US: Baker-Hughes Rig Count

Fri Jan 12 12:00:00 CST 2018

Actual Previous
N. Amer. Rig Count 1215 1098
U.S. 939 924
Gulf of Mexico 19 17
Canada 276 174

The Baker Hughes North American rig count is up 117 rigs in the January 12 week to 1,215, led again by the rebounding volatile count for Canada following a seasonal weather-related plunge at year end. The U.S. rig count is up 15 rigs from last week to 939 and is up 280 rigs from last year at this time. The Canadian count is up 102 rigs from last week to 276 but is down 39 rigs compared to last year.

For the U.S. count, rigs classified as drilling for oil are up 10 at 752 and gas rigs are up 5 at 187. For the Canadian count, oil rigs are up 87 at 185 and gas rigs are up 15 at 91.

Rising oil prices, currently at 3-year highs and around $64 per barrel, are likely to lead to further gains in drilling activity by North American exploration and development companies.

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).