Stocks were hammered and made headlines Tuesday morning, but I think Monday was all about oil as well as other stuff from Greece. Of course, these factors contribute to worrying about the economy, which are distant concerns. Here is the thing. Americans do not care how much damage is being done to the oil industry as long as gas gets cheaper. For people who live in Texas, Oklahoma, or North Dakota, this is somewhat important; Living in a single-wide in Williston, ND, in the winter without a job is purgatory.
Oil supply has been running ahead of demand since late 2013, and its finally caught up to the industry with the help of a sagging global economy.
The reaction in the past to a glut would have been OPEC cutting production with most cheating. Saudi Arabia is doing its part to send prices higher by selling less crude. However, not this time as the Desert Kingdom is challenging America’s energy industry and they might be winning.
U.S. rig counts continue to decline and this week hit 1,811, down 29 in the past week. Vertical, the most expensive, is at its lowest count since 1991. Permian Basin was down 5, as it is more expensive than Eagle Ford.
| US Rig Count January 5 | Rigs | Change |
| Directional | 175 | -6 |
| Horizontal | 1,350 | -14 |
| Vertical | 300 | -9 |