US Oil Rig Count Rises by 6; Crude Price Bouncing Back

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In the week ended February 2, 2018, the number of land rigs drilling for oil in the United States totaled 765, six more than in the previous week and up by 182 compared with a total of 583 a year ago. Including 181 other land rigs drilling for natural gas, there are a total of 946 working rigs in the country, one fewer week over week and up by 217 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 March delivery settled at $65.80 a barrel on Thursday and traded down about 1% Friday afternoon at $65.20 shortly before regular trading closed.

The natural gas rig count decreased by seven to 181 this week. The count for natural gas rigs is now up by 36 year over year. Natural gas for March delivery traded up about 0.5% at around $2.87 per million BTUs, down 29 cents since last Friday.

The rising count for U.S.-based rigs is putting downward pressure on crude prices, which are on track to close the week down by about $1.00 over the past five trading sessions. The U.S. Energy Information Administration (EIA) reported Wednesday that U.S. crude oil production rose to more than 10 million barrels a day in November, the first time in 40 years that U.S. production has reached that level.

The EIA has already projected that U.S. production will average 10.3 million barrels a day this year and 10.9 million barrels a day in 2019. Saudi Arabia now produces around 10 million barrels a day and Russia produces about 11 million.

Among the states, Baker Hughes reported that Colorado added two rigs, while North Dakota and Ohio added one each. Wyoming lost three rigs, and Louisiana and Texas lost one each.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 427, unchanged compared with the previous week’s count. The Eagle Ford Basin in south Texas has 66 rigs in operation, also unchanged week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 46 working rigs, up one for the week.

Producers added no new horizontal rigs last week to maintain the count at 808, while offshore drillers shut down one rig to bring the offshore count to 16 working rigs.