Energy
Oil Rig Count Down by 10 Last Week; US Production Declining
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West Texas Intermediate (WTI) crude oil for October delivery bounced to a high of nearly $46.50 a barrel last week before settling at $45.92 on Friday. For the week WTI gained just 15 cents.
Last week marks the second consecutive week with a substantial drop in the rig count. The U.S. Energy Information Agency (EIA) reported that August production fell by 140,000 barrels a day compared with July production, and the total U.S. production likely will average 9.2 million barrels a day this year and 8.8 million barrels a day next year. The International Energy Agency (IEA) on Friday said that U.S. production from onshore shale plays could fall by 400,000 barrels a day next year, which will be partially offset by higher production from the Gulf of Mexico, netting out at a decline of 180,000 barrels a day.
The number of rigs drilling for oil in the U.S. is down by 940 year over year and down by 10 week over week. The natural gas rig count fell by six, from 202 to 196. The count for natural gas rigs is down by 142 year over year.
Gasoline stockpiles increased by 400,000 barrels last week.
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Hedge funds — under the Managed Money heading in the Commodity Futures Trading Commission (CFTC) weekly Commitments of Traders report — dumped 11,969 short contracts last week and added 7,921 contracts to their long positions. The movement reflects changes as of the September 8 settlement date. Managed money holds 258,812 long positions, compared with 128,732 short positions. Hedge funds continue to reduce their short positions as the glut of crude slowly diminishes.
Among the producers themselves, short positions outnumber longs, 323,160 to 178,255. The number of short positions last week rose by 22,539 contracts, and longs rose by 19,796 positions. Positions among swaps dealers show 300,193 shorts versus 218,692 longs. Swaps dealers added 2,398 contracts to their short positions last week and cut 2,195 long contracts.
Among the states, Texas lost nine rigs last week while Colorado and Louisiana lost two each. Kansas, North Dakota and Wyoming each lost one. Alaska added one rig in the week.
In the Permian Basin of west Texas and southeastern New Mexico, the rig count fell by three to 250. The Eagle Ford Basin in south Texas also dropped three rigs to bring its count to 90, and the Williston Basin (Bakken) in North Dakota and Montana now has 71 working rigs, down one from the prior week.
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Enterprise Products Partners L.P. (NYSE: EPD) lists a posted price of $41.08 per barrel for WTI and a September 12 price of $33.78 a barrel for North Dakota Light Sweet. The posted price for a barrel of Eagle Ford crude is $41.03. The price for all grades slipped by about $1.50 a barrel.
The pump price of gasoline decreased week over week. Saturday morning’s average price in the United States was $2.35 a gallon, down about 2.5% from $2.411 a week ago.
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