• 4 minutes Ten Years of Plunging Solar Prices
  • 7 minutes Hydrogen Capable Natural Gas Turbines
  • 10 minutes World looks on in horror as Trump flails over pandemic despite claims US leads way
  • 13 minutes Large gas belt discovered in China
  • 6 hours Would bashing China solve all the problems of the United States
  • 25 mins China to Impose Dictatorship on Hong Kong
  • 11 hours COVID 19 May Be Less Deadly Than Flu Study Finds
  • 4 hours Incompetent "Journalists"
  • 11 hours Model 3 cheaper to buy than BMW 3 series.
  • 4 hours Yale University Epidemiologist Publishes Paper on Major Benefits of Hydroxchloroquine for High-risk Outpatients. Quacksalvers like Fauci should put lives ahead of Politics
  • 50 mins Thugs in Trumpistan
  • 13 hours Iran's first oil tanker has arrived near Venezuela
  • 14 hours Let’s Try This....
  • 14 hours Pompeo's Hong Kong
  • 17 hours Chicago Threatens To Condemn - Possibly Demolish - Churches Defying Lockdown
  • 5 hours 60 mph electric mopeds
  • 19 hours HVDC Cheaper Than Low-carbon Natural Gas
  • 19 hours Oil and Gas After COVID-19
Will U.S. Shale Survive If Oil Hits $40?

Will U.S. Shale Survive If Oil Hits $40?

The oil price collapse is…

Stocks To Watch As Shale Bounces Back

Stocks To Watch As Shale Bounces Back

The United States shale patch…

Oil Rigs Hit Highest Level in Decades

The number of oil rigs in operation hit a multi-decade high as productivity plateaus. The oil industry added 12 more rigs according to the most recent data from Baker Hughes, totaling 1,473 active rigs looking for oil. That is the highest level since Baker Hughes separated out rig counts for oil and natural gas in 1987. Meanwhile, rigs drilling for natural gas declined by 18, dropping to a total of 326.

Oil prices have remained steadily above $90 per barrel for most of 2013 and all of 2014 thus far. These high prices support drilling. The oil bonanza in American shale basins – largely dominated by the Eagle Ford and the Bakken – led to a rapid rise in oil rig counts since 2009. However, over the last year, rig counts began to plateau. Far from being a negative indicator for the level of drilling activity, the rig count stopped climbing because drillers were squeezing out greater production from each rig. These productivity gains allowed more wells to be drilled and more oil to be produced with the same number of rigs. This made looking at the rig count as a proxy for drilling activity a bit less reliable than it had been in the past.

Related Article: Albany Orders Moratorium on Bakken Crude

More recently however, productivity gains have slowed in the Eagle Ford, the Marcellus, and elsewhere. With drillers beginning to run up against the limits of efficiency gains, they will need to add more rigs if they want to lift production. They are also switching to more advanced rigs which use state-of-the-art technology. According to Fitch, this will lift prices for rigs.

Meanwhile, the simmering tension over Crimea has WTI oil prices back over $100 per barrel, a price level that will contribute to steady demand for drilling within the United States.

By Joao Peixe of Oilprice.com



Join the discussion | Back to homepage



Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News