Crude Oil Futures Surge as US Rig Count Hits 13-Year Low

Strategic Insights -

Crude oil futures surged on Friday in both domestic and international markets as investors and speculators continued to book fresh positions in the energy commodity. This was largely driven by a falling rig count in the US, which experts believe may curb production growth in the world's largest fuel consumer. Companies such as Statoil, BP, and Royal Dutch Shell have cut investments in response to plummeting oil prices. The escalation of a labor dispute at BP in the US Midwest and the news of a major US refinery strike also contributed to the surge in oil futures.

Key Takeaways:

  • The US rig count fell by 83 to its lowest level since December 2011, reaching 1,140 last week, according to Baker Hughes.
  • Companies such as Statoil, BP, and Royal Dutch Shell have cut investments in response to plunging oil prices.
  • Oil workers at BP in the US Midwest joined the biggest US refinery strike since the 1980s as labor talks yielded little result.
  • American employers created over 200K jobs for the 12th consecutive month in January 2015, boosting demand for oil.
  • US consumer credit rose by USD 14.8 billion in December 2015, with credit-card use rising the most in eight months.
  • The labor dispute at BP and the refinery strike have raised fears over tighter oil supplies.

Statistics:

  • US non-farm payroll employment rose by 257,000 in January 2015, exceeding expectations of a 230,000 gain.
  • December's non-farm payroll employment was revised from 253,000 to 329,000.
  • US consumer credit rose by USD 14.8 billion in December 2015, compared to USD 13.5 billion in November.
  • The US job market experienced the biggest three-month hiring gains in 17 years since January 2015.

Sources:

  • Baker Hughes
  • Dion Global Solutions Limited
  • Contify.com