Rig Count Declined This Week to 1842 from 1855
Welcome back from Thanksgiving! It is time to get the last remaining items accomplished by the end of the year! If you were busy eating turkey and shopping, then you may be jolted back into the market’s reality today.
US onshore rig count down to 1842, -13 from last week
Rig counts declined this week to 1842 from 1855 last week for US lower 48 onshore rigs. The decline is not substantial but Friday’s events in the market were a surprise for many people. WTI Crude Oil closed at $66.26 / bbl which is just a dollar shy of the 52 week low. For the last several months, we have heard all the market analysts talk about oversupply of crude oil due to the shale plays. It’s difficult to understand the rationale for the sell off of crude on Friday. The price dropped -10.17% in half a day of trading. Some believe that OPEC signaled an oil price war against the U.S. You could interpret the price drop due to the OPEC news.
But I don’t think that is the case. The global economy is not improving as fast as many would like. Commodity prices, in general, not just oil prices have taken a beating this year. Heating Oil is -31%, Silver -18%, and Copper –19%. Meanwhile, Gold prices are down -4% this year, too. The simple answer may be “over supply” as many have suggested; however, there are too many other factors at play. Weaker economies across the globe may be the cause.
Permian remains strongest
This week Permian Basin is +1 compared to last week and +96 compared to last year at this time. Eagle Ford is -1 compared to last week and -17 compared to last year. Click here to see the weekly insights report.
Bakken has 191 rigs running +3 from last week but +11 compared to a year ago. The Marcellus shale lost -1 rig this week and is -5 compared to last year.
Mississippian shale play was -1 this week and -3 compared to last year at this time. Niobrara is +4 this week and +13 from a year ago. These 6 shale plays account for 64% of the rig activity in the U.S.
Find out more by checking out our insights to Baker Hughes Rig Count report.
Drilling permits in Texas take sharp decline
After several months of steady increases, November shows a sharp decrease in the number of drilling permits. In October, there were 3,045 drilling permits while November’s activity is down to less than half at 1,507 permits.
We are looking at this more closely to understand how drilling permits are impacted by quarterly budget planning, seasonality, pad drilling practices, and other factors.