Rigs and Spreads
Rigs counts saw their best week since last November
Total oil rig counts: +4 to 501
Horizontal oil rig counts: +4 to 449
The Permian horizontal oil rig count: +1
The Canadian horizontal oil rig count saw a bit of life this week, +8 to 114, but still 26 below this week last year
The US horizontal oil rig count is falling at a pace of -2.5 / week on a 4 wma basis.
This number has been negative for 45 of the last 46 weeks
Frac spreads rose, +3 to 263
As earlier, this is still too high for the current rig count, as DUCs continue to fall.
To hold DUCs steady, the spread count must fall by 27
US Crude and Condensate Production Revisions
The most interesting news this week was EIA revisions to US crude and condensate production.in both the monthly STEO and weekly PSR
US crude and condensate (C+C) production has been revised up 400 kbpd in the October STEO.
This changes the production narrative, as it shows almost unbroken growth from Jan. 2022 to Sept. 2023, with growth averaging about 1 mbpd / year despite falling rigs counts since last December
Since August 2022, a gap had appeared between US C+C production as reported in the weekly PSR and the monthly STEO (bottom graph).
As a result of this gap and the upward revision per the monthly STEO, the weekly C+C numbers have been revised up 1 mbpd in the last two months, bringing the PSR and STEO C+C numbers back into alignment (red circle, graph below)
This is a very large revision, but sometimes that's how it goes. It does make the data harder to interpret.
The latest STEO (top graph) also shows US C+C production peaking last month.
Given the strength of trend to that point, a near term decline would seem less likely
Therefore, an upward revision of Q4 C+C numbers seems quite plausible
On the whole, however, the EIA sees US production peaking, which seems probable given on-going declines in rig counts, but timing is uncertain.