Crude oil prices continued to climb in April, reaching their highest point since the summer of 2023. However, when the averages for May are compiled, oil prices are expected to lose some ground, dipping back under $80/bbl in some cases. Among the three major crudes, Brent jumped 5.3% higher, to average $89.94/bbl. WTI averaged $85.35/bbl for a 5.0% gain, while Dubai Fateh increased 4.9%, to average $90.87/bbl.
On the production front, U.S. oil output remained at a high level in February, averaging 13.2 MMbpd, up 5.0% from the same month a year ago. Worldwide oil output was up during April, averaging 600,000 bpd higher than the 2023 average.
U.S. natural gas prices recovered only slightly in April, up $0.20/MMbtu from a record-low $1.49/MMbtu that the EIA recorded in March. However, the 12-month running average still declined, going from $2.41/MMbtu in March to $2.36/MMbtu in April. Following the dramatic price spikes and drops of first-quarter 2024, the current outlook for possible gas price recovery looks to be slow.
U.S. drilling activity remained largely the same in April, with no change to the total rig count average from March (625 units). California halved its previous six-rig count in March, losing three onshore rigs, while Louisiana’s number dipped by six—four onshore and two offshore rigs. Texas posted a net gain of two rigs, while New Mexico and Oklahoma picked up one, each.
Drilled but uncompleted. The monthly reduction of U.S. DUC numbers continues to decline slowly, as does the y-o-y decline. In April 2024, the DUC count rested at 4,510, down 12 wells from the March level and 813 less than the April 2023 level. The Bakken and Eagle Ford continue to trend downward, with identical 41.7% y-o-y declines, joined by the Niobrara’s 26.2% drop. The Anadarko, Appalachia and Permian regions had more modest reductions, with 9.1%, 5.2% and 5.2% declines, respectively. The Haynesville continues a trend of adding DUCs (+7.6%), though not substantially enough to offset the overall y-o-y decline in DUC count (-15.3%).
International rig count. Drilling activity increased slightly in March, with a total international rig count of 1,181, an eight-rig increase from February’s numbers. The increase is largely thanks to new offshore additions in the African, Latin American, and Asian-Pacific regions—unsurprising, considering recent discoveries offshore Namibia and Guyana. WO
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