By JOHN P. TRETBAR
Crude prices retreated from three-month highs after China warned of an "explosive" outbreak of COVID-19. By midday Monday, the benchmark futures contract in New York had dropped to $119.83 per barrel. London Brent was down to $121.19 per barrel.
Kansas Common crude at CHS in McPherson dropped 75 cents on Friday and starts the week at $111 per barrel.
The auto club AAA reports the national average price for a gallon of regular gasoline was over $5.01 on Monday. A spokesperson said we may soon see people start to change their daily driving habits, or lifestyle, but it hasn't happened yet. Prices are 15 cents higher than a week ago, and nearly two dollars higher than last year at this time. There are 21 states with average prices over $5. The average in Kansas Monday was over $4.66 per gallon.
The government reported a slight dip in domestic crude-oil production last week. The Energy Information Administration says US operators pumped 11.945 million barrels per day in the week through June 3rd. That's down 5,000 barrels per day from the week before. Imports were down as well. EIA reports average imports of 6.2 million barrels per day, down by 64,000 barrels from the week before.
Baker Hughes reports 733 active drilling rigs across the US on Friday, an increase of six oil rigs. The count in New Mexico was up five rigs. Texas was down one.
Drilling was underway Friday on one lease in Russell County and another in Stafford County. Independent Oil & Gas Service reports operators were about to spud a new well in Barton County. Kansas Regulators approved 21 permits for drilling at new locations across the state last week, ten in eastern Kansas and eleven west of Wichita, including one new permit in Stafford County. year-to-date, there are 649 new drilling permits in Kansas. Operators completed 19 new wells last week, nine of them east of Wichita and ten in Western Kansas including one in Barton County. That's 687 new well-completions so far this year.
Oil-by-rail across the US was down nearly three hundred tanker carloads from the week before. The Association of American Railroads says that marks a 7.6% drop from a year ago. Traffic in Canada was down week-over-week, but up 4.4% over last year.
Russia's export revenues are actually rising since its invasion of Ukraine, thanks in part to a dramatic increase in crude purchases by India and other Asian nations. Analysts say Russia earned more than $97 BILLION dollars from fossil fuel exports in the first 100 days of the invasion. So far this year India has imported nearly 60-million barrels from Russia, nearly five times their total of 12 million barrels for all of last year.
The Governor of Colorado last week signed into law a ban on certain chemicals used in hydraulic fracturing operations. The law banning so-called PFAs takes effect in 2024. It also bans a wide range of consumer items ranging from cosmetics to car seats.
The government reports a continuing rise in oil-patch employment. The oilfield services and equipment sector saw employment rising by nearly 5,000 jobs in May, with increases in five out of seven categories they tracked. The biggest spikes were in support activities, and engineering construction. There were slight losses in product and machine manufacturing. The Bureau of Labor Statistics reports says these are the best job totals in the patch since September 2021.
The chief executive at Chevron tells Bloomberg TV there may never be a new refinery built in the US. The last new refinery was built in the 1970s. CEO Mike Wirth says you have to commit capital ten years ahead, and then wait decades for a return on investment, which he says is not easy in the current fiscal and political environment.