By JOHN P. TRETBAR
Eagle Communications
The government says record U.S. crude production will continue to grow next year. The Energy Information Administration forecasts a one-million barrel per day increase in U.S. output next year. Current output averages over 13 million barrels per day, an all-time high.
The Energy Information Administration's Short Term Energy Outlook says production cuts by the OPEC-Plus export group will offset growth elsewhere. That should help maintain what the government called a "relatively balanced" global market. The Energy Information Administration also forecasts a drop in domestic gasoline use. If our gasoline consumption matches the forecast, it would mark the lowest per capita consumption rate in twenty years.
A monthly report from OPEC acknowledges dramatic U.S. supply growth, and forecasts increased growth in oil demand within and outside the cartel's customer base. The Monthly Oil Market Report increases its expectations for demand through the end of this year, and predicts steady growth in demand next year. OPEC reports the lowest U.S. imports since December, and the highest U.S. exports since March.
Record high production is tracking alongside record high wages and unemployment in the U.S. oil patch. Wages for front-line oil-and-gas workers rose for a third straight month in September to a new record: $43.63 per hour. Citing data from the Labor Department, Bloomberg reports take-home pay in the patch is up 5.7% over a year ago. The unemployment rate in oil and natural gas jumped to 6.1% in October compared to less than 1% (0.8%) a year earlier. This is the second time this year that oil patch unemployment rose above 6%.
The benchmark Nymex futures contract settled Friday at $77.17 per barrel, up more than a dollar on the day. But in the last week the price is down more than three dollars, in the last two weeks it's down eight dollars, and in the lasts three weeks it's down more than eleven dollars a barrel. In morning trading Monday prices were up more than sixty cents. London Brent rose above $82 a barrel and WTI was just a few cents shy of $78.
Kansas Common crude at CHS in McPherson starts the week at $67.50 per barrel after gaining a $1.50 on Friday. That's down more than three dollars from the start of the month.
The Rotary Rig Count from Baker Hughes stands at 616 active rigs, down two oil rigs from last week. The count in Louisiana was down three. Texas was down two rigs. Oklahoma and New Mexico were each up one.
The Kansas Rig Count from Independent Oil & Gas Service is down one rig in western Kansas and up one east of Wichita. The tally is up ten percent from a month ago, but down more than 26% from last year at this time. Drilling was underway Friday on one lease in Barton County and one in Ellis County.
Kansas regulators report 197 new intent-to-drill notices across the state last month, including five in Barton County and six in Ellis County. The Kansas Corporation Commission lists 1,188 new intents for the first nine months of the year, compared to 1,457 through October last year. So far this year, Barton County has 36 intents on file. Ellis County has 43. Russell County has five and Stafford County adds 24.
Kansas regulators approved permits for drilling at 25 new locations last week, 14 in eastern Kansas and 11 west of Wichita, including one in Barton County. That's 1,140 new permits so far this year, compared to 1,436 a year ago, a drop of about 20%.
Independent Oil and Gas Service reports 52 newly-completed wells across the state, with 33 in western Kansas, including one in Barton County, five in Ellis County and one in Stafford County.
The benchmark Nymex futures contract settled Friday at $77.17 per barrel, up more than a dollar on the day. But in the last week that price is down more than three dollars, in the last two weeks it's down eight dollars, and in the last three weeks it's down more than eleven dollars a barrel. In morning trading Monday prices were up more than sixty cents. London Brent rose above $82 a barrel and WTI was just a few cents shy of $78.
As goes Citgo, so goes Venezuelan refining. It could take several months, but three refineries are included in the upcoming auction of the Venezuelan company Citgo as part of the U.S. move to relax sanctions against that country. According to the Energy Information Administration, the three refineries together account for about five percent of U.S. refining capacity. The refineries are built for the sour, heavy crude grades once supplied by Venezuelan oil fields. On October 23, marketing materials were offered to potential buyers, marking the formal beginning of the process to auction off the company.
Petroleum rail shipments were one of nine cargo categories that saw increases in October according to the Association of American Railroads, which noted an increase of 5,046 carloads or 14.2% over last year. Oil-by-rail traffic for the week through October 28 was up more than 13% over a year ago. At 9,976 tanker carloads, rail shipments increased by 33 carloads over the week before.