Onshore rig count drops sharply despite rising oil price - offshore count remains steadyNews // February 9, 2015
Gulf of Mexico activity showed a sharp decline last week, falling faster at this point than the drop seen 6 years ago in the 2008-2009 oil price crash. The Baker Hughes rig count showed a fall of 88 in the US onshore total, with this now having declined by 470 from a 2014 high of 1,876 in November down to 1,406 on 6 February 2015.
The GCA Indices for rig count and oil price are a comparison of today’s data with the average in the three month period April to June 2014. Changes this week places the GCA Index for US onshore rigs at 78, compared to 83 the previous week.
In contrast to the onshore rig count, GCA noted that the offshore rig count continues to remaining fairly stable, adding one more oil rig and closing up 2 index points to 88.
The GCA Index for Brent rose a strong 5 points during the week, to close at 53.
GCA executive director and senior strategic advisor Bob George said: "The fall in rig count accelerated this week, with a particularly large fall (37) in the Permian Basin. In contrast to the fall in rig count, it has been a roller coaster time for oil price with both Brent and WTI in the end gaining around US$10 per barrel from the price trading just before last week’s rig count was announced.
"For the first time this year prices climbed above their closing 2014 level. While sentiment on price may at the moment appear to be more up than down, what rises so quickly can just as quickly fall – as it did in the first few days of this year.
"Operators are likely to still remain very cautious and seek greater stability before changing plans so recently put in place.”