Record Drop in Oil Rig Count | Russell T. Rudy Energy LLC
“World Oil” reports that for a record eleventh straight week, the U.S. oil rig count dropped again last week to 1,019. Over this period 556 rigs have been idled, bringing the rig count to the lowest level since 2011. Gas rigs also decreased by 48 to 1,310.
World-wide, the response to the collapse in crude oil prices has resulted in the loss of over 100,000 jobs and shrunk capital spending by more than $86 billion.
In spite of domestic rig count losses, the U. S. Energy Information Agency predicts that domestic oil production will rise to 9.3 million barrels per day by the end of 2015, the most since 1972. Currently we are producing the most we have since 1983.
U. S. oil producers are facing stiff international competition, from OPEC in general and Saudi Arabia in particular. The latter is actually increasing production in an effort to maintain market share at the cost of dropping prices. A resurgent Iraqi oil industry is now producing the most it has since 2007, further contributing to oversupply.
Even EOG Resources Inc., the largest, fastest growing domestic shale operator, has indicated that cutbacks in its 2015 drilling program will result in its production bottoming out in the second or third quarter. The company plans to cut spending by 40% this year, completing only half as many wells as in 2014.
To read more about this and other topics, please go to www.worldoil.com .
