Environment and Energy

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

Written by Brett Linton

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.

The situation in Canada has started to improve over the last few weeks. The Canadian rig count increased by 23 to 192 rigs this past week, with oil rigs up 7 to 98 rigs and gas rigs up 16 to 94 rigs. Compared to last year the 192 count is a decrease of 189 rigs, with oil rigs down 128 and gas rigs down 61. International rigs decreased by 12 to 1,146 rigs for the month of June, a decrease of 198 rigs from the same month one year ago. For a history of both the US and Canadian rig count, visit the Steel Market Update website here.

About the Rotary Rig Count

A rotary rig is one that rotates the drill pipe from the surface to either drill a new well or sidetracking an existing one. They are drilled to explore for, develop and produce oil or natural gas. The Baker Hughes Rotary Rig count includes only those rigs that are significant consumers of oilfield services and supplies.

The Baker Hughes North American Rotary Rig Count is a weekly census of the number of drilling rigs actively exploring for or developing oil or natural gas in the United States and Canada. Rigs considered active must be on location and drilling. They are considered active from the time they break ground until the time they reach their target depth.

The Baker Hughes International Rotary Rig Count is a monthly census of active drilling rigs exploring for or developing oil or natural gas outside of the United States and Canada. International rigs considered active must be drilling at least 15 days during the month. The Baker Hughes International Rotary Rig Count does not include rigs drilling in Russia or onshore China.

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