In a recent report compiled by Baker Hughes, the number of oil rigs operating in the United States has seen a modest increase, climbing by five rigs for the week ending Friday. This brings the total count of oil drilling rigs to 488, compared to 483 rigs the previous week. In the gas sector, three additional rigs have been added, bringing the total to 97.
However, the miscellaneous rigs have remained stable at five, showcasing minimal fluctuations in lesser-used drilling categories. When we look back at last year’s data, the U.S. was operating with 515 oil rigs, 121 gas rigs, and five miscellaneous rigs, indicating a notable decline in the total rig count year-on-year. Overall, there are a total of 590 rigs currently operational in the U.S., marking a significant decrease from 641 rigs reported at the same time last year.
State-by-state analysis reveals that Louisiana, Oklahoma, and Wyoming contributed to this week’s increase, each adding three rigs to their counts. Conversely, states such as California and Pennsylvania experienced setbacks, with both states recording a decline of two rigs each. Expanding the scope to North America, the oil-and-gas rig count saw a marginal increase of six this week, reaching 808.
This figure still lags behind the 831 rigs operational at the same time last year. Notably, Canada recorded a decrease of two rigs, bringing its total down to 218. On the pricing front, West Texas Intermediate (WTI) crude oil has seen a slight uptick of 0.3%, reaching $69.19 per barrel during Friday's late-afternoon trading.
Meanwhile, Brent oil climbed by 0.2% to settle at $72.08 per barrel, indicating positive weekly gains. However, both WTI and Brent prices faced pressures earlier in the week on Tuesday. Saxo Bank released a report highlighting that crude oil prices are rebounding from a three-year low; however, there are growing concerns regarding a slowdown in global oil demand growth, particularly due to a cooling economy in China.
The International Energy Agency (IEA) has recently adjusted its global oil demand growth outlook for this year, attributing this decrease to the economic conditions in China. Similarly, the Organization of the Petroleum Exporting Countries (OPEC) has reduced its oil demand projections for 2024 and 2025, further emphasizing concerns surrounding future demand. In their analysis, Saxo Bank has pointed out that a generally supportive risk-on sentiment, coupled with disruptions caused by hurricanes in the U.S., is promoting a fresh round of short covering among investors.
A critical price level to monitor is $75 per barrel for Brent, which could serve as an indicator for future market movements. As of the latest data, WTI is reported at $33.23, with a slight change of -0.06, reflecting a percent change of -0.18..