By JOHN P. TRETBAR
The Kansas benchmark closed out the month of August with an average price of $57.96 per barrel, the best August average in three years. Kansas prices are 20 dollars a barrel higher than at the first of the year. Prices at CHS in McPherson dropped 75 cents on Friday, but Kansas Common remains 75 cents a barrel higher than a week ago to start the week at $59.50 per barrel.
The U.S. Coast Guard said on Monday it was investigating nearly 350 reports of oil spills in and along the U.S. Gulf of Mexico in the wake of Hurricane Ida. The storm wreaked havoc on offshore oil production platforms and onshore oil and gas processing plants. About 88% of the region's offshore oil production remains shut, and more than 100 of the area's production platforms remain unoccupied, more than a week after Ida made landfall on Aug. 29.
The government loaned a large amount of crude oil from the Strategic Petroleum Reserve to Exxon Mobil. According to a report from Reuters, The U.S. Energy Secretary authorized the loan of 1.5 million barrels of crude oil to a refinery in Louisiana, to keep the gasoline flowing in the aftermath of Hurricane Ida.
Baker Hughes reports the Rotary Rig Count was 497 rigs Friday, down 16 oil rigs. The count in Louisiana was down 14 rigs. Oklahoma and New Mexico were each up one.
Independent Oil & Gas Service reports eight active drilling rigs in eastern Kansas, which is unchanged for the third week in a row. In Western Kansas, the count is down one at 25 active rigs. Operators in Barton County have reached total depth and are evaluating four wells. They're about to spud a new well on a lease in Stafford County, where two other drillers report reaching total depth.
Regulators okayed 17 new drilling locations across Kansas last week, five in eastern Kansas and 12 west of Wichita, making 677 new permits so far this year. Independent Oil & Gas Service reports 14 newly-completed wells across Kansas last week, 542 so far this year.
OPEC and its allies last week agreed to stick to their existing policy of gradual oil output increases, despite increasing demand and ongoing U.S. pressure for faster increases. The OPEC-Plus oil exporters are increasing output by 400,000 barrels per day per month.
The government reported declining U.S. crude inventories for the third week in a row. The Energy Information Administration reports stockpiles totaled 425.4 million barrels, an increase of more than seven million barrels. EIA said U.S. inventories are about six percent below the five-year average for this time of year. In a weekly report, EIA said gasoline stockpiles increased last week by 1.3 million barrels, and are currently about two percent below the five-year seasonal average. U.S. crude-oil imports rose 183,000 barrels to 6.3 million barrels per day. EIA said the four-week average is nearly 14% higher than the same period a year ago.
Crude production in the United States increased slightly. For the week through August 27th, output averaged just over 11.5 million barrels, marking an increase of 81,000 barrels per day over the week before. EIA says production is nearly two million barrels per day higher than in the same week last year.
A government report shows U.S. crude-oil production for the first half of the year is down nearly seven percent compared to last year. The Energy Information Administration says U.S. output for the first six months of 2021 averaged 10.92 million barrels per day, compared to 11.7 million last year at mid-year. Kansas output for January through June was 74,571 barrels per day. That's down nearly two percent from just over 76,000 barrels per day last year.
EIA said U.S. output for June was over 339 million barrels, or 11.3 million barrels per day. That's down about 5,000 barrels per day from May's output. Texas retains the top spot with production in June of nearly 4.8 million barrels per day, or 42% of total U.S. output. For the fourth month in a row, output in New Mexico beat North Dakota's totals and is once again the number-two crude-producing state. June output in Kansas totaled 2.3 million barrels, or nearly 78,000 barrels per day.
The government said gasoline prices across the country rose to their highest Pre-Labor Day levels since 2014. EIA said Prices rose 92 cents or 42% compared to last year.
Oil-by-rail shipments across the U.S. and Canada accelerated last week. The Association of America Railroads reports 10,878 tanker cars hauling petroleum across the U.S. during the week through August 28th. That's up 570 cars from the week before, and a 6.4% increase over the same week last year. Canadian oil-by-rail is up 269 cars over last week and up 62% over last year. AAR reports total rail traffic of all cargo was down slightly last month. Carload counts were up but intermodal shipments was down more than three percent.