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US Rig Count Rises on Higher Oil Drilling, Gas Rigs Fall
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In its weekly release, Houston-based oilfield services company Baker Hughes Inc. reported a higher U.S. rig count (number of rigs searching for oil and gas in the country) than the previous week. The West Texas Intermediate (WTI) oil futures are currently trading at around $49 per barrel.
Analysis of the Data
Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 431 in the week ended Jul 1, 2016. This was up by 10 from the week before.
The current nationwide rig count is less than half the prior-year level of 862. Notably, the count had peaked at 4,530 in 1981. Inversely, an all-time low was recorded in March and since then, the rig count has recovered marginally.
Rigs engaged in land operations were 408 compared with 397 in the previous week. Inland water activity involved four rigs, up by one from the prior week. Offshore drilling was down by two to 19 units.
Natural Gas Rig Count: The count fell by one from last week to 89. However, the current natural gas rig count is almost 95% below the high of 1,606 reached in late summer 2008. In the year-ago period, there were 219 active natural gas rigs.
Oil Rig Count: The count was up by 11 from the previous week at 341. The number had skyrocketed to 1,609 in Oct 2014 – the highest figure to have been reported since Baker Hughes started breaking up oil and natural gas rig counts in 1987. The current tally is well below the previous year’s rig count of 640.
Rig Count by Type: The number of vertical drilling rigs was up by eight to 61, while the horizontal/directional rig count (encompassing new drilling technology that can drill and extract gas from dense rock formations, also known as shale formations) was up by two to 370.
Gulf of Mexico (GoM): The GoM rig count was down by two to 18 units.
Conclusion
Key Barometer of Drilling Activity: The Baker Hughes data, issued since 1944, acts as an important yardstick for energy service providers in gauging the overall business environment of the oil and gas industry.
An increase or decrease in the Baker Hughes rotary rig count weighs heavily on demand for energy services like drilling, completion and production provided by companies that include large-cap firms such as Halliburton Co. (HAL - Free Report) , Schlumberger Ltd. (SLB - Free Report) and Weatherford International plc .
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US Rig Count Rises on Higher Oil Drilling, Gas Rigs Fall
In its weekly release, Houston-based oilfield services company Baker Hughes Inc. reported a higher U.S. rig count (number of rigs searching for oil and gas in the country) than the previous week. The West Texas Intermediate (WTI) oil futures are currently trading at around $49 per barrel.
Analysis of the Data
Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 431 in the week ended Jul 1, 2016. This was up by 10 from the week before.
The current nationwide rig count is less than half the prior-year level of 862. Notably, the count had peaked at 4,530 in 1981. Inversely, an all-time low was recorded in March and since then, the rig count has recovered marginally.
Oils-Energy Sector Price Index
Oils-Energy Sector Price Index
Rigs engaged in land operations were 408 compared with 397 in the previous week. Inland water activity involved four rigs, up by one from the prior week. Offshore drilling was down by two to 19 units.
Natural Gas Rig Count: The count fell by one from last week to 89. However, the current natural gas rig count is almost 95% below the high of 1,606 reached in late summer 2008. In the year-ago period, there were 219 active natural gas rigs.
Oil Rig Count: The count was up by 11 from the previous week at 341. The number had skyrocketed to 1,609 in Oct 2014 – the highest figure to have been reported since Baker Hughes started breaking up oil and natural gas rig counts in 1987. The current tally is well below the previous year’s rig count of 640.
Rig Count by Type: The number of vertical drilling rigs was up by eight to 61, while the horizontal/directional rig count (encompassing new drilling technology that can drill and extract gas from dense rock formations, also known as shale formations) was up by two to 370.
Gulf of Mexico (GoM): The GoM rig count was down by two to 18 units.
Conclusion
Key Barometer of Drilling Activity: The Baker Hughes data, issued since 1944, acts as an important yardstick for energy service providers in gauging the overall business environment of the oil and gas industry.
An increase or decrease in the Baker Hughes rotary rig count weighs heavily on demand for energy services like drilling, completion and production provided by companies that include large-cap firms such as Halliburton Co. (HAL - Free Report) , Schlumberger Ltd. (SLB - Free Report) and Weatherford International plc .
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>