Baker Hughes reported another 6-rig increase to the number of oil and gas rigs this week.
The total number of oil and gas rigs now stands at 990, which is an addition of 201 rigs year over year.
The number of oil rigs in the United States increased by 4 this week, for a total of 800 active oil wells in the U.S.—a figure that is 169 more rigs than this time last year. The number of gas rigs rose by 1 this week, and now stands at 189; 32 rigs above this week last year.
The oil and gas rig count in the United States has increased by 66 in 2018.
Canada continued its severe losing streak, with a decrease of 54 oil and gas rigs on top of last week’s loss of 29 oil and gas rigs. Canada now has 57 fewer rigs than it did a year ago.
Oil prices managed to climb this last week and were up today without any clear catalyst. What is clear is that while the threat of steel tariffs and strong U.S. crude oil production, which rose again in the week ending March 09 to 10.381 million bpd, seems to be limiting gains, there are insufficient catalysts to bring oil prices down.
At 12:28 pm EST, the price of a WTI barrel was resilient, trading up $0.98 (+1.60%) to $61.84—a ~$.30 increase over last week’s prices. The Brent barrel was also trading up on the day, by $0.84 (1.29%) at $65.78—an increase of about $0.40 over last week’s level.
At 1:07pm EST, both benchmarks had gained ground, with WTI trading at $62.29 (+$1.10) and Brent trading at $65.88 (+$0.93).
By Julianne Geiger for Oilprice.com
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However, others state that oil is on the rise today due to short-covering for the week. I just have one question then: How come there is always such a thing as short-covering but there is never, ever "long-covering"?
What is really pushing prices up as I have been saying for ages, is a robust global oil demand, accelerating global economy and a virtual re-balancing of the oil market. To this could be added the probability that the OPEC/non-OPEC Production cut agreement is going to be extended beyond 2018 but in a different format to reflect changes in the market and with a permanent mechanism that could respond to either tightening in the oil market or a build in global oil inventories.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
The ground is thawing and the rigs can’t move. Happens every year.