By JOHN P. TRETBAR
Kansas crude prices are once again above $30, but remain more than $16 a barrel below the prices posted last year at this time. CHS in McPherson on Friday raised prices by a quarter to $30.50 per barrel.
AAA reports just 10 states had average gasoline prices below two dollars a gallon last week, and Kansas was one of them. The statewide average for a gallon of regular was just over $1.97 Thursday. We spotted $1.99 across Great Bend and $1.89 at several stations in Hays. The national average was a fraction over $2.19 a gallon, which is up a cent and a half from a week ago, down a penny from a month ago, and down 47 cents from a year ago.
Independent Oil & Gas Service reports five active drilling rigs in eastern Kansas, which is up one, and five in the western half of the state, which is down one. Operators are about to spud one new well in Russell County. Baker Hughes reported 261 active drilling rigs across the U.S. on Friday, four oil rigs and two rigs drilling for natural gas. The rig count in Texas was up seven, while New Mexico was down two rigs.
Regulators in Kansas approved 11 new drilling permits last week, six in eastern Kansas and five west of Wichita, including one location in Barton County. That's 315 permits statewide so far this year, compared to 741 by this point last year.
Operators completed eleven new wells last week across Kansas. Independent Oil & Gas Service reports five of those were east of Wichita and six were in Western Kansas, including one in Ellis County. The year-to-date total is 655 completions. At this time last year, the state saw over one thousand newly completed wells.
The government reported a big drawdown in U.S. crude oil supplies. The Energy Information Administration reported total inventories of just under 495 million barrels for the week ending September 18. That marks a decline of more than one and a half million barrels. EIA says inventories remain about 13% above the five-year average for this time of year.
U.S. crude-oil production was just over 10.7 million barrels per day, down 154,000 barrels per day from the week before, and down more than two million barrels per day from a year ago.
U.S. crude oil exports reached a record high in February and have since fallen each month, based on data through June. The U.S. Energy Information Administration says U.S. crude oil exports in the first half of the year are still higher than they were in the first half of last year.
Monthly crude oil imports declined sharply in April before increasing in May and June. EIA says imports were still lower than the same period last year. During that time, global demand fell by more than ten percent. Last week refineries increased imports by 160,000 barrels per day, but the four-week average is 24% below the same period a year ago.
The governor of California on Wednesday announced a timeline under which the state would ban the sale of new passenger vehicles powered by gasoline. The plan won’t stop people from owning or selling used gas-powered cars. But in 2035 it would end the sale of all new gas guzzlers in the state that accounts for more than one out of every 10 new cars sold in the U.S.
The state oil company in Libya reopened three ports for oil exports last week, as a political truce took hold. Reuters reports Shell provisionally chartered an oil tanker to load crude from one of the open ports at the end of this week. The ports have been shut down since January as part of a wider blockade. Bloomberg reports Libyan output has tripled in the week since the deal was reached.
Two huge Oklahoma-based Permian Basin producers have announced their merger. WPX Energy of Tulsa will merge with Oklahoma City-based Devon Energy in an all-stock transaction. The combined company will keep the name Devon Energy with its headquarters in Oklahoma City.
Just a week after revealing its plan to turn itself into a clean-energy giant, BP watched its share price drop to a 25-year low. Bloomberg reports top brass spent last week making presentations to show the world they could adapt to a low-carbon future without sacrificing returns. Investors were skeptical, and on Thursday BP stock closed at its lowest level since October 1995.
The Russian budget took a $164 billion hit last year because of a two-percent drop in crude prices. The Ministry of Natural Resources announced the value of Russia's crude reserves dropped by 17% in 2019. Russia's oil reserves make up more than 70% of that country's Gross Domestic Product. Analysts expect a much larger hit this year because of the pandemic price crash.
Based solely on the number of wells drilled, 2020 is shaping up to be the worst year since the 1930s, and perhaps earlier. World Oil offers a new drilling forecast suggesting we could drill fewer than 11,000 wells this year. That's half of last year's total and one fourth the total six years ago. The last time the total was below 12,000 wells was 1933.