(+) US Oil Weekly Update: Drone Attacks and Peace Negotiations

Drone attacks on The Caspian Pipeline Consortium (CPC) elevated benchmark crude prices earlier this week. CPC is operating the main export route for Kazakh crude to the global markets, and after attacks by seven UAVs has reduced flows to market.

Crude transport from the Chevron operated Tengiz field in Kazakhstan to a terminal near the Russian Black Sea port of Novorossiysk has reduced flow rate due to the biggest CPC pumping station on Russian territory is out of service. Crude from the CPC is mostly exported to Western markets. An estimated reduction of 30- 40% could result in the loss of 400 000 bpd of supply.

Iraq has announced opening of flows of Iraqi- Kurdish crude to the port of Ceyhan. Other bearish announcements, the tariffs by the Trump administration could weigh down oil prices, with higher consumer goods, slower global economy and reduced fuel demand.

Figure 1: Disrupted CPC-Supply Elevated Crude Prices

US Crude inventories and production

US commercial crude oil inventories increased by 4.6 million barrels in the week ending February 14, with market forecasters predicting between 2.8 and 3 million barrel-increase in crude stocks. U.S. commercial crude oil inventories are about 3 percent below the five-year average for this time of year and 10.5 million barrels lower than a year ago. U.S. crude oil refinery inputs averaged 15.4 million barrels per day during the week ending February 14, 2025, which was flat compared to the previous week`s average. Refineries operated at 84.9 percent of their operable capacity last week.

Figure 2: US Crude Stocks including SPR at 827.8 million Barrels

Figure 3: US Crude Stocks Excluding SPR at 432.5 million Barrels

US Rig Activity

The total number of active rigs operating in the US according to Baker Hughes rig count increased by two rigs last week, currently at 588. Oil focused rigs increased last week, from 480 to 481 active rigs. Gas focused rigs increased by one, now at 101 active rigs. Miscellaneous was flat last week still at six active rigs.

Figure 4: Active Oil Focused Rigs Increased From 480 to 481

Figure 5: Gas Focused Rigs Increased from 100 to 101 Active Rigs

Figure 6: Total Active Rigs in the U.S. Increased by Two Last Week, now at 588

Figure 7: Rig Count in Major Basin

Baker Hughes has issued the rotary rig counts as a service to the petroleum industry since 1944, when Baker Hughes Tool Company began weekly counts of U.S. and Canadian drilling activity. Baker Hughes initiated the monthly international rig count in 1975. The North American rig count is released weekly at noon Central Time on the last day of the work week.

By the Numbers February 20, 2025