Rigs targeting oil and natural gas in the U.S. declined by one this week to 1,738, according to Baker Hughes Inc. (BHI)
The U.S. total count has declined by 44 since Aug. 2 as producers adopted new technologies to shorten drilling times and boost well productivity in shale formations, weakening demand for new equipment. The amount of crude produced per rig in the U.S. has surged to a record in both North Dakota’s Bakken and Texas’s Eagle Ford plays, according to the Energy Information Administration.
“New technologies for drilling and producing natural gas and oil have made traditional measures of productivity, such as a simple count of active rotary drilling rigs, obsolete,” the EIA, the U.S. Energy Department’s statistical arm, said in an Oct. 22 report.
U.S. oil output rose to 7.9 million barrels a day in the week ended Oct. 18, the highest since March 1989, data compiled by the EIA show. Fracking and horizontal drilling boosted output from shale formations, helping the U.S. met 87 percent of its own energy needs in the first six months of 2013, on pace to be the highest annual rate since 1986.
Oil stockpiles climbed 1.4 percent last week to 379.8 million barrels, the highest level for this season in at least 10 years.
West Texas Intermediate crude for December delivery increased 64 cents, or 0.7 percent, to $97.75 a barrel at 1:05 p.m. on the New York Mercantile Exchange, up 14 percent in the past year.
Natural gas for November delivery rose 4.3 cents, or 1.2 percent, to $3.672 per million British thermal units on the Nymex, up 6.9 percent from a year ago.
U.S. gas stockpiles rose 87 billion cubic feet last week to 3.741 trillion, the EIA said yesterday. Supplies were 2.4 percent below year-earlier inventories and 2.1 percent above the five-year average.
Producers have been pulling rigs out of gas-rich plays to focus on more profitable crude- and liquids-drilling since 2009, with oil-targeted rigs now making about three-quarters of the total count. Crude is trading almost 27 times as much as gas, up from 10 times five years ago.
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