Energy

Oil Rig Count Drops by 5, Hedge Funds Grow Wary on Crude

Paul Ausick

Published: May 7, 2016 9:35 am

Last Updated: January 13, 2020 9:45 am

In the week ended May 6, the number of rigs drilling for oil in the United States totaled 328, compared with 332 in the prior week and 668 a year ago. Including 86 other rigs drilling for natural gas, there are a total of 415 working rigs in the country, down by five week over week and down 479 year over year. There is one rig listed as “miscellaneous.” 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 June delivery traded up about 0.5% on Friday to settle at $44.56, down about 0.3% for the week. The U.S. Energy Information Administration (EIA) reported last Wednesday that crude supplies had increased by 2.8 million barrels in the week ended April 29 and that gasoline supplies had increased by 500,000 barrels.

Without the impact of several major supply disruptions last week, crude prices may have fallen even further. The massive fire near Ft. McMurray, Alberta, has forced the evacuation of some 88,000 people and burned about 1,600 structures. Fortunately there have been no deaths reported.

There has been no reported damage to facilities in the oil sands region, but as much as 1 million barrels a day may have been shut-in due to the fire. That amounts to about 40% of daily production.

The fire has burned an area of about 386 square miles, 10 times the size of Manhattan, and could double in size over the weekend, according to a report in The Globe and Mail. The provincial government has given evacuees a debit card pre-loaded with $1,250 for each adult and $500 for each dependent to help residents meet immediate needs.

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