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Decline in U.S. Drilling Activity Continues

Decline in U.S. Drilling Activity Continues

Apr 26, 2024

Decline in U.S. Drilling Activity Continues

Recent data published by Baker Hughes on Friday revealed a decrease in the number of active drilling rigs for oil and gas in the United States. This week, the total rig count dropped by 6, bringing the number down to 613, in contrast to last year's total of 755 rigs at the same time.

The oil rig count experienced a decline of 5 rigs this week, following a gain of 5 in the previous week. Currently, there are 506 oil rigs in operation, which marks a decrease of 85 compared to the same period last year. The number of active gas rigs also saw a reduction, with a loss of 1 rig this week, resulting in a total of 105 gas rigs. This represents a significant year-over-year decrease of 56 gas rigs. The count for miscellaneous rigs remained unchanged at 2.

Despite the decline in drilling rigs, U.S. crude oil production has maintained a consistent output, holding steady at an average of 13.1 million barrels per day (bpd) for the seventh consecutive week, ending April 12. This level is 200,000 bpd below the all-time high of 13.3 million bpd.

In a positive turn, Primary Vision's Frac Spread Count, which estimates the number of crews completing previously unfinished wells, ended a four-week losing streak. Completions increased by 8 to 260 for the week ending April 19, although this is still 30 crews fewer than the count from the same time last year.

Regionally, the Permian basin saw a slight decrease of 1 rig after a 2-rig increase the week before. The Eagle Ford basin's rig count remained the same, with no changes reported for two consecutive weeks.

Prices for both oil benchmarks saw an increase of approximately $0.50 per barrel. At 12:25 p.m. ET, before the data release, the West Texas Intermediate (WTI) benchmark was trading up by $0.49 (+0.59%) on the day at $84.06, which is roughly $0.90 higher than last week's prices at the same time. The Brent benchmark saw a $0.54 (+0.61%) increase, trading at $89.55, approximately $2 per barrel more than the price a week prior.

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