US: Baker-Hughes Rig Count

Fri Apr 06 12:00:00 CDT 2018

Actual Previous
N. Amer. Rig Count 1114 1127
U.S. 1003 993
Gulf of Mexico 12 12
Canada 111 134

The Baker Hughes North American rig count is down 13 rigs in the week to 1,114, as a large seasonal drop in the volatile Canadian count once again overshadowed a U.S. increase. The U.S. rig count is up 10 rigs from last week to 1,003 and is up 164 rigs from last year at this time. The Canadian count is down 23 rigs from last week to 111 and is down 21 rigs compared to last year.

For the U.S. count, rigs classified as drilling for oil are up 11 at 808, gas rigs are unchanged at 194 and miscellaneous rigs are down 1 at 1. For the Canadian count, oil rigs are down 23 at 48 and gas rigs are unchanged at 63.

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).