BY JOHN P. TRETBAR
Crude prices reached ten-month highs last week, reflecting optimism spawned by new vaccine developments, despite dramatic increases in U.S. crude stockpiles. The benchmark Nymex futures contract briefly topped $46 a barrel, while Brent crude in London was flirting with the $50 mark. Kansas Common crude at CHS reached $37 a barrel for the first time since late February. Monday's price in McPherson was down slightly to $36.75 per barrel.
With crude-oil prices at their highest price point in months, average gasoline prices are also on the rise, despite falling U.S. demand. The national average was nearly $2.16 a gallon last week, up a nickel from a month ago. At $1.94 per gallon, Kansas is among sixteen states with average pump prices below two dollars. Prices remain at $1.99 a gallon in Great Bend, for a third-straight month. Prices in Hays are cheaper but on the rise, with $1.93/gallon still available at a couple of stations. Your 15-gallon fill-up will cost you about half a dollar more than a month ago, but about four dollars less than a year ago.
For the week ending December 10, there were eight active drilling rigs in eastern Kansas, down one, and nine West of Wichita, which is up one. Independent Oil & Gas Service reports a total of 57 rigs available across Kansas, 17 of them active, compared to 107 available and 43 active rigs a year ago. Operators reached total depth this week at one well in Barton County and one in Ellis County.
Baker Hughes reported an increase of 12 oil rigs for a total rig count of 338 nationwide. Texas was up six and the count in Wyoming was up four.
Regulators in the Sunflower State granted 12 new drilling permits last week, nine of them east of Wichita and three in Western Kansas. That makes 448 new permits year-to-date. Independent Oil & Gas Service reports one newly-completed well in eastern Kansas last week and three west of Wichita. That's 765 completions so far this year statewide.
The government reports domestic crude-oil stockpiles increased over 15-million barrels last week. At over 503 million barrels, U.S. inventories are about 11 percent above the five-year average for this time of year.
The Energy Information Administration estimates U.S. crude-oil production in November was 11.2 million barrels per day, an increase of 300,000 barrels per day from September. The government said worldwide consumption was down more than six million barrels per day year-over-year, but was up two million barrels from the average for the third-quarter of 2020. EIA's weekly production tally was over 11.1 million barrels per day last week.
U.S. crude imports increased by over a million barrels per day. The government says that over the last four weeks, imports averaged nearly 11% less than the same four-week period last year.
The United States imported more crude oil and petroleum products than it exported in May and June of this year, reversing a 15-year-long trend. After being a net exporter for seven consecutive months the US became a net importer again in May and June, according to a government report.
Oil-by-rail deliveries rose nearly 30% week over week, but remain nearly 14% behind last year's totals. The Association of American Railroads reports 11,710 rail tanker cars hauling petroleum or petroleum products during the week ending December 5.
A new Trump administration decision has cleared the way for oil and gas drilling on more than 200,000 acres of the Little Missouri National Grasslands in North Dakota. The decision to open up the previously protected badlands acreage was celebrated by North Dakota's congressional delegation, but disparaged by local conservationists. The decision has been on the table dating back to the presidency of George W. Bush. The final version substantially shrinks the amount of "roadless" land shielded from surface drilling work.
Drooping oil field activity is having a significant impact on the Oklahoma economy. State Treasurer Randy McDaniel said total collections are two percent below a year ago, with gross production taxes on oil and gas down by half. The state's oil patch has shed 20,000 jobs in the past two years. Production tax receipts have been lower year-over-year for 15 consecutive months, but have trended lower since late 2018.
The world's largest crude exporter is cutting prices to the U.S. but raising them to it's biggest customers in Asia. Saudi Aramco raised all pricing for January to Asia after OPEC and allies agreed to a gradual increase in production starting next month. The OPEC-Plus deal reduced the total production increases, from nearly two million to half a million barrels per day.
For the fourth time in a month, Saudi oil infrastructure has come under fire amid that kingdom's years-long civil war in Yemen. Authorities say a remote-controlled, bomb-laden boat slammed into a tanker sparking an explosion and fire early Monday. The incident closed the Saudi's most important shipping point. The sailors on board were safely evacuated with no injuries.