By JOHN P. TRETBAR
Brokers predict volatility in the crude marketplace will continue. A cascade in prices last week was attributed to optimism about a possible diplomatic breakthrough and a call from one OPEC member to increase production. But by Thursday peace talks broke off with no progress, the production offer was walked back, China halted refinery exports and the Iran nuclear deal stalled again, in what Barron’s Magazine called a “white-knuckle ride for commodities.”
Crude futures prices are cooling off somewhat. Near-month Nymex crude settled Friday over $109, a gain of more than three dollars per barrel. But by lunchtime Monday prices were more than six dollars lower. Light sweet Nymex crude for April delivery was fetching $103.07 per barrel.
Kansas crude prices last week topped $100 a barrel briefly at refineries in McPherson, Coffeyville and El Dorado, their highest level since 2008. Prices have since retreated. Kansas Common crude at CHS in McPherson starts the week at $99.50 per barrel, up nearly six dollars from the first of the month and more than $43 higher than a year ago. That price reached $114 on March 8.
Baker Hughes reported 663 active drilling rigs Friday (3/11), an increase of eight oil rigs and five seeking natural gas. The count in Texas was up 12 from the week before.
Independent Oil & Gas service reports an increase of 34 spudded wells over the total spuds at this point last year, and 63 active operators working in Kansas thus far in 2022. The active rig count in Kansas was down two from a week ago but more than double the tally from a year ago.
Operators completed 26 new wells across Kansas last week, with eight in the western half of the state, including one each in Barton, Ellis and Russell counties. Kansas regulators OK’d 41 new drilling locations last week, including one in Barton County, two in Ellis County, two in Russell County and one in Stafford County.
The national average price for a gallon of gas hit an all-time high of $4.33 on Friday, March 11, before falling a penny and holding throughout the weekend and Monday at $4.32. The auto club AAA says the average across Kansas is $3.81/gallon. Prices in Great Bend are holding steady at $3.79, while some stations in Hays are down to $3.74. Prices for diesel fuel are also at or near record highs.
Oil-by-rail tallies across the US are more than four hundred carloads higher than a week ago, but still trail last year’s shipments by more than 12%. The Association of American Railroads reports Canadian traffic is up 255 tanker carloads week-over-week, but down about seven percent from last year at this time.
The government reported US crude-oil inventories dropped by nearly two million barrels last week. The total on March 4th was 411.6 million barrels, or about 13% below the five-year average for this time of year. EIA said gasoline stockpiles dropped by nearly one-and-a-half million barrels.
US crude imports last week averaged 6.3 million barrels per day, up 600,000 barrels from the week before. Over the last four weeks, imports were more than ten percent higher than during the same four weeks last year.