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US oil and gas rig count posts first weekly gain in nearly two months, up 5 to 954: Enverus

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US oil and gas rig count posts first weekly gain in nearly two months, up 5 to 954: Enverus

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Houston — The US oil and gas rig count posted its first weekly gain in nearly two months, rising by 5 to a total 954, during a week of higher domestic oil prices, albeit from a geopolitical event on the other side of the world, Enverus/DrillingInfo data showed on Thursday.

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The last time the US rig count rose was the week of July 24, when the number of active rigs in domestic fields was up by 10 to 1,049.

In the past 10 months, the rig count has dropped by more than 275 rigs from the recent peak of 1,233 in mid-November 2018.

Rigs chasing oil increased by 8 to 763, while rigs drilling for natural gas dropped 3 to 186, according to the data for the week ended September 18.

Generally, the rig count increase is likely "noise," S&P Global Platts Analytics analyst Taylor Cavey said.

"Week-on-week trends are hard to correlate to anything," Cavey said. "That said, the general trend is down, and I think it ties nicely with [industry's] capital discipline and conservative drilling story."

"I imagine we will see more of the same the rest of the year," he added. "I wouldn't be surprised by further declines, but I think it is more likely to see flat drilling activity."

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SLIGHT OR NO ACTIVITY CHANGES IN MOST BASINS

Basin wise, changes in activity were generally slight or neutral in the eight named large plays.

The largest movements were a three-rig loss in the Denver-Julesburg Basin in Colorado, which was down three rigs, leaving 24, and a two-rig gain to 79 in the Eagle Ford Shale of South Texas.

Other than that, three basins gained one rig each -- the Permian Basin in West Texas/New Mexico, up to 415; the Haynesville Shale in Northwest Louisiana/ East Texas, up to 53; and the Dry Marcellus Shale mostly in Pennsylvania, up to 28.

Three other basins remained the same -- the Williston Basin, in North Dakota/Montana, at 58; the Wet Marcellus, also in Pennsylvania, at 19; and the Utica Shale mostly in Ohio, steady at 15.

And the SCOOP-STACK of Oklahoma lost a rig, leaving 61.

US PERMITS UP BY 72 TO A TOTAL 754

Approved US oil and gas permits also were down this week by 72 to a total of 754 permits.

The largest change in a named play came from the DJ Basin, up 84 to 110 permits.

The Permian gained 25 for a total of 150, the Dry Marcellus was down 25 to two, and the Eagle Ford lost 22, leaving 52.

All other basins were up or down fewer than 10 permits from last week.

Earlier this week, a drone attack on Saudi oil infrastructure cut that country's oil production by 5.7 million b/d. Officials had earlier said they expected production to be restored to 11 million b/d by the end of this month and 12 million b/d by the end of November.

But some sources have been skeptical. On the other hand, analysts generally believe it would be difficult for the US to offer a quick production response, even though domestic oil output has grown rapidly in recent years because of the lag between procuring rigs, drilling times, and bringing them online. And producers have largely committed to not raising capital budgets this year.

The attacks pushed WTI, which had been hanging below $60/b, to nearly $63/b at the close of Tuesday. But the price has since fallen below $60/b.

According to Platts data, WTI prices this week averaged $58.06/b, up $1.29, while WTI Midland prices averaged $58.01/b, up $1.31.

The Bakken Composite price was $51/b even, up $1.35.

Natural gas prices were slightly up too. Henry Hub prices averaged $2.66/MMBtu this past week, up 11 cents, while Dominion South price averaged $2.03/MMBtu, up 9 cents.

-- Starr Spencer, starr.spencer@spglobal.com

-- Edited by Derek Sands, newsdesk@spglobal.com