US oil rig count under 500, gas drill rigs at 2yr low: Baker Hughes
Quantum Commodity Intelligence – North American drilling activity resumed the downwards trend with both oil and gas activity reduced, according to the latest report from oilfield services firm Baker Hughes.
The total rig count decreased by eight rigs to 605 in the week ending 3 May, leaving the count 143 rigs below the same stage last year and down 17 from the 622 units at the start of 2024.
Rigs drilling for oil dropped by seven to 499 units, 89 fewer than at the same stage last year, while rigs drilling exclusively for gas were down three to 102. The small category of rigs classed as miscellaneous added two units.
The gas rig count now stands at a two-year low, with drillers cutting production by around 10% this year due to depressed prices, including negative levels at the Waha hub, which prices Permian gas.
Texas, the largest-producing state, lost five units to stand at 292, while Alaska also lost five rigs to stand at just nine, although this was likely linked to a seasonal turnaround.
The Permian Basin, spanning West Texas and New Mexico, eased by one rig, while Texas' Eagle Ford was down three units.
Prices
Crude oil prices retreated sharply last week, largely triggered by a steep increase in US crude oil inventories. The EIA reported that commercial stocks swelled by 7.3 million barrels last week to a 10-month high of 460.9 million barrels.
NYMEX WTI trading on the Chicago Mercantile Exchange closed Friday at $78.11/b for the Jun24 contract, a drop of 6.8% on the week as benchmarks tested seven-week lows.
Front-month Jun24 ICE Brent futures settled at $82.96/b, down 6% over the same timeframe.
Natural gas finally showed some positive upside, with warmer temperatures set to boost power demand as the air-conditioning season kicks in.
Additionally, cuts implemented earlier this year from major producers, including EQT and Chesapeake, have started to rebalance market dynamics. The reductions are expected to be extended beyond Q2.
The Jun24 Henry Hub contract on NYMEX ended the week 12% higher at $2.14/mmBtu.
