US Oil Rigs Count Hits 16-Month Low as Industry Faces Uncertainty

June 28, 2023
1 min read
Source: Oil Rigs USA, Google

The number of oil rigs, which is considered a premature signal of future scenarios, dropped by 5 to 682 in the last week of June, on the 23rd of the month, resulting in the lowest level since April 2022. Following this, Baker Hughes documented that the number of Oil rigs was down by 71 in total. This is a small decline of 9% compared to last year. The Current number of rigs is 682, which is 71 rigs less than the count of last year’s tally and 393 rigs less than at the beginning of 2019. The decline was the result of losing six oil rigs, bringing the total to 546, while 130 gas rigs remain untouched. Gas rigs are down to 27 rigs below last year’s count, while oil rigs are down to 48.

Furthermore, there was a significant increase in single rigs in the miscellaneous sector, making a total of six rigs in the sector. In the Permian Basin, one of the leading oil-producing areas, the rig count dropped by 1 and currently stands at 8 rigs below the total count of the previous year. Meanwhile, in Eagle Ford, the rig numbers stayed steady but were down by 12 rigs compared to last year. According to Primary Vision’s frac spread count, which predicts that the number of crews finishing uncompleted wells increased by 2 to 268 in the last week of June, dating from June 16th, it still stays behind the previous year’s count by 16.

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The following week marked the eighth consecutive week of constant cutoffs in the total number of oil and natural gas rigs, resulting in the first of its kind since July 2020. Initially Enverus, a data provider, stated that the number of drillers was reduced by 8 in the last week of June, dating June 21st, taking the total tally to 741. This action resulted in a decline of an estimated 24 rigs in the previous month and a year-over-year decrease of 12% in total. This decline of rigs is caused by decreasing gas rates, which have further led to exploration and production institutions and Companies like Chesapeake Energy Corp., Southwestern Energy Co., and Comstock Resources Inc. plan to announce a decrease in production of cutting rigs, especially in the Haynesville shale region, which includes Arkansas, Louisiana, and Texas.

The production of crude oil in the United States of America was reduced to 12.2 million barrels per day in the 3rd week of June, which was equivalent to January levels, but US production levels were upscaled by 200,000 when compared to the previous year.

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