WTI continues climb
West Texas Intermediate’s slow climb from lows of $43.46 in March reached a 2015 milestone today. The U.S. crude benchmark gained more than 3% on May 5, taking WTI over the $60 per barrel mark for the first time in the calendar year. The rise in prices comes as the number of active rigs drilling in the U.S. continues to drop.
Last week’s Baker Hughes (ticker: BHI) rig count showed that the number of rigs drilling for oil and gas in the U.S. fell for the 21st straight week to 905 total rigs. Of those, 679 were drilling for oil while 222 drilled for gas. The smaller active rig fleet is slowing down production into an oversupplied market, helping to lift oil prices after they plummeted in November of last year.
Some analysts also predict the first draw on crude oil inventories to be reported this week after a series of massive builds. The Energy Information Administration has yet to report a draw in 2015. As production continues to slow, there could be greater draws on crude inventories, relieving concerns of maxing out storage tanks and continuing to push oil prices further up.
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