The natural gas rig count rose by one to 182 for the week ending August 18, 2017. In the week ending August 19, 2016, the natural gas rig count was only 83. So, the number of active natural gas rigs has more than doubled in the past year. However, natural gas active futures only rose 6% on a year-over-year basis.
Oil rig count impacts natural gas supplies
From a different viewpoint, in the week ending August 18, 2017, the natural gas rig count was 88.7% below its peak of 1,606 in 2008. However, natural gas supplies rose significantly during this period. The rising oil rig count during this period could be behind the large additions in natural gas supplies. Usually, natural gas is a product during oil’s extraction—this is particularly the case with US shale-based oil production.
Last week, the US oil rig count fell by five to 763. However, on a YoY basis, it rose 87.9%. US crude oil (DBO) (USL) prices were broadly in the price range of $40–$50 per barrel in the past year. It could have caused oil rigs to become steady in the last few weeks. The US crude oil rig count has consolidated in the range of 760-770 since the week ending July 7, 2017.
New well gas production per rig could be an another important factor for natural gas (FCG) supplies and prices. The new well gas production per rig could rise 25% in September 2017—compared to the same period in 2016 based on the U.S. Energy Information Administration’s estimates.
In the next part, we’ll focus on natural gas inventory data.