Source: Trey Cowan, Senior Industry Analyst, S&P Global Platts Analytics, May 17, 2018

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 Weekly Market Pulse

The US active land rig count fell by five compared to last week, reaching a total of 995 actively drilling for the week ending May 11. This shift was made up of offsetting movements between oil rigs and gas rigs.

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Oil rigs experienced a week on week decline of 7 while gas rigs rose by 2 over the same time frame. Similar to the drops in both the total and oil rigs, the horizontal rig count fell by four rigs versus the prior week to a total of 867 actively drilling.

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Crude oil prices have made some notable moves since the beginning of the year. The WTI Cushing price has risen by nearly $11/barrel since the year opened, primarily driven by strong global demand, tighter inventories, and geopolitical tension. The bulk of this increase has taken place over the past month and a half, with WTI gaining more than $8/barrel since the start of April.

That said, WTI at Midland has been a different story. The outright price at Midland is actually down $2/barrel since the beginning of the year, with the discount to WTI at Cushing reaching as wide as $13/barrel during early May. Midland’s discount this month likely indicates an increasingly tight supply/demand environment in the Permian basin.

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For the complete analysis and more general trends on top operators by play, market share of drilling contractors and other drilling data check out the Platts RigData RADAR report.  Email customerservice@rigdata.com or call 800-371-0083 to request a sample copy.

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