The relationship between rigs and energy production disconnected in 2008

The relationship between rigs and energy production disconnected in 2008. Rig counts have long been used to help predict future oil and gas production. The total U.S. rig count is down 30 percent since October, an unprecedented retreat. The theory goes that when oil rigs decline, fewer wells are drilled, less new oil is discovered, and oil production slows. But production isn't slowing yet. In fact, last week the U.S. pumped more crude than at any time since the 1970s. The headline U.S. oil rig count offers little insight into the outlook for U.S. oil production growth, Goldman Sachs analyst Damien Courvalin wrote in a Feb. 10 report. We've seen this before, in natural gas... Why is this happening? Producers are getting better at blasting oil and gas out of the ground. The rigs that are being idled tend to be the older machines, and the most effective rigs are being concentrated on the most-productive oil fields. Eric Kuhle, a Wood Mackenzie analyst says: The relationship between rigs and energy production disconnected in 2008. Full article: (VIEW LINK)


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