The number of active oil and gas rigs in the United States rose this week by 3 rigs, largely dispelling earlier analyst notions that Hurricane Harvey would delay as much as 10 percent of upcoming fracking work, and suspend roughly half the rigs in Eagle Ford.
The total oil and gas rig count in the United States, post Harvey, now stands at 943 rigs, up 446 rigs from the year prior, with the number of oil rigs in the United States flat this week and the number of gas rigs increasing by 3.
Oil rigs in the United States now number 759—352 rigs above this time last year.
While some were expecting a boost in oil prices due to an expectation that there would be a Harvey-related drop in the number of active US rigs, refinery shutdowns in the US—which had climbed to about a third of total crude oil refining in the United States and include the first and second largest refineries in the US—severely diminished the demand for crude oil as refineries have no need for the crude while in shutdown mode. While some refineries have since restarted production, 16 percent of total US refinery capacity—or 3.04 million barrels per day—remains offline in Texas.
In 2005, it took refineries between one and two months to resume normal operations in the wake of Katrina.
Prices continued to fall on Friday—and were off 6 percent on the month as a whole—despite decreased exports from OPEC for the month of August. At 12:15pm EDT Friday, WTI was trading down 0.42 percent at US$47.03, with Brent trading down 0.40 percent at US$52.65.
In line with a small rise in the number of oil rigs, US crude oil production continues to increase, with average production averaging 9.530 million barrels per day for the week ending August 25, up just slightly from 9.528 million bpd the week prior.
While Hurricane Harvey, which was downgraded to a tropical storm before its conclusion, is safely in the oil industry’s review mirror, Hurricane Irma—upgraded Thursday to a Category 3 and expected to strengthen in the coming days—is currently headed for the Caribbean and has the potential to deal yet another blow to the US as early as late next week.
At 6 minutes after the hour, WTI was trading at $47.04 with Brent crude trading at $52.49.
By Julianne Geiger for Oilprice.com
