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20 August, 2018 00:00 00 AM
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Oil prices settle lower while active drilling rig count remains level

Xinhua
Oil prices settle lower while active drilling rig count remains level

The number of active drilling rigs in the United States remained unchanged at 1057, or 111 more than this time last year, showed weekly data collected by Baker Hughes released on Friday, reports Xinhua from Houston. Meanwhile, the price of the West Texas Intermediate (WTI) for September delivery and Brent for October delivery decreased by 2.54 percent and 1.35 percent, respectively, in the week ending Aug. 17.

The Houston-based oilfield services company reported that the number of active oil rigs remained unchanged at 869 this week with more than half of oil rigs, or 486, were located in Permian Basin region of western Texas and southeastern New Mexico. The number of gas rigs also remained unchanged at 186.

Canada’s total rig count increased by three to 212 this week. Its oil rig count increased by one and its gas rig count increased by two this week. Canada’s oil and gas rig count was down by two year on year. Its oil rigs were up by 20 year on year, while the number of gas rigs were down by 22 year on year.

Analysts attribute the major decline in the Canadian gas rig count to the very low gas prices on the Canadian natural gas spot market. The natural gas producers preferred curtailing their production rather than increasing in the current depressed market.

Oil prices were pressured on Wednesday as the U.S. Energy Information Administration (EIA) reported a large build in the U.S. crude oil inventories. Furthermore, the ongoing trade dispute between the United States and China, as well as the currency crisis in some emerging economies like Turkey, intensified downward movement in the oil prices.

Pressured by those negative factors, WTI and Brent declined by 2.42 percent and 1.95 percent, respectively, on Wednesday.

Anas Alhajji, an energy economist based in Dallas, Texas, told Xinhua that “prices declined due to higher inventories, trade tension, concerns on China’s demand, and depreciation of currencies in emerging market economies and others.”

Another factor that pressured the oil prices is the stronger U.S. dollar. U.S. Dollar Index has maintained above 96 level for this week.

“The main threat for growth in global demand this summer is the rising U.S. dollar,” said Alhajji.

U.S. Dollar Index is a measure of the value of the U.S. dollar relative to a basket of foreign currencies. Oil is mostly traded in U.S. dollars all over the world and a stronger dollar pressures the oil demand.

During the week ending Aug. 17, the WTI for September delivery declined by 1.72 dollar to settle at 65.91 dollars a barrel on the New York Mercantile Exchange, reporting a loss of 2.54 percent in the week. Brent crude October delivery declined by 0.98 U.S. dollar to settle at 71.83 dollars a barrel on the London ICE Futures Exchange, reporting a loss of 1.35 percent.

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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