The U.S. rig count plunged this week, as the deleterious effects of the deeper fall in oil prices since December start to be felt.
According to Baker Hughes, the U.S. rig count declined by a shocking 48 rigs for the week ending on February 5, the largest reduction since March of 2015. The total rig count now stands at 571, made up of 467 oil rigs and 104 natural gas rigs.
The Permian Basin still accounts for the bulk of the active drilling rigs, with 180 as of this week. West Texas remains profitable to drill, at least in some of the best areas. Still, the Permian had well over 500 rigs a little over a year ago.Related: Obama Proposes $10 Tax On Each Barrel Of Oil
The Williston Basin in North Dakota, home of the Bakken formation, now only has 42 rigs, down from nearly 200 in late 2014.
Plummeting rig counts have yet to translate into significant cutbacks in oil production, although the sharp increase in output exhibited between 2011 and 2014 came to a screeching halt last year.
However, with rig counts plumbing new lows, production drop offs could be just around the corner.
By Charles Kennedy of Oilprice.com
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