Active Rig Count - Sept 30

[dan_s]

The North American active rig count increased by 35 last week.

United States:
> Rigs drilling for oil increased by 7 to 425, compared to 614 a year ago and 1,609 at the peak in October, 2014
> Rigs drilling for gas increased by 4 to 96, compared to 195 a year ago

Canada
> Rigs drilling for oil increased by 7 to 84, compared to 70 a year ago
> Rigs drilling for gas increased by 17 to 78, compared to 109 a year ago

Rigs drilling in Texas (245) and Oklahoma (68) account for 60% of the rigs drilling in the United States, primarily focused on the Permian Basin and SCOOP/STACK in Oklahoma.

The EIA's Drilling Productivity Report estimates that U.S. onshore production will decline by 61,000 BOPD and 302,000 Mcfpd from September to October. U.S. onshore production has been on steady decline since early 2015 and is likely to stay on decline through year-end.

Per the EIA:
> U.S. crude oil production has averaged 8,499,000 Bbls per day over the last six weeks
> U.S. refiners have consumed 16,645,000 Bbls per day over the last six weeks
> U.S. imports of crude oil have been 8,139,000 Bbls per day over the last six weeks.
This does not add up to the 23 million barrel decline in U.S. oil inventories that the EIA has reported over the last four weeks. My SWAG is that EIA has been over-reporting U.S. oil production all summer and to correct the error they've lower inventories. The numbers that EIA reports each week are based on formulas that over the years have been proven to be flawed. When actual numbers come in months later they are forced to make adjustments. The active rig count during the 2nd quarter was no were close to the level needed to stabilize U.S. production. Larger declines should have shown up in 3rd quarter production.