By JOHN P. TRETBAR
Eagle Media
A big drop in oil prices is being called a collective sigh of relief after Israel refrained from attacking Iran's energy infrastructure. The benchmarks were all down six percent Monday.
Weekly crude production in the United States topped 13.5 million barrels per day for only the second time ever, but output declined from last week's all-time high. The Energy Information Administration (EIA) reports output of 13,526,000 barrels per day in the week through October 18, a decline of 5,000 daily barrels from a week earlier.
Cumulative production so far this year is up six percent to top 13.2 million barrels a day for the first time ever.
EIA reports crude inventories increased by more than five million barrels to 426 million barrels. That's about four percent below the five-year average for this time of year.
The government took delivery on 800,000 barrels of crude oil for the Strategic Petroleum Reserve (SPR) last week. The SPR now holds more than 384 million barrels, up nearly ten percent from a year ago, but just over half the total from three years ago.
The weekly Rotary Rig Count from Baker Hughes was 585 rigs, up two oil rigs but down two seeking natural gas. Louisiana was down two rigs; Pennsylvania was down one. New Mexico, Oklahoma and Ohio were each up one.
Independent Oil & Gas Service this week reported 27 new drilling locations statewide last week. There are 15 in eastern Kansas and 12 west of Wichita, with one new permit in Barton County and one in Stafford County.
Crude prices at CHS in McPherson are nearly three dollars below the monthly average, but rose $1.50 on Friday to start the week at $62 per barrel. That's up $2.50 from a week ago and $2.00 higher than at the first of the month.
Two offshore drillers that were once the world's largest are considering a merger. According to World Oil and Bloomberg, stock prices for both Transocean and Seadrill are both down by more than 25%, but the two would create a combined market value of $6 billion at current prices.
Transocean, which owned the Deepwater Horizon rig involved in the blowout in the Gulf of Mexico, was the only major offshore rig contractor to avoid bankruptcy during the 2020 downturn. The companies could yet opt to remain independent. Bloomberg reports the talks are ongoing and no deal has been reached as of yet.
The U.S. is a net crude-oil importer, bringing in about 2.3 million barrels a day more than we shipped out last week. Product exports outpace imports by nearly 5 million barrels a day. Weekly crude imports rose nearly a million barrels to 6.4 million barrels a day. The four-week average is up slightly from a year ago.
Crude exports averaged just over 4million barrels a day, down 11,000 daily barrels. Four-week average crude exports are down nearly 100,000 barrels a day from a year ago.
North Dakota crude oil production increased by nearly 300,000 barrels from July to August. The Department of Mineral Resources reported an August production total of just over 36.5 million barrels, or 1.18 million barrels a day.
An oil terminal Iran built to bypass the vital Strait of Hormuz now appears partially filled with crude, offering Tehran a means to get a little of its oil into the world without using the waterway.
Iran has threatened to close the strait many times, a hollow threat because it would lock in its own oil production. The so-called "Jask" terminal is located outside the Persian Gulf and would bypass the relatively narrow waterway. Jask can load one million barrels per day, with storage capacity of about 20 million barrels. Iran's main terminal at Kharg Island boasts capacity of roughly three times that.
After eight months, they have found the tug boat that was dragging the oil barge that was leaking oil and fouling the waters around the island of Tobago. They found the tug nearly 6,000 miles away, across the Atlantic Ocean in Angola. The oil spill was first noticed last February. It took until August to remove the oil barge. And now, in October, they have taken the tug into custody and filed a $270 million claim. But as of now they have no idea who owns the tug.