US Oil Rig Count Drops by 10, Crude Price Continues Slide

In the week ended January 19, 2018, the number of land rigs drilling for oil in the United States totaled 747, down by five compared to the previous week and 196 higher than a total of 551 a year ago. Including 189 other land rigs drilling for natural gas, there are a total of 936 working rigs in the country, down by three week over week and up by 242 year over year. The data come from the latest Baker Hughes North American Rotary Rig Count released on Friday.

West Texas Intermediate (WTI) crude oil for February delivery settled at $63.95 a barrel on Thursday and traded down about 1.1% Friday afternoon at $63.23 shortly before regular trading closed.

The natural gas rig count increased by two to 189 this week. The count for natural gas rigs is now up by 47 year over year. Natural gas for February delivery traded about flat at around $3.18 per million BTUs before the count was released and fell a penny following the report’s release.

The U.S. Energy Information Administration’s (EIA) Short-Term Energy Outlook (STEO), released last week, estimates that U.S. dry natural gas production averaged a record-high 78.1 billion cubic feet per day during December 2017, beating the previous estimated record set a month earlier when production averaged 77.3 billion cubic feet per day.

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The STEO forecasts that dry U.S. natural gas production will average 73.6 billion cubic feet a day in 2017, up by 700 million (1%) than 2016 average production of 72.9 billion cubic feet per day. STEO’s forecast 2017 production is still lower than the record annual average U.S. natural gas production of 74.2 billion cubic feet per day in 2015.

Among the states, Baker Hughes reported that Wyoming added three rigs, West Virginia added two and four states — Louisiana, New Mexico, Pennsylvania and Texas — each added one. Ohio and Colorado each lost four rigs during the week while Alaska, North Dakota and Utah each lost one.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 409, six more than the previous week’s count. The Eagle Ford Basin in south Texas has 67 rigs in operation, down by three week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 45 working rigs, one less for the week.

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