Permian Basin added rigs for the third straight week as of Feb. 28 in Baker Hughes’ weekly report of active oil and gas drilling rigs amid reports of continued record production in U.S., rising exports and sinking global demand. Permian added 2 rigs in past week for a new total of 411 (466 a year ago). Texas added 4 (397 a week ago, 503 a year ago), New Mexico was unchanged (115 a week ago, 107 a year ago), and U.S. lost 1 rig (791 a week ago, 1,038 a year ago). Texas’ gain was the largest among major producing states in the last week. Permian Basin has added rigs in 6 of the last 7 weeks.
U.S. Department of Energy said March 4 that U.S. produced a record 13.1 million barrels of crude oil per day during last week of February and exported nearly 4.2 million barrels. Production was up 100,000 b/d from the previous week, and exports were up nearly 500,000 b/d. And DOE said March 2 that production in 2019 reached 12.23 million b/d – up more than 10 percent from 10.99 million b/d in 2018 with 17 percent growth rate. Texas produces more than 40 percent of the nation’s crude, and the DOE predicts that U.S. production will rise to 13.2 million b/d in 2020 and to 13.6 million b/d in 2021 “with most of the production growth coming out of the Permian region.” Texas had a record 5.35 million b/d in December.
IHS Markit said world oil demand in 2020Q1 will decline by the largest volume in history. “This is a sudden, instand demand shock,” Jim Burkhard of IHS Markit said, “and the scale of the decline is unprecedented.” Most of the demand decline is in China (origin of COVID-19 virus), but demand elsewhere also is declining.
Eddy County in New Mexico lost 2 rigs in past week as of Feb. 28, but continues to lead Permian Basin with 60 rigs. Lea County, N.M., is next with 55 followed by the Texas counties of Reeves (41), Martin (40), Loving (33), Howard (32) and Ward (20).
North Dakota is third among states with 52 rigs followed by Louisiana (49) and Oklahoma (48). Eagle Ford is runner-up among regions with 68 rigs followed by Williston (53), Haynesville (42) and Marcellus (38).
