The nation's active rotary rig count fell by four this week to 954 overall, according to a Friday, Aug. 4, report from Baker Hughes, a GE Co. (BHGE - Get Report) . The drop follows an eight-rig increase last week and is a positive sign for commodities as analysts recently have suggested the U.S. needs to curb its production rate in order for oil and gas prices to meaningfully increase.
All-told, active oil-directed rigs decreased by one to 765 units and natural gas-directed rigs dropped by three to 189. The U.S. offshore rig count tumbled by seven this week to 17 units and is flat year over year, according to Baker Hughes.
The Eagle Ford Shale of south Texas saw the greatest individual basin gain week over week with two new rigs coming online, while Oklahoma's Cana Woodford saw the most significant drop, falling by three. Overall, Texas saw the greatest uptick in rig activity with four rigs added, and Louisiana's drilling profile decreased the most with 5 rigs coming offline.
The U.S. rig count is up 490 rigs from this time last year when it stood at 464, according to Baker Hughes. Oil rigs are up by 384 year over year, and gas rigs have climbed 108, while miscellaneous rigs are down by two.
According to analysts at Seaport Global Securities, comments made recently by bellwether drillers Patterson-UTI Energy Inc. (PTEN - Get Report) and Helmerich & Payne Inc. (HP - Get Report) indicated that rig count growth is flattening but the super specialized rig market remains tight. Seaport noted earlier this week that both companies have made significant upgrades to increase their super specialized rig fleets.
On the price side of the equation, oil fell on Friday due to an increase in OPEC exports and strong domestic production.
"Increasing OPEC production and increasing OPEC exports are the reason the market has been trading lower," PVM Oil Associated analyst Tamas Varga told Reuters.
PPrices were being pressured by U.S. output, but strong demand is helping to offset the losses.
OPEC is leading daily production cuts of 1.8 million barrels, and so are some non-OPEC members like Russia, Reuters added. However, OPEC's July exports of 26.11 million bpd hit a record high.
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