Baker Hughes Total US Rig Count Increases To 789

The latest Baker Hughes North American rig count data recorded an increase in total rigs to 789 in the week ending March 17th from 768 the previous week.

The number of oil rigs increased to 631 from 617, the 9th successive weekly increase, while the number of gas rigs rose to 157 from 151.

The number of oil rigs is now 63% higher than year ago levels and only one short of being 100% above 2016 lows.

As was the case last week, growth was not led by the Permian basin with the number of rigs actually falling by one on the week.

There was an addition of 4 rigs in the Williston basin while Eagle Ford added 2 and there were 3 new rigs in the Mississippian basin from an extremely low base.

There was an addition of 4 rigs for Texas on the week while Oklahoma added 10. There was also an increase in North Dakota after a significant period of stagnation which suggests companies are looking to widen exploration again.

Given significant lead times, the recent slide in oil prices is unlikely to have an immediate impact on drilling numbers, especially as US companies have increased capital spending allocations for this year. There will, however, be the potential for a significant scaling back in activity if prices weaken further in the second quarter of 2017.

WTI oil prices ticked fractionally lower on the data, although moves were limited as prices held near $48.70. Natural gas prices edged higher to $2.96 per mBtu despite the increase in gas rigs.

Tim is a contributing author to EconomicCalendar.com. He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.