“So why is the rig count going up in the US? “
The normal time lag between prices and drilling.
Two months ago at $50/bbl, it was worthwhile to start some wells. Now at $40/bbl, fewer projects will get a green light, so when the rigs are done with what they are working, there will be less follow-on jobs.
The “shale Band” for prices is usually considered $45-65/bbl. As prices change, the lowest cost fields in Texas would be the last to stop and the first to start, while the highest cost major field, the Marcellus in Pennsylvania, would be among the last to rehire.
Technology has brought the cost to produce shale oil down somewhat, but Middle East producers have inherently lower cost to economically produce - under $10/bbl for some Saudi fields.
Total demand has to exceed their capacity for prices to sustain a rise in price. That will basically require the global economy to improve.
Yes but the fiscal breakeven price for Saudi oil is $106/bbl, which explains why they have spent down almost 25% of their reserves.