Active Rig Count - May 13

[dan_s]

The North American active rig count continues to fall, although a few more rigs went to work in Canada. Each decline in the active rig count sets a new record low. Baker Hughes (BHI) has been reporting the rig count for over 70 years and this the lowest number of active oil & gas drilling rigs in North America that they have ever reported.

United States:
> Rigs drilling for oil: Down 10 to 318. This compares to the peak of 1,609 in October, 2014 and 660 a year ago.
> Rigs drilling for gas: Up 1 to 87. This compares to 223 a year ago.
> Gulf of Mexico is down 2 to 21, compared to 33 a year ago.

Canada:
> Rigs drilling for oil is up 5 to 16, compared to 21 a year ago
> Rigs drilling for gas is up 2 to 26, compared to 56 a year ago

Charts: http://www.zerohedge.com/news/2016-05-1 ... nues-crash

We have seen a sharp drop in the active rig count since the first of the year because upstream companies have slashed capital expenditures to the bone. I am expecting U.S. oil production to drop sharply in the 3rd quarter. This week the EIA reported that lower 48 production dropped 80,000 BOPD last week.