The oil rig count continued to drop in April and is now at a five-year low. According to Baker Hughes, 976 rigs were still operating at the end of the month, down 11 percent from 1,100 in March and 47 percent from 1,835 in April 2014. Eleven closed this week alone. This spectacular plunge has had the obvious effect of curbing output and helping oil begin its recovery from a low of $44 per barrel in January. Production appears to have peaked in mid-March at 9.42 million barrels per day and is now showing signs of rolling over.
A price reversal historically has occurred between six and nine months following a drop in the rig count. The number of rigs operating peaked in October and oil started to bottom in January.
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| Baker Hughes Oil rig count plunges to the lowest level since October 2010 |
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| The Saudis sent the market into a freefall in November when they decided to defend their market share instead of propping up prices, and they show no sign of changing course. |
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| The U.S. has almost 500 million barrels of crude oil in storage. That's by far the most oil in storage since record-keeping began in 1982. Supplies have grown because of surging domestic production and restrictions on most crude exports. |
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| "Brent Crude Oil price has most likely bottomed out!" thinks Tiho of The Short Side Of Long |
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| A sideways consolidation into late June is now likely. Credits: www.equityclock.com |
