Oil rig count rises
Baker Hughes (BHI) will release the weekly crude oil rigs report on July 10, 2015. Last week, Baker Hughes published its weekly crude oil and natural gas rig count report on July 2, 2015. The data showed that active crude oil rigs rose by 13 to 641 for the week ending July 3, 2015. In contrast, crude oil rigs fell by three to 628 for the week ending June 26, 2015. US active crude oil rigs rose for the first time in 2015. As of June 26, 2015, oil rigs fell consecutively for 29 weeks. The currently active oil rigs are 59% below the 2014 level of 1,562 active crude oil rigs.
Last week, the massive rise in crude oil rigs signifies the confidence of oil and gas producers. The rise in crude oil rigs keeps oil and gas drillers—like Flotek (FTK), Baker Hughes, and Halliburton (HAL)—busy. However, the recent fall in crude oil prices by more than 15% could negatively impact the drilling activity. There’s a possibility of a slowdown in the rig count’s rise for the week ending July 10, 2015.
Oil prices fell more than 50%, since the mid week of June 2014 due to oversupply concerns. This led to a massive fall in crude oil rigs. The falling rig count led to improvement in the drilling activity and a fall in the pricing of drilling contracts in order to sustain business. As a result, the volatility in crude oil prices is impacting oil and gas producers and drillers. They also affect energy ETFs like the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and the Select Sector SPDR Fund ETF (XLE).