Oil, gas decline may be reversing course
The number of operating rigs in the U.S. rose for the first time since oil markets crashed in March, a sign that the historic industry downturn may be reversing course.
Energy companies were operating 254 oil and gas rigs nationally during the past week, up 10 from last week, according to Baker Hughes, a Houston oil-field services company that has been tracking the number of rigs since the 1940s. Across the nation, there are 183 operating oil rigs, up 11 from last week; 69 natural gas rigs, down one from last week; and two maintenance rigs.
The rig count, a leading indicator of U.S. oil and gas production, has plunged more than 60 percent since midMarch, after the coronavirus pandemic slashed demand and forced oil prices to plummet as drillers paused production. The number of rigs hit a low of 244 last week, well below the lowest point of the most recent downturn in May 2016, when there were 404 operating rigs.
Texas added 8 rigs, the biggest gain among states during the past week, for a total of 108. Texas, home to most of the Permian Basin, hosts
about half of the nation’s oil and gas rigs.
The Permian Basin, the nation’s most productive shale play stretching from eastern New Mexico to West Texas, has 127 rigs in operation, up 10 from the previous week. The Eagle Ford in South Texas has 9 rigs in operation, down two from the previous week. The Haynesville in East Texas remained steady with 32 rigs in operation.
Many energy companies are restarting oil and gas production as crude prices have climbed above $40 a barrel. West Texas Intermediate, the U.S. benchmark, settled Friday at $42.34 per barrel.
Most U.S. oil producers plan to restore nearly all of the production shut down during the oil crash by September, according to Rystad, a Norwegian energy research firm.
Some companies, however, plan to keep most production offline as coronavirus cases continue to rise in the U.S., hampering the economic recovery. Pioneer Natural Resources, which cut oil production by 7,000 barrels per day in the second quarter, plans to restore just 1,000 barrels per day. Apache, which curtailed 7,500 barrels per day in May, says it may restore just 3,000 this year.