U.S. Oil Rig Count Soars
December 9, 2016 ~ Energy Update
Oil prices are riding high at over $50 a barrel and natural gas spot prices are approaching $4. The spike in oil prices is due largely to a deal cut by members of the Organization of Petroleum Exporting Countries. In order to slow the pace of drilling and allow the supply and demand to even out, OPEC had tentatively signed off on a deal to cut production by 1.2 million b/d from October levels to around 32.5 million b/d from the start of January along with a commitment from Russia to slash output by 300,000 b/d.
The Effect of the OPEC Deal
Even as the OPEC deal has evolved, industry observers aren’t sure who’s on board with the production cuts and who’s not, and whether the deal has staying power. Also, U.S. oil production is rising so fast that it might offset any cuts by OPEC and other countries.
Oklahoma crude oil prices as of 5 p.m. Friday, December 9th.
Oklahoma Sweet: Sunoco Inc. ☞$48 Oklahoma Sour: Sunoco Inc. ☞$36
February Brent crude futures ended the Friday session up at $54.33 and January WTI settled at $51.50 per barrel.
Natural gas futures for January delivery closed trading at $3.74 per MMBtu on December 9, 2016. Prices rose due to cold weather forecasts and the bullish US natural gas inventory report. Prices hit a 2016 and two-year high.
Oil rigs hit 498 this week and are now just down 26 vs. a year ago.
Rig Count Summary – Source: Baker Hughes
- Total U.S. rig count (oil and gas) increased by 27.
- Total U.S. oil rig count increased by 21.
- The horizontal rig count increased by 18.
- The oil rig count outside of the Permian increased by 10.
- The natural gas rig count increased by 6.
For the second consecutive week, the Permian Basin saw the biggest increase in rigs, with 11 rigs added. That brings the overall number of rigs in the West Texas region to 246 — the most in any major domestic basin. The DJ-Niobrara Basin, located in Northeast Colorado and Southeast Wyoming, had the second largest increase in rigs with six, bringing the total to 24 rigs in the region.
OKLAHOMA NEWS – Rig Count Slides One
The Oklahoma rig count now stands at 80, not far from the 2016 high of 88, set back on January 29th. The Scoop and Stack plays continue to hold the highest rig counts with double-digit rig counts in Blaine, Kingfisher, and Grady Counties.
Custer gained two rigs this week with Dewey and Kingfisher Counties adding one each.
Blaine County lost two while Grady, Major, and McClain all lost one each.
Compiled and Published by GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma. ☞Email: [email protected]