US natural gas rig count
Baker Hughes (BHI) released its weekly natural gas rig count report on October 30, 2015. The US natural gas rig count rose by four to 197 for the week ending October 30, 2015. Likewise, the gas rig count rose by one to 193 for the week ending October 23, 2015. The natural gas rig count rose for the third consecutive week. However, the natural gas rig count was flat for October compared to the previous month.
The falling natural gas rig count suggests that gas drillers are less optimistic about higher and stable natural gas prices. So, they’re keeping the rigs idle due to lower natural gas prices. Natural gas prices fell almost 30% in the last year due to lower natural gas prices. The falling rigs will curb natural gas production over the long term. However, natural gas production rose due to improving productivity and lower drilling costs. The US natural gas drilling activity fell by 43% from 346 in 2014 to 197 in 2015.
The fall in the drilling activity also impacts oil equipment companies like Baker Hughes (BHI), Schlumberger (SLB), Noble (NE), and Halliburton (HAL). ETFs like the PowerShares DB Energy ETF (DBE) and the iShares US Oil Equipment & Services ETF (IEZ) are also affected by the uncertainty in the energy market. The current bearish momentum of natural gas prices and fluctuating weather suggest that natural gas drilling activity could slow down in the short term.