Crude futures prices held fairly steady Friday after a big sell-off Thursday. Cash crude on the Nymex went for $57.87 per barrel Thursday, down $3.53 per barrel. The near month contract for light sweet crude was going for $57.92at mid-day Friday. London Brent was up 18 cents at $67.94 per barrel.
The world’s insurers are getting skittish about underwriting oil tankers heading to or from the Persian Gulf, as tensions build in the region. A new report from Bloomberg notes that the “Joint War Committee” of the Lloyd’s Market Association in London will expand it’s so-called “listed areas” to include the Persian Gulf. That means the group believes the region poses a greater risk for shipping, and potentially warrants higher insurance costs. The last time the entire region held that designation was a period that ended in June 2005 and encompassed the most recent Iraq War. The classification comes after the committee met to discuss the sabotage of four tankers at a port in the United Arab Emirates.
Wednesday’s government reports showed domestic weekly production up slightly to of 12.177 Million barrels per day. EIA said crude oil inventories were up 4.7 million barrels from the previous week. Imports averaged 6.9 million barrels per day last week, down by 669,000 barrels per day from the previous week.
In the words of one market analyst, imports of Russian crude oil by refineries in the U.S. is “on steroids.” In reporting published on the Web site “seeking alpha dot com,” Russ Dallen of Caracas Capital Markets said Russian exports to the U.S. are set to triple. According to the report, those numbers directly negate a Saudi strategy to reduce U.S. stockpiles. The report suggests that members of the so-called “OPEC plus” agreement face a major crossroads at their meeting next month, as they try to prop up prices by cutting production and inventories.
Independent Oil & Gas Service reported three active drilling rigs in eastern Kansas, up two for the week, and 23 west of Wichita, which is down three. Operators were drilling at one site each in Barton, Ellis and Stafford counties. Baker Hughes reported 983 active rigs for the week nationwide, down five oil rigs and up one searching for natural gas. New Mexico reported a drop of four rigs.
Operators received 19 permits for drilling at new locations across Kansas last week, nine of them east of Wichita, and ten in Western Kansas, including one in Barton County, two in Ellis County and one in Stafford County. Regulators have approved 358 new drilling permits so far this year.
Independent Oil & Gas Service reported 46 newly-completed wells across Kansas for the week, including two in Barton County and one in Ellis County. There were 30 new completions east of Wichita, and 16 in Western Kansas.
Colorado officials say they have no plans to stop energy companies from drilling for oil and gas while regulators overhaul state rules to prioritize health, safety and the environment. Some environmentalists and community activists have demanded the Colorado Oil and Gas Conservation Commission stop issuing permits until those new rules are complete. The commission is part of the state’s Department of Natural Resources, and the chief executive of the DNR said it was never the intent of the Legislature to pause their work. The newly reconstituted Commission held its first meeting Tuesday as the agency starts a massive rewrite of regulations in the patch. After a series of court rulings and ballot initiatives, a new law requires the commission to emphasize public safety and the environment ahead of energy production. The new law gives local governments some authority over the location of wells and changes the commission makeup to dilute industry influence.