Oil prices are making a huge move.
WTI crude just touched a high of $US48.35 per barrel, up 8.7% from Thursday’s close.
Brent crude is following suit, surging 9.5% to $US53.08 per barrel.
Earlier Friday, Baker Hughes reported that the number of oil and gas rigs operating in North America fell by 128, or 6.2%, to 1,937 during the week ending January 30, 2015. US rigs in operation fell by 90 to 1,543 rigs.
The North American rig count is down 19% from a year ago. The US rig count is down 13% year-over-year.
A shale-fuelled production boom in the US met a global economic slowdown, which has led to a global oil supply glut that caused prices to crash from last summer’s levels.
The big drillers have been announcing massive cuts to spending plans as many projects have become uneconomical. On Friday, Chevron said its spending budget would be down by around 13% year-over-year in 2015. ConocoPhillips and Occidental, America’s third and fourth biggest oil companies, announced 15% and 33% capital budget cuts respectively.
Analysts expect these production cuts will help prices stablize as the supply and demand dynamics come to some sort of balance that favours more stable prices.
Below is a longer term look at WTI crude prices.