Rig Count Sees Another Weekly Gain

U.S. drillers this week added oil and natural gas rigs for a 12th week in a row, Baker Hughes Co. said, marking the longest streak of additions since June 2017 as crude prices hit their highest in more than a year.

However, according to Enervus Rig Analytics, the U.S. rig count fell by 12 in the last week to 435 as of Feb. 10. The count is up 5% in the last month but still down 47% year-over-year. The change between Feb. 7 and Feb. 10 is likely explained by rig downtime between wells, Enverus said. The count hasn’t been as high as 452 since April 2020.

U.S. oil rigs rose by seven this week, their biggest weekly increase in almost a month, while gas rigs fell two to 90. The rig count in shale plays has increased almost every week with the rise in oil prices.

In the Permian Basin, the U.S. has added 49 active rigs since Jan. 1 with the Midland Basin adding the most. The Delaware Basin rig count has increased by nine since the start of 2021 to reach 105, fueled by single rig increases. In the Denver-Julesburg (D-J) Basin, the Niobrara shale play activity rose 57%, or four rigs, to 11, also due to single rig increases by operators.

After falling to record lows below zero in April 2020 due to coronavirus demand destruction, WTI crude futures in the U.S. climbed over $59/bbl this week, their highest since January 2020. Looking forward, however, WTI was only trading around $58/bbl for the balance of 2021 and $53/bbl for 2022, which could prompt some producers to reduce activity in the future.