News from the Oil Patch, 4/29/24
John P. Tretbar
Statewide crude production bottomed out last year. The Kansas Geological Survey reports total Kansas output last year of 27.7 million barrels or 75,805 barrels per day. That's down more than 1,200 barrels a day from the year before to the lowest annual tally on record. Kansas output has been in a steady decline since the high point in 2014, when operators pumped more than 135,000 barrels a day or nearly double current output.
* Most county totals were also lower. Output in Ellis County leads the state rankings but drops by 110 barrels a day from a year earlier to 5,881 barrels per day.
* At number two, Haskell County dropped by more than two hundred barrels to just over 4,500 per day.
* Barton County showed an increase of nearly a thousand barrels to 4,080 barrels per day. Finney County pumped 3,800 barrels per day, an increase of 130 daily barrels.
* Rooks County was number five with 3,600 barrels a day, up 41 barrels.
* Russell County drops to number six in the county rankings, with average daily output of 3,594 barrels a day.
* Stafford County production ranks eighth, dropping by nearly 100 barrels a day to just under 2,500 barrels per day.
Regulators approved 27 new drilling locations across the state last week, with 11 in Western Kansas including one new drilling permit in Russell County. That's 283 new permits this year, compared to 416 by this time last year.
Operators completed 24 wells in Kansas last week. Independent Oil and Gas Service reports 18 new completions east of Wichita and six in the western half of the state. That's 378 wells so far this year, compared to nearly 600 a year ago.
The Kansas Rig Count from Independent Oil and Gas Service drops by two rigs in eastern Kansas to 12 active rigs. West of Wichita, there are 18 active rigs, which is up one from last week. The count is down six percent from last week and down nine percent from last year at this time. Drilling was underway on Friday on leases in Barton and Stafford counties.
Friday's Rotary Rig Count from Baker Hughes drops to 613 rigs, a decline of five oil rigs and one seeking natural gas. The tally in Louisiana was down four rigs. New Mexico was down one rig while Texas was up one.
Stockpiles are dropping, except in the Strategic Petroleum Reserve. The Energy Information Administration reports commercial crude inventories dropping 6.4 million barrels to just under 454 million as of April 19. Stockpiles are about three percent below the five-year average for this time of year. Government data reflect an increase in strategic inventories for the second week in a row. EIA's weekly Petroleum Balance Sheet shows an increase of 800,000 barrels in the SPR, marking a total increase of 1.4 million barrels in the last two weeks. EIA canceled previous efforts to buy about three million barrels when market prices failed to meet the government's target $79 a barrel. Prices have been over $80 for more than a month. The reserve remains a little over half full, at more than 365 million barrels. The US stored more than 600,000 barrels before Russia's invasion of Ukraine prompted the government to sell off strategic stockpiles to tame prices.
EIA notes US crude production increased slightly from a week ago. Alaska adds six thousand barrels per day while the lower-48 states held steady for a nationwide average of 13,137,000 barrels per day.
The US is a net petroleum exporter, but we import more crude oil than we ship out by 1.3 million barrels a day. Domestic crude-oil imports last week rose 36-thousand barrels a day for an average just shy of 6.5 million barrels a day, outpacing crude exports by 1.4 million barrels a day. The Energy Information Administration says petroleum product imports were also up slightly, driving total petroleum imports up to nearly 8.5 million barrels a day. Total petroleum exports topped 12 million barrels a day last week.
Slack demand drops gasoline prices, across the country and here at home. Pump prices are down despite dwindling national gasoline and diesel inventories. The auto club Triple-A says motor fuel demand typically slows in the run-up to Memorial Day and the traditional summer driving season. Gasoline prices have dropped two cents from last week. Diesel prices nationwide are three cents lower than a week ago. The EIA reports diesel consumption this year is lower than usual, due largely to warmer winter weather and reduced manufacturing activity, but also to the substitution of biofuels on the West Coast.