US oil rig count down for third week out of four
The US rig count fell slightly for the third time in the previous four weeks. Chevron photo.
Canadian oil rig count unchanged
The oil rig count in the United States fell slightly for the third time in the previous four weeks as oil prices continue to stumble.
According to the weekly report by Baker Hughes there were three fewer oil rigs operational in the week ending Sept. 8. The total now is now at 756, the lowest since June. This time last year, there were 414 rigs operational in the US.
In Canada, the oil rig count was unchanged at 102 and there was one new gas rig, bringing the total gas rigs to 100. At this time last year, there were 134 gas and oil rigs in total.
Last month, US drillers cut seven rigs, the first monthly reduction since May of last year.
The decline in the number of rigs occurred during the week where Hurricane Harvey wreaked havoc in Texas, forcing the shut down of some operations in the Eagle Ford shale play. As well, a number of refineries in the US Gulf Coast were shuttered due to Harvey.
Crude prices fell on Friday. By 2:44 p.m. EDT, benchmark Brent crude dropping by 65 cents to $53.84/barrel and US WTI fell by $1.63 to $47.46/barrel.
According to projections by the US Energy Information Administration, US oil production is expected to rise to 9.4 million barrels per day (b/d) in 2017 and to a record 9.9 million b/d in 2018. In 2016, total US production amounted to 8.9 million b/d.
Despite OPEC’s supply cut pact which aimed to cut production by participants by 1.8 million b/d, global oil production has outpaced demand, causing slumping oil prices. As a result, exploration and production companies are reducing their spending plans for this year.
E&P companies had expected higher oil prices this year and had planned ambitious spending programs for 2017 and are still spending much more this year than last.
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