The number of oil rigs in the US held steady in the week ended Friday, reflecting data compiled by energy services company Baker Hughes ($BKR). The counts for oil, gas, and miscellaneous rigs remained unchanged at 479, 102, and four, respectively, on a weekly basis. A year ago, the US operated 494 oil, 118 gas, and four miscellaneous rigs, showcasing a slight decline in overall activity. This week, 585 rigs were operating across the US, down from 616 a year earlier.
Among US states, the tally for top producer Texas remained flat at 281, while Louisiana’s count fell by three. Conversely, Oklahoma added two rigs to its count. Across North America, oil and gas rigs saw a decrease of six, bringing the total to 792 from the preceding week and marking a reduction from 815 a year ago.
In Canada, the rig count dropped by six to 207 on a weekly basis. In the markets, West Texas Intermediate crude oil saw a decline of 2.6%, trading at $70.49 a barrel during late Friday's afternoon session, while Brent crude fell 2.2% to $73.98 a barrel. Both benchmarks were still on course for a weekly gain despite the price drop. This decrease occurred as supply concerns linked to Hurricane Rafael in the US Gulf of Mexico eased, which contributed to an adjustment in market dynamics.
Following Donald Trump's victory in the recent US presidential election, significant moves were observed across various asset classes, including commodities, as noted by Saxo Bank in a Friday report. Looking ahead, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, may encounter heightened challenges in 2025 amidst Trump’s 'drill, baby drill' stance coupled with a sluggish economic outlook.
According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, these dynamics could lead to a scenario where production surpasses demand, resulting in limited capacity for increased output from OPEC+ members, many of whom are already grappling with rising government deficits and a pressing need for revenue.
This evolving landscape could pose challenges for OPEC+, particularly if some members produce beyond agreed limits..