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Will the US Crude Oil Rig Count Pressure Oil Prices?

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Aug. 18 2020, Updated 10:24 a.m. ET

US crude oil rig count  

Oilfield services company, Baker Hughes (BHI) released its weekly US crude oil rig count report on June 16, 2017. It reported that the US crude oil rig count rose by six or 0.8% to 747 on June 9–16, 2017.

The rig count has risen 121.7% from the same period in 2016. US crude oil rigs have risen for 22 consecutive weeks. The expectation of a rise in crude oil rigs this week could pressure oil prices. Lower crude oil prices have a negative impact on oil drillers like Transocean (RIG) and Diamond Offshore (DO). They also have a negative impact on oil producers like Sanchez Energy (SN) and Goodrich Petroleum (GDP).

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Peaks and lows 

The US crude oil rig count peaked at 1,609 in October 2014. On the other hand, it hit 316 in the week ending May 27, 2016—the lowest level since the 1940s. Since then, the US crude oil rig count has risen 136.2% due to the rise in crude oil prices in 2016.

US crude oil drilling activity  

The U.S. Energy Information Administration released its monthly drilling productivity report on June 12, 2017. It estimates that US crude oil output will rise in the seven shale regions by 127,000 bpd (barrels per day) to 5,475,000 bpd in July 2017—compared to June. Production is at the highest level since early 2016. Production is expected to rise mainly in the Permian and Eagle Ford Shale regions. President Trump’s energy plans and a rise in production from the US could pressure oil (USO) (UCO) prices.

Read Will US Crude Oil Prices Hit $30 per Barrel? and Latest on Crude Oil Prices: Fed’s Meeting and Nigeria’s Supplies for more on crude oil prices.

Read Will US Natural Gas Bulls Overshadow the Bears? for more on natural gas prices.

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