Texas leads US rig count to a third weekly gain: Baker Hughes

Quantum Commodity Intelligence – North American drilling activity nudged higher for a third consecutive week although the gains were again modest, according to the latest report from oilfield services firm Baker Hughes.

The total rig count increased by three to 625 the week ending 1 December, adding to the two additional units reported in each of the two previous weeks. This was still 162 rigs below the same stage last year, or down 20.

Oil rigs accounted for the gains with five new units, taking the count to  505 units last week, or 122 fewer than at the same stage last year. Rigs drilling for gas dropped by one to 116, or 39 down on the year.

Texas, the largest producing state, was up three rigs at 306, while no other states posted a loss or gain of more than one rig.

In September, US production of crude and NGLs came in just below 20 million bpd equivalent, up 8% on the year to a new record high.

Meanwhile, US crude oil prices retreated for a sixth consecutive week after futures slumped at the backend of the week following an unconvincing OPEC+ meeting.

NYMEX WTI trading on the Chicago Mercantile Exchange settled on Friday at $74.07/b for the Jan23 contract, down 1.9% on the week.

Front-month Feb23 ICE Brent futures closed at $78.88/b, also down 1.9% over the same timeframe.

But US natural gas prices remained under strong downward pressure as the Jan23 Henry Hub contract on NYMEX lost another 5% last week, closing at $2.814/mmBtu, which was the lowest settle of the year for the Jan24 contract.

Record production levels again hit prices, offsetting near-record LNG exports in November. According to the Energy Information Agency (EIA), US exports last month were 8 million metric tons, the second highest on record.