The Baker Hughes North American rig count plunged by 58 rigs to 708 in the Dec. 29 week from 766 a week ago and fell 155 from 863 a year ago.

The U.S. rig count is up 2 from last week at 622 and down 157 rigs from 779 last year at this time. The Canadian count is down 60 from last week at 86 and compared to last year is up 2 rigs from 84. The Gulf of Mexico rig count is up 1 at 18 in the latest week from last week and up 3 from a year ago.

For the U.S. count, rigs classified as drilling for oil are up 2 at 500, gas rigs are flat at 120, and miscellaneous rigs are flat at 2. For the Canadian count, oil rigs are down 54 at 27 and gas rigs are down 6 at 59.

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).