U.S. oil rig count fell for 7th consecutive week

Oil prices are beginning the new week of trading down in the wake of predominantly weak Chinese economic data. Brent has fallen to a good $50 per barrel and WTI has slipped below the $47 per barrel mark, notes Commerzbank. 

New data relating to drilling activity in the US that were published late on Friday by the oil service provider Baker Hughes had driven up prices. The figures showed that the oil rig count decreased by a further 10 last week, which was the seventh consecutive weekly decline. 

Drilling activity is at its lowest level since July 2010, with an oil rig count of just 595. This means that a further fall in US (shale) oil production is but a matter of time. According to the CFTC's statistics, which were likewise published on Friday, the week to 13 October saw speculative net long positions in WTI rise by 8,900 to 182,300 contracts. 

The last time money managers showed such optimism was at the end of June. In other words, the increase in the WTI price to over $50 per barrel in the reporting week was speculatively driven for the most part. As a result, it proved unsustainable and has meanwhile been corrected again.