U.S. Drillers Need $60 Oil to Stage Real Comeback, IEA Sayby
Number of active rigs 75 percent below October 2014 peak
IEA reiterates view U.S. shale oil output to fall this year
While shale drilling in the U.S. is on the rise again, prices need to climb nearer to $60 a barrel for U.S. producers to have a “substantial” boost in activity, the International Energy Agency said.
Producers remain “cautious on outlook,” and further drilling increases this year may be “limited,” the IEA said in its monthly report.
Drillers hired more rigs this year as U.S. oil prices staged a rally that saw futures close at $51.23 a barrel in June, the highest so far this year. There were 381 active rigs as of August 5, the highest number since March 18, according to Baker Hughes Inc. data. That number remains more than 75 percent below the October 2014 peak, the IEA said.
Despite the gains in the rig count, the IEA reiterated its view that shale oil production will decline by half a million barrels a day this year with a further drop of 200,000 barrels a day next year. The number of completed wells will drop by half this year compared with last year, it said.
U.S. oil production has dropped 12 percent to 8.445 million barrels a day from a record 9.61 million barrels a day in June last year, according to data from the Energy Information Administration.