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June 2, 2022June 2, 2022

Oil Prices Soar on EIA report!

OPEC, Russia-led group agree to increase oil production

WTI prices extended earlier gains following the bullish EIA inventory report that overshadowed the boost in production announced by OPEC+.

The Energy Information Administration (EIA) is the statistical agency of the Department of Energy. It provides policy-independent data, forecasts, and analyses to promote sound policy making, efficient markets, and public understanding regarding energy, and its interaction with the economy and the environment.

Crude prices have climbed a whopping 6-handles on the day, surging to $117.27 from an overnight low of $111.20. This is the highest since March.

The market has been whipped recently, with prices climbing on news EU would sanction some Russian oil imports, only to tumble on reports OPEC+ was considering excluding Russia from production quotas which suggested increased output from Saudi and UAE to make up for the loss.

https://stockwinners.com — Rig Counts Rise – See Stockwinners.com Market Radar to read more

Then overnight there was talk that the cartel would boost production between 500 M and 700 M barrels, which saw prices dip to the lows, but only briefly.

Prices rallied and remained elevated into the $114 area, even after OPCE+ confirmed the production increase by some 50% or 648k bpd in July and August, as there were doubt the increased output can be effected.

There is also skepticism supply will be able to meet demand down the road. The market also was likely pricing in an inventory shortfall, which the EIA confirmed with crude stocks falling 5.1 M barrels, while distillates and gas stocks declining too.

WTI is up $1.43 to $116.67 per barrel. Brent is up $1.22 to $117.52 per barrel. Gasoline is up 0.126 to $4.199 per gallon. Note that dollar is weaker today which is also helping oil prices. Euro last traded at $1.08 after hitting a low of $1.06 on the day.

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February 16, 2021February 15, 2021

Oil Prices Reach Pre-Pandemic Level

Front-month WTI oil futures rallied over 2% to a 13-month high at $60.95.

A flaring up in the Yemeni civil war boosted crude prices, in addition to reflation-trade positioning, which is being aided by the ongoing tumble in world-wide positive Covid test results (now one third the January peak), alongside optimism about vaccination programs and prospects of big stimulus spending in the U.S. and EU.

Taking step back, the question is how much higher can oil prices go in a sustained manner.

Crude markets are now well into pre-pandemic ranges, yet global demand is not likely be restored for a considerable time.

OPEC last week cut its 2021 oil demand projection by about 100 M barrels per day due to more severe than anticipated lockdowns in major economies in the first half of the year.

This forecast still assumes a global economic recovery in the latter half of the year on the back of successful vaccination programs. This puts the focus on supply, leaving aside the impact of a softening dollar, which is only a part of the story and is in any case a partial by-product of the demand for oil and other assets in the global reflation trade.

Higher oil prices justify shale production

The OPEC+ group are limiting quotas, which are being reviewed on a monthly basis.

Saudi Arabia unilaterally complemented this regime with an additional two-month output cut, which took effect this month and which has more than offset rising supply out of Libya and Iran.

Without talking numbers, this supply restraint is evidently proving effective given the oil price rise and the recent corresponding draw downs in global crude inventories.

But, U.S. shale oil production, which is viable again after the surge in oil prices, is rising and will have increasing impact — the rig count is already up 70% since the 2020 lows.

This is something the EIA forecasted in its February oil market report.

Then there is there question of continued OPEC discipline.

Saudi Arabia is unlikely to extend its unilateral supply reduction beyond March, as it won’t want to give up market share.

Discipline among the OPEC+ nations will be a factor going forward, and is more likely to weaken than strengthen.

The Saudi-Russian price war last year illustrated how quickly the dam of quota curtailment can burst, although a repetition of that episode seems highly unlikely.

Overall, market sentiment remains strongly bullish.

JPM in a recent note forecast an “epic systemic short squeeze” will unfold over the next month, and a GS note mooted $150.0 as an upside target.

Analysts are less optimistic, being skeptical of the bullish supply gap hypothesis.

The oil industrial is well positioned, in terms of known and unexploited reserves, to respond to any sustained demand increases, while demand-quelling factors, such as the new trend for working from home, and alternative electrical powered transport is increasingly available.

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October 30, 2020

Rig Counts Rise!

Baker Hughes reports U.S. rig count up 9 from last week to 296

Baker Hughes (BKR) reports the U.S. rig count is up nine from last week to 296 with oil rigs up 10 to 221, gas rigs down one to 72, and miscellaneous rigs unchanged at three.

Baker Hughes has been reporting weekly rig counts for more than 50 years

U.S. Rig Count is down 526 rigs from last year’s count of 822, with oil rigs down 470, gas rigs down 58 and miscellaneous rigs up two.

The U.S. offshore rig count is unchanged at 13, down nine year-over-year.

Oil Rigs, See Stockwinners.com Market Radar to read the latest on oil and rig count

The Canada rig count is up three from last week to 86, with oil rigs down two to 40, gas rigs up five to 46.

Canada rig count is down 56 rigs from last year’s count of 142, with oil rigs down 53, gas rigs down three.

Brent crude is down $0.37 to $37.89 per barrel. West Texas Intermediate (WTI) crude is down $0.40 to $35.77 per barrel.

Gasoline last traded at $1.03 per gallon.

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August 21, 2020

Rig counts rise!

Baker Hughes reports U.S. rig count up 10 to 254 rigs

Baker Hughes (BKR) reports that the U.S. rig count is up 10 from last week at 254 with oil rigs up 11 to 183, gas rigs down 1 to 69, and miscellaneous rigs unchanged at 2.

The U.S. Rig Count is down 662 rigs from last year‘s count of 916, with oil rigs down 571, gas rigs down 93, and miscellaneous rigs unchanged at 2.

The U.S. Offshore Rig Count is unchanged at 13 and down 15 year-over-year.

The Canada Rig Count is up 2 rigs from last week to 56, with oil rigs up 1 to 20, gas rigs up 1 to 36, and miscellaneous rigs unchanged at 0.

The Canada Rig Count is down 83 rigs from last year’s count of 139, with oil rigs down 75, gas rigs down 8 and miscellaneous rigs unchanged at 0.

Brent crude is down 77 cents to $44.13 per barrel. West Texas Intermediate (WTI) crude is down 75 cents to $42.07 per barrel.

Gasoline last traded at $1.28 per gallon down a penny on the day.

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August 14, 2020

Rig counts continue to decline

Baker Hughes reports U.S. rig count down 3 to 244 rigs

Baker Hughes (BKR) reports that the U.S. rig count is down 3 from last week at 244 with oil rigs down 4 to 172, gas rigs up 1 to 70, and miscellaneous rigs unchanged at 2.

The U.S. Rig Count is down 691 rigs from last year’s count of 935, with oil rigs down 598, gas rigs down 95, and miscellaneous rigs unchanged at 2.

The international offshore rig count for April 2018 was 194. Stockwinners — The U.S. offshore rig count is down 14 from last year.

The U.S. Offshore Rig Count is up 1 to 13 and down 14 year-over-year.

The Canada Rig Count is up 7 rigs from last week to 54, with oil rigs up 6 to 19, gas rigs up 1 to 35, and miscellaneous rigs unchanged at 0.

The Canada Rig Count is down 88 rigs from last year’s count of 142, with oil rigs down 82, gas rigs down 6 and miscellaneous rigs unchanged at 0.

Brent crude is down 24 cents to $44.71 per barrel. West Texas Intermediate (WTI) crude is down 32 cents to $41.92 per barrel.

Gasoline last traded at $1.23 per gallon unchanged on the day.

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August 7, 2020August 7, 2020

Rig count declined in July

Baker Hughes reports U.S. rig count down 4 to 247 rigs last week

Baker Hughes (BKR) reports the U.S. rig count is down 4 from last week at 247, with oil rigs down 4 to 176, gas rigs unchanged at 69, and miscellaneous rigs unchanged at 2.

The U.S. offshore rig count is unchanged at 12 and down 11 year-over-year.

Baker Hughes announced that the Baker Hughes international rig count for July 2020 was 743 down 38 from the 781 counted in June 2020, and down 419 from the 1,162 counted in July 2019.

The international offshore rig count for July 2020 was 183, down 11 from the 194 counted in June 2020, and down 72 from the 255 counted in July 2019.

The average U.S. rig count for July 2020 was 255, down 19 from the 274 counted in June 2020, and down 700 from the 955 counted in July 2019.

The average Canadian rig count for July 2020 was 32, up 14 from the 18 counted in June 2020, and down 89 from the 121 counted in July 2019.

The worldwide rig count for July 2020 was 1,030, down 43 from the 1,073 counted in June 2020, and down 1,208 from the 2,238 counted in July 2019.

Brent crude is down 68 cents to $44.41 per barrel. West Texas Intermediate (WTI) crude is down 75 cents to $41.23 per barrel.

Gasoline last traded at $1.21 per gallon down 2 cents.

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May 8, 2020May 8, 2020

Rig Counts Collapse!

Baker Hughes reports U.S. rig count down 34 to 374 rigs

Baker Hughes (BKR) reports that the U.S. rig count is down 34 rigs from last week to 374, with oil rigs down 33 to 292, gas rigs down 1 to 80, and miscellaneous rigs unchanged at 2.

The U.S. Rig Count is down 614 rigs from last year’s count of 988, with oil rigs down 513, gas rigs down 103, and miscellaneous rigs up 2 to 2.

The U.S. Offshore Rig Count is down 1 rig from last week to 15 and down 5 year-over-year.

The Canada Rig Count is down 1 rig from last week to 26, with oil rigs unchanged at 7 and gas rigs down 1 to 19.

WTI in 2020 has traded widely, Stockwinners

The Canada Rig Count is down 37 rigs from last year’s count of 63, with oil rigs down 15 and gas rigs down 22.

Meanwhile WTI has traded in a wide range this year. Today the June contract is up 4.5% to $24.50 per barrel.

Brent crude for June delivery is up 4.8% to $30.85 per barrel.

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April 12, 2019April 12, 2019

Rig counts declined by three

Baker Hughes reports U.S. rig count down 3 to 1,022 rigs last week
The U.S. Rig Count is up 14 rigs from last year’s count of 1,008

Baker Hughes (BHGE) reports that the U.S. rig count is down 3 rigs from last week to 1,022, with oil rigs up 2 to 833, gas rigs down 5 to 189, and miscellaneous rigs unchanged at 0.

The U.S. Rig Count is up 14 rigs from last year’s count of 1,008, with oil rigs up 18 to 833, gas rigs down 3 to 189, and miscellaneous rigs down 1.

The U.S. Offshore Rig Count is up 1 rig to 23 and up 7 rigs year-over-year.

The Canada Rig Count is down 2 rigs from last week to 66, with oil rigs down 4 to 18 and gas rigs up 2 to 48.

The Canada Rig Count is down 36 rigs from last year’s count of 102, with oil rigs down 23 and gas rigs down 13.

Crude oil (WTI) is up 66 cents to $64.25 per barrel. Brent crude is up 95 cents to $64.27 per barrel.

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July 28, 2017

Rig Counts Rise Again!

Baker Hughes reports U.S. rig count up 8 to 958 rigs

Baker Hughes (BHGE) reports that the U.S. Rig Count is up 8 rigs from last week to 958, with oil rigs up 2 to 766 and gas rigs up 6 to 192.

The U.S. Rig Count is up 495 rigs from last year’s count of 463, with oil rigs up 392, gas rigs up 106, and miscellaneous rigs down 3 to 0.

The U.S. Offshore Rig Count is up 1 rig from last week to 24 and up 5 rigs year over year.

The Canadian Rig Count is up 14 rigs from last week to 220, with oil rigs up 11 to 129 and gas rigs up 3 to 91.

The Canadian Rig Count is up 101 rigs from last year’s count of 119, with oil rigs up 69, gas rigs up 33, and miscellaneous rigs down 1 to 0.

WTI crude edged a few cents lower after the report, and though remains less than 20 cents below its earlier trend high of $49.80.

#WTI = West Texas Intermediate

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June 16, 2017June 16, 2017

Rig Counts Continue to Rise!

As long as rig counts continue to rise, crude will stay under pressure

Baker Hughes reports U.S. rig count up 6 to 933 rigs

Baker Hughes (BHI) reports that the U.S. rig count is up 6 rigs from last week to 933, with oil rigs up 6 to 747, gas rigs up 1 to 186, and miscellaneous rigs down 1 to 0.

The U.S. Rig Count is up 509 rigs from last year’s count of 424, with oil rigs up 410, gas rigs up 100, and miscellaneous rigs down 1.

The U.S. Offshore Rig Count is unchanged from last week at 22 and up 1 rig year over year.

The Canadian Rig Count is up 27 rigs from last week to 159, with oil rigs up 17 to 91 and gas rigs up 10 to 68.

The Canadian Rig Count is up 90 rigs from last year’s count of 69, with oil rigs up 63, gas rigs up 28, and miscellaneous rigs down 1 to 0.

STOCKS TO WATCH

The one group that should be benefit from the rig count rise would be Sand and Basic Materials. Stocks such as SLCA, SND, EMES, and HCLP should benefit from the rise, however these stocks are also near their 52-weeks low. These stocks should gradually bottom out at these levels. Other service companies such as SLB, HAL, BHI, TDW, and OII.

WTI crude prices are up 0.6% at $44.72, rebounding after declining by 4.3% over the two previous sessions. This puts in a little space from yesterday’s six-week low at $44.22.

#WTI = West Texas Intermediate

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.