US: Baker Hughes Rig Count

Highlights

Baker Hughes reports the North American rig count down by 21 to 729 from 750 in the previous week. The rig count is down 44 in the latest week from a year ago when it was at 773.

The U.S. rig count is down 1 from last week at 552 and down 41 rigs from 593 last year at this time. The Canadian count is down 20 from last week at 177 and compared to last year is down 3 from 180 a year ago. The Gulf of Mexico count is flat at 11 from a week ago and down 1 from 12 in the year-ago week.

For the U.S. count, rigs classified as drilling for oil are up 2 at 414, gas rigs are down 2 at 131 and miscellaneous rigs are down 1 at 7. For the Canadian count, oil rigs are down 17 at 114, gas rigs are down 2 at 63, and miscellaneous is down 1 at 0.

Definition

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.

Description

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).

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