Oil well drilling in the United States has increased dramatically in the last five years. The increase in drilling activity has had a direct impact on petroleum pricing. Rig counts are an indicator for the potential supply picture of the oil and gas industry. A sharp increase in the number of drilling rigs domestically, would potentially affect the direction of product prices. The industry tends to speculate the greater number of active drilling rigs, the lower the price.
As a resident of Western Pennsylvania, I have seen natural gas drilling rigs come and go. According to Oilprice.com, “Baker Hughes reported a 4-rig increase of active oil and gas rigs in the United States… rigs rose to 1,048 according to the report, with the number of active rigs increasing by 2 and the number of gas rigs increasing by 2. The oil and gas rig count is now 105 up from this time last year.” Even though there has been an increase in rig count from last year, prices have not gone down noticeably.
Drilling is just one of many factors that can affect the price of product. Some other major price impactors are natural disasters such as hurricanes and floods, pipeline disruptions, global instability, and Governmental policies. Rig counts continue to provide insight into the petroleum industries outlook on the future demand and the price for oil products.