Rig Count Approaching March 2020 Levels

According to Enverus Rig Analytics, the U.S. rig count is nearing levels seen in March 2020, the start of COVID-related shutdowns.

Now that the count is near 700, the next significant benchmark, according to Enverus, is to reach 800 rigs, which is roughly where the count stood before SARS-CoV-2 was identified as a pandemic. Over the first three quarters of 2021, roughly 80 rigs have been added per quarter, with the first quarter showing the strongest increase at 112 rigs. The second quarter was the weakest, adding just 51 rigs.

Even though the rig count has been rising for a record 16 months in a row, analysts noted that oil production was still expected to ease in 2021 as energy firms continue to focus more on returning money to investors rather than boosting output.

The number of U.S. oil rigs increased four to this week, their highest since April 2020, while gas rigs fell by one.

WTI was trading around $71/barrel on December 17, putting the U.S. crude futures contract on track to decline for a seventh time in the past eight weeks.

But with oil prices up about 46% this year, some energy firms said they plan to raise spending in 2021 and 2022 after cutting drilling and completion expenditures in 2019 and 2020.

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