US oil and natural gas drilling rigs
- Oil rigs unchanged at 512
- Gas rigs down 1 to 114
- Oil rigs down 16% from the peak
If I’m OPEC+ and looking at this, I feel totally in control. There’s no surge of US production coming to counter OPEC cuts.
Some notes from John Kemp:
- Based on the historical record, after prices peak it takes on average 5 months for drilling to turn down and 12 months for production to decline.
- Following the drilling peak, Lower 48 output is likely to peak in the third quarter of 2023
- Flat or falling Lower 48 production will contribute to a tightening global oil market during the final four months of 2023
It’s no wonder WTI crude is above $85 today. It could blow out higher next week if OPEC gets aggressive.