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U.S. Rig Counts on the Rise

by Elizabeth Alford on July 6, 2015

The U.S. rig count increased last week for the first time since December 2014. This is welcome news after months of instability as producers pulled back rigs to wait out the current pricing environment.

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According to Baker Hughes, who publishes weekly rig statistics, the number of U.S. rigs targeting oil rose by 12 to 640 by midday on Thursday.

The rig counts in all the shale regions began a freefall in November as producers were forced to tighten their budgets and change their strategies in order to stay competitive. These tactics have worked well and first quarter results show many companies have been able to stay the course and gain strength by slashing costs associated with drilling through greater efficiencies and supplier reductions. but has slowed in recent months. Producers have indicated that they will put rigs back online as oil prices stabilize, with many targeting the second half of the year.

James Williams, president of energy consultancy WTRG Economics, told Bloomberg that “This is fairly solid evidence that the decline in the oil rig count has come to an end, as long as oil prices hold up. If anything, this is going to bring the market down a little bit. It indicates that any production decline may only last for three months.”

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