U.S. Rig Count Increases For The Third Consecutive Month

Baker Hughes Inc. (NYSE:BHI) declared the rig count for the month of Aug 2016. In the U.S., the total number of rigs increased from the Jul 2016 count favored by a higher number of land rigs. This represents the third consecutive increase in the U.S. monthly rig count.

Analysis of the Data

North America Rig Count

Total rig count in North America – U.S. and Canada – for the month of Aug 2016 was 610, higher than the Jul 2016 count of 543 but lower than 1,089 counted in Aug 2015.

U.S. rig: Total number of rigs in the U.S. was 481; higher than 449 rigs in July but much lower than 883 in Aug 2015.

Of the total U.S. rigs, land rigs were 464. This is higher than the 429 count in Jul 2016 but a lot less than 849 rigs in Aug 2015.

The number of U.S. offshore rigs for Aug 2016 was 17, down from 20 rigs in July and 34 in Aug 2015.

Canada rig: In Canada, the total rig count was 129; higher than 94 rigs in Jul 2016 but much lower than 206 counted in Aug 2015.

International Rig Count

Total international rig – offshore and land – count for the month of August this year came at 937, down by one from July and sharply below the 1,137 count in the month of Aug 2015.

Offshore rig: Among the total Aug 2016 international rig count, the offshore rig count was 228 – slightly higher than 226 in July but much lower than 270 in the prior-year comparable month.

Land Rig: The land rig count was 709 – lower than both the Jul 2016 count of 712 and the Aug 2015 count of 867.

Conclusion

Key Barometer of Drilling Activity: The Baker Hughes data, issued since 1944, acts as an important yardstick for energy service providers in gauging the overall business environment of the oil and gas industry. Baker Hughes currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

An increase or decrease in the Baker Hughes rotary rig count heavily weighs on demand for oil energy services – drilling, completion, production, etc. – provided by companies that include names like Halliburton Co. (NYSE:HAL) , Schlumberger Ltd. (NYSE:SLB) , Weatherford International plc (NYSE:WFT) , Diamond Offshore Drilling Inc. (NYSE:DO) , and Transocean Ltd. (NYSE:RIG) .

Oils-Energy Sector Price Index

Oils-Energy Sector Price Index

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