Oil Services and Machinery

Demand for oil services shrinks with the rig count, and the number of working rigs in the U.S. continued to plummet, with no signs of bottoming out. The rig count is down 50 percent from a September peak of 2,031. Texas and New Mexico lost the most, each down more than 50 percent. The share of drilling directed to natural gas remained stable at around 79 percent.

The share of rigs using horizontal drilling has grown, indicating that conventional drilling is falling faster than drilling directed to unconventional gas. Some conventional wells in unconventional shale areas are being drilled and cased, with producers expecting to return after natural gas prices improve. They will then drill horizontally and fracture the formation for a quick boost to production and output.

http://www.dallasfed.org/research/up...