Baker Hughes Rig Count Data shows the total U.S. rig count is 480, down by 9 in the last week. North American rig counts declined by 40 to 578. Canada accounts for 31 of the North American decline.
Citing Baker Hughes, MarketWatch reports “The previous record US low was at 488 rigs on April 23, 1999. The number of active U.S. oil-drilling rigs fell for a 12th week in a row, down by 6 to 386.”
Bloomberg Econoday reports “The Baker Hughes North American rig count is down 40 in the March 11th week to 578. The U.S. rig count is down 9 at 480 and is down 645 rigs from last year. The Canadian rig count is down 31 rigs from last week to 98 and, compared to last year, is down 122 rigs.”
Baker Hughes Rig Counts 1991-Present
Check out the total counts in purple.
Mike “Mish” Shedlock
Mostly non-producing rigs?? Our over-all output is down less than 10% from the high within the last year. …Brad
Margin stress demands that rigs drill only where a good return is guaranteed. No exploratory drilling is affordable. The success rate is high so oil keeps on coming. In many cases the small outfits pump at a loss because they must meet interest payments on their debt. Likewise the Middle Eastern welfare states must feed the indigent breeders who are forbidden to practice birth control. Conventional oil storage capacity is depleted during the latter part of 2016. Next comes storage in rail cars, tanker ships, and salt domes. Someone will store lakes of cheap oil in outdoor depressions. The core of Earth is iron carbide so an endless supply of carbon is working its way to the surface everywhere. Cheap oil is good for business and bad for banks that loaned money on $100/bbl oil.
“The core of Earth is iron carbide so an endless supply of carbon is working its way to the surface everywhere.”
Wha…..? Are you suggesting crude oil is generated from earth’s mantle, and NOT as a greasy, waste product of Clinton Crime Family operations?
How does operating at a loss create money for interest payments?
The sunk costs to explore and drill the well may make the total project an NPV loser even though extraction produces positive cash flow.
The “rig count” is for wells being drilled, not existing wells. There are over a million oil & gas wells in the US, but there are different categories, as detailed here:
I think you’re confusing “rigs” and “wells.” There are many wells on land in the U.S. they may produce a few barrels per day on a rancher’s or farmer’s land for some small supplemental income. “Rigs” are large scale operations out at sea. if we had anything like 1.7 million rigs working we wouldn’t need any foreign oil for our 19 million barrel per day needs.
Obviously you did not do your homework before posting, Anonymous.
“Pumps” are what produce oil AND GAS, but as the linked site says, not all are working.
“Rigs” drill wells. Do you really think the US has only 480 oil wells producing?
Do not confuse rigs and pumps. “Rigs are large scale operations at sea”? Where do you get this stuff? Perhaps this will help clear it up for you:
Rick Weldon said:
Gulf of Mexico up 2. Those rigs continuing to pump crude. Bulls don’t want to talk about that.
James K. said:
Who cares about rig counts? Has actual production declined? That’s the question that nobody seems willing to tackle (seems like a good job for you Mish). As other posters have pointed out, there is more than one way to get oil these days, and “rigs” is actually the old fashioned method.
A bit back I posted the actual decline in production was something like 5%.
But These vanishing rigs represent money destroyed.
It also represents another American industry destroyed. It will take years and lots of money (debt) to bring this all back and by then we will be bent over and begging for oil once again and even more dependent on foreign oil, with all of its “costs”.
No capitulation just yet.
The category “VERT” on the chart is the dominant part of the total rig count. It shows a classic “hockey stick” pattern which is typical of bubbles in a market. The Elliott wave patterns are clear since its low about 20 years ago. Now that its bubble has popped, “VERT should retrace all the way to the lows about 20 years ago.