News from the Oil Patch: U.S., KS crude production rising

By JOHN P. TRETBAREagle Communications

Crude prices start the week on an up note. Near-month Nymex crude settled over $71 per barrel in New York Friday, up nearly two dollars on the day but a dollar behind the closing price a week earlier. In morning trading Monday prices were up another two percent. The Nymex benchmark contract was flirting with $73. London Brent was over $77 per barrel.Kansas crude prices are up from last week. Kansas Common crude at CHS in McPherson starts the week at $62 per barrel after gaining $1.75/bbl on Friday. Prices started the month of May at $66 per barrel which was the high for the month. The average price in McPherson in May was sixty-one eighty-two per barrel, compared to just under $70 the month before, and over $100 per barrel in May of last year.The Energy Information Administration reported growth in U.S. and state crude production. U.S. operators pumped more than 393 million barrels in March. That's just shy of 12.7 million barrels per day, compared to 12.5 million in February. Average output nationwide for the first quarter of the year was a few barrels shy of 12.6 million barrels per day.EIA reports Kansas output reached 77-thousand barrels per day in March, up about a thousand barrels per day over the month before and well ahead of the tally from a year earlier. Operators pumped 7.15 million barrels in the first quarter, or just over 76-thousand barrels per day. That's up a thousand barrels per day over the same three months last year.U.S. crude inventories rose 4.5 million barrels last week to 459.7 million barrels as of May 26th. The government reports stockpiles are two percent below the five-year seasonal average.EIA said the U.S. imported about 7.2 million barrels of crude last week, up 1.3 million barrels from the week before. Crude production dropped slightly to just over 12.2 million barrels per day for the week. Weekly U.S. output is up nearly half a million barrels per day over the same week last year.Chevron is dramatically increasing its holdings in two major oil basins in the US. The oil major announced it's buying PDC Energy in an all-stick deal valued at $6.3 BILLION. Chevron will acquire about 275,000 acres in the Denver-Julesberg Basin in Colorado and Wyoming, and raises it's holding by 25,000 acres in the Permian Basin of Texas and New Mexico. The deal is expected to close by the end of the year.Kansas regulators report 143 new intent-to-drill notices across the state last month. That's up from 104 notices in April and 139 in May of last year. So far this year there are 591 new intents, compared to 650 through May of last year. The Kansas Corporation Commission reports two new intents in Barton County, six in Ellis County and two in Stafford County.The Rotary Rig County from Baker Hughes Friday shows 696 active drilling rigs, down 15 rigs from last week. The breakouts show 14 fewer horizontal rigs at work nationwide. Texas was down six for the week, Oklahoma was down three and Louisiana was down two rigs.Independent Oil and Gas Service on Friday reported operators about to spud new wells on two leases in Ellis County. Rain delays are backing up some production across Kansas. With 12 active rigs in eastern Kansas and 26 west of Wichita, the Kansas Rig Count is nearly nine percent higher than a week ago, nearly 12 percent higher than a month ago but nearly thirty percent lower than a year ago.Kansas regulators okayed 25 new drilling permits at new locations last week, 554 so far this year, compared to 628 a year ago at this time. There are 20 new drilling locations in western Kansas including one each in Barton, Ellis and Stafford counties. Independent Oil & Gas Service reports 22 newly completed wells across Kansas. That's 731 so far this year, up 63 wells from the tally a year ago.