U.S. energy firms this week reduced the number of oil rigs active in the United States even as oil prices continued to trade over $100 a barrel after Russia's invasion of Ukraine stoked global energy supply concerns.
Overall, the total rig count, however, remained unchanged because drillers added some natural gas and other rigs this week.
That kept the U.S. oil and gas rig count, an early indicator of future output, steady at 663 in the week to March 18, energy services firm Baker Hughes Co. said in its closely followed report.
Baker Hughes said that puts the total rig count up 252 rigs, or 61%, over this time last year.
U.S. oil rigs fell three to 524 this week, while gas rigs rose two to 137, their highest since October 2019. There was also one miscellaneous rig added, Baker Hughes said.
U.S. crude futures were trading around $105 per barrel on Friday, up more than 10% since Russia invaded Ukraine on Feb. 24.
Even though the rig count has climbed for a record 19 months in a row, the weekly increases have mostly been in single digits and oil production is still far from pre-pandemic record levels as many companies focus more on returning money to investors rather than boosting output.
U.S. crude production was on track to rise from 11.2 million barrels per day (bpd) in 2021 to 12.0 million bpd in 2022 and 13.0 million bpd in 2023, according to federal energy data. That compares with a record 12.3 million bpd in 2019.
With oil prices up about 39% so far this year after soaring 55% in 2021, a growing number of energy firms said they plan to boost spending for a second year in a row in 2022 after cutting drilling and completion expenditures in 2019 and 2020.
The 2021 spending increase, however, was small and much of it went toward completing wells drilled in the past, known in the industry as drilled but uncompleted (DUC) wells.
The U.S. Energy Information Administration (EIA) said the number of DUCs available in the biggest shale basins fell for a 20th month in a row to 4,372 in February, their lowest since at least December 2013, according to data going back that far.
Analysts have been saying for months that energy firms will have to increase the number of new wells they drill soon before they run out of DUCs to complete.
Recommended Reading
Green Swan Seeks US Financing for Global Decarbonization Projects
2024-02-21 - Green Swan, an investment platform seeking to provide capital to countries signed on to the Paris Agreement, is courting U.S. investors to fund decarbonization projects in countries including Iran and Venezuela, its executives told Hart Energy.
Shell’s CEO Sawan Says Confidence in US LNG is Slipping
2024-02-05 - Issues related to Venture Global LNG’s contract commitments and U.S. President Joe Biden’s recent decision to pause approvals of new U.S. liquefaction plants have raised questions about the reliability of the American LNG sector, according to Shell CEO Wael Sawan.
BP Pursues ‘25-by-‘25’ Target to Amp Up LNG Production
2024-02-15 - BP wants to boost its LNG portfolio to 25 mtpa by 2025 under a plan dubbed “25-by-25,” upping its portfolio by 9% compared to 2023, CEO Murray Auchincloss said during the company’s webcast with analysts.
Sunoco’s $7B Acquisition of NuStar Evades Further FTC Scrutiny
2024-04-09 - The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act for Sunoco’s pending acquisition of NuStar Energy has expired, bringing the deal one step closer to completion.
Kimmeridge Fast Forwards on SilverBow with Takeover Bid
2024-03-13 - Investment firm Kimmeridge Energy Management, which first asked for additional SilverBow Resources board seats, has followed up with a buyout offer. A deal would make a nearly 1 Bcfe/d Eagle Ford pureplay.