Rig Count Decline Continues

The International rig count as updated by Baker Hughes, fell by 55 to 1258 between December 2014 and January 2015. The total world rig count stood at 3309, about 7% drop from 3570 rigs counted in December. The number of US oil rigs in use fell by 33 this week to 986. This is the lowest total for US oil rigs since the week ending June 17, 2011.

The number of oil and gas rigs in use fell by 43 to 1,267, the lowest since the week ending January 15, 2010.

The decline in oil rigs has been closely watched as the price of oil has tumbled, and at current levels, the decline in US oil rig count is about 39%; in January, Baker Hughes said the number of rigs in use has declined by 40%-60% during past oil downturns.

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Baker Hughes has issued the rotary rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of U.S. and Canadian drilling activity. Hughes initiated the monthly international rig count in 1975. The North American rig count is released weekly at noon central time on the last day of the work week. The international rig count is released on the fifth working day of each month.

The Baker Hughes Rig Counts are an important business barometer for the drilling industry and its suppliers. When drilling rigs are active they consume products and services produced by the oil service industry. The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons.

Baker Hughes Rig Counts are published by major newspapers and trade publications, are referred to frequently by journalists, economists, security analysts and government officials, and are included in many industry statistical reports. Because they have been compiled consistently for 70 years, Baker Hughes Rig Counts also are useful in historical analysis of the industry.

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