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U.S. Oil and Gas Rig Count Declines Further as Oil Price Rises

U.S. Oil and Gas Rig Count Declines Further as Oil Price Rises

Apr 5, 2024

U.S. Oil and Gas Rig Count Declines Further as Oil Price Rises

In the latest report by Baker Hughes released on Friday, the total number of active drilling rigs for oil and gas in the United States decreased, marking a continued downward trend in the rig count. This week saw a modest drop of one rig, bringing the total rig count to 620, which is 131 rigs fewer than the 751 rigs active at the same time last year.

The detailed figures show a slight increase in the number of oil rigs, which rose by two this week, following a decrease of three rigs in the preceding week. The current total of 508 oil rigs is down by 82 compared to last year's count. In contrast, the number of gas rigs decreased by two this week, resulting in a total of 110 active gas rigs, which represents a reduction of 48 rigs from the same period in the previous year. Miscellaneous rigs also experienced a decline, falling by one to a total of two rigs.

Despite the changes in rig numbers, U.S. crude oil production has remained constant this week, averaging 13.1 million barrels per day (bpd) for the week ending March 29. This figure is slightly below the all-time high of 13.3 million bpd.

The Primary Vision’s Frac Spread Count, which serves as an indicator of the number of crews finishing wells that are yet to be completed, also saw a decrease this week. The count dropped by five to 260 for the week, suggesting a slowdown in well completions.

Regionally, the Permian basin experienced an increase of one rig, replicating the rise seen in the previous week. Similarly, the Eagle Ford shale saw an uptick of a single rig this week, following a week of no changes.

Amidst these developments, oil prices showed a positive trend on Friday morning. West Texas Intermediate (WTI) crude was up by $0.86, a 0.99% rise, trading at $87.45 per barrel at 12:49 p.m. ET. This price represents an increase of over $4 per barrel on a week-over-week basis. Meanwhile, the Brent crude benchmark was trading higher by $1.09, a 1.20% gain, at $91.74, climbing nearly $5 per barrel from last week and reaching its highest point since last October.

As the industry observes the fluctuating rig count and stable production levels, the implications for future oil and gas supply, as well as the impact on prices, remain to be seen. The current data indicate a cautious approach by U.S. drillers in ramping up production, even as oil prices show an upward movement.

Originally reported by OilPrice


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