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Will the US Natural Gas Rig Count Fall Again?

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US natural gas rig count 

Every Friday, Baker Hughes releases its weekly natural gas and crude oil rig count report. The data is expected to release on September 18, 2015. Last week, the natural gas rig count fell by six to 196 for the week ending September 11, 2015. In contrast, Baker Hughes published that the natural gas rig count didn’t change for the week ending September 4, 2015. It stayed at 202 rigs. The natural gas rig count fell for the eighth time in the last ten weeks.

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Impact

The total active US crude oil and natural gas rig count fell by 16 to 848 for the week ending September 11, 2015. Likewise, the total oil and gas rig count fell by 13 to 864 for the week ending September 4, 2015. The current total oil and gas count is 1,083 below the level of 1,931 last year. It’s 43% lower than levels in 2014. The crude oil and natural gas rigs fell due to the massive fall in crude oil prices. Prices fell due long-term oversupply concerns.

Currently, the gas rig count is 42% less than the level of 338 rigs in 2014. The natural gas rig counts have been falling. However, natural gas production hasn’t slowed down. This suggests improving natural gas productivity and falling drilling costs. This might lead to a rise in natural gas production despite falling natural gas prices. The rise increase in drilling activity benefits oil drillers like Superior (SPN), Schlumberger (SLB), and Halliburton (HAL). They also impact energy ETFs like the Energy Select Sector SPDR ETF (XLE) and the SPDR Oil and Gas ETF (XOP).

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