The number of active oil and gas rigs in the United States rose by 7 on Friday, according to oilfield services provider Baker Hughes, delivering a severe blow to oil prices, which were already down to new lows for 2017.
The total oil and gas rig count in the US now stands at 877 rigs, or 462 above the count a year ago.
Oil rigs increased by 6, while gas rigs bumped up 2; a single miscellaneous rig was taken out of production.
At 12:39pm EST, WTI was trading up 1.25 percent for the day at $46.09, while Brent Crude traded up 1.07 percent at $48.90—about a $3.00 per barrel loss from last Friday. Those prices reflect almost a total reversion to the price points prior to the OPEC agreement announcement on November 30, 2016.
This week marks the sixteenth straight build for oil rigs (+181 or +34.7% since January 13). Gas rigs climbed 11 of the last sixteen weeks, for a total gain of 37 (+27.2%).
Rig Factoid: A decade ago this week, the four states that had the most number of oil and gas rigs—Texas (819), Louisiana (184), Oklahoma (182), and Colorado (109)—accounted for 74% of the total rigs in production (1704).A total of 26 states had active oil and gas rigs at that time.
Some in the industry see this as a complete failure on OPEC’s part, who set out a monumental effort to stabilize the market through “rebalancing” the oil market in hopes of lifting prices. While OPEC—and its non-OPEC counterpart—has indeed shaved about 1.8 million barrels per day off their October 2016 production levels, it has done little, if anything, to oil inventories globally, and as of today, has done little, if anything, to boost prices. Related: All Eyes On Saudi Arabia As OPEC Begins To Unravel
Rig Factoid: Today, the top four states—Texas (442), Oklahoma (120), Louisiana (62), and New Mexico (56)—account for 78% of the total rigs in production (877). The total number of states with active oil and gas rigs now stands at 20, with 7 states dropping to zero rigs, including Indiana, Kansas, Montana, Nevada, South Dakota, Tennessee, and Virginia. Florida and Illinois both rose from zero to 1 and 2 rigs, respectively.
Meanwhile, U.S. shale is carrying on, after enjoying what was a temporary lift in oil prices during the last 4 months thanks to OPEC’s production cuts.
Shortly after data release, WTI was trading at $46.29 +1.69% with Brent trading at $49.15, up 1.59%.
By Julianne Geiger for Oilprice.com
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