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
Enchanted Rock’s Microgrids Pull Double Duty with Both Backup, Grid Support
2025-02-21 - Enchanted Rock’s natural gas-fired generators can start up with just a few seconds of notice to easily provide support for a stressed ERCOT grid.
ADNOC Contracts Flowserve to Supply Tech for CCS, EOR Project
2025-01-14 - Abu Dhabi National Oil Co. has contracted Flowserve Corp. for the supply of dry gas seal systems for EOR and a carbon capture project at its Habshan facility in the Middle East.
McDermott Completes Project for Shell Offshore in Gulf of Mexico
2025-03-05 - McDermott installed about 40 miles of pipelines and connections to Shell’s Whale platform.
Equinor’s Norwegian Troll Gas Field Breaks Production Record
2025-01-06 - Equinor says its 2024 North Sea production hit a new high thanks to equipment upgrades and little downtime.
Delivering Dividends Through Digital Technology
2024-12-30 - Increasing automation is creating a step change across the oil and gas life cycle.