The US oil and gas rig count continued its downward slide this week, according to Baker Hughes, as the rig count piles on a string of losses with a drop of 11 rigs for the week, according to Baker Hughes.
For oil rigs specifically, this week marks eleven decreases out of the last thirteen weeks, falling 96 rigs in that timeframe.
The total oil and gas rig count now stands at 806, or 276 down from this time last year.
The total number of active oil rigs in the United States decreased by 10 according to the report, reaching 674. The number of active gas rigs fell by 1 to reach 129.
Oil rigs have seen a loss of 214 rigs year on year, with gas rigs down 65 since this time last year.
By state, Texas has seen a drop of 127 year on year, while Oklahoma sunk by 94 to hit 52 rigs.
Even though the number of oil rigs have declined by 203 this year alone, production has grown from 11.7 million bpd at the beginning of the year to an all-time high of 12.8 million bpd for week ending November 8, marking the first production increase after five weeks of holding fast at 12.6 million bpd. The production growth represents an increase of more than 1 million bpd from the beginning of the year.
Oil prices were up on Friday ahead of the data, with WTI up slightly at 12:17pm at $57.76 per barrel (+$0.99), which is an increase of roughly $0.40 from last week. Brent was trading up at $63.39 (+$1.11), which is up nearly $1 from last week.
Canada’s overall rig count decreased this week, with oil and gas rigs falling by 6, after last week’s 2-rig decrease. Oil and gas rigs in Canada now stand at 134, down 63 year on year.
At 14 minutes past the hour, WTI was trading at $57.75 and Brent was trading at $63.44.
By Julianne Geiger for Oilprice.com
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Baker Hughes rig count is a pivotal indicator of shale oil production. Rig counts don’t lie. They tell the truth as it is on the ground.
If this is the case, then how could the author of this article claim that despite a decline of 203 oil rigs this year alone, production has grown from 11.7 million barrels a day (mbd) to 12.8 mbd this week. If a loss of 203 oil rigs has no effect on the growth of shale oil production, then why don’t shale drillers drop another 200 rigs so production could grow by 1 mbd to 13.8 mbd.
Either the rigs have no function in helping produce oil or the author of this article like many of her colleagues are indoctrinated by their employer to always hype about significant rises in shale oil production and the great success of US sanctions against Iran oil exports.
Two days ago, the Post Carbon Institute said in a new report that projections of explosive and long-term potential for US shale may rest on some faulty and overly-optimistic assumptions.
The claim by the US Energy Information Administration (EIA) that US current oil production is 12.5 mbd is a simple lie. This figure includes natural gas liquids (NGLs) which come from natural gas wells as well as such gases as ethane, propane, butane and pentanes which may not qualify as crude oil. Moreover, there is a difference ranging from 600,000 barrels a day (b/d) and 1 mbd between weekly and monthly EIA production figures. Taking both into consideration would reduce actual US shale oil production to under 10 mbd.
Still, the US shale oil industry will be no more in 5-10 years.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
But make no mistake, shale drilling is here to stay in the US for many decades to come.