“What is dead may never die.”
That is the famous mantra of House Greyjoy from the highly acclaimed fantasy drama TV series Game of Thrones.
Indeed, this applies to the resurrecting US shale industry as the number of rigs drilling for oil and gas in the country rose from the ashes, recording a five-year peak on Monday report, after an attempt from Saudi Arabia to kill the US oil boom.
Back to Life
According to figures from the Baker Hughes, an oilfield services company, the country’s number of oil and gas rigs added 35 to 694 last week, its highest one-week surge for more than five years, proving that tables have been turned now in the oil market.
The huge jump in the rig counts erased the unexpected decline for six weeks, capped by a 70% rise in the total number of drilling for oil and gas, equivalent to 290, since May 2016 while the number of rigs targeting oil-bearing formations added up 235 or more than 70%.
US shale once became a victim of Saudi Arabia’s move not to cap output in 2014, where the global market was flooded, which in turned hurt US shale producers as the attempt by one of the world’s biggest oil producers contributed to oil glut resulting to a collapse in oil prices.
But when the members of the Organization of Petroleum Exporting Countries insisted limiting production output in late November, crude prices jumped sharply from below the $30 level two years ago to above $50 mark in the final months of 2016, which gave US producers enough breathing room to get back to work.
According to Wood Mackenzie, an industry research firm in US, the energy sector spending in the country will expand by 23% this year as major companies will take advantage on rising prices.