US drill rig count higher on Texas, Permian gas boost: Baker Hughes

Quantum Commodity Intelligence - North American drilling activity was higher the week ending 17 March, breaking the four-week run of lower counts, oilfield services firm Baker Hughes reported.

The total weekly rig count increased by eight units to 754, up around 14% up from the same time last year.

The gains were confined to the natural gas sector where the rig count increased by nine to 162, up 25 from this time last year and the highest weekly rise since before the pandemic.

The number of rigs dedicated to crude dipped by one to 589, the lowest count since last June.

Texas added five rigs to stand at 371 units and 51 more than a year ago, while the Permian Basin, spread across West Texas and New Mexico, was up seven rigs at 350 for an increase of 34 on the year.

Last week the US government's Energy Information Administration said in its own monthly Drilling Productivity Report that shale oil output in March will grow another 0.9% on the month to 9.145 million bpd.

Meanwhile, the recent slump in crude oil prices has yet to play out in the drilling sector, with time lags between sharp price movements and rig count typically extending into months, although analysts said the price rout was likely to lead to some project cancellations.   

NYMEX WTI trading on the Chicago Mercantile Exchange settled on Friday (17 March) at $66.74/b for the Apr23 contract, down 13% on the week.

Front-month May23 ICE Brent futures closed Friday at $72.97/b, down 12% over the same timeframe.

Natural gas prices were little changed with the Apr23 Henry Hub contract on NYMEX closing down1% on the week at $2.4/mmBtu.