US drilling activity continues to outpace rest of the world
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Published: Monday, 03 July 2017
The boom in US oilfield activity is not being matched by oil producers in other markets, the latest Baker Hughes rig numbers show.
The divergence in fortunes between the oil and gas sector in
North America and rest of the world is growing starker, as
Middle Eastern drilling stagnates even as rig counts in the
US soar.
In its May survey of international rig numbers, oilfield
services group Baker Hughes saw the world rig count, excluding
North America, at 957.
This leaves the total of active rigs, a proxy for oilfield
activity and of demand for oilfield minerals, up by one rig
from last month and only two from the same time last year.
The number of active rigs is flat in the Middle East, up by
two in Latin America, and down by seven in Africa.
In North America, by contrast, the number of active rigs has
soared, reflecting the fact that US producers are much more
able to ramp up production, even only a slight increase in
oil prices.
But benchmark West Texas Intermediate crude oil slipped
below the $50/barrel mark at the beginning of June, which a
number of oilfield service companies have identified as a key
price point to make US production profitable.
Oilfield activity is a key driver for demand of a number of
minerals, including barytes (barite), bentonite, and frac
sand, although the pickup in demand for some of those
minerals has lagged.
A US barytes producer and trader told IM
that some of the new activity involves returning to
mothballed projects, meaning that less of the weighting agent
is needed than on a fresh project.
And a bentonite producer told IM that many
operators are currently favouring oil-based muds, rather than
water-based, reducing demand for the clay.