With Brent and WTI above $40/B since mid-April this has been enough to spur a mini-revival in the US rig count. Since bottoming out at 316 in late May, the number of active drilling rigs targeting oil has risen in 11 of the last 12 weeks to stand at 406 on 19 August – though this 30% gain looks very modest when set aside the peak rig count of 1,609 hit in October 2014 (see chart 1).

On the back of this increased drilling there are initial indications that US crude output may finally...