Number of oil rigs down to 877
This is a decrease of 8 rigs when compared to last week, with oil rigs up 1 to 675 rigs, gas rigs down 9 to 202 rigs, and miscellaneous rigs unchanged at 0 rigs.
Compared to this time last year, the 877 count is down 1,037 rigs, with oil rigs down 900, gas rigs down 136 and miscellaneous rigs down 1.
The decline in the drilling of new gas and oil wells is having a direct impact on the amount of line pipe, storage tanks, and OCTG that is being used by the energy sector.
A good portion of these products come from hot rolled coil or plate substrate, and are reasons for both the short lead times on hot rolled and plate at North American steel producers and the falling steel prices we have seen going back to mid-2014.
Prices have since stabilized for hot rolled coil but the product is having a difficult time breaking out of a very narrow trading range partially due to the weakness in the energy sector.
The situation in Canada has started to improve over the last few weeks. The Canadian rig count decreased by 12 to 196 rigs this past week, with oil rigs down 9 to 88 rigs and gas rigs down 3 to 108 rigs.
Compared to last year the 196 count is a decrease of 213 rigs, with oil rigs down 143 and gas rigs down 70. International rigs decreased by 28 to 1,118 rigs for the month of July, a decrease of 264 rigs from the same month one year ago. ■