In its weekly release, Baker Hughes, a GE company BHGE reported an increase in 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 services players' rotary rig count impacts demand for energy services like drilling, completion and production provided by the likes of Halliburton Company HAL , Schlumberger Limited SLB , Diamond Offshore Drilling, Inc. DO and Transocean Ltd. RIG .
Total U.S. Rig Count Increases: Rigs engaged in the exploration and production of oil and natural gas in the United States totaled 1063 in the week ended Oct 12, higher than 1052 in the prior week. Notably, the rig count increased in five of the last 10 weeks.
Despite the rig count slipping to an all-time low of 404 in May 2016, it has been rising rapidly in U.S. shale resources. The current national rig count is considerably higher than the prior-year level of 928.
For the week under review, the rise in rig count can be attributed to increased onshore operations. The number of onshore rigs totaled 1037, up from 1026. The tallies for both offshore and inland water rigs were in line with the counts for the week ended Oct 5. Three rigs operated in the inland waters last week, while the number of offshore rigs was 23.
U.S. Adds Eight Oil Rigs: Oil rig tally was 869, up from 861 in the week ended Oct 5. Moreover, the current total, though far from the peak of 1,609 attained in October 2014, is significantly higher than last year's 743.
Natural Gas Rig Tally Increases in U.S.: The natural gas rig count of 193 was higher than 189 for the week ended Oct 5.
Moreover, like oil, the count of rigs exploring the commodity is above the prior-year number of 185. However, per the recent report, the number of natural gas-directed rigs is 87.9%, below the all-time high of 1,606 in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 66 units, down from the previous week's 67. However, the horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations also known as shale formations) increased by 12 units to 997.
Gulf of Mexico (GoM) Rig Count In line: The GoM rig count is 22 units, of which, 16 were oil-directed. The count is in line with the tally for the week ended Oct 5.
The number of rigs exploring Permian basin increases despite pipeline bottleneck. Permian added four oil rigs, while one oil rig was included in the DJ-Niobrara basin. Arkoma Woodford witnessed the addition of one natural gas rig.
Overall, the West Texas Intermediate (WTI) crude pricing scenario has been favorable for drillers to further ramp up activities given that the commodity has recovered from historical low marks touched in early 2016. Notably, traders mostly remained bullish on oil with optimism that the United States is going to implement sanctions on crude export by Iran - the third-largest producer of oil among the OPEC member countries - on Nov 4.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportSchlumberger Limited (SLB): Free Stock Analysis ReportHalliburton Company (HAL): Free Stock Analysis ReportDiamond Offshore Drilling, Inc. (DO): Free Stock Analysis ReportTransocean Ltd. (RIG): Free Stock Analysis ReportBaker Hughes, a GE company (BHGE): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research