Crude prices inched up in January, as the prospect of increased Chinese demand offset the apprehension that inflation and steadily rising interest rates would trigger a global economic recession. WTI climbed 2.2%, to average $78.12/bbl in January, with Brent trading at $82.50/bbl, up 2% compared to December. U.S crude output increased 300,000 bopd to average 12.3 MMbopd in January. Saudi Arabia’s production was essentially unchanged, with the kingdom averaging 10.45 MMbopd, while output from Russia was up 50,000 bopd to 9.85 MMbopd.
In the U.S., natural gas prices at Henry Hub have plummeted $6.32/MMBtu since August ($8.81/MMBtu), to average just $2.49/MMBtu during the first two weeks of February, a decline of 72%. The dramatic price drop, despite the destruction of the Nord Stream subsea gas pipelines in September 2022, forced the EIA to revise its 2023 HH gas spot price to $3.40/MMBtu, down 50% from last year and 30% less than their January STEO prediction.
U.S. rig count. With stability returning to global crude markets, U.S. drilling was essentially unchanged in January, as the rig count dropped just eight rigs to average 772 in January. The overall Texas count was up seven rigs to 379, with the Permian’s District 8 gaining seven rigs (212). Operators in District 1 (Eagle Ford) upped the rig count to 31, three more than tallied in December. The largest losses were reported in Oklahoma, down four to 65 rigs, with Louisiana dropping three to average 65 in January.
Drilled but uncompleted. The DUC count continues to build at an alarming rate, especially in regions dominated by natural gas production. In January 2023, there were 4,671 DUCs in the U.S., 205 more than the 4,466 tallied in January 2022. Large y-o-y gains were reported in the Haynesville (637, +73%), Niobrara (561, +63%) and Appalachia (633, +17%) regions. These three regions account for 61% of the total U.S. DUC count.
International rig count. International activity has increased steadily since May 2022 and has not experienced excessive rig count swings, with the exception of Canada. In December, rigs working outside the U.S. averaged 1,055, 56 fewer than the 1,111 running in November. The decrease was attributed mainly to a 46-rig drop in Canada.
- Applying ultra-deep LWD resistivity technology successfully in a SAGD operation (May 2019)
- Adoption of wireless intelligent completions advances (May 2019)
- Majors double down as takeaway crunch eases (April 2019)
- What’s new in well logging and formation evaluation (April 2019)
- Qualification of a 20,000-psi subsea BOP: A collaborative approach (February 2019)
- ConocoPhillips’ Greg Leveille sees rapid trajectory of technical advancement continuing (February 2019)