US crude and NGLs output is still growing strongly. But the latest output forecasts for key shale formations have been revised down with the country’s rig count dipping over the last six weeks. The latest Baker Hughes numbers show 749 active oil drilling rigs as of 15 September, down by 19 from early August.
Looking at shale formations in isolation, here the oil rigcount has continued to edge higher, though August, which saw a mere four rigs added, taking the total to 814, saw the lowest gains since levels bottomed out at 314 in May 2016 (see chart and MEES, 22 September for full data). The stalling of drilling activity comes at the end of four months where US marker WTI struggled to break out beyond the mid-$40s – a level several producers had flagged up as borderline profitable in terms of adding production (output additions, almost by definition, come from more marginally-economic areas). But, with WTI continually testing $50/B over the past week, and closing above this level for only the second time in almost four months, we could be set for a drilling uptick as well. (CONTINUED - 679 WORDS)
