Rigs Down Again Last Week

, $USO, ,

In the week ended 26 June, the number of rigs drilling for Crude Oil in the United States totaled 628, compared with 631 in the prior week and 1,558 a year ago.

Including 231 other rigs mostly drilling for Nat Gas, there are a total of 859 working rigs in the US, up 2 W-W, and down 1,014 Y-Y. The rig count data is from the latest Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count.

It appears that the increase in demand that followed the collapse in Crude Oil prices around the end of last year is about over.

In California, highway traffic rose by 2.6% Y-Y in May, the same rate as the growth in April. The prior 2 months showed stronger growth, and the current growth rate is nearly the same as the long-term average of 2.5%. The situation is much the same in Texas.

Across the , the Information Administration reports that based on a 4-wk average, finished motor fuel (gasoline) production is down from 10.16-M in the same period last year to 9.78-M this year.

For WTI Crude Oil, this has resulted in a price that has hung in the 60 area for West Texas Intermediate (WTI) and 65 for Brent. WTI Crude Oil for August delivery closed at 59.65 Friday, about 0.30 below its price a week ago Friday, which was about 0.20 below the price on Friday 2 weeks ago.

The number of rigs drilling for Crude Oil in North America fell by 930 Y-Y and fell by 3 W-W. The Nat Gas rig count increased by 5 to a total of 228. The rig count for Nat Gas rigs is down by 86 Y-Y.

US Crude Oil stockpiles fell by 4.9-M bbl last week, the 8th consecutive weekly decrease. Gasoline stockpiles rose slightly as refineries raised run levels to 94% of capacity, up about 250,000 BPD from the prior week. Gasoline inventories remain in the upper 50% of the 5-yr average range.

Hedge funds under the Managed heading in the Trading Commission (CFTC) Commitments of Traders report cut their long positions last week by just 465 contracts and raised their short positions by 2,772. The movement reflects changes as of the 23 June settlement date. Managed holds 297,027 long positions, compared with 61,220 short positions.

Among the producers, short positions outnumber longs 372,730 to 198,644. The number of short positions last week fell by 13,578 contracts, and longs dropped by 12,583 positions. Positions among swaps dealers show 353,377 shorts versus 182,504 longs. Swaps dealers cut just 157 contracts from their long positions last week and added 4,911 short contracts.

The pump price of gasoline ticked down slightly W-W. Saturday morning’s average price in the United States was 2.779 a gal, down about 0.5% from 2.795 a week ago.

Analysis for USO:OverallShortIntermediateLong
Neutral (0.09)Neutral (-0.12)Neutral (0.04)Bullish (0.33)
Analysis for UNG:OverallShortIntermediateLong
Neutral (-0.19)Bearish (-0.27)Neutral (-0.19)Neutral (-0.10)
Analysis for UGA:OverallShortIntermediateLong
Neutral (0.23)Neutral (0.13)Neutral (0.21)Bullish (0.36)

Have a terrific weekend.