US Oil Rig Count Falls by 4, on Top of 10 Last Week, but Crude Price Remains Low

In the week ending December 14, 2018, the number of land rigs drilling for oil in the United States totaled 873, a drop of four compared to the previous week and up by 126 compared with a total of 747 a year ago. Including 198 other land rigs drilling for natural gas, there are a total of 1,071 working rigs in the country, four less than a week ago and up by 141 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 January delivery settled at $52.58 a barrel on Thursday, and it traded down up about 2.5% Friday afternoon at around $51.25 shortly before regular trading closed. WTI is on track to close the week down by about 2.5%. Brent crude for February delivery traded at $60.27 a barrel, down nearly 2% for the day.

The natural gas rig count remained unchanged at 198 this week, and the number of “miscellaneous” rigs remained at zero. The count for natural gas rigs is now up by 15 year over year. Natural gas for January delivery traded down nearly 7%, at around $3.84 per million BTUs, down by about 70 cents compared to last Friday’s price.

Crude oil prices have been volatile again this week, with news of a new production cut from OPEC and its partners sending prices higher early in the week. Then doubts about OPEC+ and its ability to rebalance the market added to weaker global economic growth estimates for next year to send prices lower.

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Among the states, Baker Hughes reports that four states added rigs during the week: Wyoming added five rigs and Texas added three, while Kansas and Ohio each added one. New Mexico lost five rigs in the week, while North Dakota and Oklahoma each lost two and Alaska and Pennsylvania each lost one rig.

In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 486, down by three compared with the previous week’s count. The Eagle Ford Basin in south Texas has 81 rigs in operation, one more week over week, and the Williston Basin (Bakken) in North Dakota and Montana has 53 working rigs, down by three for the week.

Producers dropped six horizontal rigs this week and the count fell to 927, while offshore drillers reported a total of 23 rigs, unchanged from the previous week’s count.

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