U.S. Gas Rigs Down 9, Oil Rigs Up 12; Unconventional Operators Added 6 Rigs

3rd July 2015

U.S. rigs drilling for oil increased for the first time this year, after 29 consecutive weeks of declines. The total number of actively drilling oil rigs jumped by 12 this week following several weeks of small decreases, which indicates that the streak of rigs being taken offline may be nearing its end.

The Baker Hughes U.S. onshore rig count gained 2 this week, bringing the total number of active rigs to 833, compared to a decrease last week.  Across the three major unconventional oil basins, 6 rigs were added, with the Eagle Ford up 3, Permian up 1, and Williston up 2 week-on-week.  Rig activity over the past week included the adding of 3 horizontal rigs.

The decline in rig count now stands at 1,043 (56%) from a November 2014 high of 1,876 to 833 on 3 July 2015.

Rigs active in the Gulf of Mexico added 1 oil-focused rig this week, bringing the total to 29 (17 oil-focused and 12 gas-focused).

U.S. refineries processed an average of 16.5 million barrels of crude oil per day, operating at 95% utilization.  EIA data indicated that imports were up by 780,000 barrels per day, averaging about 7.5 million barrels per day, which was reflected in the 7.5 million barrel increase this week into storage. The return to normal oil import levels has reversed the trend of reducing oil in storage and is putting downward pressure on crude oil price. 

The U.S. benchmark for oil has been staying around $60 a barrel since late April, but closed Wednesday at $56.96 per barrel, the contract’s lowest price since April 22 and its largest loss since a rout April 8 removed $3.56 per barrel.