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U.S. Oil, Gas Drillers Struggle Amidst Slowdown

U.S. Oil, Gas Drillers Struggle Amidst Slowdown

May 3, 2024

U.S. Oil, Gas Drillers Struggle Amidst Slowdown

The United States has seen a decline in the number of active drilling rigs for oil and gas. According to the latest report published by Baker Hughes on Friday, the total rig count dropped by 8 to a current total of 605. This figure represents a significant decrease from the 748 rigs that were operational at the same time last year.

The detailed breakdown of the data reveals that the number of oil rigs decreased by 7 this week, marking a continuous drop following a decline of 5 in the preceding week. Oil rigs now total 499, which is 89 fewer than the count at this time last year. Additionally, the number of gas rigs declined by 3 this week, bringing the total down to 102. This reflects a loss of 55 active gas rigs compared to the previous year's figures. There was a slight increase in miscellaneous rigs, which rose by 2.

Despite these decreases in rig numbers, U.S. crude oil production has remained consistent, maintaining an average of 13.1 million barrels per day (bpd) for the week ending April 26. This rate has been unchanged for eight consecutive weeks and is down 200,000 bpd from the all-time high of 13.3 million bpd.

Another key metric, the Primary Vision’s Frac Spread Count, which estimates the number of crews completing wells that are still unfinished, experienced a slight decline in the week ending April 26, falling to 257. This indicates a weekly decrease of 3 completions.

Regionally, the Permian basin saw a minor reduction of 1 rig, continuing a downward trend from the previous week. The Eagle Ford shale also experienced a drop, with the rig count falling by 3 this week after no change in the prior week.

Oil prices reflected the industry's downturn, with both benchmarks showing a decrease on Friday. Before the data release at 12:46 p.m. ET, the West Texas Intermediate (WTI) benchmark was trading down by $0.50, a 0.63% decrease, at $78.45 per barrel. This price point is approximately $5.50 lower than the previous week at the same time. Meanwhile, the Brent benchmark showed a decrease of $0.41, down by 0.49%, trading at $83.26, which is around $6 less per barrel compared to a week ago.

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