In the period ended December 18, the number of rigs drilling for oil in the United States totaled 541, compared with 524 in the prior week and 1,536 a year ago. Including 168 other rigs drilling for natural gas, there are a total of 709 working rigs in the country, unchanged week over week and down 1,166 year over year. The data come from the Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count released on Friday.
West Texas Intermediate (WTI) crude oil for February delivery closed last Friday at $35.62 and dropped about 3% to close at $34.55 a week later. WTI set a new 52-week low of $34.29 per barrel on Friday afternoon following the release of the Baker Hughes report.
U.S. crude oil inventories increased by 4.8 million barrels last week, according the Energy Information Administration. The U.S. crude oil inventory, excluding the Strategic Petroleum Reserve, now stands at 490.7 million barrels, its highest level since April’s all-time record high of 491 million barrels.
The drop in price was moderated somewhat by the lifting of the 40-year ban on U.S. crude oil exports. A study by the U.S. Energy Information Administration earlier this year indicated that lifting the ban is not expected to have a significant impact on either the price of crude or the pump price of gasoline in the United States.
The number of rigs drilling for oil in the United States is down by 995 year over year but up by 17 week over week. The natural gas rig count fell by 17 to total 168 at the end of the week. The count for natural gas rigs is down by 170 year over year. Very low natural gas prices have probably contributed to the cut in rigs.
Gasoline stockpiles increased by 1.7 million barrels last week, and U.S. refineries ran at 91.9% of capacity, a week-over-week decrease of about 41,000 barrels a day.
Hedge funds — under the Managed Money heading in the Commodity Futures Trading Commission (CFTC) weekly Commitments of Traders report — dropped 3,411 short contracts last week and added 1,744 long contracts. The movement reflects changes as of the December 15 settlement date. Managed money holds 254,885 long positions, compared with 175,477 short positions. Open interest totaled 1,678,527, down about 2% week over week. The number of hedge funds with large short positions remained unchanged at 63 last week.
Among the producers themselves, short positions outnumber longs, 361,271 to 149,708. The number of short positions fell by 10,276 contracts last week and longs fell by 11,755 positions. Positions among swaps dealers show 235,857 shorts versus 239,281 longs. Swaps dealers dropped 5,332 contracts from their short positions last week and also cut 7,169 long contracts.
Among the states, Texas and Pennsylvania each lost four rigs last week, Louisiana dropped two and Wyoming dropped one. West Virginia added four, while Alaska, Kansas, New Mexico and Oklahoma each added one.
In the Permian Basin of west Texas and southeastern New Mexico, the rig count rose by two to a total of 206. The Eagle Ford Basin in south Texas added one rig to bring the total there to 77, and the Williston Basin (Bakken) in North Dakota and Montana now has 58 working rigs, unchanged from the prior week.
Enterprise Products Partners L.P. (NYSE: EPD) lists a posted price of $31.18 per barrel for WTI and a December 19 price of $26.81 a barrel for North Dakota Light Sweet. The posted price for a barrel of Eagle Ford crude is $31.13. The price for all three grades of crude fell by less than $1 a barrel in the past week.
The pump price of gasoline decreased week over week. Saturday morning’s average price in the United States was $2.001 a gallon, down about 0.7% from $2.015 a week ago.
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