U.S. rig count falls, oil prices rise slightly.
U.S. energy firms cut the number of oil and gas rigs over the past week to a record low for a 14th week even as higher oil prices prompt some producers to start drilling again. The rig count fell in the U.S. to an all-time low of 247 in the week to Aug. 7, according to Baker Hughes Co.—687 rigs, or 74%, below this time last year.
The oil price collapse during the second quarter pushed U.S. operators to curtail significant volumes in April and May, but according to Enverus, most of those companies have reported that shut-in volumes were brought back online in June.
The Energy Information Administration (EIA) reported U.S. oil output in mid-June of this year was 10.5 million bbl/d. As of July, oil production in the U.S. had rebounded to 11.1 million bbl/d. However, oil production is still down about 15% from March’s output of 13.1 million bbl/d.
The Bakken was hit particularly hard by curtailments, according to the North Dakota Department of Mineral Resources statistics.
In March, the Bakken averaged 1.4 million bbl/d of oil production from 16,263 wells. By May, Bakken production fell about 40% to 858,395 bbl/d from 12,809 wells in May.
Still, the Bakken is the only major shale play that the EIA predicts will increase output in August. The agency foresees an improving situation in the play in August, with oil volumes expected to rise by 18,000 bbl/d compared with July.
As of Aug. 5, the WTI front-month contract settled at $42.19/bbl, which is up 5% in the last month, but down 26% year-over-year. Henry Hub natural gas prices settled at $2.19/MMbtu—up 8% in the last month and down 20% year-over-year.
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