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Baker Hughes Reports 5-Rig Drop As Oil Heads For Weekly Loss

August 11, 2017

The Houston oilfield services provider said three oil rigs came online, while the natural gas rig count decreased by eight.

North American Drilling Rig CountU.S. oil and natural gas producers took offline five drilling rigs over the past week, Baker Hughes, a GE Co. BHGE, reported Friday, Aug. 11, bringing the Houston oilfield services provider's active count to 949. The drop in rigs extends a brief period of tepid drilling activity in a U.S. shale sector that saw a rapid production boost in the first half of 2017. 

Overall, the count of oil-directed rigs climbed by three to 768, but the natural gas rig count dropped by eight to 181. Meanwhile, the U.S. offshore rig count is up one this week and up one rig year over year, Baker Hughes reported. 

West Texas' Permian Basin and South Texas' Eagle Ford Shale saw the greatest rig decline this past week with two rigs and three rigs coming offline in the plays, respectively. All-told, Texas saw the biggest fall in rig activity with seven rigs removed, while only California and New Mexico saw rig additions.

The U.S. rig count is up 468 rigs from this time last year when it stood at 481, according to Baker Hughes. Oil rigs are up by 372 year over year, and gas rigs have climbed 98, while miscellaneous rigs are down two to zero.

Earlier this week oil prices rebounded following a significant reduction in U.S. crude oil stockpiles. The EIA reported Wednesday that domestic inventories were reduced by 6.5 million barrels during the week ended Aug. 4.

Nevertheless, oil prices were set to end the week down big as the International Energy Agency on Friday issued a report in which it reduced demand estimates for crude in 2017 and 2018 and reiterated doubts over whether OPEC is actually committed to cutting production. 

Source: The Street

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