John P. Tretbar
Kansas Common crude at CHS in
McPherson starts the week at $42.50 per barrel. That's unchanged on the week
and nearly four dollars higher than the price posted January 1. Kansas daily
crude prices have stayed above $42 since January 8th, topping $43 on six of those
days. The average price for the month of January was over $42 per barrel for
the first time in a year.
The U.S. Energy Information Administration says U.S. crude oil output in
November increased by more than ten million barrels over the month before. Kansas
output reached 2.19 million barrels, or just over 73-thousand barrels per day.
That's also slightly higher than the month before.
Intent to drill notices filed in the State of Kansas continued to decline last
year. There were just 51 intents filed in December, bringing the annual total
for 2020 to 560 intents, according to the Kansas Corporation Commission. That's
less than half the total from the year before, which was down a third from the
year before that.
Baker Hughes reported 384 active drilling rigs this week, an increase of six
oil rigs. The count in Texas was up seven, while New Mexico was down three rigs
for the week.
Independent Oil & Gas Service reported an increase in its weekly Rig Count
in Kansas. There are eight active drilling rigs in eastern Kansas, up four for
the week, while the count west of Wichita was up one at eight active drilling
rigs.
Kansas regulators approved 36 new drilling permits last week, five of them in
Western Kansas, including one in Stafford County.
Independent Oil & Gas Service reports 20 newly-completed wells for the week
across Kansas. There were 16 east of Wichita and four in Western Kansas,
including one in Stafford County. Operators have completed 55 wells across the
state so far this year.
The government says it's weekly tally of U.S. crude inventories dropped by
nearly ten million barrels, but remained about five percent above the five-year
average for this time of year. The Energy Information Administration says
stockpiles dropped to just under 477 million barrels.
EIA reported a decline in U.S. crude-oil imports of one million barrels per
day. Over the past four weeks, imports averaged 13.9% less than the same
four-week period last year.
U.S. crude production last week was down 97-thousand barrels per day, dropping
below 11 million barrels per day for the first time since last November.
Oil-by-rail shipments reached another one-year high last week, with 12,522
tanker cars hauling petroleum products, according to the Association of
American Railroads. The running total for the year is down 11% from a
year ago.
The Biden administration's moratorium of oil and gas leasing on federal public
land faced an immediate legal attack from an energy industry group said to
represent 200 oil and gas companies. Western Energy Alliance filed a petition
in U.S. court in Wyoming, asserting the suspension of leases is
"unsupported and unnecessary," and represents an overreach by the
government. The alliance asserts that the president doesn't have the authority
to ban leasing on public lands. They claim the suspension will cost tens of
thousands if not millions of jobs.
The oil and gas industry in Texas paid out nearly $14 billion in taxes and
royalties last year despite the pandemic. The Texas Oil and Gas Association says
the total was lower than the record-high $16.3 billion in taxes and royalties
paid in fiscal year 2019, when oil and natural gas production in the Lone Star
State surged to records.
A new study is prompting some energy producers to rethink proposed flaring regs
in the Lone Star State. Research from the energy analysts at Rystad Energy
suggests that requiring oil and gas companies to capture 98% of the natural gas
produced in Texas could yield more than $440 million in additional revenue in
just the next four years.
For the third year in a row, lawmakers in New Mexico introduced a measure to
block the process that helped make the state the number-three crude-oil
producer in the U.S. A ban on fracking was first introduced back in 2019,
and a legislative audit from that year found the idea could lead to a $3.5
billion loss in revenue. Opponents assert the move would kill some jobs, and
send others across the state line into Texas. The bill's sponsor tells the
Carlsbad Current Argus that the measure would not impact any current or ongoing
fracking operations, but was meant to give the state some breathing room in
addressing the practice’s impact on water and air quality.
A Canadian trade group is predicting a slow rebound for that country's oil
patch. The Canadian Association of Petroleum Producers expects capital
investment in oil and gas to increase 14% this year, to more than 21 billion
U.S. dollars. The group projects spending will remain below pre-pandemic
levels, and will be less than one-third of the industry's peak investment year
back in 2014.