By June 2, 2017 Read More →

US rig count up for 20th straight week: Baker Hughes

rig count

Baker Hughes reports the US rig count increased by 11 in the week ending June 2.SandRidge photo.

US rig count expected to level off as prices stick in $50 range

The US rig count rose for the 20th straight week, according to data released by Baker Hughes on Friday.  With oil prices struggling to rise over $50 per barrel, some analysts expect the pace of additions to level off in the coming months.

In Canada, the rig count rose by six and now sits at 99, which is 58 rigs more than this time last year.

US drillers added 11 oil rigs in the week ending June 2, making the total count 733, which is the most since April 2015 and more than double the count during the same week last year.


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While the US rig count rose again, the monthly additions in May were at the lowest levels since October due to stagnant oil prices.  Crude prices stalled in February and prices are now no higher than they were a year ago.

Reuters market analyst John Kemp expects the rig count to stop rising in the next few months.  “The active rig count is likely to peak in June or July unless the price of benchmark West Texas Intermediate (WTI) crude starts rising again above $50 per barrel.”

US crude futures were trading under $48/barrel, putting the front-month on track for a second weekly decline in a row.  Calendar 2018 was fetching almost $49/barrel.

Investors are concerned that President Trump’s decision to walk away from the Paris Climate Accord could boost US drilling activity and add to the bulging global crude glut.

Prior to Trump’s call on the Paris agreement, the US Energy Information Administration projected US production to increase to 9.3 million barrels per day (b/d) in 2017 and to a record high of 10 million b/d in 2018.

In 2016, the US pumped an average of 8.9 million b/d.

In a Reuters report, this week analysts at Simmons & Co along with energy specialists at Piper Jaffray forecast the total oil and gas rig count to average 874 in 2017, 1,086 in 2018 and 1,197 in 2019.  Most wells produce oil and gas.

If the Simmons’ 2019 forecast is correct, that would be the highest number of active wells since 2014 when there were 1,962 rigs.  According to Baker Hughes, the rig count peaked in 2012 at 1,919.

So far in 2017, the average rig count is 798.





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