The total number of operating rigs in the U.S. the week ending December 29th was 929, 747 oil and 182 gas. In percentage terms, on a month on month, (m/m) basis, oil rigs were down 0.3% and gas rigs increased by 1.1%. In numerical terms, there was no change m/m. On a year on year, (y/y) comparison, rigs were up +42.3% for oil and +37.8% for gas. The combined figure was +41.2% or +271 rigs.
Figure 1 shows the Baker Hughes U.S. Rotary Rig Counts for oil and gas equipment in the U.S. from 2012 to present. Despite the recent upward momentum, the rig count is still well down from the lofty 1,930 level enjoyed in September 2014.
Figure 2 presents the North American rig count by basin. The Permian basin in West Texas is by far the largest producer, (It reaches from just south of Lubbock, to just south of Midland and Odessa, extending westward into the southeastern part of New Mexico). On December 29th the Permian basin contained 398 oil rigs and zero gas rigs. At less than one fifth the output of the Permian are the Cana Woodford, (73 oil, 0 gas) and Eagle Ford, (63 oil and 7 gas) in the number two and number three spots. Eagle Ford is also in Texas while the Cana Woodford is mostly in Oklahoma but does stretch into the northeastern part of the panhandle in Texas. The Marcellus basin (Pennsylvania, West Virginia, Eastern Ohio and Southern New York) had the most gas wells with 48 and zero oil. Haynesville (eastern Texas and western Louisiana) was a close second with 45 gas rigs and zero oil.
At the end of 2017, Texas had 452 rigs, plus one off-shore rig, (48.7% of the total), followed by Oklahoma with 120, (12.9%), New Mexico with 75, (8.0%). Louisiana had 47 on-land and 17 off-shore, (6.9%). North Dakota’s count was 46, (5.0%). These five states together account for 81.5% of the nation’s rig count.
Prices are moving up. Referencing Bloomberg Energy, West Texas Intermediate (WTI) crude oil closed at $60.45 today, very close to its high for the year. Its range over the past 52 weeks has been between $43.76 and $60.74 per barrel. WTI crude has been trending higher since its recent low of $42.53 on June 21st. Brent crude oil closed at $66.57 per barrel today, close to its 52 week high of $67.29. Its 52 week range was $46.38 to $67.29 per barrel. Brent crude has been trending higher since its recent low of $45.22 on June 21st. Natural gas closed at $3.04 per MMBtu today. It has been trending higher over the past month. Its 52 week range was between $2.56 and $3.74 per MMBtu.
Canadian rotary rig count totaled 136 on December 29th, 62 oil rigs and 74 natural gas rigs. These figures were down 44.1% m/m for oil and off 33.3% m/m for gas, -38.7% on a combined basis. Most of this decline occurred in the final week of the year. On a y/y comparison, oil rigs were up 19.2%, while gas rigs decreased by 26.0% for a combined decrease of 13.4%. The province of Alberta had by far the greatest amount of rigs with 118, (86.8%), followed by British Columbia with 13, (13.2%).
At Gerdau we monitor rig counts along with the price of oil and natural gas since it has a major impact on long product sales to include Special Bar Quality sucker rods for downhole pumping strings to merchant and structural products for rigs and oilfield equipment.