US Oil Rig Count Jumps 10, Crude Price Holds On to Gain

In the week ending August 10, 2018, the number of land rigs drilling for oil in the United States totaled 869, up by 10 compared to the previous week and 101 more compared with a total of 768 a year ago. Including 186 other land rigs drilling for natural gas and two listed as miscellaneous, there are a total of 1,057 working rigs in the country, 13 more than a week ago and up by 108 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 September delivery settled at $66.81 a barrel on Thursday and traded up about 1.1% Friday afternoon at around $67.57 shortly before regular trading closed. WTI is on track to close the week down about 1.4%. Brent crude for October delivery traded at $72.85 a barrel, also up about 1.1% for the day.

The natural gas rig count rose by three to 186 this week. The count for natural gas rigs is now up by five year over year. Natural gas for September delivery traded down about 0.7% at around $2.93 per million BTUs, down about five cents compared to last Friday.

The International Energy Agency (IEA) said in its monthly report released Friday morning that global demand for crude will rise by 1.5 million barrels a day next year, an increase of 115,000 barrels a day since last month’s report. Higher output from Russia and other OPEC countries lifted production in July by 300,000 barrels a day. That projected increase in demand is keeping crude prices from diving in the wake of the sharp increase in this week’s rig count.

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Among the states, Baker Hughes reports that Louisiana added six rigs, New Mexico had five more and Alaska and Oklahoma each added two rigs. California and Ohio each added one rig, while Texas lost two and three states — Arkansas, Kansas and Pennsylvania — each lost one rig.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 485, five more compared with the previous week’s count. The Eagle Ford Basin in south Texas has 79 rigs in operation, down by one from a week ago, and the Williston Basin (Bakken) in North Dakota and Montana has 56 working rigs, unchanged for the week.

Producers made added 12 horizontal rigs this week and the count rose to 924, while offshore drillers reported a total of 18 rigs, a gain of two compared with the previous week’s count.

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