By JOHN P. TRETBAR
Crude futures settled Friday at $109.56 per barrel, marking a weekly loss of nearly nine percent. Prices briefly dropped to a four-week low just over $108 per barrel. US markets and banks were closed Monday to mark the Juneteenth holiday.
Kansas crude prices dropped below $100 a barrel for the first time in a month. Kansas Common crude at CHS starts the week at $99.75 per barrel, the lowest price in McPherson since May 18th.
Gasoline prices have dropped below five dollars a gallon nationwide. The auto club AAA reports the average pump price across the US for a gallon of regular was just over $4.98. That's down three cents from a week ago. The average across Kansas was a fraction over $4.65 a gallon, We spotted $4.69 at most outlets in Hays on Monday and $4.79 across Great Bend.
US natural gas prices fell by about 16% after a major export facility announced it won't reopen anytime soon. Freeport LNG suffered a major fire and explosion two weeks ago and now says a return to full operations won't happen until late this year.
The Rig Count in Kansas is unchanged from a week ago, with 23 active rigs east of Wichita and 32 in Western Kansas. Independent Oil & Gas Service reports drilling underway Friday on a lease in Barton and drilling underway or about to start on two sites in Russell County. So far this year, 154 Kansas operators have spudded 596 wells, up more than 75% from a year ago. Operators completed 44 wells across Kansas last week, 16 in eastern Kansas and 28 west of Wichita, including six in Barton County and one in Ellis County. That's 731 completed wells so far this year. Kansas regulators okayed 67 permits for drilling at new locations. Thirty were west of Wichita including three in Ellis County.
The Rotary Rig Count from Baker Hughes 740, up seven rigs. The count in New Mexico was up seven.
US crude inventories increased by two million barrels last week. The Energy Information Administration reports stockpiles of 418.7 million barrels as of June 10th. US inventories are about 14% below the five-year average for this time of year. Gasoline stockpiles dropped by 700,000 barrels last week and are about 11% below the five-year average.
The family trust of billionaire-founder Harold Hamm is hoping to take Continental Resources private. In a news release, the company said it received an all-cash offer of $70 per share to those holding the approximately 17% of the company that his family does not already own. The deal could take the huge U.S. shale producer private at a valuation of $25.41 billion. Reuters reported Continental's shares jumped 16% to nearly $75 a share on the news, indicating investors believe a higher offer could be forthcoming.
Russia has passed Saudi Arabia to become India's second biggest crude-oil supplier, and China's largest, despite international sanctions. India imported 819,000 barrels per day from Russia in May, according to a report from Reuters. They are taking advantage of record discounts, now reaching $30 under the international benchmark. Russian sales to China reached nearly two million barrels per day, an increase of 25% from the month before.
Despite pledging to increase production last month, OPEC and its export partners fell short by more than a million barrels per day of their announced production increases. According to the cartel's Monthly Oil Market Report on Monday, May output was just over 28.5 million barrels per day, down 176,000 barrels per day from the month before.
US operators increased crude production last week by 90,000 barrels a day, topping 12-million barrels per day for the first time since April of 2020. During the week through June 10th, domestic output reached 12.035 million barrels per day, according to a weekly government report. That's up 789,000 barrels a day over the same week a year ago.
The Energy Information Administration reports crude imports increased 800,000 barrels per day over the week before, to average seven million barrels per day. The four-week average is up about two percent over the same four weeks a year ago.
Winter weather plagued the North Dakota oil patch in April, dropping crude production by 20%. Back-to-back blizzards knocked out electrical power to the patch, costing some operators between 45% and 100% of their output. Director Lynn Helms of the North Dakota Department of Mineral Resources told reporters the problems continued into the month of May. Statewide production in April, totaled just over 900,000 barrels per day. At 93%, the state's gas-capture rate dipped slightly from the record set the month before.
US oil-by-rail numbers were up week-over-week, but still trail last year's tallies. The Association of American Railroads reports 10,037 tanker carloads hauling petroleum and petroleum products during the week through June 11th. That's up 715 carloads from the week before but nearly six percent behind the count last year at this time. Canadian traffic increased nearly 14% over last year, gaining more than 400 carloads week over week.