Oil rigs are falling fast across US

The chart explains the fall in active rig count in Texas, top oil producing region in US.

• US shale oil production is expected to see a net gain of just 1,000 barrels/day in April, according to the US Energy Information Administration. The future investments are getting hold at a much faster rate than was previously estimated.

• Number of active rigs has fallen sharply from above 1500 to 922, just within a few months. Texas which is heart center of crude oil production saw falls in rig count by 29% in February from January level.

• As per latest estimate, only Permian region will show a significant production net gain in April, at 21,000 barrels/day, compared. Previous estimate was a gain by 20,000 barrels/day in March alone.

• Producers are focusing on more productive and cost effective wells for now and some industry specialist expressed concern that oil projects close to a trillion dollar have been shelved across world.

• US producers are still producing more than 9 million barrels a day, still very high and capable enough to fill up the oil storage. US crude oil stocks hover around 450 million barrels, highest since 1930.

• However, month-on-month increase in the four-week moving average dropped steadily from 229,000 barrels/day in September to 55,000 barrels/day in January.

As of current, the supplies of global crude oil still remain at large which is expected to keep pressure on crude oil on the downside, however shelving of crude projects might show concerns over future supply.

WTI is currently trading at $48.4/barrel up 0.27% for the day.