The WTI pushed above the $80 mark earlier this week after the market panic the previous week. Signals from the main demand engine, China which shows softening expectationsand OPEC cut its global demand forecast for 2024 for the first time since releasing the forecast of 2.25 million bpd growth a year ago. The cartel lowered its demand projection for this year by 135 000 bpd to 104.3 million bpd. Still well above pre-pandemic historical average of 1.4 million bpd with a growth forecast of 2.1 million bpd.
Figure 1. WTI Still Well Below $80 levels
US Crude inventories and production.
After a six-week consecutive decline in U.S. commercial crude oil inventories we had a 1.4 million barrels increase. At 430.7 million barrels the inventories are about 5 percent below the five-year average for this time of year, and 9 million barrels lower than a year ago. The SPR increased as well by 700 000 barrels and at 376.5 million barrels the SPR are 28.2 million barrels above levels a year ago. The domestic US production decreased by about 100 000 bpd at 13.3 million bpd and sits around the four-week production average with 7.2 percent higher than a year ago. US crude oil refinery inputs averaged 16.5 million barrels per day with refineries operated at 91.5% of their operable capacity last week.
Figure 2. US Crude Stocks including SPR at 807.2 million barrels.
Figure 3. US Crude Stocks Excluding SPR at 430.7 million barrels.
US Rig Activity.
According to Baker Hughes rig count we had an increase of two active rigs. Active oil focused rigs increased by three, but active gas focused rigs declined by one. Total active rigs in the US at 588 are well below compared to a year ago when we had 654 active rigs. Active oil focused rigs 485, compared to 525 a year ago, and active gas focused rigs 97 compared to 123 a year ago.
Figure 4. Numbers of Active Oil Rigs increased by three at 485.
Figure 5. Continued decline in Active Gas Rigs, now at 97.One less compared to last report.
Figure 6. Increase of two Active Rigs Compared to Last Report.
Figure 7. Rig Count in Major Basins.
Baker Hughes has issued the rotary rig counts as a service to the petroleum industry since 1944, when Baker Hughes Tool Company began weekly counts of U.S. and Canadian drilling activity. Baker Hughes initiated the monthly international rig count in 1975. The North American rig count is released weekly at noon Central Time on the last day of the work week.
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