January 14th, 2019
Kansas Common crude at CHS in McPherson dropped a dollar Friday, and will start the week at $41.75 per barrel. That’s $3.50 more than a week ago, but is a dollar lower than the price a month ago and nearly $13 less than a year ago.
The national average price for a gallon of regular gasoline went up last week for the first time since October. The automotive club AAA reported Monday’s average of $2.24 is up a penny on the week, but is 15 cents lower than a month ago and is down 28 cents year-on-year. The average across Kansas was up three tenths to $1.965. It’s down to $1.94 at several locations in Hays, and as cheap as $1.92 in Great Bend.
Energy activity declined in our area during the fourth quarter of 2018, according to the Energy Survey from the Federal Reserve Bank of Kansas City. The KC Fed interviewed executives across the district which includes Kansas and Oklahoma about their current activity and economic outlook. This marks the first time in nearly three years they’ve noted a quarterly decline in their “drilling and business activity index.” More than half of the executives said lower oil prices caused them to slightly or significantly reduce their capital spending plans in the year ahead. About 35% said they would not reduce capital spending or that it was too soon to tell.
Baker Hughes reported a drop of four oil-drilling rigs last week, and an increase of four rigs actively seeking natural gas. Oklahoma was down four rigs, while Texas and Louisiana were each down two. Canada reported a season increase of 104 rigs to 184 for the week.
Independent Oil & Gas Service reports nine active drilling rigs east of Wichita last week, down one, and 28 in Western Kansas, up one. They’re preparing to spud a new well in Ellis County. Drilling is underway at one lease in Barton County and one in Stafford County.
Independent reports 28 new well completions for the week, 12 in eastern Kansas and 16 west of Wichita. There was one dry hole completed in Barton County and one completed well in Ellis County producing pay dirt.
Operators filed 16 new drilling permits last week, 22 so far this year. There are seven new permits in eastern Kansas and nine west of Wichita, including one in Ellis County and one in Stafford County.
The State of Colorado is holding out for drilling-pad limits in an upcoming oil and gas lease sale in northwestern Colorado that includes migration corridors and winter-range habitats for big game. Most of an earlier sale by the Bureau of Land Management was deferred, after the governor raised wildlife and other concerns. Colorado Parks and Wildlife has written that the acreage up for sale this March be limited to just one drilling pad per square mile.
Canada’s CBC reports a spike in bankruptcy and similar insolvency filings in Alberta, a trend blamed on low Canadian oil prices. In the past year, nearly 11,000 more Albertans filed, up 8.4 per cent over a spike the year before.
Based on weekly tallies from the U.S. Energy Information Administration, domestic producers pumped more crude oil last week than ever before, 11.705 million barrels per day, beating the previous high by 20-thousand barrels per day. Based on the weekly reports, the U.S. produced a cumulative daily average of 10.85 million barrels of crude oil per day last year, which would be a record. That’s about 1.5 million barrels per day more than the same figure from the year before.