Back to top

Image: Bigstock

US Oil & Natural Gas Rig Tally Rises for 2 Straight Weeks

Read MoreHide Full Article

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

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 impacts demand for energy services like drilling completion and production, provided by the likes of Halliburton Company (HAL - Free Report) and Schlumberger Limited (SLB - Free Report) .

Details

Total US Rig Count Rises: The count of rigs engaged in the exploration and production of oil and natural gas in the United States was 512 for the week through Sep 17,higher than the prior-week count of 503. Thus, the tally has increased for two successive weeks, marking the highest count since April 2020. The current national rig count is higher than the year-ago level of 255.

The number of onshore rigs for the week ended Sep 17 totaled 505, higher than the prior-week count of 497. In offshore resources, six rigs were operating, in line with the prior-week count.

US Oil Rig Count Increases: Oil rig count was 411 for the week ended Sep 17, higher than the prior-week count of 401. The current tally of oil rigs — far from the peak of 1,609 attained in October 2014 — is higher than the year-ago figure of 179.

Natural Gas Rig Count Declines in US: Natural gas rig count of 100 was lower than the prior-week count of 101. The count of rigs exploring the commodity was, however, higher than the prior-year week’s 73. Per the latest report, the number of natural gas-directed rigs is 94% below the all-time high of 1,606 recorded in 2008.

Rig Count by Type: The number of vertical drilling rigs totaled 29 units, higher than the prior-week count of 26. 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 483 compared favorably with the prior-week level of 477.

Gulf of Mexico (GoM) Rig Count In Line: GoM rig count was 4 units, of which all were oil-directed. The count was flat with the prior-week tally.

Rig Count in Permian

Permian — the most prolific basin in the United States — recorded a weekly oil rig tally of 258, higher than the prior-week count of 253. The tally for oil drilling rigs in the basin increased for six straight weeks. In the Eagle Ford shale play, the tally for oil drilling rigs increased to 34 from 31 in the prior week.

Outlook

The price of West Texas Intermediate crude is trading above the $70-per-barrel mark. The commodity’s price is significantly higher than the pandemic-hit April last year, when oil was in the negative territory. With coronavirus vaccines being rolled out at a massive scale, the demand for fuel will possibly improve further. This has paved the way for further rig additions although drilling activities have slowed down as upstream players are mainly focusing on stockholder returns rather than boosting output.

Meanwhile, investors may keep an eye on energy stocks like Whiting Petroleum Corporation (WLL - Free Report) and Earthstone Energy, Inc. (ESTE - Free Report) are expected to benefit if oil price continues to stay healthy. While Whiting Petroleum sports a Zacks Rank #1 (Strong Buy), Earthstone Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.