As if the recent nosedive that oil prices have taken in the last few days wasn't bad enough-Baker Hughes reported a staggering increase to the number of rigs. The number of active oil and gas rigs increased by 29 to Baker Hughes data. This brings the total number of oil and gas rigs to 975, which is an addition of 234 rigs year over year.
The number of oil rigs in the United States rose this week by 26 with the number of gas rigs increasing by 3. The number of oil rigs now stands at 791 versus 591 a year ago. The number of gas rigs in the US now stands at 184, up from 149 a year ago.
At 11:24 am EST, the price of a WTI barrel was trading down $1.35 (-2.21 percent) to $59.80-almost a staggering $5.00 under this same time last week. The Brent barrel trading down $1.39 (-2.14 percent) to $63.42, also almost $5 per barrel under last week, and a loss of 9 percent since the highs in late January.
Pressing on prices are robust US production. US crude oil production rose again, to 10.251 million bpd, from 9.919 million bpd the week before, setting another new high and surpassing the psychological threshold of 10.0 million bpd.
Last week, the EIA pressured prices even further when it changed its US production forecast, with their prediction that the US would reach 11 million bpd by the end of 2018-a full year earlier than its previous estimates that it had made just last month.
The Permian basin rig count saw the greatest increase to the number of rigs at 10.
At 1:09pm EST, WTI was trading at $59.03 (-$2.12) with Brent trading at $62.68 (-$2.13).
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
Of course WTI at $52, Brent close to $60 caused enough cash to flow that everybody got GREEDY. If $55 was good, wouldn't $65 be better, and when they talked WTI up to $65 they all started to talk about $85, or who knows $100 a barrel. Everybody knew the U.S. market can't collude and fix prices like OPEC/Russia, because its ILLEGAL, and that with WTI at $65 the gold rush was on, but everybody pretended that the U.S. industry would find a way to collude and fix prices without getting arrested, and not use all that technology they've invested in that lets them produce more for less and get it to market in months rather than years. Just weeks ago, articles on this website were talking about how the U.S. shale oil industry estimates by the IEA were overblown, and U.S. production wouldn't increase that fast, and all meant to reassure the GREEDY and drive oil prices higher even with a glut still sloshing around. The GREEDY always manage to rationalize facts away.
Well guess what. U.S. production has outstripped all estimates, its at 10.2 Million barrels a day, and the IEA says it will hit 11 Million by end of year 2018. I would be you that is wrong. U.S. production, supported by this huge increase in rig counts, will hit 11 million by Mid year, and hit 11.5 or more by year end.
I'm sure greed hasn't given up yet, and the market will twist itself in knots coming up with ways to push the price of oil back up, but its very likely too late to stop the surge over the next year in U.S. production. Greed Folks. Every single time you can count on GREED. It will be interesting to see if they can now keep oil from falling to $30 a barrel this year. I supposed OPEC/Russia can idle more of their capacity, and if the worlds economy grows they just might be able to stabilize oil prices/WTI in the low $50s, but if they push it back into the $60s they are really dooming themselves, but never count out greed.