The number of operating drill rigs nationally rose by two to 752 this week, according to oil field services company Baker Hughes. Oil and gas companies have added 273 rigs in the past year, a nearly 57 percent increase from the 479 operating at this time last year.
Meanwhile, the price of West Texas Intermediate, the U.S. benchmark for crude oil, fell to around $97 per barrel on Wednesday as investors fear a looming recession. The price went back up Thursday to close at $102.73 per barrel, partially due to reports of a continued fall in fuel inventories.
Oil prices were already recovering from the pandemic this year, but Moscow’s invasion of Ukraine pushed them up even more as countries sanctioned Russian oil and gas, tightening global oil supplies that already couldn’t keep up with surging demand from pandemic recovery.
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Experts say that while companies are increasing output, they’re staying with already planned increases instead of rapidly increasing drilling. Investors have been pushing companies to increase shareholder returns and exercise more discipline when it comes to spending.
Companies in Texas are currently operating 361 rigs, up one from last week, and a more than 60 percent jump from this time last year when only 224 rigs were operating in the state. This week’s rig was added in the Permian Basin, which spans parts of West Texas and New Mexico.
Analysts say the Permian is set to hit record production of more than 5 million barrels per day this year. Investment in oil and gas production is also expected to increase by 20 percent globally this year.
