In a sign that the US shale boom may be running out of steam, the US rig count dropped by four in the week ending October 6.
There are now 936 oil and gas rigs in the US. While this is still 412 more than at the same point last year, the trend seems to be shifting direction. Some 137 rigs came online in the first quarter this year, but this growth slowed in the subsequent quarter. A drop of six rigs was then recorded in the third quarter, and now the fourth quarter has kicked off with a drop too.
Faltering oil prices may be responsible for the drop in rigs. Unlike with conventional oil production, where a single break-even price can be calculated for a field, the break-even price for shale oil can vary greatly, even within a single play. While ExxonMobil, whose industrial lubricants can be bought through Mobil UK stockists, claims its Permian assets will be profitable even at $40 a barrel, other companies may use different practices and technologies, or they may have less productive prospects.
Despite the recent drops in the rig count though, US oil production continues to rise. Just before the end of September, production reached 9.561 million barrels a day, which is close to the 1970 all-time production record of 9.6 million barrels a day. Barring a short period of disruption caused by Hurricane Harvey, nearly every week has seen a new high in US oil production.