Rig Counts vs. Oil Prices: Equilibrium Is Near (BHI)

Baker Hughes (NYSE: BHI) has released its weekly rig count. The overall count between the U.S. and Canada did post another drop despite the notion that oil prices have risen back to where many new projects would be profitable. But the good news is that there was a pause in the U.S. in the report a week ago, and there was a pause in the Canadian drops this week.

The U.S. Rig Count is down 38 from last week at 1,005; down 810 year-over- year.

The Canadian Rig Count up 8 from last week at 83 down 29 year-over-year.

The US Offshore rig count is 48, up 4 from last week; down 14 year-over-year.

This is far from good news on the production side, but it seems that there is finally a stabilization taking place now that the price of oil is back up to profitable levels for drillers.

Economists might even start thinking that equilibrium is starting to be found. At least the first signs of it.

Jon C. Ogg