Increases in Rig Count, but Oil Prices Fall Again

The U.S. rig count rose 11% in October, but down 60% year-over-year.

Enverus reported that the largest week-over-week gains by major basin were in the Gulf Coast (up five to 35) and Permian (up five to 138). In both regions, multiple companies resumed activity after several months of inactivity, and a number of E&P firms spudded wells for the first time in one to two years.

U.S. crude prices fell below $35/bbl in the past week. This is the lowest price recorded since June, after previously holding around $40 for four months since mid-June. Although oil prices were down 42% since the beginning of 2020, they were still up about 88% over the past six months mostly on hopes global economies and energy demand will return when governments lift coronavirus lockdowns.

U.S. oil producers Chevron Corp. and Exxon Mobil Corp., however, cut their spending in the third quarter of 2020 to beat weak trends in fuel demand caused by the COVID-19 pandemic.

Exxon Mobil, the largest U.S. producer by volume, also said it will cut its capital spending for 2021 to between $16 billion and $19 billion, a cut of as much as 30% from this year's plan.

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