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Natural Gas Rig Counts and Prices Following the Same Trend

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Gas rig count declines

Baker Hughes (BHI) will publishes its latest weekly oil and gas rig count report on July 17, 2015. The active US natural gas rig count declined slightly by two to 217 for the week ended July 10, 2015. Likewise, gas rigs dropped by nine to 219 for the week ended July 3, 2015. Natural gas rig counts declined for the sixth time in the last ten weeks.

The total crude oil and natural gas rig count marginally increased by one to 863 for the week ended July 10, 2015. Likewise, the total oil and gas rig count increased by three to 862 for the week ended July 3, 2015. Currently, the gas rig count is 30% below last year’s level of 311.

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Natural gas prices declined more than 30% since July 2014 due to oversupply concerns. The long-term lower natural gas prices led to the decline in drilling activity. As a result, drilling activity declined. This negatively affects oilfield companies like Flotek (FTK), Baker Hughes (BHI), and Halliburton (HAL). Declining natural gas prices should continue to pressure oil and gas drilling and producing companies.

ETFs like the Energy Select Sector SPDR ETF (XLE) and the SPDR Oil and Gas ETF (XOP) consist of oil and gas producing, refining, marketing, and services companies. The decline in natural gas prices also affects the performance of these ETFs. The XOP ETF moved in natural gas prices’ direction in yesterday’s trade. XOP fell by 1.17% at the close of trade yesterday. In contrast, the XLE ETF marginally gained by 0.14% in yesterday’s trade.

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