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 </figure>News from the Oil Patch, Jan. 13John P. TretbarKansas Common crude at CHS in McPherson starts the week at $49.25 per barrel, after dropping fifty cents on Friday.The
 government reported an increase in crude inventories that pressed on 
U.S. prices. Inventories increased last week to 431.1 million barrels, a
 jump of 1.2 million barrels. The Energy Information Administration says
 that's equal to the five-year average for this time of year. &nbsp;The
 government reported a slight dip in U.S. crude production last week, 
but it's still the third highest weekly tally ever.&nbsp; EIA says U.S. 
operators pumped 12.883 million barrels per day for the week ending 
January 3. That brings the four-week average to 12.858 million barrels 
per day.&nbsp; That's nearly 11 percent higher than the same four-week 
average a year ago.The Kansas rig count from Independent Oil 
&amp; Gas Service shows a four percent drop from a week ago, a 24% drop 
from a month ago, and a 41% drop from a year ago.&nbsp; There are currently 
22 active rigs in Kansas, 13 of those in Western Kansas, which is down 
three.Baker Hughes reported 781 active rigs nationwide, a 
decline of 11 oil rigs and four seeking natural gas. The count in Texas 
was down seven rigs. Canada reported a big seasonal increase, up 118 to 
203 active rigs.Independent Oil &amp; Gas Service reports just 
two new well completions across Kansas last week. Both of them were dry 
holes: one in Osage County, and one in Rawlins County. Kansas regulators
 approved the first 27 new drilling permits of the year including one 
new permit in Barton County.A report from the Kansas City 
Federal Reserve Bank shows oil and gas activity in the U.S. 10th 
District dropped in the fourth quarter, and expectations for future 
activity continued to decline. The Fed's quarterly energy survey showed a
 significant decrease in drilling and business activity, but a slight 
improvement in revenues, wages and benefits. The 10th District includes 
Kansas, Oklahoma, Colorado, Nebraska, Wyoming, western Missouri and 
northern New Mexico.&nbsp; Firms in the district said they'd need to see 
average crude prices of $65 a barrel for substantial increases in 
drilling to occur.U.S. Oil-by-rail starts the year more than 
eight percent higher than last year. The Association of American 
Railroads reports more than 13-thousand tanker cars moving petroleum and
 petroleum products for the week ended January 4.&nbsp; Total U.S. freight 
train traffic was down five percent.&nbsp; Oil-by-rail in Canada was up 
nearly nine percent over a year earlier.The Dallas Morning News 
has joined a rising chorus in the Lone Star State, urging producers 
there to throttle back the state's oil and gas production. Texas is now 
the center of history’s biggest oil and gas boom, but the newspaper 
reports in an editorial that regulators may need to slow production 
slightly. One reason is the growing practice of burning off or "flaring"
 natural gas produced at oil wells, a practice that is growing in the 
absence of pipeline takeaway capacity. Texas alone now flares more gas 
than many states consume. The flaring can be seen from space, with 
nighttime satellite pictures making the Permian Basin look like Texas’s 
biggest metropolis.Apache Corp. will close its San Antonio 
office and lay off 272 employees. That's according to a document filed 
with the Texas Workforce Commission cited in the San Antonio Express 
News. The notice says the company will begin shutting down the regional 
office March 6. Apache was one of three Texas oil-and-gas firms 
announcing a total of nearly 600 layoffs last week, on the heels of 
Occidental Petroleum's big staff reduction announced earlier.Saudi
 Aramco has exercised its so-called "over-allotment option" to raise the
 size of its already record-breaking initial public offering. The Saudi 
Arabian state-owned oil monopoly said late last week it had issued an 
additional 450 million shares, raising the size of its IPO $3.8 billion 
to a total of $29.4 billion.Russia’s crude oil and condensate 
output hit a post-Soviet high last year even as it curbed production 
under an agreement with OPEC. According to the Houston Chronicle and 
Bloomberg, 2019 marked the 11th consecutive year of output growth in 
Russia.&nbsp; Despite being one of the architects of the original "OPEC Plus"
 agreement in 2016, Moscow has a poor record of actually meeting its 
pledged output goals. The country consistently failed to meet its quota 
last year, overshooting its target in nine of the 12 months.

News From the Oil Patch (1/14