US: Baker-Hughes Rig Count


Fri Nov 17 12:00:00 CST 2017

Actual Previous
N. Amer. Rig Count 1123 1110
U.S. 915 907
Gulf of Mexico 21 18
Canada 208 203

Highlights
The Baker Hughes North American rig count is up 13 rigs in the November 17 week to 1,123. The U.S. rig count is up 8 rigs at 915 and is up 327 rigs from last year at this time. The Canadian count is up 5 rigs from last week to 208 and compared to last year is up 24 rigs.

For the U.S. count, rigs classified as drilling for oil are unchanged at 738 and gas rigs are up 8 at 177. For the Canadian count, oil rigs are up are up 1 at 109 and gas rigs are up 4 at 99.

The second consecutive weekly increase follows 5 weeks of declines and indicates that North American exploration and development companies are finally responding to a month-long climb in oil prices that last week attained the highest levels in over 2 years, with WTI reaching nearly $58 per barrel before retreating this week on news of inventory increases. With breakeven rates for many U.S. exploration and development companies below $45 per barrel, drilling activity is likely to heat up further if current price levels are maintained.

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).