How Are Natural Gas Prices And The Global Gas Rig Count Correlated?

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Natural gas prices and the global gas rig count are positively correlated, with a correlation of almost 95%. As natural gas prices fall, the price realizations for oil and gas producing companies also 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 gas rigs worldwide, resulting in a fall in the global gas rig count. In the table below, we show how the plummeting natural gas prices over the last 20-21 months has caused a steep decline in the global gas 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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