New data from oil field service company Baker Hughes reveals that the number of active drilling rigs in the United States rose by seven in the week ending mid-June.
The US oil industry appears to be gradually returning to pre-pandemic levels of production, despite many operators prioritising investor returns over growing production capacity. At the same time last year, there were 470 active rigs in the US, and there are now 740. Of the newest rigs, four are for oil production and the remainder are for gas.
The Permian Basin has long been a focus of both energy giants like BP, which also makes industrial products like the Castrol Hyspin spindle oil, and smaller operators, but the rig count there remained stable, with the additional rigs appearing in other shale areas like Eagle Ford.
The increasing rig count also seems to be reflecting in increased production, with the Energy Information Administration reporting that for the week ending June 10, oil production rose to its highest level since April 2020 and the onset of the COVID-19 pandemic at 12 million barrels per day (bpd). Prior to the pandemic, US oil production had reached a record high of 12.3 million bpd.
While greater US crude oil production will help offset the disruption resulting from the situation in Ukraine, the oil markets are expected to remain relatively tight. At the time of writing, Brent Crude was trading at around $112 per barrel, somewhat lower than the recent peak of $123 in early June.