Econintersect by rjs, MarketWatch 666 3/23/2020
Oil prices hit 18 year low in largest drop in 29 years; natural gas prices end at a 24 year low; DUC backlog at 7.1 monthsOil prices ended down nearly 30% this week, despite rising nearly 24% on Thursday in the largest single day price jump in history, as the economic impact of the coronavirus pandemic and the Saudi-Russian oil price war continued to destabilize pricing...after falling 23% to $31.73 a barrel for the same reasons last week, the contract price of US light sweet crude for April delivery opened more than 6% higher at $33.75 a barrel Monday morning in an initial response to the Fed's emergency interest rate cut to 0% on Sunday, but those gains quickly evaporated as traders interpreted the Fed move as panicked and desperate while the Saudis continued to flood global markets with $25 oil, driving US prices down more than 10% to a session low of $28.03 per barrel before recovering to close at $28.70 a barrel, a loss of $3.03 on the day..----
This Week's Rig CountThe US rig count decreased for the 22nd time in the past 27 weeks during the week ending March 20th, and is now down by 28.7% from the last rig count of 2018.....Baker Hughes reported that the total count of rotary rigs running in the US decreased by twenty rigs to 772 rigs this past week, which was also down by 244 rigs from the 1066 rigs that were in use as of the March 22nd report of 2019, and 1,157 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in an attempt to put US shale out of business...
The number of rigs drilling for oil decreased by 19 rigs to 664 oil rigs this week, which was also 160 fewer oil rigs than were running a year ago, and considerably less than the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 1 to 106 natural gas rigs, which was the least number of natural gas rigs active since October 21st of 2016, and hence was a 41 month low for natural gas drilling, down by 86 gas rigs from the 192 natural gas rigs that were drilling a year ago, and way down from the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition to those rigs drilling for oil & gas, two rigs classified as 'miscellaneous' continued to drill this week; one on the big island of Hawaii, and one in Lake County, California... a year ago, there were no such "miscellaneous" rigs deployed..
Offshore drilling activity in the Gulf of Mexico remained at 19 rigs this week, with 18 Gulf rigs deployed in Louisiana waters and one rig still drilling offshore from Texas...that's now one less than the number of rigs that were deployed in the Gulf a year ago, when 17 rigs were drilling offshore from Louisiana and three rigs were operating in Texas waters...with no rigs deployed off other US shores elsewhere at this time, the current Gulf of Mexico rig count is thus equal to the national offshore rig total, as it has been all winter...
The count of active horizontal drilling rigs decreased by 17 rigs to 696 horizontal rigs this week, which was the fewest horizontal rigs active since December 13th 2019, and also 204 fewer horizontal rigs than the 900 horizontal rigs that were in use in the US on March 22nd of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014....in addition, the vertical rig count was down by four rigs to 27 vertical rigs this week, and those were down by 26 from the 53 vertical rigs that were operating during the same week of last year....on the other hand, the directional rig count was up by one rig to 49 directional rigs this week, but those were also down by 14 from the 63 directional rigs that were in use on March 22nd of 2019...
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The details on this week's changes in drilling activity by state and by major shale basin are
shown in our screenshot below of that part of the rig count summary pdf from Baker
Hughes that gives us those changes...the first table below shows weekly and year over
year rig count changes for the major oil & gas producing states, and the table below that
shows the weekly and year over year rig count changes for the major US geological oil
and gas basins...
