Shale drillers extend boom amid oil glut – Shale drillers boom oil glut - Arhive

Shale explorers put more oil rigs to work last week, extending a drilling boom that’s boosting US production and undermining Opec’s efforts to reduce a global glut.
Rigs targeting crude increased by two last week, bringing the total to 765, according to Baker Hughes data reported on Friday. It’s the second week of renewed growth after drillers snapped a 23-week stretch of advances at the end of June. Shale explorers have been the driving force behind a surge in US production, more than doubling the rig count from a low of 316 in May 2016.
The industry is counting on rising demand to come to its rescue. West Texas Intermediate rose more than 5% last week on forecasts for strengthening global oil demand and a report that American inventories shrank. But the US benchmark has lingered below $50 a barrel since May amid rising production from Opec and non-Opec producers.
“Negative sentiment and scepticism persist as Opec has underwhelmed by only extending, not deepening, cuts into 2018 while production remains elevated,” Vincent G Piazza, senior analyst for US oil and gas, wrote in a research note on Friday.
Three of the US big four basins expanded last week, led by an addition of four rigs in the Permian play in West Texas and New Mexico. The Eagle Ford basin in Texas was the only one to see a decline, pulling back five rigs for a total of 71 rigs working there.
The International Energy Agency raised its forecast for demand growth on Thursday, despite concerns that expanding production from the Organisation of Petroleum Exporting Countries is thwarting its own efforts to reduce global supplies. Kuwaiti Oil Minister Issam Almarzooq said on Monday that Libya and Nigeria, which are exempt from the agreement to curb production, may be asked to cut their output now that their oil industries are recovering from prolonged disruptions.
US crude production grew by 59,000 bpd as activity in Alaska recovered, according to data from the Energy Information Administration.
While WTI gained more than $2 last week, rising above $46 a barrel, it’s still 14% down for the year and less than half its value three years ago. The middling prices may lead drillers to slow the expansion in coming months.
“I think we need to see a little bit more of a trend,” Brian Youngberg, energy analyst at Edward Jones & Co, said by phone on Friday.
Pumpjacks and other infrastructure for producing oil dot fields outside of Watford City, North Dakota, US. Rigs targeting crude increased by two last week, bringing the total to 765, according to Baker Hughes data reported on Friday.
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