U.S. Oil Rig Count Holds Fast, Breaks 8-Week Freefall Streak

The total U.S. rig count (both oil and gas) fell again this week from 406 to 404. While the U.S. oil rig count held fast at 318 as reported by Baker Hughes’ latest oil rig count, the U.S. gas rig count fell from 87 to 85.

Last week, it was the number of U.S. oil rigs that had fallen, with U.S. gas rigs up by one. This time, it’s the other way around.

In normal times, an unchanged oil rig count would be so-so news. But even though the total oil rig count was stable this week, it’s still about 50 percent of last year’s U.S. oil rig count, and an all-time low, at least since Baker Hughes has been keeping track. Related: Oil Glut Set To Worsen As Libya Unblocks 300,000 Bpd Of Production

Some experts think this stabilizing activity means that oil may have finally hit the bottom, but Baker Hughes stated that it does not expect U.S. rig counts to really stabilize until the latter half of the year, and an increase in the number of active rigs in the U.S. is out of the question.

Although the overall U.S. oil and gas rig count stayed relatively stable overall, variances were seen across the states, with Louisiana gaining the most traction—make that the only traction—with 47 rigs in operation this week, up 7 from last week. Texas, on the other hand, continued its decline, with 173 rigs operating this week, down from 181 the week before, and down from 188 on May 6—an 8% drop in two weeks. Related: Oil Prices Under Pressure As Global Supply Outages Diminish

An 8 percent drop may not seem crippling, but a year ago, Texas had 373 rigs in operation. That a loss of 200 rigs in a year—more than a 50 percent drop.

Other big percentage losers, year over year, is Arkansas with a 100% loss in the number of operating rigs (down to 0 from 8), Kansas with a 77% drop (from 13 to 4), and North Dakota with a 71% drop (from 78 to 24).

By Charles Kennedy of Oilprice.com

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