Energy Economy

US Oil Rig Count Drops by 1, Crude on Track to Lose More Than 6% for the Week

Paul Ausick

In the week ending Nov. 2, the number of land rigs drilling for oil in the United States totaled 874, a decrease of one compared with the previous week and up by 145 compared with a total of 729 a year ago. Including 193 other land rigs drilling for natural gas, there are a total of 1,067 working rigs in the country, down by one week over week and up by 169 year over year. The data comes from the latest Baker Hughes North American Rotary Rig Count released on Friday afternoon.

West Texas Intermediate (WTI) crude oil for December delivery settled at $63.69 a barrel on Thursday and traded down about 1.1% Friday afternoon at around $62.99 shortly before regular trading closes. WTI is on track to close the week down by more than 6.5%. Brent crude for January delivery traded at $72.76 a barrel, down about 0.1% for the day.

The natural gas rig count remained unchanged at 193 this week and the number of “miscellaneous” rigs remained at zero. The count for natural gas rigs is now up by 24 year over year. Natural gas for December delivery traded up about 1.4% at around $3.28 per million BTUs, up by about 7 cents compared with last Friday and down about 2 cents from its high of around $3.30 for the week.

The U.S. government has granted waivers to eight countries that will allow them to continue importing Iranian oil once new U.S. sanctions against Iran go into full effect on Monday. South Korea, Japan, and India are known to be among the countries receiving waivers. All eight will be announced officially on Monday.

When sanctions against Iran were announced, they supported oil prices. In the past several weeks, however, record U.S. production along with higher production from Saudi Arabia and Russia has stopped the crude price hikes and prices continue to sink. China does not pay any attention to the U.S. sanctions and continues to buy Iranian crude in large quantities.

Among the states, Baker Hughes reports that Oklahoma added three rigs this week while Louisiana, New Mexico, and Ohio each added one. Texas lost four rigs and three states–Kansas, Pennsylvania, and West Virginia–lost one each.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 487, down by two  compared with the previous week’s count. The Eagle Ford Basin in south Texas has 79 rigs in operation, unchanged week over week. The Williston Basin (Bakken) in North Dakota and Montana has 56 working rigs, also unchanged for the week.

Producers added two horizontal rigs this week and the count rose to 929, while offshore drillers reported a total of 18 rigs, unchanged from the previous week’s count.