North Dakota Rig Count Falls And Prices … Fall?

The North Dakota Department of Mineral Resources announced that the drilling rig count in the state had fallen to 29 – the lowest count since October 2005. By contrast, one year ago there were 94 active drilling rigs in the state, and the state's high mark for operating rigs came in 2012 with 218 active rigs.

Concurrently with the reduction in drilling rigs, this morning, oil reached near one-month lows on news of an unexpected dip in the demand for gasoline in the U.S. and on doubts that the much discussed oil producers freeze will materialize.

These seemingly contradictory notes provide clear evidence to us that the supply/demand precipice upon which oil prices are balanced is treacherous, and that any climb toward higher prices is going to be slow at best.