US rig count down as gas drilling leads losses: Baker Hughes
Quantum Commodity Intelligence – North American drilling activity extended the 2024 retreat as the sector lost another four units with gas leading the losses, according to the latest weekly report from oilfield services firm Baker Hughes.
The overall count retreated by four rigs to 600 in the week ending 24 May, leaving the total at 111 rigs below the same stage last year and down 22 since the start of 2024. The figure was also the lowest since January 2022.
Rigs drilling for oil were unchanged at 497 units, 73 fewer than at the same stage last year, while rigs drilling exclusively for gas lost four units to stand at 99, down over a third on the year and the lowest since October 2021.
Texas, the largest-producing state, lost three rigs to stand at 287, while neighbouring New Mexico and Louisiana added one unit each, but falls in the Appalachian gas basin states accounted for the net losses.
The Permian Basin, spanning West Texas and New Mexico, was unchanged at 312 and is now down 38 on the year, while the Marcellus gas basin lost three more rigs to stand at 26.
Prices
Crude oil prices tested three-month lows last week before rebounding slightly on Friday and while most shale plays remain profitable, analysts said that unhedged frackers are starting to feel the pain while new drilling projects could be pushed back.
NYMEX WTI trading on the Chicago Mercantile Exchange closed Friday at $77.72/b for the Jul24 contract, a fall of 2.3% on the week as benchmarks remained under pressure due to concerns over the likely slow pace of US rate cuts.
Front-month Jul24 ICE Brent futures settled at $82.12/b, down 2.2% over the same timeframe, while Aug24 closed $81.84/b.
Meanwhile, US natural gas initially continued the month's firm uptrend, but a selloff at the back end of the week erased the gains.
The Jun24 Henry Hub contract on NYMEX ended the week 4% lower at $2.52/mmBtu, having posted $2.90/mmBtu on Thursday, while the Jul24 contract closed at $2.773/mmBtu.
