Energy
Oil Rig Count Dives by 20, Hedge Funds Load Up on Short Contracts
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In the period ended January 8, the number of rigs drilling for oil in the United States totaled 516, compared with 536 in the prior week and 1,421 a year ago. Including 148 other rigs drilling for natural gas, there are a total of 664 working rigs in the country, down 34 week over week and down 1,086 year over year. The data come from the latest Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count released on Friday.
Benchmark West Texas Intermediate (WTI) crude oil for February delivery traded down about 1.2% on Friday to settle at $33.16, a drop of more nearly 10% for the week. The price fell further, to $32.88, in electronic trading. The U.S. Energy Information Administration (EIA) reported last Wednesday that crude supplies had decreased by 5.1 million barrels in the week ended January 1, but that gasoline supplies had soared by 10.6 million barrels.
Geopolitics reared its head in the oil markets last week as Iran and Saudi Arabia have clashed in a (so far, mostly) war of words over the Saudi’s execution of a Shiite cleric. The impact on the markets has been modest, but it’s early days yet.
Another geopolitical event, again courtesy of Saudi Arabia, is a confirmation from Saudi Aramco that it is considering a public offering of shares in what may be the world’s most valuable company. Depending on how you choose to determine its value, Saudi Aramco could be worth anywhere from $3 trillion to $10 trillion. That’s trillion with a “tr.”
The number of rigs drilling for oil in the United States is down by 905 year over year and down by 20 week over week. The natural gas rig count dropped by 14, from 162 to 148. The count for natural gas rigs is down by 181 year over year. Continuing high production rates and warmer weather have forced the change, although colder weather is on tap for much of the United States in the next week. Natural gas closed the week $2.48 per million BTUs, a gain of 6.4% for the week.
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