Baker Hughes Oil Rig Count Increases by 2

Baker Hughes, a US based industrial services company, one of the world's largest oil company, have revealed a growth in the number of active oil rigs as they grew by 2 to stand at 416 for the week ending in September 16. From the last 16 weeks, this was its 14th week of consecutive growth with one week unchanged and the other experiencing a fall. There was also a fall in the number of gas only rigs as they edged lower by 3 to stand at 89.

The total number of active oil and gas rigs now sit at 506, as they experienced a decrease by 2.

The total count is now 336 lower from a year earlier while the oil only rigs count is 225 lower. The oil rig count last week grew by 7 to 414, as the total rig count added 11 to reach 508. Oil had an overall weak response to today's data release. The October WTI futures contract has currently slipped by over than 2% to $43.57.

On the other hand fresh supply glut worries are now stemming from Nigeria and Libya as they plan to raise their output in the coming weeks. Libya’s National Oil Corporation said this week it would double the production within four weeks after it was handed control of crucial ports that had been seized by forces loyal to the country’s rival administration. At the same time, Nigeria, Africa’s biggest crude producer also seem ready to also increase its oil exports, traders said.

A persistent crude supply glut has hammered prices for more than two years as rival producers maintain high output levels in their fight for market share. A meeting later this month in Algeria between Russia and the Organisation of the Petroleum Exporting Countries is expected to touch on price stability but analysts remain doubtful a deal can be reached to freeze or cut output.

The level of U.S. production is currently the key to market balancing as since 2010 the U.S. has witnessed more growth in daily output than any other major producer thanks to the boom in shale oil production but is never likely to join any group effort to control supplies. UBS analysts said in their latest oil market report they expected Brent to average $60 a barrel next year and $70 in 2018. "In the absence of a clear price anchor we believe that while over supply persists crude will likely trade in a wide range between cash costs of current supply at $30/bbl and lower and the long-run marginal cost at $60-80/bbl," they wrote.