For the first time this year, the number of oil rigs operating in the U.S. went up, according to oil field services company Baker Hughes. But what does that mean for the largest oil producing state in the country?
For Texas, and the U.S., the increase is more of a bellwether, but after months of declines it could signal a stabilizing of the U.S. oil markets. According to Baker Hughes, there was a net gain of only three rigs – a loss of nine gas rigs was offset by the addition of 12 oil rigs.
Star Spencer is a senior editor for Platts Energy Information Service. She says it looks like the industry is betting that U.S. crude has settled around $60 a barrel.
“They’ve been able to push down the break-even price at which their operations are economic,” Spencer says. “And they feel like they're more comfortable with maybe adding a rig here or there because they're drilling their best plays.”
“Play” is just another word for oil field, by the way. If the industry continues to add rigs, Spencer expects many of them will be in Texas, adding that there’s nothing in the numbers to suggest a quick return to an oil boom like the state experienced the last several years.
Contrary to earlier, more optimistic projections, some analysts now think the price of U.S. crude will linger around $60 a barrel through the end of the year.