The United States oil and gas rig count jumped by 15 this week, to its highest level since September 25, 2015, according to Baker Hughes’ latest report on domestic drilling activity.
The number of oil and gas rigs currently active in the United States now sits at 824, which is an increase of 374 year over year.
The steady and sizeable jump in rigs signals an indifference by American shale producers towards warnings issued by the Saudi Arabian leadership against increased production. The KSA, which serves as the de facto leader of the Organization of Petroleum Exporting Countries (OPEC), entered into an agreement with its fellow bloc members and 11 NOPEC nations to cut production by 1.8 million barrels. But cheap shale output from the United States is now threatening the effectiveness of the OPEC agreement, diminishing the likelihood of ending the supply glut.
Most of this week’s increases were to the number of active oil rigs, which increased by 10 to 662, compared to 362 a year ago. The number of gas rigs also increased by 5 to 160, up from 155 last week and 88 a year ago.
The Permian Basin saw the most number of rigs added again this week, bringing 4 additional rigs online after adding 7 last week, now at 319 versus only 145 rigs a year ago. Cana Woodford and DJ-Niobrara each lost two rigs, while Eagle Ford, Granite Wash, and Haynesville all added a rig.
A half hour prior to the data release, WTI was trading up $0.08 (.16%) at $50.43 per barrel, with Brent trading up $0.19 (.36%) at $53.32 per barrel. After the impressive increases to the number of rigs now in production, WTI began to fall and had slid 10 cents within 15 minutes.
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By Julianne Geiger for Oilprice.com
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