Oil Rig Count Drops by 1, Total Now Up 490 Year Over Year

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In the week ended August 4, 2017, the number of rigs drilling for oil in the United States totaled 765, down by one compared with the prior week and up by 384 compared with a total of 381 a year ago. Including 189 other rigs drilling for natural gas, there are a total of 954 working rigs in the country, down by four from last week and up by 490 year over year. The data come from the latest Baker Hughes North American Rotary Rig Count released on Friday.

West Texas Intermediate (WTI) crude oil for September delivery settled at $49.03 a barrel, up 1.1% on Thursday. Crude prices were trading up about 0.7% Friday afternoon at around $49.35 and remained essentially flat after the rig count data were released.

The natural gas rig count decreased by three to a total of 189. The count for natural gas rigs is now up by 108 year over year. Natural gas for September delivery traded down about 0.8% at $2.78 per million BTUs before the count was released and also remained essentially flat afterward.

The price of WTI crude is likely to settle down a little for the week. GasBuddy senior analyst Patrick DeHaan said this earlier this week:

The rise in oil has come due to unrest and concern over the political outlook in Venezuela, a major supplier of crude oil to the U.S., due as well to Saudi Arabia’s export cut to six million barrels per day. Add on top of it U.S. oil inventories that have declined over 50 million barrels from March and you have a recipe for a continued rally in gasoline prices in much of the country. Watch for some volatility in oil and gasoline prices in the weeks ahead, especially with what’s going on in Venezuela. August will likely feature the summer’s highest gasoline prices.

The volatility DeHaan warned about was evident this week as traders wondered about OPEC’s commitment to the production cuts and rising concerns about Venezuela.

Among the states, Texas added four rigs last week and Alaska added one. Louisiana lost five rigs, Oklahoma lost two while New Mexico and North Dakota each lost one rig.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 379, unchanged compared with the previous week’s count. The Eagle Ford Basin in south Texas has 78 rigs in operation, two more week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 53 working rigs, down one for the week.