General Electric’s company Baker Hughes published its weekly US crude oil rig count report on October 20, 2017. It reported that US oil rigs fell by seven to 736 for the week ending October 20, 2017. Rigs fell 0.9% week-over-week. They are at the lowest level since June 2, 2017. Rigs slowed due to stalling oil (USO) (OIL) (DBO) prices in the past few months.
Baker Hughes and Schlumberger are the largest oilfield service companies in the world. These companies think that US shale production is slowing. Any fall in US crude oil is bullish for crude oil (UCO) (SCO) prices.
Peaks and lows for US crude oil rigs
US oil rigs hit a peak of 1,609 in October 2014. Technological advancements, cheaper credit availability, and higher crude oil prices from 2011 to 2014 led to the rise in drilling activity.
In contrast, rigs hit 316 in May 2016, the lowest level since the 1940s. Rigs had fallen due to lower crude oil prices in 2015. However, rigs are up by 420 rigs or 133% since May 2016 due to higher crude oil prices in 2016.
EIA’s US shale oil production
According to the EIA, US shale oil production in the significant shale regions will rise by 81,000 bpd (barrels per day) to 6,120,000 bpd in November 2017 compared with October 2017.
US crude oil rigs are near a five-month low. West Texas Intermediate (or WTI) crude oil (UWT) (DWT) prices are down 8.8% year-to-date (or YTD). Rigs could fall further if oil prices fall. But, if rigs rise, it could increase US production and weigh on oil prices.