Rigs Counts Keep Falling In America: What It Means
For over 70 years now, Baker Hughes Incorporated (NYSE: BHI) has been issuing rotary rig counts for the United States and Canada every week. On top of this the company has also published a monthly international rig count for the last 40 years.
The oilfield services supplier assured the rig counts are “an important business barometer for the drilling industry and its suppliers. When drilling rigs are active they consume products and services produced by the oil service industry. The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons.”
North America & The World
On Friday, the company released its . As of November, the United States had 771 active rigs, down from 775 last Friday. This figure implies a substantial decline from the 1,925 rigs registered a year ago, and marks the tenth consecutive week with a declining count.
Related Link: U.S. Rig Count Falls For Ninth Straight Week
Canada also saw a descent in the number of active rigs, from 191 last week to 185 this week. A year ago, the count ascended to 410.
Finally, on a global scale (excluding North America), the rig count also continued to tumble. After declining roughly 2.6 percent month-over-month, October saw 1,111 active rigs, down from 1,140 in September, and from 1,308 in October of 2014.
Oil And Gas
A more detailed look at Baker Hughes’ report reveals that the fall in U.S. active rigs was driven by a decline in active oil rigs, from 578 last week to 572 this week. Meanwhile, the gas rigs count rose by 2 to 199.
In Canada, on the other hand, both counts fell. Active oil rigs saw a reduction from 84 last week to 79 this week, while the active gas rigs count dropped slightly from 107 to 106.
The Stock Market
The United States Oil Fund LP (ETF) (NYSEARCA:USO) fell almost 2 percent on Friday trading, as oil prices –and futures- tumbled for a third day in a row.
Baker Hughes, on the other hand, was up more than 3 percent.
Industry peers like Halliburton Company (NYSE: HAL) and National-Oilwell Varco, Inc. (NYSE: NOV) also rose on Friday trading.
Other energy companies with market caps close to Baker Hughes, however, tended to plummet on Friday trading. Companies like Pioneer Natural Resources (NYSE: PXD), Energy Transfer Equity LP (NYSE: ETE) and TransCanada Corporation (USA) (NYSE: TRP), lost at least 1 percent.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
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