US rig count lower on Texas slide: Baker Hughes
Quantum Commodity Intelligence – North American drilling activity eased for a second consecutive week, with Texas leading the losses, according to the latest report from oilfield services firm Baker Hughes.
The total rig count retreated by three units to 621 the week ending 28 March, leaving the count 134 rigs below the same stage last year but little changed since the start of 2024.
Rigs drilling for oil slipped by three, standing at 506 units, 86 fewer than at the same stage last year. Rigs drilling exclusively for gas were unchanged at 112, but a figure 50 fewer than year-ago levels, with drillers cutting nearly a third of gas rigs over the past 12 months.
Texas, the largest-producing state, dropped four units to 290, while Louisiana lost another three rigs to stand at 41. However New Mexico added five rigs, seeing something of a relative boom with the count standing at 111 and up seven on the year.
The Permian Basin, spanning West Texas and New Mexico, was unchanged at 316, while none of the major basins moved by more than one unit.
Canada
Meanwhile, Baker Hughes reported a drop of 18 rigs to 151 in Canada last week, although the move was largely seasonal, according to analysts.
"The latest weekly downturn for oil and gas rigs is part of the annual spring 'break up' period, a seasonal slowdown in activity associated with the end of the winter drilling season when ground conditions begin to thaw and which slows or prevents the movement of large heavy equipment such as drilling rigs in certain regions," said RBN Energy.
RBN noted that the turnaround period typically impacts the oil rig count much more than gas rigs. However, this can vary depending on ground conditions in each region.
Prices
US oil prices ended the first quarter on a firm footing, with NYMEX WTI trading on the Chicago Mercantile Exchange closing Friday at $83.17/b for the May24 contract, a gain of 3.15% on the week. Since the start of the year WTI has gained around 16%.
Front-month Jun24 ICE Brent futures settled at $87.00/b, up 2.6% on the week, gaining over 13% over the Q1 period.
However, natural gas remained in the doldrums despite recently announced output cuts from major gas producers EQT and Chesapeake.
The May24 Henry Hub contract on NYMEX ended the week 2.5% down at $1.76/mmBtu, while prices at the Waha hub, which sets values for Permian gas was in negative territory on slow demand plus maintenance on key pipelines, including the El Paso Natural Gas (EPNG).
Ongoing problems at Freeport LNG have also added to natural gas woes in Texas, as the export terminal continues to operate at reduced capacity.
