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U.S. oil drillers add rigs despite crude price collapse – Baker Hughes

U.S. oil producers added 21 oil rigs in the past week, the most in over a year, data showed on Friday, suggesting that drillers were moving more aggressively than expected, just before crude prices’ latest dive down.

Oil producers, who cut rigs in the face of falling prices late last year, began to add rigs back in the week ending July 2, oil services company Baker Hughes Inc said in its closely followed report.

The latest addition comes amid a 21 percent collapse in U.S. crude prices from a recent high in June, data showed on Friday.

The rise in the rig count this week was the biggest increase since April 2014. It was, however, only the third addition over the past 33 weeks, bringing the total rig count up to 659, the highest since late May.

Drillers added oil rigs in all four of the major U.S. shale oil basins with three in the Permian in West Texas and eastern New Mexico, two in the Eagle Ford in South Texas, and one each in the Niobrara in Colorado and Wyoming and the Bakken in North Dakota and Montana.

Related: Oil prices fall on oversupply worries as U.S. rig count rises

The rig increase shows that energy firms have followed up on their plans to drill more when U.S. crude prices were averaging $60 a barrel in May and June.

U.S. crude oil futures this week, however, entered a bear market with prices down to about $48 a barrel from a recent high over $61 in late June. A 20 percent downturn is considered by many traders to constitute a bear market.

In reaction to the Baker Hughes report, U.S. crude futures extended their losses, from down 0.8 percent to down 1.5 percent on the day, to a contract low of $47.72.

Analysts said both U.S. and Brent crude futures were trading at their lowest levels since March on lackluster global demand growth and lingering oversupply concerns as the Organization of the Petroleum Exporting Countries (OPEC), the United States and other producers continue pumping record or near record amounts of oil out of the ground.

The current bear market was the biggest decline for U.S. crude futures since the front-month fell nearly 60 percent from over $107 in June 2014 to under $44 in January due to those same oversupply and uninspiring demand growth worries.

In response to that near 60 percent price collapse, U.S. drillers eliminated thousands of jobs and idled 60 percent of the record high 1,609 oil rigs that were active in October.

Despite those cuts, U.S. crude production has averaged 9.6 million barrels per day for nine weeks in a row, its highest level since the early 1970s, according to government data.

(Reporting by Scott DiSavino; Editing by Marguerita Choy)

This article was from Reuters and was legally licensed through the NewsCred publisher network.

88 comments

  1. Put OPEC out of business!

  2. OPEC won’t go out of business

  3. 21 rigs out of the 1200 stacked—

    • Something is better than nothing or even more rigs lost rgt geeeez

    • Always negative Thad unstacking any is better than unstacking none.

    • So you really like the story about tte ‘Tooth Fairey’?
      Patrick jumping up and down ‘high fiving” is not the thing to be doing. No pretty pictures, no syrupy stories…. if someone has a chance to get out pretty stories could cause them to make the wrong decision
      In the ’86 crash I hung on until ’88 then lost everything home vehicles, boat, shop –and marriage. And had to get another job–it was not easy and when the oil field came back- I came back.

    • There’s shouldn’t have been 1600 rigs drilling in the first place. 1600 rigs is what caused this collapse. Simple economics. They need to put a cap on rigs to avoid this in the future! But no, too many money hungry new oil companies out there looking to get rich quick on oil. I’d rather makes Billions over 30 years of steady oil prices, than to make Millions on 4 years of 100+ a barrel oil. Simple

    • Josh what you are saying does not make any sense.. Drlg for oil is to supply the nation’s needs and end imports. Taking your concept to the point of foolish would be stacking all rigs except for a few and let the price soar.. Profitable for the leaseholder and profitable for the oil companies BUT the high cost of oil would cause a recession.

    • I didn’t say stack all the rigs except a few. But 1600 rigs was way too much by a loonnngggg shot! 1000+ is still a long shot. Maintain a steady move of rigs to keep the supply glut under control and maintain 75-80 dollar oil. That’s not expensive and turns a good profit while keeping millions of people employed.

    • Josh the US oil boom reduced imports– the oil NOT imported stayed in the global supply OPEC decide to maintain their production rate causing the glut.
      The US can not control the glut- NOTE over 1,200 rig stacked in the US, OPEC maintains production rates and the glut continues

  4. Are they pushing on a preemptive strike on the “tank” of the market? Would like to see your input on this

  5. It over oil prices are $ 46.87 for now they may back up by 2016.

  6. hot damnificados Im goin back to workpad

  7. A few rigs might come out to satisfy leases just to go back into the weeds

  8. Its gonna put everyone out of business if we dont start cutting production!

  9. Put out one where hubby can go to work on

  10. 25 stacked rigs just North of Dickinson, ND…

  11. Bernard Huber what’s the rig count doing? Up or Down…

  12. Lifting of oil export ban will ease up the glut…

  13. We just picked up the most since April 2014 like 20

  14. Nobody knows nothing about nothing just talk about this up and down stuff! It’s all up to the system on what’s going to happen and when…so stop wasting peoples time and hopes when in fact nobody knows when its going to happen…live life day by day be glad we’re still Alive… And if you don’t like it where your at and what your doing well only YOU can help that. Just my opinion God bless all and taking it one day at a time.

  15. Maybe looking ahead ???? Maybe an increase in 2016 ???

  16. There are about 60-80 rigs stacked in Midland/Odessa Tx too

  17. Say hello mr bankruptcy

  18. its a business. …go to college find a real job

  19. Lol oil workers overpaid and still wine

  20. Funny oil workers want a war if they lose the way overpaid jobs

  21. Heck I love $2.00 a gal gas… the whole USA does. .no one cares you lose your overpaid lazy butts

  22. Remember most people go to college… them that do have the right to complain. ..your overpaid bums don’t

  23. West Texas still busy. People and trucks everywhere

  24. Offshore took a plunge as well…..really miss going deep blue!

  25. Alot of HP rigs stacked in Seguin Texas as well

  26. If and when you pass a metallurgy course or have a welding engineer or CWI degree, then you can talk john until then go troll else where

  27. Surprised? Not me. Why? The people that work the petroleum sector of this country’s economy, and the importance of oil to a stable oil supply, to world economy, aren’t stupid. They see what’s coming down the pike a lot future ahead than you think! Given this agreement with Iran, if I may, they see war coming and a total disruption of oil from the Middle East, which would bring total chaos to the world if there wasn’t one stable oil supplying country.

  28. Soon, Ryan Searls, soon.