News from the Oil Patch, July 27
By John P. Tretbar
Crude prices take a deep dive after the US and Iran pause hostilities. New York market quotes drop nearly three dollars a barrel on Friday at $81.31 per barrel for the September contract. Prices continue to drop on Monday, posting an additional six-percent decline. WTI dips under $84 a barrel. London Brent was trading a few pennies over $90 by lunchtime. Kansas Common crude at CHS in McPherson starts the week at $79.50 per barrel after dropping three dollars on Friday.
Drillers have notched 419 wells from spud to full depth so far this year in The Sunflower State, down 84 wells or 17 percent from a year ago. Total footage is down 27 percent. Operators completed 16 wells this week, eleven of them west of Wichita. Independent Oil and Gas Service lists two wells in Finney County, two in Gove County, one in Haskell County, and one in Ness County.
Kansas regulators okay 20 new drilling locations statewide this week. There are two new permits in Barton County out of seven in Western Kansas. That's 442 new drilling permits so far this year, compared to 409 a year ago.The Kansas Rig Count is unchanged at seven rigs east of Wichita, and up two at eleven rigs in the western half of the state. That's a 12 percent increase from a week ago and up six percent from a month ago. But the tally is unchanged from the same week last year. Independent Oil and Gas Service reports drilling underway on Friday in Graham, Gove and Haskell counties.
The Rotary Rig Count from Baker Hughes is up one gas rig from last week, but down two oil rigs, for a total of 587 active rigs. The national report is up by 45 rigs from a year ago, but down one rig from last week. The tally in Texas is down two, while the count in Colorado rises by one rig.
Weekly US crude production drops below a recent benchmark. Crude oil output in the week through July 17 drops under 13.8 million barrels a day, the first time that's happened in five weeks. The government reports the four-week average remains above 13.8 million.
US commercial crude inventories are up two million barrels from last week, but down more than seven million barrels from a year ago at just over 411 million barrels. The Energy Information Administration reports commercial stockpiles are about six percent below the five-year average for this time of year.
EIA reports another 5.1 million barrels swapped out of the Strategic Petroleum Reserve into the marketplace this week. The SPR today stands at just over 311 million barrels, down from more than one hundred million barrels from a year ago, and less than one-half the facility's capacity, which is over 720 million barrels.
US crude-oil exports drop ten percent this week to 3.3 million barrels a day. The four-week average is over 3.5 million, up nearly half a million barrels a day from a year ago.
Crude imports rise slightly to 5.8 million barrels a day. The four-week average is down more than eleven percent from the same four weeks last year.Imports from Canada drop to just over 3.6 million barrels a day, down about a quarter million barrels a day from a week ago. Venezuela's shipments rise slightly to 688-thousand barrels a day. Mexico adds nearly half a million barrels a day, Brazil adds a quarter million, and Ecuador chips in 103-thousand barrels a day.
Output in the number-three crude-oil producing state dropped slightly in May. The North Dakota Department of Mineral Resources reports oil production averaged one-point-one-two (1.12) million barrels per day in May, down by 16-thousand daily barrels from April. Natural Gas production rose slightly. Natural gas flaring at oil wells increased by about three percent as the gas-capture rate decreases slightly from the month before. The North Dakota Department of Mineral Resources says the total number of producing wells in the state set another record, rising to nearly 20-thousand wells.