US: Baker-Hughes Rig Count

Fri Oct 13 12:00:00 CDT 2017

Actual Previous
N. Amer. Rig Count 1140 1145
U.S. 928 936
Gulf of Mexico 20 22
Canada 212 209

The Baker Hughes North American rig count is down 5 rigs in the October 13 week to 1,140. The U.S. rig count is down 8 rigs at 928 but is up 389 rigs from last year at this time. The Canadian count is up 3 rigs at 212 and is up 47 rigs from last year.

For the U.S. count, rigs classified as drilling for oil are down 5 rigs at 743, gas rigs are down 2 at 185, and miscellaneous rigs are down 1 at 0. For the Canadian count, oil rigs remain unchanged at 112 and gas rigs are up 3 at 100.

The third consecutive weekly decline shows the rig count again surprisingly declining in areas impacted by Harvey, contrary to expectations of the rebooting of drilling operations that were interrupted by the hurricane. The rig count in Texas was down 4 rigs at 444, Louisiana rigs are down 1 rig at 65, and Gulf of Mexico rigs are down 2 at 20.

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.

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).