The streak of declining rig counts reached nine weeks in the U.S. in Baker Hughes’ weekly report of May 8, but New Mexico ended its streak at seven weeks. U.S. lost 34 more rigs in the previous week for a new total of 374 (988 a year ago). The U.S. count is down 62 percent in the past year. Bloomberg said, “Energy companies are in a full-on retreat as the historic slump in crude markets prompts widespread job cuts, budget reductions, contract cancellations and well shut-ins.” Production cuts have occurred in all parts of the upstream sector, including majors such as Chevron and ExxonMobil and west Texas shale drillers such as Diamondback Energy and Parsley Energy. U.S. rig count dropped to 404 in 2016 at the bottom of the previous oil bust.
New Mexico added 4 rigs last week for a new total of 70 (102 a year ago). It was the only major producing state to add rigs in the past week. Texas again led the declines by dropping 28 rigs for a new total of 173 (485 a year ago). It was the state’s eighth straight week with a falling rig count. And Permian Basin lost 21 rigs for a new total of 198 (457 a year ago).
Rig counts in other top states as of May 8 include Louisiana with 38 (39 last week), Pennsylvania with 23 (unchanged), North Dakota with 20 (26 last week) and Oklahoma with 13 (15 last week). Rig counts in other top regions include Haynesville with 32 (unchanged), Marcellus with 30 (unchanged), Eagle Ford with 27 (30 last week) and Williston with 20 (26 last week).
Also, U.S. Energy Information Administration lowered its forecast for crude oil production in both 2020 and 2021. EIA said Tuesday production will average 11.69 million b/d through yearend (down from a previous forecast of 11.76 million b/d) and lower by 130,000 b/d in 2021 to 10.9 million b/d.