US oil drill rigs in sharpest weekly fall for 16 months - Baker Hughes

23 Jan 2023

Quantum Commodity Intelligence - North American oil drilling activity tumbled sharply the week ending 20 January, registering the largest drop since September 2021, oilfield services firm Baker Hughes reported.

The number of rigs dedicated to crude slumped by 10 units the week to 613, although the combined count was offset by rigs drilling for natural gas up by six at to 156.

The total weekly rig count was down four at 771, the lowest since November, but up from up from 604 rigs at the same time last year, or 28%.

Texas bucked the broader trend adding one rig to stand at 380 and is up 100 on the year.

The Permian Basin, spread across west Texas and New Mexico, was down by two rigs at 354, but an increase of 62 on the year.

US crude production was unchanged at 12.2 million bpd, according to the latest weekly data from the Energy Information Administration.

But US shale output continued to edge higher during December and is forecast to hit record highs in the coming months, although the rate of growth is expected to shrink as tight oil producers curtail investment amid volatile energy prices and questions over longer-term demand.

The EIA called December shale output at a three-year high of 9.21 million bpd, with that figure expected to creep up to 9.3 million bpd in January and reach an all-time high of 9.38 million bpd in February.

Meanwhile, shale pioneer Chesapeake Energy Corp announced it is selling a portion of its Eagle Ford operations to WildFire Energy for $1.425 billion.

NYMEX WTI trading on the Chicago Mercantile Exchange settled on Friday (20 January) at $81.64/b for the Mar23 contract, a gain of 1.9% on the week.

Front-month Mar23 ICE Brent futures closed Friday at $87.63/b, up 2.75% over the same timeframe.