U.S. energy firms cut the number of oil and natural gas rigs operating to a record low for a fifth week in a row even as some producers begin to reverse cuts as prices recover from historic lows caused by a slump in fuel demand amid coronavirus lockdowns.
The U.S. oil and gas rig count, an early indicator of future output, fell by 17, or 6%, to an all-time low of 284 in the week to June 5, according to data from energy services firm Baker Hughes Co. going back to 1940.
That was 691 rigs, or 71%, below this time last year and was the fifth week in a row the U.S. count fell to a fresh record low.
U.S. oil rigs fell 16 to 206 this week, their lowest since June 2009, while gas rigs dropped by one to 76, their lowest on record according to data going to 1987.
U.S. crude futures were trading at about $39 per barrel June 5, up 132% over the past six weeks but still down 36% since the start of the year.
Shale producers Parsley Energy Inc. and EOG Resources Inc. on June 2 disclosed plans to restore some or all of their output cuts. In North Dakota, state energy officials this week reduced by 7% an estimate of production shut-ins in the second-largest oil producing state.
However, production coming back online is a fraction of what has been cut, and analysts said they expect U.S. energy firms to continue chopping rigs for the rest of the year and keep the count low in 2021 and 2022.
Recommended Reading
VAALCO Acquires 70% Interest in Offshore Côte D’Ivoire Block
2025-03-03 - Vaalco Energy announced a farm-in of CI-705 Block offshore West Africa, which it will operate under the terms of an acquisition agreement.
Continental Resources Signs JV to Explore Shale Oil, Gas in Turkey
2025-03-12 - Early evaluations from the joint venture between Continental Resources, Türkiye Petroleum and TransAtlantic Petroleum suggest ultimate recoverable reserves could reach 6 Bbbl of oil and 32 Tcf to 65 Tcf of gas.
Diversified Bolts-On Appalachia Gas Production, Midstream Assets
2025-01-06 - Diversified Energy will buy Summit Natural Resources’ assets, including producing wells and coal mine methane wells, in the southern part of the Appalachian Basin.
Petro-Victory Buys Oil Fields in Brazil’s Potiguar Basin
2025-02-10 - Petro-Victory Energy is growing its footprint in Brazil’s onshore Potiguar Basin with 13 new blocks, the company said Feb. 10.
Occidental, Ecopetrol Extend Midland Basin Drilling JV
2025-02-03 - The updated plans between Occidental and Colombian state oil company Ecopetrol call for 34 new Midland Basin wells between April 2025 and June 2026.