Down Debt

Rigs increase by 7 as crude prices rebound

The number of drilling rigs operating in the United States jumped by seven this week as crude prices recouped their early week losses.

The drillers added six rigs in Texas and one rig in Oklahoma, bringing the country’s number to 491, according to oil services firm Baker Hughes and research firm Enverus. A year ago, 251 rigs were in service as the global pandemic reduced demand for crude.

Texas, the country’s largest oil and natural gas producer, led the rebound this week as drillers added six rigs, including four in the prolific Permian Basin of West Texas. The state has 228 platforms in service, up from 103 a year earlier.

Drilling activity in the United States rebounded this week as oil markets recovered from OPEC’s decision to gradually restore production levels to pre-pandemic levels over the coming year . West Texas Intermediate, the benchmark for US crude, was trading around $ 72 a barrel Friday at noon.

OPEC: Oil tumbles after OPEC ends production cuts as Delta variant spreads

“The expansion of the (OPEC) baseline is a wake-up call for US shale producers and has created short-term downside risks for oil,” said Francisco Blanch, a strategist for oil on Friday. commodities at Bank of America in a global research report. “Yet the new deal also extends supply controls until December 2022. In a way, the new deal simultaneously supports and reduces the upside (and downside) risks in world crude prices, and put OPEC + in the driver’s seat of the oil markets for the next 18 months. “

Baker Hughes said this week that he expects shale drilling in North America to develop more slowly in the second half of the year as the big oil majors continue to tighten their purse strings in a bid to satisfy shareholders and convince investors. Many oil companies are focusing on paying down debt and increasing shareholder dividends instead of increasing production despite rising oil prices.

Private exploration and production companies, which are not beholden to shareholders, run much of the drilling activity in North America. However, these companies only represent 6% of US crude production.

Baker Hughes CEO Lorenzo Simonelli said on Wednesday he estimated 50 more platforms could be added in North America by the end of the year.

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