News from the Oil Patch, Nov. 2
John P Tretbar
Kansas Common crude at CHS in McPherson dropped
another half dollar on Friday and to end the month at $26 a barrel. That's four
dollars less than a week ago, and twenty dollars less than a year ago. The average
price for the month of October was $29.69 a barrel, compared to $29.84 in
September and over $47 in October of 2019.
Volatility on the futures markets sent prices for West Texas Intermediate crude
up and down Monday following a ten-percent weekly drop last week, the biggest
since April. Prices on Friday fell to their lowest levels in five months. By
midday Monday the near-month Nymex contract was up 39 cents to $36.18 per
barrel. London Brent gained 41 cents at $38.35.
U.S. crude production rebounded last week to reach it's highest level since the
end of July. Weekly production dropped below ten million barrels two weeks ago,
but last week topped eleven million, an increase of more than 1.2 million
barrels per day.
The Energy Information Administration reports U.S. crude-oil inventories
increased more than four million barrels last week. Stockpiles are now about
nine percent above the five-year seasonal average.
The government reports weekly crude imports to the United States were up half a
million barrels last week to 5.7 million barrels per day. The four-week average
is 13% below the same period last year.
The Kansas Corporation Commission reported a slight increase in the number of
intent-to-drill notices filed across the state. October's tally of 75 intents
is the highest since December. That's 468 so far this year, a little over
one-fourth of the total through October of last year. There are five new
intent-notices in Barton County, one in Ellis County and two in Stafford
County.
Independent Oil & Gas Service reports seven active drilling rigs in eastern
Kansas, which is up two for the week, and nine west of Wichita, which is down
one. Drillers reached total depth on a well in Ellis County last week, and will
soon spud a new well in Stafford County.
Baker Hughes reported a total national rig count of 296, noting an increase of
ten oil rigs, eight of them in Texas and two in New Mexico.
A dry hole in Stafford County was among ten newly-completed wells in Kansas
last week, four in eastern Kansas and six west of Wichita. Independent Oil
& Gas Service says there are 704 new completions so far this year compared
to more than one thousand up to this point last year.
Kansas regulators approved permits for drilling at 28 new locations last week,
19 east of Wichita, nine of them in the western half of the state, including
one in Ellis County. So far this year there are 386 new drilling permits across
the state, down from nearly 15-hundred a year ago.
The government says gasoline demand has dropped to its lowest level since
mid-June, and Triple-A says that's good news for motorists. The national
average pump price drops to $2.14 [["two fourteen"]] a gallon. Kansas
prices are down a cent and a half from a week ago, four cents from a month ago
and forty cents from a year ago. We spotted $1.89 at several outlets in
Hays, while prices remained at $1.99 across Great Bend. You'll says more than
five dollars on your 15-gallon fill-up compared to a year ago.
Oil-by-rail traffic in the U.S. is down nearly 22% from a year ago. The
Association of American Railroads reports 10,169 tanker cars hauling petroleum
for the week ending October 24, down nearly ten-thousand cars from the week
before. Canada's oil-by-rail traffic is down more than 28% year over year.
Exxon Mobil Corp. will slash its global workforce by 15% over the next two
years. Bloomberg reports the cuts will include 1,900 U.S. jobs, mostly in
Houston, as well as an undisclosed number of positions around the world, up to
a total of about 14,000 people. The world's four largest oil companies have
announced plans to cut nearly 40,000 jobs between them in response to the
demand slump brought on by the pandemic.
Canada's Suncor Energy is hoping to sell several of its oil and gas fields in
the North Sea. Bloomberg says the company could reap half a billion dollars in
the planned sales. After a slow start to the year as the coronavirus crisis
disrupted plans across the industry, asset-sale activity in the North Sea has
picked up in the second half.
Reuters reports that struggling oil and gas companies in the Canadian province
of Alberta will get a three-year break on municipal property taxes for land
where they are drilling wells or building pipelines. The provincial government
last week said it would also lower property tax assessments on less-productive
wells and eliminate a provincial tax on drills.