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US Oil & Gas Rig Tally Increases in 2 of Last 3 Weeks

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In its weekly release, Baker Hughes Company (BKR - Free Report) reported an increase in the U.S. rig count.

More on the Rig Count

Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry.

A change in the Houston-based oilfield service player’s rotary rig count affects demand for energy services like drilling, completion and production, provided by the likes of Halliburton Company (HAL - Free Report) , Schlumberger Limited (SLB - Free Report) and Transocean Ltd. (RIG - Free Report) .

Details

Total US Rig Count Increases: The count of rigs engaged in the exploration and production of oil and natural gas in the United States was 256 in the week through Sep 4 versus the prior-week count of 254. Thus, in the past three weeks, the tally has increased in two. The current national rig count is, however, below the prior year’s 898.

The number of onshore rigs in the week ending Sep 4 totaled 240, in line with the prior-week count. Moreover, the count of rigs operating in the inland waters was one, same as the prior-week tally. Notably, in the offshore resources, 15 rigs were operating, higher than the count of 13 for the week ended Aug 28.

US Adds 1 Oil Rig: Oil rig count was 181 in the week through Sep 4, compared with 180 in the week ended Aug 28. Investors should also note that the current tally of oil rigs, far from the peak of 1,609 attained in October 2014, is, however, below the year-ago 738.

Natural Gas Rig Count Flat in US: The natural gas rig count of 72 was in line with the prior-week count. However, the count of rigs exploring the commodity is lower than the prior-year week’s 160. Importantly, per the latest report, the number of natural gas-directed rigs is 95.5% below the all-time high of 1,606 recorded in 2008.

Rig Count by Type: The number of vertical drilling rigs totaled 16 units, higher than the prior-week count of 13. However, the horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations, also known as shale formations) of 240 was lower than the prior-week level of 241.

Gulf of Mexico (GoM) Rig Count Increases: The GoM rig count is 15 units, of which all were oil-directed. The count was higher than the prior-week count of 13.

Rig Count in Prolific Basins

Permian — the most prolific basin in the United States — saw its weekly oil rig tally in line with the prior-week count. Notably, the Haynesville basin saw the addition of one gas rig in the week through Sep 4.

Outlook

With oil prices recovering rapidly – the West Texas Intermediate (WTI) crude has improved more than 240% since late April – as economies are reopening, most analysts opine that the weekly rig count will continue to increase. Meanwhile, investors may keep an eye on two energy stocks which are expected to benefit if the oil price rally sustains – Devon Energy Corporation (DVN - Free Report) and Diamondback Energy Inc. (FANG - Free Report) . Both the stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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