Energy
US Adds a Dozen Oil Rigs, Reversing 6 Months of Declines
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After eight consecutive weeks of declining crude oil inventories, the U.S. Energy Information Administration (EIA) reported that inventories rose by 2.4 million barrels in the week ending June 26. Prices, which had already slipped to around $58.15 a barrel, dipped to $58 and closed below $57 a barrel on Thursday.
The inventory boost during the week was almost entirely due to a big jump in crude oil imports, which were up more 750,000 barrels a day week over week to about 7.5 million barrels a day. Just the increase adds up to 5.25 million barrels over the course of the week, more than two very-large crude carriers (VLCCs).
Refineries were running at 95% of capacity, with daily input of more than 16.5 million barrels a day, roughly even with the previous week. That indicates that last week’s rise was almost entirely due to a couple of extra VLCCs reaching U.S. ports. The oil came in and was promptly added to storage. This week, the situation may reverse. The point is that imports fluctuate, sometimes a lot. Last week was one of those times.
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The number of rigs drilling for oil in North America fell by 922 year over year and rose by 12 week over week. The natural gas rig count decreased by nine to a total of 219. The rig count for natural gas rigs is down by 92 year over year.
Gasoline stockpiles fell by 1.8 million barrels last week, even though refineries raised run levels to a near-record high. Gasoline inventories remain in the upper half of the five-year average range.
The Commodity Futures Trading Commission (CFTC) will not release its Commitments of Traders report on futures and options until Monday July 6.
Four states lost five rigs last week: Louisiana (two), Colorado, Kansas and West Virginia. Texas and North Dakota gained two each, while New Mexico, Ohio and Oklahoma each added a single new rig. Totals remained unchanged in the other states.
In the Permian Basin of west Texas and southeastern New Mexico, the rig count rose by one to 232. The Eagle Ford Basin in south Texas added three rigs to finish the week with a count of 106, and the Williston Basin (Bakken) in North Dakota and Montana now has 77 working rigs, up three from the prior week.
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Enterprise Products Partners L.P. (NYSE: EPD) lists a posted price of $53.38 per barrel for West Texas Intermediate (WTI) and a July 2 price of $48.95 a barrel for North Dakota Light Sweet and a posted price of $53.18 a barrel for Eagle Ford crude. All prices are about $2.70 a barrel lower than they were a week ago.
The pump price of gasoline ticked down slightly week over week. Friday morning’s average price in the United States was $2.77 a gallon, down about 0.3% from $2.779 a week ago.
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