US rig count lower, Texas leads falls: Baker Hughes
Quantum Commodity Intelligence – North American drilling activity resumed the year's downward trend during the third week of September after stabilizing during the first half of the month, according to the latest report from oilfield services firm Baker Hughes.
The total rig count fell by 11 units to 630 the week ending 22 September, which was 134 rigs below the same stage last year, or down 18%, and the lowest level since February 2022.
The oil rig count dropped to 507, which was 95 fewer than at the same stage last year, while rigs drilling for gas gained eased by three rigs to 118, which was 42 fewer on the year.
Texas led the declines dropping five units to 312 and is now 50 fewer than a year ago, while the Permian Basin, spanning West Texas and New Mexico, added two rigs, dropped five to 317 and is now 27 lower from year-ago levels.
Meanwhile, NYMEX WTI trading on the Chicago Mercantile Exchange settled on Friday at $90.03/b for the Nov23 contract, down 0.8% on the week.
Front-month Oct23 ICE Brent futures closed at $93.22/b, down 0.75% over the same timeframe.
Natural gas
US natural gas was higher over the week as the Oct23 Henry Hub contract on NYMEX closed at $2.637/mmBtu for a slim gain of 1%.
Persistently high production continues to cap prices, while a technical issue reduced supplies to Cheniere's Sabine Pass LNG plant on the US Gulf Coast, coming a week after the Freeport LNG terminal in Texas was forced to cancel at least four LNG cargoes due to a fall in feedgas.
According to latest EIA data, working gas in storage was 3,269 billion cubic feet (bcf), a net increase of 64 Bcf from the previous week. Stocks were 410 bcf higher than at the same stage last year and 183 bcf above the five-year average of 3,086 bcf.
Bank of America expects storage levels to remain at relatively high levels, keeping prices in check despite a boost to demand.
"During 2Q-3Q23, as wind underperformed, gas power burns averaged 39 bcf per day, up from 36.7 bcf per day over the same period in 2022 and 33.7 billion cubic feet per day in 2021," BoA noted.
"Meanwhile, demand should rise three billion cubic feet per day year on year to 121.1 billion cubic feet per day due to higher LNG exports, which are set to average 1.8 billion cubic feet per day above 2022 levels thanks to Freeport's return," added the report, referencing the extended shutdown of the export terminal last year.
