Oil slump pulls ‘rig count’ out of obscurity The collapse in crude prices has sidelined hundreds of oil- and gas-drilling rigs in recent months, with two of the most prolific U.S. oil-producing areas the hardest hit. West Texas’ Permian Basin and North Dakota’s Williston Basin, which includes the Bakken Shale formation, top the list, losing 198 and 63 rigs, respectively, from late November to last week, according to data from Baker Hughes Inc. BHI, -0.02% That’s nearly half of the total number of rigs lost in the same period. Rigs are being mothballed as energy companies struggle to contain costs amid a slide in oil prices of more than 50% in just over six months. While prices have recovered slightly since then, the world continues to grapple with a glut of oil. The speed of the drop in active rigs, however, has surprised Wall Street—and shone a spotlight on the “rig count,” a relatively unknown data point released every Friday by Baker Hughes, an oil-field services company. The company has released the data since 1944 (a monthly international rig count started in 1975). Some 1,300 rigs are active through Feb. 13 in the U.S. and Canada, down 30% from about 1,860 rigs in November 2014, which was the most since the 1980s. “It happened faster than we thought,” said Byron Pope, an analyst with Tudor Pickering Holt in Houston. His company had predicted slightly fewer than 1,100 rigs by the end of 2015.A rare bullish sign for oil Consultants at Wood Mackenzie said Thursday they expect another 15% drop in the rig count, which would level off at around 1,000 rigs by August. Drilling rigs “are currently being stacked at an alarming rate,” Scott Mitchell, a research director at Wood Mackenzie, said in a statement. The rig count is yet another clue as traders try to divine how far oil prices might fall, and when they might rebound. The steady decline in recent weeks has been one of the few bullish signs for oil prices—the number of active rigs in the U.S. and Canada hasn’t been this low in five years. Most investment banks and industry observers, however, expect the decline in operating rigs to do little, at least for now, to slow down U.S. production or dent crude stockpiles. It likely won’t do much until about the second half of the year. That’s because the U.S. is still pumping a lot of oil and making more efficient use of drilling techniques, and it’s sitting on the largest inventories since the 1920s. Besides the sidelined rigs, the slump in oil prices has pushed companies to slash their spending budgets for this year and to announce layoffs. Even exploration and production companies with balance sheets viewed as healthy enough to ride out the lower prices are taking a more conservative view of where the industry is headed, Tudor Pickering Holt’s Pope said. It is relatively easy to mothball a rig, he said. Once the work on a particular well is done, the energy company that contracted the rig “can just decide to let that rig go,” he said. Oil has lost 51% from a peak in June 2014, and the price fall only accelerated after the Organization of the Petroleum Exporting Countries in late November stood firm on its production goals, rather than reducing supply. Oil traded lower on Thursday, but off session lows. OPEC’s gambit appears to be working: last week, OPEC lowered its supply growth estimate for non-OPEC producers, and slightly raised its demand forecast for its own oil. — Sally French contributed to this article.