Market Overview

Rig Counts Fell In North America On The Black Monday Week; Oil & Gas Stocks Still Surging


Baker Hughes Incorporated (NYSE: BHI) has been publishing rotary rig counts for the United States and Canada, every week for more than 70 years. Additionally, the oilfield services company has also issued a monthly international rig count -- for the last 40 years.

The firm assures the rig counts are “an important business barometer for the drilling industry and its suppliers. When drilling rigs are active they consume products and services produced by the oil service industry. The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons.”

North America & The Globe

Baker Hughes released its latest rig count on Friday. As of August 28, the United States had 877 active rigs, 8 less than last week. This decline puts an end to the several-week-long upsurge the figure experienced. In addition, it implies a massive fall from the 1,914 rigs operating a year ago.

Canada was already experiencing a downtrend; and this continued over the past week. The northern country saw a 5.7 percent decline in active rigs, from 208 to 196. A year ago, the country had 409 active rigs.

Looking outside of North America, the rig count continued to fall. After tumbling roughly 1 percent, month-over-month, in June, July witnessed a 2.44 percent decline in the global active rigs count, which now stands at 1118 rigs. This compares to 1382 active rigs counted in July 2014.

Oil And Gas

The research note also distinguishes oil and gas rigs. A detailed look reveals that this week’s decline in U.S. active rigs was driven by a fall in active gas rigs, from 211 last week to 202 this week. Meanwhile, oil rigs continued to rise, from 674 to 675.

Canada, on the other hand, saw its total rig count fall on a 9.2 percent reduction in oil rigs –to 88- and a 2.7 percent drop in the gas rig count – to 108.

Stocks On The Move

The United States Oil Fund LP (ETF) (NYSE: USO) is up more than 6.4 percent on Friday trading, while Baker Hughes rose about 1 percent.

Most of the 20 largest companies (by market cap) in the oil & gas segment are surging on Friday. Among Oil & Gas Related Equipment and Services stocks, all of the top 20 companies are up, except for Kinder Morgan Management, LLC (NYSE: KMR), which is flat.

Some of the biggest large and mega-cap winners of the day include Chevron Corporation (NYSE: CVX), Anadarko Petroleum Corporation (NYSE: APC), Plains GP Holdings LP (NYSE: PAGP), Cameron International Corporation (NYSE: CAM), and Schlumberger Limited. (NYSE: SLB), all up more than 2 percent.

Posted-In: Rig counts VetrNews Commodities Global Econ #s Markets


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