North America Rig Count Grows
Oil and gas rig counts have risen despite oil price uncertainty, according to the latest data from oilfield services provider Baker Hughes.
The firm’s latest rig count overview shows North American exploration activities holding ground despite looming trade wars, as U.S. rig count increased by 136 year-on-year to 1,075, and Canadian rig count sat at 184, up 108 from the previous month’s count, but down 92 year-on-year.
Permian and Marcellus Add Rigs
Oil drilling in the U.S. declined in Oklahoma and the Gulf of Mexico, while Pennsylvania and West Virginia in the Marcellus shale play each gained two rigs. The Permian Basin also gained one net rig with two added on the New Mexico side and one going offline in West Texas.
“The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons,” a spokesperson for Baker Hughes said.
The international rig count also grew with Baker Hughes reporting 1,025 rigs for December, as compared to 991 in November.
Markets have been watching oil production closely so far this year, as the ongoing trade between China and the U.S. threatens to impact global demand. While the steady rig count is positive for short-term breakbulk demand, the longer-term picture remains uncertain.
"We are not in the business of trusting or not trusting presidents. We are in the business of watching the market and correcting it every time the geopolitics (are) a factor, affecting the market,” said Suhail Al Mazrouei, outgoing OPEC president.
The U.S. drilling outlook has also been affected by the government shutdown, which has placed a question mark over proposals to open offshore areas to increased drilling.
Revisions to the Blowout Preventer Systems and Well Control rule, finalized as recently as 2016 to prevent disaster’s such as the Deepwater spill, will likely face opposition from multiple states if raised after government resumes.
Photo: Oil rig. Credit: Wikimedia