Oil Rig Counts Confirming Trends (BHI, OIH, USO)

Baker Hughes Incorporated (NYSE: BHI) has just released its weekly rig count, and the rig count is back up.  In the rig count data for services business there is the Oil Services HOLDRs (NYSE: OIH) and for the weeks ahead in oil prices we always track the United States Oil (NYSE: USO).

There may be of course some seasonality and year-end issues, but the breakdown is as follows:

• U.S. Rig Count is up 6 from last week at 1700; up 480 year over year.
• Canadian Rig Count is up 176 from last week at 422; up 80 year over year.
• The US Offshore rig count is 25, up 1 from last week; down 17 year over year.

The rig count is not seeming to have much impact as energy prices and commodities are acting weak in general.  The United States Oil (NYSE: USO) fund is down just a bit less than 1% at $37.31 and the Oil Services HOLDRs (NYSE: OIH) is actually up almost 1% at $137.77.

Baker Hughes Incorporated (NYSE: BHI) is trading higher this afternoon after a Goldman Sachs upgrade to Buy from Neutral this morning.  Oil itself is trading down almost 1% at $87.60 on the day.

JON C. OGG