US: Baker-Hughes Rig Count

Fri Nov 03 12:00:00 CDT 2017

Actual Previous
N. Amer. Rig Count 1090 1100
U.S. 898 909
Gulf of Mexico 18 20
Canada 192 191

The Baker Hughes North American rig count is down 10 rigs in the November 3 week to 1,090. The U.S. rig count is down 11 rigs at 898 but is up 329 rigs from last year at this time. The Canadian count is up 1 rig from last week to 192 but compared to last year is up 38 rigs.

For the U.S. count, rigs classified as drilling for oil are down 8 rigs at 729 while gas rigs are down 3 rigs to 169. For the Canadian count, oil rigs are up 4 rigs at 100, gas rigs are down 3 rigs at 91 and miscellaneous rigs are unchanged at 1.

Following the release of the report, the smaller future domestic production gains implied by the fifth weekly decline in a row for the count helped propel WTI crude oil prices up about 40 cents to around $55.30 per barrel, the highest level in more than two years.

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).