The number of active oil rigs in the United States fell by 4 to 172, Baker Hughes reported today. That’s the lowest level since 2005 in the days before the U.S. oil shale boom.
The news is likely to get worse for U.S. producers and oil service companies. The number of drilling permits dropped last month to the lowest since September 2010, according to industry consultant Rystad Energy.
West Texas Intermediate, the U.S. benchmark, closed at $42.18 a barrel today (down 0.14%). Unless WTI prices move towards $50 per barrel in the next few weeks, a rebound in rig activity is unlikely before the first half of 2021,” Artem Abramov, an analyst at Rystad, wrote to clients this week.
U.S. oil production will likely end the year about 20% lower than at the start of 2020, according to IHS Markit.
