- Shutting down and restarting a rig is not as simple as an on/ off switch. Shutting down means lay offs and restarting means rehiring. These are business processes which take time and also depend upon the local labor market where the rig is based. Many times the laid ...
A few weeks back I had written about why oil looked ready for a bounce and that rig count in USA had been falling at the highest rate on record.
Since that post, oil has risen over 10% and as of this writing the trend only seems to be getting stronger. The impact of falling rig count is also evident in the declining production of oil in US as is evident from the chart below (EIA.gov)
While the optimists among you may argue that the decline may be temporary and production may rise again, there are several factors to consider:
