Oil Drilling Plunges the Most in Two Years With Shale Producers Pulling Back

May 19, 2023 by Bloomberg
image is BloomburgMedia_RUX0W2T0G1KW01_22-05-2023_12-00-08_638203104000000000.jpg

A natural gas flare burns near an oil pump jack at the New Harmony Oil Field in Grayville, Illinois, US, on Sunday, June 19, 2022. Top Biden administration officials are weighing limits on exports of fuel as the White House struggles to contain gasoline prices that have topped $5 per gallon.

Oil drilling is collapsing in the US as producers rein in output, mirroring a recent plunge in rigs searching for natural gas.

Rigs targeting crude declined by 11 to 575 this week, according to data released Friday by Baker Hughes Co. It’s the biggest weekly drop since September 2021. The pullback was led by the Permian Basin of West Texas and New Mexico, the most prolific US shale play, where four rigs were dropped.


Shale explorers, particularly closely held companies, are responding to lower oil and natural gas prices by keeping a lid on spending growth and in some cases cutting their budgets until crude prices climb again. The drop in oil rigs follows last week’s retreat in natural gas drilling by the fastest pace in seven years.


©2023 Bloomberg L.P.

By David Wethe

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