Note: Next week’s report will be distributed and posted on the web on Wednesday since I will be heading to New York for the Oil Supply and Demand conference.
Natural gas rig count down 23 from last week and 314 from last year
Baker Hughes today announced that the number of rigs drilling for natural gas fell 23 to 565. Last year at this time there were 879 rigs operating that indicated they were drilling for natural gas. That is a decline of 36% from year ago levels.
While on the oil side the rig count jumped 28 over last week and is now 1414. A year go 969 rigs were searching for oil. That is a 46 % jump in rigs in just 12 months.
We keep hearing that drilling for oil is being held back by environmental regulations and government policy but the data doesn’t support that view at all.
Market forces are clearly moving the drilling activity. The question now is whether the drop in natural gas rigs has gone to far and when that will be reflected in both supply and price.