The recent rebound in oil prices notwithstanding, the glut is still very much with us. The EIA estimated that crude stocks climbed by 9.4 million bbl last week, triple the 3.1 million bbl build forecast by analysts. This continued rise in inventories to record levels has reined—and may even be reversing— the past month’s gain in crude prices. On Thursday, US crude futures fell below $40/bbl and seemed to be headed for the biggest weekly drop in WTI prices in the past 2 months. Brent crude futures also fell below $40/bbl on Thursday morning.

At least the possibility of some major oil exporters meeting in Doha on April 17 continues to help prop up crude prices, at least not allowing them to fall back to the <$30/bbl lows seen earlier this year. Some of this week’s fall in crude prices could be overly pronounced due to many markets being closed on Friday for Easter celebrations. Additionally, the strengthening US dollar over the past week has contributed to the fall in oil prices, making crude priced in US dollars less affordable to countries holding other currencies.

One rig does not make a rally

We had to scratch our heads over the headlines touting the Baker Hughes count of oil-directed rigs rising by one in a single week as representing some sort of bottom for the rig count and a hopeful sign of recovery. Even as silly as that notion is, our data disagrees. As we tally it, the US active land rig count continued its decline in another week-to-week drop, from 409 to 391, with oil rigs down by -12 and gas rigs lower by -6. The majority of the oil-directed rig fall was seen in the Permian Basin and the Eagle Ford.