US Rig Count Rises to Highest Since March 2015

By Harshith Aranya
Friday, October 19, 2018

U.S. drillers added oil rigs for a second week in a row this week, raising the rig count to the highest level since March 2015.

Drillers added four oil rigs in the week to Oct. 19, bringing the total count to 873, General Electric Co's Baker Hughes energy services firm said in its closely followed report on Friday.

The U.S. rig count, an early indicator of future output, is higher than a year ago when 736 rigs were active because energy companies have ramped up production to capture prices that are higher in 2018 than 2017.

Due to transport constraints to remove oil from the Permian Basin, the largest oilfield in the United States, new drilling had stalled since June but has begun to edge up as a new pipeline is due to start up and help the bottleneck.

On Friday, U.S. crude futures were trading around $69.36 per barrel, on track to fall for a second week in a row on rising U.S. inventories and concern that trade wars were curbing economic activity.

So far this year, U.S. oil futures have averaged $67.24 per barrel. That compares with averages of $50.85 in calendar 2017 and $43.47 in 2016.

Looking ahead, crude futures were trading around $69.42 per barrel for the balance of 2018 and at $69.25 for calendar 2019.

U.S. financial services firm Cowen & Co this week said the exploration and production (E&P) companies it tracks have provided guidance indicating an 18 percent increase this year in planned capital spending.

Cowen said the E&Ps it tracks expect to spend a total of $85.3 billion in 2018. That compares with projected spending of $72.2 billion in 2017.

Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast the average combined oil and natural gas rig count would rise from 876 in 2017 to 1,031 in 2018, 1,092 in 2019 and 1,227 in 2020.

Since 1,067 oil and gas rigs were already in service, drillers would not have to add any rigs for the rest of the year to hit Simmons' forecast for 2018.

Year-to-date, the total number of oil and gas rigs active in the United States has averaged 1,022. That keeps the total count for 2018 on track to be the highest since 2014, which averaged 1,862 rigs. Most rigs produce both oil and gas.

U.S. crude oil output in 2018 is expected to rise 1.39 million barrels per day to 10.74 million bpd, according to the U.S. Energy Information Administration said in its Short Term Energy Outlook (STEO).


(Reporting by Scott DiSavino and Harshith Aranya Editing by Marguerita Choy)

Categories: Energy North America Oil Natural Gas Shale Oil & Gas

Related Stories

Cheniere, JERA Ink Long-Term LNG Sale and Purchase Agreement

Seatrium Engages Axess Group to Clear FPSOs for Brazil Deployment

Inpex Picks FEED Contractors for Abadi LNG Onshore Plant

BP, ONGC, Reliance Industries Ink Deal for Offshore Exploration in India

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

Sapura Scoops Over $118M for Chevron, PTTEP Subsea Ops off Thailand

SBM Offshore’s Jaguar FPSO Enters Drydock in Singapore (Video)

Seatrium Makes First Turnkey FPSO Delivery to Petrobras

KBR-SOCAR Joint Venture Secures Work for BP in Azerbaijan

Fugro Expands Geotechnical Testing Capabilities in Indonesia

Current News

Cheniere, JERA Ink Long-Term LNG Sale and Purchase Agreement

Shelf Drilling Lands New Jack-Up Contract in Vietnam, Extends Egypt Deal

Seatrium Engages Axess Group to Clear FPSOs for Brazil Deployment

Inpex Picks FEED Contractors for Abadi LNG Onshore Plant

Inpex Kicks Off FEED Work for Abadi LNG Scheme Offshore Indonesia

ADNOC Signs Long-Term LNG Deal with Hindustan Petroleum Corporation

Sapura Energy Rebrands to Vantris Energy

BP, ONGC, Reliance Industries Ink Deal for Offshore Exploration in India

Allseas-Boskalis Consortium Bags $1.4B Offshore Gas Pipeline Job in Taiwan

CNOOC Brings New Offshore Gas Field On Stream

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com