News from the Oil Patch, Dec. 16
John P. Tretbar
US crude-oil production rose to another record last week, 13,631,000 barrels per day, topping the previous record by nearly 100,000 daily barrels. The Energy Information Administration reports a spike in the four-week average as well, up 3.4% to more than 13.4 million barrels per day. Cumulative output for the year so far is up more than five percent from a year ago, to more than 13.2 million barrels a day.
The government says the production cost of those barrels is dropping. EIA compared financial results and production for 34 publicly-traded companies and found that increasing well productivity is reducing their cost per barrel, and freeing up cash for dividends, stock buybacks, and other uses.
The Kansas Geological Survey reports a continuing drag on the state's output. Operators in Kansas produced 17.9 million barrels of crude from January to August, or 73,635 barrels per day, a 4.3% drop from the first eight months last year. The Kansas Geological Survey reports all but one of the top-ten producing counties declined during that period. Ellis County still tops the list, with an average of 5,735 barrels per day, down more than 200 barrels a day from the same eight months last year. Output is up more than 13% in Finney County at number two. Haskell County ranks third, but drops by about ten percent compared to last year. Barton County ranks fourth at 3,872 barrels per day, down six percent from a year earlier. Russell County output is fifth in the rankings with 3,548 barrels per day, down about three percent. Output dropped about four percent in Stafford County, which ranks eighth among counties statewide.
The Energy Department takes delivery on another 700,000 barrels of crude for the Strategic Petroleum Reserve at a $15 per barrel markdown from the sales price two years ago. Current strategic stockpiles total more than 392 million barrels, up 12% from a year ago. US commercial crude inventories dropped by nearly 1.5 million barrels last week to 422 million.
Kansas crude prices are at four-week highs but about six dollars below the average so far this year. Kansas Common crude rose a dollar a barrel on Friday at CHS in McPherson, to start the week at $61.50 per barrel. The average price per barrel in McPherson so far this year has been just under $67. The average so far this month is under $61 per barrel.
Operators completed 40 wells across the state last week, including two in Barton County. Independent Oil & Gas Service reports 28 wells east of Wichita and 12 in Western Kansas. That's 1,282 well-completions so far this year, compared to 1,628 by this time last year.
Kansas regulators okayed 25 new drilling permits last week with 20 in eastern Kansas and five in the western half of the state. That's 1,110 new drilling locations statewide so far this year, which is down 124 permits from the total a year ago.
The Kansas Rig Count from Independent Oil and Gas Service is up one at 11 rigs in eastern Kansas, and up one at 22 rigs west of Wichita. The total number of rigs either moving to or currently on site is up ten percent from a month ago, but down nearly six percent from last year at this time.
The latest report from Baker Hughes is up one gas rig and down one in the miscellaneous column, for a total of 589 rigs. Texas was down two rigs. New Mexico was up two. Pennsylvania drops by one rig and Louisiana is up one. The horizontal tally was down one rig, while the total for directional rigs was up one.
The government reports gasoline and diesel inventories are up from last week but both are four percent below the five-year seasonal average. EIA reports demand for gasoline is up marginally from a year ago while diesel demand is down slightly. National gasoline and diesel prices are down half a penny from a week ago. Triple-A reports just 18 states left with regular gas over three dollars a gallon. Average prices in Kansas drop to $2.66 for regular and $3.18 for diesel.
Crude-oil imports averaged just under six million barrels a day, down from 6.5 million a year ago and 6.8 million two years ago. The four week average is over 8.3 million, up slightly from a year ago.
Crude exports averaged just over three million barrels a day, down 700,000 barrels from a year ago and down 1.3 million from two years ago. Four week average crude exports are down more than 300,000 barrels.
Comparing imports to exports shows the US is a net crude-oil importer by more than 2.8 million barrels a day. Adding product imports and exports to that equation reveals we are a net petroleum exporter by nearly 2.5 million barrels a day.