US Oil Rig Count Up by 2, Prices Inch Higher From Multi-Month Low

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In the week ending November 16, 2018, the number of land rigs drilling for oil in the United States totaled 888, an increase of two compared to the previous week and up by 150 compared with a total of 738 a year ago. Including 194 other land rigs drilling for natural gas, there are a total of 1,082 working rigs in the country, one more than a week ago and up by 167 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 December delivery settled at $56.46 a barrel on Thursday and traded up about 0.5% Friday afternoon at around $56.76 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 $67.11 a barrel, up about 0.7% for the day.

The natural gas rig count dropped by one to 194 this week, and the number of “miscellaneous” rigs remained at zero. The count for natural gas rigs is now up by 17 year over year. Natural gas for December delivery traded up about 3.8% at around $4.20 per million BTUs, up by about 45 cents compared to last Friday and down about two cents from its high of around $4.82 for the week. The high was posted Wednesday.

Natural gas prices spiked this week as colder weather moved into the heavily populated eastern part of the country. After dropping back following Thursday’s report on gas in storage, the colder forecast for the coming week has been moving prices higher again.

Crude prices dropped sharply Tuesday and posted a new low for the December contract of $53.84 a barrel. The prompt (front) month contract posted its lowest level of the past 12 months on Wednesday. On October 3, the prompt month contract was just over $76 a barrel.

Among the states, Baker Hughes reports that Texas added three rigs this week and Pennsylvania added one. Oklahoma lost two rigs while New Mexico and Ohio each lost one rig.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 493, up by one compared with the previous week’s count. The Eagle Ford Basin in south Texas has 79 rigs in operation, three more week over week, and the Williston Basin (Bakken) in North Dakota and Montana has 57 working rigs, unchanged for the week.

Producers added four horizontal rigs this week and the count rose to 939, while offshore drillers reported a total of 22 rigs, one more than the previous week’s count.