Morgan Stanley crushed it.
In April, Morgan Stanley analysts said the oil rig count would bottom in 12 weeks.
And last Thursday — the 11th week after that call — data from driller Baker Hughes showed that the rig count rose for the first time this year.
Pretty close, but it looks like they nailed that call.
The analysts noted back in April that the rig count historically troughed about 25 weeks after oil drillers started taking rigs offline. That was the 13th week, and so there remained 12 more weeks.
While we don’t yet know that the rig count has bottomed for sure, Morgan Stanley looks like it got this call right. Or, said another way, history proved a useful guide.
At around 1:00 p.m. ET on Friday, Baker Hughes will release the latest tally of oil and gas rigs, which could show only the second rise in the oil rig count this year, and a rise in the combined count for the second week in a row.
Ahead of the data, West Texas Intermediate crude oil futures fell slightly to about $US52.61 per barrel. Oil rallied more than 3% on Thursday after a sharp sell off earlier this week with other commodities that took WTI to a three-month low.
Here’s Morgan Stanley’s chart showing when the rig count has historically bottomed, and the fact that we’re there right now.
And here’s the unmissable chart of the rig count plunge, which is now perking up ever so slightly: