News from the Oil Patch, June 2
By John P. Tretbar
Crude prices in New York jumped five dollars Monday after dropping nine dollars last week. Monday's settlement price for light sweet July crude was $92.16 per barrel, up more than 5.5 percent in one day, with Tuesday offers gaining another dollar to top $93 per barrel by afternoon. London Brent is over $95 per barrel.
Crude prices in the Sunflower State close out May with the highest monthly average in nearly four years. Kansas Common crude at CHS in McPherson starts June at $77.50 per barrel after dropping a $1.50 on Friday. Prices in McPherson last month averaged $88.24 per barrel, the highest monthly average for Kansas Common since July 2022.
Your road-trip keeps getting cheaper, although not exactly cheap. US pump prices for regular gasoline drop three cents on the day and twenty cents from last week to four twenty-nine per gallon nationwide, and three eighty-eight ($3.88) across Kansas. Average prices remain more than $1.00 per gallon higher than a year ago. Diesel prices are down 15 cents from last week across the country, and 18 cents lower across Kansas, according to the auto club AAA.A government auction raises a whopping four billion dollars for oil-and-gas acreage in the Permian Basin, a record take that quadruples the previous record. The offering included the Administration's revised royalty rates, 12.5%, down from 16.67%. The Bureau of Land Management reports 61 bidders placed over a thousand bids on 74 parcels stretching out over 33,000 acres in New Mexico and Texas. In the end there were three bidders offering up $3.9 BILLION for about 83% of the acreage offered.
The government reports declining crude-oil inventories for a fifth week in a row, and declining fuel inventories for a 13th consecutive week. At just under 442 million barrels as of May 22, commercial crude stockpiles are about two percent below the five-year average for this time of year. Fuel inventories declined for a 13th week, dropping double-digits behind five-year seasonal averages.
EIA reports another drawdown at the Strategic Petroleum Reserves, swapping out more than nine million barrels this week. At 364 million barrels, strategic reserves are now the lowest in two years, since refill operations began after the last drawdown.
US operators pump more than 13.7 million barrels of crude oil per day this week, up 13,000 barrels a day from a week ago. The four-week average is up more than two percent from the same four weeks last year.
Yet another crimp in the energy supply chain, as important transportation hubs dry up. Barges are reducing cargoes as river levels drop on Europe's most important waterways. Water levels on the Rhine River dipped so much that a crude barge had to reduce its load to 1,000 tons at the waypoint of Kaub, Germany. That's about 40% of the capacity of the barge, according to data from Spotbarge cited by Bloomberg.
State regulators report another spike in the intent-to-drill permits filed here last month. The Kansas Corporation Commission notes 100 new intent-to-drill permits statewide or 350 so far this year. That beats the tally by the end of May last year by 15 percent. In Ellis County, operators file two new intents, making eight so far this year. Stafford County adds three for a total of six this year. The KCC Web site returns two after a search in Finney County, and three in Gove County. Add SIX new intents in Haskell County, 13 so far this year. Rooks County adds two, where they also notch 13 so far in 2026. The 288 oil, gas and service wells drilled from spud to full depth this year trail the same tally a year ago by 21 percent. Total footage is down 35%. Independent Oil and Gas Service reports six new completions west of Wichita and two in eastern Kansas.
The Kansas Rig Count from Independent Oil and Gas Service is up eleven percent from last week. There are nine active rigs in eastern Kansas, which is up two, and 11 west of Wichita, which is unchanged. The tally is up five percent from last month and 25% higher than a year ago. Drilling was underway or close on Friday on leases in Ellis, Rooks and Gove counties, and two leases in Haskell County.
US rig Counts rose by four oil rigs this week to 562 according to Baker Hughes. New Mexico is up five rigs. Texas gains one. Oklahoma and Louisiana are each down one.
The US remains a net importer of crude oil, with imports outpacing crude exports by 772,000 barrels per day. After two weeks at near-record heights, US crude exports last week tumble twenty percent to their lowest weekly tally in more than a month: 4.4 million barrels a day. The four-week average remains over five million. Crude imports drop 804-thousand barrels or 13 percent, to 5.2 million barrels a day.