Rig Counts and Oil Price Chasing (BHI, USO, OIL)

Baker Hughes Incorporated (NYSE:BHI) announced today that the international rig count for May 2009 and it looks like the endless slide we saw all of 2009 is being confirmed as either over or at least severely moderating on the international front.  The count is the U.S. and Canada is still lower, but the most recent weekly data seen in the last two weeks seems better than the overall monthly trends.  The United States Oil (NYSE: USO) ETF is up 0.5% at $37.87 and the iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) is up 0.6% at $25.03 in early trading.  Where these ETF’s trade will more likely come from changes in the Dollar and oil prices rather than based on the May rig counts.

The new international rig count for the end of May was 993.  That is a gain of 7 from the 986 counted in April 2009, but is still down 82 from the 1,075 counted in May 2008.

The international offshore rig count for May 2009 was 272, which is down 1 rig from the 273 counted in April 2009 and is down 33 from the 305 counted in May 2008.

The US rig count for May 2009 was 918, and that is down 77 from the 995 counted in April 2009 and down 945 from the 1,863 counted in May 2008.

The Canadian rig count for May 2009 was 72, down 2 from the 74 counted in April 2009 and down 63 from the 135 counted in May 2008.

The worldwide rig count for May 2009 was 1,983, down 72 from the 2,055 counted in April 2009 and down 1,090 from the 3,073 counted in May 2008.

The United States Oil and the iPath S&P GSCI Crude Oil Total Return Index ETN are reacting to the positive move in oil after the jobs data rather than the rig count data.

Jon C. Ogg
June 5, 2009