By JOHN P. TRETBAR
Eagle Media
New York crude prices last week dipped to their lowest since April of 2021. The near-month NYMEX contract dropped 95 cents Friday to end the week at $58.29 per barrel, a five dollar loss for the week.
Kansas crude prices also drop to four-year lows. Kansas Common crude at CHS in McPherson starts the week at $48.50 per barrel. The last time prices in McPherson were this low was February of 2021. Kansas prices in April averaged of $52.22 per barrel. That's down six dollars from the average in March and down more than $22 from a year earlier.
The tally of intent to drill notices filed with the Kansas Corporation Commission dropped in April. The KCC web site notes a total of 47 new intents, compared to 94 in April of last year. That's 249 new intents so far this year, compared to 320 by this time last year.
The Rotary Rig Count from Baker Hughes was 584, marking a decline of four oil rigs and an increase of two seeking natural gas. The Texas total drops by three rigs, Ohio is down three, and Louisiana is up three. The active horizontal drilling fleet is down four rigs.
The Kansas Rig Count from Independent Oil & Gas Service is down one in eastern Kansas at seven rigs, and unchanged west of Wichita at 13. The tally is down 13% from last month, and 35% lower than a year ago.
Independent Oil and Gas Service reports 15 newly completed wells, with six in western Kansas. That's 427 completions this year, compared to 406 last year at this time. Drilling permits trail last year by 24%. The KCC okayed ten new drilling locations, 240 so far this year, compared to 318 a year ago.
The Kansas Geological Society recognized and named one new oil field at its meeting April 23. The Juggernaut field is located in Gove County. That makes seven new fields so far this year.
U.S. crude production rebounds from a winter downturn. The latest government numbers show a slight increase in crude production in February, over 13.1 million barrels a day. The Energy Information Administration says Texas production rose 41,000 daily barrels to 5.6 million. That's almost as much as the next 12 states combined. Output in Kansas in February averaged 66,000 barrels a day, according to the EIA report.
Crude-oil exports jumped nearly two million barrels a day in one week to their high for the year, then dropped by 1.5 million the following week. This week they rebound more than half a million barrels a day for a weekly average of 4.1 million.
After dropping every week since April crude oil imports from Canada rose last week to a near high for the month of 3.7 million barrels. Monthly Canadian crude imports have dropped from 661,000 barrels a day in January to 480,000 in April, according to EIA.
As oil prices keep dropping, refills for the Strategic Petroleum Reserve are rising. So are the profits. Shortly after the invasion of Ukraine, we sold some 300 million barrels of crude to tame prices, getting an average price of $95 a barrel. To date we've replaced nearly 200 million barrels, with savings ranging from $15 a barrel for most of last year, to $25 this year, to $35 a barrel at today's prices. The government reported an additional 1.1 million barrels added last week.
The Energy Information Administration says commercial crude inventories dropped by 2.7 million barrels, and are about six percent below the five-year seasonal average.
U.S. crude-oil production increases slightly from last week, but remains below 13.5 million for a fourth consecutive week. EIA reports cumulative output so far this year of 13.49 million barrels which is up three percent from a year ago.
Bloomberg is reporting a shift in focus in Canada from oil to natural gas. New gas well drilling licenses for the first quarter rose 26% to the highest quarterly total in two years. Oil well licenses fell 24% to the lowest in three years. The report attributes the shift to low oil prices and an expected spike in crude production from the OPEC-Plus exporters.
According to the International Energy Agency, Canada is the world’s fourth-largest oil producer and the fifth-largest producer of natural gas. Nearly all of its oil and much of its gas is exported to the U.S.