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Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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Oil Prices Under Pressure As Rig Count Climbs Again

Coming off of what turned out to be a rather rocky morning for oil prices, U.S. drillers added 5-rigs to the number of oil and gas rigs this week, according to Baker Hughes. The total number of oil and gas rigs now stands at 1013, which is an addition of 156 rigs year over year.

The number of oil rigs in the United States increased by 5 this week, for a total of 820 active oil wells in the U.S.—a figure that is 132 more rigs than this time last year. The number of gas rigs stayed the same this week, still at 192; 25 rigs above this week last year.

While U.S. drillers seem determined to add rigs, Canada—which is suffering from a rather tumultuous war in its country over pipeline infrastructure and a rather significant discount in its Western Canadian Select (WCS) benchmark—continues to hemorrhage rigs, losing 9 more oil and gas rigs this week, after shedding hundreds of rigs in the in the last couple of months. At 93 total rigs, Canada now has 6 fewer rigs than it did a year ago.

Oil prices were trading down on Friday after President Donald Trump took a swing at OPEC’s price manipulation via Twitter.

“Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” The tweet read. WTI had just come off end-2014 highs on Thursday¬—a result of the of the Joint Technical Committee (JTC) of the OPEC and non-OPEC oil producers yesterday, which found that oil inventories in developed economies had dropped to just 12 million barrels over the official target of the cuts—the five-year average. Related: Disaster Looms Over Libyan Oil

West Texas Intermediate was trading down $0.06 (-0.09 percent) at $68.27 at 12:37pm EST. The Brent benchmark was trading down $0.10 (-0.14 percent) at $73.68. Both benchmarks are still up week on week.

Aside from the Trump effect, oil price pressures remain from growing U.S. production, which rose again in the week ending April 13, reaching 10.540 million bpd—the eighth build in as many weeks—less than a half million bpd off the 11.0 million bpd forecast that many predict for 2018.

By Julianne Geiger for Oilprice.com

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  • John Brown on April 20 2018 said:
    Oil prices just a week or two ago were looked like they'd drop below $60, so a close today of WTI over $68, even if down a few cents is hardly a drop. The trend has been very much up. Trump has it right. OPEC/RUSSIA led by the Saudis who want $80 to $100 oil for their IPO are manipulating the price up. Its all smoke and mirrors. But who cares? The Russians seem a little concerned about $80 plus oil because that has the U.S. shale oil and gas industry on fire and not a bad way. It also gives a fantastic window for renewable energy to compete for more market share while they continue to bring their cost down. Russia suspects that medium and long term they are dooming oil prices, and Saudi Arabia can make tons off of $25 and $30 a barrel oil but Russia cannot. Neither can the USA, but once the investment is made at $80 there's no sense shutting it off. At $80 to a hundreds its best to just let it rip, get the capital expense back fast, and then just keep the spigot open. Its a game but the longer OPEC/Russia idle capacity and push the price up the faster U.S. production grows, and alternative fuels come online.
  • Dan on May 04 2018 said:
    Adding 5 rigs is not hot supply boom when Canada is losing rigs as fast or faster. Oil to $100 !!! The world needs 35 billion barrels minimum per year. Why should oil companies suffer while Apple overcharges ? Who picks the winners and losers? Shouldn't an iPhone be $29?

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