News from the Oil Patch Feb. 11
John P. Tretbar
Crude prices rebound slowly from their low point for the year. Light sweet NYMEX crude for March delivery settled Monday at $72.32 per barrel, an increase of more than a dollar on the day. So far this year, prices average just under $74, ranging from just over $70 last week to just over $80 a month ago.
Kansas Common crude at CHS in McPherson starts the week at $61.25 per barrel after dropping half a dollar on Friday. Prices in McPherson are down $1.50 since the first of the month and 75 cents lower than at the first of the year.
Cold weather in Europe turns the natural gas market on its ear, raising prices to the point that crude oil is becoming more cost effective. The European benchmark for natural gas trading jumped four percent in one day to two-year highs, and stockpiles across the continent were at their lowest level in three years. Prices on Monday jumped to a two-year high, to roughly the equivalent of a $100 barrel of oil, according to reporting by Bloomberg. Europe’s natural gas prices now make burning oil for industrial uses more cost-effective. European factories are starting to rely on oil and even coal as cheaper alternatives.
The government reports the largest increase in crude-oil stockpiles in more than a year. Commercial crude inventories spiked last week, jumping 8.7 million barrels to just under 424 million. The Energy Information Administration reported stockpiles were about five percent below the five-year average for this time of year. That's the biggest weekly total since last November, and the largest increase in weekly stocks since November of 2023. The Energy Department secured another 300,000 barrels of crude for the Strategic Petroleum Reserves, which now tops out over 395 million barrels, a ten percent increase in the last year.
Crude production in the United States rose by nearly a quarter million daily barrels, to 13,478,000 barrels per day. The Energy Information Administration reports four-week average output of just over 13.4 million, up more than three percent from the same four weeks a year ago. This is the 11th highest weekly production average ever reported by EIA.
Crude imports outpaced exports by 2.5 million barrels a day last week. Refined product exports surpass imports by more than 4.5 million. The government reports US crude imports were up nearly half a million barrels a day to just under seven million. Four-week average imports are up by nearly three percent compared to the same four weeks last year. The US exported 4.3 million barrels of crude per day last week. The four week average is down two percent from a year ago.
Independent Oil and Gas Service reports 21 new well-completions last week, 143 so far this year. There are six listed in Western Kansas, including two in Stafford County. Kansas regulators okayed six new drilling permits last week, with just three West of Wichita including two in Finney County.
The list of top oil and gas operators in Kansas last year includes some familiar names, including a few that are drilling today. Merit Energy of Dallas, Texas was number one in Western Kansas last year based on total footage drilled. That's according to a summary from Independent Oil and Gas Service. Berexco of Wichita is next, followed by American Warrior of Garden City and Darrah Oil of Wichita. Next are Shakespeare Oil of Salem, Illinois and Murfin Drilling of Wichita. Between them, these six operators drilled 150 wells, drilling over 710,000 total feet of well bore, out of 2.5 million feet drilled in all of Western Kansas.
The weekly rig count from Independent Oil and Gas Service is down four rigs in Western Kansas, but drilling was underway Friday on leases in Ellis, Finney and Haskell counties.
Baker Hughes reports an increase of two gas rigs and one oil rig for a total of 586 active rigs nationwide. The breakout for horizontal drilling is up four rigs. The count in Oklahoma was down two rigs. Texas, Utah, Louisiana and Wyoming were each up one.