By JOHN P. TRETBAR
Eagle Communications
Following a nine percent weekly decline last week, Monday's prices for Nymex, near-month light sweet crude was up nearly five percent, gaining $3.84 to $86.63 per barrel.
Friday's price for Kansas Common crude at CHS was $73 a barrel, down $8 from the first of the month. Kansas Common ended the month of September at $81 a barrel. The average for the month was a fraction below $80. That's up ten percent from the September average of $71.69 per barrel. September prices in McPherson were up nearly seven percent from a year ago.
The auto club AAA says slack demand and falling costs have trimmed your gasoline expenses. The national average pump price is down a nickel from a month ago at $3.76 per gallon. Prices in Kansas are seven cents lower than last month, at $3.56 per gallon. Local fill-up cost for a 15-gallon tank were slightly lower, but remained about six dollars higher than six months ago.
U.S. crude-oil inventories dropped by more than two million barrels from the ten-week lows set last week to just over 414 million barrels as of September 29. The Energy Information Administration says crude stockpiles nationwide are about five percent below the five-year average for this time of year. Stockpiles at the storage hub in Cushing, Oklahoma were actually a little higher for the first time in eight weeks.
U.S. operators pumped more than 12.9 million barrels per day for the fourth week in a row. The government said domestic output is up 4,000 barrels per day from week ago and nearly 900,000 barrels per day ahead of a year ago.
Crude-oil imports dropped by 730,000 barrels per day last week to just over 7.9 million bpd. The four-week average is up 2.7% from last year at this time.
The weekly Rotary Rig Count from Baker Hughes has declined with few interruptions for months, and has now reached it's lowest total since February of last year. The oil-rig tally on Friday was down five active rigs. The count in Texas was down seven rigs, while New Mexico was up four. Oklahoma was up two rigs.
The Kansas Rig Count from Independent Oil and Gas Service was unchanged from last week at 12 active rigs east of Wichita and 25 in western Kansas. The tally is up 2.8% from last month and down 36% from last year. Drilling was underway Friday on leases in Barton and Ellis counties.
Kansas operators completed 38 wells last week, five of them in Western Kansas. That's 1,314 well-completions so far this year statewide, which is up 77 wells from the total a year ago. Independent Oil and Gas Service reports 40 new drilling permits, with ten in western Kansas including two in Barton County and three in Ellis County. Total new drilling locations so far this year outnumber the tally from a year ago by 169 permits.
Russia’s President Vladimir Putin has ordered the regulation of fuel oil prices for the heating season in Russia. Moscow’s ban on exports of gasoline and diesel will remain in place for as long as necessary, according to reporting by Reuters.
Saudi Arabia and Russia reaffirmed that they will stick with oil production curbs of more than one million barrels per day until the end of the year. The leaders of the OPEC+ coalition announced the plans in separate official statements last week. Riyadh has slashed crude oil production by a million barrels per day, and Moscow is curbing exports by 300,000 barrels per day, on top of earlier cuts made with fellow OPEC+ exporters.
Despite some big projects getting the green light, the Biden Administration is slamming the brakes on a lot of oil-and-gas production on public lands. The Interior Department announced steps to thwart oil development from the remote reaches of Alaska to the open seas off U.S. shores. They're canceling leases to drill in the Arctic National Wildlife Refuge that were sold during the Trump Administration. That initiative will not affect existing leases in the reserve, including ConocoPhillips’ gigantic new Willow project. Oil industry leaders and their allies on Capitol Hill argue the administration is unfairly constraining development in the reserve, which is about the size of Indiana and was set aside by President Theodore Roosevelt in 1903.
The administration is also cutting back on offshore lease auctions. Officials released plans last week for three auctions of offshore drilling rights over the next five years. Bloomberg reports the leasing program offers the fewest auctions ever offered since the government started planning them in five-year blocks.
The government released monthly crude-oil production stats for July, showing the second-best national output ever, at 12,991,000 barrels per day. That's the best monthly average since the all-time high nearly four years ago. Texas led the way with output of more than 5.6 million barrels per day, which is an all-time record.
The report shows Kansas output of 74,000 barrels per day in July, which is down slightly from June. Kansas ranks 12th in the list of crude-producing states in July. The top five are Texas, New Mexico, North Dakota, Colorado and Oklahoma.
Oil-by-rail traffic was up by 262 tanker car-loads compared to the week before, at 10,169 tanker carloads. The Association of American Railroads says that's a nearly ten percent increase over the same week last year. Association of American Railroads reports overall rail traffic in September was up 1.5 percent over a year ago. The trade group says shipments of petroleum and petroleum products was one of 13 cargo categories that posted gains last month, up 16.6% year-over-year.
Electricity demand reaches its second highest peak ever. On July 27, 2023, peak hourly electricity demand in the continental United States reached 741,815 megawatt-hours. The Energy Information Administration says this peak was the second highest since the agency began tracking demand seven years ago. Energy Information Administration says the all-time high, the peak peak, was over 742,000 megawatt-hours, set on on July 20, 2022.