The oil and natural gas rig count fell further last week, falling to just 918 or ~55% below its 2008 peak. This lower drilling activity seems to guarantee lower production within a few weeks that may bring balance to the fuel market. Another development was the price of gasoline passing diesel – as I wrote would happen by this weekend.
Rig Count Yet to Find Bottom
The number of active rigs drilling for oil and natural gas fell by 10. The rig count for oil fell 4.7% and for natural gas fell .3%. Even though prices for both fuels seem to have bottomed, producers aren’t taking a chance with extra exploration expenditure. If we don’t see rig counts stabilize shortly, a dramatic drop in production will take place in the months ahead.
Gasoline Price Now Higher Than Diesel
This morning, the national average pump price passed $2.30 and its alternative diesel stayed at $2.29 per gallon. The recent quick rise in gas prices should begin to moderate in the mid-$2.30s unless some big bullish news developments take place in the week ahead. The price hikes of the last month and the growth of China’s vehicle market (passing the US for top global market) are crucial reminders that efficiency should be a top priority for consumers.
I’ll keep you up-to-date on oil and gas prices and their impact on climate mitigation as they develop in the months ahead.
Onwards in the Sustainable Energy Transition-
Tags: China vehicle sales, efficiency, gas prices, Oil, rig count