(+) US Oil Weekly Update: Putin Warns Trump Against Lowering Prices

Benchmark crude prices had a rough opening to the week, with AI-news coming out of China. DeepSeek shocked the markets with their advancements in AI technology sending US down a steep slope. WTI recovered some of the early loss by midweek but has since continued with a downward trajectory.

US President Donald Trump has reached out to Saudi Arabia’s de facto leader Muhammed bin Salman to persuade the OPEC group to lower prices. Russia`s President Vladimir Putin warns Trump against lowering prices stating that lower prices could be damaging for both economies.

Ukraine continues to hit Russian oil refineries; General Staff of the Armed Forces of Ukraine announced a second hit at a Russian oil refinery in less than a week.

Figure 1: WTI Struggles to Hold Above $70 mark

US Crude inventories and production

US commercial crude oil inventories increased by 3.5 million barrels in the week ending January 24, with market forecasters predicting 3.2 million barrels increase in crude stocks. U.S. commercial crude oil inventories are about 6 percent below the five-year average for this time of year and 6.8 million barrels lower than a year ago. U.S. crude oil refinery inputs averaged 15.2 million barrels per day during the week ending January 24, 2025, which was 330 Kbpd lower than the previous week`s average. Refineries operated at 83.5 percent of their operable capacity last week.

Figure 2: US Crude Stocks including SPR at 809.9 million Barrels

Figure 3: US Crude Stocks Excluding SPR at 415.1 million Barrels

US Rig Activity

The total number of active rigs operating in the US according to Baker Hughes rig count dropped by four rigs last week, currently at 576. Oil focused rigs decreased last week, from 478 to 472 active rigs. Gas focused rigs increased by one, now at 99 active rigs. Miscellaneous rigs increased by one now at five active rigs.

The Permian Basin in Texas had the biggest decline with six rigs, and now below 300 active rigs at 298.

Figure 4: Active Oil Focused Rigs Decreased From 478 to 472

Figure 5: Gas Focused Rigs Increased from 98 to 99 Active Rigs

Figure 6: Total Active Rigs in the U.S. Dropped by Four Last Week, now at 576

Figure 7: Rig Count in Major Basins

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 January 29, 2025