U.S. energy firms cut the number of oil and natural gas rigs operating to a record low for a 10th week in a row but the rate of decline has slowed as higher oil prices prompt some producers to start drilling again.
The U.S. oil and gas rig count, an early indicator of future output, fell by five to an all-time low of 258 in the week to July 10, according to data from energy services firm Baker Hughes Co. going back to 1940.
That was 700 rigs, or 73%, below this time last year.
U.S. oil rigs fell by four to 181 this week, their lowest since June 2009, while gas rigs dropped by one to 75, matching its record low hit a couple of weeks ago, according to data going back to 1987.
The U.S. Energy Information Administration (EIA) projected a fall in domestic crude output to 11.6 MMbbl/d this year from a record 12.2 MMbbl/d in 2019, while global petroleum and other liquid fuels consumption will drop to 92.9 MMbbl/d in 2020 from a record 101.0 MMbbl/d in 2019.
Even though U.S. oil prices are still down about 34% since the start of the year due to coronavirus demand destruction, U.S. crude futures have jumped 113% over the past three months to about $40 per barrel 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.
Recommended Reading
Elk Range Royalties Makes Entry in Appalachia with Three-state Deal
2024-03-28 - NGP-backed Elk Range Royalties signed its first deal for mineral and royalty interests in Appalachia, including locations in Pennsylvania, Ohio and West Virginia.
SilverBow Gears Up for Proxy Fight with Kimmeridge
2024-04-09 - Both SilverBow Resources and Kimmeridge Energy Management have proposed a slate of candidates for the board of directors with a vote set for May 21.
Marketed: Paloma Natural Gas Eagle Ford Shale Opportunity in Frio County, Texas
2024-02-16 - Paloma Natural Gas has retained EnergyNet for the sale of a Eagle Ford/ Buda opportunity in Frio County, Texas.
Kodiak Gas Services Closes $850MM Deal for CSI Compressco
2024-04-02 - Kodiak Gas Services’ acquisition of CSI Compressco was financed as an all-equity transaction valued at approximately $854 million, including assumption of $619 million in debt.
Kimmeridge Withdraws SilverBow Deal to Focus on E&P’s ‘Broken’ Board
2024-04-16 - Investment firm Kimmeridge said it had withdrawn its offer to combine its Eagle Ford E&P with SilverBow Resources as it promotes a slate of independent directors for SilverBow’s board at the company’s May annual meeting.