By JOHN P. TRETBAR

U.S. crude prices dropped more than two percent on Friday, after China announced it would impose a five percent tariff on U.S. oil imports.

Kansas Common crude at CHS in McPherson dropped a dollar on Friday to end the week at $44.50 per barrel, down fifty cents from a week ago but up a quarter from the first of the month.

Baker Hughes reported the largest weekly drop since April in its weekly rotary rig report. There were 916 active drilling rigs across the U.S. on Friday, down sixteen oil rigs and three seeking natural gas. The count in Texas was down four, Oklahoma was down three and New Mexico was down two. Colorado was down four rigs, and Pennsylvania reported a drop of six drilling rigs.

Independent Oil & Gas Service reported 26 newly completed wells across the state, eleven east of Wichita and 15 in Western Kansas, including one in Ellis County. So far this year, Kansas operators have completed 950 wells.

Regulators approved 17 permits for drilling at new locations in Kansas last week, all of them in the western half of the state. There are two new permits in Barton County and one in Stafford County. There are 625 new drilling permits across Kansas so far this year.

The Kansas Corporation Commission announced an investigation into a string of earthquakes near Hutchinson. Regulators are collecting data and analyzing recent injection well activity in Reno County in an effort to determine what caused a series of earthquakes earlier this month that knocked down ceiling tiles and broke some windows. The largest of the quakes August 16 was a magnitude 4.2, and was felt as far away as Ponca City, Oklahoma and Kansas City, Missouri.

U.S. producers have been shipping increasing amounts of crude oil by rail over the last decade, as pipeline capacity failed to keep up with booming production. New analysis on the Web site “Freight Waves” suggests some changes on the horizon. Analysts say as long as the cost of production plus the cost of rail shipping is less than the sale price, the trend could continue. But because of the decreasing difference between national and international price benchmarks, those profit margins are decreasing. Analysts say crude-by-rail from the Permian Basin to the Gulf Coast will soon fade out of the picture, as a string of new pipelines come on line. Data from the government show most oil-by-rail travels to the east and west coasts.

Weekly oil-by-rail totals topped year-ago totals by more than ten percent last week. According to the latest tally from the Association of American Railroads, producers shipped petroleum and petroleum products on 12,004 rail tanker cars during the week ending August 17. The cumulative total so far this year is over 421,000 rail cars, an increase of more than 20% over the total a year ago at this time. Canada saw a 22% increase in the weekly total and a 24% increase in the year-to-date total. AAR says total rail traffic for the week was down 5.2 percent compared with the same week last year.

The government reported another near-record for domestic crude-oil production. For the week ending August 16, operators pumped 12.339 million barrels per day, an increase of six thousand barrels per day over the week before and the second-largest weekly tally ever. That total is 39,000 barrels per day below the all-time weekly record set back in May.

The dramatic increase in U.S. crude production has fueled our rise to become the top-producing nation in the world, and has reduced our reliance on imported oil by more than ten percent compared to a year ago. The government reported average imports of 7.2 million barrels per day for the week ending August 16, down about half a million barrels per day from the week before.

The U.S. Energy Information Administration reports a drop in U.S. crude oil inventories. The latest weekly numbers show stockpiles of 437.8 million barrels, down 2.7 million barrels from the last count. Inventories are still about two percent above the five-year seasonal average.

The lobby group that represents Canada’s oil sector has registered for the first time as a political third party, stepping up its advocacy efforts ahead of October’s federal election. According to the Edmonton Journal, changes to the Canada Elections Act mean the group must register if it’s to discuss issues that could be associated with a particular candidate. Election watchers are predicting a surge in lobbying efforts by energy companies as well.

Revenue collections in New Mexico are hundreds of millions of dollars higher than projections, thanks to booming oil production in the Permian Basin. Total state revenue collections were $273 million more than expected through April. The Legislature already approved a $663 million increase in spending in the current budget, including big bucks for education and highways. One lawmaker tells the Albuquerque Journal there could be another big spending increase in the upcoming budget year, while still keeping cash reserves of 20% or more.

The U.S. refining arm of Saudi Aramco is buying a chemical plant adjacent to it’s refinery in Port Arthur, Texas. Reuters reported the purchase as part of the Saudi push into petrochemicals. The Saudis are in the middle of an $18 billion expansion of its operations on the Gulf Coast.