Since 1944, one of the largest oil field service companies in Texas, Baker Hughes Company, has released data at the end of each week on the state of the oil and gas industry. Last week, Baker Hughes reported an increase in U.S. rig counts which affects demand in a variety of energy sectors such as drilling, completion and production. These rigs are aided in the exploration and production of oil and natural gas domestically.
After the recent drone strike and killing of Iran’s major general Qasem Soleimani, it goes without saying the United States may experience more difficulties importing crude oil from the Middle East. Along with external problems, the U.S. also faces internal issues. As we go into 2020, we are starting to see a decline in rig counts. According to Baker Hughes, just this past week alone, the U.S. had lost nine oil rigs causing our rig count to be less than 279.
On May 22nd WTI Crude nearly reached $73 / barrel and since then prices have dipped almost 10%.
China has responded to the Trump administration’s recently implemented tariffs on steel and aluminum with tariffs on imports of 128 American made products that range from 15% to 25%. The list of products are wine, frozen pork, nuts, fruits and aluminum scrap. Not on the list, U.S. crude.