In the week ended December 1, 2017, the number of rigs drilling for oil in the United States totaled 749, up by two from the prior week and up by 272 compared with a total of 477 a year ago. Including 180 other rigs drilling for natural gas, there are a total of 929 working rigs in the country, six higher week over week and up by 332 year over year. The data come from the latest Baker Hughes North American Rotary Rig Count, released on Friday.
West Texas Intermediate (WTI) crude oil for January delivery settled at $57.40 a barrel on Thursday, and it traded up about 1.3% Friday afternoon at $58.17 shortly before regular trading closed.
The natural gas rig count rose by four to a total of 180 this week. The count for natural gas rigs is now up by 61 year over year. Natural gas for January delivery traded up about 1.5% at around $3.07 per million BTUs before the count was released and was essentially unchanged following the report’s release.
The oil rig count rose for the second consecutive week and weighed a bit on higher crude prices following yesterday’s agreement among OPEC members and their allies to extend crude oil production cuts through the end of December 2018. The agreement left the Russians and others some wriggle room to pull out of the deal at the June OPEC meeting, depending on market conditions.
The view from here is that Russia allowed the Saudis and OPEC to say whatever they wanted in the official announcement of the extension, but that the Russians have made clear that they won’t be bound the agreement if U.S. production increases and continues to eat into Russian sales in Europe.
According to Baker Hughes, six horizontal rigs were added during the week to bring the total number of this type of rig to 792 out of the 929 total oil and gas rigs. Lateral lengths on horizontal rigs have been increasing and some now extend more than three miles underground from the well pad.
Among the states, Texas added four rigs last week while Kansas, New Mexico, North Dakota and Utah each added one rig. Colorado and Louisiana lost one rig each.
In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 397, up by four compared with the previous week’s count. The Eagle Ford Basin in south Texas has 67 rigs in operation, unchanged week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 48 working rigs, one more for the week.