WTI Slides Despite Plunge In US Oil Rig Count

Tyler Durden's picture




 

The oil rig count dropped 20 to 516 in the last week - the biggest weekly drop in 4 weeks to new cycle lows. Crude was unimpressed, jumping modestly and then fading...

  • *OIL RIGS IN PERMIAN BASIN FELL BY 9 TO 200, BAKER HUGHES SAYS
  • *OIL RIGS IN WILLISTON FELL BY 4 TO 49, BAKER HUGHES SAYS

Rig count decline accelerated notably... Rig count continues to track the 3mo lagged WTI price...

 

And crude popped and dropped...

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Fri, 01/08/2016 - 13:08 | 7017835 madbraz
madbraz's picture

i thought "rig count" referred to the number of times these guys rig the market in a day...

Fri, 01/08/2016 - 13:20 | 7017889 Tyrone Shoelaces
Tyrone Shoelaces's picture

That kind of rig count is measured in 1 millisecond ticks.

Fri, 01/08/2016 - 14:15 | 7018114 PAPA ROACH
PAPA ROACH's picture

There is ZERO geo-political risk in price here, none. Market is 100% discounting any type of infrastructure attack on facilities. Not smart.

Fri, 01/08/2016 - 13:09 | 7017842 LawsofPhysics
LawsofPhysics's picture

NO means NO! (as in no price discovery).

enjoy the discount while it lasts, why the fuck not?

Fri, 01/08/2016 - 13:10 | 7017850 KnuckleDragger-X
KnuckleDragger-X's picture

It's not about rigs but the holes already in the ground and how much we're actually using.......

Fri, 01/08/2016 - 15:29 | 7018528 Mr_mud
Mr_mud's picture

Markets are supposed to be forward looking at the fact that less rigs now means less production down the road

Fri, 01/08/2016 - 13:23 | 7017897 farmboy
farmboy's picture

True, but crudes slides for the same reason why stocks seems to rise for ever. It called divine intervention from the US.

Fri, 01/08/2016 - 13:36 | 7017944 sudzee
sudzee's picture

OT: Silver crashing.

Fri, 01/08/2016 - 13:43 | 7017969 DC Beastie Boy
DC Beastie Boy's picture

Watch silver and gold, they'll follow crude up and down.  Anyone that thinks there will be a breakout in ag and au are mistaken.  They're still considered commodities to the masses and that perception is what they will keep going. 

They will only break out or reset when this current system breaks and only until then.  Those in charge have too much time and value invested at this point.

Fri, 01/08/2016 - 15:33 | 7018550 Mr_mud
Mr_mud's picture

maybe so, but they wont announce pulling that plug to the masses, if you are not positioned for it, you will miss it.

Fri, 01/08/2016 - 14:04 | 7018055 roadhazard
roadhazard's picture

I <3 cheap gas.

Fri, 01/08/2016 - 14:46 | 7018279 Hubbs
Hubbs's picture

Implied is the woefully inefficient (EROEI) fracking industry production. Maybe the wells can be converted to windmills.

Fri, 01/08/2016 - 16:01 | 7018673 scatha
scatha's picture

I guess those mofos and presstitutes from business media are paid for lying hence they are coming up with ridiculous stories that Saudis fighting to their market share against Russia, Venezuela, Iran and US frackers. Bull Shit, they are fighting to survive as a fiefdom, publicly acknowledging a year ago that global crude oil demand is in a secular collapse lasting at least 20 years, Russia and China agreed.

They are selling ARAMCO, domestic stocks, anything that moves because they want to arm themselves and desperately trying to diversify sources of income by privatization of state assets eliminate massive subsidy, the core of the Saudi social contract, increase prices and impose massive taxes on population as well as devised plan to expel 10 millions of foreign slaves (workers) and force Saudi citizen into low pay (traditionally) demeaning work. Even they consider allowing women to work with men, even as truck drivers.

This is nothing short of revolution and not merely economic pasturing.

Being cut off from China by Russian and Iranian deals they are fighting to survive, acknowledging US imperial economic collapse, accepting Yuan based crude oil benchmark and signing up with the Shanghai crude oil exchange market while dumping their US treasuries and arming themselves to teeth predicting that US military shield will evaporate soon leaving them vulnerable to desintegration.

More on what’s really going on in global economy unrelated to FED’s meaningless spectacle as well as discussion of the foundation of real economy can be found here:

 

https://contrarianopinion.wordpress.com/economy-update/

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