US rig count nudges higher, led by Texas: Baker Hughes

16 Oct 2023

Quantum Commodity Intelligence – North American drilling activity nudged higher during the second week of October, lifted by an increase from Texas, according to the latest report from oilfield services firm Baker Hughes.

The total rig count increased by three units to 622 the week ending 13 October, but still 147 rigs below the same stage last year, or down 19%.

The oil rig count increased by four to 501 last week, 109 fewer than at the same stage last year, although rigs drilling for gas dipped by one rig to 117, which was 40 fewer on the year.

Texas largely accounted for the gains, increasing four units to 301 but is still 64 fewer than a year ago, while the Permian Basin, spanning West Texas and New Mexico, nudged up two rigs to 311.

US crude oil prices rallied sharply last week despite North American production levels soaring to a record 13.2 million bpd in early October, reacting to global events and in particular conflict in the Middle East.

NYMEX WTI trading on the Chicago Mercantile Exchange settled on Friday at $87.69/b for the Nov23 contract, up 5.9% on the week.

Front-month Dec23 ICE Brent futures closed at $90.89/b, up 7.4% over the same timeframe.

US natural gas was slightly lower over the week as the Nov23 Henry Hub contract on NYMEX closed at $3.23/mmBtu, down 3% although largely consolidating the October gains.

Firm demand in the LNG export market was again offset by high production levels, while domestic winter-heating demand has yet to get going.

Natural gas is the primary heating fuel for 46% of US homes, according to the Census Bureau’s 2022 American Community Survey.