The U.S. rig count fell by three this week to 750, but is still up 275 from this time last year.
After jumping by more than a dozen last week, the U.S. rig count is down even as global crude oil supply remains tight and energy demand continues to recover from the pandemic.
The number of operating drill rigs nationally fell by three to 750 this week, according to oil field services company Baker Hughes. Oil and gas companies have added 275 rigs in the past year, a nearly 58 percent increase from the 475 operating at this time last year.
Companies in Texas are currently operating 360 rigs, down two from last week. This week’s count is likely an anomaly for the state, which has already seen a big jump from this time last year when only 222 rigs were operating in the state. Analysts say the Permian Basin, which spans parts of West Texas and New Mexico, is set to hit record production of more than 5 million barrels per day this year.
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Meanwhile, the price of West Texas Intermediate, the U.S. benchmark for crude oil, is up slightly to start off the month of July. It had gone down last week on investor fears of a looming recession, but has consistently sat above $100 per barrel for the last few months – and experts say it will likely stay above the triple digit mark through the end of the year.
On Friday West Texas crude was up $2 and trading around $107 per barrel.
Things are a bit different for the international rig count this week, which is up by 19 this week. However, the international count has only gone up by about 100 since this time last year as the U.S. continues to outpace other oil producing nations in terms of added rigs.
Energy security and worsening inflation have been top of mind for U.S. officials, especially since Russia’s invasion of Ukraine made an already tight global oil supply even tighter. The Biden Administration has been calling on companies to increase domestic production in hopes of easing prices.
Analysts have said that while companies are working to increase production overall this year, they’re sticking to planned increases instead of quickly ramping up output. Investors have been pushing companies to exercise more discipline when it comes to spending, and companies have remained focused on returning money to shareholders and reinvesting profits instead of changing drilling plans.
Additionally, the war and uneven pandemic recovery have caused snags in the global supply chain, making it harder for oil and gas drilling companies to get some needed supplies.
This week’s decline comes on the heels of a Rystad Energy analysis showing the estimated amount of recoverable oil in the U.S. has increased by 8 billion barrels this year.
Kyra Buckley is an energy reporter for the Houston Chronicle.
Kyra specifically covers the region's oil and gas companies, focusing on drilling and oil field services. Before joining the Chronicle's business desk in April 2022, Kyra covered energy at Houston Public Media for two years. She previously worked at NPR member stations in Colorado and Oregon, and is a 2015 graduate from the University of Oregon in journalism and political science.
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