News from the Oil Patch, Aug. 19
John P. Tretbar
Crude prices are down three dollars in three days. Futures prices settled a dollar and a half lower on Friday. Near-month NYMEX crude closed the day at $76.65 per barrel. That's a weekly loss of 21 cents per barrel. By lunchtime Monday, prices were another three percent lower. NYMEX crude was trading below $75 and London Brent dropped under $78. Kansas Common crude at CHS in McPherson starts the week at $67 per barrel after dropping a dollar and a half on Friday.
The number-three crude-producing state in the country gets new energy leadership. Lynn Helms retired as Director of the North Dakota Department of Mineral Resources earlier this year after 26 years managing the state's dramatic rise in energy production. Nathan Anderson will take the reins as Director starting next month.
Output in North Dakota dropped below 1.2 million daily barrels for the second month in a row and the third time this year. Production dips to 1,175,000 barrels per day in June, down 1.9% from revised May totals. DMR reported a one-percent drop in North Dakota's gas-capture rate, and a more than one-percent drop in natural gas production.
Kansas regulators okayed ten permits for drilling at new locations, with two in eastern Kansas and eight west of Wichita. That's 614 new permits this year, compared to 800 reported a year ago at this time.
Operators completed 45 new wells across Kansas last week. That's 836 new well completions since the first of the year, compared to 1,096 by this time last year. Independent Oil and Gas Service reports 28 new well completions in the eastern half of the state and 17 west of Wichita, including one in Ellis County.
The Kansas Rig Count from Independent Oil and Gas Service is down one in Western Kansas at 17 active rigs and unchanged east of Wichita at 12. The statewide tally is up 12 percent from a month ago but down 33 percent from last year at this time.
At 586 rigs, the Rotary Rig Count from Baker Hughes was two oil rigs lower and one gas rig higher last week. Texas was down three rigs. Oklahoma was up two.
The government is reaping a paper profit from lower crude prices to the tune of tens of millions of dollars. The Energy Department last week bought another 700-thousand barrels of crude for the Strategic Petroleum Reserve. That's 12.3 million barrels since April, paying below $80 a barrel to replace crude we sold two years ago for over $95.Commercial crude oil inventories increased by 1.4 million barrels in the week through August 9th to more than 430 million. Stockpiles are about five percent below the five-year average for this time of year.
The EIA reports US crude production dipped from last week's all-time record. The Energy Information Administration reports weekly output averaging 13,287,000 barrels per day, down from more than 13.4 million a week ago. Cumulative production so far this year is up more than seven percent from last year at this time.
Crude-oil imports outpaced exports by two and a half million barrels a day. Product exports beat imports by 5.4 million, making the US a net petroleum exporter by nearly three million barrels a day.
Imports averaged 6.3 million barrels a day, up 61-thousand daily barrels from a week ago, but down 873-thousand barrels from a year ago. The four-week average is down about two percent from last year. EIA reports crude exports increased three percent from last week but dropping 18 percent from a year ago. Four-week average exports are down two percent.
Chevron says goes deep, despite extreme pressure. The company announced the first-ever offshore crude production from fields long thought to be out of bounds because of extreme sub-sea pressure. The company announced the first production from the $5.7 BILLION "Anchor" development, 140 miles off the coast of Louisiana. Project operators expect peak output will reach 75,000 barrels of oil and 28 million cubic feet of natural gas per day. Over the course of the next 30-years, the project will include seven sub-sea wells drilling in depths of about five-thousand feet, linked to what they call a Floating Production Unit. Reuters reports that up until now we lacked the equipment able to cope with pressures of up to 20,000 pounds per square inch.