Oil Futures Curve Is Looking Pretty Flat

This week's Baker Hughes rig count data provided some feed for oil bulls heading into the weekend. The most closely followed figure, the U.S. oil rig count, fell by five and now sits at 763. To me, the numbers were indicative of producers waving the white flag in marginal areas and those using marginal production technologies. 

The rig count in the Permian Basin was flat on the week, as it was in the South Texas hotspot Eagle Ford shale. In fact, the net decline of six rigs came from the Williston basin in North Dakota and the Granite Wash and Mississippian plays, two areas mainly located in Oklahoma. Also, the overall decline in rig count was entirely comprehended by a drop in six vertical rigs, a technology that has largely been rendered obsolete with the advent of horizontal well design. Vertical rigs account for only 7% of the total North American rig count, and it is not a surprise these units are being sidelined. ...544 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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