Decline in U.S. Oil Drilling Signals Market Shift: Baker Hughes Reports

In a fresh report released by Baker Hughes, the oil and gas sector in the United States has shown a decline in active drilling rigs this week. The total rig count decreased by one, bringing the current number down to 587 rigs, a significant drop from 623 rigs at the same time last year.

Specifically, the number of active oil rigs fell by four this week to 484, marking an 18-rig decrease compared to the previous year. Meanwhile, the count of gas rigs saw a slight increase of three, reaching a total of 99. However, this figure is still down by 17 rigs from last year. The miscellaneous rig count remained stable at four.

Interestingly, U.S. crude oil production has plateaued, remaining unchanged for the week ending September 20. According to the Energy Information Administration (EIA), the current production rate stands at approximately 13.0 million barrels per day (bpd), just 200,000 bpd shy of the all-time high of 13.2 million bpd.

In terms of completion activity, the Frac Spread Count, which estimates the number of crews finalizing unfinished wells, increased from 230 to 236 for the week ending September 20. This marks the second consecutive week of gains after a period of five weeks of declines, indicating a potential turnaround in completion efforts.

Drilling activity within the Permian Basin showed a minor drop, decreasing by one rig to a total of 306. This number is only six rigs fewer than last year. The Eagle Ford region maintained its count at 48 rigs—down by one from the same week a year ago.

On the financial front, oil prices experienced a rise on Friday amidst geopolitical tensions, particularly following an Israeli strike on Hezbollah’s command in Beirut. At 12:56 p.m. ET, West Texas Intermediate (WTI) saw a gain of $0.49 (+0.72%), trading at $68.16, although it still reflects a loss of roughly $4 per barrel from the previous week. The Brent benchmark also rose by $0.38 (+0.53%), trading at $71.98, yet it's down nearly $3 per barrel compared to last Friday.

As the U.S. oil sector navigates these fluctuations, experts are closely watching how drilling activities and geopolitical factors play into future supply and pricing dynamics. With these recent trends, analysts warn that the oil market could be on the brink of significant changes. Will the industry adapt, or will it succumb to these new pressures? Stay tuned, as the situation continues to develop.