Energy Economy

US Oil Rig Count Down 5, Crude Price Set to Post Small Weekly Loss

In the week ending July 20, 2018, the number of land rigs drilling for oil in the United States totaled 858, down by five compared to the previous week and up by 94 compared with a total of 764 a year ago. Including 187 other land rigs drilling for natural gas and one listed as miscellaneous, there are a total of 1,046 working rigs in the country, eight fewer than a week ago and up by 96 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 $69.46 a barrel on Thursday and traded up about 1.1% Friday afternoon at around $70.25 shortly before regular trading closed. Brent crude for September delivery traded at $72.86 a barrel, up about 0.4%.

The natural gas rig count fell by two to 187 this week. The count for natural gas rigs is now up by just one year over year. Natural gas for August delivery traded up less than 0.1%, at around $2.77 per million BTUs, up a penny compared to last Friday.

Crude oil prices have nearly fully recovered from a $2 a barrel drop in the first two days of the week. They might have recovered more than all the drop had President Trump not complained on Thursday about the effect of the Fed’s rate hike policy, which immediately caused the dollar to fall and oil prices to hold onto the gains of the previous two days. It promises to be a bumpy ride for crude oil in a narrow price range around $70 for the next several days.

Among the states, Baker Hughes reports that New Mexico added four rigs while Ohio and Wyoming added one each. Texas lost five rigs this week, Oklahoma lost three, Louisiana dropped two and three states — Alaska, North Dakota and West Virginia — lost one each.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 476, unchanged compared with the previous week’s count. The Eagle Ford Basin in south Texas has 81 rigs in operation, unchanged for a third straight week, and the Williston Basin (Bakken) in North Dakota and Montana now has 56 working rigs, down one for the week.

Producers removed eight horizontal rigs this week, and the count fell to 922, while offshore drillers reported a total of 17, two less compared with the previous week’s count.

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