By JOHN P. TRETBAR
Kansas Common crude at CHS starts the week at $59.75 per barrel, the best price in McPherson since October 2018. That's up nearly two dollars from the first of the month and $21 higher than at the first of the year.
By midday, Monday the Nymex benchmark futures contract was down 16 cents from Friday's settlement, to $69.46 per barrel. London Brent reached $72.17 a barrel in intraday trading Friday, the highest price for the international benchmark since 2019. Brent prices remained above $71 Monday.
Kansas crude-oil production rose 15% in March from the month before, according to a government report. But state output remained more than 11% behind March of last year. The Energy Information Administration said Kansas production reached 2.3 million barrels in March. That's about 77,000 barrels per day, compared to 67,000 barrels a day the month before and 87,000 barrels per day a year earlier. EIA reports U.S. output in March reached 11.2 million barrels per day, up 14% on the month, but down 12 percent from March 2020. After a big drop in February, crude output in Texas jumped 26% in March to 4.4 million barrels per day.
The government's weekly petroleum report shows production, inventories and imports all dropped last week. U.S. operators produced 10.88 million barrels per day during the week ending May 28. That's down 168,000 barrels per day from the week before and about 300,000 barrels per day less than the same week last year. EIA said inventories dropped more than half a million barrels. Stockpiles are about three percent below the five-year seasonal average. Imports were down more than half a million barrels per day last week at 5.6 million barrels per day. EIA said over the last four weeks, average imports are slightly lower than the same four weeks last year.
The Rig Count in Kansas from Independent Oil & Gas Service was down one rig in the eastern half of the state and unchanged out west. Drilling was underway on one lease in Ellis County Friday. Baker Hughes reports 456 active drilling rigs across the U.S., which is down one gas rig from last week. The count in Texas was down two while New Mexico was up two.
There are 18 new drilling permits in Kansas this week, including 11 in Western Kansas, to bring the total so far this year to 369 new drilling permits. Independent Oil & Gas Service reports 21 newly-completed wells across Kansas, 11 of them west of Wichita. That's 321 well completions so far this year.
Weekly oil-by-rail totals posted a 27% increase over last year at this time. The Association of American Railroads reports 11,163 tanker cars moving petroleum products for the week ending May 29. That's up 363 tankers from the week before. AAR says total U.S. rail traffic in May was up 28% over May of 2020. Total combined U.S. traffic for the first 21 weeks of the year was up nearly 14% compared to last year.
The auto club AAA says gasoline demand has jumped steadily since the end of April, dropping supply levels around the country. That means pump prices are likely to see fluctuation this month. The average price across the country was just over $3.04, or more than a dollar a gallon higher than a year ago. The average across Kansas was just under $2.83 per gallon. Filling up a 15-gallon tank locally will cost you about a dollar more than last week, a dollar less than last month, and about $17 more than a year ago at this time.
The government says U.S. energy consumption last year dropped by a record seven percent from the year before. The Energy Information Administration sways energy use decreased for all fuels except renewable energy, which increased by two percent. Petroleum consumption last year dropped by 13%, and natural gas was down two percent.
Authorities braced for protests in northern Minnesota in the final construction push to replace a crude oil pipeline. Environmental and tribal groups oppose Enbridge Energy’s ongoing effort to replace its aging Line 3, which carries Canadian crude from Alberta. It clips a corner of North Dakota on its way across northern Minnesota to Enbridge’s terminal in Superior, Wisconsin. The Canadian and Wisconsin replacement segments are already carrying oil. The Minnesota segment is about 60% complete.