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IOGsi RED TOP NEWS:
WEEK #28, July 9, 2020
IOGsi Week #28, July 9, 2020 Highlights - There were 15 new oil and gas Drilling Permits issued in Kansas this past week by the Kansas Corporation Commission. This brings the year-to-date total of new drill locations issued to 229, compared to 495 locations a year ago (- 54%)-------------- COFFEYVILLE RESOURCES reports Kansas crude prices rose by $1.25 / bbl from a week ago (+ 4%). Kansas Common price at the close of the day on July 8th was $31.25 / bbl, Southcentral Kansas crude $33.00 / bbl and Eastern Kansas crude $28.50 / bbl. The total number of active drilling rigs in Kansas, either moving to or currently on drill sites, rose from 5 rigs a week ago to 8 (+ 60%). A month ago, there were only 4 active rigs (+100%). This same time a year ago, 30 rotary rigs were active in the State (- 73%). --------------- Statewide this year, 266 wells have been drilled with total footage drilled of about 914,364 ft. - for a well average depth of 3,437 ft. Of the total, 812,161 ft was drilled in the western ranges and 102,203 ft in the eastern ranges of the State. Last year total footage over the same period was around 2,015,394 (- 55%).
In other news, the Energy Information Administration (EIA), Washington, D.C., has released its July Short-Term Energy Outlook (STEO) which remains subject to heightened levels of uncertainty because mitigation and reopening efforts related to the 2019 novel coronavirus disease (COVID-19) continue to evolve. EIA said reduced economic activity related to the COVID-19 pandemic has caused changes in energy supply and demand patterns in 2020. Uncertainties persist across the U.S. Energy Information Administration’s (EIA) outlook for all energy sources, including liquid fuels, natural gas, electricity, coal, and renewables.--------------- EIA said “the forecast of rising crude oil prices reflects EIA’s expectation of declines in global oil inventories during the second half of 2020 and through 2021. EIA expects high inventory levels and surplus crude oil production capacity will limit upward price pressures in the coming months, but as inventories decline into 2021, those upward price pressures will increase. EIA estimates global liquid fuels inventories rose at a rate of 6.7 million barrels per day (b/d) in the first half of 2020 and expects they will decline at a rate of 3.3 million b/d in the second half of 2020 and then decline by a further 1.1 million b/d in 2021.” ---------------EIA expects “annual average U.S. crude oil production to fall in 2020 and 2021 as forecast West Texas Intermediate (WTI) spot prices remain less than $50/b through 2021. EIA forecasts that U.S. crude oil production will average 11.6 million b/d in 2020 and 11.0 million b/d in 2021. These levels are 0.6 million b/d and 1.2 million b/d, respectively, lower than the 2019 average of 12.2 million b/d.” ---------------EIA forecasts U.S. liquid fuels consumption will average 18.3 million b/d in 2020, down 2.1 million b/d from 2019.