US Oil & Gas Rig Count Down 1,014 Rigs, Canada Improves

According to Baker Hughes data from July 17, 2015, the U.S rig count for the week was 857 rigs exploring for or developing oil or natural gas. This is down 6 rigs when compared to last week, with oil rigs down 7 to 638 rigs, gas rigs up 1 to 218 rigs, and miscellaneous rigs unchanged at 1 rig. Compared to this time last year, the 857 count is down 1,014 rigs, with oil rigs down 916, gas rigs down 97, and miscellaneous rigs down 1.

The decline in the drilling of new gas and oil wells is having a direct impact on the amount of line pipe, storage tanks, and OCTG that is being used by the energy sector. A good portion of these products come from hot rolled coil or plate substrate, and are reasons for both the short lead times on hot rolled and plate at North American steel producers and the falling steel prices we had seen going back to mid-2014. Prices have since stabilized for hot rolled coil but the product is having a difficult time breaking out of a very narrow trading range partially due to the weakness in the energy sector.