Natural gas supplies
In the week ended January 19, 2018, the natural gas rig count was 88.2% below its historic high of 1,606 in 2008. However, natural gas supplies rose despite this large increase in the natural gas rig count. The rising oil rig count propelled natural gas supplies. Natural gas is often a by-product of oil extraction from the US’s shale regions.
Moreover, the oil rig count, an indicator for US oil supplies, could rise in the coming months. On January 23, 2018, US crude oil active futures were at their new highest closing level of $64.47 per barrel in the last three years. So, we could see the oil rig count at its new multiyear high by July 2018 based on oil rig and oil (UCO) (BNO) price patterns.
Natural gas rig count
In the week ended January 19, 2018, the natural gas rig count rose by a few rigs. During the same week, the natural gas rig count was at 189. In the last seven weeks, the natural gas rig count stayed between 180 and 190. Natural gas production fell 0.2% over this time period. Natural gas producers could add more rigs. Thus, any spike in natural gas or the oil rig count could limit natural gas’s (GASL) (GASX) upside because natural gas supplies would rise.