The weekly release by Baker Hughes Company reveals that the rig count in the United States has decreased, marking the fourth consecutive week of decline. The latest count, which includes rigs engaged in oil and natural gas exploration and production, was 711 for the week ended May 26, lower than the previous week's count of 720. This data provides valuable insights into the demand trajectory for the company's oilfield services.
The onshore rig count for the week ended May 26 was 689, showing a decrease from the previous week's count of 697. In offshore resources, the count was 20 rigs, down from the prior week's count of 21. These figures indicate a reduction in drilling activities both onshore and offshore.
The number of oil rigs in the United States fell to 570 in the week ended May 26, compared to the prior-week figure of 575. This count is significantly lower than the peak of 1,609 rigs reached in October 2014 and also lower than the count from the same period last year, which stood at 574.
The natural gas rig count in the United States decreased to 137, down from the previous week's count of 141. This count is also lower than the tally from the same week last year, which was 151. The latest report reveals that the number of natural gas-directed rigs is currently 91.5% lower than the all-time high recorded in 2008.
The rig count in the Gulf of Mexico (GoM) decreased to 20 units, all of which were oil-directed, compared to the prior week's count of 21. Meanwhile, the Permian Basin, the most prolific basin in the United States, saw an increase in its weekly oil rig tally to 347, up from the previous week's count of 346.
The fluctuation in rig counts and drilling activities can have an impact on the forex market, particularly on currency pairs tied to oil-producing nations. The decrease in U.S. rig counts may signal a potential decrease in oil supply, which could lead to higher oil prices. This could strengthen the currencies of major oil exporters, such as Canada (CAD) or Norway (NOK), against other currencies in forex trading. Additionally, forex traders may closely monitor the West Texas Intermediate crude price, as it influences the profitability of exploration and production activities, ultimately affecting the forex market. The news of solid oil prices potentially leading to rig additions may create trading opportunities for forex participants, who may consider adjusting their positions in currencies affected by oil price movements.