US Oil Rig Count Down 2, Crude Price on Track to Close the Week Lower

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In the week ending August 3, 2018, the number of land rigs drilling for oil in the United States totaled 859, down by two compared to the previous week and up by 94 compared with a total of 765 a year ago. Including 183 other land rigs drilling for natural gas and two listed as miscellaneous, there are a total of 1,044 working rigs in the country, four fewer week over week and up by 90 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 September delivery settled at $69.61 a barrel on Thursday and traded down about 0.8% Friday afternoon at around $68.40 shortly before regular trading closed. Brent crude for October delivery traded at $73.19 a barrel, down about 0.4%.

The natural gas rig count fell by three to 183 this week. The count for natural gas rigs is now six fewer year over year. Natural gas for September delivery traded up about 1.5% at around $2.86 per million BTUs, six cents more compared to last Friday.

Crude oil prices have bounced around this week and look on track to close the week with a loss of around 1%. WTI traded over $70 a barrel on Monday and dipped to right around $67 on Thursday. Geopolitics is getting most of the blame for the volatility, and, as we approach the end of the summer driving season (Labor Day weekend), demand for gasoline is not expected to pick up much.

Among the states, Baker Hughes reports that Wyoming added two rigs, while Louisiana and Pennsylvania added one rig each. West Virginia lost three rigs this week, and Colorado and New Mexico each lost two rigs. Alaska and North Dakota lost one rig each.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 480, unchanged compared with the previous week’s count. The Eagle Ford Basin in south Texas has 80 rigs in operation, also unchanged week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 56 working rigs, one fewer for the week.

Producers dropped 10 horizontal rigs this week and the count fell to 912, while offshore drillers reported a total of 16, up by one compared with the previous week’s count.