US crude production collapsed this week with most of Texas offline and we would expect rig counts to have continued to stabilize (if not fall) following the lagged track of WTI, and they did – oil rigs dropped 3 to 756, the lowest since June.
As a reminder, Crude production in the Lower 48 collapsed…
This is the biggest week-on-week fall since August 2012, when Hurricane Isaac shut in more than 1.3 million barrels a day of Gulf of Mexico production.
Uncertainty has the “market pulling in their horns ahead of the storm. They are worried about demand destruction,” Phil Flynn, senior market analyst at Price Futures Group, says. The market also “seems to be a little technically heavy”