By JOHN P. TRETBAR
Bad news in the banking sector bled into the oil patch briefly on Monday. Futures prices for Brent crude, the global benchmark, fell 4.6% to $78.95 a barrel shortly after noon London time. Within the next two hours, prices reversed course to top $82. In New York, what could have been WTI's biggest-ever one-day drop plunged prices below $73. Nymex prices were over $75 at lunchtime. Prices were up a dollar in McPherson on Friday. Kansas Common crude starts the week at $67 per barrel at CHS. That's down $3 from a week ago, and a dollar lower than at the first of the month.
A joint House Committee hearing is planned Tuesday in Topeka at which an official from TC Energy is set to face questions from lawmakers about the Keystone Pipeline spill in Washington County. U.S. government regulators are now officially requiring operators to reduce pressure from higher levels approved six months ago. TC Energy's CEO tells Reuters they are already operating within the reduced pressure limits.
Kansas operators have spudded 194 wells so far this year. Independent Oil & Gas Service reports both spuds and total footage are down nearly 30% from a year ago. Kansas regulators okayed 19 new drilling permits last week, 12 of them in Western Kansas, including one new permit in Barton County and two in Stafford County. Operators in Kansas completed 43 wells last week, 416 so far this year, with 12 west of Wichita, including one in Ellis County and one in Russell County.
Absent a big turnaround in December, 2022 is shaping up to be the eighth consecutive year of declining crude oil production in Kansas. The Kansas Geological Survey reports statewide output of 2.2 million barrels in November, down from 2.3 million a month earlier. That's nearly 25.8 million barrels so far this year. Ellis and Russell counties showed slight monthly increases, while Barton and Stafford counties notched declines. Crude production in Kansas has declined each year since the record high set in 2014.
Kansas regulators report 119 new intent-to-drill notices last month, compared to 123 in February last year. That's 248 new intents so far this year, compared to 220 a year ago. According to online records of the Kansas Corporation Commission, Barton County added six notices in February, or ten so far this year. Ellis County notchedseven new intents in February, 13 year-to-date.
A weekly report from the Energy Information Administration shows the first drawdown in crude inventories since the week ending December 16th. Supplies dropped last week by 1.7 million barrels to 478.5 million. EIA says stockpiles are about seven percent above the five-year average. The government reports US crude production dropped by about 100,000 barrels per day last week to 12.24 million barrels per day. That's down from 11.6 million barrels per day a year ago. Imports last week increased by 63,000 barrels to 6.3 million barrels per day. The four week average is up 1.4% from the same four weeks a year ago.
US President Joe Biden has approved a major oil and gas drilling project in Alaska despite strong opposition. Located on Alaska's remote North Slope, the $8 BILLION Willow project is the largest oil development in the region for decades and could produce up to 180,000 barrels of oil a day.
The Canadian Association of Petroleum Producers (CAPP) says oil-patch investment there could reach $30 billion (US) this year, up 11% from last year, but still well below record highs set seven years ago. CAPP predicts more than $8 billion in new investments in oil-sands production this year, and more than $20 billion in conventional production. The trade group says will be the third straight year of growth, marking a more-than 80% increase since 2020.