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Canada pulls North American rig count higher

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The North American rig count improved slightly more than 13 percent from June, with Canada showing strides since May wildfires, Baker Hughes data show.

Baker Hughes recorded a U.S. rig count for July at 449, up about 7.5 percent from the previous month. The Canadian rig count of 94 was up 49 percent from June.

Canadian data may reflect a recovery in activity since May, when wildfires in Alberta disrupted about 1 million barrels of oil per day in net crude oil production. Most operators have since returned to full service and energy company Canadian Natural Resources said this week it was raising its production forecast for the year.

For the sector as a whole, the increase in rig activity may be emblematic of sentiments expressed by drillers that the worst of the downturn in oil prices is over. In reporting its revenue for the second quarter, Baker Hughes, which provides drilling services for the industry as well as data, said the 10 percent decline was encouraging, all things considered.

Crude oil prices stabilized somewhat during the second quarter after moving below $30 per barrel in early 2016. Rig counts, a metric that loosely gauges exploration and production activity, started to improve in recent weeks as a result. In July, Schlumberger, the world’s largest oilfield services company, said “we now appear to have reached the bottom.”

Internationally, Baker Hughes reported a 1.1 increase in rig activity from June. Year-on-year, however, rig activity is down. For the United States and Canada, rig counts are down 48 percent from July 2015.