By JOHN P. TRETBAR
Crude futures prices bounced back on Monday, gaining six percent, after a big sell-off Friday in which prices drifted below $37. By midday Monday, the benchmark Nymex contract was up $2.37 to $39.42 per barrel. London Brent rose to $41.50 per barrel.
CHS in McPherson dropped its prices by $1.75 on Friday. Kansas Common starts the week at $27.25 per barrel. The monthly average for the Kansas benchmark crude dipped below $30 a barrel in September for the first time since June.
Kansas regulators reported a small increase in the number of intent-to-drill notices filed in Kansas. Ellis County notched six new intents last month, Barton and Stafford counties each report one. According to the Kansas Corporation Commission the total statewide is 50 intents for the month of September, up from 38 in August. So far this year, Kansas operators have filed 393 such notices, down from 842 a year ago.
Independent Oil & Gas Service reports three active drilling rigs in eastern Kansas, down one for the week, and four west of Wichita, also down one. Drilling is underway on one lease in Ellis County. Baker Hughes reports 266 active drilling rigs across the U.S. Friday, an increase from last week of six oil rigs. The count in New Mexico was up three.
Regulators signed off on just six new drilling permits in Kansas last week, four of them east of Wichita and two in Western Kansas, including one in Ellis County. There are 321 permits for drilling at new locations on file so far this year across the state compared to nearly 800 through the third quarter of 2019.
Independent Oil & Gas Service reports 14 newly-completed wells across Kansas last week, with ten new completions in the eastern half of the state, and four in Western Kansas. That's 669 so far this year compared to well over 1,000 completions by the end of the third quarter last year.
Domestic crude inventories dropped by two million barrels last week. The Energy Information Administration reports stockpiles of just over 492 million barrels, which is about 13% above the five-year seasonal average.
The government reported a slight increase in U.S. crude production last week. The Energy Information Administration says domestic output increased 36,000 barrels per day over the week before to 10.74 million barrels per day.
Imports last week were down 45,000 barrels per day. EIA says the four-week average is nearly 22% less than the same four-week period last year.
In its yearly report on natural gas production, consumption and exports, the government says the U.S. set records in all three last year. The Energy Information Administration says dry natural gas production increased by ten percent, consumption was up three percent, and exports were up by nearly 30%.
The re-entry of Libya into the oil marketplace continues. Two weeks into an easing of a blockade by eastern forces, Reuters reports the OPEC member is seeing a nearly three-fold ramp up in oil production, which reached 270,000 barrels per day. Exports have doubled and are expected to rise even more as they open more terminals.
The former head of the Libyan bank responsible for managing the country's oil revenues is behind bars amid corruption allegations. Bloomberg reports a state prosecutor is investigating some risky investments that cost the bank $1.6 billion, as well as efforts to falsify the bank's profits and mismanage funds.
The price tag for plugging and cleaning up abandoned oil and gas wells could soon reach staggering proportions. Reporting in the Houston Chronicle suggests taxpayers could be left on the hook for plugging and cleaning up so-called "orphan wells." The expense could reach $117 Billion in Texas alone. There are some 3.8 million unplugged oil and gas wells nationwide, including more than 783,000 in Texas.
A Houston company is hoping to connect three Texas crude-oil pipelines into a large export facility. Max Midstream has bought the Seahawk Pipeline and Terminal at the Port of Calhoun southwest of Houston. They plan to connect to both the Eagle Ford and Permian basins to transport up to 20 million barrels a month. In a news release, the company said exports could begin with completion of the first phase of the project late this year.