The U.S. oil and gas rigs count is up today according to today's Baker Hughes report, marking the third straight week of increases for the oil side of things.
The number of active U.S. oil rigs rose by 9 this week, after rising by 3 last week. The total number of U.S. oil rigs in production as of today's report is 337. When last week's report came out with the second straight week of increases, oil prices slid. Despite today's news-and despite those who are worried that more rigs means more oil, which means lower prices-WTI was up $1.34 to $47.55 as of 2:00pm EST today, over the previous close.
The number of active gas rigs also rose this week, up one from 85 to 86, bringing the total number of active oil and gas rigs to 424.
The increase in the number of rigs, although modest, should come as no surprise-oil prices have shot up almost 80 percent since the dark times of February, and the market is now more attractive.
For those who are afraid that this increase will immediately translate into increased production-and inevitably the end of the oil price rally-it may come as some comfort to know that even though the higher oil prices may indeed entice a few players to ramp up production, it is unlikely that today's prices, which are still disappointingly shy of the $100 per barrel WTI seen just years ago, will create an instant and massive entry back into the production game.
For the rig count to return to what it was just a year ago, the U.S. oil and gas industry would have to bring 433 more oil and gas rigs online-more than double today's total.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More