The rig count for the shortened Thanksgiving holiday week ending Nov. 25 was down in most domestic unconventional plays and across the United States, but Canada experienced a rare uptick in its rig numbers, according to Baker Hughes Inc.
The United States lost 13 rigs compared to the previous week, falling to 744 total rigs. There were 555 oil rigs, down from 564, and 189 gas rigs, down from 193 (see Daily GPI, Nov. 20). Canada, on the other hand, saw an increase in the number of rigs, up to 184, compared with 166 the previous week.
Those fewer rigs have been more than enough to keep the nation's storage facilities filled to the brim. The Energy Information Administration (EIA) on Wednesday reported a 9 Bcf injection, pushing inventories to a new record level of 4,009 Bcf, the latest in a series of record levels (see related story). Natural gas inventories are 554 Bcf greater than last year and 252 Bcf more than the five-year average, EIA said.
Stagnant commodity prices haven't offered incentive to put more rigs in action, but there could be some light on the horizon, according to Barclays Capital (see Daily GPI, Nov. 23). Barclays has reduced its outlook for 2016 U.S. natural gas prices, but balances are expected to tighten in the second half of next year as growth slows and demand grows from the largest non-weather related demand increase since 2010.
Barclays continues to see an upward trend in prices in the second half of 2016 because of new market demand. The futures market is pricing in a warm winter, but if it's not as warm as forecasted and production increases disappoint, "the pieces should be in place" for a second-half 2016 rally, according to Barclays.
The rig count has been on a downward trend for months. In the latest Baker Hughes tally, the Mississippian Lime and Eaglebine, which is also known as the Upper Eagle Ford Shale, were the only unconventional plays to add rigs -- three in the former and one in the latter.
The biggest loser was the Permian Basin, which gave up four rigs, but there were also declines in the Barnett Shale, California, Denver-Julesburg/Niobrara, Eagle Ford in South Texas, Granite Wash, Green River Basin, Marcellus Shale and Williston Basin.
The U.S. rig count for the week was down 61% from its year-ago total of 1,917. Canada's count was a 58% decline from its year-ago level of 438.