The Baker Hughes North American rig count is down 71 at 684 in the Dec. 27 week from 755 a week ago and down 24 from 708 a year ago. The big drop in the latest week mostly reflected a decline in Canadian oil rigs.

The U.S. rig count is flat from last week at 589 and down 33 rigs from 622 last year at this time. The Canadian count is down 71 from last week at 95 and compared to last year is up 9. The Gulf of Mexico rig count is flat at 12 in the latest week from last week and down 6 from a year ago.

For the U.S. count, rigs classified as drilling for oil are flat at 483, gas rigs are flat at 102, and miscellaneous rigs are flat at 4. For the Canadian count, oil rigs are down 66 at 44, gas rigs are down 5 at 51, and miscellaneous is flat at 0.

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).