US natural gas rig count rises
On Friday, August 7, 2015, Baker Hughes published its weekly crude oil and natural gas rig count report. The natural gas rig count rose by four to 213 for the week ending August 7. In contrast, the natural gas rig count fell by seven to 209 for the week ending July 31, 2015. The natural gas rig count rose for the fourth time in the last ten weeks.
The current natural gas rig counts are 33% lower than the levels of 318 in 2014. Natural gas rigs fell due to falling natural gas prices. Natural gas prices fell due to oversupply concerns. The long-term lower natural gas prices are affecting the drilling activity. Oil equipment companies like Superior (SPN), Schlumberger (SLB), and Halliburton (HAL) are affected due to lower natural gas prices.
The total crude oil and natural gas rigs rose by ten to 884 for the week ending August 7. The total rigs are 1,023 lower than the level of 1,098 rigs last year. These levels are 40% lower than the levels last year. Crude oil and natural gas rigs rose for the week ending August 7, despite oversupply concerns. The rising rigs will add more pressure to natural gas prices.
The volatility in natural gas prices also impact energy ETFs like the Energy Select Sector SPDR ETF (XLE) and the SPDR Oil and Gas ETF (XOP). These ETFs also followed the footsteps of natural gas prices in yesterday’s trade. They fell by 1.79% and 3.09% at the close of trade on August 7.