A few comments from Steven Kopits of Princeton Energy Advisors LLC on Apr 13, 2017:
Total US oil rigs were up 11 to 673
US horizontal oil rigs added 11 to 572
The US horizontal oil rig count is now within three weeks of the entire number necessary to cover the US contribution to incremental global oil supply.
US supply is blowing right through earlier production gain forecasts, up by 600 kbpd over the last half year
Source: http://www.calculatedriskblog.com/#MWapKDU9MMpHdUed.99
"Short of some crazy international incident that significantly impacts global supply"
Like war in the middle east?
This rig count rise is purely speculative - there are no market conditions driving such a ramp up.
Until we see sustained inventory draw downs (and the market lets them draw down) drilling activity will remain relatively flat to decreasing. Short of some crazy international incident that significantly impacts global supply, the market is in it's new "normal."
Oil is below $50. That's what happens when rig count goes up and there is a supply glut.
Won't help too much. As pointed out, most drillers have surplus rigs which they will cannibalize for parts. Also only land rig count is increasing. The higher margin offshore rig sector is stagnant/ declining.
Also, if US keeps increasing supply there will be another glut causing prices to drop again.
and the price of oil is still falling. Not the brightest economic mind are you.
Rig count going up doesn't improve the demand side for NOV. If Drilling Contractor X has half their rigs operating they sure do have a lot of spare equipment and parts ready to replace failing stuff. Which means they don't need much in the way of NOV equipment and most services. MAYBE this will help drill pipe and drill bits . . MAYBE.
It's not the rig count, it's the folks running the company.
This show is not going to get better.
As quickly as they come up, they can do down. I'm not getting my hopes up - there's not a lot of market fundamentals driving this run up.