US Oil Rig Count Rises Again, Price on Track for Weekly Drop of Nearly 2%
In the week ended December 8, 2017, the number of rigs drilling for oil in the United States totaled 751, two more than in the prior week and up by 253 compared with a total of 498 a year ago. Including 180 other rigs drilling for natural gas, there are a total of 931 working rigs in the country, two more week over week and up by 307 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 $56.69 a barrel on Thursday and traded up about 1% Friday afternoon at $57.28 shortly before regular trading closed Friday.
The natural gas rig count remained flat at 180 this week. The count for natural gas rigs is now up by 55 year over year. Natural gas for January delivery traded up about 0.6% at around $2.78 per million BTUs before the count was released and was unchanged following the report’s release.
The oil rig count rose for the third consecutive week and traders are trying to figure out if U.S. producers are going to invest in more drilling or pay more attention to cash flow and returns to investors.
One company planning to boost investment in drilling is ConocoPhillips. The country’s largest independent exploration and production company has said it will boost capex by $2 billion next year, doubling its spending on North American shale plays.
Researchers at RBN Energy track capex plans and estimate spending of around $55 billion this year rising to $60 billion in 2018. For that spending increase, production is estimated to rise from around 4 million barrels a day to more than 4.2 million barrels. Capex in 2014 totaled around $130 billion, while production in the year averaged just over 3.9 million barrels a day. See the RBN Energy website for more details.
Among the states, Texas added five rigs last week, New Mexico added three, Pennsylvania added two and Louisiana and West Virginia each added one. Ohio lost four rigs, Colorado lost three and three states — Kansas, North Dakota and Oklahoma — each lost one.
In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 400, three more compared with the previous week’s count. The Eagle Ford Basin in south Texas has 70 rigs in operation, also up by three, and the Williston Basin (Bakken) in North Dakota and Montana now has 47 working rigs, one less for the week.