News from the Oil Patch, June 2
John P. Tretbar
US energy exploration drops for a fifth consecutive week, according to a key forecast metric. Horizontal drillers account for the lion's share of that. The Rotary Rig Count from Baker Hughes drops by three to 563 rigs, its lowest tally since November of 2021. The count of rigs drilling for oil drops for the fifth week in a row, down four rigs this week and 24 rigs since the beginning of April. The gas tally is up one rig this week. The number of active horizontal drilling rigs is down by three. That count is 19 rigs lower than on April 25, before five consecutive weekly declines.
At 16 active rigs, the Kansas Rig Count from Independent Oil and Gas Service is down 16 percent from last week, 24 percent from last month and 47 percent from last year. The tally west of Wichita is unchanged at eleven active rigs.
Regulators in the Sunflower State okayed a dozen new oil-and-gas drilling locations last week, all of them in eastern Kansas. The tally so far this year east of Wichita is up 12 at 142 permits. The total in Western Kansas is unchanged at 141. There are 283 new drilling locations so far this year statewide, compared to 385 by this time last year.
Independent Oil and Gas Service reports 21 new well-completions for a total of 506 so far this year, down 40 wells from a year ago. The list includes three wells in Finney County and one in Haskell County.US crude imports outpaced exports by more than two million barrels a day, according to weekly reporting from the Energy Information Administration. Imports averaged 6.3 million barrels a day last week, which is down nearly half a million daily barrels from a year ago, and almost a million barrels a day lower than two years ago. Crude exports averaged 4.3 million barrels a day.US crude production tops 13.4 million barrels per day, the first weekly output report to surpass that level this month. EIA reports cumulative output this year and the four-week average are both up two percent from a year ago.
After rising more than five million barrels in two weeks, US crude inventories dropped by more than half of that this week. EIA reports commercial stockpiles total just over 440 million barrels as of May 23rd. That's about six percent below the five-year seasonal average.
Reuters published a survey of refiners who are suggesting Saudi Arabia, the world's biggest crude exporter, could soon cut prices to their lowest level in six months. Prices have tumbled since the Saudis and their partners in OPEC-Plus announced a production increase for April, May and June.
Russia's oil-patch tax policy, along with tanking crude prices, are making the country's critical export unprofitable. Newsweek reports their oil and gas revenue in May has fallen by one third from a year ago to just under $6.5 BILLION, the lowest level since July of 2023.