Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Natural Gas | Oil

US oil, gas rig count falls 45 to 721, amid continued market turmoil: Enverus

Commodities | Agriculture | Grains | Oil | Crude Oil | Jet Fuel | Petrochemicals | Coronavirus

Market Movers Americas, Aug 10-14: PVC demand bounces back from six-week decline

Oil

Platts Market Data – Oil

Capital Markets | Commodities | Oil | Crude Oil | Refined Products | Fuel Oil | Gasoline | Jet Fuel | Naphtha | Marine Fuels | Equities | Financial Services | Banking | Non-banks | Private Markets

North American Crude Oil Summit, 3rd annual

Oil | Crude Oil | Refined Products

Crude retreats after overnight rally, traders await fresh drivers

US oil, gas rig count falls 45 to 721, amid continued market turmoil: Enverus

Highlights

Nationwide totals down 11% in two weeks

Half of rigs dropped on week came in Permian

Roughly 90% of weekly decrease was oil-directed

Houston — The US oil and gas rig count fell 45 this week to 721, data from Enverus showed Thursday, as producers continued to slash E&P budgets amid oil prices at low levels not seen since the early 2000s.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The large domestic rig count drop follows an even steeper plunge of 47 last week, for a total decline of 92 rigs in two weeks, a nationwide decrease of 11%.

Twenty-two, or about half, of the 45 rigs operators gave back this week came in the Permian Basin of West Texas/New Mexico, leaving 374.

Oil rigs accounted for 41 of the 45 rigs lost this week, about 90% of the total decline, leaving 586 oil rigs working. Four losses were gas rigs, leaving 135.

Lower oil prices about half their early-March value have forced cutbacks by upstream operators desperate to preserve their cash flows. This week, WTI averaged $21/b, down 35 cents, while WTI Midland had a much steeper drop at $14.34/b, down $6.60, as storage bins in West Texas began to fill, according to S&P Global Platts Analytics data.

The Bakken Composite price averaged $15/b, down $4.34.

For natural gas, Henry Hub prices averaged $1.64/MMBtu, down 3 cents, while Dominion South prices averaged $1.25/MMBtu, down 8 cents.

Click here for full-size image

TOO MUCH PRODUCTION

"Even if rig counts and completions fall to zero next week, there will be too much production to meet downstream demand," said James Williams, president of WTRG Economics. "Storage on the Gulf Coast is filling up and causing pipelines to require producers to verify that they have either storage or a buyer at the other end of the pipeline."

Williams noted on March 30 the cash price at Cushing was over $20/b, but the Midland, Texas, price was $14.10/b and on the Gulf Coast, Louisiana Light Sweet crude was only $5.85/b.

"Operators or the Texas Railroad Commission have to cut production in order to eliminate the discount to WTI at Cushing," Williams said.

In other large basins this week, rigs fell by five to 63 in the Eagle Ford Shale of South Texas and were down by four to 47 in the Williston Basin of North Dakota/Montana.

Rigs in gas basins were little changed, except for the Haynesville Shale of East Texas/Northwest Louisiana, which shed three rigs, leaving 37.

CHALLENGES AHEAD

Analysts have said a wave of bankruptcies is in store for the oil patch, and on Wednesday, Whiting Petroleum became the first sizeable company to file for Chapter 11.

The challenges facing the North American energy patch over the coming quarters should not be underestimated, Evercore ISI analyst Stephen Richardson said in a Thursday investor note.

The collapse of regional prices points to a looming significant fill in storage and rationing of upstream, all before a large uptick in imports from Saudi Arabia have hit US shores or global storage, Richardson said.

"While we are skeptical that a regulator or industry association can mandate enough shut ins to balance the system, the market will need to do the work (via low prices, in places to zero) in order to force production to stay in the ground from both new and existing wells," he said.

As a result, this is essentially "uncharted territory," Richardson added.

"We have witnessed this before but only for short periods of time where hydrocarbons compete with themselves for access to infrastructure," he said. "We think the severity of this workout is little understood by the market."