Rig Counts Down, Inventories Down, Crude Oil Prices Volatile

Rig Counts Down, Inventories Down, Crude Oil Prices Volatile


For the week ended 28 August, the number of rigs drilling for Crude Oil in the United States totaled 675, compared with 674 in the prior week and 1,575 a year ago.

Including 202 other rigs mostly drilling for Nat Gas, there are a total of 877 working rigs in the US, down by 8 W-W, and down 1,037 Y-Y The data come from the latest Baker Hughes Inc. (NYSE:BHI) North American Rotary Rig Count.

WTI Crude Oil had a volatile week, posting a 52-wk low of 37.75 bbl last Monday, consolidated the fall, bounced and finished at 45.33.

The US commercial Crude Oil inventory dropped by 5.5-M bbl last week due to a drop of more than 800,000 BPD in imports.

None of that was strong enough to drive prices up by more than 20% in just under 5 trading days. Meaning, that barring some Black Swan disruption to supply (not Shell’s problems in Nigeria), prices should stop rising so on buyer exhaustion fast and back off the Friday high. However, my position is Neutral in here.

The number of rigs drilling for Oil in the United States is down by 1,575 Y-Y, but it rose by 1 from the prior week. The Nat Gas rig count fell by 9 from 211 to 202. The count for Nat Gas rigs is down by 338 Y-Y.


Gasoline stockpiles increased by 1.7-M bbl last week.

Managed Money in the Commodity Futures Trading Commission (CFTC) weekly Commitments of Traders (COT) report sold 3,154 short contracts last week and added to their long positions by 3,526 contracts. The movement reflects changes as of the 25 August settlement date. Managed money holds 245,238 Long positions, compared with 156,004 Short positions.

Hedge funds cut their short positions for just the 2nd time in 7 weeks and resumed their roles as Crude Oil Bulls.

Among the producers

Short positions outnumber longs, 301,821 to 166,580. The number of short positions last week fell by 13,485 contracts and longs fell by 11,799 positions. Positions among swaps dealers show 299,743 shorts Vs 218,135 longs. Swaps dealers cut 2,379 contracts from their short positions last week and dropped 7,085 long contracts.

Enterprise Products Partners L.P. (NYSE:EPD) lists a posted price of 41.67 bbl for WTI and a 29 August price of 32.41 bbll for North Dakota Light Sweet. The posted price for a barrel of Eagle Ford Crude is 41.63. All prices are more than 4.00 bbl higher than they were a week ago, gaining back about 50% their losses over the past 5 weeks.

The pump price of Gasoline decreased week over week. Saturday morning’s average price in the United States was $2.49 gal, down nearly 4.8% from $2.615 a week ago.

HeffX-LTN Analysis for USO: Overall Short Intermediate Long
Neutral (-0.03) Neutral (-0.16) Neutral (0.22) Neutral (-0.14)
HeffX- LTN Analysis for UNG: Overall Short Intermediate Long
Bearish (-0.26) Bearish (-0.47) Neutral (-0.08) Neutral (-0.22)
HeffX-LTN Analysis for UGA: Overall Short Intermediate Long
Bearish (-0.37) Bearish (-0.34) Bearish (-0.47) Bearish (-0.32)

Stay tuned…


Paul Ebeling

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