Page 18 - NorthAmOil Week 34
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NorthAmOil PERFORMANCE NorthAmOil
US rig count rises for first time since March
US THE US’ active oil and gas rig count rose in
the week up to August 21 according to oilfield
services firm Baker Hughes, marking the first
increase in 24 weeks, or since early March.
The total rig count rose by 10 to 254 in the
week up to August 21. The number of oil-fo-
cused rigs actually increased by 11, but the num-
ber of gas rigs fell by one on the previous week
for a net gain of 10. In the week up to March 6
– the last week in which the overall rig count rose
– the count reached 793 rigs, and today’s figure since December, even though the overall level
is around 68% down on that number, illustrat- of rig activity in the basin was the lowest since
ing the severity of the industry downturn. The Baker Hughes started tracking basin-level
week-on-week decline rate has slowed signifi- numbers.
cantly in recent weeks as crude prices have sta- The patterns suggest that predictions made
bilised and energy demand has picked up since recently by Halliburton – the leading provider of
the worst of the lockdowns related to coronavi- hydraulic fracturing services – could be playing
rus (COVID-19). out. The firm has projected that fracking activity
Under these circumstances, shale drillers bottomed out in the second quarter of this year,
have been cautiously ramping up their activity while drilling activity will reach a bottom in the
again, including restoring curtailed output and third quarter before some modest recovery takes
resuming some – albeit limited – new drilling. place.
Indeed, the oil rig count increase last week largely Meanwhile, the US Energy Information
came from the Permian Basin, which continues Administration (EIA) has forecast that Permian
to dominate US production despite the regional Basin oil and gas production will rise slightly in
rig count plunging 70% from 418 rigs in total in September compared to August, even as an over-
mid-March to 127 as of August 21. The data also all decline across the US’ leading shale regions is
showed the largest weekly Permian rise in rigs projected to continue.
PROJECTS & COMPANIES
ExxonMobil dropped from Dow
US SUPER-MAJOR ExxonMobil will be dropped is seen as an indicator of the US stock market’s
from the Dow Jones Industrial Average (DJIA) performance. ExxonMobil has been a DJIA con-
prior to the start of trading on August 31. S&P stituent since 1928, when it was known as Stand-
Dow Jones Indices said in a statement this week ard Oil. Its removal leaves Chevron as the sole
that ExxonMobil would be replaced by Sales- energy company within the index.
force.com, a cloud computing firm. The composition of the DJIA has changed
ExxonMobil is one of three names to be rarely in recent years. Apple was added in 2015,
dropped from the DJIA, alongside pharmaceuti- following in the footsteps of Nike and Goldman
cal firm Pfizer and aerospace and defence manu- Sachs, both of which gained entry in 2013. How-
facturer Raytheon Technologies. Those are being ever, the majority of the companies within the
replaced in the index by Amgen and Honeywell index have been constituents for more than 10
International respectively. years.
S&P Dow Jones said the changes had been Unlike other S&P indices, where compa-
prompted by DJIA constituent Apple’s decision nies’ weightings are related to their market
to split its stock 4:1. The split will reduce the capitalisation, the DJIA is calculated accord-
index’s weight in the Global Industry Classifi- ing to its members’ share prices. ExxonMobil’s
cation Standard (GICS) Information Technol- stock had fallen in four of the six years prior to
ogy sector, S&P Dow Jones said, adding that the 2020 and is currently down another 40% in the
changes would help to offset that reduction. year to date, illustrating the recent weakness of
“They also help diversify the index by remov- commodities.
ing overlap between companies of similar scope “Those changes are a sign of the times
and adding new types of businesses that better – out with energy and in with cloud,” the
reflect the American economy,” S&P Dow Jones Independent Advisor Alliance’s chief invest-
continued. ment officer, Chris Zaccarelli, was quoted by
The DJIA is comprised of 30 companies and Bloomberg as saying.
P18 www. NEWSBASE .com Week 34 27•August•2020
