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US crude oil rig count by the numbers

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Oil rig count plummets

Oilfield service company Baker Hughes’s (BHI) crude oil rig count decreased by 49 last week, from 1,366 to 1,317. The latest figures mark the seventh straight weekly fall. In that time span, the oil rig count has dropped by 229. Oil rig activity has fallen most steeply in recent weeks. For the week ending January 9, for example, the oil rig count declined by 61. That’s the biggest weekly reduction since 1991.

Most affected is the Williston basin, where the crude oil rig count decreased by 13. In the Eagle Ford and Permian shales, rig counts each decreased by six.

In the “other” basins category, oil rigs decreased by 16. “Other” rigs are those in smaller basins or those that don’t fall within a specific geographic basin.

The oil rig count has fallen by 292, or 18%, since hitting a high not that long ago. The rig count was 1,609 on October 10, 2014—the highest it had been since January 2005.

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Oil producers such as Whiting Petroleum (WLL), Chevron (CVX), Hess Corporation (HES), and Continental Resources (CLR) have a relatively high break-even point. CVX and HES account for 13.4% and 1.4% of the Energy Select Sector SPDR ETF (XLE). As oil prices continue to dip, these companies are taking a hit, as revenues are closely tied to crude oil. For more on the relationship between crude oil prices and rigs, read Part 9 of this series.

As well, you may be interested in Market Realist’s recent series, As oil benchmarks converge experts ask “Will the US export?,” which covers the latest crude oil price movements.

One-year oil rig count comparison

In the last year, the number of oil rigs in operation fell by 99, or ~7%. In comparison, their numbers grew by 101 during the same period last year. Activity in the oil-rich Permian Basin in West Texas drove most of the increase in 2014. Read Part 4 of this series for more information about the Permian rigs.

In the next part of this series, we’ll look at why US gas-targeted rig counts increased.

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