Baker Hughes has reported yet another increase in the U.S. oil and gas rig count this week, with 16 more rigs coming online. The previous two weeks have seen increases of 13 and 27 respectively, bringing the total number of active rigs to 653. The U.S. is now just 47 rigs below the count this time last year, evidencing the recovery that is being seen in both U.S. oil and gas.
The most recent climb has largely been fueled by the OPEC production cut agreement, and while not a single barrel has yet been cut by the cartel, the promise to reduce supply has clearly been enough for the U.S. shale patch to begin bringing rigs back online. The oil rig count continues to follow the lagged oil price perfectly, suggesting that we are far from seeing an end to the recent climb in oil rigs.
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Oil rigs once again led the way this week, with an increase of 13 compared to just 3 gas rigs. While the oil rig count has seen a remarkably strong rebound since the OPEC agreement, it remains far below the highs of 2014.
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Oil prices continued to trade slightly lower following the rig count release, with WTI trading at $52.84 and Brent trading at $54.99 at the time of writing.
By Charles Kennedy of Oilprice.com
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