It’s a rite of summer in the oil patch. .That’s because drilling rigs are returning to the field after the seasonal spring breakup and marking the unofficial start of summer on the Prairies. .According to the latest numbers from the Canadian Association of Energy Contractors (CAOEC), there were 136 active rigs as of Friday, up from 102 on May 15 and 98 the week before. That’s out of a total fleet of 440 registered units.. Rig countRig counts are starting to rebound on the Prairies. .As expected, Alberta led the way with 88 followed by Saskatchewan with 26, BC with 19 and Manitoba with one. Two ‘others’ — the Hibernia and White Rose platforms off Newfoundland — are included in the totals..More than 70 of those were drilling for oil — which favours Saskatchewan — and 44 were searching gas, which is concentrated in the Alberta Foothills and northeastern British Columbia..It comes as the US land rig count declined for the fifth week in a row, to 696 and is near the lowest level since 2020. According to Baker Hughes, that’s down about 11% from the 2023 peak of 758 in January..Calgary-based drillers Precision and Ensign accounted for a combined 13.8% of all active rigs south of the border. Unlike Canada, the US doesn’t typically decline during the spring months, apart from states like North Dakota..The drop in gas drilling is being fuelled by lower prices for both oil and gas, but especially gas on both sides of the border. In Canada, narrower differentials between Canadian benchmark Western Canadian Select are keeping the oil numbers strong..To that end, US-sourced oil from Midland in West Texas — hence, WTI — is being included in European Brent prices for the first time, as of June 1..That’s because Brent is sourced from just five offshore fields in the North Sea off Scotland and Norway, whose combined output dipped below 700,000 barrels per day and is falling fast. Even faster, if the UK’s Labour Party has its way..Last week British opposition leader Keir Starmer vowed to block new oil and gas off Scotland’s coast if elected prime minister as part of his climate change plans — to which Scottish politicians responded ‘bullocks.’.Scottish Conservative leader Douglas Ross vented on social media: “First it was the SNP, now Labour want to abandon the north east and the thousands of jobs that support North Sea oil and gas.”.Sound familiar?.By contrast, US oil exports rose 700% since export restrictions were lifted 10 years ago to more than 4 million bpd — more than Canada’s entire production — with about 1.25 million bpd going to Europe and making it a more representative benchmark price. .Because WTI is cheaper than Brent — owing to supply and demand — it’s not clear if Brent will come down or WTI will go up. If it does, it would have a beneficial impact on the entire Canadian crude slate which is priced in US dollars, but sold in Canadian currency..On Friday, WCS at Cushing, Okla. was fetching $58.15 a barrel, up about $1.84. The differential, meanwhile, shrank to $13.83.
