The United States rig counts increased for the second straight week, which sent oil prices in the opposite direction, Friday. And this combination, compounded by the strong dollar, weighed on shares of BP p.l.c. (BP), which declined Friday by as much as 2.78% to a session low of $32.12.
Energy Starting to Cool Off
The number of rigs operating in the U.S. fields rose to 328, compared to 325 from the previous week, according to Reuters, citing data compiled by oilfield services firm Baker Hughes Incorporated (BHI). Comparatively, this still marks a drastic decline of almost 50% from the same period a year ago when rig counts reached 635 rigs online. (See also: 3 Reasons Why U.S. Oil Imports Are Rising.)
The pullback in energy didn’t impede BP’s willingness to merge its Norwegian business with a subsidiary of Det Norske Oljeselskap ASA (DETNF). London-based BP said the $1.3 billion joint venture, called Aker BP, will be an all-stock deal that will help the combined company lower operating costs, Reuters reports. Aker will own 40% of the joint venture and will be the main shareholder, while BP will own 30%. Reuters noted that the remaining stake will be held by other shareholders. (See also: BP Strategizes Profits Amid Slumping Oil Prices.)