US rig count lower on further Texas declines: Baker Hughes

Quantum Commodity Intelligence – North American drilling activity continued the year's downward trend in the first rig count of October as it slumped to a fresh 20-month low, according to the latest report from oilfield services firm Baker Hughes.

The total rig count fell by four units to 619 the week ending 6 October, 143 rigs below the same stage last year, or down 19%, and the lowest level since February 2022.

The oil rig count dropped five rigs to 497 last week, 105 fewer than at the same stage last year, although rigs drilling for gas edged by two rigs to 118, which was 40 fewer on the year.

Texas again led the declines again, dropping seven units to 297 and is now 63 fewer than a year ago, while the Permian Basin, spanning West Texas and New Mexico, dropped three rigs to 309 and is now 36 lower from year-ago levels. 

Crude oil prices slumped sharply last week, although the price hikes during the third quarter have done little to stem the decline in the rig count.

NYMEX WTI trading on the Chicago Mercantile Exchange settled on Friday at $82.79/b for the Nov23 contract, down 8.8% on the week.

Front-month Dec23 ICE Brent futures closed at $84.58/b, down 8.25% over the same timeframe.

US natural gas was higher over the week as the Nov23 Henry Hub contract on NYMEX closed at $3.34/mmBtu, up over 15% as markets gear up for winter heating demand amid the first cold blast of the year, while export volumes remain strong.

Meanwhile, US major ExxonMobil is closing in on its acquisition of the Permian's largest oil producer, Pioneer Resources, in what is seen as further consolidation across the shale industry.