Baker-Hughes Rig Count Falls As WTI Rallies

About an hour ago, this week’s Baker-Hughes Rig Count was released to the public. Surprisingly, the number of U.S. rigs in operation fell modestly. Given the recent crude oil bull market, one would think North American producers would expand drilling operations. This hasn’t been the case as hydraulic frackers and offshore drillers are taking a conservative approach to 2021.

Below is a brief look at today’s oil rig count:

Event                                                Actual                    Previous

U.S. Oil Rig Count                              309                           310

U.S. Total Rig Count                          402                           403

In short, the Baker-Hughes Rig Count is off one oil rig week-over-week. This is a minute change but does suggest external concerns are weighing on the industry. New policies from the Biden administration and concerns over a COVID-19 reboot have many energy producers wary of the market fundamentals. Subsequently, the number of rigs in operation is holding firm.

Last night, POTUS Joe Biden gave his first national address. The tone toward COVID-19 was ominous, as summed up by the following quote:

“The only way to get our lives back, to get our economy back on track, is to beat the virus….that’s why I’m using every power I have as POTUS to put us on a war footing to get the job done.”

Biden went on to say that July 4th is a tentative restart date for the nation as a whole. According to today’s Baker-Hughes report, U.S. energy producers aren’t buying it; they view added fracking restrictions and the potential for more COVID shutdowns to be big risks. 

Baker-Hughes Rig Count Falls, WTI Rallies

It’s been a whipsaw week for April WTI crude oil. However, don’t be confused ― a strong bullish bias remains warranted. 

Overview: As you can see from the daily chart above, bidders stepped in with conviction on Wednesday’s opening dip. Now, the bulls are in control of WTI going into mid-March. If prices continue to drive toward $75.00, an uptrend in Baker-Hughes figures is likely over the near-term.