By JOHN P. TRETBAR
Kansas Common crude at CHS in McPherson closed out the month of June at $48.75 [[“forty-eight seventy-five”]] per barrel. That’s five dollars more than at the beginning of the month, thirteen dollars more than at the beginning of the year, but nearly sixteen dollars less than last year at this time. The average price for June was $45.14 [[“forty-five fourteen”]] per barrel, compared to $57.50 [[“fifty-seven fifty”]] in June of last year.
Baker Hughes reported 967 active drilling rigs across the U.S. Friday, an increase of four oil rigs. There are 124 active drilling rigs in Canada, up five. Oklahoma reports an increase of two rigs and Texas was up one. Independent Oil & Gas Service reports six active drilling rigs in eastern Kansas, up two for the week, and 22 west of Wichita, which is unchanged.
Triple-A is predicting higher gasoline prices for some of us going into the Independence Day holiday. A fire in Philadelphia forced the permanent shutdown of the oldest and largest refinery on the east coast. The federal government announced large reductions in domestic crude oil and gasoline inventories. This could all push pump prices higher. The national average price for a gallon of regular on Monday (7/1) was up a penny to just over $2.71 a gallon, which is about 11 cents lower than last month at this time. The average in Kansas was a little over $2.46 a gallon. Locally, you should be able to save about two dollars on your 15-gallon fill up compared to a month ago.
Regulators report just 115 new intent-to-drill notices across Kansas for the month of June, bringing the statewide total to just 530 for the first half of 2019. That’s 355 fewer intents than the total through June of 2018, a year in which total Kansas crude production reached its lowest level in more than a decade. There was one new intent filed last month Barton County. That’s 18 so far this year. Ellis County reports six new intents in June and 20 through the month of June. Russell County had one last month and seven year-to-date. There were no new intents filed last month in Stafford County, which has 11 for the first six months of the year.
The Kansas Geological Survey reports the state’s crude oil production in March was 2.8 million barrels. First quarter production was just over 8.1 million barrels statewide. Barton County production stands just short of 400-thousand barrels for the first three months of the year. Ellis County produced 625-thousand barrels. The total in Russell County was 369-thousand barrels and Stafford County produced just over 253-thousand.
Regulators approved 24 permits for drilling at new locations statewide last week, seven east of Wichita and 17 in Western Kansas, for a total of 455 permits so far this year. There’s one new permit in Ellis County and one in Russell County.
Independent Oil & Gas Service reports continuing weather-related problems delaying some production activity in Western Kansas. There were four leases in Ellis County where the site is too wet to begin completion work. There was one well completed in Ellis County last week and three in Barton County. Across the state there were 46 newly-completed wells, 750 so far this year. There were 33 completions in Western Kansas and 13 east of Wichita.
The government said U.S. crude oil inventories dropped nearly 13 million barrels last week to 469.6 million barrels. That’s about five percent more than the five-year average for this time of year.
The U.S. Energy Information Administration reported domestic production was down slightly to 12.07 million barrels per day for the week ending June 21. That’s a drop of 92-thousand barrels from the week before, but over a million barrels per day more than a year ago at this time.
Imports were down more than 800-thousand barrels to 6.7 million barrels per day. The four week average for imports is down more than 10% from the same period a year ago.
A new report shows that we’re consuming a lot more oil than we’re producing. According to the authoritative Statistical Review of World Energy from BP, worldwide crude oil consumption set a record last year at 99.8 million barrels per day. Worldwide production only reached 94.7 million barrels per day. The United States remains the world’s top oil consumer, at 20.5 million barrels per day last year. China was second and India was third.
Sky high economic expectations in the Permian Basin in southeastern New Mexico are prompting United Airlines to offer daily flights direct from Hobbs, New Mexico to Denver. United is ready to start the new service October 28. Flights from Hobbs to Houston began eight years ago.