Saudi Arabia has the highest number of active rigs in its history

The global oil market has changed drastically since the last meeting of the Organization of Petroleum Exporting Countries (OPEC) in November 2014. However, the intentions of each of the 12 member countries have not, and likely will not change as the cartel’s June meeting approaches.

The cartel is scheduled to convene for the first time in more than seven months on June 5 in Vienna. The decision from the last meeting to maintain output sent oil prices and North America rig counts into a tailspin that some analysts argue is still in search of a bottom.


Top line (light green) represents the Saudi rig count.

The stark differences between drilling activity of OPEC member producers and North America’s oil and gas producers are apparent in rig counts. Since the beginning of December 2014, the United States has dropped 54% of its fleet, amounting to 1,035 rigs. A total of 885 remain. (Baker Hughes, the provider of the rig statistics, suspended updates regarding the well counts in April as a cost-saving measure.)

Canada’s drop has been much worse: the 72 active rigs account for only 17% of the 422 rigs in service at the beginning of December.

In the meantime, OPEC has remained consistent with its rig counts with some countries pouring it on.

Saudi Arabia has the most active rigs in its history, and Iraq is attempting to gain a greater share of the prize as the cartel’s second largest producer. Opening the oil spigots was not well-received by all members of the group; Algeria, Iran and Venezuela have all publicly called on Saudi Arabia to reduce output to no avail. The Saudis have been steadfast in their approach to holding market share, and some analysts believe $100 oil will never be seen again.

Aside from Venezuela and Nigeria, OPEC rig counts are virtually unchanged compared to the November 2014 fleet. Algeria, Kuwait and Saudi Arabia have increased their fleet by a total of 10% in that time frame, while OPEC as a whole has wavered in the 430 to 460 range.


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