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Where Is the Offshore Rig Count Heading?

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Weekly US rig count

The rig count is a key demand indicator for the offshore drilling industry. The US offshore rig count stood at 22 in the week ended November 22, 2017. The rig count rose by one from the previous week. However, it is still down by one rig year-over-year.

The US oil rig count increased by nine to 747 in the week ended November 22, 2017. The rig count is 57.5%, or 273, higher than the rig count in the same period in 2016.

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Importance of the rig count

The rig count measures the number of rigs that are engaged in active drilling. An increase in the rig count indicates a rise in demand for drilling activity, and a decrease indicates a fall in demand.

International rig count: October 2017

In October 2017, the international offshore rig count was 204—down 14 rigs from 190 in the previous month. Compared to October 2016, the rig count rose by four rigs.

The total international rig count (land and offshore) was 951, which was higher than 920 in October 2016.

Monthly rig count: October 2017

The number of US offshore rigs rose to 21 in October 2017 from 18 in September. The rig count dropped by two compared to October 2016. The onshore rig count rose 65% in October 2017 to 901 from 544 in October 2016.

A dropping rig count suggests that the offshore drilling (IYE) industry is still struggling. This could indicate a subdued outlook for companies such as Seadrill (SDRL), Diamond Offshore (DO), Transocean (RIG), Rowan Companies (RDC), and Ensco (ESV).

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