Canadian Drilling – Split Personality

For the week of October 17, Baker Hughes reported that the Western Canadian gas-directed rig count fell two to 61 (blue line and text in left hand chart below), its first weekly loss since the beginning of August, three less than one year ago and is at its lowest level for this time of year since 2020. The oil-directed rig count rose eight to 136 (red line and text in right hand chart), its highest level since mid-March, and 15 less than a year ago. Drilling activity has been constrained due to increased caution exercised by producers over capital spending programs as crude oil prices have been stagnant to falling, while Western Canadian natural gas cash prices have been staging a modest recovery after experiencing record negative lows in late September.