US: Baker-Hughes Rig Count

Fri Dec 29 12:00:00 CST 2017

Actual Previous
N. Amer. Rig Count 1065 1141
U.S. 929 931
Gulf of Mexico 18 19
Canada 136 210

The Baker Hughes North American rig count plummeted by an outsized 76 rigs in the December 29 week to 1,065, dominated for the second week in a row by a seasonal weather-related decline in Canada. The U.S. rig count is down 2 rigs from last week to 929 and is up 271 rigs from last year at this time. The Canadian count is down 74 rigs from last week to 136 and is down 21 rigs compared to last year.

For the U.S. count, rigs classified as drilling for oil remained unchanged at 747 while gas rigs are down 2 rigs at 182. For the Canadian count, oil rigs are down 58 at 62 and gas rigs are down 16 at 74.

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).