WTI Hits $52 Handle As US Rig Count Tumbles To 8-Month Lows

Tyler Durden's picture

Just as T. Boone Pickens warned "watch the rig counts" last week, so the Baker Hughes rig countjust collapsed for the 3rd week in a row to 8-month lows. This is the fastest 3-week drop since mid-2009. Crude prices were already weak but the news has flushed WTI to a $52 handle (not seen in the front-month contract since May 2009)

 

Rig count is tumbling...

 

Some context for the surge in US rig count...

 

And while the drop in Canadian rig count sounds impressive - it's the worst since 2009 - it's much more seasonal

 

WTI Hits A $52 handle!!

 

And then there's this...

 

Charts: bloomberg

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jubber's picture

...and US futures all green ??????????

kliguy38's picture

Of course they're green ........ the algobots are on Holiday mode.........no way it goes red........

Arius's picture

Is this a reaction to the greek elections?

FieldingMellish's picture

Its a reaction to algorithms running on computers in New Jersey. That is all the fun-durr-mentals that count these days.

ZerOhead's picture

Atlantic City New Jersey...

FieldingMellish's picture

Might as well be... not many humans left there anyhow.

Soul Glow's picture

But it's ok because oil isn't a leading indicator, it's transitory.

svayambhu108's picture

Maybe I should have added #sarc

The Wizard's picture
Who are the real terrorists and slave dictators ? Libya was in much better shape when they had their gold. Libyan people were treated better than any other ME country and they knew it. Not only did they want to stop Ghadaffi's move against the petrodollar, the US wanted to steal all of the gold he had accumulated for his country.
The bankststers wanted him eliminated.
https://www.youtube.com/watch?v=XorKTwkFPDU&feature=youtube_gdata_player
El Vaquero's picture

The energy credit chart tells us that another big financial crisis is looming.  Oil prices go back up, or expect a junk bond crisis.  It'll be like a high speed, high energy impact.  You know that peices will go flying, but figuring out where which peice will get shattered and where it will fly will be anybody's best guess.  A bond crisis that sees UST yeilds plummet and everything else gets nuked?  Yeah, it could happen.

MrButtoMcFarty's picture

Yet another shining example of DEM governance...

UselessEater's picture

today's top headlines - as a car crash happens outside my window while I type (crap, pause, seems OK, yep all fine a fender bender):

who we like:

http://www.nydailynews.com/news/politics/obama-golf-game-boots-bride-gro...

who we do not like:

http://www.nydailynews.com/news/world/argentina-president-adopts-boy-sto...

gotta say media is freakin awesome and so helpful for the future. KMA (RIP Arron Russo)

edit some sarc intended...

Fractal Parasite's picture

Ruble plummeting as well. Looks like they're having another go, as explained in this 25 minute talk (English subtitles).

How and why the Ruble was driven lower.
http://www.youtube.com/watch?v=Un5rsKFo7Xo

Nikolai Starikov, writer on geo-politics and international finance, explains in detail the mechanisms of the ruble's 2014 fall, the passivity or complicity of the financial authorities, and the end result this is leading to.

Attacks against Russia are happening on multiple fronts, including:
- Sanctions suspending credit lines from abroad;
- Speculators easily manipulating the RUB exchange rates;
- False flag atrocities;
- The oil price determined by OPEC;
- Preparation of a “Patriotic Maidan”.

Starikov claims that all of the above is instigated by Washington to defend the dollar's supremacy and prevent the rise of the Eurasian Economic Union, which officially comes into existence at the beginning of 2015.

El Vaquero's picture

Psst!  The Dems and Repubs are just like competing mafia groups.  They may fight against each other, but when it comes to your little shop on the corner, both will demand a "protection" fee from you.  The only real difference between them is the label that they put on themselves.  They're both out to benefit, and if they have to fuck you in the ass to do it, neither will bring lube.

PTR's picture

I believe the concept is called "manufactured debate" (or something to that extent.)

 

It's also referred to some as just bullshit.

Escrava Isaura's picture

 

 

Political parties?

Narcissism of minor difference

 

Babaloo's picture

"...the news has flushed WTI to a $52 handle."

What news?

ZerOhead's picture

Collapsing rig counts should be long term bullish so my guess is that "the news" is something so bad we are never to speak of it...

Tall Tom's picture

Collapsing Rig Counts may be bullish in the long term...MAY being the key word.

 

However in the short term it indicates that the Companies are seeing little demand thus they shut down rigs.

 

It indicates a waning demand in the short term so prices subsequently decline.

 

A contrarian bet might be to go long oil in the long term at these low prices.

 

I would not pull that trigger just yet. Let this pie cook a bit longer. I know that the aroma is sweet. But this pie is not done baking.

 

Patience, young man...patience. It will decline much more before this shitstorm is over. (Of course waiting for a price recovery may take an extended period because this is the deflationary episode before any hyperinflation can develop...if a hyperinflation develops...)

 

Watch Saudi Arabia.

 

Patience young man, patience. Do not catch the falling knife.

 

(What an Exponential Collapse. Exponential Collapse always precede an Exponential Growth as well. Of course for the Bear Side of the trade it is an Exponential Growth Curve. Just invert the Price Curve and that is the growth in Profits on the Short End of the trade. . Man Math is beautiful when displayed graphically.)

QQQBall's picture

go fuck yourself with your crude projections and trading advice.

NESD's picture

The term collapse is casually used by ZH as it mostly reports most things as all doom and all gloom all the time.  Rigs drilling for oil are still up 117 from this week last year.  What one could call a collapse with a short term focus could still be honestly reported as a rise using a slightly longer time frame.  True, no one expects the down trend to reverse anytime soon but it is not all doom yet. There are still 1000+ rigs making hole and putting payroll in worker’s pockets.  For the most part is less efficient rigs that are being dropped, not the newer most productive rigs.  NG rigs were actually up 2 rigs wk/wk. No collapse there (yet) despite terrible prices, but that is not news because it is not all doom and gloom all the time.

SAT 800's picture

Good for you; that's whtat we usually are in need of here; the other side of the story.

sun tzu's picture

That's because those rigs have already been under lease contract. You can't just plug up the hole and take a $10 million hit for breaking the lease. They have no choice.

As the older rigs go off lease, I doubt the E&P's will be ordering more. That's when the rig count will collapse.

SAT 800's picture

re: WTI; well, there's a bottom here someplace; darned if I know where. It's a good contract to trade; $1,000 / dollar; and the margin is not too high. But as I say, I don't hve a clue. And I don't want to find out the expensive way.

saints51's picture

Fuck Tyler, you jinxed the son of a bitch again. Every time you do this we get a low volume melt up.

FreeShitter's picture

Dont blame the messenger buy the fuckin dip

HYMN's picture

" Who could imagine, it can't happen here, everybodies clean and it can't happen hear" Frank Zappa

pound the vix's picture

when in doubt pound the vix lower

wmbz's picture

Who cares what the hell the rig count is? The obvious demand is for STAWKS!

We don't need no stinking oil rigs! All we need is MOAR!

 

q99x2's picture

Similar to 2008. Interesting.

surf0766's picture

Yes except Bush was president and the Progressive Federal Reserve, Kramer, and the rest of the media were well in the bag for their Marxist-in-Chief...

 

surf0766's picture

I was not a supporter of Bush either..

mayhem_korner's picture

 

 

Someone is deathly afraid of these collapsing crude prices.  CNBC is parading clips of the Libya fires in a desperate attempt to overplay anything that might cause sentiment to drive prices the other way. 

Release The (misallocated capital) Kraken

sun tzu's picture

How many trillions in derivatives are tied to oil prices at $70 and above?

pound the vix's picture

Wall Street - Heads I win, Tails you lose

Quinvarius's picture

Jamie Dimon:  Are you scared yet, Janet?  Do you want to see something really scary?  Go ahead and keep pulling this car over.  I will show you something really scary.

https://www.youtube.com/watch?v=ETC6NSxpFFE

Flying Wombat's picture

Speaking of rig count, the offshore drillers are going to be seeing a lot of headwinds given the large number of rigs coming to market at exactly the wrong time.

ebworthen's picture

Let's get oil to $10/barrel and Gold to $7,200/troy ounce so I can buy back my 1987 Porsche 944S and afford the parts and mechanic.

Buckaroo Banzai's picture

LOL, son, if oil gets to $10/bbl, gold will be closer to $72/oz than $7200/oz

 

Bunga Bunga's picture

Gold goes back to $300, where it was in 1999. WTI will frontrun this (1999 = $10).

BlindMonkey's picture

I will be stacking every fucking ounce I can get my greedy hands on.  That is a promise.

LawsofPhysics's picture

...well as long as everyone in the western world is living in mud huts, then yes.  Oil is very much an important part of maintaining a high standard of living.  Sure, if we all want to go back to being "hunter-gatherers" then, and only then, would you really see "no demand" for oil.

 

Simply more paper bullshit games.  Look, if an oil company makes a huge capital and resource investment to get some wells producing, they will keep them producing until they are dry.  Storing oil is no big deal, shutting down and starting up is.

Tall Tom's picture

Paying the costs to pump it and store it is a big deal. There is also a limited above ground capacity.

 

As as for MOST Westerners living in mud huts...I think that might be a part of the plan...

 

They are wiping out the middle class. And a poor serf is a good slave.

froze25's picture

Not so fast we can take our shit and put it in a container and make bio gas and live off of shit powered vehicles.

Winston Churchill's picture

Instead of the powered shit vehicles.

ebear's picture

"Storing oil is no big deal"

Can be.  When you hear of tankers being chartered to store oil, then you'll know it's a problem.

In the current political environment I would expect stategic reserves will get filled first.

LawsofPhysics's picture

" I would expect stategic reserves will get filled first." -- Bingo.  Lots and lots of underground storage.  Just ask the U.S. military and all their oil contract engineers.

The spice must flow and the U.S. military makes sure of that.