US oil rig count fails to rise despite rally in crude

London (Quantum Commodity Intelligence) - The US oil rig count has failed to rise for the first time in six weeks despite the rally in crude prices, and the gas rig count has fallen for the fifth week in a row, data from Baker Hughes shows Friday.

The oil rig count stayed at 359 for the week ending June 4, the same as a week earlier.

There was one more rig added in both the Eagle Ford and Ardmore Woodford basins, but two were dropped from Granite Wash.

US crude futures WTI broke through $70/b during Friday, the highest since October 2018, but the oil rig count remains sharply below pre-pandemic levels of around 670 in January 2020.

"Overall, drilling activity in the past four months has shown only a fairly disappointing recovery given that prices have increased by around 30%, though we do not believe this was due chiefly to technical or economic reasons," noted Commerzbank analysts. 

"Instead, decisions relating to the environment and corporate policy are the key factor, in our opinion."

"For one thing, shale oil companies will have to be more cautious about investments in the future.

"And for another, less investment in the oil sector in general can be expected in the future due to environmental policies."

The US gas rig count dropped to 97, down from 103 on May 7.

But Canada saw an extra 15 oil rigs, bringing its total to 43, while its gas rig count was steady at 34.

The North American rig count rose by 14 over the week to 533.