News from the Oil Patch, Sep. 5
John P. Tretbar
Crude prices have gained four dollars and change in just the last two trading sessions. The benchmark Nymex crude contract settled Friday over $85 for the first time since November 15th last year. Prices were up another two percent in midday trading Tuesday, with Nymex crude over $87 and London Brent over 90.
Kansas Common crude at CHS in McPherson starts the week at $75.75 per barrel. The average price for Kansas crude in August was $71.69 per barrel, compared to just under $66 in July and over $90 in August of last year. Current Kansas prices are about four dollars higher than a month ago.
Kansas regulators report 83 new intent-to-drill notices in August, including one in Barton County, three in Ellis County, one in Russell County and one in Stafford County. So far this year, the Kansas Corporation Commission reports 901 new intents statewide, down 280 from the tally at the end of August last year.
The Rotary Rig Count from Baker Hughes continues a string of declines, dropping by one to 631 rigs, the lowest total since February 7th. The count in Texas was down one.
The Kansas Rig Count from Independent Oil and Gas Service is unchanged from last week, down 2.6% from a month ago, and 35% lower than a year ago. Drilling was underway Friday on one lease in Ellis County and about to get underway on another.
Kansas regulators approved eight new drilling locations statewide last week, with seven in Western Kansas including one in Barton County. The year-to-date tally is 834 new permits, down 274 permits from last year at this time. Independent Oil & Gas Service reports operators completed 32 wells across Kansas last week or 1,152 so far this year. That's up 88 wells from last year at this time. Kansas operators have spudded 844 wells so far this year, down 272 wells from a year ago.
Crude production in the United States topped 12.8 million barrels per day in June for only the fourth time in history. Leading the way was Texas with over 5.5 million barrels per day in June, and over 5.6 million for the first half of the year. New Mexico, in second with 1.8 million barrels, remains about 700-thousand barrels per day ahead of North Dakota in third. The total in Kansas dipped slightly to 75,000 barrels per day, but the average for the first and second quarters of 2023 remains at 76,000 barrels per day.
U.S. crude inventories continue to drop despite continuing record-level production. U.S. crude-oil stockpiles dropped by another 10.6 million barrels last week. Not including the Strategic Petroleum Reserve, the total is just shy of 423 million barrels as of August 25th. That's about three percent below the five-year seasonal average and the lowest government report since the first week in January.
EIA said production averaged over 12.8 million barrels per day, unchanged from a week earlier and about 684-thousand barrels per day ahead of a year ago.
The Energy Information Administration said crude imports were down more than 300,000 barrels to 6.6 million barrels per day. The four-week average is 12 percent higher than a year ago.
The refinery fire in Garyville, Louisiana was finally declared out after burning four days. Investigators say a storage tank leaked and caught fire Friday morning in a containment dike. Ten people were treated for heat stress or minor injuries. The Marathon Petroleum facility north of New Orleans is the third-largest refinery in the U.S.