Natural gas rig count
Baker Hughes (BHI) will publish the active natural gas rig count report on July 10, 2015. Last week, Baker Hughes reported that gas rigs fell by nine to 219 for the week ending July 3, 2015—compared to natural gas rigs rising by five to 228 for the week ending June 26, 2015. The natural gas rig count fell for the sixth time in the last ten weeks.
Total crude oil and natural gas rigs rose by three to 862 for the week ending July 3, 2015. Currently, total crude and natural gas rigs are 1,012 lower than the level of 1,874 last year. Crude oil prices fell more than 50% since the mid week of June 2014—led by oversupply concerns. As a result, oil and gas producers’ confidence fell. This resulted in a massive fall in the drilling activity.
The recent volatility in crude oil and natural gas prices might slow down the drilling activity. This could negatively affect oilfield companies like Flotek (FTK), Baker Hughes (BHI), and Halliburton (HAL). The consensus of rising production, record inventories, and mild weather might put more pressure on natural gas prices.
The uncertainty in the energy market also impacts ETFs like the Energy Select Sector SPDR ETF (XLE) and the Spider Oil and Gas ETF (XOP). These ETFs consist of oil and natural gas producing stocks. XLE and XOP rose slightly in line with natural gas prices in yesterday’s trade. These ETFs rose by 0.51% and 1.97%, respectively, at close of trade yesterday.