News from the Oil Patch, Sep. 22
By John P. Tretbar
The Iran war has sparked a new shortage in the energy marketplace and another source of price volatility. Prices for the largest tankers, known as Very Large Crude Carriers, are more than 12 times higher than just three months ago to over one million dollars per day for the most expensive routes. Drone attacks that temporarily shut Saudi Arabia’s bypass pipeline earlier this month have forced more shipments through the Strait of Hormuz. The impact has spread worldwide to push the daily tanker rates to record highs.
Diesel prices on Monday rose another penny nationwide to $6.52 per gallon, up nearly thirty cents from last week, nearly a dollar higher than last month, and nearly two dollars higher than a year ago.
Kansas gasoline prices average $4.17 a gallon, thirty cents lower than the national average of $4.47 per gallon.
Crude oil prices cascade again. Both New York and London benchmarks drop nearly five percent on Monday. Dated Brent crude was trading over $116 dollars a barrel, but the next-month contract was below $100.
Kansas crude prices closed the week Friday at $90.50 per barrel at CHS, down $1.50 on the day, up 25-cents from last week, and ten dollars a barrel more than at the first of the month.
Kansas crude-oil production in May dropped by 27-thousand total barrels from April to May. Total output reached just over two million barrels in May for a daily average of 65,237 barrels per day. The Kansas Geological Survey offers the latest county breakouts. Ellis County holds on to the top spot, with 5,369 barrels per day. Finney County takes over the number-two spot at 3,932 daily barrels. Haskell County slips to third place among the counties top producers with 3,874 barrels per day. Rooks County claims fourth with 3,270 daily barrels. Barton County is fifth, with 1,340 barrels per day in May.
A total of 554 wells were drilled to full depth in Kansas so far this year, down 51 wells or 15 percent from a year ago. The total footage drilled this year is down 17 percent from last year at this time.
Independent Oil and Gas Service reports five new well completions this week, all of them in eastern Kansas.
Kansas regulators okay 19 new drilling locations this week. Seven are east of Wichita and 12 are in Western Kansas, including one new permit in Finney County and one in Gove County. That's 540 permits for drilling at new locations so far this year, compared to 510 permits a year ago.
The Kansas Rig Count is unchanged in eastern Kansas at eight rigs, and unchanged west of Wichita at 12 rigs. The tally is down about five percent from a month ago and 33 percent lower than a year ago.
Baker Hughes reports 595 active drilling rigs this week, up two oil rigs and two gas rigs from last week. The total is up 53 rigs from a year ago. North Dakota and New Mexico jump three rigs. Utah is up one. Texas, Louisiana and Colorado each drop by one rig.
Weekly crude-oil imports have topped seven million barrels a day only three times this year and 12 times in the last five years. This week, crude imports are over 7.1 million barrels a day. The four-week average of 6.7 million barrels per day is nearly eight percent higher than a year ago.
Crude imports from Canada rise about half a million barrels to 4.4 million, the highest tally since the week of August 7. Imports from Nigeria are up nearly 200,000 daily barrels this week to 782 million. Saudi shipments rise slightly to 362,000 barrels a day.
The Energy Information Administration reports US crude exports average over 4.8 million barrels a day, a 41 percent increase over a week ago, and the highest weekly tally since early June. The four week average is up about a quarter million barrels a day to 4.1 million. Total petroleum exports rise five percent from last week.
US crude-oil production drops from last week's record, but remains over 13.9 million barrels a day for only the second time ever. The four-week average rises to an all-time high, just under 13.9 million. Cumulative output so far this year now averages over 13.7 million barrels a day.
Commercial crude stockpiles drop 600-thousand barrels from last week to just over 423 million. Stockpiles are about one percent above the five-year average.
The US Strategic Petroleum Reserves drop nearly half a million barrels to 285-Million as of September 11th. That's down more than 120 million barrels or 30 percent in the last year. The tally is down more than 440 million barrels from total capacity of 727 million barrels, which we reached in December of 2009.
A forecast from EIA suggests domestic natural gas inventories are on track for better-than average stockpiles at the end of injection/storage season and the start of winter. EIA expects inventories to rise five percent over the five-year pre-winter average.