U.S. rig count, a leading indicator of U.S. oil and gas production published weekly by Baker Hughes, increased in the week ended Aug. 21 for the first time since the price collapse that began in early March of this year. Following the 10 rig gain in mid-August, the count has only experienced small changes, indicating that the abrupt jump is not indicative of a steady recovery trend. As of Sept. 1, the total decrease in rig count since March still sits at approximately 70%, with the count falling to 252 rigs from 788.
Recent insignificant swings in rig counts indicate that most operators are not confident enough in the current stage of recovery to invest in bringing rigs back online on a large scale. With oil prices hovering between $40 and $45 per barrel for the last three months and a decrease in natural gas prices to $2.50 per million British thermal units (MMbtu) on the heels of Hurricane Laura, producers will continue to feel pressure to conserve capital expenditures for the near future.