Just as T.Boone Pickens warned, [2] watching the US Rig Count is key to comprehending the looming crisis in oil. The last 4 weeks alone have seen a drop of over 100 rigs - the 2nd fastest slide since 2001 in percentage terms. This is the worst December to January since 2008/9. As Pickens noted, "demand is down" - "lower demand is the main driver" - "rig count is gonna fall - drop 500 rigs in next 6-9 months"
[3]
Note that prices diverged lower as rig counts kept going before rolling over and then crashing...
[4]
Charts: Bloomberg
