News From The Oil Patch, May 1
John P. Tretbar
The monthly government production tally shows US crude output was down slightly in February, but remains ten percent higher than a year ago. According to the Energy Information Administration, February crude output was just over 12.4 million barrels per day. Production in Kansas dropped slightly from last month, but rose slightly from last year, at just over 76-thousand barrels per day.
The weekly government production tally was up 120,000 barrels per day compared to the week before, averaging just over 12.2 million barrels per day, compared to 11.9 million a year ago.
US crude inventories dropped by more than five million barrels last week. EIA reports stockpiles of 460.9 million barrels, not including the Strategic Petroleum Reserve. That's about one percent below the five-year average for this time of year.
Crude prices in New York rose about two dollars a barrel Friday but were poised to give most of that back by lunchtime Monday. The benchmark Nymex contract was trading over $75 per barrel. London Brent was a few cents over $79 by midday. Kansas Common crude at CHS in McPherson starts the week at $67 a barrel.
Some 120 Kansas operators have spudded 400 wells so far this year, drilling an estimated 1.1 million feet of well bore. Independent Oil & Gas Service says spuds are down 12% from a year ago, while total footage is down nearly 23%.
US crude imports increased by 81-thousand barrels per day. EIA said the four week average is up more than eight percent from the same four weeks a year ago.
The weekly Rotary Rig Count from Baker Hughes Friday (4/28) showed 755 active drilling rigs across the US/ The oil rig count unchanged. The tally of vertical rigs was up five, while directional drilling was down one and horizontal was down two. Oklahoma was down three rigs, Louisiana was up three and New Mexico was up two.
The Kansas Rig Count is down slightly for the week, 17 percent lower than a month ago, and 35 percent lower than a year ago. The count west of Wichita is unchanged at 20 rigs. Operators were about to spud a new well in Barton County on Friday. Drilling was underway on leases in Barton and Stafford counties. Operators across Kansas completed 16 wells last week including one each in Barton, Ellis and Stafford counties. Independent Oil & Gas Service reports 596 new well-completions so far this year, compared to 542 a year ago.
Kansas regulators approved 24 new drilling locations across Kansas last week, 416 for the year compared to 486 by the end of April last year. Out of 19 new drilling permits in western Kansas, there are two in Barton County and one each in Ellis and Stafford counties.
Tensions flared in the Middle East as Iran's navy seized an oil tanker on it's way from Kuwait to Houston. Reuters reported the seizure came days after the US confiscated crude from a tanker at sea in what the Navy called a sanctions-enforcement operation. The latest escalation between Washington and Tehran comes after years of sanctions pressure over Iran's nuclear program. Iran does not recognize the sanctions, and its oil exports have been rising.
The US Supreme Court paves the way for wave of climate-change lawsuits in state courts against energy companies. The high court last week declined to hear an effort by major oil companies to move climate-change lawsuits from state to federal courts, where the companies could expect more favorable treatment. City, county and state governments are suing Chevron, Shell, Exxon Mobile and others alleging varied environmental harms from the emission of greenhouse gases. Depending upon what they're able to prove in state court, they could force energy firms to pay billions of dollars in a nationwide reckoning over climate liability, to help cover the cost of droughts, floods, wildfires and other disasters. Observers say it will be years before we see any such verdict, as each case must now go through the state civil court process, including possible dismissal and a lengthy discovery process.