By JOHN P. TRETBAR
Skittish investors selling off oil futures late last week because of rising Covid numbers are back with the bulls on Monday on news of another vaccine breakthrough. This is the second time in just over a week that Coronavirus vaccine reports turned around crude-oil price trajectories. Futures prices were up more than three percent by midday Monday. The Nymex benchmark futures contract gained $1.36 to $41.49 per barrel. London Brent rose to $44.13, a gain of $1.35 per barrel.
CHS in McPherson dropped its prices 75 cents per barrel on Friday. Kansas Common starts the week at $30.50 per barrel. That's down from $48 per barrel a year ago, but it's three dollars more than a week ago and $4.50 more than at the first of the month.
The Rig Count in Kansas was unchanged last week according to Independent Oil & Gas Service. There are seven active rigs east of Wichita, and 11 in Western Kansas. Drilling is underway on a lease in Barton County and another in Ellis County. Operators are about to spud new wells in Barton and Stafford counties. Baker Hughes reports 312 active drilling rigs across the U.S., including ten oil rigs and two seeking natural gas. The count in Texas is up six for the week, while New Mexico was up three.
Regulators approved 14 new drilling permits last week, seven in eastern Kansas and seven west of Wichita.
Independent Oil & Gas Service reports operators completed nine new wells last week, which brings the total to 728 newly completed wells so far this year. There were eight in Western Kansas, including one in Ellis County. There was one completion in eastern Kansas.
The government last week said domestic crude-oil stockpiles increased by more than four million barrels to more than 488 million barrels. That's about six percent above the five-year seasonal average. The Energy Information Administration said crude production in the U.S. increased last week to more than ten and a half million barrels per day. That's an increase of 51,000 barrels per day over the week before, but more than two million barrels per day behind the figures from a year ago.
EIA says U.S. crude imports increased by nearly half a million barrels per day last week to five and a half million barrels per day. The four-week average is down more than 12 percent from a year ago.
Crude storage at Cushing ticked upward again last week. The government reports stockpiles stored at the Oklahoma hub have now reached 77% of capacity.
Oil-by-rail traffic in the U.S. is up for the week, but down more than 17% from a year ago according to weekly reports from the Association of American Railroads.
A final vote is scheduled later this week for Colorado regulators hoping to ban the venting or flaring of natural gas at well sites. The new rules would also include requirements that the industry assess the cumulative impact of drilling on a local and statewide scale. The new regs would prohibit the routine burning or releasing of natural gas at oil well sites. Alaska is the only other state that bans such releases. The Colorado Oil and Gas Conservation Commission plans a final vote on Friday.
The state energy regulator in Texas is taking steps to reduce the flaring and venting of natural gas produced by oil wells, but not in the way environmentalists had hoped. The Railroad Commission of Texas is making changes to the form needed to apply for exceptions to the state's flaring rules. They're requiring more details to justify the exception, reducing the amount of time allowed for obtaining such an exception, and providing incentives for use of new technology.
The government says global fuel consumption dropped by nearly six million barrels per day last month compared to a year earlier, but consumption was higher than the second- and third-quarter averages. EIA now predicts Brent crude prices will remain near $40 per barrel for the rest of the year, but then will rise to $47 a barrel next year.
President-elect Joe Biden’s campaign promise to phase out oil could lead fairly quickly to the demise of at least two controversial pipeline projects. The Wall Street Journal suggests the election "probably" signals the end of the long-delayed Keystone XL oil pipeline and threatens the future of Dakota Access, another major crude conduit.
Crude production in Libya continues to rise, topping 1.24 million barrels per day over the weekend, according to Reuters. That's up 200,000 barrels per day from the totals reported Nov. 7. The OPEC member's crude output was almost entirely cut off by a civil war and blockade earlier this year.
Soil cleanup with oil-eating worms? A headline from a Russian study indicates just that. But, technically, it's the animals within the animals consuming spilled oil and cleaning the soil. The author of the study says they are using parasitic nematodes as a way to deliver marine bacteria, which consume and break down petroleum products into fatty acids.
Cenovus Energy will acquire Husky Energy for $2.9 billion in stock. The deal will combine operations and for total output of about 750,000 barrels per day of oil and gas. The expanded Cenovus would be the third-largest Canadian producer after Canadian Natural Resources and Suncor Energy. S&P Global Platts reports the company will keep the Cenovus name and its headquarters in Calgary, Alberta.