June 4th, 2018
The government reported the highest monthly US crude production ever, a whopping 10.47 million barrels per day in March, up nearly 15% year on year. Texas production jumped 25%. Here in Kansas, the U.S. Energy Information Administration report lists 97 thousand barrels per day, nearly five percent lower than last year at this time.
The Kansas Corporation Commission reports 143 intent-to-drill notices filed during the month of May (706 so far this year). That’s two more than the month before, but down four from May of last year. Barton County reported three new intents filed last month. Ellis County notched six. There was one in Russell County and four in Stafford County.
Operators in Kansas produced more than 2.2 million barrels of crude oil in February, just over 5.6 million barrels for the first two months of the year. The Kansas Geological Survey said the two-month total in Barton County was 277-thousand barrels plus. Ellis County’s total was over 431-thousand barrels. Production in Russell County increased to 256-thousand through February, and in Stafford County, operators produced a two-month total of 164-thousand barrels.
Over the last two years, the average price for a barrel of Kansas Common crude in McPherson has increased more than $23. The May monthly average at CHS in McPherson was $60.17/bbl. That’s more than $21 higher than the average in May of last year, which was more than two dollars over the May average the year before. The peak monthly average price for Kansas Common dates back to June of 2008, when the former NCRA refinery shelled out an average of more than $124/bbl. (Note: this story was originally broadcast using monthly averages from April, which reflected a higher two-year increase than the May figures)
London Brent reached its largest premium over U.S. futures prices in more than three years, suggesting U.S. exports are becoming more competitive. The spread between Brent and U.S. crude stands at more than ten dollars a barrel, its widest since 2015.
Amid U.S. demands to offset China’s $335 billion trade deficit, that country’s Ministry of Commerce has granted import licenses to eleven new private or “teapot” refiners, bringing the total to 28. China has called off refinery production to clear the air in the refining hub hosting a major trade show. Reuters reports that Exxon may have been late to the “teapot party,” but made up for it with a huge marketing blitz at the show. Their booth was manned by the global crude marketing manager and a dozen traders and marketers. They also hosted dinner for 200 prospective customers and traders. Observers note this as a dramatic departure from Exxon’s traditional, more private, sales pitches.
A firm is starting up an oil-sands project in eastern Utah in hopes of tapping into an estimated 30-billion-barrel reserve there. The Grand Junction Sentinel reports the company Petroteq is touting a new way to separate bitumen from sand, using no water, no high temperatures and no high pressure, without producing greenhouse gases. According to the newspaper the process extracts up to 99% of all hydrocarbon contents and recycles up to 99 percent of the benign solvents it uses. The company says the leftover sand can be returned to the ground, or used for construction or fracking.
The North Dakota Public Service Commission approved a pipeline conversion project to deliver more crude oil to the Dakota Access Pipeline. The Bismarck Tribune reports Hess Corporation will convert about 19 miles of gathering pipelines in McKenzie County to transmission lines. The company plans the addition of three booster pumps as well as new pipeline monitoring systems.
In Colorado, activists are circulating a petition for a ballot initiative to change state law, requiring setbacks of 25-hundred feet, between oil and gas development and occupied structures, playgrounds and water sources. That’s five times the current setback rule. The group has about nine weeks left to collect more than 100-thousand signatures needed to place the question onto the ballot. Big oil is spending big bucks to fight the initiative which they say, if passed, would cost thousands of jobs and billions of dollars in economic impact. KMGH-TV7 reports an industry-friendly PAC opposing the measure has collected millions from big oil firms. The state’s largest, Anadarko, wrote a check for more than two million dollars. Nobel Energy and Extraction Oil and Gas added another four million. The industry as a whole since January has given more than eight million dollars.