Some oil services companies’ share prices may have been enjoying upticks in October, but these are more likely the result of slightly healthier oil prices than anything else.
Over the last two years, from its peak at the end of September 2014, the U.S. combined oil and gas rig count has fallen by 1,409, or nearly 73%. Since almost every rig in the U.S. is owned by an oil services company, it remains no wonder that they are currently having such a hard time.
Any talk of a “rebound” in the rig count and an upsurge in shale oil production really should be taken with a pinch of salt. The uptick of 120 in the count between the ends of May and September this year accounts for only some 8.5% of the total number of rigs taken out of services in the past couple of years.
This hardly constitutes a rebound. Nor does it presage any upsurge in unconventional oil supply. The rig count is, indeed, creeping up, but that’s it.
U.S. Oil and Gas Rig Count
Source: Baker Hughes
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