After an up and down week for crude oil prices, the U.S. rig count extended its upward momentum to make it six out of the last seven weeks in the positive. The total number of active rigs increased by seven rigs over last week to 447, according to date released today by Baker Hughes (ticker: BHI). Despite gains in the last few weeks, the rig count remains low having fallen 410 rigs from the year ago mark of 857.

The upward move was mostly due to increases from oil rigs, with oil plays adding six rigs and gas plays adding one rig. The turnaround in rig count over the last few weeks comes as oil hovers in the $45 to $50 range. Oil originally breached the $45 mark in late April and made the move toward $50 a barrel in early June, closing above $50 on June 7 for the first time since July 2015. Rig count consequently went up that week for the first time since August 2015.

Baker Hughes rig count

Canadian rig count increased by 14 rigs this week to 95 rigs, giving the North America count a 21 rig boost overall. Oil rigs and gas rigs both gained seven rigs this week, with the largest increase coming in Alberta with seven additional rigs.

Oil price was largely un-moved by the news, changing by $0.10 in the two hours following the news, up from $45.83 per barrel to $45.93 per barrel.

The rigs increase comes amidst concerns that oil prices in the $45 to $50 dollar range would spur companies to increase drilling efforts and bring new production online, mitigating the depletion of the supply glut. This report did little to alleviate those concerns, however the uptick in rig count was met with little reaction from the market.


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