Baker Hughes reported a sharp drop in the number of active oil and gas rigs in the United States this week.
The total number of active oil and gas drilling rigs fell by 14 rigs, according to the report, with the number of active oil rigs falling by 15 to reach 847 and the number of gas rigs increasing by 1 to reach 198.
The oil and gas rig count is now 99 up from this time last year, 82 of which is in oil rigs.
Oil prices were trading up earlier on Friday as fears heightened over what some see as tight oil supplies with Venezuela's oil-industry prospects look increasingly dim while OPEC seems content with its current scaling back of production despite those concerns. A further tailwind for oil prices came late on Thursday as President Donald Trump suggested there would be further efforts made to resolve the trade conflict with China, "leaving NOTHING unresolved on the table," Trump said in a Thursday tweet.
At 12:04pm EST, the WTI benchmark was trading up $0.82 (+1.52%) at $54.61-a roughly $1 increase from last week, with Brent crude trading up $1.17 (+1.92%) at $62.01 per barrel-up less than $1 per barrel on the week.
Canada's oil and gas rigs increased by 11 rigs this week. Canada's total oil and gas rig count is now 243, which is 99 fewer rigs than this time last year.
The EIA's estimates for US production for the week ending January 25 shows an increase at an average rate of 11.9 million bpdÂ-a record for the US-for the third week in a row.
By 1:07pm EDT, WTI had increased by 2.06% (+$1.11) at $54.90 on the day. Brent crude was trading up 2.40% (+$1.46) at $62.30 per barrel.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
Comments
The exchange uses a complex formula to determine the closing price, which includes all prices of WTI within the last 2 minutes of trading (1:28 - 1:30 PM Central).
Now, why they do this I do not know...the CBOT does not do that for futures products such as Soybeans and Wheat--the closing price is the last price processed when the market closes.
But in those last 2 minutes, 'algos' has WTI trading with great volume (a bonus for the NYMEX, which collects fees from every contract traded, as well as the National Futures Exchange, who collects $0.01 for every contract of every commodity traded).
What I have noticed is especially true on "up days" like today:
After closing prices have been posted (CNBC web site always announces it at the top just a few minutes after), WTI is always trading ABOVE that closing price until the market closes at 4 PM Central.
Two things really frustrate me about this to no end:
1) When the markets open up again (on Globex), prices tend to continue that upward trend, thereby keeping bullish sentiment, which of course seems to "only" allow for upward movement in price.
2) The FACT that there is no such evidence of "long unwinding" (the opposite of short-covering) in WTI. For example, before the last 2 minutes of trading, front-month contracts of WTI were trading in the $54.80s then in the final 2 minutes soared to close at $55.26.
My overall point? Well, you could certainly use this information to your trading advantage...if you are willing to uphold the non-stop double standards of hypocrisy that exist within oil bulls.