US Oil Rig Count Up a Little; Crude Price Softens on Russian Production Increase

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In the week ended June 1, 2018, the number of land rigs drilling for oil in the United States totaled 861, up by two compared to the previous week and 128 higher than a total of 733 a year ago. Including 197 other land rigs drilling for natural gas and two listed as miscellaneous, there are a total of 1,060 working rigs in the country, up by one, week over week, and 144 more than a year ago. The data come from the latest Baker Hughes North American Rotary Rig Count released on Friday afternoon.

West Texas Intermediate (WTI) crude oil for July delivery settled at $67.04 a barrel on Thursday and traded down about 0.9% Friday afternoon at $66.45 shortly before regular trading closes. Brent crude for August delivery traded at $77.08 a barrel.

The natural gas rig count fell by one to 197 this week. The count for natural gas rigs is now up by 15, year over year. Natural gas for July delivery traded up about 0.1%, at around $2.96 per million BTUs, up about a penny compared to last Friday.

Russian oil giant Rosneft raised crude production by 70,000 barrels a day over the past two days, according to a report from Bloomberg. The company announced the increase, saying it was “preparation” for a gradual easing of production quotas that Russia agreed to with OPEC and that have been in force since January of last year.

Rosneft’s spare capacity is tabbed at 120,000 to 150,000 barrels a day and average production during the first quarter was 4.57 million barrels a day. The company said it could quickly restore 100,000 barrels a day of production. OPEC and its partners will make a decision on whether to raise production quotas following the cartel’s June 22 meeting.

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

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 477, one less compared with the previous week’s count. The Eagle Ford Basin in south Texas has 80 rigs in operation, up by two, week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 56 working rigs, down by one for the week.

Producers added three horizontal rigs this week and the count rose to 929, while offshore drillers reported a total of 18, unchanged from last week’s count.