The Baker Hughes U.S. rig count continues to steadily climb, gaining another 3 rigs this week. A total of 602 rigs are exploring for oil, up 5 from last week, while gas rigs declined by 2.
By state, Texas still leads the pack with 386 rigs, up 8 from last week. Alaska and Louisiana each lost two, while North Dakota is down one rig this week. Wyoming gained one.
By basin, the Permian still remains strong with 306 rigs, gaining 3 from last week, while the Eagle Ford gained three as well, with 64 rigs there total. The Cana Woodford was up 2 this week. The Haynesville also gained 1. The Williston Basin and the Granite Wash each lost a rig.
Some concern about shale production still remains. Some believe the production cuts by OPEC could be compromised with the continued increase at home. According to EIA data, U.S. crude production at 9 million barrels a day last week was the highest level since early April 2016. Market watch’s Mark Decambre and Jenny W. Hsu stated Wednesday:
The crude market has been anxious about rising production, namely from U.S. shale-oil producers and Russia, which has a history of not complying with production limits.
However, OPEC has so far shown compliance, and the International Energy Agency (IEA) has said the OPEC cuts are the deepest on record.
Oilprice.com reported OPEC Secretary-General Mohammed Barkindo dismissed speculation that the United States’ increase in shale oil production was counteracting the effects of the bloc’s less-than-two-month-old output reduction strategy. However, MarketWatch reported that Mohammed al-Sada, the oil minister of OPEC member Qatar, said not all the pieces were falling into place under the agreement, since compliance by non-OPEC members are only at about 50 percent of what was promised.
Russia, one of those non-OPEC countries who committed to cuts did report it has reduced its oil production by 117,000 bpd in January, said Oilprice. But their exports, like the United States, were up. Exports through the Transneft pipeline were up 114,000 barrels per day in January compared to December.
West Texas Intermediate crude is at $54.45, and Brent Crude is at $56.58, down 1 percent.