US: Baker-Hughes Rig Count

Fri Mar 23 12:00:00 CDT 2018

Actual Previous
N. Amer. Rig Count 1156 1209
U.S. 995 990
Gulf of Mexico 13 13
Canada 161 219

The Baker Hughes North American rig count is down 53 rigs in the March 23 week to 1,156, as in a replay of last week, a weather-related seasonal drop in the volatile Canadian count easily overshadowed a U.S. increase. The U.S. rig count is up 5 rigs from last week to 995 and is up 186 rigs from last year at this time. The Canadian count is down 58 rigs from last week to 161 and is down 24 rigs compared to last year.

For the U.S. count, rigs classified as drilling for oil are up 4 at 804, gas rigs are up 1 at 190, and miscellaneous rigs are unchanged at 1. For the Canadian count, oil rigs are down 51 at 93 and gas rigs are down 7 at 68.

The Canadian count usually declines dramatically with the onset of the "spring thaw" when muddy terrain makes moving drilling equipment difficult and environmentally prohibitive.

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).