US energy producers operated the lowest number of oil and natural gas rigs ever as the novel coronavirus pandemic and plunging oil prices forced the closure of rigs in three top oil- and gas-producing regions since mid-March, the Energy Information Administration (EIA) said in a report on Wednesday
WASHINGTON (Pakistan Point News / Sputnik - 20th May, 2020) US energy producers operated the lowest number of oil and natural gas rigs ever as the novel coronavirus pandemic and plunging oil prices forced the closure of rigs in three top oil- and gas-producing regions since mid-March, the Energy Information Administration (EIA) said in a report on Wednesday.
"Drilling in oil-focused plays has declined as the impact of mitigation efforts for the 2019 novel coronavirus (COVID-19) have caused declines in petroleum demand and the resulting fall in crude oil prices," the report said. "In mid-March, the Permian region had 405 operating rigs. By May 12, that number had fallen by 57 percent to 175 rigs. The Eagle Ford and Bakken regions saw similar declines in their rig counts, of 64 percent and 69 percent, respectively, in that time."
The Permian region is located in southeastern New Mexico and western Texas, the Eagle Ford region in southern Texas and the Bakken region in Montana and North Dakota.
The report cited the Baker Hughes May 12 rig count of 339 rigs operating in the United States as the lowest ever recorded in a data series dating back to 1987.
The rig count began to decrease sharply in mid-March. The quick reduction in active rigs reflects the sudden loss of petroleum demand related to coronavirus-related mitigation efforts that also resulted in recent increases in the amount of crude oil placed in storage, the report said.
Similarly, natural gas rig activity has decreased along with the natural gas price. However, the decrease in natural gas prices has been over a longer period than oil prices; natural gas prices were already at multi-year lows in early 2020, the report also said.
Record-high dry natural gas production in November 2019, low demand because of warm weather and relatively small withdrawals from storage during the winter heating season (November 1-March 31) have led to a sustained decrease in the natural gas price, the report added.
