In a notable shift within the U.S. energy sector, the number of active oil rigs experienced a decline of two during the week ending Friday, bringing the total count down to 486 from 488 the previous week, as reported by Baker Hughes, a leader in energy services. Meanwhile, the gas rig count saw a slight uptick, adding three rigs to reach a total of 102, while the count of miscellaneous rigs remained stable at five.
This decrease in oil rigs marks a significant contrast compared to the previous year's figures, where the U.S. was operating 506 oil rigs, 119 gas rigs, and four miscellaneous rigs. Overall, there were 593 rigs actively operating in the U.S. by the end of the week, reflecting a decrease from the 629 rigs reported a year earlier. Texas, the leading state for oil production, added two rigs this week, boosting its total to 282, while Louisiana experienced a reduction of one rig.
On a broader scale, North America saw an increase in oil and gas rigs, rising by five to a total of 841 compared to the previous week. The Canadian rig count also rose, with four additional rigs coming online for a total of 248, mainly driven by oil activity. In market performance, West Texas Intermediate crude oil dipped 0.8% to settle at $69.80 a barrel during late trading on Friday, while Brent crude saw a 1% decline to $72.85.
Notably, both benchmark prices are projected to record a loss of over 3.5% for the month of February. This decline in oil prices aligns with broader concerns regarding the energy sector's health, as identified in a recent report from Saxo Bank. Market analysts have expressed worries that a potential global trade war could impede growth and subsequently reduce demand for fuel products.
These concerns arise at a time when OPEC and its allies remain uncertain regarding crude oil production levels for April and beyond, according to Ole Hansen, the Head of Commodity Strategy at Saxo Bank. Additionally, there are indications that Iraq may soon resume oil exports from the semi-autonomous Kurdistan region via the Iraq-Turkey pipeline, which could further impact the oil supply landscape.
A recent report from the Energy Information Administration highlighted an unexpected draw in commercial crude stockpiles within the U.S. last week, emphasizing the changing dynamics in the energy market as it responds to both domestic and geopolitical influences..