Houston oilfield services company Baker Hughes reported Friday its weekly rig count report.
U.S. energy firms this week increased the number of oil rigs operating for a second week in a row amid concerns that crude supplies will swamp global demand as U.S. output keeps growing from record levels.
Thanks to a shale boom, the United States became the world’s top crude producer last year and record output is expected to rise 1.5 million barrels per day (bpd) to 12.4 million bpd this year, the U.S. Energy Information Administration said in a monthly forecast last week.
The International Energy Agency warned in its monthly report that the global oil market will struggle this year to absorb fast-growing crude supply from outside the Organization of the Petroleum Exporting Countries, highlighting U.S. output growth.
The continued slowdown in US drilling activity comes as West Texas Intermediate crude oil prices continue to hover in the low-$50/b area. On Thursday, the prompt-month contract was assessed at $54.41/b, down from an October high at more than $76/b, S&P Global Platts data shows.
Forward oil prices remained in contango this week. On Wednesday, the 12-month rolling WTI Frontline at Houston MOC financial contracts were assessed at an average price of $56.12/b, up nearly $4/b since mid-January.
Despite recent increases in both spot and forward oil prices, many producers have announced plans during recent fourth-quarter 2018 earnings calls to reduce rig activity this year.
After hitting a more-than-four-year high at $4.70/MMBtu in November, the prompt-month NYMEX Henry Hub contract has declined sharply in recent weeks.
Weekly Summary: Total rigs engaged in the exploration and production in the U.S. rose slightly for the week ended February 15, 2019, climbing 2 rigs up to 1051. Land rigs dropped 1 rig to 1028. The offshore rig count gained 2 rigs to 21. Rigs drilling in the inland waters added 1 rig, doubling up to 2.
Oil Rig Count: The US crude oil rig count gained 3 rigs, going from 854 up to 857 for the week. There are 59 more rigs targeting oil than last year. Rigs drilling for oil represent 81.5 percent of all drilling activity.
US oil rigs tested an all-time high of 1,609 in October 2014. In contrast, the rigs hit 316 in May 2016—the lowest level since the 1940s.
Natural Gas Rig Count: The natural gas rig count – which plunged to its lowest in August of 2017 – went down 1 rig to 194. The number of rigs drilling for gas is 17 rigs higher than last years count.
Among major oil- and gas-producing states:
Louisiana gained 4 new rigs, Wyoming went up 3 rigs, while Alaska, California and West Virginia each picked up one new rig.
Four states were unchanged this week, namely Colorado, Kansas, Ohio, and Utah.
Pennsylvania lost 3 rigs, New Mexico and Texas lost 2 rigs each, while North Dakota and Oklahoma lost 1 rig each.
Summary of Major Plays – Ranked By Rig Count
– Permian Basin 473 rigs compared to last week’s 478 rigs
– Eagle Ford 82 rigs compared to last week’s 82 rigs
– Cana Woodford 59 rigs compared to last week’s 59 rigs
– Williston 57 rigs compared to last week’s 58 rigs
– Marcellus 61 rigs compared to last week’s 63 rigs
– Haynesville 56 rigs compared to last week’s 54 rigs
– DJ-Niobrara 31 rigs compared to last week’s 31 rigs
– Utica 19 rigs compared to last week’s 19 rigs
– Granite Wash 4 rigs compared to last week’s 5 rigs
– Arkoma Woodford 5 rigs compared to last week’s 5 rigs
Compiled and Published by GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.