US Oil Rig Count Up for First Time in 3 Weeks, Prices Rise 1%

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In the week ending July 6, 2018, the number of land rigs drilling for oil in the United States totaled 863, five more compared to the previous week and up by 100 compared with a total of 763 a year ago. Including 187 other land rigs drilling for natural gas and two listed as miscellaneous, there are a total of 1,052 working rigs in the country, up by five week over week and by 100 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 August delivery settled at $72.94 a barrel on Thursday and traded up about 1% Friday afternoon at around $73.70 shortly before regular trading closed. Brent crude for September delivery traded at $77.11 a barrel, down about 0.3%.

The natural gas rig count was unchanged at 187 this week. The count for natural gas rigs is now down by two year over year. Natural gas for August delivery traded up about 0.7% at around $2.86 per million BTUs, down about six cents compared to last Friday.

Crude oil prices have been wobbling around but are on pace for a weekly gain of around 0.5% or so. President Trump’s tweets demanding that the Saudi cut prices have not had much impact on prices but have caused some wariness among traders. If the Saudis actually do boost output more than they have already agreed to, the impact on futures markets could be sharp. The futures and options markets are tilted heavily toward long positions, and as traders dump those, crude prices could fall sharply. No one wants to be caught on the long-and-wrong side of the bet on crude.

Among the states, Baker Hughes reports that New Mexico added four rigs last week, North Dakota added three, Louisiana added two and Oklahoma and Wyoming each added one rig. Texas lost four, Colorado lost one, and Alaska and Utah lost two each.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 475, one more compared with the previous week’s count. The Eagle Ford Basin in south Texas has 81 rigs in operation, also up by one week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 57 working rigs, up by three for the week.

Producers added four horizontal rigs this week, and the count increased to 930, while offshore drillers reported a total of 18, unchanged compared with the previous week’s count.