US: Baker Hughes Rig Count

Highlights

Baker Hughes reports the North American rig count is up 5 at 791 from 786 in the previous week. The rig count is up 67 in the latest week from a year ago when it was at 724.

The U.S. rig count is down 1 from last week at 587 and up 45 rigs from 542 last year at this time. The Canadian count is up 6 from last week at 204 and compared to last year is up 22 from 182 a year ago. The Gulf of Mexico count is down 1 from a week ago at 10 and flat from 10 in the year-ago week.

For the U.S. count, rigs classified as drilling for oil are down 2 at 450, gas rigs are up 1 at 127 and miscellaneous rigs are flat at 10. For the Canadian count, oil rigs are up 2 at 138, gas rigs are up 3 at 62, and miscellaneous is up 1 at 4.

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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