Will US Natural Gas Rig Counts Rise for the 3rd Straight Week?
US natural gas rig count
Baker Hughes (BHI) is scheduled to release its weekly US natural gas rig count report on Friday, September 15. In the last report, Baker Hughes reported that the US natural gas rig count rose by four to 187 from September 1 to 8. The US natural gas rig count rose 2.2% week-over-week and 103.3% year-over-year. Rigs rose for the second straight week. If this momentum continues, the US natural gas rig count could rise for the week ending September 15.
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Crude oil rig counts impact natural gas
Natural gas is often a byproduct of crude oil. US crude oil rigs have risen by 440 or 140% from the low in May 2016. The US crude oil rig count rose due to the rise in crude oil prices in 2016.
US crude oil prices are near a two-month high. Brent crude oil prices are at a five-month high. US natural gas is at a two-week high.
Higher crude oil (XLE)(XOP) and natural gas (UNG)(DGAZ) prices could drive US drilling activity and spur natural gas production. Higher drilling and production can have a positive impact on drillers and producers’ earnings, including Diamond Offshore (DO), Halliburton (HAL), Antero Resources (AR), WPX Energy (WPX), and Schlumberger (SLB).
Monthly international natural gas rig count
Baker Hughes’s international oil and gas rig count doesn’t include data from the United States and Canada. It estimates that international natural gas rigs fell by one to 200 in August. International natural gas rigs fell 0.5% month-over-month and 0.5% or by one rig year-over-year.
The number of active US natural gas rigs is at a five-week high. The number of active oil and gas rigs could rise if crude oil and natural gas prices trade firm. However, rising rigs could bring more supply to the market, which would in turn pressure prices.
In the next part, we’ll discuss US natural gas production.