The Baker Hughes US oil rig count has risen from 418 to 424. This increase sheds light on oil drilling activity in the United States. This information is not a recommendation to buy or sell assets. It’s crucial for individuals to do their own research before making investment decisions.

Risk Disclaimer

FXStreet does not guarantee that this information is free from errors or delivered on time. All associated risks, including potential losses, are the reader’s responsibility. The views in this article reflect the opinions of the authors and do not necessarily represent FXStreet’s stance. The author does not own any stocks or have business ties with the companies mentioned. The author and FXStreet do not offer personalized advice and are not responsible for any omissions or errors. They are not investment advisors, and this article should not be taken as investment advice. Recent Baker Hughes data shows that the US oil rig count has increased to 424. This slight rise suggests that US producers may be getting ready to increase their output. For us, this indicates a rising confidence in the market’s ability to handle new supply in the coming months.

Current Production Trends

Although the number of rigs has gone up, it’s still significantly lower than the levels seen in 2023, which often exceeded 500 rigs. Despite the lower rig count, US crude production has remained efficient, with recent EIA data showing output around a record 13.4 million barrels per day. This indicates that even minor changes in rig activity can greatly influence supply forecasts. This potential rise in supply comes as we observe mixed signals on global demand, especially considering ongoing economic uncertainty in Asia. Additionally, OPEC+ has stuck to its production quotas through 2025, providing a price support level. These elements create a delicate balance against the latest US production data. For traders in derivatives, the current environment may present an opportunity to sell call options on WTI crude futures. The rising US supply could limit any significant price increases, reducing the risk for those selling calls. This approach allows traders to earn a premium by betting that prices won’t dramatically rise soon. We’re also monitoring implied volatility, which may stay high due to these conflicting market signals. Now could be a good time to consider calendar spreads, selling near-term futures contracts while buying longer-dated ones. This strategy relies on the belief that immediate supply issues will have a larger impact on short-term prices than on the long-term outlook. Create your live VT Markets account and start trading now.

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