The number of active oil and gas rigs in the United States rose for the eighteenth straight week, Baker Hughes reported on Friday—this time by 16.
The number of oil rigs in operation increased by 8, and gas rigs increased by the same number. Combined, the total oil and gas rig count in the US now stands at 901 rigs, or 497 above the count a year ago. The last time oil and gas rigs in the US exceed 900 was May 1, 2015.
At 12:27pm EST, WTI was trading up 2.21% for the day at $50.44—having crossed the ever-important $50-per-barrel mark. Brent Crude traded up 2.19% at that time, at $53.66. Both benchmarks had picked up almost $3.00 per barrel from last Friday after the Energy Information Administration (EIA) reported earlier in the week a decrease in both crude oil and gasoline inventories, and after reports that OPEC may consider not only extending production cuts into 2018, but that it may consider deepening them as well. With the extension into 2018 likely already priced into each oil barrel, a deepening of the production cut—or rumors of deepening the production cut—was the only tool OPEC had left in its arsenal to combat the effects of U.S. shale to lift prices, even if only temporary.
The last four months or more have been particularly difficult for OPEC, as production cuts and talks of extensions and deeper cuts seem to be met at every turn by U.S. shale, backed by its most capable challenger—the Permian Basin. Related: Oil Prices Rise As Most OPEC Members Back Deal Extension
This week, the heavyweight known as the Permian, added 4 rigs, but the Mississippian also put 3 into play, followed by the Marcellus with 2 rigs. DJ-Niobrara, Granite Wash both lost rigs.
Both benchmarks started to slip within minutes after data release—proving that OPEC’s clout isn’t what it used to be, with WTI trading at $50.37 and Brent at $53.62%.
By Julianne Geiger for Oilprice.com
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