US: Baker-Hughes Rig Count

Fri Oct 27 12:00:00 CDT 2017

Actual Previous
N. Amer. Rig Count 1100 1115
U.S. 909 913
Gulf of Mexico 20 20
Canada 191 202

The Baker Hughes North American rig count is down 15 rigs in the October 27 week to 1,100. The U.S. rig count is down 4 rigs at 909 but is up 352 rigs from last year at this time. The Canadian count is down 11 rigs from last week to 191 but compared to last year is up 38 rigs.

For the U.S. count, rigs classified as drilling for oil are up 1 at 737 while gas rigs are down 5 rigs to 172. For the Canadian count, oil rigs are down 11 at 96, gas rigs are down 1 rig at 94 and miscellaneous rigs are up 1 to 1.

Another large decline in the count is the fourth in a row, mostly caused by seasonality as cold weather begins to curtail operations in northern regions and partly probably by lingering hurricane-related problems.

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).