Must-know: Why the total US rig count shot up last week
19 rigs added to the U.S. total rig count
The U.S. total drilling rig count increased by 19 rigs, from 1,889 to 1,908, during the week ending August 8, according to Baker Hughes, which publishes rig counts every week. This marked the highest number of rigs since August 31, 2012.
The number of oil rigs increased by 15, while the number of natural gas rigs increased by three. Rigs that were categorized as “miscellaneous” also increased by one unit last week.
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The increase in rig count was led by increases in both horizontal and vertical rig drilling. See Part 3 of this series to learn more about vertical versus horizontal rigs.
Year-to-date (or YTD), the total U.S. rig count has increased by 157, or 9%. Oil rigs have increased by 210, or 15%, while natural gas rigs have decreased by 56, or about -15%.
Rig count trends show how much inclination companies have to spend on drilling
Rig counts represent how many rigs are actively drilling for hydrocarbons—oil and gas. Baker Hughes notes that rig count trends are “governed by oil company exploration and development spending, which is influenced by the current and expected price of oil and natural gas.”
Since rig counts show one measure of oil and gas drilling activity, the figure can also be a useful indicator to gauge the activity levels of oilfield service companies like Halliburton (HAL) and Schlumberger (SLB)—all of which are part of the Energy Select Sector SPDR (XLE).