With oil prices continuing to climb, rig counts have also risen in lock step, though production remains well below pre-pandemic levels.

The benchmark West Texas Intermediate crude is up nearly 8.7% over the week to US$72.19 per barrel while the broader Brent crude is up 7.4% to US$73.68.

Higher oil prices translate to better margins, which are especially important for high cost US shale oil, and that is reflected in the increase in the number of operating oil and gas rigs.

According to Baker Hughes, the number of operating oil and gas rigs in the US rose by 7 in the week ending 16 July 2021 to 491, well above the 240 rigs operating during the same time last year.

The majority of these rigs were operating in the Permian Basin, which is also the most prolific tight and shale oil, with 242 rigs operating in the week ending 16 July 2021.

This is up by four from the previous week and 116 rigs from the same time the last week.

Meanwhile, Primary Vision’s fracture stimulation spread count increased by another four to 242 frac spreads – the equipment used for the fracture stimulation of shale wells.

It noted that the current rate of increase will see about 255 spreads in use by the end of August.

By way of comparison, about 388 spreads were operating on average during 2019, falling to just 154 spreads in 2020 due to the impact of the COVID-19 pandemic.

US oil production is also holding steady at about 11.4 million barrels of oil per day, which the Energy Information Administration says is well below the 13.1MMbpd peak seen in February 2020.

However, Primary Vision says that a comfortable goal for 2021 is to hit production of between 11.7MMbpd to 12MMbpd, which is what it believes the market can tolerate.