Energy

US Oil Rig Count Falls by 2, November Delivery Price Moves Higher

Paul Ausick

Published: September 21, 2018 1:35 pm

Last Updated: January 11, 2020 5:31 pm

In the week ending September 21, 2018, the number of land rigs drilling for oil in the United States totaled 866, a one fewer than in the previous week and up by 122 compared with a total of 744 a year ago. Including 186 other land rigs drilling for natural gas and one listed as miscellaneous, there are a total of 1,053 working rigs in the country, down by two week over week and up by 118 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 November delivery settled at $70.32 a barrel on Thursday and traded up about 1.5% Friday afternoon at around $71.36 shortly before regular trading closed. WTI is on track to close the week up by around 3%. Brent crude for November delivery traded at $78.06 a barrel, down about 0.2% for the day.

The natural gas rig count remained unchanged at 186 this week. The count for natural gas rigs is now down by four year over year. Natural gas for October delivery traded about flat at around $2.98 per million BTUs, up by 21 cents compared to last Friday and about 7% higher for the week.

President Trump took to Twitter again Thursday to express his displeasure with OPEC as Brent crude traded close to $80 a barrel. That price appears to be Trump’s line in the sand. Get too close and expect a tweet.

We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!

— Donald J. Trump (@realDonaldTrump) September 20, 2018

A week earlier Secretary of Energy Rick Perry congratulated OPEC, Saudi Arabia and Russia for raising their production in order to avert a spike in prices.

Going into the November elections, the president would rather have a crude price nearer $70 than $80, but November is also when full U.S. sanctions against Iran kick in. Making up for that loss plus the dwindling of production from Venezuela is going to be problematic. Expect more presidential tweets.

Among the states, Baker Hughes reports that Texas added six rigs this week while Oklahoma dropped three, Alaska and Ohio lost two each, and North Dakota dropped one rig.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 488, five more compared with the previous week’s count. The Eagle Ford Basin in south Texas has 79 rigs in operation, up by one week over week, and the Williston Basin (Bakken) in North Dakota and Montana has 53 working rigs, down by one for the week.

Producers dropped two horizontal rigs this week and the count slipped to 919, while offshore drillers reported a total of 18 rigs, unchanged from the previous week’s count.