The Baker Hughes weekly report shows a small rise in oil rigs, now totaling 411. On the other hand, gasoline rigs dropped by one, leaving a total of 123. Overall, the number of rigs decreased by one to 539. At the same time, oil prices went up slightly by $0.10, reaching $63.98.

Price Below Moving Average

This price remains below the 100-day moving average, which is at $64.89. As a result, the daily moving averages show a bearish trend as the weekend approaches. The small rise in oil rigs to 411 indicates that producers are not eager to increase supply with current prices. With oil under its 100-day moving average of $64.89, the outlook remains bearish. This mix of slow production and weak price movement suggests that the market is either well-supplied or has demand issues. We are also seeing signs of slowing demand, which supports a cautious view for the coming weeks. The latest U.S. Energy Information Administration (EIA) report, released on August 6, 2025, showed an unexpected increase in crude oil inventories by 2.1 million barrels, contrary to expectations of a decline. This indicates that consumption is lagging behind supply, a typical scenario as the summer driving season comes to an end.

Trend of Capital Discipline

This low rig count is part of a broader trend of capital discipline from producers since 2024. Currently, the count of 411 rigs is much lower than the around 500 rigs active throughout much of 2023. This historical context shows that producers are focused on returning value to shareholders and are unlikely to quickly ramp up drilling, even if prices rise slightly. In this context, derivative traders might look for strategies to benefit from stable or declining oil prices. Buying put options with strike prices in the low $60s could help protect against or make gains from a further drop in prices. Additionally, selling out-of-the-money call credit spreads above the $65 resistance level could be another effective strategy, allowing traders to earn premium as long as oil prices don’t make a significant jump. Create your live VT Markets account and start trading now.

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