The recent data reveals a slight reduction in the number of oil rigs operating in the United States, with a total decrease of two during the week ending Friday. According to energy services company Baker Hughes, the current count for oil rigs stands at 480, down from the previous 482. Concurrently, the natural gas sector also faced a decline, shedding three rigs to reach a total of 100.
The miscellaneous category remained unchanged at four rigs. This is a notable decrease compared to the same period last year when there were 499 oil rigs, 117 gas rigs, and three miscellaneous rigs in operation. Overall, the latest figures indicate that 584 rigs were active in the United States as of Friday, a significant decrease from 619 rigs operating a year prior. Focusing on state-level production, Texas, the leading oil-producing state, saw a decline of three rigs, resulting in 282 rigs in operation.
Meanwhile, Colorado and Utah each lost one rig during the week. Across North America, the overall number of oil and gas rigs increased week over week by 117, bringing the total to 800, down from 832 rigs a year earlier. In Canada, the count surged by 122 rigs to reach 216, predominantly driven by oil production. Turning to market prices, the West Texas Intermediate crude oil experienced a noteworthy increase of 3.8%, trading at $76.71 per barrel late on Friday afternoon.
Similarly, Brent crude rose by 3.7%, with prices reaching $79.80 per barrel. Both oil benchmarks have seen more than a 3% increase thus far in October. In a significant geopolitical development, the US Department of the Treasury announced further sanctions against Russia, targeting its oil production capabilities and export activities.
This strategic move may lead to an uptick in crude oil demand from select producers in the Middle East, particularly Saudi Arabia, as outlined in a recent report by Saxo Bank. Saxo's Head of Commodity Strategy, Ole Hansen, attributed the rise in oil prices this year to heightened fuel demand, particularly in the US during the winter months, which has been characterized by exceptionally cold temperatures in January.
He noted that fundamental support for oil prices heading into 2025 could be affected by the potential for further sanctions imposed by the Trump administration on Iran, which could place additional upward pressure on oil markets going forward..