US rig count eases, Texas lower again: Baker Hughes

Quantum Commodity Intelligence – North American drilling activity eased for a second week as the year's downtrend resumed following a brief respite during October, according to the latest report from oilfield services firm Baker Hughes.

The total rig count dipped by two to 616 the week ending 10 November, 163 units below the same stage last year, or down 21% and the lowest number of working rigs since February 2022.

The oil rig count also decreased by two to 494 last week, 128 fewer than at the same stage last year, while rigs drilling for gas were unchanged at 118, which was still 37 down on the year.

Texas again accounted for the losses, falling two units to 302 as the largest producing state continued to give up the gains made last month, while Louisiana added three rigs.

Meanwhile, US crude oil prices retreated for a third week as focus switched away from the Middle East conflict and towards faltering demand growth concerns.

NYMEX WTI trading on the Chicago Mercantile Exchange settled on Friday at $77.17/b for the Dec23 contract, down 4.1% on the week.

Front-month Jan23 ICE Brent futures closed at $81.43/b, also down 4.1% over the same timeframe.

US natural gas slumped to multi-week lows on a combination of mild weather, record production and bloated storage levels. The Dec23 Henry Hub contract on NYMEX closed Friday at $3.033/mmBtu, which was the lowest settle of the year for that contract.

The day-ahead spot was also under pressure, with prices slumping to around $2/mmBtu, a significant discount to front-line futures, which carries the cost of storage. According to Reuters data, spot Henry Hub has traded below futures for 176 out of 212 trading days so far in 2023.