Oil Rig Count Rises by 2, Crude Oil Price Dips

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In the week ended July 14, 2017, the number of rigs drilling for oil in the United States totaled 765, up by two compared with the prior week and up 408 compared with a total of 357 a year ago. Including 187 other rigs drilling for natural gas, there are a total of 952 working rigs in the country, unchanged week over week and up by 505 year over year. The data come from the latest Baker Hughes Inc. North American Rotary Rig Count, released on Friday.

West Texas Intermediate (WTI) crude oil for August delivery closed up 1.3% on Thursday to settle at $46.08. Crude prices, which had been trading up about 1.1% Friday at around $46.60, dipped to $46.50 after the rig count data were released.

The natural gas rig count decreased by two to a total of 187. The count for natural gas rigs is now up by 98 year over year. Natural gas for August delivery traded up about 0.7% at $2.98 per million BTUs before the count was released and remained essentially flat afterward.

Following a week of reports from the U.S. Energy Information Administration (EIA), the International Energy Agency (IEA) and OPEC that all agree global production is rising and jeopardizing a rebalancing of the market for crude oil, the price of crude is headed for a 5% gain on the week. Higher prices are the result of rising global demand that exceeds the projected production growth.

Among the states, Texas added three rigs this week, Utah added two, while North Dakota and Colorado added one each. Alaska, Louisiana and Oklahoma each lost two rigs during the week.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 373, up four compared with the previous week’s count. The Eagle Ford Basin in south Texas has 80 rigs in operation, down four week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 53 working rigs, up one for the week.