BY JOHN P. TRETBAR
Year-end numbers from the Kansas Corporation Commission reflect a dramatic drop in drilling activity last year across the state and here at home. Regulators in Kansas approved just 560 new intent-to-drill notices across Kansas last year, less than half of the total from 2019, nearly 2,000 fewer than five years ago, and a far cry from the more than 7,000 intents filed back in 2014. For the year, Barton and Ellis counties each reported 16 intents for the year, Russell County had six, and Stafford County notched 12.
CHS in McPherson raised its prices slightly last week to end the year, and start the new year, at $38.75 per barrel. That's up a dollar from a week ago, but down more than twelve dollars from the first of last year. The average price for the month of December was $37.44, compared to $31.55 in November of 2019. The average for December of 2019 was over $50.
U.S. crude-oil inventories dropped more than six million barrels last week to nearly 494 million barrels. The Energy Information Administration says Stockpiles are about 11% above the five-year average.
EIA reports total U.S. production last week dropped slightly, but ended the year above eleven million barrels per day for the fifth week in a row. A year ago at this time, U.S. production was approaching 13 million barrels per day.
Imports dropped more than a quarter million barrels per day last week. The four-week average for imports is down nearly 15% from last year at this time.
The government Wednesday said the crude-storage facilities at Cushing, Oklahoma have reached 74% of working capacity. Analysts first started to worry about storage capacity during the price crash in April, when prices dipped below zero briefly and producers fled the market to put crude production into storage, either on board tankers or at the tank farms in Oklahoma. In late April the world's largest independent offshore storage firm ran out of space, and Cushing reached 83% of capacity in early May.
North Dakota’s top oil regulator says 2020 will be known for the rapid collapse of crude prices, dismantled drilling rigs and idled wells. All in all, says Mineral Resources Director Lynn Helms, it was a pretty terrible year for the industry. Helms told the Bismarck Tribune that next year does not look very promising in terms of growth. He says we will need a year or more before oil and gas prices prompt sustained growth in North Dakota.
Regulators say total crude oil and condensate production in the top U.S. producing state declined for the third straight month, reaching its lowest total since May. The Railroad Commission of Texas reports monthly output of 128 million barrels, or 4.1 million barrels per day. That's down from over five million barrels per day before the pandemic.
Colorado officials have agreed to enact more stringent regulations on ozone emissions from the oil and natural gas industry at the instruction of Governor Jared Polis. The state is hoping to avoid a dramatic downgrade under the federal Clean Air Act, which could require reformulated gasoline blends in some areas.
Weekly oil-by-rail deliveries are down more than ten percent on the week and nine percent year-over-year. The Association of American Railroads reports 10,296 rail cars hauling petroleum during the week ending December 26th. The trade group reports the year-to-date totals are down nearly 14%. Canada reported an 18% drop for the week, with an annual total more than 20% below 2019.
Triple-A reports the national average reached two-and-a-quarter per gallon last week, the highest prices since stay-at-home guidance was issued in March. Nearly twenty states reported average prices at least three cents higher than a week earlier. Kansas was not one of them, sporting a statewide average of just over two-oh-one per gallon on December 31. That's up three tenths of a cent on the week and about fourteen cents per gallon higher than a month earlier. Prices were up to $2.05 per gallon in Great Bend, and we spotted $2.03 at several retailers in Hays. Filling up your 15-gallon tank will cost you a dime more than a week earlier, two dollars more than last month, and a dollar more than six months ago.
Russia is speeding up work on a natural gas pipeline to Germany in a race against the clock before the U.S. tightens sanctions against the project. Bloomberg reports the 764-mile NordStream-2 pipeline reached a milestone on Monday with the completion of pipe-laying in German’s exclusive economic zone. Among the next steps is resuming work in Denmark’s part of the Baltic Sea, where the bulk of the remaining sections will be located. The pipeline would bypass the traditional transport corridor through Ukraine. Work on the project was stopped a year ago by U.S. sanctions, but resumed earlier this month when the Russian state-run natural gas company found its own ship to lay the pipeline.
The outlook for the crude market in the Mediterranean Sea next year is heavily dependent on recently restored crude-oil exports from Libyan. But, at least one analyst is not optimistic that the new supplies will be reliable. Argus Media reports that in the weeks since restrictions on Libyan oil development were lifted, prices for competing Algerian crude have gone up rather than down, with regional refiners wary of Libyan stability. Since the ceasefire deal was struck between warring factions, Algerian prices gained around thirty cents per barrel. Libyan production was nearly 1.3 million [["one point three million"]] barrels per day.