In the week ended December 2, the number of rigs drilling for oil in the United States totaled 477, up by three from the prior week and down by 68 compared with a total of 545 a year ago. Including 119 other rigs drilling for natural gas and one rig listed as “miscellaneous,” there are a total of 597 working rigs in the country, up by four week-over-week and down 140 year-over-year. The data come from the latest Baker Hughes North American Rotary Rig Count released on Friday.

Benchmark West Texas Intermediate (WTI) crude oil for January delivery traded up about 1.2% on Friday to settle at $51.68. Crude rose by nearly 14% for the week following the agreement among OPEC and other producing nations to curb production. The U.S. Energy Information Administration (EIA) reported last Wednesday that crude supplies had decreased by 900,000 barrels in the week ended November 25 and that gasoline supplies had risen by 2.1 million barrels.

Saudi Arabia got its way and on Wednesday and pushed through a nominal production cut of about 1.2 million barrels a day from OPEC members. This was greeted by a run up of nearly $6 a barrel in crude prices by the end of the week.

The hard part, as always, is getting the producing countries to live up to their promises. Brown University professor Jeff Colgan is among those not impressed with the deal, calling it “mostly meaningless” in an article at Foreign Affairs. He writes:

In a detailed analysis of OPEC’s behavior since 1982, I found that OPEC cheated on its own aggregate production target a whopping 96 percent of the time—and every member is guilty of taking part. Worse still, changes in production targets had almost no impact on production itself. Maybe 2016 will be different, but this pattern cannot be ignored.

We also noted on Friday that the agreed cuts affect production, not exports. Saudi Arabia has about 278 million barrels of crude in its domestic stockpiles and can easily continue to export at current levels for months even with the production cuts. The same is not true of all OPEC members, and those that cannot maintain export levels will almost certainly boost production when cash flows drop.

The number of rigs drilling for oil in the United States is down by 68 year over year but up three week over week. The natural gas rig count increased by one to a total of 119. The count for natural gas rigs is down by 73 year over year. Natural gas for January delivery closed the week at $3.46 per million BTUs, up 27 cents on the near-month contract compared with the prior week.

Hedge funds — under the Managed Money heading in the Commodity Futures Trading Commission’s (CFTC’s) weekly Commitments of Traders report — dropped 16,633 short contracts for WTI crude oil last week and dropped 12,744 long contracts. The movement reflects changes as of the November 29 settlement date. Managed money now holds 321,114 long positions compared with 162,434 short positions. Open interest totaled 2.020,026. There were 48 hedge funds with large short positions last week, down from 49 in the prior week.

Among the producers themselves, short positions outnumber longs 554,091 to 290,721. The number of short positions rose by 17,602 contracts last week, and longs added 22,053 contracts. Positions among swaps dealers show 253,767 short contracts versus 212,452 long positions. Swaps dealers added 1,633 contracts to their short positions last week and dropped 25,574 contracts from their long positions.

U.S. refineries ran at 89.8% of capacity, a week-over-week decrease of about 114,000 barrels a day. Imports fell by about 30,000 barrels a day, to around 7.5 million barrels a day in the week.

Among the states, Texas added seven rigs last week, Wyoming added four and Oklahoma added two. Louisiana lost four rigs while Colorado and North Dakota each lost two. Utah dropped one rig.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 235, up seven compared with the previous week’s count. The Eagle Ford Basin in south Texas has 40 rigs in operation, up two from a week ago, and the Williston Basin (Bakken) in North Dakota and Montana now has 31 working rigs, down two for the week.

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Enterprise Products Partners lists a December 3 posted price of $48.13 per barrel for WTI and $49.58 a barrel for Eagle Ford crude. The price for WTI and Eagle Ford crudes rose by $5.62 a barrel in the week.

The pump price of regular gasoline rose by nearly five cents a gallon week over week. Saturday morning’s average price in the United States was $2.172 a gallon, up $0.047 compared with $2.125 a week ago. The year-ago price was $2.045 a gallon.

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