Calls for new oil supplies are being answered by more producers as U.S. prices stay above $100 per barrel, propelled by Russia’s invasion of Ukraine
. Prices are up 70 per cent year-over-year, offsetting worries of a second pandemic price drop and inflation.
“U.S. oil prices are $30 to $40 per barrel higher” than late last year and “rig counts are becoming more responsive” to that price movement, said AJ O’Donnell, a director at East Daley Capital. Shale firms also are tapping drilled-but-uncompleted wells, standbys that can be quickly added to production. The number of such wells fell in February to 4,372, the lowest since 2013, U.S. data shows.
Private companies have ramped up activity as major oil companies focus on cutting debt and increasing shareholder payouts. Publicly traded companies vowed to improve returns after years of overspending. Hess Corp recently said it would strongly consider moving up the timeline for adding a fourth rig to its North Dakota operations if prices remain elevated.
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