Kansas Crude prices continue to improve but haven’t quite reached the plateaus of yesteryear. On Friday Aug. 31, Kansas Common at CHS in McPherson gained $2.50 to end the month at $63 a barrel.  The monthly average was $58.16 per barrel.  That’s far better than the averages, in the 30s, of the last three years or so, but still far short of the plateau reached in August of 2013, when Kansas Common fetched an average $90.74 cents a barrel.

Kansas-based drilling contractors report a drop of six rigs that are moving in, rigging up or drilling.  The number of rigs awaiting their next location assignment was up seven, so the aggregate active rig count is up one.  In Western Kansas 30 rigs are drilling or getting ready to.  Independent Oil & Gas Service reports drilling ahead at leases in Ellis and Stafford Counties, and completion tools on the way in at two plays in Barton County and five in Ellis County.  A whopping 14 leases in Barton County report they’re evaluating after reaching total depth, four in Ellis County, one in Russell County and eight in Stafford County.

Friday’s rig counts from Baker Hughes show an increase of four across the U.S. to 1,048 active rigs.  Canada reported 228 active rigs, down one.

Just two new drilling permits filed in our area for the week, one each in Ellis and Stafford counties.  Statewide, operators filed 64 permits, 42 for new locations in eastern Kansas and 22 in the western half of the state, for a year-to-date total of 1,198.

Independent Oil & Gas Service reported 37 new well completions across Kansas for the week, 1,033 so far this year.  There were 24 newly-completed wells east of Wichita and 13 in Western Kansas, including two in Ellis County.

Kansas oil production topped 14.6 million barrels during the first five months of the year, an additional 2.88 million barrels in April and 3.08 million barrels in May.  That’s according to the latest data from the Kansas Geological Survey.  The total is nearly half a million barrels less than the May totals last year, the worst year since 2005 for oil production. But the top four counties all posted increases over last year.  County production totals through May showed Ellis County on top with 1.09 million barrels.  Next comes Haskell County with a nearly ten percent increase at 1.04 million.  Finney County produced 723 thousand barrels, and Barton County had 715-thousand. Russell County produced 663-thousand barrels and Stafford County checks in with 438-thousand.

A Canadian Court last week overturned approval of the Trans Mountain oil pipeline expansion, but the ruling has less to do with the pipeline than the related increases in tanker traffic, and the consultation or lack of it, with native tribes.  The Federal Court of Appeal ruled that regulators wrongly narrowed the review of the project to exclude tanker traffic, and that’s something of great interest to the First Nations tribes of western Canada.  The federal government did not adequately consult First Nations as is required by Canadian law, according to the ruling.  The future of the project is not clear, but its approval has been quashed.  Parliament’s Natural Resources Committee was called to an emergency meeting Tuesday.  The ruling could be appealed to the country’s supreme court.

Jet fuel prices have skyrocketed, flying 36.5% higher than a year ago, and some commercial airlines are grounding flights as a result.  In about a month, American Airlines will suspend service between Chicago and China and reduce flights between Chicago and Japan due to what the airline called the “current fuel and competitive environment.”  Hawaiian Airlines suspended service to and from Beijing.

Industry analysts are scrutinizing the upcoming first physical deliveries of crude oil sold on China’s new futures market.  Reuters reports five Chinese firms are slated to deliver 600,000 barrels of Middle Eastern crude to Chinese customers who bought the September contract on the Shanghai International Energy Exchange.  Analysts say that smooth crude deliveries through this new mechanism will be key to the success of the enterprise. China wants that futures contract to evolve into a third global price benchmark, traded in Chinese currency.