The total U.S. rig count currently lies at 533 rigs, nearly double the 269-count noted last October in 2020. Rig count growth has been impressive over the last year, with the majority of the change in the rig count originating from growth in oil rigs.
The WTI’s rise to $80 from a bout of negative pricing last year has been remarkable, and as oil prices continue to soar upward, producers are expected to slowly wean off their previous policies of strict capital discipline in the wake of COVID, and tepidly increase drilling activity.
The increase in the rig count is a testament to this fact. Because the rig count is a lagging indicator of oil price, the fact that oil has risen during the last two months is a clear sign that the rig count is likely to keep increasing in the near term future.
Source: Gelber & Associates