In the latest report on the state of oil rigs in the United States, the number has decreased by one rig during the week that ended on Friday. According to the data compiled by energy services company Baker Hughes, the total count for oil rigs has moved down to 482 from the previous week's figure of 483.
Interestingly, the natural gas sector saw a slight increase with one additional rig added, bringing the total gas rigs to 103. The miscellaneous component remained unchanged at four rigs. This data reflects a significant change when compared to the same time last year, where the United States had an operational tally of 501 oil rigs, 118 gas rigs, and two miscellaneous rigs. Currently, a total of 589 rigs are operational across the US, a decrease from 621 rigs operational a year earlier, indicating a noticeable decline in the oil sector's drilling activity. Breaking down the data by state, Texas, as the top oil-producing state, added one rig, raising its count to 285, whereas Louisiana experienced a decrease with the loss of one rig.
This trend highlights a shifting landscape in the oil production dynamics across the nation. When looking at North America as a whole, oil and gas rigs fell by one this week, totaling 683, which is down from 746 rigs that were operational a year ago. In Canada specifically, the rig count has also seen a decline, dropping by one to a total of 94 rigs. On the pricing front, West Texas Intermediate crude oil saw an increase of 1.3% on Friday, trading at $74.07 a barrel, and Brent crude rose 0.9% to $76.61 a barrel, both of which are on track to achieve consecutive weekly gains.
This upward trend in crude oil prices is notable, as it often reflects supply-demand dynamics and geopolitical factors affecting the markets. Moreover, a noteworthy observation from UBS Securities was shared regarding crude oil's potential exclusion from President-elect Donald Trump's upcoming tariffs on products imported from Mexico and Canada.
The analysis suggests that imposing a 25% tariff on crude from these regions would significantly increase the United States' reliance on the Organization of the Petroleum Exporting Countries (OPEC). This perspective points to the fact that growing Canadian crude production has lessened the US's dependency on OPEC oil, a trend that is favorable and likely not something Trump would wish to reverse..