In the week ended August 21, the number of rigs drilling for oil in the United States totaled 674, compared with 672 in the prior week and 1,564 a year ago. Including 211 other rigs mostly drilling for natural gas, there are a total of 885 working rigs in the country, up by one from a week ago and down 1,011 year over year. The data come from the latest Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count.

Benchmark West Texas Intermediate (WTI) crude oil briefly dropped below $40.00 a barrel on Friday before settling at $40.45 for the day, down nearly $2.00 a barrel for the week. The unexpected 2.6 million barrel increase in crude oil inventories, reported Wednesday by the U.S. Energy Information Administration (EIA), was the main driver of the lower prices last week. WTI traded at more than $43.00 a barrel in advance of the report and tumbled to a low of $40.81 before settling at $41.27 for the day.

There are two significant factors that drove the inventory increase. First, the shutdown of a refining unit at BP’s Whiting, Ind., refinery removes about 235,000 barrels a day from U.S. refining throughput. There is no estimate of when the unit may come back online.

Second, U.S. imports rose by 475,000 barrels a day last week to more than 8 million barrels a day. That works out to about 3.3 million barrels more than the prior week. Added to the 1.65 million barrels that the Whiting refinery did not buy, the shocking thing is that U.S. commercial inventories rose by just 2.6 million barrels last week.

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The number of rigs drilling for oil in the United States is down by 1,564 year over year, but rose by two from the previous week. The natural gas rig count remained unchanged with a total of 211. The count for natural gas rigs is down by 330 year over year.

Gasoline stockpiles decreased by 2.7 million barrels last week.

Hedge funds — under the Managed Money heading in the Commodity Futures Trading Commission (CFTC) Commitments of Traders report — added 8,143 contracts to their short positions last week and reduced their long positions by 9,435 contracts. The movement reflects changes as of the August 18 settlement date. Managed money holds 241,712 long positions, compared with 159,158 short positions. The addition of short positions marks the fifth time in the past six weeks that hedge funds have gone short. The hedgies cannot seem to get out of oil fast enough.

Among the producers themselves, short positions outnumber longs, 315,306 to 178,379. The number of short positions last week rose by 16,211 contracts and longs rose by 11,200 positions. Positions among swaps dealers show 302,122 shorts versus 225,220 longs. Swaps dealers cut 4,492 contracts from their short positions last week and added 19,115 long contracts.

Among the states, Texas lost six rigs last week and Pennsylvania lost two. Colorado, Louisiana and West Virginia each lost one rig. North Dakota and Oklahoma each added three rigs last week while Alaska, California, Kansas and Wyoming added one each. Counts were unchanged in Arkansas, New Mexico, Ohio and Utah.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count fell by two to 253. The Eagle Ford Basin in south Texas also dropped two rigs to bring its count to 99, and the Williston Basin (Bakken) in North Dakota and Montana now has 73 working rigs, up by three from the prior week.

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Enterprise Products Partners L.P. (NYSE: EPD) lists a posted price of $36.90 per barrel for WTI and an August 22 price of $29.91 a barrel for North Dakota Light Sweet. The posted price for a barrel of Eagle Ford crude is $36.86. All prices are around $2.00 a barrel lower than they were a week ago and have dropped by about $7.50 a barrel in the past four weeks.

The pump price of gasoline decreased week over week. Saturday morning’s average price in the United States was $2.615 a gallon, down nearly 2% from $2.667 a week ago.

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