Headlines often focus on big discoveries or major new sources for crude oil. This can obscure the fact that as much as 20 percent of the Nation's crude oil production comes from marginal-volume stripper wells. Oil stripper wells generally produce from reservoirs that are approaching the end of their commercial lives and are typically operated by smaller independent companies. By definition, oil stripper wells are those that produce no more than 15 barrels of oil equivalent per day over a twelve-month period (some of these wells also produce natural gas). While these wells are small individually, they make a significant contribution to the Nation's domestic production because of their sheer number - over 300,000. In fact, oil stripper wells made up 85 percent of the country's producing oil wells in 2008.
The number of oil stripper wells has remained roughly constant since 1994. Their share of total oil well production (including the natural gas production mentioned above) stayed fairly level through 2003, but has since increased, up from 16 percent in 2003 to 20 percent in 2008. The increase in production share is largely the result of flagging production from non-stripper oil wells, down 17 percent since 2003 despite a well count decline of only 3 percent.
The picture is somewhat different for natural gas stripper wells. While similar in number to oil stripper wells, they collectively accounted for only about 12 percent of U.S. natural gas production in 2008. Despite a generally increasing count through 2008, their share of production has flattened recently. This is due primarily to major increases in shale gas production from high-volume horizontal wells. For more information, please see Distribution of Wells by Production Rate Bracket.
U.S. Average Gasoline Price Climbs a Nickel
The U.S. average price for regular gasoline increased five cents to $2.90 per gallon. The price was $0.82 above last year at this time. Although prices rose in all regions of the country, the size of the increase varied considerably, ranging from about a penny to more than seven cents. The East Coast average climbed over four cents to $2.88 per gallon. The average in the Midwest increased the most of any region, shooting up more than seven cents to $2.88 per gallon. The Gulf Coast price moved up a nickel to $2.78 per gallon. The smallest increase occurred in the Rocky Mountains where the price went up almost a penny to $2.90 per gallon. The average price on the West Coast rose two cents to $3.08 per gallon, while the average in California moved up three cents to $3.12 per gallon.
Diesel fuel prices also increased in all regions of the country, with the national average moving up more than four cents to $3.12 per gallon, $0.94 higher than last year. The average price on the East Coast gained over a nickel, moving up to $3.13 per gallon. Advancing in excess of four cents, the average in the Midwest reached $3.10 per gallon. The Gulf Coast price was $3.08 per gallon after going up by four and a half cents. In the Rocky Mountains, the price rose by about three cents to $3.17 per gallon. The West Coast and California averages each increased three cents to $3.24 per gallon and $3.26 per gallon, respectively.
Propane Stocks Post Another Build
Propane inventories grew again last week by 1.8 million barrels to 36.2 million barrels. The Midwest showed the largest gain of 1.1 million barrels, while Gulf Coast stocks grew by 0.8 million barrels. Rocky Mountain/West Coast regional stocks also grew slightly, but East Coast regional stocks fell by 0.8 million barrels. Propylene non-fuel use inventories increased their share of total propane/propylene stocks from 8.4 percent to 8.6 percent.
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