Baker Hughes reported that the number of oil and gas rigs in the US fell again this week by 64, falling to 664, with the total oil and gas rigs clocking in at 361 fewer than this time last year. It is the largest single-week drop since March 2015. It is the fewest number of active rigs since January 2017.
The number of oil rigs decreased for the week, by 62 rigs, according to Baker Hughes data, bringing the total to 562 - a 269-rig loss year over year.
The total number of active gas rigs in the United States fell by 2 according to the report, to 100. This compares to 194 a year ago.
Despite the sharp drop off in rigs, the EIA’s estimate is that the United States still produced 13 million barrels of oil per day on average this week, just 100,000 bpd off the all-time high. However, it is important to note that this figure is merely an estimate “using a combination of short-term forecasts”.
The number of rigs in the most prolific basin, the Permian, fell by 31 this week to 351, compared to 462 rigs one year ago. The second-largest basin, the Eagle Ford, lost 6 rigs this week, for a total of 57 rigs, compared to 78 a year ago.
The WTI benchmark at 12:32 pm was trading at $26.68 (+5.37 percent) per barrel—more than $5 per barrel above last week levels as OPEC+ appears to be discussing a production cut deal to the tune of 10 million bpd on encouragement from U.S. President Trump. Related: $1 Oil: Saudi Arabia's Attempt To Crush U.S. Shale
The Brent benchmark was trading at $32.70 (+9.22 percent)—also more than $5 per barrel above last week’s levels.
Canada’s overall rig count decreased by 13 rigs as well this week, to a total of just 41 rigs. Oil and gas rigs in Canada are now down 27 year on year.
WTI was trading up 5.37 percent on the day at 1:09 pm EDT, with Brent trading up 9.22 percent.
By Julianne Geiger for Oilprice.com
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This raises a vital question. If the loss of 62 rigs in one single week including 31 rigs in the Permian which is the heart of US shale oil production hardly affected US oil production, it only exposes how inefficient the shale oil industry by employing some 62 rigs that aren't needed.
The EIA production figures are becoming a joke based on weekly forecasts which are normally inflated by 700,000 barrels a day (b/d) to 1 mbd compared with the monthly figures.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London