US Rig Count Falls, US Crude Oil Production Falling

US Rig Count Falls, US Crude Oil Production Falling


For the week ended 11 September the number of rigs drilling for Crude Oil in the United States totaled 652, compared with 662 in the prior week and 1,592 a year ago. Including 196 other rigs drilling for Nat Gas, there are a total of 848 working rigs in the country, down by 16 W-W and down 1,083 year over year. The data come from the latest Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count.

WTI Crude Oil for Oct delivery bounced to a high of nearly 46.50 bbl last week before settling at 45.92 Friday. On the week WTI gained 15 cents.

As I write WTI and Brent Crude Oil are trading at:

WTI Crude Oil (NYMEX) USD/bbl. 44.77 +0.14 +0.31% OCT 15 22:16:15

Brent Crude (ICE) USD/bbl. 48.18 +0.04 +0.08% OCT 15 22:13:50

Last week marks the 2nd week running with a substantial drop in the rig count.

The US Energy Information Agency (EIA) reported that August production fell by 140,000 BPD compared with July production, and the total US production likely will average 9.2-M BPD this year and 8.8-M BPD in Y 2016.

The International Energy Agency (IEA) Friday said that US production from onshore shale Oil plays could fall by 400,000 BPD next year, which will be partially offset by higher production from the Gulf of Mexico, netting out at a decline of 180,000 BPD.

The number of rigs drilling for Crude Oil in the US is down by 940 Y-Y and down by 10 W-W. The Nat Gas rig count fell by 6 from 202 to 196. The count for Nat Gas rigs is down by 142 Y-Y.

Gasoline stockpiles increased by 400,000 bbls last week.

In Managed Money heading (hedge funds) in the Commodity Futures Trading Commission (CFTC) weekly Commitments of Traders (COT)report exited 11,969 short contracts last week and added 7,921 contracts to their long positions. The movement reflects changes as of the 8 September settlement date. Managed money holds 258,812 long positions, compared with 128,732 short positions.

Among the producers: short positions outnumber longs, 323,160 to 178,255. The number of short positions last week rose by 22,539 contracts, and longs rose by 19,796 positions. Positions among swaps dealers show 300,193 shorts Vs 218,692 longs. Swaps dealers added 2,398 contracts to their short positions last week and cut 2,195 long contracts.

Enterprise Products Partners L.P. (NYSE:EPD) lists a posted price of 41.08 bbl for WTI Crude and a September 12 price of 33.78 bbl for North Dakota Light Sweet. The posted price for a barrel of Eagle Ford Crude is 41.03. The price for all grades declined by about 1.50 a bbl.

The pump price of Gasoline decreased W-W. Saturday morning’s average price in the United States was $2.35 gal, down about 2.5% from $2.411 a week ago.

HeffX-LTN Analysis for USO: Overall Short Intermediate Long
Very Bearish (-0.51) Bearish (-0.35) Very Bearish (-0.51) Very Bearish (-0.67)
HeffX-LTN Analysis for OIL:  Overall Short Intermediate Long
Bearish (-0.34) Neutral (-0.14) Bearish (-0.47) Bearish (-0.42)
HeffX-LTN Analysis UNG: Overall Short Intermediate Long
Bearish (-0.34) Bearish (-0.33) Bearish (-0.33) Bearish (-0.36)
HeffX-LTN Analysis for UGA:  Overall Short Intermediate Long
Bearish (-0.37) Neutral (-0.19) Bearish (-0.47) Bearish (-0.46)

Have a terrific week.


Paul Ebeling

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