Some New Rigs Added Last Month; Crude Futures Have Increased Over Past Three Months
As of July 8, the total U.S. rig count only fell seven rigs from last week, according to Enverus.
Faring the best were natural gas plays, with the onshore Gulf Coast region well starts (dominated by the Haynesville Shale) down 18% in the second quarter and Northeast spuds (primarily the Marcellus and Utica shale plays) down 22%. The largest monthly declines were in the Denver-Julesburg Basin (-57%), Williston Basin (-17%) and Permian Basin (-16%). Gas plays along the Gulf Coast, primarily the Haynesville Shale, have had smaller decreases.
The U.S. Energy Information Administration projected a fall in domestic crude output from 12.2 million bbl/d in 2019 to 11.6 million bbl/d in 2020. Global petroleum and other liquid fuels consumption fell from a record 101 million bbl/d in 2019 to 92.9 million bbl/d in 2020.
Even though U.S. oil prices are still down about 34% since the start of the year due to the effect of coronavirus on fuel demand, U.S. crude futures have jumped 113% over the past three months to about $40/bbl on July 10 on hopes global economies will snap back as governments lift lockdowns.
Analysts said higher oil prices will encourage energy firms to slow rig count reductions and possibly start adding some units later this year.