Baker Hughes reported that the number of oil and gas rigs in the US fell again this week by 44, falling to 728, with the total oil and gas rigs clocking in at 278 fewer than this time last year. It is the largest single-week drop since February 2016.
In the runup to the published rig count, analysts were predicting that the results would show a steep drop off in the number of active rigs, and three of the biggest drilling operators in Texas made significant budget cuts, indicating that the industry is bracing for tougher times ahead.
The number of oil rigs decreased for the week, by 40 rigs, according to Baker Hughes data, bringing the total to 624-a 192-rig loss year over year.
The total number of active gas rigs in the United States fell by 4 according to the report, to 102. This compares to 190 a year ago.
The miscellaneous rig count stayed the same this week, for a total of 2 miscellaneous rigs.
Despite the sharp drop off in rigs, the EIA's estimate is that the United States produced 13 million barrels of oil per day on average this week, just 100,O00 bpd off the all-time high.
The number of rigs in the most prolific basin, the Permian, fell by 23 this week to 382, compared to 454 rigs one year ago. The second largest basin, the Eagle Ford, lost 4 rigs this week, for a total of 63 rigs, compared to 78 a year ago. Related: Not Even The $2 Trillion Stimulus Package Can Save Oil Markets
The WTI benchmark at 12:15 pm was trading at $21.26 (-5.93%) per barrel-almost $3 per barrel below last week levels as market fears entrench deeply that the industry will get squeezed beyond repair between oversupply coming from Saudi Arabia and Russia, and lack of demand coming from the Covid-19 lockdowns that are widespread throughout the world's largest oil consuming nation, the United States.
Further pressure was put on oil prices today when it became clear that the $2 trillion stimulus bill might not sail through the House unopposed, as fiscal hawks threaten to delay the process.
The Brent benchmark was trading at $27.33 (-4.61%)-roughly $2.50 per barrel below last week's levels.
Canada's overall rig count decreased by 44 rigs as well this week, to a total of just 54 rigs. Oil and gas rigs in Canada are now down 34 year on year.
WTI was trading down by 4.42% on the day at 1:08pm EDT, with Brent trading down 3.60%.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More