Rig count, oil prices increase

The U.S. rig count rose by about 13 rigs in the last week to 393 as of Jan. 6, according to Enverus Rig Analytics.

The count is down 3% in the last month and down 52% year-over-year. The Appalachian and Permian basins both added three rigs. The month-over-month, declines occurred in the Gulf Coast (down five) and Permian (down five).

The most notable changes in the last month were in the Louisiana’s Haynesville, Oklahoma’s STACK and the Midland Basin. Three rigs were added in the Haynesville, and the STACK play doubled its activity level (month-over-month).

WTI crude futures in the U.S. soared to almost $52 this week, the highest level since February 2020. The higher prices have already encouraged energy firms to drill more since the total rig count fell to a record low of 244 in August, according to Baker Hughes data going back to 1940.

While the rig count fell by 454 in 2020, its second annual decline in a row, it rose in the fourth quarter in its biggest increase since second-quarter 2017.

However, WTI was trading lower at around $51/bbl for the balance of 2021 and $48 for calendar 2022, which could prompt producers to reduce activity.