Overall rig count down again due to fewer rigs seeking gas
Baker Hughes (ticker: BHI) released its weekly rig counts, indicating that the number of rigs drilling for oil in the United States increased for the first time in 10 weeks. While more rigs were drilling for oil in the U.S. than in previous weeks, the overall number of active rigs fell by four due to lower counts in gas rigs.
The total rig count for the week ended November 13, 2015 was 767, down from 771 last week. The largest declines this week came from California and Texas, both of which saw two fewer rigs from last week’s count. The largest gain was seen in Oklahoma, which added two rigs.
Oil rigs snapped a 10 week decline, with this week’s count totaling 574, up from 572 last week. The number of gas rigs fell by six to 193 this week, offsetting the small gains seen in the oil patch.
Rig counts likely have a long road ahead of them before seeing any substantial gains.
U.S. crude benchmark WTI was down $0.99 at 4:15 EST today, a loss of more than 2% in a single day of trading. The low for WTI at posting time was $40.22 per barrel. The continued decline in prices came as the Department of Energy reported yet another build to crude oil inventories yesterday. Oil prices have fluctuated more in the last year following OPEC’s decision to defend market share than during 2014.
Crude oil builds and devalued oil hurt Canada’s dollar today as well, with the currency slipping below CAD$0.75-to-USD$1 mark. The Bank of Montreal put out a report Friday suggesting it doesn’t see the Canadian dollar’s fortune changing any time soon. Economists widely expect the Federal Reserve to raise interest rates at its next policy meeting in December, which BMO thinks could push the Canadian dollar below USD$0.74 early in the New Year, before rallying to around the USD$0.78 level by the end of 2016, reports CBC.