US Crude Oil, Natural Gas Rig Counts Rise: Is This a Good Thing?
The US rig count versus the world
According to estimates by Baker Hughes (BHI), the total number of active rigs in the rest of the world currently exceeds the US rig count. In July 2015, there were an average of 866 active rigs in the United States. At the same time, there were a combined 1,301 rigs in Africa, the Asia-Pacific, Canada, Europe, Latin America, and the Middle East.
In February, the US rig count started falling behind the rest of the world’s rig count for the first time since 2009. It has been below the global count for the past six months.
Rig count comparison
The United States still has more active rigs than any other country in the world. The Middle East is a distant second, with 391 active rigs in July 2015. That month, the Middle East’s rig count decreased by ten over June’s figures. Latin America comes in third, with 313 active rigs recorded in June 2015.
Overall, the combined global rig count inched up 1.5% to 2,167 in July, up from 2,136 in June. In the same month, the total rig count increased 0.6% in the United States. Between 2009 and 2014, the number of US rigs surpassed the total number of international rigs in operation by an average of 190, or 12%.
What this means
Greater international rig activity benefits oil and gas equipment and service companies such as National Oilwell Varco (NOV), Weatherford International (WFT), Ensco plc (ESV), and FMC Technologies (FTI). National Oilwell Varco accounts for 5% of the Market Vectors Oil Services ETF (OIH).
The declining US rig count is a strong indication of the negative effect weak energy prices are having and will continue to have on the American shale boom.
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