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IOGsi RED TOP NEWS:
WEEK #23, June 4, 2020
IOGsi Week #23, June 4, 2020 Highlights - There were 6 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 locations issued to 197. Last year at this time, 382 permits were granted, down by 185 permits (- 48%)-------------- COFFEYVILLE RESOURCES reports Kansas crude prices rose by $4.50 / bbl from last week (+ 20%). Kansas Common is $27.50 / bbl, Southcentral Kansas crude $29.25 / bbl and Eastern Kansas crude $24.75 / bbl. The total number of active drilling rigs in Kansas, either moving to or currently on drill sites, remains unchanged at 4 from week ago. A month ago, there were also 8 active rigs (- 50%). This same time a year ago, 22 rotary rigs were active in the State (- 82%). --------------- All drilling activity in the state is currently taking place in the Western Ranges.
In other news, the U.S. ENERGY INFORMATION ADMINISTRATION (EIA), Washington, D.C., reports in April, the Henry Hub natural gas spot price averaged $1.73 per million British thermal units (MMBtu). EIA forecasts that natural gas prices will generally rise through the rest of 2020 as U.S. production declines. EIA forecasts that Henry Hub natural gas spot prices will average $2.14/MMBtu in 2020 and then increase in 2021, reaching an annual average of $2.89/MMBtu. EIA expects prices to rise largely because of lower natural gas production compared with 2020. U.S. dry natural gas production set a record in 2019, averaging 92.2 Bcf/d. EIA forecasts dry natural gas production will average 89.8 Bcf/d in 2020, with monthly production falling from an estimated 93.1 Bcf/d in April to 85.4 Bcf/d in December. Natural gas production declines the most in the Appalachian region and Permian region. In 2021, forecast dry natural gas production averages 84.9 Bcf/d, rising in the second half of 2021 in response to higher prices.
EIA estimates that total U.S. working natural gas in storage ended April at 2.3 trillion cubic feet (Tcf), 20% more than the five-year (2015–19) average. In the forecast, inventories rise by 2.1 Tcf during the April through October injection season to reach almost 4.2 Tcf on October 31, which would be a record level. EIA forecasts that U.S. liquefied natural gas exports will average 5.8 Bcf/d in the second quarter of 2020 and 4.8 Bcf/d in the third quarter of 2020. U.S. liquefied natural gas exports are expected to decline through the end of the summer because of lower expected global demand for natural gas.