While it's been a troubled ten months for the oil and gas sector in terms of prices there does, at last, seem to be some indications that the steady reduction in active rigs is coming to a close for the first time in more than a year. In fact, last week showed the number of active gas and oil rigs in the U.S. increasing for the fifth straight week.
These increases are the first sustained growth since 2013 and suggest that the capacity needs are now over-riding some of the fiscal decisions which have curtailed new rig development, research, and testing. All factors that have dramatically reduced the active rig total to less than half of where it stood a year ago.
We've seen a net increase in the demand for hot shot trucking services over the same period of time and some semblance of solidity in the energy sector will only bolster demand that has remained solid in the manufacturing and construction sectors. Meanwhile low oil prices and an erratic stock market have many analysts nervous, but the underlying indicators all point to a healthy U.S. economy overall.
Oilfield services company Baker Hughes Inc. reported the number of rigs exploring for oil and natural gas in the U.S. increased by one to 885 this week, these numbers represent 674 rigs seeking oil while 211 explored for natural gas. This compared to a year earlier when just under 1,900 rigs were active. This marks the rig count’s fifth consecutive weekly gain. We'll watch this data over the coming weeks and months to see if the figures can continue to rise.
image courtesy Linda Tipton