• This week marks a psychological turning point in the oil cycle
• Total oil rigs rose, +2 to 862
• But horizontal oil rigs declined, -1 to 765
• Horizontal oil rigs have gone exactly nowhere in the last 11 weeks at WTI averaging above $68 / barrel.
• Under $68 WTI, the horizontal oil rig count is unlikely to rise further (although oil production will continue to increase at current rig numbers).
• Investors are beginning to appreciate that reviving rig count growth will involve moving to the next level of oil prices, and the back end of the futures curve is swinging up accordingly.
CR note: This graph shows the US horizontal rig count by basin.
Graph and comments Courtesy of Steven Kopits of Princeton Energy Advisors LLC.