US: Baker-Hughes Rig Count

Fri Jan 26 12:00:00 CST 2018

Actual Previous
N. Amer. Rig Count 1285 1261
U.S. 947 936
Gulf of Mexico 17 19
Canada 338 325

The Baker Hughes North American rig count is up 24 rigs in the January 26 week to 1,285. The U.S. rig count is up 11 rigs from last week to 947 and is up 235 rigs from last year at this time. The Canadian count is up 13 rigs from last week to 338 but is down 7 rigs compared to last year.

For the U.S. count, rigs classified as drilling for oil are up 12 rigs at 759 but gas rigs are down 1 to 188. For the Canadian count, oil rigs are up 12 at 220 and gas rigs are up 1 at 118.

The weekly gains in the count have been fed by the rising price of oil, with WTI prices up almost 3 dollars this week at around $66.15 per barrel, the highest level since 2014, making exploration and development by North American drillers increasingly profitable.

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).