In an attempt to increase productivity, shale oil drillers in the United States have begun moving rigs to more productive areas of the Permian and Eagle Ford basins, analysts at Goldman Sachs said. Data from oil services firm Baker Hughes Inc showed on Friday that the fall in US oil rig count slowed last week, suggesting the collapse in drilling may be coming to an end as prices recover.
"The county level rig data is showing potential signs of high grading with rig increases in some of the more productive counties of the Permian and Eagle Ford plays, despite the aggregate rig count still declining," analysts at Goldman Sachs said in a weekly report, Reuters reported. The observation comes after the analysts in the past several weeks have said the rig data showed little evidence of high grading. High grading, with producers eliminating the least efficient rigs first and moving rigs to more productive areas, could help stabilize production.
The current rig count implies that U.S. oil production growth will reach 185,000 barrels per day year-on-year by the fourth quarter, with a slight decline in production between the second and third quarter, Goldman Sachs said.
