Features
Active rig counts ease in US, rise in Canada
Written by Brett Linton
July 12, 2024
US drill rig activity resumed its downward trend last week, while Canadian counts increased to a four-month high, according to the latest data release from Baker Hughes.
US rigs
In the week ended July 12, the number of active drilling rigs in the US fell by one week over week to 584. Oil rigs declined by one to 478, gas rigs fell by one to 100, and miscellaneous rigs rose by one to six.
There were 91 fewer active US rigs compared to the same week last year. The number of active oil rigs is down by 59, gas rigs are down by 33, and miscellaneous rigs are up by one.
Canada rigs
The number of rigs operating in Canada increased by 14 last week to 189. Oil rigs rose by 11 to 126 and gas rigs increased by three to 63. This is the highest Canadian count recorded since mid-March.
This week there are two more active drilling rigs in Canada than there were one year ago. Oil rigs are up by 12 and gas rigs are up by 10.
International rig count
The international rig count is updated monthly. The total number of active rigs for the month of June rose to 957, up by four from May and down by 10 from levels one year prior.
The Baker Hughes rig count is important to the steel industry because it is a leading indicator of demand for oil country tubular goods (OCTG), a key end market for steel sheet. A rotary rig rotates the drill pipe from the surface to either drill a new well or sidetrack an existing one. For a history of the US and Canadian rig counts, visit the rig count page on our website.
Brett Linton
Read more from Brett LintonLatest in Features
Final Thoughts
Steel equities and steel futures fell hard after news broke earlier this week that the US and Mexico might reach an agreement that would result in the 50% Section 232 tariff coming off Mexican steel. The sharp declines didn’t make much sense, especially if, as some reports indicate, Mexico might agree to a fixed quota. They didn't make sense even if steel flows between the US and Mexico remain unchanged.
SMU Survey: Mill lead times tick higher after late-May lows
All five of the averages for sheet and plate mill lead times tracked by SMU extended moderately this week, according to buyers responding to our latest market survey.
SMU Survey: Mills less negotiable on sheet prices, buyers say
Most steel buyers responding to our market survey this week reported that domestic mills are considerably less willing to talk price on sheet products than they were in recent weeks, but remain open to bargain on plate prices.
Dodge Momentum Index recovered in May
Following three months of little to no growth, the Dodge Momentum Index (DMI) increased in May, according to the latest data released by Dodge Construction Network
SMU Community Chat: Tanners explores if US steel industry still needs imports
The US steel industry is edging closer to independence from imports, and it may only take one more mill to tip the scales, according to Timna Tanners, managing director at Wolfe Research.