By David Wethe
West Texas Intermediate oil, the U.S. benchmark, has hovered around $40 a barrel for most of the past month.
“Unless WTI oil prices move towards $50 per barrel in the next few weeks, a rig activity rebound is unlikely before the first half of 2021,” Artem Abramov, an analyst at Rystad, said in a note this week.
The rig count is a closely watched metric because it’s long been considered indicative of future crude production. The relationship is imperfect, however, because of the time lag between drilling a well and commencing production, as well as other factors such as the turning off of existing wells in response to price movements.