By JOHN P. TRETBAR
Eagle Communications
Kansas crude prices are down slightly after reaching their peak for the month last week.
Kansas Common crude at CHS in McPherson starts the week at $71.25 per barrel after dropping 25 cents Friday. That's up a dollar from the first of the month and more than $11 dollars higher that at the first of the year. The near-month contract for light sweet crude on the Nymex settled Friday over $81 per barrel for the second day in a row, and only the second time this year. Prices were up two percent by lunchtime Monday. Nymex crude was trading over $82 a barrel and London Brent was over $86.
The latest lease sale announced by the government under the Inflation Reduction Act will include parcels in northwestern Kansas. According to the announcement from the Bureau of Land Management, this sale includes 18 parcels in New Mexico and eight in Cheyenne County, Kansas. The 30-day public protest period to receive additional public input will close April 10, with the sale scheduled to follow on June 13.
Statewide well completions so far this year are running about half of the pace set last year. But the weekly report from Independent Oil & Gas Service shows more completions than in any week since before the pandemic. Operators completed 62 wells across Kansas in the week through March 14, the most since January of 2019. Out of 62 wells completed last week, just eight were dry holes. The last time operators filed that many completion reports, five years ago, the percentage of dry holes was much greater, 20 dry holes out of the 66 newly completed wells reported.
Kansas regulators okayed 15 new drilling locations last week, including one new permit in Barton County. That's 173 drilling permits so far this year, compared to 254 by this time last year.
The Rotary Rig Count from Baker Hughes rose by seven rigs from a week earlier. The count in Louisiana was up five rigs, Texas was up three and New Mexico was up one. Oklahoma was down one rig.
The Kansas Rig Count from Independent Oil & Gas Service notes 18 active rigs in western Kansas, which is up three for the week. Drilling was underway or about to start on leases in Barton and Stafford counties.
U.S. operators exported a record 1.9 million barrels of propane per day in December. That's the largest such tally since 1973, when the government started keeping track. The Energy Information Administration reports the spike in exports stems mainly from the huge price spread between the U.S. Gulf Coast and from East Asia, the biggest spread in ten years. During the second half of last year, Saudi propane exports to Asia fell by 22%, while U.S. exports to Asia grew six percent.
Crude exports set a record last year, up 13% from the previous record set the year before. The government says exports for the year averaged over four million barrels per day. The Energy Information Administration says U.S. sales abroad have increased in every year since the ban on most exports was lifted in 2015. The new report from Energy Information Administration suggests record-high production is supporting the spike in exports. Many U.S. refineries are optimized to run heavy, sour crude, while much of the output here in the U.S. is light, sweet crude. The report suggests this creates export incentives.
The government says both crude imports and exports dropped last week.
U.S. crude oil imports averaged 5.5 million barrels per day last week, a decline of 1.7 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.4 million barrels per day. That's 183,000 barrels or nearly three percent higher than the same four-week average last year.
Crude-oil exports dropped last week by nearly 1.5 million barrels per day. The Energy Information Administration says operators shipped out of country 3,147,000 barrels per day in the week through March 8. The four-week average for crude exports drops to 4.3 million barrels per day, down about six percent from the four-week average a year ago.
Output from the U.S. oil patch slid back from recent record highs but remained above 13 million barrels per day for a seventh straight week. U.S. crude production dropped last week by more than 100,000 barrels per day from the week before, to 13,132,000 barrels per day. Current output beats the same week a year ago by 888,000 barrels per day. Average production over the last four weeks reached 13,225,000 barrels per day, which is up eight percent from a year ago.
Domestic crude inventories dropped by 1.5 million barrels last week. The Energy Information Administration reports stockpiles of 447 million barrels as of March 8. EIA said inventories are about three percent below the five-year average for this time of year.