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U.S Rig Count Crosses 900 for First Time in 2 Years
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Oil field services firm Baker Hughes Inc. recently reported the rig count for the week ended May 19, 2017.
Along with imminent OPEC meeting, the announcement of the U.S rig count also made it to the headlines as the total number of oil and natural gas rigs crossed the mark of 900 for the first time since May 1, 2015. Also, this is the 18th consecutive increase in the U.S. weekly rig count after the nation witnessed a fall in the number of rigs during the week ended Jan 13.
North America Rig Count Increases
Total rig count in North America – the U.S. and Canada – for the week ended May 19, was 986. The reported figure was higher than 965 a week ago and 448 a year earlier.
Total U.S. Rig: Total number of rigs in the U.S. was 901. This was higher than 885 rigs in the week ended May 12 and much higher than 404 a year ago.
Of the total U.S. rigs, land rigs were 874. The reported figure is higher than 860 rigs in the previous week and 375 rigs in year-ago period.
The number of U.S. offshore rigs for the week ended May 19, was 23. This is higher than 21 rigs in the previous week but lower than 24 rigs in the previous year.
U.S Oil Rig Count: The count was up by eight from the previous week to 720. The number had skyrocketed to 1,609 in Oct 2014 – the highest figure since Baker Hughes started reporting oil and natural gas rig counts separately in 1987. The tally is also well above the previous year’s rig count of 318.
U.S Natural Gas Rig Count: The count improved by eight from the last week to 180. However, the current natural gas rig count is nearly 90% below the high of 1,606 reached in late summer 2008. There were 85 active natural gas rigs in the year-ago period.
Canada rig: In Canada, the total rig count was 85 compared with 80 rigs in last week. There were 44 rigs a year ago.
Reasons for Improvement
In North America, both the U.S. and Canada rig counts increased from the prior week and the previous year. Texas, where rig count rose by eight, was mainly responsible for the increase in the U.S. weekly rig count. Oklahoma, where the count of rig was up by four, was also responsible for the rise in the number of rigs in the U.S.
Let’s analyze the broader factors for the increase in rig count in the U.S. Since OPEC and non-OPEC countries agreed to curb crude output amid the supply glut, oil prices jumped and nearly doubled from the lows it slipped to in last February. Also, energy ministers of Saudi Arabia and Russia held discussions to extend the OPEC deal to the end of Mar 2018. This should further strengthen oil prices.
Given these developments, U.S. shale producers have been gathering to oil patches as they will be able to sell the commodity at higher prices. U.S. exploration and production (E&P) companies are expected to produce more, in turn, gaining a larger market share at the expense of OPEC.
Our research says that the upstream companies are most likely to witness year-over-year earnings growth of 99.9%, 88.2% and 152.9%, respectively, during 2017.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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U.S Rig Count Crosses 900 for First Time in 2 Years
Oil field services firm Baker Hughes Inc. recently reported the rig count for the week ended May 19, 2017.
Along with imminent OPEC meeting, the announcement of the U.S rig count also made it to the headlines as the total number of oil and natural gas rigs crossed the mark of 900 for the first time since May 1, 2015. Also, this is the 18th consecutive increase in the U.S. weekly rig count after the nation witnessed a fall in the number of rigs during the week ended Jan 13.
North America Rig Count Increases
Total rig count in North America – the U.S. and Canada – for the week ended May 19, was 986. The reported figure was higher than 965 a week ago and 448 a year earlier.
Total U.S. Rig: Total number of rigs in the U.S. was 901. This was higher than 885 rigs in the week ended May 12 and much higher than 404 a year ago.
Of the total U.S. rigs, land rigs were 874. The reported figure is higher than 860 rigs in the previous week and 375 rigs in year-ago period.
The number of U.S. offshore rigs for the week ended May 19, was 23. This is higher than 21 rigs in the previous week but lower than 24 rigs in the previous year.
U.S Oil Rig Count: The count was up by eight from the previous week to 720. The number had skyrocketed to 1,609 in Oct 2014 – the highest figure since Baker Hughes started reporting oil and natural gas rig counts separately in 1987. The tally is also well above the previous year’s rig count of 318.
U.S Natural Gas Rig Count: The count improved by eight from the last week to 180. However, the current natural gas rig count is nearly 90% below the high of 1,606 reached in late summer 2008. There were 85 active natural gas rigs in the year-ago period.
Canada rig: In Canada, the total rig count was 85 compared with 80 rigs in last week. There were 44 rigs a year ago.
Reasons for Improvement
In North America, both the U.S. and Canada rig counts increased from the prior week and the previous year. Texas, where rig count rose by eight, was mainly responsible for the increase in the U.S. weekly rig count. Oklahoma, where the count of rig was up by four, was also responsible for the rise in the number of rigs in the U.S.
Let’s analyze the broader factors for the increase in rig count in the U.S. Since OPEC and non-OPEC countries agreed to curb crude output amid the supply glut, oil prices jumped and nearly doubled from the lows it slipped to in last February. Also, energy ministers of Saudi Arabia and Russia held discussions to extend the OPEC deal to the end of Mar 2018. This should further strengthen oil prices.
Given these developments, U.S. shale producers have been gathering to oil patches as they will be able to sell the commodity at higher prices. U.S. exploration and production (E&P) companies are expected to produce more, in turn, gaining a larger market share at the expense of OPEC.
Companies Poised to Benefit
Firms belonging to the Zacks categorized Oil & Gas-U.S Exploration & Production industry are likely to benefit the most from these developments. Our proprietary model shows that Bonanza Creek Energy Inc. , Legacy Reserves LP and W&T Offshore Inc. (WTI - Free Report) are among the upstream companies that are worth including in your portfolio. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research says that the upstream companies are most likely to witness year-over-year earnings growth of 99.9%, 88.2% and 152.9%, respectively, during 2017.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>