Corrected
By JOHN P. TRETBAR
U.S. crude prices posted their sixth consecutive loss on Friday, with the near-month contract for light sweet crude on the Nymex settling at $66.26 per barrel. That's down nearly two dollars from a week earlier and more than $17 lower than the settlement price on October 25, the last time weekly prices rose.
Crude traders took an optimistic turn on Monday, with prices rising more than two percent in New York and London. The benchmark Nymex contract gained $1.61 to $67.87 per barrel in mid-morning trading Monday. London Brent was up $1.69 to $71.57.
The OPEC-Plus group of crude-oil exporters opted to continue with their gradual output increases next month, and the Saudis have raised prices again. CEO Amin Nasser of Saudi Aramco said last week the market has overreacted to the new Omicron variant of the COVID virus. According to a Bloomberg report, Nasser said he was "very optimistic about demand."
Kansas Common crude at CHS in McPherson dropped a quarter per barrel on Friday (12/3), and will start the week at $56.50 per barrel. That's down two dollars a barrel from a week ago. Kansas Common started the month of December nearly twenty dollars lower than the month before. The average price for the month was just over $68.34 per barrel, about $37 a barrel higher than a year ago.
Independent Oil & Gas Service reports drilling activity in Kansas is up more than 87% compared to last year at this time based on the number of new wells spudded. For the first 48 weeks of the year, there are 983 new wells, compared to just 524 during the same week in 2020. The number of active operators in the state is up more than 40% at 233.
Independent Oil & Gas Service reports 15 active drilling rigs in eastern Kansas, which is up one for the week, and 27 west of Wichita, which is unchanged. Drilling is underway at one well in Barton County and one in Ellis County. Operators were about to spud new wells on one lease in Ellis County and one in Stafford County.
The weekly Rotary Rig Count from Baker Hughes shows 569 active drilling rigs, which is unchanged from last week in the aggregate. But the state count in New Mexico was up five while Texas and Louisiana were each down two.
Kansas regulators last week approved 25 new drilling permits, 16 in eastern Kansas and nine west of Wichita, including two in Barton County. There are 1084 new drilling locations on the books so far this year in Kansas.
Operators in Kansas completed 25 new wells last week, 865 so far this year. There were 15 new well-completions in eastern Kansas and ten in the western half of the state, including one in Stafford County.
State regulators reports new intent-to-drill notices are down for the month but well above the total a year ago. The Kansas Corporation Commission says 133 new intents were filed in November, compared to 159 in October, and just 41 in November of 2021 bringing the total so far this year to 1,160. That's more than double the total of 509 filed through November of 2020. There are 10 new intents on file in Barton County, three in Ellis County, one in Russell County and two in Stafford County.
Oil-by-rail traffic in the U.S. declined for the 12th consecutive week. The Association of American Railroads reports 8,934 carloads of petroleum and petroleum products rolling the rails during the week through November 27th. That's down nearly 15-hundred tankers from the week before, and a 1.5% decrease year-over year. Canadian totals increased by about 500 carloads from the week before, but are down more than three percent year-over year Total domestic rail traffic was down nearly five percent for the week. The trade group says total monthly freight traffic in November increased in 15 of the 20 categories they track. Senior Vice-President John Gray says coal is leading the way, with year-to-date carload totals up more than eleven percent. That's nearly 306,000 carloads more than last year at this time. Gray says the main driver for coal is natural gas prices, which have doubled in the last year.
Critics are blasting regulators of the oil-and-gas industry in Texas for new rules aimed at preventing a repeat of last February's deadly freeze. The Railroad Commission of Texas adopted the new rules last week, but they won't be implemented in time for this winter, and the state is still at risk of blackouts. The February storm led to one of the biggest power outages in U.S. history, knocking out electricity to more than 4 million customers and leading to hundreds of deaths. Some homes were left without heat and water for days.
CORRECTED, 12:40 p.m. Dec. 7: Our reporting was incorrect. A recent natural-gas rate increase approved by regulators in Oklahoma was not in fact related to the cold snap in February. The Oklahoma Corporation Commission is considering a cost-recovery case related to the winter weather events of last February which is still pending. But that case is not about rates, and is unrelated to the rate increase referenced in the report. We regret the error.