U.S. Onshore Rig Count Drops 11; Crude Storage Drawdown Largest in 12 Months

U.S. Onshore Rig Count Drops 11; Crude Storage Drawdown Largest in 12 Months

12th June 2015

The Baker Hughes U.S. onshore rig count continued the renewed decline this week, dropping 11 rigs compared to a drop of 5 rigs last week.  The rig count has now declined by 1,046 (56%) from a November 2014 high of 1,876, to 830 on 12 June 2015.  However, it was the lesser basins that took the hit, with the three major oil producing basins unchanged overall with the Eagle Ford up 1, Permian Basin down 1, and Williston Basin flat week on week. 

Rigs active in the Gulf of Mexico gained 2 oil-focused rigs this week bringing the total to 29 (19 oil-focused and 10 gas-focused).

Intraweek crude price volatility continued with WTI starting off the week around US$58.00 per barrel, before rallying up to US$61.50 on the Tuesday release of the EIA weekly storage estimate.  This showed a drawdown of 6.8 million barrels of oil, the largest since exactly one year ago and continues a 6-week trend that has reduced total crude in U.S. storage 20 million barrels, from 490 million to 470 million as of June 5, 2015. 

U.S. refineries are now processing a record 17 million barrels of crude oil per day, operating at 95% utilization, a high which hasn’t been seen in a decade.  The EIA is expecting a U.S. unconventional production decline of 91,000 barrels per day for the month of June which, if it proves accurate, will likely solidify crude prices.  WTI closed at US$59.98 vs. US$57.97 last week.

Authors

U.S. Onshore Rig Count Drops 11; Crude Storage Drawdown Largest in 12 Months

Neil Abdalla

Senior Professional, Geoscientist - neil.abdalla@gaffney-cline.com

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