US Oil Drillers Cut Rigs for 12th Week in a Row

Posted by Eric Haun
Friday, March 11, 2016

U.S. energy firms this week cut oil rigs for a 12th week in a row to the lowest level since December 2009 as drillers continue to slash capital expenditures despite crude prices having apparently bottomed, data showed on Friday.

 
Looking forward, many analysts think the rig count will rebound later this year when prices rise.
 
Drillers removed six oil rigs in the week ended March 11, bringing the total rig count down to 386, oil services company Baker Hughes Inc said.
 
That compares with 866 oil rigs operating in the same week a year ago. Drillers started to steadily reduce their rig count after crude prices began to collapse mid-2014.
 
U.S. crude futures were trading just under $39 a barrel, up 8 percent on the week and set for its fourth weekly gain on forecasts of tighter supplies as U.S. and non-OPEC crude output was beginning to fall faster than previously expected.
 
After falling as low as $26.05 a barrel last month, its lowest level since 2003, U.S. crude has rebounded and was around $42 for the balance of 2016 and $45 for calendar 2017.
 
Chevron Corp said this week it will add two rigs in the oil-rich Permian shale of West Texas in 2016, part of a bet that crude prices will rise this year.
 
Other producers, however, are still reducing rigs due to the crude oil price rout.
 
In Alaska, BP Plc said it will cut the number of rigs operating in its Prudhoe Bay field from five to two and cut more than 200 contracting jobs. 
 
In an effort to extend the life of existing wells, some drillers are investing in new technologies, like choking and lifting, to keep their wells producing oil and natural gas for longer. 
 
Those efforts however were not expected to boost U.S. oil output over the next two years, only slow the rate of decline.
 
U.S. oil production was expected to fall from 9.4 million barrels per day in 2015 to 8.7 million bpd in 2016 and 8.2 million bpd in 2017, according to the federal estimates this week. 
 
Analysts at Morgan Stanley this week forecast North American exploration and production companies would cut spending on oil and natural gas rigs by over 50 percent in 2016 versus 2015, before increasing spending by over 40 percent in 2017 versus 2016.
 
Analysts at Swiss bank UBS lowered their North American rig count expectations with activity in the first quarter to decline by 26 percent from the fourth quarter.
 
Analysts at Simmons & Co International forecast the overall U.S. gas and oil onshore rig count would fall around 10 rigs per week for the rest of the quarter.
 
Analysts at Evercore ISI forecast the gas and oil land rig count would fall by an even bigger 15 rigs per week for the rest of the quarter before holding mostly steady during the second quarter and rising in the second half of 2016, 2017 and 2018.
 
The total oil and gas rig count this week fell to 480, with 386 oil and 94 gas rigs, the lowest level since at least 1987. Gas rigs <RIG-GS-USA-BHI> were at their lowest level since at least 1987, according to the Baker Hughes records. 
 
 
(Reporting by Scott DiSavino, Barani Krishnan; Editing by Marguerita Choy)

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter May 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

Hercules Offshore Filing for Bankruptcy Again

Hercules Offshore Inc said it planned to file for prepackaged Chapter 11 bankruptcy, just six months after the rig contractor emerged from bankruptcy protection.

DONG Energy Listing to Value Group at up to $16 Bln

DONG Energy's has set a potential $16 billion price tag on its stock market debut, giving investors a chance to buy into the growth in offshore wind power, but

Østensjø Rederi Orders Another Wind Farm Vessel

Rolls-Royce has signed a contract with shipyard Astilleros Gondan in Spain to design and equip a second Service Operation Vessel for ship owner Østensjø Rederi.

Energy

GloMEEP Project Forges Ahead with Train-the-Trainer Workshop

A global Train-the-Trainer workshop on energy efficiency has been delivered in China (23-27 May), preparing the personnel needed to cascade knowledge on energy

Hercules Offshore Filing for Bankruptcy Again

Hercules Offshore Inc said it planned to file for prepackaged Chapter 11 bankruptcy, just six months after the rig contractor emerged from bankruptcy protection.

Strike Idles 38 Oil Tankers at Fos-Lavera

Some 38 oil tankers have been held up at the Fos-Lavera oil port in southern France, the country's biggest, including 25 at harbour, up from 12 the previous day,

News

GloMEEP Project Forges Ahead with Train-the-Trainer Workshop

A global Train-the-Trainer workshop on energy efficiency has been delivered in China (23-27 May), preparing the personnel needed to cascade knowledge on energy

Diana Charters Out Two Bulkers

Diana Shipping Inc. today announced that, through a separate wholly-owned subsidiary, it entered into a time charter contract with Bunge S.A., Geneva, for one of its Panamax dry bulk vessels,

Long Beach Port Maintains Strong Bond Rating

Fitch Ratings, one of the top three U.S. credit analysis agencies, has affirmed the Port of Long Beach’s “AA” rating on its outstanding debt. Fitch stated the AA rating — its highest for U.

Ferries

Conrad Shipyard Christens Woods Hole Ferry

M/V Woods Hole, a 235-foot long passenger ferry built for the Steamship Authority of Woods Hole, Mass., was christened on May 20 at Conrad Aluminum in Amelia, La.

Ferry Crew-member Missing off Pembroke Coast

HM Coastguard is coordinating the search for a missing crew-member from a ferry, who it is believed may have gone overboard off the Pembroke coast.   The Coastguard

Naviera Nabia Orders Newbuild from Gondan

Gondan Shipyard signed a new contract for the construction of a new vessel for Naviera Nabia, part of Acuña Group, from Bueu (Pontevedra-Spain). This new catamaran

Offshore Energy

Hercules Offshore Filing for Bankruptcy Again

Hercules Offshore Inc said it planned to file for prepackaged Chapter 11 bankruptcy, just six months after the rig contractor emerged from bankruptcy protection.

VOS Sugar First Charter

The newest addition to Vroon’s fleet, subsea-support vessel (SSV) VOS Sugar, recently started work in the BARD Offshore 1 Offshore Wind Farm (OWF). The vessel

China COSCO Moving to Offshore Winds

China COSCO Shipping, which uses bulk carriers and container vessels to transport goods, has seen its cargo business decline amid China's slowdown and has decided

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Naval Architecture Navigation Pod Propulsion Port Authority Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0943 sec (11 req/sec)