Rig count falls slightly in the last week while crude futures, gas prices rise
The U.S. rig count fell by four in the last week, according to Enverus Rig Analytics. The count is up 2% in the last month and up 97% in the last year. The largest week-over-week changes occurred in the Gulf Coast, down three to 71, and Anadarko Basin, down two to 56.
The largest quarterly increase by major play was in the Anadarko Basin, whose third-quarter average of 47 rigs was up 47%, rigs compared to the second quarter. The number of active operators in the basin rose at the end of the third quarter as well.
The Williston Basin averaged 24 rigs in the third quarter, up 41% compared to the second quarter.
The quarter-over-quarter changes in other major plays were less substantial. The Permian Basin increased 6%. The D-J Basin averaged 13 rigs, or one more than in the second quarter. The Gulf Coast averaged three higher at 66 rigs, and Appalachia averaged one rig fewer at 43.
WTI crude futures in the U.S. rose to their highest since 2014 in intra-day trade this week and were currently trading above $79/bbl on October. 8, buoyed by a global energy crunch that has helped natural gas prices to record highs and prompted China to demand increased coal production.
Higher natural gas prices have not yet prompted drillers to start looking for more gas. U.S. gas prices rose to their highest since 2008 earlier last week, up over 120% so far this year, but the gas rig count was still lower than it was in July.
Oil is another story. With oil prices up about 64% so far this year, some energy firms said they plan to raise spending in 2021 after cutting drilling and completion expenditures over the past two years.
Occidental Petroleum wants to raise margins and re-establish dividend payments for its shareholders rather than focus on growing its oil production volumes, the head of one of the largest U.S. producers said Oct. 7.
U.S. investment bank Piper Sandler last week forecast the rig count would rise to an average of 472 in 2021 and 599 in 2022 from 436 in 2020.
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