Energy
Oil Rig Count Drops by 10, Hedge Funds Raise Short Bets
Published:
Last Updated:
In the week ended May 13, the number of rigs drilling for oil in the United States totaled 318, compared with 328 in the prior week and 660 a year ago. Including 87 other rigs drilling for natural gas, there are a total of 406 working rigs in the country, down nine week over week and down 482 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 down about 1.1% on Friday to settle at $46.21, up about 3.5% for the week. The U.S. Energy Information Administration (EIA) reported last Wednesday that crude supplies had decreased by 3.4 million barrels in the week ended May 6, and that gasoline supplies had dropped by 1.2 million barrels.
The massive fire near Fort McMurray, Alberta, continues to burn, but its path has taken it away from the city and most of the oil sands production facilities. It is still too dangerous to allow residents to return, and by one estimate damage could exceed $9 billion. An estimated 2,432 homes and other structures have been destroyed and many left standing have been damaged.
As much as 1.2 million barrels a day of production may still be off-line, nearly half the region’s usual production rate. Minor damage has been reported at only one facility, but until evacuees are allowed back into their homes, production will continue to be curtailed.
The impact on global oil supplies and crude oil prices has not been severe because the shutdowns are viewed as temporary and even at their worst probably affected no more than 1% of the globe’s supply of crude oil. Last week’s price hikes had more to do with supply disruptions in Nigeria and Libya, both of which could continue to prop up prices in the coming weeks.
24/7 Wall St.Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
