Rig Count Continues Decline

In the past two months the price of oil has recovered nearly 40%, but the rig count continue to decline, setting a record for falling for 25 straight weeks. Baker Hughes says the fall in rig count is "the driving force behind the recent oil price recovery as fewer rigs means less future oil production, which is just what the oversupplied oil market needs to self-correct." The horizontal rig count has fallen nearly 60% reflecting the painful road to balancing the world oil supply. Challenger, Gray & Christmas, an out placement firm working with the oil and gas industry reports over 52,000 jobs lost in the U.S.  in the past year due to the decline in drilling. As supply and demand rebalance oil prices will rebound "to the point where the industry can be in a position to resume growth on a more profitable and sustainable level."