US Oil Rig Count Unchanged, Prices Set to Close Down This Week

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In the week ending July 13, 2018, the number of land rigs drilling for oil in the United States totaled 863, unchanged compared to the previous week and up by 98 compared with a total of 765 a year ago. Including 189 other land rigs drilling for natural gas and two listed as miscellaneous, there are a total of 1,054 working rigs in the country, two more than a week ago and up by 102 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 $70.33 a barrel on Thursday and traded up about 1% Friday afternoon at around $71.02 shortly before regular trading closed. Brent crude for September delivery traded at $75.29 a barrel, down about 1.1%.

The natural gas rig count rose by two to 187 this week. The count for natural gas rigs also is up by two year over year. Natural gas for August delivery traded down about 1.3%, at around $2.76 per million BTUs, down about 10 cents compared to last Friday.

Crude oil prices have been seeking a direction all week. First up a little, then sharply down, and finally recovering some on Friday. Still, prices are on track to fall by about 4% for the week. The big drop came Wednesday following a report that U.S. inventories of crude dropped by 12.6 million barrels last week. While that may seem to support a price hike, rather than a price drop, production remains at record levels (10.9 million barrels a day) and demand is dropping. Combined with promised increases from OPEC and its partners, prices may have done all the rising they’re going to do this summer.

Among the states, Baker Hughes reports that Texas added two rigs this week, while Colorado and Louisiana each added one. Alaska and California each lost one rig during the week.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 476, one more compared with the previous week’s count. The Eagle Ford Basin in south Texas has 81 rigs in operation, unchanged week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 57 working rigs, also unchanged.

Producers added no horizontal rigs this week, and the count remained unchanged at 930, while offshore drillers reported a total of 18, up by one compared with the previous week’s count.