Home Commodities U.S. Oil Rig Count Drops Again, But Crude Supplies Rise by 2.8...

U.S. Oil Rig Count Drops Again, But Crude Supplies Rise by 2.8 Million Barrels

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The number of oil rigs in the United States declined again last week, falling to 328 from 332 the previous week and 668 one year ago.  Altogether, including the 86 rigs used to drill for natural gas, there are 415 rigs operating in the country. But despite the decline in the number of rigs, crude supplies increased.

A report from the U.S. EIA (Energy Information Administration) showed that crude supplies were up by 2.8 million barrels in the final week of April and gasoline supplies were up by 500,000 barrels.

WTI (West Texas Intermediate) crude oil was up 0.5% on Friday to $44.56, but was still down 0.3% for the week.

Several major supply disruptions kept oil prices from making a steep decline. The massive fires burning in Alberta near Ft. McMurray has forced the evacuation of 88,000 people and burned 1,600 structures.

While no damage has been reported to any facilities in the oil sands area, it is estimated that as much as 1 million barrels per day have been shut-in because of the fires. This equates to roughly 40% of production each day.

The fire in Alberta has already destroyed 386 square miles. The provincial government has supplied each evacuee with a debit card loaded with $1,250 for every adult and $500 for every child in order for families to meet their immediate needs.

Chevron also shut down a platform in Nigeria, and production in Venezuela declined. Both of these events also disrupted global supply.

How are hedge funds responding to the oil data?

We’re seeing a number of investors betting on oil, and we also saw many hedge funds dump short contracts last week. According to a report from the Commodity Futures Trading Commission, hedge funds dropped 258 short contracts last week and 10,968 long contracts.

With that said, short positions among the producers themselves outnumber the long positions at 472,880 to 184,485. Short positions were up by 11,828 contracts, while long positions were up by 14,494 last week.

We’re also seeing gas prices rising again, with a 0.3% increase in pump price last week from $2.208 the previous week to $2.215 last week.

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