From Staff Reports
Drillers in Texas shut down seven rigs in the past week as prices began rising on expectation of production outages due to Tropical Storm Barry and continuing geopolitical tensions.
Across the nation, drillers cut four oil rigs, bringing the total down to to 784, the lowest since February 2018, according to Baker Hughes. During the same week a year ago, 863 rigs were operating.
Two U.S. gas rigs were taken out of service in the past week, leaving 172 at work. A year ago, 189 were operating.
With the addition of one miscellaneous rig, the total combined count now stands at 958. The same week a year ago, 1,054 were operating.
Reflecting Texas’ big weekly loss, Baker Hughes said the West Texas-New Mexico Permian Basin lost six rigs, to 437. Another five were shut down in South Texas’ Eagle Ford Shale, leaving 66 at work.
The East Texas-Louisiana Haynesville Shale added one, to 52.
Oklahoma’s tally was up one, to 98. That reflected single-rig gains in both the DJ Niobrara and Cana Woodford plays.
Colorado gained two, to 31.
The rig count, an early indicator of future output, has declined over the past seven months as independent exploration and production companies cut spending on drilling to focus on earnings growth instead of increased output.
Despite the declines, the U.S. Energy Information Administration projects U.S. crude output will rise to 12.36 million barrels per day this year, up from the annual record of 10.96 million barrels per day set in 2018.
Surging U.S. oil output will outpace sluggish global demand and lead to a large stocks build around the world in the next nine months, the International Energy Agency said Friday.
U.S. crude was trading at about $60 per barrel Friday on the New York Mercantile Exchange, putting the contract on track to rise about 5 percent after slipping almost 2 percent in the previous week. Reasons for the rise: U.S. oil producers in the Gulf of Mexico since midweek cut more than half their output ahead of Tropical Storm Barry, and as tensions continued to simmer in the Middle East.