(+) US Oil Weekly Update

The oil market reacted to Israeli attack on Iran negatively and the events last weekend sent crude oil prices sharply lower. The Israeli launched its long-expected retaliation strike on Iran in the early Saturday hours last weekend, with a complex air assault involving over a dozen aircrafts. The attack came in three waves between 2am and 6am. According to open reports Israel hit over 20 locations with key targets involved, but without aiming at energy infrastructure. The news of the targeted attack not involving key oil and nuclear facilities sent oil prices plummeting at market open.

Though fundamentals have been weak, the concerns of an Israeli strike on Iranian oil facilities have added a significant risk premium in crude prices over the last couple of weeks. This risk premium is now shaved off, with traders monitoring the Middle Eastern situation closely.

The US presidential election is set to take place next week, with the two contestants still going toe-to-toe. The result of the election might not have an immediate, significant impact on oil price, but with Trumps drill baby drill» philosophy with lower expected demand forecasts in 2026 this might add additional pressure on prices.

Figure 1. Pressure on Benchmark Crude Prices.

US Crude inventories and production

US commercial crude oil inventories had a small increase of 0.515 million-barrel in the week ending October 25, while market forecasters expecting an increase of 2.3 million barrels. U.S. crude oil inventories are about 4 percent below the five-year average for this time of year and 3.6 million barrels higher than a year ago. U.S. crude oil refinery inputs averaged 16.1 million barrels per day during the week ending October 25, 2024, which was a 30 Kbpd less than the previous week`s average. Refineries operated at 89.1 percent of their operable capacity last week.

Figure 2. US Crude Stocks including SPR at 811.3 million Barrels

Figure 3. US Crude Stocks Excluding SPR at 425.5 million Barrels.

US Rig Activity

The total number of active rigs operating in the US according to Baker Hughes rig count remains flat for the week at 585. Oil focused rigs had a decrease last week, down from 482 to 480. Gas focused rigs increased by two from 99 to 101 active rigs. Miscellaneous rigs remained flat at four active rigs.

Figure 4. Active Oil Focused Rigs Increased From 482 to 480

Figure 5. Gas Focused Rigs Increased From 99 to 101 Active Rigs

Figure 5. Total Active Rigs in the U.S. Flat for the Week at 585

Figure 6. 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.

By the Numbers October 30, 2024

En vandrelysten finansnerd med tydelige spor av graphomania og bibliofili i blodet. Hans første møte med markedet bortsett fra noen kornete aksjekurser på 28" tekst TV, var igjennom Odin fondene i 2000 – 2001. Der diversifiserte han pengene ut på ODIN Offshore, ODIN Norden og ODIN Finland, helt tilfeldig. Etter å først dyppet stortåen forsiktig ned i vannet ble han etter hvert hektet. I 2002 gjorde han sin første handel i en enkeltaksje, Selskapet hadde ticker symbolet, STL- eller Statoil på folkemunne. Der kastet han alle kortene i panikk etter en liten korreksjon noen måneder senere, han elsket det! Nå kombinerer han sine to hobbyer, skriving og finans og smelter dem sammen til en lidenskap.