US Oil Rig Count Soars by 10, Crude Price Appears Unfazed

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In the week ended January 12, 2018, the number of land rigs drilling for oil in the United States totaled 752, up by 10 compared to the previous week and up by 230 compared with a total of 522 a year ago. Including 187 other land rigs drilling for natural gas, there are a total of 939 working rigs in the country, 15 more than a week ago and up by 280 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 February delivery settled at $63.80 a barrel on Thursday, near its highest level in three years, and it traded up about 0.2% Friday afternoon to $63.96 shortly before regular trading closes.

The natural gas rig count increased by five to 187 this week. The count for natural gas rigs is now up by 51 year over year. Natural gas for February delivery traded up about 3.6% at around $3.19 per million BTUs before the count was released, and it rose a penny afterward.

Natural gas prices have risen 13% in the past week, helped along by Thursday’s report of an all-time record high draw of 359 billion cubic feet. Very cold weather in the heavily populated northeastern states has driven demand — and, of course, prices — to record highs in some cities.

The sharp pickup in new oil rigs being put to work is almost surely a reaction to crude oil prices that have reached a three-year high. Even the relatively huge increase of 10 new land rigs this week is not pushing crude prices down.

Among the states, Baker Hughes reported that New Mexico and Louisiana each added five rigs, Colorado added two and Alaska and Utah each had one more rig. Texas lost two rigs last week.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 403, three more compared with the previous week’s count. The Eagle Ford Basin in south Texas has 70 rigs in operation, unchanged week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 46 working rigs, also unchanged for the week.