The Obama administration is expected to reverse its prior stance on Atlantic oil drilling and close East Coast waters to oil and gas companies. The initial decision could have opened more than 100 million acres of the Atlantic to offshore exploration. Obama’s new course of action echoes the president’s commitment to environmental issues in the last year of his presidency.

In somewhat related news, Desjardins Capital Markets noted in a recent report:

US drilling activity falls to 40+ year low. Following this week’s decrease, the rig count is now officially at a modern-day record low, based on Baker Hughes data dating back to 1975, dipping below the previous tally of 488 set in April 1999. While acknowledging that the productive capacity of today’s drilling rigs has exploded in relative terms, we ultimately believe that the collapse in drilling will result in a significant supply response, particularly from key shale plays. Furthermore, we still have no visibility on a potential recovery in drilling activity, noting that producers are likely to continue dropping rigs in the interim, albeit at a more moderate pace following the sharp decline of the past 18 months. And while the recent commodity price recovery provides much-needed relief, we believe that producers will be hesitant to begin putting capital back into the ground until oil prices have stabilized in the US$45–50/bbl range, likely using periods of improved prices to repair balance sheets and to layer additional hedges.

While Evercore ISI opines:

The most interesting data point this week: Rig counts in the Woodbine, Ardmore, Arkoma, PRB, Piceance, Barnett and Fayetteville are all below five questioning the short and medium-term viability of these plays at current prices.
? According to Baker Hughes, the rig count for the week ended 3/11 is down 64 rigs over the past four weeks. According to RigData, the rig count for the week ended 03/04 is down 89 rigs over the same period. The decrease in the BHI number was largely driven by a decrease in the number of unconventional oil rigs in the Eagle Ford, Permian and other plays.

See the following visualizations which highlight figures relevant to the Obama administration decision regarding Atlantic oil drilling.
US Offshore Oil Production

Atlantic oil drilling

Crude Oil Spot Pricing

 

Crude Oil Production by Country

 

U.S. Net Imports of Crude Oil and Petroleum

 

Average Retail Gas Price in East Coast

 

Atlantic oil drilling