Maybe it’s OPEC’s promise for production cuts, maybe it’s Donald Trump’s new staff appointments, or maybe there’s just some good vibes floating around in the air. No matter what the reason, cheers went up today when Baker Hughes released the weekly rig count, showing an increase of 27 rigs exploring for oil and natural gas this week.
Even though the rig count is currently 624, down 85 from last year at this time, it’s still a significant increase from last week. Rig counts are up internationally, too, up 5 globally since November. Canada saw an increase of 30 rigs from last week as well, with a current rig count of 230.
According to Oilprice.com, the overall increase this week represents the highest spike in the number of active oil rigs in the United States since July 2015. Natural gas rigs increased by a total of 6 overall, another nice jump in comparison to past weeks and months.
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The largest regional increase was in the Permian Basin, with an increase of 11 rigs.
An interesting observation by OilPrice.com is the timing of the increase in rigs. While this week’s jump was more substantial than previous weeks, indicating confidence in OPEC’s promise to cut production by 1.2 million barrels per day, the increase has been steady all along, also indicating confidence in the ability to fix the price problem domestically. OilPrice says:
The steadily increasing number of active oil rigs in the U.S. at a time when OPEC had failed to agree on a production cut at the Doha meeting may be a sign that oil and gas players in the U.S. are not waiting for OPEC to correct the market, and that they are behaving independently of the once-revered cartel.
One might assume that the energy sector is going to take its cues from its new leader and focus more on energy independence rather than allowing outside sources to dictate their success.