Now on its second week, United States oil rigs are increasing in number, amounting to a total of 645 active oil rigs in activity today. According to the report from Baker Hughes Inc., there were 12 additional active rigs last week while this week saw an addition of 5 additional active rigs.
The increase in oil rig count is good news for oil companies, operators and investors. Since the summer of last year, the number of active rigs has been significantly decreasing when oil prices have gone down by 60%. This resulted to a reduction of active of oil rigs, decreasing employment demand in oil operations as well as lowered oil prices for the consumers.
Additional rigs across the country
The additional number of rigs are said to be spotted in various oil plays across the country. There are an additional 8 rigs to the existing 239 in the Permian Basin. Meanwhile, Eagle Ford has lost four rigs and the Williston region in North Dakota has lost six. By state, there were three more additional rigs in New Mexico, Colorado, California and Ohio. Meanwhile, there have been no changes within the oil rigs in the states of Arkansas, Wyoming, Alaska and Oklahoma.
While rig count slightly increases, prices of oil have gone down. According to analysts, the reduction of oil price is due to many factors, including oversupply to the global market; stress over nuclear talks with Iran, declining Chinese stock economy and issues with Greece and its creditors.
Ramping up drilling activity
However, the increase in rig count as well as oil price averaging at $60 per barrel indicates that the oil economy will be good enough to begin ramping up drilling activity. This has been the case for Pioneer Natural Resources Co. Analysts believe that oil operators have began identifying economically viable rigs even for $60 per barrel. Still, it is essential to keep identifying high quality rigs and improve on the efficiency of the process.
As the first oil rig increase from the 29 weeks of decreasing rig count, experts saw a light of optimism to the rather stressed US oil economy. Analysts from Goldman thought it was “first sign of this response and suggests that producers are increasingly comfortable at the current costs/revenue/funding mix.” The increase in rig count is an indication that America is toughening up to the present oil economy despite the numerous events that affect oil price globally.
Experts keeping their eyes peeled
Industry experts and key players are keeping their eyes peeled to the reports from Baker Hughes. The rig count provided can have significant impacts to in answering the demands for oil demand through exploration, drilling and production.
For now, the total rig count doesn’t even make it even half to last year’s 1,873. Record also shows that the highest recorded rig count was in August-September of 2008, totaling to 2,031 active rigs. Still, even with its slow increase, this could be indication that United States oil industry is now slowly gaining back its momentum.