Advertisement
Canada markets closed

  • S&P/TSX

    21,807.37
    +98.93 (+0.46%)
     

  • S&P 500

    4,967.23
    -43.89 (-0.88%)
     

  • DOW

    37,986.40
    +211.02 (+0.56%)
     

  • CAD/USD

    0.7275
    +0.0012 (+0.16%)
     

  • CRUDE OIL

    83.24
    +0.51 (+0.62%)
     

  • Bitcoin CAD

    88,035.05
    -1,339.41 (-1.50%)
     

  • CMC Crypto 200

    1,371.97
    +59.35 (+4.52%)
     

  • GOLD FUTURES

    2,406.70
    +8.70 (+0.36%)
     

  • RUSSELL 2000

    1,947.66
    +4.70 (+0.24%)
     

  • 10-Yr Bond

    4.6150
    -0.0320 (-0.69%)
     

  • NASDAQ

    15,282.01
    -319.49 (-2.05%)
     

  • VOLATILITY

    18.71
    +0.71 (+3.94%)
     

  • FTSE

    7,895.85
    +18.80 (+0.24%)
     

  • NIKKEI 225

    37,068.35
    -1,011.35 (-2.66%)
     

  • CAD/EUR

    0.6824
    +0.0003 (+0.04%)
     

US Oil & Gas Rig Tally Sets Record Lows for 3 Straight Weeks

Zacks Equity Research
·4 min read

In its weekly release, Baker Hughes Company BKR reported a drop in the U.S. rig count.

More on the Rig Count

Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry.

A change in the Houston-based oilfield service player’s rotary rig count affects demand for energy services like drilling, completion and production provided by the likes of Halliburton Company HAL, Schlumberger Limited SLB, Diamond Offshore Drilling, Inc DO and Transocean Ltd. RIG.

Details

Total US Rig Count Falls: Rigs engaged in the exploration and production of oil and natural gas in the United States fell to an all-time low of 318 in the week through May 22, compared with the prior-week count of 339. The current national rig count is below the prior year’s 983.

ADVERTISEMENT

Investors should know that with the recent all-time low mark, the tally has touched record-low levels for three successive weeks, thanks to dented global energy demand owing to the coronavirus pandemic.

The number of onshore rigs in the week ending May 22 totaled 306 versus the previous week’s 327. Notably, the tally of rigs operating offshore plays through the week till May 22 was 12, in line with the prior-week count. Also, no rigs operated in inland waters, same as it was in the prior week.

US Removes 21 Oil Rigs: Oil rig count was 237 in the week through May 22, compared with 258 in the week ended May 15. Since crude prices are in the bearish territory, explorers are cutting their capital budget considerably. This led the weekly tally of oil rigs to fall for 10 consecutive weeks. Notably, among the upstream energy players in North America that decided to lower their capital budget for 2020 are Occidental Petroleum Corporation OXY and Marathon Oil Corporation MRO. Marathon Oil currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors should note that the current tally of oil rigs, far from the peak of 1,609 attained in October 2014, is also below the year-ago 797.

Natural Gas Rig Count Flat in US: The natural gas rig count of 79 is in line with the prior-week count. Notably, the count of rigs exploring the commodity is lower than the prior-year week’s 186. Per the latest report, the number of natural gas-directed rigs is 95% below the all-time high of 1,606 recorded in 2008.

Rig Count by Type: The number of vertical drilling rigs totaled eight units, compared with the prior-week count of 10. Moreover, the horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations, also known as shale formations) of 310 was lower than the prior-week level of 329.

Gulf of Mexico (GoM) Rig Count Flat: The GoM rig count is 12 units, of which all were oil-directed. The count was in line with the prior-week tally.

Rig Count in Major Basins & Outlook

Permian — the most prolific basin in the United States — saw a drop in oil rig tally by 13 in the week ended May 22. Importantly, the oil rig count dropped for 10 consecutive weeks in Permian. Moreover, drillers in the Eagle Ford shale play lowered oil rig count by two.

Notably, domestic drillers may continue to lower rigs in oil patches since global energy demand has declined drastically owing to worldwide social distancing measures taken to combat the pandemic.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Transocean Ltd. (RIG) : Free Stock Analysis Report
 
Marathon Oil Corporation (MRO) : Free Stock Analysis Report
 
Schlumberger Limited (SLB) : Free Stock Analysis Report
 
Halliburton Company (HAL) : Free Stock Analysis Report
 
Diamond Offshore Drilling, Inc. (DO) : Free Stock Analysis Report
 
Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report
 
Baker Hughes Company (BKR) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research