The U.S. rig count is up 15 oil and gas rigs this week, nearly doubling last week's rig increase and heralding new supply to add to the existing glut and push oil prices down further.
According to the Baker Hughes rig count released at 1:00 EST today, oil rigs are up 14 for the week, while gas rigs were down by one, and 'miscellaneous' rigs were up two.
The biggest gains were in Texas, where 15 new rigs were brought on line, with the Permian basin specifically seeing eight new rigs put into action.
The total U.S. rig count is now 462, with Canada coming in with seven new rigs at 102.
At the time of the rig count release, West Texas Intermediate (WTI) was trading at US$43.94 per barrel, while Brent crude was trading at US$45.37.
This week trading has seen oil prices slump downward by US$0.83 by mid-day Friday (EST). On Wednesday, prices closed at a weekly low of US$43.96.
The decline is being attributed to a ramp-up in drilling fields that are profitable with oil below US$50 per barrel, adding further to the supply glut.
The U.S. rig count took a major dive beginning in August 2015, but since May 2016 has started the climb back upwards, with 41 drilling rigs at work since late May and until last week's rig count.
The U.S. rig count is still down 414 oil and gas rigs from the same time a year ago.
Last week, the U.S. oil and gas rig count rose by 7, with six new oil rigs added to the roster and one additional gas rig, bringing total operational rigs in the U.S. to 447 according to the 15 July rig count data. The biggest rig gains last week were in New Mexico and Louisiana, while the previous week saw the biggest gains in Texas' Permian basin and Williston.
The current nationwide rig count is less than half the prior-year level of 863. The count had peaked at 4,530 in 1981, while an all-time low was recorded in March. Since then the rig count has recovered marginally.
By Charles Kennedy of Oilprice.com
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