The latest data from Baker Hughes indicates that the number of oil rigs operating in the United States has risen by five for the week ending Friday. This increase brings the total oil rig count to 482, up from 477 the previous week. Conversely, the number of gas rigs saw a decline, dropping by two to a total of 101, while the miscellaneous rig count remained unchanged at six.
Looking back a year, the US was operating 529 oil rigs, 128 gas rigs, and seven miscellaneous rigs, showcasing a considerable decrease in overall rig activity. In total, there are currently 589 rigs operational in the US, a notable decline from the 664 rigs active at the same time last year. Breaking it down by state activity, Oklahoma stood out by adding two rigs, while both Alaska and North Dakota contributed one new rig each. Expanding the lens to North America, the landscape for oil and gas rigs also saw a weekly increase, with 17 more rigs now in operation, bringing the total to 800.
However, this number still lags behind last year's count of 857 rigs. Specifically, in Canada, the rig count rose by 14 to a total of 211, primarily propelled by the oil sector. Meanwhile, market dynamics are showing volatility. As West Texas Intermediate crude oil prices dipped by 1% to $77.47 per barrel in Friday's late-afternoon trading session, it appears to be on track for a weekly decline.
This fluctuation in oil prices is compounded by recent significant political events impacting the economic landscape. In a surprising turn of events this weekend, US President Joe Biden announced his withdrawal from the presidential race and endorsed Vice President Kamala Harris as the Democratic Party's nominee for the 2024 elections.
This political development signals a potentially contentious race ahead, pitting Harris against former President Donald Trump. Notably, analysts from the Australia and New Zealand Banking Group have provided insight into how these political shifts could interact with the oil market. They assert that should Trump regain presidency, his policies might prove to be neutral to slightly supportive for oil prices.
However, they caution that his administration might dilute significant climate change initiatives such as the Inflation Reduction Act, which could hinder the growth of renewable energy and electric vehicle markets. The ANZ report further explains that any slowdown in the transition towards electric vehicles could inadvertently sustain high demand for oil over an extended period.
Despite this, the bank notes that concerns over an impending supply surge are exaggerated. The likelihood of a Trump administration revitalizing new exploration efforts seems low, with predictions indicating stagnation in US oil supply driven by broader economic considerations..