By John P. Tretbar
U.S. crude futures prices were up three percent Monday. The Nymex near-month contract for light sweet crude settled Friday at $63.58 per barrel, and by lunchtime Monday was up nearly two dollars at $65.46. London Brent rose to $68.14 per barrel, a gain of $1.70.
The Kansas benchmark jumped a dollar and a half on Friday, matching the price posted May first. Kansas Common crude at CHS in McPherson starts the week at $53.75 per barrel, which is still nearly two dollars below the price a week ago.
U.S. gasoline average prices were up 17 cents per gallon over a month ago, and up more than a dollar a gallon from a year ago. A gallon of regular was going for $2.74 at most stations in Hays and Great Bend, where your 15-gallon fill-up was a dime cheaper than a week ago. The average across Kansas was just over $2.84. AAA said prices have stabilized following the recent pipeline closure, but warned of fluctuating prices leading up to the holiday weekend. The auto club said motorists will be greeted with the most expensive Memorial Day Weekend gas prices since 2014.
There are 30 new drilling permits across Kansas this week, 18 in the eastern half of the state and 12 west of Wichita, including one in Ellis County and two in Stafford County. That's 324 new drilling permits so far this year. Operators in Kansas have completed 12 new wells, four of them east of Wichita and eight in Western Kansas, including one well in Barton County. Independent Oil & Gas Service reports 277 well completions so far this year.
The weekly rig counts are flat on the month but up 54% year-over-year. Enverus Rig Analytics reports the totals in North Dakota reached a one-year high, calling that the first sign that the Bakken shale play is recovering from the downturn. Baker Hughes on Friday reported 455 active rigs across the U.S., noting an increase of four oil rigs. The count in Oklahoma was up four rigs, which Texas was down two.
Independent Oil & Gas Service reports six active drilling rigs in eastern Kansas, up two for the week, and 19 west of Wichita, which is unchanged. Drilling was underway on leases in Ellis and Russell counties, and operators are about to spud a new well in Stafford County.
The government on Wednesday said domestic crude inventories rose by more than a million barrels last week to 486 million barrels. That's about one percent below the five-year seasonal average. Total gasoline inventories dropped by two million barrels last week and are about two percent below the five year seasonal average.
The Energy Information Administration reported a slight increase in U.S. crude-oil production last week. Output rose five thousand barrels per day but was still just short of eleven million barrels per day. A year ago, production was over eleven-and-a-half million. EIA reported average imports of 6.4 million barrels per day last week, an increase of 900-thousand barrels per day. The four-week average is nearly 11% higher than the same four-week period last year.
Domestic oil-by-rail shipments were up nearly 15% over last year. The Association of American Railroads reported 11,230 tanker cars hauling petroleum for the week ending May 15, which is up by 1,107 tanker cars over the week before. Canadian oil-by-rail traffic was up more than 34% year-over-year.
The state of New Mexico brought in a whopping $109 million in royalties from oil and gas production on State Trust Land. A news release from the State Land Office says the record haul goes into New Mexico's Land Grant Permanent Fund, to underwrite public schools, hospitals and universities.
A report from Bloomberg shows a wide array of industries and political causes hoping to take advantage of the recent pipeline cyberattack. Many oil-industry groups called for bigger investment in fossil-fuel infrastructure, including refineries and the previously-canceled Keystone Pipeline. Environmentalists said the key is more electric vehicles on the road and solar panels on the grid. One conservative think tank called the outage a wake-up call for pipeline protests to stop. Even a coal advocacy group got into the act, pointing out that they don't use pipelines.
A federal judge on Friday said he will not force the closure of the embattled Dakota Access pipeline while regulators conduct a new environmental analysis. U.S. District Court Judge James Boasberg said the Native tribes fighting for closure had not shown irreparable harm based on the threat of an oil spill. That ruling could be appealed. Dakota Access has been shipping oil from North Dakota’s Bakken oil field to Illinois for four years.
The frenzy of mergers and acquisitions in the oil patch continues following a sustained recovery in prices. Cabot Oil and Gas agreed to merge with Cimarex [["SIM-er-ex"]] Energy in an all-stock deal valued at nearly seven and a half billion dollars. Cabot operates in the northeastern US, and Cimarex is a mid-tier driller in Texas and Oklahoma. Bloomberg reports the merger will lead to the elimination of about $100 million in annual costs.
U.S. Secretary of State Antony Blinken on Sunday joined a chorus of diplomats disputing Iran's claims that oil sanctions could soon be lifted. Iran's president last week said the United States was ready to lift trade sanctions, although a senior Iranian official contradicted him and European diplomats said difficult issues remained. Blinken says he has not seen Iran's compliance with nuclear commitments needed to move forward with the Vienna deal. According to reporting by Reuters, refineries in India and at least one in Europe were re-evaluating purchases to make way for Iran's crude during the second half of this year.