In the week ending July 27, 2018, the number of land rigs drilling for oil in the United States totaled 861, three more compared to the previous week and up by 95 compared with a total of 766 a year ago. Including 186 other land rigs drilling for natural gas and one listed as miscellaneous, there are a total of 1,048 working rigs in the country, up week over week by two and 90 more 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 September delivery settled at $69.61 a barrel on Thursday and traded down about 1.7% Friday afternoon at around $68.46 shortly before regular trading closed. Brent crude for September delivery traded at $73.93 a barrel, down about 0.8%.
The natural gas rig count fell by one to 186 this week. The count for natural gas rigs is now six fewer year over year. Natural gas for September delivery traded up about 0.8% at around $2.78 per million BTUs, up a penny compared to last Friday.
Today’s big news is the $10.5 billion acquisition by BP of BHP Billiton’s ill-considered 2015 purchase of acreage in the Haynesville, Permian Basin and Eagle Ford shale plays. The acquisition puts BP back in the game in land-based exploration and production.
One other note from the Permian Basin: Tom Kloza at OPIS is keeping an eye on the discount on crude from the Permian compared to WTI. His latest reading: “[T]he discounts for disadvantaged regional crude are widening. WTI in Midland now $17 bbl off WTI futures (~$52.15 bbl) and WCS in Alberta at $26.30 bbl discount (~$42.85 bbl).” These discounts won’t decline until more pipelines are built, and that is at least six months away for the next substantial capacity increase.
Among the states, Baker Hughes reports that Pennsylvania added two rigs this week and six states added one each: Alaska, Kansas, New Mexico, North Dakota, Texas and West Virginia.
In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 480, four more compared with the previous week’s count. The Eagle Ford Basin in south Texas has 80 rigs in operation, down by one week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 57 working rigs, up one for the week.
Producers made no changes in horizontal rigs this week and the count remained unchanged at 922, while offshore drillers reported a total of 15, two fewer compared with the previous week’s count.