The number of rigs drilling for oil dropped another 8 last week to 660. This compares to 1,609 rigs drilling for oil in early October, 2014.
The number of rigs drilling for gas increased by 2 last week to 223, compares to 326 a year ago.
As I explained in the last edition of The View From Houston, the big drop in the number of rigs drilling for oil has more of an impact on domestic natural gas supply than the number of rigs targeting gas. Those shale oil wells produce a lot of "associated gas" with very steep decline rates.
The front month (June) contract for WTI crude oil closed 1 cent off the high for the day on May 15th at $59.96/bbl. There is definitely resistance at $60/bbl. If we see several closes over $60/bbl it will become a strong suppor level. There is not a lot of resistance until we get to $70/bbl. My SWAG is that WTI tops $75/bbl before year-end.
Natural gas closed over $3.00 today and I think the gas market is going to be a lot tighter by Christmas.
U.S. Active Rig Count - May 15
U.S. Active Rig Count - May 15
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: U.S. Active Rig Count - May 15
Check out the U.S. dollar index: http://www.marketwatch.com/investing/index/dxy/charts
If the dollar continues to fall it will be bullish for oil prices and the U.S. economy in general.
If the dollar continues to fall it will be bullish for oil prices and the U.S. economy in general.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group