US oil drilling slumps to lowest level since October - Baker Hughes

Quantum Commodity Intelligence - North American oil drilling activity dropped again in the week ending 27 January, extending the previous week's decline, oilfield services firm Baker Hughes reported.

The number of rigs dedicated to crude fell by four to 609, the lowest since October, having already slumped by 10 units in the previous week.

However, the combined count was offset by rigs drilling for natural gas up by four to 160, leaving the combined weekly rig count unchanged at 771, up from the 610 rigs at the same time last year.

The combined count is down eight rigs for the month, the biggest drop since July 2020 and the second consecutive monthly decline for the first time since the summer of 2020.

Texas was unchanged at 380 rigs and is up 96 on the year, while the Permian Basin, spread across west Texas and New Mexico, was up by three rigs at 357 for an increase of 64 on the year.

The declines came in smaller production basins, said Baker Hughes.

Meanwhile, US crude production was unchanged for a third consecutive week at 12.2 million bpd, according to the latest weekly data from the Energy Information Administration.

Separately, Baker Hughes enjoyed surging revenues and record orders in the fourth quarter of 2022, flagging strong growth in exploration and production (E&P), although supply chain disruptions and inflation made for a tough quarter, the firm said.   

Rival oilfield services firm Halliburton reported better-than-expected fourth-quarter results, with the firm's fracking equipment fully booked, while SLB — the biggest player globally — racked up $3.4bn in profits in 2022, almost a third of which came in the last quarter.

NYMEX WTI trading on the Chicago Mercantile Exchange settled on Friday (27 January) at $79.68/b for the Mar23 contract, a fall of 2.4% on the week.

Front-month Mar23 ICE Brent futures closed Friday at $86.66/b, down 1.1% over the same timeframe.