The total U.S. rotary oil rig count continues to trend lower and is now down 150 rigs from early September last year, which is 14.3 percent lower. From a capacity standpoint, total rigs targeting oil have fallen by 122 and represent 82 percent of all drilling activity. Similarly, rigs targeting natural gas have also trended lower, falling by 26 vs. last year.
It is highly likely that low prices for oil/gas have led to the decline in active rigs as higher-cost operations are idled. The decline in activity has, in turn, propped up near-term prices as oil prices has steadied around $55 per barrel and natural gas prices have been trending higher after reaching a low point in early August.
Crude prices reacted strongly this week to lost Aramco capacity due to a reported drone attack on an oil and gas facility in Saudi Arabia.