Active Rig Count - Jan 8
Posted: Fri Jan 08, 2016 2:20 pm
Baker Hughes reports another BIG drop in the U.S. active rig count. Upstream companies are slashing their drilling budgets as they go into "Hunker Down" mode until commodity prices improve.
Obviously, the big drop in the Canadian rig count they reported last week was an error because they show a big increase this week. This is a reminder that these weekly reports are not accurate during the holiday season. The only reasonable explanation is that Canada needed a week of hard freeze to move in a bunch of rigs.
United States
Rigs drilling for oil down another 20 to 516, compared to 1,412 a year ago and the peak of 1,609 in October, 2014.
Rigs drilling for gas down another 14 to 148, compared to 329 a year ago
Texas had the biggest drop. Down 13.
I now believe the active rig count will drop under 500, with less than 400 drilling for oil within the next six weeks.
Even fewer wells are now being completed. Rate of production decline will continue to accelerate.
Obviously, the big drop in the Canadian rig count they reported last week was an error because they show a big increase this week. This is a reminder that these weekly reports are not accurate during the holiday season. The only reasonable explanation is that Canada needed a week of hard freeze to move in a bunch of rigs.
United States
Rigs drilling for oil down another 20 to 516, compared to 1,412 a year ago and the peak of 1,609 in October, 2014.
Rigs drilling for gas down another 14 to 148, compared to 329 a year ago
Texas had the biggest drop. Down 13.
I now believe the active rig count will drop under 500, with less than 400 drilling for oil within the next six weeks.
Even fewer wells are now being completed. Rate of production decline will continue to accelerate.