Oil Falls as Rigs Rise
The oil market had remained stable the past few months, with prices moving little and hovering between $51 to $56 a barrel. Volatility is back. WTI has dipped by 9 percent since Tuesday and settled at $48.49 per barrel. Meanwhile, Brent, the global benchmark, lost 8 percent, settling at $51.37. Crude’s collapse also worried stock market investors and triggered a sell-off on Wall Street, leading to the first weekly decline for U.S. stock markets in over a month.
The biggest factor for the drop in prices was a report by the Energy Department that United States oil stockpiles had increased by 8.2 million barrels over the past week.
In addition, oil experts and officials from the Organization of Petroleum Exporting Countries (OPEC) have been clamoring of impending market volatility due to high American shale oil output.
Saudi Oil Minister Khalid al-Falih told reporters at a conference in Houston on Tuesday that OPEC would not be giving a “free ride” to U.S. shale producers—shale producers that have taken the liberty of bringing over a hundred new rigs online in the market upturn fueled by the bloc’s recent production cuts.
Most energy analysts agree that while the renewed selling by commodity traders might send oil prices below $45 a barrel for a time, the most likely outlook is for prices to bounce back and to continue to climb over the next few years.
The rig count is up for the 8th straight week, as reported by Baker Hughes. The number of rigs exploring for oil and natural gas in the U.S. increased by 12 this week to 768. There are now 617 rigs drilling for oil and 151 exploring for natural gas this week.
The total rig count is up by 288 rigs from last year’s count of 480, with oil rigs up 231 from 386 and gas rigs up 57 from 94.
Louisiana increased by five rigs, Colorado and Oklahoma each were up three, Ohio and Wyoming rose by two and California gained one.
Alaska declined by three and New Mexico dropped one. Arkansas, Kansas, North Dakota, Pennsylvania, Texas, Utah and West Virginia were all unchanged.
OKLAHOMA SUMMARY – 101 Rigs – Plus 3
The state count jumped back to 101 rigs running after falling to 98 rigs last week. The count is up from the low of 54 in February 2016. Oklahoma’s Cana Woodford play — which includes the STACK and SCOOP fields — dropped one rig to 48. The Ardmore Woodford has 1 rig while the Arkoma Woodford has 6 rigs running.
By county, Blaine, Custer, and Roger Mills lost 1 rig each while Grady County lost 2 rigs. Canadian, Dewey, and Stephens gained 1 rig each, Garvin is heating up as it gained 2 rigs and Kingfisher jumped up by 3 rigs. Blaine County has the most rigs running with a total of 27.
Check out our proprietary and interactive Rig Count Dashboard.
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Compiled and Published by GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma. ☞Email:firstname.lastname@example.org