over 21-hundred barrels a day. Other top producers include Rooks county at over 32-hundred barrels a day, Ness County at 28-hundred, Butler County at 18-hundred, and Rice County at more than 13-hundred barrels a day.
In the number-three crude-producing state, the number of producing wells drops by one well from highest tally ever. But the record for longest lateral well just got longer, according to the latest from the North Dakota Department of Mineral Resources. Crude production drops to 1.13 million barrels per day Operators continue to extend their reach horizontally. The state reports average lateral footage reached an all time high of over two and a half miles. Natural gas production is slightly higher, but so is the amount natural gas burned off at oil wells, which jumps 25 percent. The statewide rate of natural gas captured at oil wells drops to 95.5 percent.