Where will the US rig count end the year? Most people think right around where it is right now.
I launched a LinkedIn poll last week asking people how they thought the US rig count would move from now through the end of the year.
I presented three options:
➜ Down 20+ rigs
➜ Plus or minus 20 rigs from today
➜ Up 20+ rigs
Over half the respondents chose the middle option, believing we’re not going to see a huge swing in either direction as we approach December.
I set up the poll because the US rig count had started to climb after the start of the Iran War.
We’re now up 20 rigs in just the past 9 weeks, from mid-April to mid-June.
I was curious to learn how folks were thinking about any enduring momentum.
We’ve already seen what’s happened to US oil prices, which are now back to around $70 per bbl, not far from their pre-war levels.
And given how the year-ago baseline has retreated, we’re back to year-over-year gains, having picked up 9 rigs in the past 52 weeks.
With how firmly E&Ps have embraced capital discipline, and how aggressively they are harvesting cash to return to shareholders, it’s absolutely fair to be skeptical of more rig pickups from here.
I also think it’s reasonable to assume we’ll be in a stable period going forward.
When you rewind over the past year or so, the rig count trajectory has been notably flat.
But with the days of war-driven $90+ WTI seemingly behind us, it’s open question whether or not E&Ps want to hunker back down and goose their dividend and buyback programs as much as possible.
