US Oil Rig Count Adds 5; Crude Price Up Slightly
In the week ended April 27, 2018, the number of land rigs drilling for oil in the United States totaled 825, five more than in the previous week and up by 128 compared with a total of 697 a year ago. Including 195 other land rigs drilling for natural gas and one listed as miscellaneous, there are a total of 1,021 working rigs in the country, eight more than a week ago and up by 151 year over year. The data come from the latest Baker Hughes North American Rotary Rig Count released on Friday afternoon.
West Texas Intermediate (WTI) crude oil for June delivery settled at $68.19 a barrel on Thursday and traded down up about 0.1% Friday afternoon at $68.28 shortly before regular trading closed. Brent crude for July delivery traded at $74.03 a barrel.
The natural gas rig count rose by three to 195 this week. The count for natural gas rigs is now up by 24 year over year. Natural gas for June delivery traded down about 2% at around $2.78 per million BTUs, four cents more than last Friday.
On Tuesday, Permian WTI traded at a discount of $8.25 a barrel to the WTI spot price at Cushing. The gap widened to $11 a barrel at one point during the day. The discount was due entirely to the lack of additional pipeline takeaway capacity.
S&P Global Platts noted that the U.S. Energy Information Administration expects Permian production to rise to 3.18 million barrels a day in May, which is only slightly lower than pipeline capacity of 3.3 million barrels a day. Producers are paying rail transport costs of $6 to $8 per barrel and trucking fees of averaging about three times that range to move crude to Houston and Corpus Christi.
Among the states, Baker Hughes reported that Oklahoma added six rigs, Texas added four, North Dakota added three, Ohio added two and California added one. Alaska and New Mexico each lost three rigs, Wyoming lost two and three states — Colorado, Kansas and Pennsylvania — each lost one rig.
In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 455, one less compared with the previous week’s count. The Eagle Ford Basin in south Texas has 75 rigs in operation, also down by one week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 56 working rigs, or three more for the week.
Producers added 12 horizontal rigs this week and the count rose to 901, while offshore drillers reported an unchanged total of 18.