US Oil Rig Count Adds 9; Crude Price Doesn’t Blink

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In the week ended May 4, 2018, the number of land rigs drilling for oil in the United States totaled 834, up by nine compared to the previous week and 131 more compared with a total of 703 a year ago. Including 196 other land rigs drilling for natural gas and two listed as miscellaneous, there are a total of 1,032 working rigs in the country, 11 more week over week and up by 155 year over year. The data come from the latest Baker Hughes North American Rotary Rig Count released on Friday afternoon.

West Texas Intermediate (WTI) crude oil for June delivery settled at $68.43 a barrel on Thursday, and it traded up about 1.9% Friday afternoon at $69.71 shortly before regular trading closed. Brent crude for July delivery traded at $74.83 a barrel.

The natural gas rig count rose by one to 196 this week. The count for natural gas rigs is now up by 23 year over year. Natural gas for June delivery traded down less than 0.1% at around $2.73 per million BTUs, down about five cents compared to last Friday.

The rising oil rig count (up by 19 in the past three weeks) combined with higher production from existing wells should be weighing on crude prices, but they continue to rise mainly out of traders’ concern over the possibility that Trump may abandon the multi-nation sanction agreement with Iran. With at least a portion of Iran’s 3.8 million daily barrels removed from global markets, the price of crude could rise by anywhere from $2 to $10 a barrel.

Among the states, Baker Hughes reported that New Mexico added six rigs, Oklahoma and Texas added two each and three states — Alaska, Louisiana and North Dakota — added one each. Colorado lost one rig this week.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 461, up by six compared with the previous week’s count. The Eagle Ford Basin in south Texas has 76 rigs in operation, one more than a week ago, and the Williston Basin (Bakken) in North Dakota and Montana now has 57 working rigs, up by one for the week.

Producers added 12 horizontal rigs again this week and the count rose to 913, while offshore drillers reported an unchanged total of 19, one more than last week’s count.

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