In the week ended May 22nd, the number of rigs drilling for oil in the U.S. totaled 659 compared with 660 in the prior week and 1,528 a year ago. Including 222 other rigs mostly drilling for natural gas there are a total of 885 working rigs in the U.S., down 3 week-over-week, and down 972 year-over-year. The data comes from the latest Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count.

Last week marks the smallest drop in oil rig counts since the count rose by 5 in the first week of December. The price of WTI crude oil finished the week up fractionally, the 10th consecutive week to post a price increase. WTI closed the week at $59.99 after touching a high of $60.80 on Friday. The weekly high came on Monday when crude reached $61.71.

The number of rigs drilling for oil fell by 869 year-over-year and fell by 1 week-over-week. The natural gas rig count decreased by 1 to a total of 222. The rig count for natural gas rigs is down by 103 year-over-year.

Analysts at Goldman Sachs took a decidedly bearish view of the oil market last week, saying WTI prices could fall to $45 a barrel by October.  Over the five-year period from 2016 to 2020, Goldman now sees Brent crude at $65 a barrel for 2016 to 2018, falling to $55 a barrel in 2020. WTI is forecast to trade at a discount to Brent in 2020, at $50 barrel.

As WTI prices have risen to around $60 a barrel, cuts to new drilling have slowed and there has been plenty of talk that drilling will pick up. If that happens, and the wells are completed and beginning pumping crude, the price of crude could very well drop again because there is little evidence of a sharp increase in demand. Goldman thinks that the global imbalance in the crude markets has not been fixed and that the recent rally is “self-defeating” because it “undermines the nascent rebalancing.”

U.S. crude stockpiles fell by 2.7 million barrels last week, the third consecutive large decrease. Gasoline stockpiles also fell as refineries ran at more than 92% of capacity, down about 100,000 barrels a day from the previous week. Gasoline inventories remain well above the upper limit of the five-year range for this time of year.

Hedge funds — under the Managed Money heading in the Commodity Futures Trading Commission’s (CFTC) Commitments of Traders report — cut their long positions last week and increased their short positions. The funds cut long positions by nearly 7,000 contracts and boosted short positions by about 5,500. The movement reflect changes as of the May 19th settlement date. Managed money holds 318,849 long positions compared with 68,276 short positions.

Among the producers themselves short positions outnumber longs, 372,326 to 201,379. The number of short positions last week fell by 30,156 contracts while longs fell by 33,699. Positions among swaps dealers show 377,572 shorts versus 197,979 longs. Swaps dealers decreased their long positions by a total of more than 6,000 contracts last week while shorts added 18,849 contracts.

The states losing the most rigs last week were Louisiana (down 4) and West Virginia (down 3). New Mexico and Pennsylvania each added three rigs and Arkansas added two rigs last week. Rig counts in Texas, California, Colorado, and Utah were unchanged.

In the Permian Basin of west Texas and southeastern New Mexico the rig count remaind at 233; the Eagle Ford Basin in south Texas dropped 1 rig and reports that 107 are now working; and the Williston Basin (Bakken) in North Dakota and Montana has 78 working rigs, down 1 compared with the prior week.

As of Friday, the posted price for Williston Basin sweet crude remained unchanged at $48.94 a barrel and Williston Basin sour also remained unchanged at $44.33. Eagle Ford Light crude remained at $56.25, the same price as WTI.

The price of gasoline increased over the week. Saturday morning’s average price in the U.S. is $2.738 a gallon, up about 1.4% from $2.699 a week ago.

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