Oil Rig Count Coninues to Slide | Russell T. Rudy Energy LLC
“World Oil” reports that the domestic oil rig count dropped for the 14’th straight week, the biggest retrenchment on record. The decrease of 56, down to 866, is the lowest level in almost four years.
The crude oil price collapse has resulted in billions of dollars of reductions in energy investment, and the loss of thousands of jobs. Some industry observers predict a drop to 700 rigs by the end of April. The plummeting rig count will have to result in lower oil production at some point. However, in the meantime, the U. S. Energy Information Administration (EIA) reported record production of 9.37 million barrels of oil per day (bopd) for the week ended March 6, and an average of 9.3 million bopd for all of 2015. Were this to happen, it would be the highest level of oil production since 1972.
Increased domestic, as well as OPEC, production will continue to exert downward pressure on crude prices. OPEC in general, and Saudi Arabia in particular, increased production in February, and has indicated it will not rein in production until non-member producers do so first.
Allen Brooks, managing director of PPHB Securities, observed “The good news is that we may be nearing a bottom in the rig decline. The bad news is we don’t know when or how fast the rig count might rebound.”
To read the article in its entirety, please go to http://www.worldoil.com/news/2015/3/13/us-oil-rigs-slide-for-14th-straight-week-dropping-to-866 .
