In the week ended March 11, the number of rigs drilling for oil in the United States totaled 386, compared with 392 in the prior week and 866 a year ago. Including 94 other rigs drilling for natural gas, there are a total of 480 working rigs in the country, down nine week over week and down 645 year over year. The data come from the latest Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count released on Friday.

West Texas Intermediate (WTI) crude oil for April delivery traded up about 1.7% on Friday to settle at $38.49, a rise of nearly 7.2% for the week. The U.S. Energy Information Administration (EIA) reported last Wednesday that crude supplies had increased by 3.9 million barrels in the week ended March 4 and that gasoline supplies had fallen by 4.5 million barrels.

In its monthly Oil Market Report for March, the International Energy Agency (IEA) said that February’s global crude oil production declined by 180,000 barrels a day compared with February 2014 supply and averaged 96.5 million barrels a day. The decline is 10% smaller than the January decline and the total daily supply was unchanged.

The U.S. Energy Information Administration (EIA) reported earlier last week that shale oil production is expected to fall another 106,000 barrels per day in April, and for 2016 the agency is forecasting average U.S. production of 8.7 million barrels a day, down from an estimated 9.4 million barrels a day in 2015.

The EIA also has forecast Gulf of Mexico production at 1.63 million barrels a day in 2016, rising to 1.79 million in 2017 and 1.91 million by December 2018, a record high. A total of eight new projects that came online in 2015 will be joined by five more by the end of 2017. At the end of December 2015, Gulf production had reached 1.63 million barrels a day and the 2015 average was 1.54 million barrels a day.

Putting the estimates together, it’s fair to say that the offshore producers, including Exxon, BP and Chevron, will be increasing their production at the expense of onshore shale producers. And these increases will continue irrespective of crude prices.

Now that prices have increased sharply over the past two weeks, traders and investors are smiling. But the average breakeven price for WTI from onshore shale plays is around $36 a barrel. And remember, the rig count won’t rise or maybe even stop falling because the wells are drilled. Producers can complete already-drilled wells quickly and begin producing again just as rapidly as they stopped.

The number of rigs drilling for oil in the United States is down by 480 year over year and by six from last week. The natural gas rig count fell from 97 to 94. The count for natural gas rigs is down by 163 year over year. Natural gas for April delivery closed the week at $1.81 per million BTUs, up 14 cents from $1.67 at the end of the prior week. Natural gas posted a 52-week low of $1.61 two weeks ago.

U.S. refineries ran at 89.1% of capacity, a week-over-week increase of about 59,000 barrels a day. Imports fell by 244,000 barrels a day, remaining around 8.3 million barrels a day in the week.

Hedge funds — under the Managed Money heading in the Commodity Futures Trading Commission (CFTC) weekly Commitments of Traders report — dumped 33,346 short contracts last week and added 7,494 long contracts. The movement reflects changes as of the March 8 settlement date. Managed money holds 286,827 long positions compared with 121,576 short positions. Open interest totaled 1,816,474. There were 58 hedge funds with large short positions last week, a decrease of 10 compared with the prior week. The hedgies have dumped short contracts in large numbers for the past three settlement periods, largely due to climbing crude oil prices.

Among the producers themselves, short positions outnumber longs by more than two to one, 459,477 to 177,906. The number of short positions rose by 17,363 contracts last week, and longs increased by 11,545 positions. Positions among swaps dealers show 221,932 shorts versus 262,414 longs. Swaps dealers added 245 contracts to their long positions last week and 22,638 short positions.

Among the states, Texas dropped 12 rigs last week, Oklahoma lost three, New Mexico dropped two and North Dakota and Ohio dropped one each. Pennsylvania and Louisiana each added three rigs, Kansas added two and California and Utah each added one.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count fell by six to a total of 152. The Eagle Ford Basin in south Texas dropped three to a new total of 43, and the Williston Basin (Bakken) in North Dakota and Montana now has 32 working rigs, down one from the prior week.

Enterprise Products Partners L.P. (NYSE: EPD) lists a posted price of $34.95 per barrel for WTI and a March 12 price of $29.34 a barrel for North Dakota Light Sweet. The posted price for a barrel of Eagle Ford crude is $34.90. The price for all three varieties rose by $2.58 a barrel last week. The gain was smaller than the prior week’s gain.

The pump price of gasoline rose by about 5.7% week over week. Saturday morning’s average price in the United States was $1.917 a gallon, up from $1.813 a week ago.

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