Stay updated on oil and gas stories, prices and the weekly rig count. Sign up for our Weekly Newsletter HERE.
Baker Hughes data reveals a significant weekly drop in the U.S. oil-rig count-the biggest monthly reduction since February 2016
SOURCES: Baker Hughes, CNBC, and Reuters
Baker Hughes data reveals a significant weekly drop in the U.S. oil-rig count – U.S. energy firms cut the most oil rigs since April 2015, removing rigs for a second week in a row as a coronavirus-related slump in economic activity and fuel demand has forced massive retrenchment in investment by oil and gas companies.
Drillers cut 40 oil rigs in the week to March 27, bringing down the total count to 624, the lowest since March 2017, energy services firm Baker Hughes Co. said in its weekly report.
The oil rig count, an early indicator of future output, is down 24% from the same week a year ago when 816 rigs were active.
For the month, the oil rig count fell by 54, the biggest monthly reduction since February 2016, putting it down for the second time in three months.
Halliburton Co., the king of fracking and the No. 3 overall service provider, is planning for almost two-thirds of all rigs on the continent to shut down by the fourth quarter.
Despite the sharp drop off in rigs, the EIA’s estimate is that the United States produced 13 million barrels of oil per day on average this week, just 100,000 bpd off the all-time high.
Gasoline demand in the U.S. has dropped “35% to 40%” in the last five or six days as stay-at-home advisories in many states have been implemented, truck stop billionaire Jimmy Haslam said earlier Friday on “Squawk Box.” Haslam runs Pilot Flying J, the largest operator of highway rest stops catering to truck drivers. He also owns the NFL’s Cleveland Browns.
In addition to slumping demand, an oil price war between Saudi Arabia-led OPEC and its allied nations, including Russia, has unsettled supply. Earlier this month, the Saudis announced plans to increase production after an output cut deal among the so-called OPEC+ nations fell apart.
Falling demand and increasing supply have acted as a two-pronged headwind to oil prices.
On Friday, Brent crude oil, the international benchmark, plunged $1.41 to $24.93 a barrel while West Texas Intermediate crude oil, the U.S. benchmark, slid a $1.09 to $21.51.
Total rigs engaged in the exploration and production in the U.S. collapsed, losing 44 rigs for the week ended March 27, 2020, down now at 728. Land rigs were responsible for nearly all of it, falling 41 rigs to 710. The offshore rig count dropped 1 rig, with 18 rigs still running. Rigs drilling in the inland waters fell 2 rigs, down to zero.
Oil Rig Count:
The US crude oil rig count went down 40 rigs, from 664 to 624 for the week. There are 192 fewer rigs targeting oil than last year. Rigs drilling for oil represent 85.7 percent of all drilling activity.
Natural Gas Rig Count:
The natural gas rig count – which plunged to its lowest in August of 2017 – was down 4 rigs, to 102 rigs. The number of rigs drilling for gas is 88 rigs fewer than last year’s count.
AMONG MAJOR OIL- AND GAS-PRODUCING STATES:
UTAH picked up 1 new rig
FOUR states were unchanged, namely California, Ohio, Pennsylvania, and West Virginia.
Texas lost 29 rigs, Oklahoma was down 4, Louisiana and New Mexico each lost 3, Colorado and North Dakota lost 2 rigs each, while Alaska and Wyoming were down 1 rig each.
Summary of Major Plays – Ranked By Rig Count
– Permian Basin 382 rigs compared to last week’s 405 rigs
– Eagle Ford 63 rigs compared to last week’s 67 rigs
– Cana Woodford 13 rigs compared to last week’s 18 rigs
– Williston 49 rigs compared to last week’s 51 rigs
– Marcellus 39 rigs compared to last week’s 39 rigs
– Haynesville 40 rigs compared to last week’s 43 rigs
– DJ-Niobrara 19 rigs compared to last week’s 20 rigs
– Utica 9 rigs compared to last week’s 9 rigs
– Granite Wash 3 rigs compared to last week’s 3 rigs
– Ardmore Woodford 4 rigs compared to last week’s 4 rigs
– Arkoma Woodford 1 rig compared to last week’s 1 rig
For more details on the latest national and state news regarding last Friday’s Baker Hughes rig count data, check out the interactive rig count dashboard on the Oklahoma Index tab of our website.
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.
SOURCES: Baker Hughes, CNBC, and Reuters