In the weekly release,
Baker Hughes Company ( BKR Quick Quote BKR - Free Report) reported an increase in the U.S. rig count. More on the Rig Count
Baker Hughes’ data, which is 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 Quick Quote HAL - Free Report) , Schlumberger Limited ( SLB Quick Quote SLB - Free Report) and Transocean Ltd. ( RIG Quick Quote RIG - Free Report) . Details The count of rigs engaged in exploration and production of oil and natural gas in the United States was 346 for the week through Dec 18 versus the prior-week count of 338. Thus, the tally has increased for four weeks in a row, indicating that oil and gas drillers are gradually returning to domestic shale plays. However, the current national rig count is below the year-ago level of 813. Total U.S. Rig Count Increases:
The number of onshore rigs for the week ending Dec 18 totaled 328 compared with the prior-week count of 323. Notably, the count of rigs operating in inland waters was two, same as the prior-week tally. Moreover, in the offshore resources, 16 rigs were operating, higher than the prior-week count of 13.
Oil rig count was 263 for the week through Dec 18 compared with 258 in the week ended Dec 11. Importantly, the tally has been the highest since May. 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 level’s 658. The U.S. Adds 5 Oil Rigs: Natural gas rig count of 81 was higher than the prior-week count of 79. However, the count of rigs exploring the commodity was below the prior-year week’s 125. Importantly, per the latest report, the number of natural gas-directed rigs is 95% below the all-time high of 1,606 recorded in 2008. Natural Gas Rig Count Increases in the U.S.: The number of vertical drilling rigs totaled 17 units, higher than the prior-week count of 15. Moreover, 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 329 compared favorably with the prior-week level of 323. Rig Count by Type: The GoM rig count was 16 units, of which all were oil-directed. The count was higher than the prior-week tally of 13. Gulf of Mexico (GoM) Rig Count Increases: Rig Count in Prolific Basin
Permian — the most prolific basin in the United States — recorded a weekly oil rig tally of 173 versus the prior-week count of 168. Thus, the basin has been adding oil drilling rigs for nine straight weeks.
Although the West Texas Intermediate crude price — approaching $48 per barrel — is significantly below the price of more than $60 at the beginning of 2020, the commodity price has improved considerably over the past few months. The momentum is likely to continue since the rolling out of the coronavirus vaccine has already started in the United States, raising hopes that fuel demand will recover soon.
Meanwhile, investors may keep an eye on two energy stocks that are expected to benefit if the oil price rally sustains --
Devon Energy Corporation ( DVN Quick Quote DVN - Free Report) and Diamondback Energy Inc. ( FANG Quick Quote 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 . Breakout Biotech Stocks with Triple-Digit Profit Potential
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