Natural Gas Drilling Rises in U.S. as Oil Activity Slows
The U.S. natural gas rig count rose four units to 166 during the week ended Friday (Sept. 9), while a slowdown in the oil patch dropped the combined domestic tally one unit overall to 759, according to the latest numbers from Baker Hughes Co. (BKR).
Oil-directed rigs in the United States fell five units to end the week at 591. The 759 active U.S. rigs as of Friday is up from 503 rigs running in the year-earlier period, according to the BKR numbers, which are partly based on data from Enverus.
U.S. land drilling was unchanged overall week/week, while the Gulf of Mexico count eased one unit lower to 13. A four-rig increase in directional drilling was offset by declines of three horizontal rigs and two vertical units, according to the BKR data.
The Canadian rig count dropped three rigs for the period, all oil-directed. The Canadian count ended the week at 205, up from 143 a year ago.
Changes by major drilling region included a two-rig decline in the Permian Basin, which saw its running total fall to 340. That’s up from 254 in the year-ago period. The Mississippian Lime doubled its count week/week, adding one unit to finish the week with two active rigs.
Counting by state, Texas saw a three-rig decline for the period, while Louisiana and Oklahoma each dropped one rig. One-rig gains were recorded in Alaska, Kansas, New Mexico and Utah, the BKR data show.
Natural gas spot prices at Henry Hub will average roughly $9/MMBtu during the fourth quarter before retreating to around $6 on average in 2023 amid rising domestic production, according to the latest projections from the Energy Information Administration (EIA).
Spot prices at the national benchmark averaged $8.80 in August, versus $7.28 in July, the agency said in the latest edition of its monthly Short-Term Energy Outlook, published Wednesday.
Meanwhile, the agency forecasted average Brent crude oil prices of $98/bbl in 4Q2022 and $97 in 2023. Potential supply disruptions and “slower-than-expected” production growth continue to create risks for higher prices, researchers said.
“As a result of high natural gas prices globally, we increased our forecast for oil consumption in 4Q2022 and 1Q2023 as electricity providers, particularly in Europe, may switch to oil-based generating fuels,” researchers said.
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