Oil prices dipped lower Friday afternoon on news that the U.S. oil rig count was up by nine this week, to a total of 325 rigs in what is the largest increase in the weekly rig count since December last year.
As Oilprice.com has noted repeatedly, any increase in oil prices would lead to an uptick in U.S. production, as evidenced by a halt to the previously steady decline in U.S. counts this week.
According to Baker Hughes rig count data released on 3 June, while the oil rig count was up nine to 325, the gas rig count fell five to 82 rigs. The total rig count—both oil and gas—was up four to 408. Related: Scotland Bans Fracking, Forever
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On the news, West Texas Intermediate (WTI)—the US crude oil benchmark—was down 1.4 percent, this afternoon, to US$48.35 per barrel in New York. Related:Against All Odds, Russia Plans to Boost Oil Production by 185,000 Bpd
Last week, the U.S. oil rig count fell from 318 to 316 after the previous week’s slight reprieve, coming in at the lowest at any point in time since Baker Hughes has been keeping track.
The 2-count loss in the number of active oil rigs was offset by an increase in U.S. gas rigs, up from 85 to 87, holding the total U.S. oil and gas rig count steady at 404.
The U.S. oil rig count fell by two, as reported by Baker Hughes’ latest oil rig count, while the U.S. gas rig count climbed slightly to 87.
By Charles Kennedy of Oilprice.com
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Ridiculously false. Adding rigs doesn't necessarily increase production. And in this case it will not even stem the decline. Not by a long shot! There aren't enough rigs currently deployed to simply maintain production levels. 9 rigs don't change that.