OPEC Can’t Stop The Beat: U.S. Adds 10 Oil Rigs
The United States count of oil rigs jumped by 15 this week. The count reached its highest level since September 18, 2015.
The number of oil and gas rigs currently active in the United States now sits at 839. This is an increase of 396 year over year.
Rig-count bemoaners chastise U.S. shale for quickly bringing more capacity online. They fear that this will limit price increases in the industry. Nevertheless, it must be acknowledged that this is indeed the precarious nature of the free market system. A prices rise, so does industry confidence. As industry confidence rises, so do investments. As investments rise, so does capacity. As capacity rises, production soon follows. And this lowers prices.
Likewise, as prices fall, so does investor confidence. As investor confidence falls, so does capacity. As capacity falls, production falls. And prices eventually rise. Such is the circle of free market life. And as the wise Tracy Turnblad once said, you can’t stop the beat. This is true even if you’re OPEC.