Oil Rig Count Rises/Prices Fall | Russell T. Rudy Energy LLC
According to an article in “Rigzone”, the Baker Hughes oil rig count rose last week for the fourth straight week. However, mobilization of these rigs was a result of plans developed back in May and June when it looked like prices were stabilizing. This disconnect between rig count and prices is primarily attributable to the lead time involved between price fluctuations and rig deployments. For the week ended August 14, the oil rig count reached 672, the highest since early May. However, prices have now hit their lowest level in 6 ½ years.
The latest oil rig count is still 58% lower than the peak last October, and domestic production remains stubbornly high. From mid-May to late June U. S. output averaged 9.6 million barrels of oil per day (bopd), the highest since the early 1970’s. Last week the rate had only dropped to 9.4 million bopd.
Last week 5 oil rigs were added in the Eagle Ford shale of South Texas and 1 in the Niobrara of Colorado and Wyoming. The Permian basin of West Texas and Southeastern New Mexico remained flat and the Bakken shale of North Dakota and Montana lost two rigs.
Most industry observers feel that as long as the world-wide oil glut persists, and demand continues to slump, especially in China, prices will continue to fall.
To read the article in its entirety, please go to http://www.rigzone.com/news/article_pf.asp?a_id=140124 .
