Friday, January 13, 2012

U.S. Rig Count: -20 to 1,987

The weekly Baker Hughes rig count showed a 20 rig decrease, bringing the number of working rigs to 1,987.  Oil rigs held at 1,191, while gas rigs were down 20 to 791 and miscellaneous rigs held at five.  By type, horizontal rigs were up one to 1,161, vertical rigs were down 18 to 613 and directional rigs were down three to 213.

The number of gas rigs is at its lowest point since January 2010, but it is still above its lowest recent level of 665 in June 2009.  While we definitely need to see a reduction in gas rigs to see any upward bump in gas prices, I would argue (actually, have been arguing) that a drop in gas rig count will not directly correlate with a reduction in gas supply and therefore an improvement in prices.

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