By JOHN P. TRETBAR
Eagle Communications
It could be weeks before U.S. crude production recovers from the winter weather hammering the patch in Texas and North Dakota. Bloomberg cites market participants estimating crude output is down by about ten million barrels per day. That includes upwards of six million barrels in the Permian Basin of Texas and New Mexico. Crude production in North Dakota is also taking a beating from winter weather. Output was cut in half last week and remains down about 20% this week. That's according to the North Dakota Pipeline Authority.
The dramatic drop comes on the heels of the second-best weekly production tally ever. U.S. operators pumped 13,335,000 barrels per day in the seven days through January 12, just 2,000 daily barrels behind the record, set three weeks earlier. The Energy Information Administration says current output topped the week before by 142,000 barrels per day, and surpasses the same week a year ago by more than a million barrels per day. Four-week average production through January 12 was just over 13.2 million barrels per day, an all-time high.
Energy Information Administration said U.S. commercial crude inventories dropped by 2.5 million barrels last week to just under 430 million barrels. That's about 3% below the five year seasonal average.
The government reported crude imports averaging 7.4 million barrels per day, up by 1.2 million barrels per day from the previous week. The four-week average is about 6.6% higher than the same four-week period last year. Crude exports dropped to just under 4million barrels per day last week. Total petroleum and petroleum products exports rose to 11.2 million barrels per day.
The weekly Rotary Rig Count from Baker Hughes is 620 active rigs, down two oil rigs, but up three seeking natural gas. The count in Texas was down three rigs. The Kansas Rig Count from Independent Oil & Gas Service is down 7.9% from a week ago at 16 active rigs east of Wichita and 19 in western Kansas. The tally is unchanged from a month ago, and down more than 31% from a year ago.
Operators in Kansas completed eight wells last week, five east of Wichita and three in western Kansas. Independent Oil and Gas Service reports 69 well completions so far this year. Kansas regulators okayed nine new drilling locations statewide, with one in eastern Kansas and eight west of Wichita, including one in Russell County. That's 55 new drilling permits across the state so far this year.
North Dakota operators increased output by two percent in November, to nearly 1.3 million barrels per day. The Department of Mineral Resources says the state remains about half a million barrels per day behind New Mexico.
Drone attacks shut down Russia's second busiest Western crude export terminal. The attacks on Sunday, Jan. 21 sparked a widespread fire at a gas-condensate plant and prompted at least two tanker captains to pull their crude tankers back to sea. Maritime tracking data suggests loading had resumed by midday Monday at the facility on the Baltic Sea. Russia exports about 680,000 barrels per day from the terminal, mostly to India and China. Regional media reports assert the attack was organized by Ukraine’s secret services, targeting and igniting a source of fuel for the Russian army.
Spot prices for North Sea and Mediterranean crude oil spiked last week as attacks on commercial vessels threatened trade routes through the Red Sea. Bloomberg reports many tankers diverted away from the busy waterway, adding to cargo costs and tightening the global fleet.
BP appointed interim CEO Murray Auchincloss as its permanent chief executive, in a move that signals the oil major will stick with the shift to greener energy launched by his predecessor Bernard Looney. Looney quit in September after failing to disclose past relationships with company colleagues.
Royal Dutch Shell is set to conclude nearly a century of operations in Nigeria. The British energy giant is selling its subsidiary there to five local businesses for nearly $2.4 billion. Shell pioneered Nigeria's oil and gas business beginning in the 1930s. It has struggled for years with hundreds of onshore oil spills, theft, sabotage, operational issues, costly repairs and high-profile lawsuits. The OPEC member once boasted the 15th largest national production totals in the world.
Africa’s newest and biggest oil refinery has begun production of diesel and aviation fuel in Nigeria, ending a years-long wait. The $19 billion facility has a capacity of up to 650,000 barrels per day.