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US Rigs Looking To Bounce Back

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Editor’s remarks:
Rig count is an important measure for gauging supply and demand, and determining the outlook of the oil industry. The number of rigs drilling has sharply declined in the last 18 months due to the oversupply in the industry, with a 50% decline in offshore rigs in the US between August 2015 and August 2016. Many producers were simply priced out of the market, primarily due to OPEC and Russia pushing high supply and the low demands of a mild winter in 2015. Oil majors have slashed investment by billions, cut jobs by tens of thousands, and most importantly improved their efficiencies through acquisitions and internal transformations. The number of US oil rigs drilling began increasing before the announcements to cap production. The likes of Hess Corp, Apache Corp and many other shale giants are stronger than ever, as the number of oil rigs drilling is once again on the rise. Rather than simply keeping afloat, US producers are hoping to compete on an equal footing with other oil exporting nations. It is unclear by how much oil supply will decrease, but it is certain that the strong US producers remain in a position to somewhat challenge the oil cartel, and without being allowed to join any organisation themselves, they are bound to no agreements.

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