By JOHN P. TRETBAR
Eagle Communications
Experts blame hot weather, along with high oil prices for the recent spike in gasoline and diesel prices. Refineries must scale back operations when the temperature tops 95 degrees, so operations are dramatically lower nationwide.
The auto club AAA pegs national gasoline prices at their highest since November, an average of $3.82 per gallon, up seven cents from a week ago, and nearly thirty cents higher than a month ago. The average across Kansas is up 40 cents in the last month to $3.65 per gallon.
Friday's Rotary Rig Count from Baker Hughes dropped by four oil rigs for a total of 659 active rigs nationwide. Horizontal drilling was down by seven rigs. Drilling in the Permian Basin was down five rigs. The state breakouts show Texas down eight rigs while New Mexico was up two.
The Kansas Rig Count from Independent Oil & Gas Service is unchanged statewide, but up two in the western half of the state. With 39 rigs drilling or about to, the tally is down nearly five percent from a week ago, and down 32% from a year go.
Kansas regulators okayed 18 new drilling locations last week, with eight new permits in western Kansas. That's 762 new locations statewide so far this year, compared to 967 a year ago at this time. Independent Oil & Gas Service reports operators in Kansas completed 37 new wells last week with 12 in western Kansas including one well in Russell County.
Colorado is once again changing the rules in the patch. Experts say these changes could spread.
The state will for the first time require the direct measurement of methane pollution at oil and gas wells. Supporters say the new rule improves an existing system built largely on guesswork and paperwork. Under recent legislation, emissions from the oil and gas industry must be cut 20% in seven years. A state commission will set up the new measurement methods and require transparency by operators.
The state's two major industry trade groups support the rule, which they said will bring on a sound regulatory framework to verify greenhouse gas emissions.
Saudi Arabia extended its unilateral oil production cut by another month and said it could be prolonged again or even increased. The cutback of one million barrels per day was launched last month, and will now last into September, according to a statement Thursday on state Saudi Press Agency. Bloomberg reports that will hold output from the world's largest crude exporter to about nine million barrels per day, the lowest level in several years.
Operators spudded 14 oil and gas wells last week in Kansas, 711 new wells so far this year. Independent Oil & Gas Service says that's down from 942 wells a year ago at this time. Total footage drilled is down 28% from last year.
The government reports the biggest weekly drop in U.S. crude inventories in recent memory. The Energy Information Administration reports total stockpiles of 439.8 million barrels as of July 28th. That's down 17 million barrels from a week earlier. Inventories are about one percent below the five-year average for this time of year according to the Energy Information Administration.
U.S. operators pumped nearly 12.2 million barrels of crude oil per day last week. That's down 14,000 barrels per day from the week before and just 57,000 barrels per day ahead of the same week last year.
U.S. crude imports last week increased by more than 300-thousand barrels to 6.7 million barrels per day. Four-week average imports are two percent lower than during the same four weeks last year.
The government this week reported gasoline inventories rose last week by 1.5 million barrels, but are about six percent below the five-year seasonal average. Diesel stockpiles dropped by 800-thousand barrels and are 15% below the five-year average. Diesel prices are up 31 cents from a month ago across Kansas.