The Partnership sends updates for the most important economic indicators each month. If you would like to opt-in to receive these updates, please click here.

Estimated Read Time: 1 minute

The Baker Hughes count of rigs active in the U.S. slipped to 581 the last week of June, down from 674 the same week in June ’23. The count has never recovered from its historic peak of 1,931 in September ’14 or its pre-pandemic high of 1,059 in June ’18. Since January ’24, the fleet has lost another 40 rigs. Given increases in well productivity and the industry’s focus on capital discipline, the U.S. is unlikely to see any significant increase in rig activity this year. 

West Texas Intermediate (WTI), the U.S. benchmark for light, sweet crude, traded between $73 and $83 per barrel in June. In the same month last year, WTI traded for $67 to $73 per barrel.  Prices have fallen significantly from June two years ago when Russia’s invasion of Ukraine raised concerns about the global oil supplies. 

Growth in global oil demand remains tepid. The U.S. Energy Information Administration (EIA) estimates average daily global consumption in May was flat compared to May the prior year. As a result, the Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, have kept a total of 5.86 million barrels per day (b/d), or about 5.7 percent of global demand, off the market.

U.S. crude production totaled 13.18 million b/d in March (latest data available), down marginally from the November ’23 peak of 13.295 million barrels.  EIA forecasts U.S. production will average 13.24 million b/d in ‘24 and 13.70 million b/d in ’25. The Permian Basin, Eagle Ford Sale region, and the Gulf of Mexico will account for most of the growth.

In mid-June, the retail price of gasoline was $3.43 per gallon in the U.S. and $3.00 per gallon on the Gulf Coast. In June ’23, the average price for gasoline was $3.58 in the U.S. $3.11 on the Gulf Coast. Prices have fallen considerably since June ’22 when concerns over Russia’s invasion of Ukraine drove up crude prices.  Crude accounts for roughly 57 percent of the price of a gallon of gasoline.  Refining costs account for 18 percent, state and federal taxes account for 13 percent, and distribution and market costs for about 12 percent. EIA forecasts the U.S. average to peak at $3.52 per gallon in July and trend down through the end of the year.

Prepared by Greater Houston Partnership Research Department

Patrick Jankowski, CERP
Chief Economist
Senior Vice President, Research
pjankowski@houston.org

Clara Richardson
Associate Analyst, Research
713-844-3653
crichardson@houston.org