• 5 minutes Trump vs. MbS
  • 9 minutes Saudis Threaten Retaliation If Sanctions are Imposed
  • 15 minutes Can the World Survive without Saudi Oil?
  • 49 mins WTI @ $75.75, headed for $64 - 67
  • 15 hours The Dirt on Clean Electric Cars
  • 6 hours Saudi-Kuwaiti Talks on Shared Oil Stall Over Chevron
  • 3 hours Closing the circle around Saudi Arabia: Where did Khashoggi disappear?
  • 6 hours These are the world’s most competitive economies: US No. 1
  • 22 hours Uber IPO Proposals Value Company at $120 Billion
  • 5 hours The end of "King Coal" in the Wales
  • 54 mins EU to Splash Billions on Battery Factories
  • 5 hours Coal remains a major source of power in Europe.
  • 13 hours Poland signs 20-year deal on U.S. LNG supplies
  • 1 hour U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 1 day COLORADO FOCUS: Stocks to Watch Prior to Midterms
  • 1 day UN Report Suggests USD $240 Per Gallon Gasoline Tax to Fight Global Warming
Barclays: $70 More Likely Than $100

Barclays: $70 More Likely Than $100

While there have been plenty…

Why Is This Little-Known Element Up Over 300%

Why Is This Little-Known Element Up Over 300%

Element ‘’V’’, better known as…

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


x

Join the discussion | Back to homepage

Leave a comment

Leave a comment

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