US rig count dips for second week: Baker Hughes

Quantum Commodity Intelligence – North American drilling activity was marginally lower for a second week, according to the latest report from oilfield services firm Baker Hughes.

The total rig count dipped by two units to 619 the week ending 12 January, some 156 rigs below the same stage last year, or a 20% drop.

Rigs drilling for oil eased by two to 499 units, 124 fewer than at the same stage last year. Rigs drilling exclusively for gas was down one unit at 117, down 33 on the year.

Texas, the largest producing state, was unchanged at 308, while the largest increase was North Dakota, adding two, and Wyoming, which lost two rigs. The Permian Basin, spanning West Texas and New Mexico, dropped two rigs to stand at 309.

On US oil prices, NYMEX WTI trading on the Chicago Mercantile Exchange settled on Friday at $72.68/b for the Feb23 contract, down 1.5% on the week.

Front-month Mar23 ICE Brent futures closed at $78.76/b, 0.6% over the same timeframe, with the North Sea outperforming the US benchmark.

Traders said record crude production and higher freight costs on export barrels dampened US crude prices.

US natural gas prices for the Feb24 Henry Hub contract on NYMEX rallied 14% on the week to close at $3.31/mmBtu, with many of the lower 48 states hit by winter storms, sending demand for gas rocketing.

Chesapeake Energy announced last week it had agreed to purchase Southwestern Energy to form a shale gas-focused company in an all-stock deal valued at $11.5 billion.