for Rig Count
While U.S. crude production hasn’t fully recovered, it has increased by more than 300,000 b/d since September to average just under 9 million barrels per day. As a result, the OPEC-fueled boom in prices has stalled for the time being.
Cost reductions seen throughout the industry could end up being cyclical. An increase in drilling activity will likely grant greater leverage to OFS companies, who may ultimately pass on higher expenses to oil companies.
While some companies have been able to drill profitable wells with prices at current levels and the Permian remains attractive, the U.S. oil industry is not healthy with oil under $50.
Natural gas prices in the U.S. for August delivery climbed to $2.90 per million Btu (MMBtu) on the last day of June, capping a 30 percent rally in just one month. Today’s prices are also the highest in nearly a year, ending an extraordinary run in which spot prices stayed below $2/MMBtu for much of that time.
With prices having rallied and with expectations for a stronger market next year, will drilled but uncompleted wells (DUCs) be able to stabilize U.S. shale output or bring about another wave of supply online?
Although the oilfield service giants will undoubtedly survive, there’s a lot of uncertainty going forward, prompting them to focus on cost per barrel optimization and improving efficiency
Between China, Greece, Iran, and U.S. shale, oil prices are likely to fall in the second half of the year.
Employees of the oil and gas industry, while hard-hit by low oil prices, remain optimistic that prices will rebound thanks to continued fuel demand and reliance.