The last several months have seen some significant events in energy market. In particular, both OPEC and non-OPEC producers cut deals to reduce production in December. Oil prices subsequently rose. Despite this, though, there has been admirable compliance. This says much about the resurrected OPEC, because compliance in the past has been defined by those who cheated the least.
When I wrote last, at the start of October last year, the U.S. combined oil and gas rig count had only crept up over the previous four months. Through October and November, however, the count started to pick up, and the pace quickened noticeably through the end of January this year. Even more importantly, outlooks from both operators and E&P companies suggest that an even steeper increase could be in the offing.
If the pace continues, we may actually have a rebound that could initiate a new drilling boom.
U.S. Oil and Gas Rig Count
Source: Baker Hughes1
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