Oil rig count is up again - for 8 successive weeks

 

oil rig count

The oil rig count in the US went up by 12 this week, showing a steady growth for 8 successive weeks, reflecting the long arduous recovery of the oil markets - according to Baker Hughes.

Both WTI crude and Brent crude are above the crucial mark - $50. Although, the price fell slightly on Friday, there is no indication of a calamitous drop as it happened during the height of the pandemic.

It’s not just in the US where oil rig count has gone up; even in neighbouring Canada, the rig count went up by 44 this week.

The notable aspect of the recovery in the oil price is the fact that it has not been skewed by the rising pandemic infections, global death toll and the emergence of new variants of the Coronavirus.

Although authorities pin their hopes on the vaccines to see the light end of the tunnel, the public enthusiasm remains muted, apart from those who are in the vulnerable categories.

The new, more, strict lockdowns introduced in the Western cities inevitably lead to significant drop in demand for oil; that, however, has not affected oil price so far – a curious development.

In this context, there are other factors in play that eclipse the inhibiting causes of oil price recovery.

The strong economic data from China, the growing demand in Asia, significant cuts by the OPEC and the new US administration that is determined to embark on some policy reversals of the past four years collectively boost the recovery.

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