Baker Hughes Inc. (NYSE: BHI) has released its reading on total US rig counts. After ten weeks of decline, the count is up — sort of, and depending upon what you measure.
The Baker Hughes weekly rig count for the U.S. was down by 4 rigs to 767 rigs. Friday’s report showed that the gain was in the number of oil rigs — up by just 2 to 574 rigs. Gas rigs were down by a count of 6 to 193 rigs.
Before getting excited about a whopping 2-rig increase on the oil side, let’s think about oil price trends around $42.00 per barrel for West Texas Intermediate crude. Then let’s consider that the U.S. total rig count is down by a massive 1,161 rigs from last year — at 1,928 rigs in total. Versus a year ago, the oil rigs were down 1,004 and the count on gas rigs was down 157.
Then there is the offshore rig count to consider. The U.S. Offshore rig count rose by 1 rig to 33 rigs on a weekly basis. Unfortunately for the drillers, that is down 19 rigs year over year.
The weekly count from Baker Hughes in Canada was negative by 9, down to 176 rigs. Canada’s oil rig count was down 11 to 68, and its gas rigs count rose by 2 to 108 rigs. The Canadian rig count is down 226 rigs from last year at 402 rigs — with oil rigs down 148 and gas rigs down 78.
West Texas Crude was last seen down $1.17 at $41.86 per barrel. That is a drop of 2.7% but the tally is worse than it seems. Oil prices are down from around $45 in the last week or so and down from $48 shortly after the start in November.
The rig count can do what it wants, but supplier remain high and demand just has not been growing as the global growth picture outside of the U.S. (or in the U.S. for that matter) just is not that strong.