Rig Count Rises by 10 Rigs during the Last Week
According to Enverus, the rig count rose by double digits—10—over the past week. The count is up by 46 in the last month, but still down by 451 (55%, from a year ago). The Gulf Coast added two, the Anadarko Basin added one and the Appalachia Basin added one rig during the past week.
Month-over-month, the Permian and Gulf Coast have led the recent ramp-up, accounting for 74% of the increase. The Permian added 23 rigs, with 13 more in the Midland Basin and 10 in the Delaware Basin. The Gulf Coast added 11 rigs. The Gulf Coast additions were spread across several areas and operators with EOG Resources running two rigs in the Eagle Ford for three months straight
U.S. energy firms this week added oil and natural gas rigs for a ninth week in a row to the highest since May, as producers return to the well pad with crude prices mostly trading over $40 per barrel since mid-June. U.S. crude prices rose to a 10-week high over $43 per barrel this week on hopes of an effective coronavirus vaccine.
Even though the oil contract was down about 34% since the start of the year, it was still up about 115% over the past seven months on hopes global economies and energy demand will return when governments lift coronavirus lockdowns.
According to the U.S. Energy Information Administration (EIA), U.S. production is expected to fall by 860,000 barrels per day (bbl/d) this year to 11.39 million bbl/d. It is expected to drop a further 290,000 bbl/d in 2021 to 11.1 million bbl/d.
The EIA expects production to decline in the second quarter of 2021 because new drilling activity will not generate enough production to offset declines from existing wells. Drilling activity will rise later in 2021, it forecast.
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