Increase in gas prices is helping Kansas refineries

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March 01,2000

Increase in gas prices is helping Kansas refineries

WICHITA (AP) -- Business is booming for the Kansas oil industry while consumers feel the crunch as gasoline prices are on the rise.

The national average price for gasoline, including all grades and taxes, was $1.47 on Friday, setting a new record. That's up more than 6 cents from the last national survey of 10,000 stations on Feb. 11, and a penny above the 1990 peak of $1.46.

''The international oil community is speculating that key world oil producers may increase oil production in April, which would ease oil prices and therefore gasoline prices,'' said industry analyst Trilby Lundberg of the Lundberg Survey. ''But for now, gasoline prices will probably hover around their current levels or rise even further.''

Meanwhile consumers are trying to find ways to cut gas costs.

''I don't travel as much as I did,'' said Lawrence Cowan, a Wichita resident who commutes 21 miles to his job in Colwich.

Every weekend the Cowans used to visit relatives living about an hour away, but now he says they may cut back to once a month. And if gas prices continue to rise, ''we'll have to think seriously about vacation time,'' he said.

The Kansas oil industry has increased drilling since the price hikes.

Seventeen rigs operate in western Kansas, up from five in September, said Dave Williams of the Kansas Corporation Commission's conservation division.

''We're making plans to drill several more wells than we did last year,'' said Grady Bolding, an Ellinwood-based producer. ''As soon as the price turns downward, we'll pull our horns in.''

Bolding said in his 50 years in the business, what happened to oil prices in 1998 and early 1999 was the worst. At one point, Kansas crude dropped below $8 a barrel. On Monday the price was $26.50.

Wichita's Mull Drilling Co. drilled 11 wells last year, and President Mark Shreve said this year the company expects to top 20.

With drilling on the upswing, the only problem producers say they face is finding enough workers.

Over the past two years, several oil field workers have been laid off or have left the industry.

Because of the uncertainty, most aren't likely to return to the oil patch, said Danny Biggs, vice president and general field superintendent for Pickrell Drilling Co. in Great Bend.

Although the high prices can help business, the main thing oil producers want is stability, said Biggs.

He says he wants to see prices high enough to allow producers to operate while still remaining acceptable to consumers.

Although business may be booming for now, Williams said, oil producers are keeping a close watch on the Organization of Oil Producing Countries. It could start increasing production at any time, which would cause prices to fall once again.

http://www.dodgeglobe.com/ns-search/stories/030100/sta_gas.shtml?NS-search-set=/38d59/aaaKIbfx_d59bc1&NS-doc-offset=1&

-- Martin Thompson (mthom1927@aol.com), March 19, 2000


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