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Rig Count, Production Finally Stabilizes
The lowest daily count of active rigs the U.S. so far this year, according to Enverus, was 264 rigs and since then, the count has consistently stayed above 270.
Enverus’ RigData’s Day Rate Report showed the average day rate across the U.S. and all rig classes was $15,898 in July. Rates have continued to fall across the board since February, but the decline started to taper off over the last two months after peaking at -3% month-to-month in May.
Oil production has also stabilized, according to the U.S. Energy Information Administration’s weekly petroleum status report. Output in the U.S. for the week ending July 31 was 11 million bbl/d of oil, down 100,000 bbl/d from the prior week.
On Aug. 5, the front-month contract for WTI settled at $42.19/bbl, which was the first time it closed above $42 since the price crash in early March. The front-month contract for Henry Hub gas futures settled at $2.191 per million Btu on the same day, up $0.337 per million per Btu over the last week on forecasts for warmer weather and improved demand for LNG feed gas.
The oil and gas industry appears to have found a bottom over the last month, according to Enverus, at least temporarily. However, the firm noted that the activity level is still fragile and depends on avoiding any more shocks to global demand.
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