Falling Rig Count, CapEx Cuts Having Impact
Groundhog Day might have been a scare for two out of three groundhogs, but not for the world’s oil bulls.
3 Month Oil Price (West Texas Intermediate) – Nasdaq
In spite of warnings of a short-lived rally from some banks, oil prices managed to climb nicely on Feb. 2, maintaining about a $5 spread between the key benchmarks, WTI and Brent. Analysts point to widespread CapEx cuts leading to falling rig count and future production slowdowns from the U.S. shale beds; i.e., reduce the supply to balance the equation. And even in the face of soft economic data for the U.S. and Canada, the world’s primary fuel source traded on a steady uptick. Coming off a day’s low of $46.67, March WTI traded as high as $50.56, trading late in the day just short of $50 at $49.83. Brent March contracts closed at $55.10.
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