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U.S. Oil and Gas Producers Add Rigs as OPEC Promises to Cut Production

Baker Hughes reports that oil operators brought three rigs online in the past week, while one gas rig was added.

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Written by Ander Keitz at thestreet.com

Click HERE to Read the Article by the Publisher.


For the fifth consecutive week, U.S. oil producers added more rigs — even as the Organization for Petroleum Exporting Countries, or OPEC, announced plans to cut production.

Oilfield service giant Baker Hughes (BHI) reported Friday that U.S. oil and gas producers added four more rigs in the past week, bringing the count up to 596.

The Houston-based company said that three oil rigs were added, while natural gas rigs climbed by one. The U.S. oil rig count currently stands at 477; the gas rig count totals 119.

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The Permian Basin saw the biggest increase in rigs over the last week, with seven rigs added. That brings the overall number of rigs in the lucrative west Texas region to 235 — the most in any major domestic basin. The Haynesville Shale Basin had the second largest increase in rigs with 3, bringing the total to 26 rigs in that region.

The U.S. offshore rig count declined by 1 to 22 rigs after holding flat last week.

Even though domestic producers continued to add rigs, the rig count is still well below last year, when there was 545 oil rigs and 192 gas rigs.
The Baker Hughes rig count is seen as an important industry barometer for drilling activity across the U.S. and North America.

Following the rig count, crude oil prices were gaining during midday trading on Friday. Global benchmark Brent crude was up by 0.3% to $54.12, while West Texas crude for January delivery was climbing by 0.6% to $51.34.

The rise in rigs comes after OPEC shocked the market on Wednesday and agreed to cut production by 1.2 million barrels a day, capping production at 32.5 million barrels a day, effective Jan. 1, 2017. The cartel’s leading producer, Saudi Arabia, will take the biggest cut, around 486,000 barrels a day. The deal is also contingent on a 600,000 barrel-a-day cut by non-OPEC producers; Russia has already agreed to cut by 300,000.


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Written by Ander Keitz at thestreet.com

Click HERE to Read the Article by the Publisher.

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