Oil Through the Looking Glass 10/7/20

*Singapore Holiday Adds to Quiet Friday*

Singapore was on holiday today due to a snap election which left the market without its usual morning trading window and therefore volumes were diminished. Oil continued on from losses yesterday after the announcement of the Supreme Court decision in the release of President Trump’s finances. The market looks set to post a weekly decline of over 3%  as the second wave of the virus grips the market’s attention.

*US Rig Count Falls Again*

The number of American oil and natural gas rigs fell again, dropping by 6 to 279. Since the middle of March, the US has lost some 560 rigs or around 67%. This rate has been slowing recently and now is down into sing digits falls. The majority of the losses are now coming from gas rigs rather than oil, but it’s still worth noting that several large operators are still continuing at negligible or zero rig activity.

*US Oil Bankruptcies Continue*

The American oil industry continues to struggle in the current environment as news of a new wave of bankruptcies ripples through the market. Collapses have increased in Q2 with 18 producers filing for bankruptcy, the highest number since 2016. Much of this has been caused by the huge expansion in America oil from 2015 coupled with the dramatic drop in crude prices due to the production war coupled with the virus outbreak.