The number of total active drilling rigs in the United States rose by 14 this week, on top of the 9 rig increase in the week prior, according to new data from Baker Hughes published on Friday.
The total rig count increased to 728 this week—273 rigs higher than the rig count this time in 2021 and the highest count since March 2020. Drilling has picked up substantially since the Russian invasion of Ukraine, adding 78 rigs.
Oil rigs in the United States rose this week by 13 rigs to 576, while gas rigs rose by 1 to 150. Miscellaneous rigs stayed the same, at 2.
The rig count in the Permian Basin rose by 8 this week, to 343 while rigs in the Eagle Ford rose by 3. Oil and gas rigs in the Permian are now 112 above where they were this time last year.
Meanwhile, the Frac Spread count provided by Primary Vision, which tracks the number of fracking crews finishing off wells, rose to 284 in the week ending May 13, up from 278 in the previous week.
U.S. crude oil production returned to 11.9 million bpd for the week ending May 13, according to the latest Energy Information Administration—a 300,000 bpd rise since the Russian invasion of Ukraine.
At 12:51 p.m. ET, oil prices were trending up on the day. WTI was trading at $112.50—up just $0.25 per barrel (+0.22%) on the day but up nearly $3 per barrel on the week. The Brent benchmark traded at $111.50 per barrel, down $0.51 (-0.46%) on the day and down $0.40 on the week as WTI overtakes Brent.
At 1:09 pm ET, WTI was trading at $112.50, while Brent was trading at $111.70 per barrel.
By Julianne Geiger for Oilprice.com
More Top Reads from Oilprice.com:
- Failure To Implement Russian Oil Ban Could Send Oil Crashing To $65
- Oil Markets Are Bracing For A Slew Of Bullish News
- High Gasoline And Diesel Prices Are Here To Stay
For those who don’t know the story, here is the background. The charge of the light brigade was a failed military action involving the British light cavalry led by Lord Cardigan against Russian forces during the battle of Balaclava on 25 October 1854 in the Crimean War.
US shale oil is a spent force. Whether WTI crude oil price touches $150 or $200, or even $250 and whether oil rigs climb even higher, US shale oil drillers can’t raise their production by more than 100,000-200,000 barrels a day (b/d) in 2022.
The main reason isn’t capital discipline as often claimed but the fact that the sweet and lucrative spots in the shale plays have already been exhausted forcing drillers to move to poorer and more costly-to-produce spots thus causing production costs to rise and depressing production.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London