News from the Oil Patch, May 20
John P. Tretbar
Winter weather in January wreaked havoc in the oil patch across the U.S., but until now we didn't know the extent of the slowdown here in Kansas. The latest numbers from the Kansas Geological Survey show glacial Kansas crude production in January, down 18% from the month before. Total output in the Sunflower State dropped from the historically low 71,000 barrels a day in December, to just over 58,000 barrels a day in January. Statewide production is down 21% from a year ago. Barton County output was down 15% from December. Ellis County dropped by 12%. Output in Russell County dropped 9.0% while Stafford County dipped 16%.Baker Hughes reports a slight uptick in drilling activity for the week, with 604 active drilling rigs nationwide, an increase one oil rig. The tallies in Texas and Oklahoma were each up one while New Mexico was down two rigs.
The Kansas Rig Count is up slightly from a week ago, but down slightly from a year ago. Independent Oil and Gas Service reports 31 active rigs. The tally is up one rig in eastern Kansas at 14, and unchanged west of Wichita at 17 active rigs.. Drilling was underway on Monday on a lease in Russell County.
Kansas regulators last week okayed six new drilling permits statewide. There's one in Barton County and one in Ellis County out of four in Western Kansas.
Operators completed 34 wells in Kansas last week. Independent Oil and Gas Service reports 15 of those were west of Wichita, including one in Barton County and one in Stafford County.
Government crude purchases for the SPR continue as commercial stockpiles drop. Weekly inventory data from the Energy Information Administration show the government bought another 600,000 barrels of crude last week in its ongoing effort to refill the Strategic Petroleum Reserve. The Energy Department sold off about half of our strategic reserves to stave off big price increases after Russia invaded Ukraine.US commercial crude-oil stockpiles dropped by more than two and a half million barrels last week to 457 million as of May 10. That's about four percent below the five year average for this time of year.
EIA reported a drop in US crude production for the third week in a row. Domestic operators pumped 13,117,000 barrels per day in the week through May 10. Seasonal declines in production in Alaska account for the difference of 4,000 barrels a day from a week ago, and more, bigger differences from the last several weeks. Output has topped 13.1 million barrels a day in each of the last 16 weekly reports, and in 30 out of the last 31.Tens of thousands of acres are charred in the province of Alberta, where wildfires spurred evacuations in the heart Canada's oil-sands industry. According to CBC News, more than 50 wildfires raged in Alberta by Tuesday (5/14). A provincial agency called Alberta Wildfire said the blazes grew dramatically a week earlier, when the sun came out, the humidity dissipated, and the winds shifted. No injuries have been reported.
The government reported another increase in wells drilled but uncompleted (DUC) in the nation's major shale basins. That hasn't happened for two months in a row since March of last year. It means operators drilled more wells than they completed in the seven shale basins tracked by the government. With DUCs, operators can quickly ramp up production when prices rise. The Energy Information Administration reports a total of 4,510 DUCs nationwide in April, an increase of six wells over March. The March tally was up nine wells from February. The U.S. is a net petroleum exporter, but we import more crude oil that we ship out. The difference went up last week, following several weeks of declines. The Energy Information Administration reports crude imports topped exports by 2.6 million barrels a day in the week through May 10th. Domestic crude exports were down by 333-thousand barrels to 4.1 million barrels a day. Crude imports averaged 6.7 million barrels a day, down about a quarter million barrels from a week ago. The four week average for crude exports and imports are each up about seven percent from a year ago.
Petroleum product exports top imports by nearly 4.3 million barrels a day. Product imports are down more than 13% week over week, while exports dropped about ten percent.