It was like clockwork. Every week since 1944, Houston-based Baker Hughes Inc. would release its survey of how many rigs were out drilling for U.S oil and gas. And every week, oil and gas traders would, for the most part, overlook it.
What a difference a $50-a-barrel slide in oil makes.
As Bloomberg reports, traders were bent over their desks this past Friday, staring at their screens, waiting for the noon release of the weekly figures to see whether drillers extended their biggest-ever retreat from U.S. oil fields. They did. Oil futures spiked within minutes of the count, closing at the highest level in four days.
“I don’t think I’ve heard ‘Baker Hughes’ more in my life than I have in the past month,” says Dan Flynn, a trader at Price Futures Group in Chicago. “It’s like I’m saying it in my sleep.”
The sudden interest in Baker Hughes’s rig counts shows how desperate traders have become to find the bottom of the oil market after the biggest collapse since 2008. The company, which was Hughes Tool Co. some 71 years ago when it first released the weekly count, is the third-biggest oil field service provider in the world.
“The company has distributed the rig count for about 70 years and has typically seen an increase in interest when commodity prices are more volatile,” says Melanie Kania, a Baker Hughes spokeswoman. “The recent drop in oil prices is no exception.”
The slide in prices has sidelined 480 rigs within two months, erased tens of thousands of jobs and cut hundreds of billions of dollars in spending.
“The bulls are jumping on what’s become one of the few bullish data points out there for oil,” says Tim Evans, energy analyst at Citi Futures Perspective in New York. “It seems to be the short-term traders trading around the release of the number, even when underlying oil production is still trending higher.”
