By JOHN P. TRETBAR
Crude prices tumbled six percent on Monday, with fresh demand fears blamed on the fresh outbreak of the COVID virus in China. After losing nearly two dollars a barrel on Friday, crude prices on Monday dropped to their lowest level in ten days. By lunchtime Monday, prices were down six percent with WTI fetching just over $96 a barrel and London Brent trading just over $100. On Friday, Kansas Common crude at CHS in McPherson dropped nearly two dollars and starts the week at $92.25 per barrel.
Gasoline prices are rising again. According to the auto club Triple-A, demand is ticking back up in areas where pump prices are below four dollars. The national average price for a gallon of regular rose to $4.12, up four cents from a week ago, down 12 cents from a month ago, and up about $1.25 per gallon over a year ago. Kansas prices were up as well, rising 11 cents a gallon on the week to average $3.77 a gallon.
Independent Oil & Gas Service reports a spike in Kansas drilling activity, with new spudded wells more than doubling in a week to 368 wells, up 92% year over year. They're scouting 344 wells in various stages of drilling and completion, more than double the tally from a year ago. Operators completed 29 wells last week in western Kansas, including one in Ellis County and three in Stafford County. Kansas regulators approved 31 new drilling permits across Kansas last week, 20 of them west of Wichita, and 11 in Western Kansas. The weekly rig count is down one rig in eastern Kansas at 19, and up one rig to 30 in the western half of the state. It's been busy in Barton County, with drillers continuing work on one lease and reaching total depth on ten more. Operators were about to spud new wells in Barton and Stafford counties.
The Rotary Rig Count from Baker Hughes reached 695 active rigs Friday, up one oil rig and up one seeking natural gas. The count in North Dakota was up two rigs.
The government reported an 8-million barrel dip in US crude-oil inventories last week. The Energy Information Administration says stockpiles as of April 15th dropped to 413.7 million barrels. That's about 15% below the five-year seasonal average. Gasoline stockpiles dropped by800,000 barrels, and are about three percent below the five-year average for this time of year.
US operators increased production last week by 85,000 barrels per day to just over 11.9 million barrels per day. EIA reports output is more than 900,000 barrels per day ahead of the tally last year at this time.
U.S. crude oil imports averaged 5.8 million barrels per day last week, down by 159,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.1 million barrels per day, 3.1% more than the same four-week period last year.
US Oil-by-rail shipments last week dipped by more than 853 carloads. The Association of American Railroads reports 8,466 tankers shipping petroleum and petroleum products in the week through April 16th. That's down nearly 22% from a year ago. Canadian traffic dropped slightly from the week before, but rail shipments of Canadian crude are up 14% from a year ago.
Oil and gas companies already have millions of acres public lands under lease and thousands of unused permits that can be used for production. The Bureau of Land Management’s deputy director of policy and programs said that the agency has about 25 million acres under lease for oil and gas development nationwide, and only about half of that is in production. The Grand Junction Daily Sentinel newspaper says Colorado has about 2.4 million acres under lease, with production on 1.5 million acres.
Authorities in New Mexico continue their crackdown on pollution in the oil patch, now boasting the toughest emissions rules in the nation. The nation's number-two crude producer had already placed dramatic limits on venting and flaring natural gas at production sites. The latest effort focuses on oilfield equipment shown to emit volatile organic compounds and other pollutants. The new law requires producers to calculate and certify their emissions, and to find and fix leaks on a regular basis. The rule would apply to compressors, turbines, heaters and other pneumatic devices used at production sites.
Regulators in the number three crude-producing state reported a slight increase in output in February. The North Dakota Department of Mineral Resources reports average daily output increased by about 500 barrels per day to 1.089 million barrels per day. The state improved its gas-capture rate to 94%, flaring or venting only six percent of the natural gas produced at its oil wells.
Plans are once again moving forward on North Dakota's first major oil pipeline in five years, which was delayed by the pandemic. A hearing on the needed state permits is set next month for Bridger Pipeline's 145-mile South Bend Pipeline. The Bismarck Tribune reports that by the end of the year, the company hopes to move 105,000 barrels per day to its pipeline hub in eastern Montana.
China's largest offshore oil producer CNOOC went public in Shanghai last week, after being delisted in the US for its ties to the military. In that country's 11th largest public offering ever, share prices jumped as much as 44% before ending the day 27% higher. The company raised $4.4 billion in the offering.