The Covid-19 pandemic, coupled with low oil prices, is likely to cause the largest monthly drop in fracking activity ever recorded in the United States, according to Rystad Energy.

The Covid-19 pandemic, coupled with low oil prices, is likely to cause the largest monthly drop in fracking activity ever recorded in the United States, according to a new Rystad Energy analysis.

Rystad estimates that the total number of started frac operations will end up below 300 wells in April, comprising close to 200 in the Permian and less than 50 wells each in Bakken and Eagle Ford. This translates into a 60 percent decline in started frac operations between the peak level seen in January-February and April 2020, Rystad outlined.

The company said it observed a 30 percent monthly decline in the number of started frac jobs in the Permian, Bakken and Eagle Ford basins in March and added that nationwide fracking activity, on a completed jobs basis, might have already declined by around 20 percent last month.

“With such a rapid decline in fracking already visible, very little activity will be happening in the oil basins during the remainder of the second quarter of 2020,” Rystad Energy Head of Shale Research Artem Abramov said in a company statement.

“The natural base production decline, which we have seen as an absolute floor for production, therefore becomes an increasingly relevant production scenario,” he added.

According to Rystad, if no new horizontal wells are put on production from April onwards, total light tight oil production will decline by 1 million barrels per day (MMbpd) by May, 2MMbpd by July and 3MMbpd by October to November.

The WTI oil price plunged to negative levels earlier this week. At the time of writing, WTI is trading at around $15 per barrel.

As of April 23, there have been 2.54 million confirmed cases of the coronavirus around the world, with 175,694 deaths, according to the latest figures from the World Health Organization (WHO). The United States has been the hardest hit country with over 800,000 confirmed cases and more than 40,000 deaths, as of April 23, WHO data shows.

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