US gas rig count soars, crude continues decline: Baker Hughes

Quantum Commodity Intelligence – North American drilling activity posted an overall gain for the first time in 10 weeks, led by a surge in gas rigs, oilfield services firm Baker Hughes reported.

The total weekly rig count increased by six units to 680 the week ending 7 July, still 72 rigs below the same stage last year, or down 10%.

The gains all came from rigs drilling for natural gas which soared by 11 units to 135, the biggest weekly gain in almost seven years, but still down 18 from a year ago.  

However, oil rigs continued to decline, dropping by five to 540, some 57 fewer than at the same stage in 2022.

Texas lost four rigs falling to 337 and is now 24 fewer than a year ago, while the Permian Basin, spanning West Texas and New Mexico, was up one at 342 and down eight from year-ago levels.

Permian drillers added seven gas rigs, but this was offset by the loss of six oil exploration rigs.

Despite the ongoing losses in oil drill rigs, US output remains at post-pandemic highs of around 12.4 million bpd, with focus shifting to the more productive regions.

NYMEX WTI trading on the Chicago Mercantile Exchange settled on Friday (7 July) at $7384/b for the Aug23 contract, up 4.5% on the week.

Front-month Sep23 ICE Brent futures closed at $78.47/b, up 4% over the same timeframe.

Meanwhile, natural gas prices gave up some of the June gains as the Aug23 Henry Hub contract on NYMEX closed at $2.582/mmBtu on Friday, down 8%, as record-high production and higher-than-average inventories contributed to weaker prices.