Baker Hughes’ latest Rig Count revealed that as at March 27, 2020 the count of active United States drilling rigs has dropped by 44 to 728 after falling by 20 one week earlier. In addition, the US active rig count has reduced by 278 since March 29, 2019.
The report said that U.S. oil rigs fell by 40 to 624, said to be the biggest one-week drop since April 2015, while gas rigs reduced by 4 to 102 and 2 rigs are classified as miscellaneous.
Rigs drilling for oil in the Permian Basin reduced by 23 to 382. This is said to be the biggest drop since February 2015.
The sharp reduction last week is thought to be the result of the ongoing worldwide spread of the novel coronavirus (COVID-19) and the resulting slowdown in the industry due to reduced demand for petroleum products.
While Baker Hughes has issued the rotary rig counts as a service to the petroleum industry since 1944, the oilfield services company initiated the monthly international rig count in 1975.
The Baker Hughes Rig Count is said to be an important business barometer for the drilling industry and its suppliers.
“When drilling rigs are active, they consume products and services produced by the oil service industry. The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons,” the Baker Hughes report said.
Relied on by major newspapers and trade publications, the Baker Hughes Rig Counts are also referred to frequently by journalists, economists, security analysts and government officials, and are included in many industry statistical reports. “Because they have been compiled consistently for 70 years, Baker Hughes Rig Counts also are useful in historical analysis of the industry,” the report said.