SMU Energy Analysis through December

Spot Prices

The spot market price for West Texas Intermediate (WTI) has risen since early-November, at $46.04 per barrel as of Dec. 11. Natural gas at the Henry Hub in Oklahoma was priced at $2.44 per MMBTU (million British Thermal Units) as of last week, down from the annual-high previously reported in late-October.

Rig Counts

The decline in active U.S. rigs drilling for oil and gas flattened in late-August and has continued to improve each week since. Last week there were 338 active drill rigs, comprised of 258 oil rigs, 79 gas rigs and 1 miscellaneous rig, according to the latest data from Baker Hughes (Figure 2). While up over recent months, active drill rigs are down 57 percent from the March peak of 793 rigs, just prior to the coronavirus shutdowns. The table below compares the current U.S., Canada and International rig counts to historical levels.

U.S. oil and gas production are heavily concentrated in Texas, Oklahoma, North Dakota and New Mexico, which have all seen declines of 49 to 78 percent since mid-March. The most active state, Texas, now has 154 active rigs in operation, the highest level seen since early May 2020. Texas rigs had plummeted from 407 in mid-March to 97 rigs in mid-August (Figure 3). 

Stock Levels

U.S. total crude oil stocks in 2020 had surged from mid-March through July, then steadily declined through October. The latest level is 1.138 billion barrels as of Dec. 11, up from 1.066 billion barrels at the beginning of the year (Figure 4).