Crude oil rig count
Baker Hughes is scheduled to release its weekly crude oil rig count report on July 31, 2015. For the week ending July 24, 2015, the active crude oil rig count rose by 21 to 659. In contrast, the oil rig count fell by seven to 638 for the week ending July 17, 2015. The crude oil rig count rose for the third time in the last 33 weeks. Currently, the US crude oil rigs are 58% lower than the 1,562 rigs in 2014.
Impact of oil prices on crude oil rigs
US crude oil prices fell from the peak of $107 per barrel in 2014 by more than 55% due to global oil oversupply concerns. The fall in oil prices led to the fall in drilling activity. As a result, drilling activity fell 60% from the peak of 1,609 in October 2014 to 628 in June 2015.
The drilling activity reflects oil producers’ confidence. Recently, oil prices fell more than 23% from the peak in May 2015. Despite the fall in oil prices, crude oil rigs rose by 21 rigs for the week ending July 24, 2015, as stated above. This signifies that oil producers might scale up production in order to offset lower crude oil prices. This is positive for oil drillers like Schlumberger (SLB), Superior (SPN), and Halliburton (HAL). However, high-cost wells might be kept idle. The lower crude oil prices and idled wells could narrow the gap between supply and demand. It could promote stability for oil prices in the long term.