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By Ali Stratton The number of rigs drilling for oil in the U.S. fell by one in the past week to 764, according to oil-field services company Baker Hughes Inc. The U.S. oil-rig count is typically viewed as a proxy for activity in the sector. After peaking at 1,609 in October 2014, low oil prices put downward pressure on production and the rig count receded. However, the oil-rig count has generally been rising since the summer of 2016. The nation’s gas-rig count also fell by one to 186 in the past week, according to Baker Hughes. The U.S. offshore-rig count rose by two to 23. West Texas Intermediate futures fell 2.3% to $45.84 a barrel in recent trading.

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Baker Hughes Incorporated has posted Weekly Rig Count reports to its Investor Relations website.
BHI Rig Count: U.S. +6 to 933 rigs

U.S. Rig Count is up 6 rigs from last week to 933, with oil rigs up 6 to 747, gas rigs up 1 to 186, and miscellaneous rigs down 1 to 0.

U.S. Rig Count is up 509 rigs from last year’s count of 424, with oil rigs up 410, gas rigs up 100, and miscellaneous rigs down 1.

The U.S. Offshore Rig Count is unchanged from last week at 22 and up 1 rig year over year.

BHI Rig Count: Canada +27 to 159 rigs

Canadian Rig Count is up 27 rigs from last week to 159, with oil rigs up 17 to 91 and gas rigs up 10 to 68.

Canadian Rig Count is up 90 rigs from last year’s count of 69, with oil rigs up 63, gas rigs up 28, and miscellaneous rigs down 1 to 0.

Additional information on the Rig Count is available on our Rig Count website at www.bakerhughes.com/rigcount.

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By Dan Molinski

 

U.S. crude-oil inventories jumped by more than two times what analysts were forecasting for the week ended March 17, while gasoline stockpiles fell, according to data released Wednesday by the Energy Information Administration.

Crude-oil stockpiles climbed by 5 million barrels to 533.1 million barrels, and are now at the upper limit of the average range for this time of year, the EIA said. Analysts surveyed by The Wall Street Journal had predicted crude supplies would rise by 2.1 million barrels on the week.

Oil stored at Cushing, Okla., the delivery point for U.S. stocks, increased by 1.4 million barrels to 68 million barrels, the EIA said in its weekly report.

Gasoline stockpiles decreased by 2.8 million barrels to 243.5 million barrels. Analysts were expecting gasoline inventories to fall by 2 million barrels from the previous week.

Distillate stocks, which include heating oil and diesel fuel, decreased by 1.9 million barrels to 155.4 million barrels, and are in the upper half of the average range, the EIA said. Earlier in the week, analysts had forecast supplies would decrease by 1.7 million barrels from a week earlier.

Refining capacity utilization rose by 2.3 percentage points from the previous week to 87.4%. Analysts were expecting utilization levels to rise by just 0.2 percentage point from the previous week.

 

U.S. oil inventories for week ended March 17:

Crude Gasoline Distillates Refinery Use

EIA data: +5.0 -2.8 -1.9 +2.3

Forecast: +2.1 -2.0 -1.7 +0.2

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By Alison Sider

 

Analysts expect government data scheduled for release Thursday to show natural-gas stockpiles shrank less than the average for this time of year.

The U.S. Energy Information Administration is expected to report storage levels shrank by 127 billion cubic feet of gas during the week ended Feb. 10, according to the average forecast of 15 analysts, brokers and traders surveyed by The Wall Street Journal.

The EIA is scheduled to release its storage data for the week on Thursday at 10:30 a.m. EST.

For the Feb. 10 week, the median estimate is for a decrease of 125 bcf. Estimates range from a decrease of 139 bcf to a decrease of 114 bcf.

The estimate for Feb. 10 compares to 136 bcf drained from storage in the same week last year and a five-year average drain of 156 bcf for that week.

If the storage estimate is correct, inventories as of Feb. 10 totaled 2.43 trillion cubic feet, 11.5% below levels from a year ago and 3.1% above the five-year average for the same week.

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By Mike Bird and Willa Plank

Global stocks rose Wednesday after two days of declines for the dollar and equities, boosted by solid European economic data.

The moves came ahead of the Federal Reserve’s policy statement. Though investors expect little action from the meeting, any guidance on the path of interest rates could dent or boost the nascent global reflation trade.

In Europe, equity markets followed Asian markets higher. The Stoxx Europe 600 index climbed 1% in European trading, led by a 1.4% rise in France’s CAC 40.

U.S. futures rose too, with contracts for the S&P 500 and the Dow Jones Industrial Average rising 0.2%.

Strong European business surveys helped to buoy equities shortly after markets opened. Markit’s manufacturing purchasing managers index for the eurozone rose to 55.2, the highest level in 69 months. Any figure over 50 indicates that a sector is growing.

The Fed’s policy statement is due later Wednesday. While no rate change is expected after December’s quarter-point increase, investors are awaiting signals on whether the next one is more likely to come in March or later in 2017.

The Fed’s most recent “dot plot,” which maps the expected path of interest rates among Federal Open Market Committee members, suggests six interest rate increases in 2017 and 2018, while market expectations are for just four hikes in the same period.

“This ongoing gap between the market’s expectations and the future pace of rate increases shows that there is a kind of fragility in the U.S. markets,” said Franck Dixmier, global head of fixed income at Allianz Global Investors, in an email.

“It is in the Fed’s interest to be more precise about the future pace of rate increases,” Mr. Dixmier said.

Investor caution also persisted over any potential comments from the Trump administration.

“The market is going to have a difficult time to rally because we seem to have a loss of sentiment from the perceived recklessness,” said Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets.

Adding to this sentiment were indications that the administration would prefer a weaker dollar. President Donald Trump suggested Tuesday that Japan and China were devaluing their currencies. “Every other country lives on devaluation,” he said at a meeting with pharmaceutical executives. “They play the devaluation market, and we sit there like a bunch of dummies.”

Mr. Trump’s public discussion of the value of the dollar is a complicating factor for the Federal Reserve.

“It’s not necessarily unhelpful. A stronger dollar is a natural tightener on the U.S. economy because it brings exports down. A weaker dollar may make it a little easier for the Fed to hike,” said Alex Dryden, global markets strategist at J.P. Morgan Asset Management. But Mr. Trump’s comments are a “wild card” for the Fed, Mr. Dryden added.

The Wall Street Journal Dollar index finished U.S. trading Tuesday at its lowest level since mid-November, but picked up 0.1% Wednesday.

The Nikkei Stock Average had opened lower during Asian trading, but rallied during the day. Buying accelerated after the lunch break as the dollar slowly moved higher, helping the Nikkei end up 0.6%.

Korea’s Kospi closed 0.6% higher amid stronger-than-expected trade figures and Australia’s S&P/ASX 200 finished up 0.6%.

Some markets remained closed for the Lunar New Year break, including China. Hong Kong’s Hang Seng Index dropped 0.18% in its first session of the week, catching up with weakness in other Asian stocks the previous two days.

The euro traded at $1.079 Wednesday, after reaching a 2 1/2 -month high at $1.08 on Tuesday.

European bond markets were little changed Wednesday, with 10-year government bond yields in Germany at 0.462%, slightly above Tuesday’s close of 0.439%. Ten-year British government bond yields rose to 1.445% as markets opened, from 1.411%.

Another potential catalyst for the dollar will be the U.S. jobs report for January due on Friday.

Chelsey Dulaney, Liyan Qi and Kwanwoo Jun contributed to this article.

Write to Mike Bird at Mike.Bird@wsj.com and Willa Plank at willa.plank@wsj.com

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1350 GMT Disclosures by Saudi Arabia, Kuwait and Iraq about compliance to cuts agreed by OPEC last year “appear to be a coordinated strategy to reassure the market of the agreement’s implementation,” says JBC. News that Chinese crude imports hit an all-time record high of 8.6 million barrels a day, a 10% rise, in December is also supportive for oil prices, it says.(benoit.faucon@wsj.com)

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Our trading recommendations for Crude Oil and Natural Gas had the following results for 2016

Crude Oil - Number of Trades: 6 (3 profitable, 3 unprofitable) for a cumulative gain of $3.755/bbl.

Natural Gas – Number of Trades 9 (5 profitable, 4 unprofitable) for a cumulative gain of 59 cents/mmbtu

Logon for a research trial to review the technical daily reports and other subscriber reports or request a copy of the individual trades by calling 505 995 0003.

NOTE: THESE ARE ALL “PAPER TRADES” THAT WE HAVE ACCOUNTED FOR AND FOR THAT REASON MAY NOT BE CONSIDERED ACTUAL RESULTS.  HORNSBY & COMPANY MAY HAVE PARTICIPATED IN SOME BUT NOT ALL RECOMMENDATIONS.  THE RESULT SHOWN HERE ARE TRUE AND CORRECT TO THE BEST OF OUR KNOWLEDGE BUT HAVE NOT BEEN AUDITED BY AN OUTSIDE ENTITY.  COMMODITY TRADING INVOLVES A HIGH LEVEL OF RISK AND IS NOT SUITABLE FOR ALL INVESTORS.

The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Hornsby & Company believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

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By Alison Sider

 

Natural gas prices surged in light trading Tuesday as forecasts turned colder.

Natural gas for January delivery rose 9.9 cents, or 2.7%, to $3.761 a million British thermal units on the New York Mercantile Exchange. Natural gas prices have rallied more than 6% in the past two trading sessions, sending gas to its highest price since December 2014. The more actively traded February contract gained 8.8 cents, or 2.39%, to $3.766 a million British thermal units.

Weather models are suggesting a high-pressure ridge will develop over Alaska and send Arctic cold down through the rest of North America in January. That would end a spate of mild temperatures that had caused prices to fall in recent weeks, though forecasters are divided as to when the cold will appear and how severe it will be.

The recent outlook for colder weather is the latest abrupt change in weather forecasts to whipsaw natural gas prices in recent months. Natural gas prices hit a two-year high earlier this month, but tumbled as warmer-than-usual temperatures replaced cold weather over the holidays.

About half of U.S. homes use natural gas for heat, making winter weather the biggest driver for demand and often for prices.

Commodity Weather Group LLC said Tuesday that “a massive cold pattern setup” for the second weekend in January, but noted that recent forecasts showed a “significant slowing of the income colder pattern.”

Market participants are trying to gauge how far temperatures could drop and how long the cold spell might last.

“This market continues to scream higher as it attempts to appropriately discount another blast of Arctic air that will be entering the nation’s midcontinent in force next week,” Jim Ritterbusch, president of Ritterbusch & Associates, wrote in a client note.

Still, he cautioned that the coming blast of cold air might be less severe than cold weather earlier in December: “Unless this renewed cold spell persists for a couple of weeks, we feel that February natural gas values above the 3.75 area will be difficult to maintain.”

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