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Market Wire:
Canadian Drilling Activity Surges

Sean Coakley December 15, 2017

Today’s weekly count of drill rig activity from Baker Hughes saw a decrease of 1 rig operating in United States, an increase of 19 in Canada, and a decline of 9 over the month prior for rigs operating outside of North America.

Rig Numbers & Change From Prior
United States      930    – 1
Canada                 238   +19
International       942   – 9

The crude complex continues to enthral, with yet more pipeline drama sparking dramatic price swings.

This week it was Brent, the more international of the two indices, which acted as the protagonist in the story. A crack in the North Sea’s Forties pipeline system forced a shutdown of roughly a quarter of the North Sea’s total output, cutting supplies by more than 450,000 barrels a day.

Global crude prices briefly jumped to a two-year high – and the Brent-West Texas spread spiked above $7 a barrel before settling lower as traders sourced alternative inputs for key European refineries.  As of today’s print, both global benchmarks are trading lower on the week.

Bottom Line: Despite a series of short-lived setbacks, information out of the crude complex continues to illustrate a cyclical tightening in oil markets. However, today’s mixed report on drilling activity does little to alleviate fears of a rapid deluge of Texas Tea – should crude prices remain elevated.

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