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Rig Counts Continue to Decline

by Elizabeth Alford on October 8, 2015

The oil and gas rig count continues to fall in all regions of the country. Baker Hughes reported that the number of running rigs fell by 29 last week ending at 809 by midday Friday. This marked the sixth straight week of declines.

Related: The Eagle Ford Shale rig count fell to 100

Related: The Bakken-Three Forks rig count dropped to 65

The biggest drop last week was from rigs drilling for oil. Oil rigs were down 26 from the week prior to 614, a huge drop compared to 1,591 a year ago. Natural gas rigs are down to 195, which is the lowest in 28 years.

So what does all this mean? Maybe not as much as some fear, at least when it comes to shale. One analyst says that the number is relatively meaningless because wells can be dug and brought into operation very quickly. This means even a smaller producer can pull rigs form production as a tactic while waiting for oil prices to rebound.

“…I don’t pay much attention to how many rigs are in operation, neither do I care as much about oil inventory. Companies are simply keeping the oil in the shale, rather than bring it up and place it in storage. Shale, in that regard, is the new storage facility.”

Crude rices are continuing their dance and have been fluctuating in the mid 40’s for weeks.

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