This week’s Baker Hughes report shows a small two-rig decline in the United States oil count, ending what was 17 straight weeks of no-decline in the active rig figure, providing a possible small reprieve for oil prices which have been wallowing today in the extremely sensitive market.
Prior to the release of the Baker Hughes data, today’s oil prices were on the decline, reaching losses not seen for six weeks on the market’s lack of enthusiasm over the latest round of OPEC chatter and meeting with non-OPEC producers, which unsuccessfully sought to prop up markets ahead of the Nov 30 OPEC meeting that some believe will result in a freeze or cut of some type.
Supply glut or not, the increase in overall rig count over the last four-plus months— despite this week’s small loss—still suggests that US oil is ready to take advantage of any opportunity brought by even marginally higher oil prices—no matter how volatile the day-to-day market, and no matter what the inventory numbers show—just so long as a price increase of some kind exists. This week’s dip in prices may, however, have an effect on next week’s count, as the number of active rigs usually trails pricing data.
While the oil rig count is down slightly this week, the year-on-year numbers have improved since last week. The oil rig count now sits 137 rigs below the 578-rig figure reported during the same period last year.
The gas count saw a six-rig increase to 108 rigs, and now stands at 83 rigs fewer than the count the same time last year.
The number of Texas oil and gas rigs increased again this week by two, after a spike of ten sites last week. An even bigger winner was North Dakota, which added five sites for a total of 35 for the state—still 27 fewer than the same time last year.
The biggest losers were Colorado, which lost three sites, and New Mexico, which lost two.
By basin, the Williston basin added the most rigs, for a five-site gain to bring the total for that basin to 35.
At 12:30pm EST, a half hour before Baker Hughes released the rig count data, West Texas Intermediate was trading down 1.03 percent at $49.21, with Brent trading down at 0.89 percent at $50.02. Within minutes of Baker Hughes releasing the data, WTI was trading down even further at $49.16, with Brent at $49.96.
By Julianne Geiger for Oilprice.com
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