The decline was largest in oil drilling rigs, with a loss of 69 in the week, the largest decline in 20 years. Natural gas rig counts increased by 7 and there were 3 rigs added as miscellaneous. For the year U.S. natural gas rigs have dropped by 373 and Canadian natural gas rigs have fallen by 30.
Among U.S. states, Texas saw its rig count fall by 18 week-over-week and Lousiana’s count fell by 6. For the year, the Texas count is down by 90, while Louisiana is down by 43 and Pennsylvania is down by 39.
The drop in oil rigs does not bode well for oil services companies like Baker Hughes, Halliburton Co. (NYSE: HAL), or Schlumberger Ltd. (NYSE: SLB). Natural gas rig counts have been falling for a year or more, but oil rigs have now declined for five weeks running. The reason for the drop could be a cutback due to generally falling crude prices as the outlook for energy consumption next year slides on weak forecasts for the global economy.
Another possible reason is the wide differential between Bakken and Western Canadian crude to Brent. The North American crudes are fetching about $60 a barrel, a price at which production costs make profits hard to come by on new drilling.
Paul Ausick
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
