18 Aug

US Natural Gas Rig Counts: Biggest Weekly Fall since February 2016

WRITTEN BY Gordon Kristopher

US natural gas rig counts  

On August 18, 2017, Baker Hughes (BHI) is scheduled to release its weekly crude oil and natural gas rig count report. In the previous report, it reported that rigs fell by eight to 181 on August 4–11, 2017—the biggest weekly fall since February 2016. Natural gas rig counts are near the levels seen on May 19, 2017. It suggests that natural gas rigs are slowing due to lower crude oil (USO) (UCO) and natural gas (UNG) (UGAZ) prices in the last few months.

Meanwhile, natural gas rig counts fell 4.2% week-over-week but rose 118% year-over-year.

US Natural Gas Rig Counts: Biggest Weekly Fall since February 2016

Crude oil rig counts impact natural gas prices 

Natural gas is a by-product of crude oil. US crude oil rigs have risen ~142% since the lows in May 2016. The rise in rigs could drive US crude oil and US natural gas production.

Moves in oil and gas prices impact drilling activity as well as drillers and producers’ earnings like Diamond Offshore (DO), Transocean (RIG), and WPX Energy (WPX).

US natural gas drilling activity 

The EIA (U.S. Energy Information Administration) released its monthly drilling productivity report on August 14, 2017. It estimates that US natural gas production in the seven shale regions would rise by 929 Mcf (million cubic feet) per day to 59,426 Mcf per day in September 2017—compared to August 2017.

Impact

President Trump’s energy plans could increase US crude oil and US natural gas production. High production would pressure natural gas (DGAZ) (GASL) prices in the short term and long term.

In the next part, we’ll discuss US natural gas production and consumption.

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