In July 2008, crude oil prices peaked and began to fall quickly. After 2 months they had dropped 30%, but being the smartest extrapolators in the room, producers piled on the rig count driving it higher and higher until around 5 months after oil prices peaked... the rig count completely collapsed. Today, it has now been almost 6 months since oil peaked and began its accelerating free-fall and rig counts have just started to drop (still 2% above the June peak oil levels)...
There is always a lag... and with permits down 40%, let's just see if it's different this time...
[4]
Of course, it's different this time... it's way worse! All these rigs are backed by massive debt loads at drastically lower costs of funding than is possible now... but we should ignore that, right?
Charts: Bloomberg
