US crude oil rig count
Baker Hughes, a GE company (BHGE), published its US crude oil rig count report on July 6, indicating that the US crude oil rig count rose by five last week to 863, its highest level since March 2015. The rig count has risen by 100 (~13.1%) year-over-year. Active WTI oil futures have risen ~73.6% since June 21, 2017, and the iShares US Oil Equipment & Services ETF (IEZ) has risen ~18.6%.
Active WTI crude oil futures fell 0.5% between June 29 and July 6, while IEZ fell 0.2%. McDermott (MDR), Core Laboratories (CLB), Diamond Offshore (DO), and Rowan Companies (RDC), which comprise ~8.3% of IEZ, fell 9%, 6.8%, 5.3%, and 4.6%, respectively, the most among the ETF’s holdings.
Peaks and lows
US crude oil rigs reached a record high of 1,609 in October 2014. Rigs follow WTI oil prices, with an approximate four-month lag. WTI crude oil prices averaged ~$104 per barrel in June 2014, while US crude oil rigs reached 316 on May 27, 2016, their lowest level since the 1940s. WTI crude oil prices averaged ~$32.80 per barrel in January 2016.
International crude oil rig count
The international crude oil rig count increased by ten to 753 month-over-month in June, and 26 (3.4%) year-over-year. International crude oil rigs exclude US and Canadian rigs.
US crude oil rigs hit a three-year high last week, and US crude oil prices were near a multiyear high. Higher oil prices could see rigs rise in future months, which could increase US crude oil output and eventually pressure oil prices. Next, we’ll cover hedge funds’ long positions in WTI crude oil.