10th April 2015
The Baker Hughes U.S. onshore rig count decline more than doubled this week, dropping 42 rigs compared to drops of 17 and 18 for the prior two weeks, with the majority of those rigs being laid down in Texas. The rig count has now declined by 921 (49%) from a November 2014 high of 1,876, to 955 on 10 April 2015. Rigs active in the Gulf of Mexico gained 2 week-on-week bringing the total to 31 (23 oil focused and 8 gas focused).
- 02 Apr 2015 - Rig Count Decline Pace Continues to Slow; U.S. Production Decline Largest in Three Months
- 27 Mar 2015 - Rig Count Decline Pace Slows for Third Consecutive Week; Storage Additions Continue
- 20 Mar 2015 - Rig Count Continues Slide; GOM Lease Sale Reflects Contracting Industry Sentiment
Rig counts in the three major oil producing basins declined variably, with drops of 21 in the Permian Basin, 12 in the Eagle Ford, and only 2 in the Williston Basin (Bakken). This compares to last week’s relatively minor declines of 5 rigs in the Permian and 6 rigs in the Bakken, while the Eagle Ford rig count went unchanged. All three basins currently sit at their lowest active rig counts since pre-2011.
Changes this past week place the GCA Index for U.S. onshore rigs at 53, down 51 points from the 2014 high and down 2 points from the previous week. The current onshore rig count index continues to mirror the 2008-9 decline trend. Oil rig indices for the Permian dropped 4 points to 48 and the Williston Basin dropped 1 point to 49, while the index for Eagle Ford dropped to 7 points from the prior week, bringing the total to 53.
U.S. oil inventories rose 11 million barrels to 482 million barrels for the week ending 3 April 2015, approximately double the storage build seen in the prior week’s data (EIA). However, storage additions at Cushing, Oklahoma halved to 1.3 million barrels this week vs an addition of 2.6 million barrels the prior week. While overall PADD 2 (Midwest/Cushing) storage decreased 0.6 million barrels this week vs. an increase of 4.3 million barrels last week. The net drawdown in PADD 2 (primary delivery point of U.S. light tight oil) may indicate the pending slowdown in U.S. unconventional production growth. Approximately 70% of the weekly U.S. inventory rise went into storage on the Gulf Coast, with an increase of 7.8 million barrels compared to 1.4 million barrels the prior week.
The price of WTI increased approximately US$ 2.00/bbl week-on-week closing at US$ 51.25/Bbl. The Brent-WTI went unchanged this week, remaining around $6/Bbl with Brent closing at US$ 57.58/Bbl, a US$ 2/Bbl increase week-on-week.
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