In the week ended May 15, the number of rigs drilling for oil in the United States totaled 660, compared with 668 in the prior week and 1,531 a year ago. Including 228 other rigs mostly drilling for natural gas, there are a total of 888 working rigs in the country, down six week-over-week and down 973 year-over-year. The data come from the latest Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count.

A month ago the industry dropped 26 rigs. The next week 31 rigs were idled, followed by 24 in the week ending April 24. The number fell to 11 for the week of May 9. With West Texas Intermediate (WTI) crude trading in a range of around $60 to $62 a barrel for most of last week, the market for crude may be reaching the point where supply and demand are more or less in balance.

The number of rigs drilling for oil fell by 871 year-over-year and by eight week-over-week. The natural gas rig count increased by two for the second consecutive week to a total of 223. The rig count for natural gas rigs is down by 103 year-over-year.

Some exploration and production (E&P) companies have said that they are prepared to restart drilling and completion work once prices stabilize around $60 to $65 a barrel. One week of prices around $60 a barrel hardly qualifies as a trend, but if the price breaks above $62 and holds that level, the E&P industry may declare itself healed and go back to pumping more crude. But unless demand increases, the cycle that began late last summer may repeat itself — the oil industry version of wash, rinse, repeat.

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As others have pointed out, the mantle of global swing producer has fallen on the shoulders of U.S. shale producers. The Saudis had been stuck with it since the 1980s, but finally managed to pass it along to the shale crowd last year when the kingdom persuaded OPEC to keep production up in order to maintain market share and not to worry about the price. By sticking to that plan, the shale producers had to stop drilling because the price fell below a break-even level.

Being the world’s swing producer is not an honor. The reward is that now U.S. shale producers will be expected to turn production on and off to meet global demand. Because U.S. crude cannot be exported (mostly), that means that we should see demand rise for crude from U.S. refiners that will then either refine the crude into products such as gasoline and diesel fuel, or barely refine the crude into a near-crude that can be exported. And even if crude prices stabilize around $65 a barrel, refiners should prosper.

Crude prices rose by just 0.8% last week to close out the week at around $59.88. Crude stockpiles fell by 2.2 million barrels last week, the second consecutive large decrease. Gasoline stockpiles also fell as refineries ran at about 91% of capacity, down nearly 400,000 barrels a day from the previous week.

Hedge funds — under the Managed Money heading in the Commodity Futures Trading Commission (CFTC) Commitments of Traders report — decreased both their long and their short positions. The funds cut long positions by nearly 15,000 contracts and short positions by about 12,000. Both those totals are far higher than a week ago, when managed money added about 1,500 long contracts and reduced their short positions by about 7,500 contracts. The decreases reflect changes as of the May 12 settlement date. Managed money holds 325,773 long positions, compared with 62,741 short positions.

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Among the producers themselves, short positions outnumber longs, 402,482 to 235,078. The number of short positions last week rose by 4,004 while longs added just 1,448. Positions among swaps dealers show 358,723 shorts versus 204,021 longs. Swaps dealers increased their long positions by a total of more than 7,200 contracts last week while shorts dumped 1,746 contracts.

The states losing the most rigs last week were Texas (down six) and Wyoming (down two). Kansas added four rigs and Louisiana added three rigs last week. Three states — Oklahoma, Utah and West Virginia — added one rig each.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count dropped by four to bring the total down to 233. The Eagle Ford Basin in south Texas added three rigs and reports that 108 are now working. The Williston Basin (Bakken) in North Dakota and Montana has 79 working rigs, down one compared with the prior week.

As of Friday, the posted price for Williston Basin sweet crude rose from $48.44 a barrel to $48.94, and Williston Basin sour also rose, from $43.83 a barrel to $44.33. Eagle Ford Light crude rose from $55.75 a barrel to $56.25, the same price as WTI.

The price of gasoline increased over the week. Saturday morning’s average price in the United States was $2.699 a gallon, up about 1.5% from $2.66 a week ago.

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