According to the May 12 Baker Hughes rig count, drillers added 8 rigs for a total of 885 total rigs exploring for oil and gas. It’s the 17th straight week of increases. The count is up 479 from last year at this time.
Oil rigs increased by nine, while the total rigs exploring for gas dropped by one.
It’s no surprise that Texas gained the most rigs, increasing by 8. Wyoming, North Dakota, Colorado, and Ohio each increased by 1. New Mexico and Alaska were each down one, and Oklahoma lost two.
Below are the stats by basin (data from Baker Hughes):
|Major Basin Variances||This Week||+/-|
While the rig count continues to increase, Reuters noted that the pace of rig additions is declining, which could be attributed to the continued increase in production in non-OPEC countries, primarily the United States, Canada, and Brazil. This offset OPEC’s deal to cut production, and “should limit any upside to global oil prices through the end of 2018, the U.S. government said.”
However, U.S. crude stockpiles posted their biggest one-week drawdown since December as imports dropped sharply. Last week, there was a surge in oil prices of around 4 percent, and U.S. commercial crude inventories fell by 5.2 million barrels, according to data from the Energy Information Administration (EIA) last week. CNBC’s graph shows the sharp increase in oil price last week:
Additionally, gasoline demand rose after a recent slump, and gas prices were reportedly higher. Demand should continue to rise as we approach the summer driving season.