By JOHN P. TRETBAR
Volatility continues to rule the crude marketplace, with benchmark prices gaining $2 Friday only to drop $5 on Monday. Friday's settlement price in New York for light sweet crude for September delivery was up more than $2 at $98.62 per barrel. By lunchtime Monday the benchmark contract on the Nymex was down more than $5, trading a few cents above $93 a barrel. London Brent was also nearly four percent lower, dropping below $100 a barrel for the first time in more than two weeks.
The national average for a gallon of regular gasoline fell to $4.21, down 14 cents since last week. The auto club AAA says prices in Kansas are 22 cents lower than last week, with a statewide average pump price of just over $3.83. Most stations in Hays were selling regular for $3.99 while prices in Great Bend were down to $3.79.
Kansas producers spudded 805 wells in the first seven months of the year, up from 505 last year at this time. Independent Oil & Gas Service is currently scouting 435 wells in various stages of drilling and completion, up more than 60% from a year ago. There were 32 active drilling rigs in Western Kansas last week, which is up one from the week before. Operators were about to spud a new well in Barton County. The Rig Count in Kansas shows 25 active drilling rigs in eastern Kansas, which is unchanged.
Baker Hughes reported 767 active oil-and-gas drilling rigs nationwide, an increase of six oil rigs and two seeking natural gas. The count in Texas was up six rigs over last week. Oklahoma and New Mexico were each up one.
Kansas regulators approved 34 new drilling locations across the state last week, 11 of them east of Wichita and 23 in Western Kansas, including one in Butler County, one in Ellis County, and two in Stafford County. There are 944 new drilling permits so far this year statewide, compared to 559 at the end of July last year. Independent Oil & Gas Service reports 33 newly-completed wells across Kansas, with 11 east of Wichita and 22 in the western half of the state. That's 908 new well-completions so far this year, compared to 427 last year at this time. Operators last week completed one new well in Barton County, one in Ellis County, and two in Stafford County.
The government reported a slight dip in crude production in May, the latest monthly numbers available. The Energy Information Administration reports US output dropped to 359.4 million barrels in May, down half a percent from April but up more than two percent May of 2021. Kansas output also dipped slightly to 76,728 barrels per day, down nine tenths of a percent over the month before, and 7.6% higher than a year earlier.
EIA reports reports US crude-oil production increased by 198,000 barrels per day last week to over 12.1 million barrels per day. Output is more than a million barrels per day higher than last year at this time.
The government reports crude imports averaged 6.2 million barrels per day last week, down 400,000 barrels per day from the week before. The average over the last four weeks is 1.9% higher than for the same four-week period last year.
The Energy Information Administration reports US crude inventories as of July 22nd dropped to 422.1 million barrels, a decrease of 4.5 million barrels from the previous week. Gasoline stockpiles dropped by 3.3 million barrels, and are about four percent below the five-year average for this time of year.
The world's largest oilfield service company is gearing up for growth. Halliburton CEO Jeff Miller told analysts that market fundamentals support multi-year growth in the patch. According to a statement the company is banking on improving business outside its North American base.
According to a new report in the Houston Chronicle, US oil companies are increasing their financial support for Democratic candidates, especially those with a more moderate approach to climate change. According to the nonprofit group Open Secrets, about 29% of the industry's direct political contributions since 2018 went to Democrats, compared to 21% during the 2018 election cycle and 15% in 2016. The vast majority of political contributions still go to the GOP.
Oil and gas producer Hess Corp expects to add a fourth drilling rig in the Bakken shale of North Dakota next month. Reuters called this a sign that operators are inching towards greater output increases amid high prices.
Four North Dakota men are accused of stealing more than $2.4 million worth of crude oil over a period of more than a year. Court documents accuse them of skimming oil from trucks they were offloading, by manipulating transfer pumps and other equipment. Prosecutors say they stored the purloined crude and later sold it. According to the Bismarck Tribune, the alleged ringleader told investigators that skimming oil is a common, and easy practice, and that, in his words, everybody does it.
China makes its first significant offshore shale oil discovery. China's state-owned exploration company CNOOC [["SEE nook"]] announced a new discovery well in an area of the South China Sea believed to be the home of more than 8.7 BILLION barrels of crude. The company said fracking the new wildcat well increased output from 125 barrels to nearly 10,000 barrels per day. State media called that production total commercial.
Oil-by-rail traffic was down slightly last week. The Association of American Railroads reports 10,038 tanker carloads rolling the rails hauling petroleum and petroleum products during the week through July 23rd. That's down 137 carloads from the week before, and nearly five percent below the tally a year ago. Canadian traffic was down 704 tanker carloads for the week, but up about three percent year-over-year.