Oil rig counts are at their lowest level since March 2011
Oilfield service company Baker Hughes (BHI) reported that the US crude oil rig count decreased by 11 for the week ended April 2, down from 813 to 802. The number of oil rigs is now at its lowest level since March 2011. But, the decline in oil rigs was the smallest it’s been in the last 15 weeks.
The steepest decline in oil rigs since 1990 occurred on January 30, 2015, when the weekly oil rig count decreased by 94.
The latest figures mark the 17th consecutive weekly fall in crude oil rig counts. In those 17 weeks, the crude oil rig count has crashed by 773.
Among the major resource shales, the main reductions occurred in the Williston Basin, where oil rig count dropped by six last week. In the Mississippian Lime in Northern Oklahoma and Southern Kansas, and in the Permian Basin located in western Texas and southern New Mexico, the oil rig count decreased by three a piece. Read Part 5 of this series to learn more about the Permian Basin rig count.
The crude oil rig count has fallen by 807, or 50%, since hitting a high on October 10, 2014. Between January 2005 and now, the US rig count hit its peak at 1,609 on October 10. In a later part of this series, we’ll investigate the relationship between crude oil prices and rig counts.
Producers are at risk
With oil prices continuing to dip, oil producers such as Whiting Petroleum (WLL), Marathon Oil (MRO), Hess Corporation (HES), and Continental Resources (CLR) are taking a hit. MRO and WLL together account for 2.8% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
To explore the latest crude oil price movements, please read Crude Oil Prices Gain on Lower US Production Growth.
One-year oil rig count comparison
In the last year, the number of oil rigs in operation has dropped by 696, or ~46%. In comparison, the numbers grew by 141 during the corresponding period of the previous year. Activity in the oil-rich Permian Basin in West Texas drove most of the 2014 increase.
Read the next part of this series for more on the natural gas rig count.