U.S. Onshore Rig Count Remains Flat; Crude Storage Drawdown Continues Trend for Seventh Week

19th June 2015

The Baker Hughes U.S. onshore rig count stayed at 830 this week, compared to a drop of 11 rigs last week.  The rig count has now declined by 1,048 (56%) from a November 2014 high of 1,876 to 830 on 19 June 2015.  The three major oil producing basins are up overall with the Eagle Ford flat, Permian Basin up 1, and Williston Basin up 2 week on week.  While the past two months has seen an average reduction of about 5 rigs per week, the rate of decline has clearly slowed and, with oil prices staying at their current level, the future issue now is whether the rig count “bounces along the bottom”, or starts to rise.

Rigs active in the Gulf of Mexico dropped 4 oil-focused rigs and added 2 gas-focused rigs this week, bringing the total to 27 (15 oil-focused and 12 gas-focused).

Intraweek crude price volatility continued with WTI starting off the week around US$59.91 per barrel, before rallying up to US$61.15 on Tuesday before the release of the EIA weekly storage estimate. This showed a drawdown of 2.7 million barrels of oil,  and continues a 7-week trend that has reduced total crude in U.S. storage 22.7 million barrels, from 470 million to 468 million as of June 12, 2015. This compares to an overall storage build of 108 million barrels from the start of the year to early May.

U.S. refineries processed 16.429 million barrels of crude oil per day, operating at 93.1% utilization.  EIA data indicated that imports were up by 444,000 barrels per day, averaging above 7.1 million barrels per day.  WTI closed at US$59.19 vs. US$59.98 last week.

Authors

Neil Abdalla

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

Bob George

Global General Manager - bob.george@gaffney-cline.com