US Oil Drillers Hold Back Despite Near $85 WTI
The US oil drilling sector has undergone significant changes in its response to price signals. Unlike in the past, when rising commodity prices automatically triggered increased upstream spending, current data indicates a more nuanced approach.
According to Baker Hughes and the U.S. Energy Information Administration, the total active U.S. rig count stands at 588, up by 48 rigs compared to the same point last year. However, the week-on-week story is less impressive, with only one additional oil rig in the most recent reporting period.
The Permian Basin, which accounts for approximately 44% of all active oil rigs, added two rigs but remains at a level just above its year-ago count. Meanwhile, Eagle Ford's recovery of 10 rigs is more notable, potentially driven by improved condensate economics and infrastructure improvements in South Texas.
A key indicator of production intentions is the Frac Spread Count, which measures hydraulic fracturing crews actively completing wells. This figure climbed to 198 active crews last week but remains relatively stable, suggesting producers are holding back from aggressively capitalizing on elevated prices.