By JOHN P. TRETBAR
Weekly reports show an increase in drilling activity across the country and across Kansas. Baker Hughes reports an increase in the active drilling rig count for Oct. 16. There are 282 active rigs, an increase of 12 oil rigs over the week before. The count in Texas was up seven rigs. Utah was up three and Oklahoma gained two. Rig Counts in Kansas were up 44%. Independent Oil & Gas Service reports five active rigs in eastern Kansas, up three for the week, and eight west of Wichita, which is up one. Drilling was underway Friday on leases in Ellis and Stafford counties.
Kansas regulators approved twenty new drilling permits last week, eight of them east of Wichita and 12 in Western Kansas, including one each in Barton and Ellis counties. Independent Oil & Gas Service reports four newly-completed wells across the state, 680 so far this year.
Kansas Common crude at CHS in McPherson starts the week at $31.25 per barrel. That’s a half dollar more than a week ago and more than two dollars higher than at the first of the month.
Kansas crude-oil production has plummeted alongside the national numbers because of the pandemic-related price plunge. The Kansas Geological Survey reports statewide output through June averaged 76,000 barrels per day (bpd). That’s down 16,000 bpd, or about 17%, compared to the same period last year. Barton, Ellis and Russell counties all showed declines through the first half of the year of more than 17%, but output in Stafford County was up more than four percent from the first-half total last year. Operators in Barton County pumped 3,718 bpd through the end of June. Ellis County produced 5727 bpd. Output in Russell County was 3,408 bpd, and Stafford County notched 2,511 bpd.
The Energy Information Administration said domestic crude inventories dropped by nearly four million barrels last week, but remain about 11% above the five-year seasonal average.
EIA said U.S. crude-oil production totals declined half a million barrels per day last week. Current U.S. output is 10.45 million [[“ten point four five million”]] barrels per day, That’s down more than two million barrels per day from a year ago, a decline of about 17%.
The government said U.S. crude imports averaged 5.3 million barrels per day last week, down nearly half a million from the week before. The four-week average is down more than 15% from a year ago.
Most motorists are seeing stability at the gas pump. The auto club AAA says weekly statewide averages held steady in 45 of the 50 states. At $2.17 a gallon, the national average is down a penny from a month ago, while the average in Kansas is four cents lower than last month at $1.94 per gallon. You can find it for $1.92 at several stations in Hays, but it’s up to $1.99 in Great Bend.
Oil-by-rail traffic remains nearly 20% behind last year even as grain shipments help bring total rail traffic out of its long downturn. Grain shipments are up 31% year-over-year, while total traffic is up two percent. The Association of American Railroads reports 10,259 tanker cars hauling petroleum or petroleum products during the week ending October 10, down 169 cars from the week before.
August crude oil production in the nation’s second biggest producing state increased in August, jumping 120,000 barrels per day over the final July totals. The Department of Mineral Resources reports total output in North Dakota increased to more than 36 million barrels, or 1.16 million [[“one point one six million”]] barrels per day. That’s down nearly half a million barrels per day from the all-time high reached last November.
The downturn in North Dakota production has brought the state within its anti-flaring goals, which had been out of reach a year ago. Regulators said operators there were able to capture 92% of the natural gas produced by its oil wells in August. That’s well within the state’s goals which will expand to 91% next month.
Goldman Sachs offers a surprising perspective on the presidential election. According to the Houston Chronicle, a research note released Sunday says a Blue Wave in the election would be a positive catalyst for the oil patch. The note says tougher regulations on hydraulic fracturing would likely reduce production, and thus raise prices. Newspapers across Texas, including the Chronicle, have been documenting some dramatic steps being taken in the Texas oil patch to hedge against a win by Democrats.
The Russian oil pipeline monopoly and that country’s biggest producer have reached a settlement with the French oil firm Total over dirty crude supplies. Upwards of 35 million barrels of crude contaminated with organic chlorides were sent to a German refinery last year. The amount of the settlement was not announced.
Libya took a major step toward reviving its battered oil industry by reopening its biggest field. Libya’s state energy company lifted restrictions and expects upwards of 300,000 barrels per day by next week, nearly doubling Libya’s output. The reopening follows a truce in Libya’s long-running civil war that’s already led to many oil fields and ports in the east starting up after an almost total shutdown since January.