US Oil Rig Count Unchanged, Crude on Track for 3% Weekly Loss

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In the week ending August 17, 2018, the number of land rigs drilling for oil in the United States totaled 869, unchanged compared to the previous week and up by 106 compared with a total of 763 a year ago. Including 186 other land rigs drilling for natural gas and two listed as miscellaneous, there are a total of 1,057 working rigs in the country, also unchanged week over week and up by 111 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 $65.46 a barrel on Thursday and traded up about 0.1% Friday afternoon at around $65.54 shortly before regular trading closed. WTI is on track to close the week down about 3%. Brent crude for October delivery traded at $71.45 a barrel, up less than 0.1% for the day.

The natural gas rig count remained flat at 186 this week. The count for natural gas rigs is now four more than a year ago. Natural gas for September delivery traded up about 1.2% at around $2.95 per million BTUs, about two cents more compared to last Friday.

The name of the game in oil trading these days is volatility. What effect the tariff skirmishes will have and what will happen if they develop into a full-scale trade war have weighed on demand as U.S. sanctions against Iran also begin to take effect. A general economic slowdown could begin sooner than the second half of next year.

Among the states, Baker Hughes reports that Texas added three rigs while Louisiana and Pennsylvania each added two. Oklahoma’s rig count rose by one. New Mexico lost three rigs, and four states — Alaska, Ohio, West Virginia and Wyoming — each lost one.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 486, a gain of one compared with the previous week’s count. The Eagle Ford Basin in south Texas has 79 rigs in operation, unchanged week over week, and the Williston Basin (Bakken) in North Dakota and Montana has 56 working rigs, also unchanged for the week.

Producers dropped two horizontal rigs this week and the count fell to 922, while offshore drillers reported a total of 19 rigs, one more compared with the previous week’s count.