Energy Economy

US Oil Rig Count Jumps by 10 This Week, Crude Price Holds Gains

In the week ending December 21, 2018, the number of land rigs drilling for oil in the United States totaled 883, an increase of 10 compared to the previous week and up by 136 compared with a total of 747 a year ago. Including 197 other land rigs drilling for natural gas, there are a total of 1,080 working rigs in the country, nine more than a week ago and up by 149 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 February delivery settled at $45.88 a barrel on Thursday and traded up about 0.4% Friday afternoon at around $46.07 shortly before regular trading closed. WTI was on track to close the week down by around 10%. Brent crude for February delivery traded at $54.20 a barrel, down about 0.3% for the day.

The natural gas rig count dropped by one to a total of 197 this week, and the number of “miscellaneous” rigs remained at zero. The count for natural gas rigs is now up by 13 year over year. Natural gas for January delivery traded up more than 6% at around $3.80 per million BTUs, down by about four cents compared to last Friday’s price.

Fears that a global supply glut would not be reduced by promised reductions in output from Saudi Arabia and Russia have kept crude oil prices under pressure this week. A Wall Street Journal report this morning indicates that the Saudis now plan to cut their own production by 322,000 barrels a day, higher than the kingdom’s earlier agreement to cut 250,000 barrels a day. The report put a bit of air under crude, but not a lot.

Among the states, Baker Hughes reports that North Dakota added three rigs this week, while Louisiana added two and four states — Colorado, New Mexico, Oklahoma and Pennsylvania — added one each. Alaska, Ohio and Texas each lost one rig.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 486, unchanged 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 has 56 working rigs, three more for the week.

Producers added 13 horizontal rigs this week and the count rose to 940, while offshore drillers reported a total of 24 rigs, up by one from the previous week’s count.