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Why US Crude Oil Rig Counts Fell to a 2-Month Low


Nov. 20 2020, Updated 3:25 p.m. ET

US crude oil rig counts  

Baker Hughes (BHI) released its US crude oil rig count report on August 25, 2017. Baker Hughes reported that the US crude oil rig count fell by four or 0.5% to 759 between August 18 and August 25. They fell for the second consecutive week.

This data suggests US crude oil rigs are slowing. Rigs may be slowing due to lower crude oil (IEZ)(XOP)(USO) prices in the past few months. Lower crude oil prices have a negative impact on oil producers and drillers such as Atwood Oceanics (ATW), Transocean (RIG), Northern Oil & Gas (NOG), and Triangle Petroleum (TPLM).

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Peak and low 

The US crude oil rig count hit record 1,609 in October 2014 due to higher crude oil prices between 2011 and 2014. The availability of cheaper credit facilities and technological advancement also supported the rise in rigs. In contrast, rigs hit 316 in May 2016—the lowest level since the 1940s. Rigs fell due to the lower crude oil prices in 2015 and early 2016. Higher production and breakeven costs also led to the fall in drilling activity.

EIA’s monthly drilling report  

The EIA estimates that US shale oil production will rise in the seven reported shale regions by 117,000 bpd (barrels per day) to 6,149,000 bpd in September 2017 compared to August 2017. It’s at its highest level since March 2016.


US crude oil rigs are at a two-month low, which suggests crude oil rigs could slow down further if crude oil prices don’t rise in the short term

Read Hedge Funds Reduce Bullish Bets on US Crude Oil for 2nd Straight Week for more information on crude oil price forecasts.

Also read How India’s Crude Oil Imports, Production, and Demand Impact Prices and Will the US and Libya’s Crude Oil Production Weigh on Prices? to learn more.


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