Horizontal oil rigs stabilized this week
Rig counts
Total oil rig counts were +2 to 515
Horizontal oil rig counts were +0 to 459
The Permian horizontal oil rig count was up 1
The Canadian horizontal oil rig count continues to lag, down 24 from last year.
The US horizontal oil rig count is falling at a pace of -2.0 / week on a 4 wma basis.
This number has been negative for 41 of the last 42 weeks
Frac spreads rose, +12 to 264. Again, this is not sustainable without rigs additions.
DUC inventory fell back to 16.4 weeks
We are approaching the moment of truth for the shale industry
For the last several months, the breakeven to add rigs has averaged around $77 WTI
At writing, WTI was $91
Lagged oil prices for the next eight weeks are consistently above $80 WTI, and at times well into the mid-$80s
As a result, we should in theory see at least modest life in the horizontal oil rig count
If we do not, it will be further evidence that the underlying problem is a lack of drilling opportunities, not unfavorable economics