Rigs Up, Sentiment Down in U.S. Oil Patch

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Though crude oil prices ended the week below the point at which U.S. shale drillers can break even, industry data showed a modest increase in upstream activity.

West Texas Intermediate (WTI), the U.S. benchmark for the price of crude oil, ended the seven-day period ending October 17 down about 7% to average $58.04 per barrel. The U.S. shale sector needs about $60 per barrel to at least break even, and industry respondents told the Federal Reserve Bank of Dallas last month that times were lean.

Most--about 78%--said they expected slight delays in their investment decisions, because of either the uncertainty about the direction of crude oil prices or the cost of producing oil.

Nevertheless, recent data show the industry moving ahead, with upstream activity on the rise over the seven-day period ending October 17. Oilfield services firm Baker Hughes (Houston, Texas) reported U.S. and Canada combined to add six rigs, with eight deployed internationally.

In the U.S. market, much of the gains were reported in New Mexico, which hosts parts of the Permian Basin, the largest oil producer and second-largest natural gas producer in the Lower 48 states.

New Mexico's addition of two rigs during the week marked a 2% increase from the prior week. Oklahoma, which sits on the Anadarko Basin, added two new rigs, though that was a 5% increase for a total of 42 on the week. Colorado's rig count climbed by one to 15, meanwhile, marking the highest level since April 2024.

Lower crude oil prices are still an impediment for the industry. The U.S. federal government, however, reversed course this month by pointing to a net increase in crude oil production next year, after setting a record at 13.64 million barrels per day (BBL/d) in July.

But Lorenzo Simonelli, the chief executive officer at Baker Hughes, warned its annual profits could take a $100 million hit due to U.S. tariff policies. Though U.S. President Donald Trump largely spared actual energy from tariffs, import taxes on aluminum and steel are costly for a domestic industry that makes few of the tubular products needed for midstream infrastructure.

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Firms such as Baker Hughes and SLB (Houston), formerly Schlumberger, have faced increased costs from tariffs on steel, machinery components and equipment. Last week, Ron Gusek, the chief executive officer at upstream services firm Liberty Energy (Denver, Colorado), said Trump's tariff policies were a path to "mediocrity," echoing respondents to the Dallas Fed who said $50-something oil is not a path to dominance.

"While we anticipate market headwinds to persist in the near term, we are well-positioned to capitalize on opportunities when conditions improve," Gusek said.

The company on Friday reported net income for the third quarter of $43 million, a 42% year-over-year decline. Gusek, meanwhile, took over leadership from now-U.S. Energy Secretary Christopher Wright.

Subscribers to can click here a profile of Liberty Energy.

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