US Oil Rig Tally Declines The Most Since April: Here's Why
Zacks Investment Research | Mar 23, 2020 12:35AM ET
In its weekly release, Baker Hughes Company reported a drop in the U.S. rig count.
More on the Rig Count
Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry.
A change in the Houston-based oilfield service player’s rotary rig count affects demand for energy services like drilling, completion and production provided by the likes of Halliburton Company (NYSE:HAL) , Schlumberger Limited (NYSE:SLB) , Diamond Offshore Drilling, Inc (NYSE:DO) and Transocean Ltd. (NYSE:RIG) .
Details
Total U.S. Rig Count Decreases: Rigs engaged in exploration and production of oil and natural gas in the United States totaled 772 in the week through Mar 20, lower than the prior-week count of 792. The current national rig count is also below the prior year’s 1016.
The number of onshore rigs in the week ended Mar 20 totaled 751 versus the previous week’s 771. However, the tally of rigs operating offshore plays through the week till Mar 20 was 19, in line with the prior-week count. In the inland waters, the rig count was two, on par with the prior week.
U.S. Drillers Remove 19 Oil Rigs: Oil rig count during the said period was 664, down from 683 in the week ended Mar 13. This marks the deepest weekly cut recorded since April 2019. Importantly, since crude prices are in the bearish territory, explorers are cutting capital budget considerably. Resultantly, the weekly tally of oil rigs touched the lowest mark since the beginning of this year. Notably, a few upstream energy players in North America that recently decided to lower capital budget for 2020 include Occidental Petroleum Corporation (NYSE:OXY) , Diamondback Energy, Inc. (NASDAQ:FANG) and Marathon Oil Corporation (NYSE:MRO) . Marathon Oil currently carries a Zacks Rank #3 (Hold). You can see Zacks Investment Research
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