US Oil Rig Count Rises by 2, Price Rises Slightly for the Week

In the week ending November 30, 2018, the number of land rigs drilling for oil in the United States totaled 887, a gain of two compared to the previous week and up by 138 compared with a total of 749 a year ago. Including 189 other land rigs drilling for natural gas, there are a total of 1,076 working rigs in the country, down week over week by three and 147 more year over year. The data come from the latest Baker Hughes North American Rotary Rig Count.

West Texas Intermediate (WTI) crude oil for January delivery settled at $51.45 a barrel on Thursday and traded down about 0.8% Friday afternoon, at around $50.97, shortly before regular trading closed. WTI is on track to close the week up by about 1.3%. Brent crude for February delivery traded at $59.40 a barrel, down about 0.9% for the day.

The natural gas rig count dropped by five to 189 this week and the number of “miscellaneous” rigs remained at zero. The count for natural gas rigs is now up by nine year over year. Natural gas for January delivery traded down about 2.4%, at around $4.54 per million BTUs, down by about 16 cents compared to last Friday.

The oil price decline that began in early October has lopped about 20% off the price for a barrel of crude oil. While this is a real benefit to consumers, it’s not so good for producers. Next week’s OPEC meeting is expected to result in production quotas for the cartel and its partners, including Russia, in a second effort to push prices higher. We wrote about what this means and how it may play out earlier today.

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Among the states, Baker Hughes reports that Wyoming added two rigs and three states, Alaska, Oklahoma and Utah, each added one rig. Louisiana lost four rigs, West Virginia lost two and Colorado and Texas each lost one.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 493, unchanged compared with the previous week’s count. The Eagle Ford Basin in south Texas has 79 rigs in operation, one more than a week ago, and the Williston Basin (Bakken) in North Dakota and Montana has 56 working rigs, unchanged for the week.

Producers added five horizontal rigs this week and the count rose to 934, while offshore drillers reported a total of 23 rigs, down by two from the previous week’s count.

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