By June 23, 2017 Read More →

US rig count up for record 23rd straight week: Baker Hughes

rig count

The US rig count at 758 is more than double the count this time last year.  Shell photo.

US oil rig count up to 758, highest since April 2015

The US rig count rose for the 23rd straight week as US energy firms added 11 oil rigs in the week ending June 23, bringing the total count to 758, according to Baker Hughes.

The rig count this week is the most since April 2016 and more than double the same week one year ago when there were 330 operational rigs.  Drillers have added rigs in 52 of the past 56 weeks since the beginning of June 2016.

In Canada, the rig count is up by 11 to 170, up significantly from the 76 active rigs this time last year in Canada.

US crude futures were trading at around $43/barrel on a lift from the falling US dollar.  Prices remained down for a fifth week in a row and neared a 10-month low on investor concerns about the stubborn global glut of crude.

Despite OPEC’s supply cut agreement to cut 1.8 million barrels per day (b/d), rising US, Libyan and Nigerian production have undercut the cartel’s efforts.

Analysts say crude prices will likely remain under pressure until the number of US drilling rigs stabilizes or declines.  US producers are expected to increase output to 9.3 million b/d in 2017 and a record 10 million b/d in 2018, according to government predictions.  In 2016, the US pumped 8.9 million b/d.

According to Reuters, the break even price for drilling new rigs in the US varies among shale formations and even between different areas in the same play.  However, most analysts agree producers need to see US crude prices between $45-$50/barrel.

Rystad Energy, a consultancy firm specializing in exploration and production, says wellhead break-evens for Bakken shale average around $38/barrel for wells completed in 2016-2017.

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