RBN Energy: understanding Waha -- Part 3.
Misreading important of rig counts: John Kemp is misreading the importance of rig counts, apparently not understanding US shale; fracking; re-fracks; DUCs; wells on inactive status; the incredible efficiency and effectiveness of the new rigs being used in the US; and, the improved completion technology. All things being equal, completion strategies matter a whole lot more than number of rigs. John Kemp's three tweets on the subject today:
U.S. shale firms (and OPEC) really need the U.S. oil rig count to stabilise to avert a further decline in oil prices ... dangerous to read too much into one-week change in the rig count given the volatility in the series .... but it is the first sign the rig count might, just might, stabilise or even fall in the weeks ahead, which would help put a floor under oil.Really? It's still about rig count? North Dakota Bakken is producing more oil today than it did in 2014, and as one can see from the chart above, 191 rigs back in 2014 vs a paltry 59 rigs today.
-1: Yes, that's the number that has John Kemp so excited; from his tweet:
- Baker Hughes U.S. rig count fell -1 to 940 this week (oil rigs -2 to 756, gas rigs +1 to 184) (first decline in oil rigs since early January, 2017)