US rig count drops, as oil climbs to $50

The number of rigs exploring for oil and natural gas in the U.S. fell by eight this week to 936, as oil rose to $50.

The number of rigs exploring for oil and natural gas in the U.S. fell by eight this week to 936, as oil rose to $50.

Count is up from the 506 rigs that were active a year ago.

Baker Hughes reported on Friday that 749 rigs drilling for oil and 186  of those rigs for natural gas. There was one miscellaneous rig.

Louisiana and Texas lost three rigs, while Colorado, New Mexico and North Dakota said goodbye to one. West Virginia added one rig, while Alaska, California, Ohio, Oklahoma, Pennsylvania, Utah and Wyoming remained steadily unchanged.

The U.S. rig count peaked at 4,530 in 1981, and bottomed out in May 2016 at a dismal 404.

As the rig count dropped, oil topped $50 a barrel and closed at a six-week high amid optimism among OPEC and the International Energy Agency's forecasts.

The short-term target is about $53. Demand continues to creep up.

When the refineries come back online after the hurricanes, they will pump out, and may not go into a slow down.

The hurricand-driven refinery outages across the south and southeast in the past two weeks has caused fuel distributors to pull a record amount of gasoline from storage tanks to cope with the shortage demand.

Only time will tell if oil will stay at $50 for the longterm, as companies continue to struggle with what some call the new normal.

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