Environment and Energy
August 21, 2015
Gas & Oil Rigs Have Bottomed in US & Are Improving in Canada
Written by Brett Linton
According to Baker Hughes data from August 21, 2015, the U.S rig count for the week was 885 rigs exploring for or developing oil or natural gas. This is an increase of 1 rig when compared to last week, with oil rigs up 2 to 674 rigs, gas rigs unchanged at 211 rigs, and miscellaneous rigs down 1 to 0 rigs. Compared to this time last year, the 885 count is down 1,011 rigs, with oil rigs down 890, gas rigs down 119, and miscellaneous rigs down 2.
The decline in the drilling of new gas and oil wells is having a direct impact on the amount of line pipe, storage tanks, and OCTG that is being used by the energy sector. A good portion of these products come from hot rolled coil or plate substrate, and are reasons for both the short lead times on hot rolled and plate at North American steel producers and the falling steel prices we have seen going back to mid-2014. Prices have since stabilized for hot rolled coil but the product is having a difficult time breaking out of a very narrow trading range partially due to the weakness in the energy sector.
