Baker Hughes reported on Friday that the number of oil and gas rigs in the United States rose by 1 this week. The total number of active oil and gas rigs in the U.S. is now at 403—or 390 fewer than this time last year.
The oil rig count increased by 1 this week, and the number of gas rigs stayed the same. The number of miscellaneous rigs also remained unchanged.
The EIA’s estimate for oil production in the United States for the week ending February 26 rose by 300,000 bpd to 10 million barrels, after suffering devastating losses in the week prior courtesy of the Texas Freeze, which caused major blackouts throughout the state.
Canada’s overall rig count decreased this week by 22. Oil and gas rigs in Canada are now at 141 active rigs and down 62 year on year.
The Permian basin saw another increase this week in the number of rigs. The Permian’s total rig count rose by 3, bringing the total active rigs in the Permian to 211, or 204 below this time last year.
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WTI and Brent were both trading up on Friday, still riding the highs that OPEC+ created yesterday when the group announced that it would not lift crude oil production rates starting in April as most analysts had feared. Traders and analysts alike are viewing the current market as one that is starting to tighten, even though the latest crude oil inventory build in the United States—a huge one—lifted inventories once again above the five-year average.
At 1:07 p.m. EDT, WTI was trading up 3.37% on the day at $65.98—up by nearly $4 per barrel on the week. Brent was trading up 3.64% on the day, at $69.17, up nearly $3 per barrel for the week.
By Julianne Geiger for Oilprice.com
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Second, why is the USA still dependent on OPEC for our gas prices? I thought the USA is the world's leading oil producer.
A combination of the pandemic and reckless production caused the shale industry to lose some 6.5 million barrels a day (mbd) according to my calculations, incur hundreds of billions in debts and lose its importance to the global oil market. The industry emerged from the pandemic virtually emaciated and demoralized needing a life support machine provided by US taxpayers to survive. Any wonder then that despite rising WTI crude price to $65 a barrel for the first time since 2019, shale oil drillers could only afford to add one oil rig.
The industry could hardly expect to stage a comeback soon. The crucial situation facing it is that its fate is now in the hands of OPEC+. Were OPEC+ to go for market share, prices will fall and this will immediately and very adversely impact on shale oil production.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London