In the week ended January 29, the number of rigs drilling for oil in the United States totaled 498, compared with 510 in the prior week and 1,223 a year ago. Including 121 other rigs drilling for natural gas, there are a total of 619 working rigs in the country, down 18 week over week and down 996 year over year. The data come from the latest Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count released on Friday.

Benchmark West Texas Intermediate (WTI) crude oil for March delivery traded up about 1.5% on Friday to settle at $33.74, a rise of about 4.6% for the week. The U.S. Energy Information Administration (EIA) reported last Wednesday that crude supplies had increased by 8.4 million barrels in the week ended January 15, and that gasoline supplies had risen by 3.5 million barrels.

Traders pushed crude prices up this past week, following reports that the OPEC policy of maintaining market share no matter the cost may be negotiable after all. In our view, that’s wishful thinking. Iran has said it wants no part of a production cut, and that is likely enough to keep Saudi Arabia pumping full out. As for Russia, the country has never cut production to drive prices higher; its choice has always been to grab market share, and with Iran likely to be eyeing crude sales in Europe, Russia can’t allow itself to be undercut.

The number of rigs drilling for oil in the United States is down by 725 year over year and down by 12 week over week. The natural gas rig count dropped by six, from 127 to 121. The count for natural gas rigs is down by 198 year over year. Natural gas for March delivery closed the week at $2.31 per million BTUs, up 17 cents from $2.14 at the end of the prior week.

U.S. refineries ran at 87.4% of capacity, a week-over-week decrease of about 551,000 barrels a day. Imports fell to 7.6 million barrels a day in the week, a week-over-week decline of 170,000 barrels a day.

Hedge funds — under the Managed Money heading in the Commodity Futures Trading Commission (CFTC) weekly Commitments of Traders report — added 7,081 short contracts last week and 27,502 long contracts. The movement reflects changes as of the January 26 settlement date. Managed money holds 268,202 long positions, compared with 191,118 short positions. Open interest totaled 1,761,883. There were 70 hedge funds with large short positions last week, an increase of four compared with the prior week.

Among the producers themselves, short positions outnumber longs 442,026 to 189,269. The number of short positions rose by 43,315 contracts last week, and longs rose by 20,646 positions. Positions among swaps dealers show 191,388 shorts versus 235,095 longs. Swaps dealers dropped 2,260 contracts from their short positions last week and added 2,406 long contracts.

Among the states, Texas dropped 13 rigs last week, New Mexico dropped four, Louisiana dropped three and Kansas and North Dakota lost one each. Alaska and Colorado each added two rigs while Oklahoma added one.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count fell by 17 to a total of 182. The count in Eagle Ford Basin in south Texas remained unchanged at 64, and the Williston Basin (Bakken) in North Dakota and Montana now has 44 working rigs, down one from the prior week.

Enterprise Products Partners L.P. (NYSE: EPD) lists a posted price of $30.07 per barrel for WTI and a January 30 price of $22.00 a barrel for North Dakota Light Sweet. The posted price for a barrel of Eagle Ford crude is $30.02. The price for WTI and Eagle Ford crude rose by about $4 a barrel in the past week, and North Dakota Light Sweet rose about $2 a barrel.

The pump price of gasoline fell by about 1.8% week over week. Saturday morning’s average price in the United States was $1.804 a gallon, down from $1.837 a week ago.

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