Yahoo Finance US Crude Oil Rig Count Fell for the Sixth Consecutive Week
Crude Oil Prices Rose in April: Will the Bullish Momentum Continue?
US crude oil rig count
On April 29, 2016, Baker Hughes (BHI) published its weekly US crude oil rig count. Baker Hughes reported that the US crude oil rig count fell by 11 to 332 rigs for the week ending April 29, 2016—compared to the previous week. The US crude oil rig count fell for the sixth consecutive week. It’s the lowest level since the 1940s. The US drilling activity fell by 51% year-over-year.
US crude oil rig count: Peak and low
The US crude oil rig count peaked at 1,609 rigs in October 2014. It hit the lowest level of 332 rigs for the week ending April 29, 2016, as we stated earlier. The US crude oil rig count lost 206 rigs year-to-date. The drilling activity fell due to lower crude oil prices. Crude oil prices lost 60% since June 2014. The fall in the drilling activity impacts oil drillers like Noble (NE), ENSCO (ESV), and Seadrill (SDRL).
Monthly drilling report
In its monthly drilling report, the EIA (U.S. Energy Information Administration) estimates that the US crude oil production from the seven key shale regions could fall by 114,000 bpd (barrels per day) to 4.8 MMbpd (million barrels per day) in May 2016—compared to the previous month.
Impact on stocks and ETFs
Drilling activity is the measure of oil producers’ confidence. The fall in drilling activity impacts oil producers like W&T Offshore (WTI) and QEP Resources (QEP).
The roller coaster ride in crude oil prices impacts ETFs and ETNs like the VelocityShares 3x Inverse Crude Oil ETN (DWTI), the SPDR S&P Oil & Gas Equipment & Services ETF (XES), and the First Trust Energy AlphaDEX Fund (FXN).
Read the next part of the series to learn more about Iraq’s crude oil exports and how they impact the crude oil market.
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