Permian basin drillers drive largest U.S. shale rig surge in nine months

David Wethe, Bloomberg November 19, 2023

(Bloomberg) — Drillers in the U.S. shale patch are again trying to rebound from slumping activity, this time expanding the oil rig count by the widest margin in nine months.

The number of U.S. rigs drilling for oil rose by 6 to 500, the biggest weekly jump since late February, according to data released by Baker Hughes Co. on Friday. The boost was led by explorers in the Permian Basin of West Texas and New Mexico, where four oil rigs were added. That’s the biggest increase in the region since mid-March.

Drilling-rig activity has shown signs of coming to life in the recent past, only to drop to new lows this year. Views from the biggest onshore rig contractors during the latest round of earnings calls indicated that a bottom in activity should emerge and that drilling growth should return in the final three months of the year.

Oil output from the Permian Basin is set to expand through the end of this year, according to a report this week from the U.S. Energy Information Administration. It’s a more bullish forecast from the government agency compared with a month earlier.

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