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

Southeast Asia’s 2GW Cross-Border Offshore Wind Scheme Targets 2034 Buildout

Viridien to Shed More Light on Malaysia’s Offshore Oil and Gas Potential

US Pressure on India Could Propel Russia's Shadow Oil Exports

Propane’s Economic Edge for Ports During Trade Uncertainty

Floating Offshore Wind Test Center Planned for Japan

SPE Offshore Europe 2025 set to drive transformational change for the energy sector

Norwegian Oil Investment Will Peak in '25

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

ADNOC Signs Long-Term LNG Deal with Hindustan Petroleum Corporation

PTTEP Hires Energy Drilling’s Rig for Southeast Asia Offshore Job

Current News

Malaysia’s Petronas and Oman’s OQEP Strengthen Oil and Gas Ties

Southeast Asia’s 2GW Cross-Border Offshore Wind Scheme Targets 2034 Buildout

Pharos Energy Kicks Off Drilling Campaign Offshore Vietnam

Viridien to Shed More Light on Malaysia’s Offshore Oil and Gas Potential

US Pressure on India Could Propel Russia's Shadow Oil Exports

Energy Drilling’s EDrill-2 Rig Starts Ops for PTTEP in Gulf of Thailand

RINA Wins FEED Contract for Petronas’ Flagship CCS Project in Malaysia

ABL Secures Rig Moving Assignment with India's ONGC

Pakistan, Türkiye Deepen Oil and Gas Ties with Offshore Indus-C Block Deal

Eni-Petronas Gas Joint Venture Up for Launch in 2026

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