By JOHN P. TRETBAR
In morning trading Monday, the benchmark crude futures contract in New York was up $1.48 from Friday's close, at $96.18 per barrel. Kansas Common crude starts the week at $85 a barrel at CHS in McPherson, down more than $13 from July 1.
Gasoline prices continue to drop. Local prices are as low as $4.24 a gallon at a few stations in Hays and $4.19 across Great Bend. The cost of a 15-gallon fill-up is down more than eight dollars from a month ago. Nine states are now posting average prices below four dollars a gallon, according to the auto club AAA. The national average pump price on Monday was $4.35 a gallon. The average across Kansas was $4.05.
The Rotary Rig Count from Baker Hughes reached 758 rigs, an increase of two gas rigs. The count in Alaska was up two rigs while New Mexico was down one.
The Rig Count in Kansas shows 25 active rigs east of Wichita, up one, and 31 in Western Kansas, also up one. So far this year, 182 active operators have spudded 770 wells, an increase of 298 wells from a year ago. Independent Oil & Gas Service is scouting 414 wells with drilling or completion operations underway.
Kansas regulators approved 35 new drilling locations last week. There are four new permits in Ellis County and one in Stafford County among the 18 approved in Western Kansas.
Independent Oil & Gas Service reports 27 newly-completed wells across Kansas during the week through July 21. There were 15 in eastern Kansas and 12 west of Wichita including one in Barton County and one in Stafford County.
The government last month closed the book on the probe of the fatal fire at the HollyFrontier refinery in El Dorado, Kansas in 2017. The Environmental Protection Agency will collect a $1.6 million penalty to resolve alleged violations of the federal Clean Air Act. The company had already entered into a consent decree requiring them to conduct audits to evaluate risk management compliance. According to EPA, the company stores regulated hazardous substances and failed to comply with requirements intended to protect the public from accidental releases. The government says that failure contributed to a large fire that resulted in the 2017 death of a HollyFrontier employee.
The government reported a slight drop in its weekly production report. The Energy Information Administration reports output of 11.935 million barrels per day during the week through July 15th. That's down from just over 12 million barrels per day the week before. Imports last week averaged 6.5 million barrels per day, down 200,000 barrels from the week before. Over the last four weeks, imports averaged nearly two percent more than the same four-weeks last year.
EIA reports US crude-oil inventories dropped by 400,000 barrels last week to 426.6 million barrels as of July 15. Stockpiles are about 6 percent below the five-year average for this time of year. Total motor gasoline inventories increased by 3.5 million barrels last week and are about 3% below the five year average for this time of year.
Oil-by-rail traffic in the US is up for the week but slightly behind the totals from a year ago. The Association of American Railroads reports 10,175 tanker carloads rolling the rails in the week through July 16th, up 780 carloads from the week before, but down over three percent from the same week in 2021. Canadian traffic is up 704 carloads on the week and more than 22% higher than the tally a year ago.
The number-three crude producing state in the US reports a big production spike in May. Output for May was over 32 million barrels, or nearly 1.06 million barrels per day. The North Dakota Department of Mineral Resources reports production in May was up 17% from the month before. Director Lynn Helms says they have almost recovered what they lost in April, when back-to-back blizzards shut down electrical power across much of the state. The state's gas capture statistics in May reached 95% to tie that state's previous best effort set back in March.
Operators of the Keystone Pipeline resumed normal operations Saturday, after reducing transit volumes on July 17. A power supply in South Dakota was damaged in what's described as a non-operational incident. Operator TC Energy announced resumption of normal operations July 22. Company officials said they were unable to discuss details of what it called commercially sensitive information, but said there was no material impact to TC Energy-owned facilities during the incident.
The state of New Mexico is basking in big bucks, thanks to rising crude prices. The state's Tax and Revenue Department reports oil and gas revenues topped $1.7 BILLION in the first four months of the year. That's more than double the tally from the first four months of last year. Legislative economists estimate New Mexico will rake in more than five billion dollars for the fiscal year, roughly one billion dollars more than last year's tally.
There are tentative signs that Russia's diversion of crude oil to Asia from long-time European customers is faltering. Shipments to China and India are down by almost 30% from their post-invasion peak. Bloomberg reports there are early signs that Asian nations may not be able to fully replace Russia’s European buyers.
Russia is now seeking payment for some oil exports to India in the dirham, the currency of the United Arab Emirates. Moscow is moving away from the U.S. dollar to insulate itself from the effects of Western sanctions.