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U.S. Rig Count Falling, International Tensions Rising In Oil Market

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U.S. Rig Count Falling, International Tensions Rising In Oil Market
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  • U.S. crude oil rig counts fell by 10 this week.
  • Tensions remain high in Syria between the United States, Russia and other members of the international community.
  • The U.S. Ambassador to the UN has condemned Iran’s recent missile testing as a “clear violation” of a testing ban.
  • Crude oil prices are trading higher on Friday as international geopolitical tensions rise and U.S. rig counts fall for the seventh consecutive week. Here’s a breakdown of what you need to know.

    Rig Counts

    This week’s Baker Hughes report indicated that U.S. energy companies shut down 10 additional rigs this week, lowering the total number of active rigs to only 595.

    The last time the United States had less than 600 active rigs was July 2010.

    In the seven consecutive weeks of reductions, U.S. companies have cut a total of 80 rigs. U.S. rig count reached its all-time peak at 1,609 just about one year ago.

    Related Link: Canadian Oil Sands Continue To Grow In Face Of Falling Crude Prices

    Syria

    A pair of international developing stories also have global oil investors’ collective attention. Both the United States and Russia continue to fly combat missions in Syria, and Turkey reportedly shot down a drone in Syrian airspace on Friday.

    U.S. officials believe the drone was of Russian origin, but the Russian defense ministry says all of its drones are accounted for.

    Iran

    U.S. Ambassador to the United Nations Samantha Power called Iran’s recent missile tests “a clear violation of U.N. Security Council Resolution 1929.” The already oversupplied global oil market has been bracing for an influx of Iranian oil ever since a nuclear deal was reached only weeks ago.

    A Morgan Stanley poll found investors predict an increase of at least 500kb/d to global crude oil supply by the end of 2016 as a result of the nuclear deal. There is no indication whether Iran’s recent actions put the terms of the nuclear deal in jeopardy.

    Oil trading this week was understandably choppy. Shares of the United States Oil Fund LP (ETF) (NYSE: USO) are down more than 5.1 percent on the week, but are up slightly on Friday in mid-day trading.

    Disclosure: The author holds no position in the stocks mentioned.

    Image Credit: Public Domain

    Posted-In: Baker Hughes Baker Hughes Report crudeNews Commodities Econ #s Top Stories Markets Best of Benzinga

     

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