By JOHN P. TRETBAR
Oil prices rebounded Monday after dropping nearly 10% last week. In early afternoon trading the Nymex benchmark contract was up 58 cents to $59.78/bbl. London Brent gained 34 cents a barrel to $63.13. Kansas Common crude at CHS in McPherson starts the week at $49.50 a barrel, after losing two dollars on Friday.
The government says U.S. oil production will top 11 million barrels a day much quicker than anticipated. In its monthly Short-Term Energy Outlook last week, the Energy Information Administration predicted the 11 million barrel milestone will happen by November. Previous estimates pegged it a year later.
Rig Counts are on the rise across the US and across Kansas. Independent Oil & Gas Service reported 11 active oil and gas rigs in eastern Kansas, which is up one. There are 25 west of Wichita, up two rigs. Operators are drilling at one Stafford County lease, and moving in completions tools at one site in Barton County, two in Ellis County, two in Russell County and one in Stafford County. Baker Hughes reported 975 active drilling rigs across the US last week, up 25 oil rigs and three gas rigs. Canada cut back 17 to 325 active rigs.
The Kansas Corporation Commission reports 113 new intent-to-drill notices filed across Kansas last month, the same figure as the month before, down from a year ago, up from two years ago, but way below the 459 filed in January of 2015. There was one intent filed in Barton County last month, two in Ellis County, and one in Stafford County. We haven’t seen a new intent in Russell County since November.
Kansas reported 36 new drilling permits last week, 17 east of Wichita, 19 in the western half of the state, including on in Barton County, one in Ellis County and four in Stafford County. For the month of January, regulators issued 107 permits across Kansas, 51 east of Wichita, and 56 in the western half of the state. There was one new permit filed in Barton County, two in Ellis County and one in Stafford County.
Independent Oil & Gas Service notes 41 new well completions across the state last week, 34 in eastern Kansas, and just seven west of Wichita. That’s 179 well completions so far this year. Monthly reports show 113 newly completed wells statewide in January, down slightly from a month earlier and from a year earlier. There were 55 new completions last month in eastern Kansas and 58 west of Wichita, including five wells in Barton County, six in Ellis County and four in Stafford County.
Venezuela has the world’s largest proven crude oil reserves, but its falling production is forcing the OPEC member to import crude oil from Russia. Platts reports three tankers have left Russia for Venezuelan refineries so far this year, and another is expected to load later this month.
Venezuela’s President Nicolas Maduro has called for an OPEC-wide crypto-currency, akin to the Bitcoin but backed by oil. At least one U.S. Senator is worried that an electronic coin backed by Venezuelan oil would be a way to avoid U.S. financial sanctions. The issue was raised in committee by New Jersey Senator Bob Menendez, who also highlighted reports that Russia’s government is considering a similar initiative.
President Donald Trump has backed off his proposal to stop sharing oil revenues from offshore drilling with states along the Gulf of Mexico. In the new budget proposal, the White House preserved the revenue sharing agreement, which was expected to deliver $275 million to four Gulf states this year.
Pioneer Resources announced it is selling assets elsewhere and focusing solely on the Permian Basin of Texas and New Mexico, making Pioneer a Permian Basin “pure play.” The company announced a 26% spike in its Permian oil production last year, and said it would place 250 to 275 wells on production there this year.
Budget cuts in Oklahoma are forcing regulators to consider raising fees for oversight of petroleum storage, commercial transportation, and oil and gas operations. The Daily Oklahoman cites estimates they could generate an additional $13.7 million a year. A trade group told the Oklahoma Corporation Commission that oil and gas provide about a quarter of the state’s revenues, and said the Legislature should use some of that to fund O.C.C. operations.
North Dakota voters may decide in November whether to raise the state’s oil extraction tax. The initiative would also reverse a central piece of the overhaul state lawmakers passed nearly three years ago that the state’s Democrats label a “shady last-minute deal” crafted in the final days of the legislative session.
A legislative committee in South Dakota voted down a measure to ban oil pipelines in the state. Had it passed, the measure would have prevented construction of new pipelines after July 1.
An activist from Seattle will serve one year in prison for cutting through a fence and turning a shut-off valve on the Keystone Pipeline during a protest a year and a half ago. A co-conspirator who filmed the protest was sentenced to probation Tuesday.