News from the Oil Patch, Feb. 5
John P. Tretbar
U.S. crude production is once again above 13 million barrels per day. For the week through January 26, U.S. operators pumped 13,033,000 barrels of crude per day, up more than 700,000 barrels per day. The Energy Information Administration reports four-week average production dropped below 13 million barrels per day the week for the first time in nearly four months. The last time four-week average production was below 13 million barrels per day was the week ending September 29, 2023.U.S. operators pumped more than 13.3 million barrels of crude oil per day in November, the best monthly average ever. The latest government numbers show an increase of more than 84,000 per day from the month before.
Kansas ranks 11th among oil-producing states according to EIA. The Sunflower State pumped 2.2 million barrels in November, or 73,900 barrels per day. That's up nearly a thousand barrels per day from the month before. Texas leads the way once again with 5.6 million barrels per day. Rounding out the top five are New Mexico, North Dakota, Colorado and Alaska.
The government reported crude inventories of more than 452 million barrels as of January 26, an increase of more than four million barrels. Stockpiles are about four percent above the five year-average for this time of year.
EIA says crude exports dropped by more than half a million barrels per day last week to just under four million barrels per day. Four-week average exports are up more than 700,000 barrels per day over a year ago.
U.S. crude imports were up 25,000 barrels per day week-over-week to 5.6 million barrels per day. The average over the last four weeks is nearly six percent lower than a year ago, down a million barrels a day to 6.2 million barrels per day.
Kansas crude prices dropped nearly six dollars a barrel in the last week, but are a half dollar higher than at the start of the year. Kansas Common crude at CHS in McPherson starts the week at $62.50 per barrel after dropping a dollar and a half on Friday. That price was over $68 a week ago.
The near-month contract for light sweet crude on the Nymex dropped more than a dollar to settle Friday at $72.28 per barrel, a weekly drop of $5.73 per barrel. Prices drifted lower on Monday, with the benchmark contract in New York dropping below $72 per barrel.
Muddy field conditions slowed down drilling activity in some parts of Kansas, but activity was up in others. The Kansas Rig Count from Independent Oil & Gas Service is up eight percent from a week ago, and five percent higher than a year ago. There are 15 active drilling rigs in eastern Kansas, down one, and 24 west of Wichita, which is up four rigs from last week.
Independent Oil and Gas Service reports 28 newly completed wells last week, with ten in Western Kansas including one in Ellis County. That's 114 completions so far this year. Regulators in the Sunflower State okayed ten new drilling locations last week. Seven of those were west of Wichita, including one in Barton County. That's 73 permits for drilling at new locations so far this year.
Two of the biggest producers in the world plan big growth this year in the Permian Basin thanks to two big takeovers. Chevron forecasts ten percent growth this year. According to Bloomberg, that's more than twice the pace of publicly-traded independent oil companies. The company's takeover of Hess Corp puts it on course to pump one million barrels per day from the Permian by next year, almost topping the entire state of North Dakota. Exxon sees production growth of nearly seven percent, but is expected to double its overall output once it completes the $60 billion takeover of Pioneer Natural Resources later this year.