The Baker Hughes North American rig count is up 14 in the June 2 week to 1,015, posting the fifth weekly increase in a row. The U.S. rig count is up 8 to 916 and is up 508 rigs from last year. The Canadian count is up 6 from last week to 99, and compared to last year is up 58. The third weekly gain in the Canadian count signals an early end of the Spring Breakup shutdown for Canadians rig operators, which usually makes rig operations nearly impossible each year from the beginning of March to the end of May.
For the US count, rigs classified as drilling for oil are up 11 to 733, gas rigs are down 3 to 182, and miscellaneous rigs are unchanged at 1. For the Canadian count, oil rigs are up 11 to 51, but gas rigs are down 5 to 48.
At current prices, the 126 percent year-on-year increase in the number of North American rigs drilling for oil and gas portends imminent growth in U.S. domestic oil and gas production output. For oil, the EIA estimates that each U.S. rig currently generates roughly 724 barrels of oil per day of new well production. For gas, new well production per rig is 3,544 thousand of cubic feet per day. Only a substantial decline in the price of oil would avert further gains in the rig count, as Canadian rig operators gradually come back to full capacity, and as U.S. drillers add rigs week after week, apparently perfectly content with profits from production ventures at current price levels.