Baker Hughes US Oil Rig Count Increases To 720, Highest Since April 2015

The total Baker Hughes North American rig count for the week ending May 19th increased to 901 from 885 the previous week.

The number of oil rigs increased to 720 from 712 previously and the total has increased for 18 weeks in succession.

There was also an increase of 8 in the gas rig count to 180 from 172 previously.

Horizontal rigs continued to dominate with vertical rigs now accounting for only 9% of the total.

The Permian Basin added a further 4 rigs in the week to 361 and compared with 137 in the equivalent 2016 week.

There was also an addition of 2 rigs in the Eagle Ford Basin to a total of 85 from 31 last year while there was an increase of 2 in the Marcellus Basin. There was also an increase of 3 in the Mississippian Basin to 9.

Texas continued to dominate the geographical breakdown with an increase of 8 rigs to 459 from 173 the previous year while there was an increase of 4 for Oklahoma and 2 for Louisiana.

The recovery in oil prices over the past 2 weeks should bolster confidence among shale drillers and there will be further expansion in the short term.

Further price increases would increase producer hedging which will increase the risk that price increases will stall close to current levels

Oil prices continued to on Friday with WTI trading above the $50.00 p/b level for the first time in four weeks.

Prices dipped lower following the data with WTI dipping to $50.15 p/b from $50.25 before regaining ground while natural gas prices ticked lower.

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.