US oil and gas rig count slips for third straight week

The number of rigs extracting crude oil and natural gas in the US slumped by 12 to 759 last week, Baker Hughes reported.

PHOTO: Oil fracking drill rig in the Permian Basin in West Texas, US. Getty Images

It is the lowest rig count since September last year and the largest single weekly drop in the number of oil and gas rigs since June 2020. Fears of an impending global recession pushed the dollar higher on Friday, making dollar-denominated oil more expensive and sending brent crude to an intraday low of $79.62/bbl.

After reporting record profits on selling oil and gas, US producers have flagged concerns around declining well productivity. Soaring inflation has also raised labor and material costs, forcing some oil and gas companies to rein in drilling activity. Meanwhile top oil producers like ExxonMobil and Chevron have prioritised shareholder returns over production growth after years of investor pressure.

The number of oil drilling rigs in operation in the US fell by 10 to 599 last week, while gas rigs fell by two to 158. The rig count in the Permian Basin in Texas - the biggest US oilfield - fell by three units to 354.

However, the total US oil and rig count was up by 146 rigs, or 24%, from a year earlier. US producers were then operating at reduced rates while oil demand was still on a recovery from the Covid-19 pandemic.

By Debarati Bhattacharjee

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