US drillers added 13 rigs to the number of oil and gas rigs this week, according to Baker Hughes, adding 10 active oil rigs and 3 active gas rigs. The oil and gas rig count now stands at 1,045—up 160 from this time last year.
Meanwhile, neighboring Canada lost 7 rigs for the week—the latest in a string of losses. Gas rigs in Canada are now fewer in number than they were a year ago.
Both the Brent and WTI benchmark were trading down on the day at 10:00am EST after reaching almost three-year highs earlier in the week over U.S. President Donald Trump’s announcement that the US would withdraw from the nuclear deal, combined with Venezuela’s falling production. WTI was trading down 0.32% at $71.13, with Brent trading down 0.30% at $77.24. Western Canada Select (WCS) was trading down a staggering 4%, increasing its discount to WTI.
Oil prices seem to be stuck in a perfect storm, a culmination of several geopolitical factors which include Iraq’s election scheduled for Sunday, the likes of which could see delays for project approvals and licensing awards; Venezuela’s election scheduled for May 20 which may prompt the United States to up the sanctions against Maduro’s socialist regime; the nuclear deal announcement which could restrict Iran’s exports, and OPEC comments that it would ramp up production to fill the void left by Iran if necessary.
US oil production rose again in the week ending May 04, reaching 10.703 million bpd—the eleventh build in as many weeks—about 300,000 bpd shy the 11.0 million bpd forecast that many are predicting for 2018. Earlier this week, the EIA raised its US production forecast for 2018 and 2019, anticipating that the full-year production for the United States will be 10.7 million bpd, with 11.9 million bpd forecast for 2019—a 400,000 bpd increase over its forecast last month.
By Julianne Geiger for Oilprice.com
More Top Reads From Oilprice.com:
- How Much Iranian Oil Can Trump Disrupt?
- Bank Of America: Oil Prices Could Hit $100 Next Year
- Did Trump Just Kill The OPEC Deal?