How Are Crude Oil Prices And Global Oil Rig Count Correlated?

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Crude oil prices and global oil rig count are positively correlated with a correlation of almost 90%. As crude oil prices fall, the price realizations for oil and gas producing companies decline. As a result, these companies are forced to pull back their production, implying that they hold back their capital budget for exploration and production. This leads to a sharp drop in the demand for oil rigs worldwide, resulting in a fall in the global rig count. In the table below, we show how the plummeting crude oil prices over the last 20-21 months has caused a steep decline in the global oil rig count (US & International).


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1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Chesapeake Energy

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