US Crude Oil Rig Count: Almost Flat in the Last 5 Weeks

Baker Hughes, a General Electric (GE) company, published its US crude oil rig report on December 22, 2017. The US crude oil rig count was flat at 747 on December 15–22, 2017. The rigs were near the same level in the last five weeks. However, the rigs rose 43% from a year ago because WTI oil (SCO) (DBO) prices were near a 30-month high.

Higher oil (UCO) prices benefit ETFs like the iShares U.S. Energy ETF (IYE) and the iShares U.S. Oil Equipment & Services (IEZ).

US crude oil rigs tested a record 1,609 in October 2014. In contrast, rigs hit 316 in May 2016, which was the lowest level since the 1940s. Moves in oil prices impact drilling activity. Higher oil prices benefit oil drillers and producers like Transocean (RIG), Halliburton (HAL), Stone Energy (SGY), and PDC Energy (PDCE).

The EIA released its monthly drilling productivity report on December 18, 2017. It estimated that US shale oil production in the major shale regions would rise by 94,000 bpd (barrels per day) to 6,408,000 bpd in January 2017—compared to December 2017. It will be the 13th consecutive rise in US shale oil production. Any increase in US oil output is bearish for oil prices.

The international oil rig count rose by seven or 1% to 720 in November 2017—compared to the previous month. Rigs rose 5.7% or by 39 rigs from the same period in 2016.

So far, US crude oil rigs have risen 41% or by 218 rigs in 2017. US crude oil production has risen 16.1% since July 2016. Analysts estimate that US oil production could hit 10 million barrels per day in a few months. Higher oil prices would increase US rigs and production, which will weigh on oil (UWT) prices.

Next, we’ll discuss important drivers for oil prices this week.