US rig count slides further as oil drilling retreats: Baker Hughes
Quantum Commodity Intelligence – North American drilling activity retreated to fresh 2.5-year lows with oil rigs leading the losses, according to the latest weekly report from oilfield services firm Baker Hughes.
The overall count was down four units to 590 in the week ending 14 June, leaving the total at 98 rigs below the same stage last year and down 32 since the start of 2024.
Rigs drilling for oil were down four at 488 units, 64 fewer than at the same stage last year and the lowest since January 2022. Rigs drilling exclusively for gas were unchanged at 98, the lowest number since October 2021.
Texas, the largest-producing state, was down two units at 285, while Louisiana also lost two rigs and Oklahoma one. New Mexico was the only state to post a gain, rising by one.
The Permian Basin, spanning West Texas and New Mexico, was down by one rig at 309 and 33 lower on the year, while the Haynesville gas basin dropped by one unit to 35 as producers continued to scale back dry gas production.
Canada
Meanwhile, Baker Hughes calculated that Canada added 17 rigs, including 15 oil rigs, now standing at 160 units as the seasonal turnaround continues.
"Alberta's oil sands leading the way with an increase of six, followed by Cold Lake heavy oil in Alberta and the heavy oil region of Western Saskatchewan. Versus a year ago, Cold Lake was the strongest, scoring seven higher, followed by Saskatchewan heavy oil with an increase of five," said RBN Energy.
RBN noted that the summer turnaround period typically impacts the oil rig count much more than gas rigs.
Prices
Crude oil prices rebounded strongly last week, having tested four-month lows in early June after OPEC+ said it would start increasing output again in October.
NYMEX WTI trading on the Chicago Mercantile Exchange closed Friday at $78.45/b for the Jul24 contract, a gain of 3.9% on the week as investors responded to reports that oil supplies will remain in deficit versus demand for the rest of the year.
Front-month Jul24 ICE Brent futures settled at $82.62/b, up 3.75% over the same timeframe.
US natural gas initially extended the early-summer gains as soaring temperatures lifted power demand for air cooling, but prices dropped later in the week on reports of maintenance at a major LNG export terminal.
The Jul24 Henry Hub contract on NYMEX was down 1.2% over the week at $2.88/mmBtu on 14 June, having posted five-month highs of around $3.15/mmBtu earlier in the week.
