US: Baker-Hughes Rig Count


Fri Sep 22 12:00:00 CDT 2017

Actual Previous
N. Amer. Rig Count 1155 1148
U.S. 935 936
Gulf of Mexico 19 17
Canada 220 212

Highlights
The Baker Hughes North American rig count is up 7 rigs in the September 22 week to 1,155. The U.S. rig count is down 1 rig on the week at 935 but is up 424 rigs from last year at this time. The Canadian count is up 8 rigs at 220 and is up 82 rigs from last year.

For the U.S. count, rigs classified as drilling for oil are down 5 at 744 while gas rigs are up 4 at 190. For the Canadian count, oil rigs are up 10 at 122 but gas rigs are down 2 at 98.

Unlike in previous weeks, the decline in the U.S. count was not a result of Hurricane Harvey, with Texas rigs up 1 to 453 and Louisiana rigs up 3 to 65. The 3 states registering declines during the week were Colorado, down 2 rigs at 33, North Dakota, down 3 at 49, and Oklahoma, down 3 at 127. The rise in the Texas and Louisiana counts suggests that rigs taken out of commission by Harvey are being brought back into operation and that further increases in these states will be seen in weeks to come.

Definition
The Baker Hughes North American rig count tracks weekly changes in the number of active operating oil & gas rigs. Used for drilling wellbores for wells that may eventually produce oil or gas, active rigs are essential for the exploration and development of oil and gas fields. Rigs that are not active are not counted. Components in the data are the United States and Canada with a separate count for the Gulf of Mexico (which is a subset of the U.S. total). The count includes only rigs that are significant users of oilfield services and supplies.

Description
Changes in rig counts point to changes in the supply of oil & gas. The higher the rig count, the greater the upward pressure is on oil & gas supply and in turn the greater the downward pressure is on oil & gas prices. The reverse applies when rig counts turn lower, as they did during the oil price collapse of 2014-15 when lower counts contributed to a subsequent decline in domestic oil inventories. Data on the Gulf of Mexico offer indications on production disruptions during the hurricane season (June 1st to November 30th).