Yahoo Finance The US Natural Gas Rig Count Could Fall, 10th Week in a Row
Bottom Fishing Could Lead to a Natural Gas Price Rally
US natural gas rig count
According to Baker Hughes (BHI), the US natural gas rig count fell by 18 to 104 for the week ending February 5. It fell by five to 122 for the week ending January 29. The US natural gas rig count fell for nine straight weeks for the week ending February 5.
Impact
In 2016, the active weekly US natural gas rig count fell by 58 rigs. The fall was due to lower natural gas prices as a result of long-term oversupply concerns. US natural gas drilling activity fell more than 50% in 2015. The bearish outlook for natural gas prices and the falling trend for natural gas rigs suggest that rig counts will fall more over the coming weeks.
The EIA, in its monthly drilling report, estimates that US natural gas drilling activity will reduce in March 2016 compared to February 2016. The decline in drilling activity should negatively affect drillers like Baker Hughes, Schlumberger (SLB), Superior Energy Services (SPN), Pacific Drilling (PACD), Atwood Oceanics (ATW), and Halliburton (HAL).
The roller coaster ride in the oil and gas market affects ETFs and ETNs like the PowerShares DB Energy Fund (DBE), the Direxion Daily Energy Bull 3x (ERX), the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), and the VelocityShares 3x Long Natural Gas ETN (UGAZ).
Read on to the next part of this series to learn the latest update on natural gas forecasts.
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