Rig Counts Not Just Bottoming... They Grew (BHI, OIH)

Baker Hughes Incorporated (NYSE:BHI) shows weekly data on its rig counts it sees, but this morning it has announced its rig counts for the full month of July. Higher energy prices are bringing more rigs back on.  We are even seeing a gain in the Oil Services HOLDRs (NYSE: OIH) on the news.

The company said that the international rig count for July 2009 was 974, a gain of 7 rigs from the 967 reported for June 2009.  That figure is still down 118 from the 1,092 counted in July 2008.  The international offshore rig count for July 2009 was 275, a gain of 6 rigs from the 269 counted in June 2009. That figure is still down 37 from the 312 counted in July 2008.

U.S. rigs counted also rose.  For July 2009 it was a gain of 36 rigs in June to 931.  That figure is still down a whopping 1,001 from the 1,932 counted in July 2008.

Canadian rigs grew as well.  The count for July 2009 was 175, up 50 from the 125 counted in June 2009.  That is still down 237 from the 412 counted in July 2008.

The worldwide rig count for July 2009 was 2,080, up 93 from the 1,987 counted in June 2009 and down 1,356 from the 3,436 counted in July 2008.

Celebrating this might be like celebrating a birthday at the dollar store, but this is still good news.  Energy prices were through the roof a year ago and every rig that could be found was in use.  Now that oil’s plummet has ended and that we are around $70.00 per barrel in oil, it seems that the rig counts are slowly increasing again.

The Oil Services HOLDRs (NYSE: OIH) is up 1.2% at $104.60 on the news pre-market.

JON C. OGG
AUGUST 7, 2009