Energy
Oil Rig Count Drops by 8, Hedge Funds Pile Up Short Positions
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In the week ended April 8, the number of rigs drilling for oil in the United States totaled 354, compared with 362 in the prior week and 760 a year ago. Including 89 other rigs drilling for natural gas, there are a total of 443 working rigs in the country, down by seven week over week and down 545 year over year. The data come from the latest Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count released on Friday.
West Texas Intermediate (WTI) crude oil for May delivery traded up about 6.4% on Friday to settle at $39.66, a jump of about 7.8% for the week. The U.S. Energy Information Administration (EIA) reported last Wednesday that crude supplies had decreased by 4.9 million barrels in the week ended April 1 and that gasoline supplies had risen by 1.4 million barrels.
Last week’s increase in the price of crude got a boost from the decline in U.S. inventories, some dovish remarks from Federal Reserve Chair Janet Yellen, a falling dollar and new hopes that an oil production cut will materialize following next week’s meeting in Doha.
What these events do not include is the continued difference between supply and demand. In the last update to its Short-Term Energy Outlook, the EIA forecast global oil inventories to increase by 1.6 million barrels a day in 2016 and another 600,000 barrels a day in 2017. Total world production in 2016 is forecast at 96.44 million barrels a day and consumption is forecast at 94.85 million barrels a day.
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