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Oil and gas producers in Texas added a handful of rigs this week even as oil markets remain chaotic and some investors fear a recession is on the way.
Overall, the number of operating drill rigs rose nationally by four to 763 this week, according to oil field services company Baker Hughes. Oil and gas companies in the U.S. have added 251 rigs in the past year, a 49 percent increase from the 512 operating at this time last year.
Texas led the way adding five rigs this week, while Louisiana added one. The count in New Mexico and North Dakota both ticked down by one.
This week’s count comes just a few days after the Energy Department’s monthly production forecast showing expected increases in both oil and gas output in October. Oil production is expected to increase another 132,000 barrels per day next month in the U.S. for a total of 9.1 million barrels per day. The majority of those barrels, 5.4 million, will come from the Permian Basin of West Texas and New Mexico.
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While the increasing production shows a strong rebound from the pandemic lows when drilling nearly came to a standstill, this year’s numbers are still below the 12.2 million barrels per day produced on average in 2019 in the U.S.
Meanwhile, concerns of a looming recession and renewed COVID lockdowns in China have been putting downward pressure on prices. Meanwhile Moscow’s war in Ukraine and demand outpacing tight supply, especially in places like Europe, have sent prices upward.
This week the price of West Texas Intermediate, the U.S. benchmark for crude oil, stayed in the $80s, relatively lower than the $100 per barrel oil companies were collecting earlier this year. On Friday afternoon WTI was trading around $85 per barrel.
On Wednesday, the Energy Department reported for the last four weeks gasoline demand is down 9 percent compared to the same time period last year.
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