US oil rig count rises as WTI passes $70/b

London (Quantum Commodity Intelligence) - Another six rigs were added to the US oil count last week amid the rally in WTI prices above $70/b, but there was a drop in gas rigs again, data from Baker Hughes showed Monday.

The US oil rig number increased to 365 over the week to June 11, but the gas rig count dropped one to 96, extending a slide that has seen its number drop from 103 on June 7.

"The correlation between WTI and horizontal rig count continues to suggest a significant upside potential for the number of horizontal rigs at current oil price levels, but shale companies' presentations/communication still indicate strong focus on free cash flow in 2021," noted analysts at DNB Markets.

"We can observe that US oil rig additions from through levels are slowing down compared to the previous upcycle, with a gap of 95 rigs, which can be viewed as a sign of capital discipline in the US shale oil industry."

There were 683 oil rigs in the US on March 13, 2020, before the lockdowns to prevent the spread of Covid.

While nearby WTI prices have risen above $70/b, long dated futures in 2025 remain around $55/b.

The current high price at the front of the curve has been underpinned by a high degree of OPEC and its allies to maintain production cuts.  

The number of US shale oil fracking crews was up by 6 last week to 226, down 252, or 52% since peaking in April 2019, according to data from Bloomberg.