Quote of the Week
"At the moment, a number of objective factors exclude the possibility for any cartels to dictate their will to the market. … As for OPEC, it has practically stopped existing as a united organization."
Igor Sechin, head of Russia’s biggest oil firm Rosneft
1.  Oil and the Global Economy
Oil prices continued to climb last week with New York futures closing up 3.5 percent, the tenth weekly increase in the past 13 and closing Friday at $46.21. Similarly, London prices were up 5.4 percent to close at $47.83. Forces that move the oil markets keep coming in and out of existence. Hopes that the major exporters would agree to freeze production have now faded, to be replaced by unexpected production outages in several countries as the principal force driving prices higher.
The fires in Alberta which cut tar sands production by over 1 million barrels a day are no longer a threat and production there is expected to recover in the next few weeks. The situations in Venezuela and Nigeria are more serious, however, and should current trends continue, could result in production shortfalls of a magnitude that would offset overproduction of oil and drive prices higher. In addition to the deteriorating situations in Venezuela and Nigeria, there have been smaller outages in Ghana and Libya that have helped support oil prices. A weaker US dollar in the last few months, stemming largely from the Federal Reserve’s reluctance to increase interest rates, also has been supporting the stronger oil prices.
On the other side of the equation, OPEC and Russia continue to increase production, and Iran is undergoing a spectacular rebound from years of sanctions. OPEC production was up to 32.76 million b/d in April, the highest since April 2008, just before the price crash. Iranian production in April was up by 300,000 b/d to 3.56 million according to the IEA. Although there is still a global surplus, it is being whittled away by increased demand from India and China as well as production troubles in several countries. The IEA says that stockpile builds are slowing and in the first quarter grew at the slowest rate since 2014.
Conventional wisdom says that oil prices will move higher leading to a rebound in the oil industry, but there is considerable debate as to whether this will take place in the second half of this year or be delayed into 2017 or later. The corollary to this issue is whether US shale oil production will revive when prices climb into the $60 or $70 range. Unlike deepwater oil production, the shale oil industry has the technical potential to revive rapidly if prices move higher. Deepwater oil production which is slow and very expensive to get going has been hurt so badly by the price downturn that it will take many years of high prices – likely well above $100 a barrel — before much new drilling takes place.
The US shale industry, however, faces numerous problems in the next few years. First, the rig count is now down to 318 from 1,609 in October 2014. While many of the stacked rigs could be brought back into service, assembling the crews and other infrastructure to support increased drilling will be time-consuming. Many smaller shale oil drillers have gone bankrupt in the last few years leading to massive losses on the part of the banks and investors that loaned money to enterprises that never were profitable. Whether the money will be available to finance another shale oil boom later in the decade is an open question.
New federal regulations on methane emissions were announced last week. The EPA says these rules, which are designed to mitigate global warming, will cost the industry $530 million during the next ten years. The industry already is saying that the costs of these regulations will be much higher and likely will sue in the courts to have them over turned. Unless there is a political change in the Washington this fall, however, the tougher and more expensive emissions controls likely will be a part of shale oil and gas business for at least the rest of the decade.
The threat of outages in oil production driving prices higher seems to be growing. Venezuela is very close to a complete societal collapse. Oil production has been slipping there in recent months and whether the national oil company can keep producing 2 million plus b/d amidst chaos is an open question. Likewise, in Nigeria the political situation is deteriorating. Oil production is already declining, and a revived insurgency is threatening to drive the international oil companies from the country. Between these two countries, more than 5 million b/d of oil production could be shut-in within the next few months.
Add to this slowly declining US shale oil production the deteriorating political situation in Baghdad which could reduce Iraq’s oil production and we could easily see lower global oil production and much higher prices within the next few years.  Although it is hardly ever mentioned, somewhere out there will be a cap on further growth in US shale oil production. There have been no discoveries of major new shale oil fields in the US recently, and due to high prices, production of shale oil from existing fields has contracted to a small number of sweet spots that are not as unprofitable as those in the rest of the fields.  Some analysts believe that shale oil production in the US will start to decline in the next four or five years due to geologic conditions no matter how high oil prices rise.
2.  The Middle East & North Africa
Iran: Tehran continues to claw its way back into the oil market with exports last month climbing by more than 40 percent from the March level. Some of this oil is likely to have come from oil stored aboard tankers during the sanction period rather than from new production. The scrap over market share between Iran and the Saudis continues with Tehran offering substantial discounts on oil going to Asia while at the same time accusing the Saudis of doing the same thing.
The Swiss-based companies Glencore and Vitol, the world’s largest independent oil traders, are close to signing a long-term contract to purchase crude from Tehran. The Iranians, however, want a say in where the oil traders sell Iranian oil – likely to ensure that it is not resold to political enemies such as Israel, the Saudis, or the US.  The Swiss traders are reported to have been having a hard time finding financing for the deal because of lingering US sanctions. Tehran says it has a deal with a small Italian oil company to deliver 65,000 barrels of oil per day.
Syria/Iraq: The death of Hezbollah military leader, Mustafa Badreddine, in Syria last week highlights the heavy price that Lebanese Shiites have been paying to prop up the Assad government. Some 1,200 of Hezbollah’s best fighters are thought to have been killed in Syria and thousands have been wounded. However, the fighting continues at a reduced pace with efforts to prop up a cease-fire continuing.
In Iraq, ISIL which has been under constant aerial bombardment by the US and its allies, Russia, and the Assad government is slowly being chewed up. In retaliation it has stepped up suicide bombings in Baghdad and other cities with the only offensive means it has left. Over the weekend, ISIL attacked a gas plant north of Baghdad by sending three car bombers to blow up the front gate and then followed this with an attack by six suicide bombers who succeeded in blowing up several gas storage tanks.  Last week at least 88 were killed and hundreds wounded in a series of suicide bombings in Baghdad.
The Southern Oil Company, which is Iraq’s main producer of crude, has now been split into two parts – the Dhi Qar Oil Company and the Basra Oil Company. The move was undertaken to quiet demands for more local control over oil production in the southern provinces.
Libya: The UN-sponsored Government of National Accord (GNA) is making little progress in coordinating efforts to defeat the Islamic State insurgents in Sirte. Last week a move on Sirte ended in militias from Misrata fighting with the Libyan army rather than attacking the IS. The oil situation took a turn for the worse last week when the eastern government forbad any further exports from Hariga without their approval. This move is likely in retaliation for a recent incident in which a tanker dispatched by the eastern government that is hungry for revenue was forced to return and unload as UN sanctions forbid the eastern government from selling oil for its own account. 
The closure of Hariga has forced the National Oil Company to cut production to 212,000 b/d as there was no storage space for the oil. If this situation continues, production from the southeastern oil fields will have to be shut down in the next few weeks, and Libyan exports will fall to zero. Although Libyan production is only a fraction of the 1.6 million b/d it is capable of producing, the loss of a few hundred thousand barrels per day of global oil production becomes significant when added into larger disruptions elsewhere in the world.
Saudi Arabia: Saudi Aramco is planning to step up oil production to meet increasing global demand, its chief executive said last week. The company is already pumping at near-record levels of 10.2 million b/d. Many doubt that the country can sustain production at a level much above what it is producing today. The Saudis normally redirect some of their crude production to electric power generation to keep air conditioning working during the hot summer months – a high priority in the country. This usually results in a drop in exports; however, given the competition with Iran for market share, the government may have opted to produce enough oil to meet summer demand without cutting exports.
Saudi Aramco has now been merged into a mega-“Energy, Industry, and Mineral Resources Ministry” that is responsible for much of the Saudi economy including electricity production. The goal of this reorganization is to cut down on turf wars between ministries and to pave the way for a new economy that will be less dependent on oil. The Saudis have already opened new refineries that will earn money by selling higher-valued refined products rather than simply exporting crude. The new Saudi plan dubbed “Vision 2030” aims to replace dependence on oil with the ownership of industrial assets all over the world which will provide revenue for the state.
Whether the Saudis have the money and the intellectual capital to pull off such a plan remains to be seen. Most of the work in the country is done by foreigners. Women who comprise half the native population are kept in medieval servitude. Autocratic kingdoms went out of fashion as an efficient way to organize and manage governments sometime back. The nation sits right in the middle of the global warming crisis and may soon become inhabitable without massive amounts of energy. It cannot feed itself and just had its bond ratings cut because of “material deterioration” in its credit profile.
So long as it can continue to crank out 10 million barrels of crude per day, it can survive no matter what the selling price. Should production start to slip, no matter what the price of oil, the country has almost nothing to fall back on.
3.  China
China’s oil imports continued to surge in April at the same time its economy continued to contract. Oil imports in April gained 3.2 percent over March to 7.96 million b/d as the independent refiners stepped up operations. This was close to the all-time high of 8.04 million b/d imported in February. The surge in imports came after the small independent refiners were given authority to do their own importing directly from foreign exporters. Total Chinese refining in April came to 10.93 million b/d, up 2.4 percent from last year. Much of the increase in oil products is being re-exported and is adding to an oil product glut which has been building for several months.
Some believe this glut will soon be weighing on prices. In effect, some of the crude glut is simply being refined into an oil product gluts.
The economic news out of China last week was not good with growth in factory output slowing to 6 percent after a 6.8 percent increase in March. Fixed asset investment slowed to 10.9 percent. The government continues to prop up unprofitable factories in industries with excess capacities adding to the glut of steel, aluminum and other industrial products which are driving down prices around the world. All this is adding to concerns that China’s economic situation is not stabilizing despite the ballyhooed shift to a service rather than an industrial/export economy.
The one thing in China, which continues to grow, is automobile sales which surged 6.3 percent year over year in April to 2.12 million units. While a gain of this size adds to the demand for gasoline, it does not do much for air pollution or traffic jams.
China has begun laying a second oil pipeline from Russia’s East Siberia-Pacific pipeline to Daqing in northeastern China. The new pipeline will enable China to import 30 million tons of crude from Russia each year and will diversify sources of crude in the face of declining domestic production.
As traditional industries fade in China there has been much enthusiasm among Chinese investors for stocks in hot new industries such as technology, finance, and media. This enthusiasm has led to a wave of dying Chinese companies reinventing themselves into more fashionable industries along with eye-catching names to attract investors. Last week government regulators banned companies from “expanding” into more fashionable lines outside of their core business.
4. Nigeria
The situation in the Niger delta continues to deteriorate with Nigerian oil production now down to an official 20-year low of about 1.62 million b/d according to OPEC and Platts. Other researchers, however, believe that production could now be as low as 1 million b/d. 
The oil-producing delta region has been relatively stable since 2009 when the government bought off the MEND’s (Movement for the Emancipation of the Nile Delta) 30,000 insurgents with payments amounting to $500 million per year for providing security to the oil industry. The government, however, did little to address local problems, and now we have a new group, the Nile Delta Avengers (NDA), that are creating havoc. Attacks have shut in some 250,000 b/d at the Forcados terminal, and an unusual attack on a Chevron offshore platform halted an additional 160,000 b/d. Four of the five largest oil streams are now suspended. In addition to the insurgent attacks an accidental grounding has ruptured a major pipeline shutting in still more oil
To make matters worse, the NDA has given oil companies operating in the Delta two weeks to shut down operations and to evacuate staff from the country or face “bloody attacks.” The government has ruled out negotiations with the NDA, and the insurgents say they will not stop bombing pipelines. Over the years, the Nigerian government has shown itself to be completely inept in dealing with problems in the Delta in the north where Islamic insurgents continue to create chaos.
To make matters even worse, refining of crude is nearly non-existent in Nigeria, and the country is having trouble importing sufficient oil products to meet the demand of 181 million people. The country is a monument to corruption with billions of dollars in oil revenues having gone missing in recent years. President Buhari is demanding that Britain seize and return the stolen Nigerian government assets held in British banks.
The country certainly appears to be on its last legs with the likelihood of further oil declines a distinct possibility.  Some 650,000 b/d of Nigeria’s oil production is now coming from offshore oil platforms which are more difficult, but not impossible, for insurgents to attack. Any attack that causes casualties among foreign oil workers in Nigeria would make it more likely that the international oil companies would pull out leaving the country with little or no oil production.
5. Venezuela
On Saturday, President Maduro threatened to seize factories that have stopped production and jail their owners and Sunday saw demonstrations across the country with people calling for the president to step down. The threat to seize the factories came after the country’s largest food and beverage producer halted beer production saying it could no longer import barley due to the lack of hard currency. Nearly everything in Venezuela is coming to a halt; there are serious shortages of food, medicines, and electricity. The El Paito refinery which is the main supplier of fuel in the country has shut down, due to lack of imported blending stocks. There are only a few days of gasoline left.  People are killing dogs and cats for food. Imports of food and other vital goods are down by two-thirds. US officials briefed the press on Friday that the country is near to collapse.
It is not difficult to predict what will happen to the country’s oil exports will be in the event of a collapse. The national oil company assures us that it can generate its own electricity to keep the oil pumps working; however, the Amuay refinery which normally processes 645,000 b/d is now reported to be working at only 25 percent of capacity due to lack of electricity. Foreign oil service companies are shutting down operations as they are not being paid. Oil exports seem likely be down significantly or even halted completely in the near future.
Venezuela produced about 2.2 million barrels of crude per day in April which is a considerable drop from the 2.7 million it has been producing in recent years. Much of Venezuela’s oil is heavy and sour oil so that it does not bring much on the global market. China currently is importing some 550,000 b/d of Venezuelan crude; India 380,000 b/d; and the US 803,000 b/d.  Exports to the US in March were 891,000 b/d in 1.3 million in January and 1.1 million in April 2015.
6.  The Briefs
Exploration for new crude oil deposits has fallen to its lowest level in over 60 years, pointing out the potential lack of the fossil fuel within the coming decade. In 2015, oil exploration discovered 2.8 billion barrels and associated liquids, according to IHS company data. It is the lowest annual discovered volume since 1954, which clearly reflects declining exploration operations, as oil companies are keen on cutting their expenses. Most of the newly discovered crude deposits are deepwater. It takes seven years, on average, to develop such deposits and begin producing oil from them, therefore, current exploration results could lead to a supply shortage in the mid-2020’s. (5/11)
No limits to growth: The U.S. EIA’s recently released International Energy Outlook 2016 projects that world energy consumption will grow 48% by 2040. Compared to the reference year (2012), liquid fuels use will grow 35%, natural gas will grow 75% to surpass coal, coal will edge up 18%, renewables will more than double and nearly overtake coal, and even nuclear energy will close to double. (5/13)
IEA update: The global oil surplus in the first half of this year will probably be smaller than previously estimated because of robust demand in India and other emerging nations, the IEA said. Supply will exceed demand by an average of 1.3 million barrels a day in the first six months of 2016, down from the 1.5 million projected a month ago. (5/12)
The IEA, the West’s energy watchdog, faces a possible legal split from its parent body (the OECD) following decades of friction and fresh disagreements over cooperation with China. Created in 1961 to stimulate economic progress and world trade, the OECD originated from the Organization for European Economic Cooperation, set up in 1948 to help administer the Marshall Plan to reconstruct Europe with U.S. financial aid. The IEA was established in 1974 at the proposal of US Secretary of State Henry Kissinger to help industrialized nations deal with the oil crisis after the Arab embargo squeezed supplies and sent prices surging. (5/11)
Debt binge: The world’s biggest oil companies are borrowing record amounts of money to cope with a slump in crude prices. Luckily, there’s rarely been a better time to go on a debt binge. Exxon Mobil, Royal Dutch Shell, Chevron, Total, BP and Eni have together sold the equivalent of $37 billion of bonds this year, about double the amount issued in the period before oil prices plunged. (5/14)
Some 351,000 jobs have been slashed by oil and gas production companies worldwide, according to a report by Houston-based Graves & Co.  The oilfield services sector is down the most—152,000; exploration and production is down 80,000, with the drilling sector down 52,000. (4/13)
90% drillship discounts? Ocean Rig, a company controlled by shipping billionaire George Economou, has purchased a drillship—the Cerrado—for only US$65 million at auction.  That represents less than 10 percent of the estimated price when it was built over six years ago. (5/11)
Norway’s government boosted the amount of oil money it will spend this year, dipping deeper into its sovereign wealth fund to ward off a recession. The government in its revised budget will use 205.6 billion kroner ($25 billion) of its oil wealth versus the 195.2 billion kroner it estimated in October. (5/11)
French Energy Minister Segolene Royal is discussing with the French parliament a potential ban on the import of US shale gas. The issue arose out of concerns expressed by some members of French parliament that American LNG exports to Europe have contained natural gas that is 40 percent shale gas—which environmentalists and some lawmakers argue contradicts France’s own ban on shale gas exploitation using hydraulic fracturing. (5/11)
Russian rant: OPEC is effectively extinct as a united organization and the time when it could determine global oil market conditions should be forgotten, Igor Sechin, head of Russia’s biggest oil firm Rosneft, told Reuters. The comments are the first from Russia’s most influential oil executive after crude producers failed to agree to freeze output to support prices at a meeting in Qatar last month. (5/10)
Kuwait Petroleum Corp: A senior official has confirmed to media the company’s plans to increase production by 44 percent to almost 4 million barrels a day in 2020. The plan is a continuation of current attempts to pump as much crude as possible and tender new E&P projects in the Persian Gulf. (5/12)
India’s oil product sales grew 10 percent in April year-over-year, the slowest since December as growth in diesel demand decelerated to 4.4%. But on an annual basis, India’s demand for fuel grew 11 percent in the year to March31, the fastest pace since 2001. (4/13)
In India, a raft of government initiatives has propelled the country’s insatiable appetite for LPG to record highs, leading analysts to believe that growth is expected to hover close to double digit levels in the near to medium term as New Delhi intensifies its push towards cleaner fuels. But with LPG domestic demand growing at a much faster rate than output, the country will be increasingly dependent on imports to meet its incremental consumption growth. (5/12)
In Egypt, Italy’s Eni said Wednesday it was able to boost its production at a gas field in the Nile Delta region to 65,000 barrels-of-oil equivalent within a year of making the initial discovery. The company said the next benchmark would be to double that level by the end of the year by drilling additional wells. (5/12)
In Brazil, the impeachment of Dilma Rousseff and her increasingly desperate and unlikely efforts to maintain her position as president are changing the situation for Petrobras—for the better. (5/12)
In Alberta, fires in the Fort McMurray area have moved east toward the provincial border with Saskatchewan and most energy companies working in the oil-rich area have started to assess their situations. A short-term market report from the US EIA, which counts Canada as its No. 1 oil supplier, said up to 1 million barrels per day were impacted by the wildfires. It may be the third quarter of 2016 before Canadian oil sands operations return to normal. (5/15)
Alberta wildfire: Climate change is a prime suspect in a rise of wildfires in the boreal forest. Scientists have been warning for decades that climate change is a threat to the immense tracts of forest that ring the Northern Hemisphere, with rising temperatures, drying trees and earlier melting of snow contributing to a growing number of wildfires. The near-destruction of a Canadian oil city last week by a fire that sent almost 90,000 people fleeing for their lives is grim proof of that threat. (5/11)
Alberta has had trouble getting its oil and gas to markets outside of the province. That trouble continues for Canada’s oil industry. The 1.1 million barrel-per-day Energy East Pipeline, for example, would take Alberta crude to Canada’s Atlantic coast, but it has been slowed and delayed by regulatory reviews. The CEO of TransCanada, Russ Girling, said that the failure to build new pipelines is costing the industry dearly. (5/9)
The US oil rig count declined 10 rigs in the week to May 13, bringing the oil rig count down to 318 vs. 660 one year ago, Baker Hughes said. The gas rig count was up 1 to 87, with the total U.S. rig count dropping to 405.  (5/14) [See End Note on U.S. rig count.]
Fracking contamination: A new Texas study has found that horizontal oil wells fractured by the injection of high volumes of chemicals, sand, and water contaminate nearby water wells with a variety of heavy metals and toxic chemicals that fluctuate over time. (5/11)
Arctic sunset: The prospect of producing oil from the US Arctic looks increasingly remote. First, Royal Dutch Shell pulled the plug on its drilling program in the Chukchi Sea last autumn. More recently, several companies—Shell, Eni, Statoil and ConocoPhillips—officially forfeited their rights to drill in the Arctic on May 1, having declined to pay the US government to renew licenses. (5/12)
Proved reserves are a function of prevailing oil prices. It was estimated that when oil was $100 a barrel, there was a total of 1.7 trillion barrels of proved oil reserves globally. When the price dropped dramatically during 2015, so did both the amount of proved reserves and the value of those reserves—a double whammy. At year-end 2014, the Standardized Measure of oil and gas companies reporting to the Securities and Exchange Commission was 1.4 trillion. At year-end 2015, that number was reported to be 560 billion — a year-over-year decline of 840 billion. (5/12)
Bankruptcies grow: According to data compiled by Haynes and Boone, bankruptcies declared by oil and gas companies during the first four months of 2016 (for $17 billion) matched the total declared during all of 2015. Since January of 2015, the total secured and unsecured defaults have risen to $34 billion. Two additional firms declared bankruptcy last week. (5/13)
Linn Energy LLC filed for chapter 11 bankruptcy after reaching a deal with lenders to restructure its $8.3 billion debt load and obtain $2.2 billion in fresh financing. (5/13)
Penn Virginia, a 134-year-old energy company, filed for chapter 11 bankruptcy protection last Thursday. And just like Linn, the Pennsylvania-based explorer and producer deals said it had reached a prepackaged agreement with holders of 87 percent, or $1.03 billion, of its total funded-debt obligations to restructure under chapter 11 protection and eliminate long-term debt by more than $1 billion. Penn Virginia said it expects to emerge from chapter 11 by the end of the summer. (5/13)
Chaparral Energy Inc., an Oklahoma-based oil and gas producer, is claiming a key advantage as it launches a bankruptcy turnaround effort: $152 million in bank accounts beyond the reach of secured lenders. In February, the company drew down the maximum allowed on its top-ranking loan. On Monday, Chaparral filed for chapter 11 bankruptcy protection with funds still in the bank. (5/11)
Donald Trump picked US Rep. Kevin Cramer (R) of North Dakota, a prominent climate change skeptic, to help him formulate his energy policy.  Cramer is one of the country’s most ardent oil and gas drilling advocates. Trump’s team asked Cramer, who has endorsed Trump, to write a white paper on his energy policy ideas. Cramer said in an interview that his white paper would emphasize the dangers of foreign ownership of US energy assets, as well as what he characterized as burdensome taxes and over-regulation. (5/14)
Can coal recover? The answer is that the odds don’t look good, at least for current equity holders. Coal continues to be a generally competitive source of power from an economics standpoint. The problem for the industry is that natural gas has become slightly cheaper, and perhaps more importantly, government regulation and social pressures have led to a complete halt in the construction of new coal plants. For similar reasons, many existing coal plants are being switched over to natural gas. This trend had been largely isolated to the U.S. with emerging markets still big consumers of coal.  But the switch away from coal is now spreading, in the post-Paris-accord environment. (5/9)
The offshore wind-energy industry will soon be flooded by competition as big oil companies join utilities and small renewable players in the growing sector, said the chief executive of the world’s biggest offshore wind company, Dong Energy. (5/14)
China is expected to raise its power storage capacity by ten-fold to 14.5 gigawatts by 2020, as the world’s second-biggest economy tries to cut massive waste from renewable energy projects. (5/14)
UK wind: A monthly update from the British Department of Energy and Climate Change finds the share of electricity generated from renewable energy was a record 24.7 percent last year, an increase of 5.6 percent from the previous year. (5/13)
Solar cost record: Bloomberg reports that the developers bid as little as 2.99 cents a kilowatt-hour to develop 800 MW of solar power projects for the Dubai utility company – 15% below than the previous record set in Mexico. The lowest priced solar power has plunged around 50% in the past year. (5/10)
Solar surge: At the end of 2015, the U.S. solar market had a total capacity of 27 gigawatts and one million installations.  That total is just 1 percent of the overall electrical mix of the country. Yet solar power installations are expected to grow 119 percent in 2016 or roughly 16 GW of additional installed base. That compares to 7.3 GW installed in 2015. By 2020, the U.S. could have 100 GW of installed capacity—or four percent of the electricity mix—and an annual growth installation rate of 20GW. (5/12)
Some 28% of American honeybee colonies were wiped out over the winter, with deadly infestations of mites and harmful land management practices heaping mounting pressure upon the crucial pollinators and the businesses that keep them. Over the year, from April 2015 to March 2016, beekeepers lost 44% of their colonies – the highest annual loss on record. (5/14)
End Note: The U.S. oil and gas rig count
Baker Hughes Inc. started its oil and gas rig count report in July of 1987.  They issue their report at noon on the last day of each week, adjusting occasionally for holidays. 
Since 1987, the U.S. oil rig count peaked at 1,609 in October of 2014, and is down 80% in 19 months.  The U.S. gas rig count peaked at 1,068 in July of 2001 and hit 1,606 again in late August 2008 before its nearly 95% decline over the last eight years.
Listed in the table below are some notable highs and lows during the Baker Hughes rig count era:  
Baker Hughes Inc. rig count: highlights and lowlights 1987 – 2016                                                    
Date   Oil rigs      Gas rigs    Misc. rigs  Total rigs  Oil/gas %  
7/17/87      559               337                    26                   922            61% – 37%
3 years                                                                       700-1,100                   
12/7/90       646                  495                  38             1,179              55%-42% 
6/12/92       335                  242                  19              596                 56%-41%
12/18/92     381                  528                  26              935                 41%-57%
5 years                                                                          600-900                      
9/5/97          04                  625                  3                  1,032               39%-61%
4/23/99       126                 362                  0                     488                6%-74%
7/13/01       223                1068                 2                   1,293               17%-83%
4/15/02       135                 610                  2                     747                18%-82%
5/3/03         174                 825                  2                   1,001               17%-82%
2/6/06         197               1,313                 3                   1,513               13%-87%
8/29/08       416               1,606                 9                    2,031               21%-79% 
6/12/09       183                 685                  8                      876                21%-78%
5/14/10       544                  951                 11                  1,506               36%-63%
11/4/11     1,112                 907                   7                   2,026               55%-45%   
10/10/14   1,609                 320                  1                   1,930               83%-17%
5/15/15        660                 223                   5                     888
12/7/90       646                  495                  38             1,179              55%-42% 
6/12/92       335                  242                  19              596                 56%-41%
12/18/92     381                  528                  26              935                 41%-57%
5 years                                                                          600-900                      
9/5/97          04                  625                  3                  1,032               39%-61%
4/23/99       126                 362                  0                     488                6%-74%
7/13/01       223                1068                 2                   1,293               17%-83%
4/15/02       135                 610                  2                     747                18%-82%
5/3/03         174                 825                  2                   1,001               17%-82%
2/6/06         197               1,313                 3                   1,513               13%-87%
8/29/08       416               1,606                 9                    2,031               21%-79% 
6/12/09       183                 685                  8                      876                21%-78%
5/14/10       544                  951                 11                  1,506               36%-63%
11/4/11     1,112                 907                   7                   2,026               55%-45%   
10/10/14   1,609                 320                  1                   1,930               83%-17%
5/15/15        660                 223                   5                     888               74%-21%
5/13/16        318                   87                   1                     406               78%-21%