U.S. energy firms kept the number of oil and natural gas rigs unchanged at a record low as the rig count fell for a fifth straight month, although July marked the smallest monthly decline due to a recovery in prices.
The rig count, an early indicator of future output, steadied at the all-time low of 251 in the week to July 31, according to data from energy services firm Baker Hughes Co. going back to 1940.
Before this week, the count had hit all-time lows for 12 straight weeks.
In July, drillers cut 14 rigs, putting the count down for a fifth month in a row, albeit the smallest cut since February before the coronavirus crisis hit oil demand.
U.S. oil rigs fell by one to 180 this week, while gas rigs rose one to 69.
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The FEAR that upstream companies will ramp up drilling activity now that WTI is back to $40/bbl can be crossed off the "List of Fears". I don't expect any meaningful increase in the number of rigs drilling for oil until WTI is firmly over $50/bbl. We might see an uptick in rigs drilling for gas if the NYMEX contracts for natural gas for December to March are still over $2.50 when we get to November.
Active Rig Count continues to fall in July
Active Rig Count continues to fall in July
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group