News From The Oil Patch, July 20
By John P. Tretbar
The national average pump price for regular gasoline topped four dollars on Monday, up 13 cents from a week ago, but just a nickel a gallon higher than a month ago. Prices were under three dollars a gallon in the days leading up to the Iran invasion. The average across The Sunflower State Monday is $3.67 per gallon according to AAA, Diesel prices rise to $5.10 per gallon nationwide and $4.57 across Kansas.
US crude prices jumped more than three dollars on Friday. The front-month NYMEX contract for light sweet crude closed the trading day at $82.49 per barrel. Offers on Monday morning ranged from a high over $85 to a low just over $81 a barrel. Kansas Common crude at CHS in McPherson starts the week at $72.75 per barrel after a five-percent bump on Friday.
The government is now reporting publicly what some pundits have warned about for months: crude-oil storage at Cushing, Okla. is dropping to dangerously low levels. Storage facilities for crude oil and petroleum products require a minimum volume of product in their tanks and pipes to remain operational. If storage levels fall below their minimum volume, pump suction can become ineffective and storage facilities cannot function. These minimum volumes are sometimes called "tank bottoms."
The Energy Information Administration reports Cushing stockpiles fell below tank bottom of 20 million barrels for the last three weeks or so. EIA says they are reviewing the results of a pilot study to better understand the minimum working inventory levels at facilities across the country.
The Strategic Petroleum Reserves drops by three million barrels this week. At over 316 million barrels, the SPR is down more than 86 million barrels from a year ago. The government reports commercial inventories, not including strategic reserves, dropped by nearly two million barrels to just under 410 million. That's down 12 million barrels or three percent from a year ago. Diesel supplies rose slightly while gasoline stocks were marginally lower. EIA says gasoline demand is down by about one percent compared to a year ago. Diesel demand is down two percent.US crude production tops 13.8 million barrels a day for the fifth consecutive week.
The four-week average is over 13.8 million for the third week in a row. The Energy Information Administration reports cumulative production for all of this year is just under 13.7 million barrels a day.US crude exports spiked dramatically, if briefly, at the outbreak of hostilities with Iran, reaching a peak by April 24 at 6.4 million barrels a day, the all time high. Crude exports have tapered down to half that much in the meantime. This week, crude exports rise to just over 3.7 million barrels a day, up half a million daily barrels. The four-week average for crude exports is just under four million barrels a day, down about 700,000 barrels from a year ago.
U.S. crude oil imports increase this week by 60,000 barrels to average 5.7 million barrels per day. The four-week average is down 12 percent from the same four weeks last year. At 3.8 million barrels a day, US crude imports from Canada are up slightly from last week and down about a quarter million barrels a day from the same week last year. Since hostilities with Iran began, Canada crude supplies to the US average 3.7 million barrels a day, compared to just under four million before the war started. All but three of the countries shipping crude oil to the US this year have reduced those shipments since the war began. A government report shows shipments from Venezuela more than doubled since April. Brazil and Ecuador were up slightly.
Operators have drilled 388 wells from spud to full depth this year, down 90 wells from a year ago. Total footage drilled is down 28% from last year. Independent Oil and Gas Service reports ten new well-completions this week, with four in eastern Kansas and six west of Wichita, including wells in Haskell, Gove and Stafford counties. That's 432 new well completions so far this year, down by 250 wells from the same tally a year ago.
Kansas regulators okayed 14 new drilling locations this week. That's 422 so far this year, compared to 391 new permits a year ago. There are two new permits in Stafford County, one in Ellis and one in Rooks County, out of eight in Western Kansas.
The Kansas Rig Count from independent Oil and Gas Service is up one at seven rigs in eastern Kansas, but down two in the western half of the state at nine rigs. Drilling continued over the weekend on leases in Rooks and Haskell counties, and two leases in Gove County.
The Rotary Rig Count from Baker Hughes is up seven rigs at 588. The breakout for oil rigs, and horizontal drilling rigs, are each up seven from last week. The US tally is up 44 rigs from a year ago. Texas, New Mexico and Oklahoma were each up two rigs from last week. Utah is up one rig.
Liquefied Natural Gas trade set a new record last year, then dramatically slowed this year. Europe increased its LNG imports by nearly thirty percent last year, leading all regions around the world. LNG trading volumes worldwide rose 5.4% to a record 56.3 BILLION cubic feet per day in 2025. The Energy Information Administration says the record was driven largely by U.S. LNG export capacity expanding to meet growing demand. EIA says US LNG exports increased by 26% to 15.1 BILLION cubic feet per day last year, 26 percent of the global total. EIA forecasts exports to rise another two BILLION cubic feet per day this year. Global output this year has gone down following the closure of the Strait of Hormuz, locking in a lot of LNG.
Self-imposed production limits within the OPEC-Plus exporters group are not holding up in the face of spiking wartime crude prices. Since pulling out of OPEC-Plus, the United Arab Emirates says its production has surged 80 percent, rising 1.71 million barrels to 3.8 million barrels a day. Nigeria has exceeded its quota and produced more than it has in six years, according to the government regulator there.