WTI crude started the new quarter off Friday, April 1 at $38.14 per barrel. This is a negative 3.35 percent change from last week Thursday when it closed at $39.46 per barrel. This is the first time in six weeks that oil fell. Producers continue to struggle, and the current Baker Hughes rig count is at 450. That is fourteen fewer rigs than last week when the U.S. active rig count was at 464 rigs.
Oil Production Freeze?
For months now talk of a production freeze or cap has been discussed. According to a Wall Street Journal article Saudi Arabia refuses to even consider a production cap unless other major producers including Iran are willing to follow suit. A Bakken.com article, however, reported 12 countries have agreed to participate in a meeting in Qatar to consider a cap on production which would freeze outputs at a specific level. Confirmed countries include Russia, the United States, and Kuwait.
The US jobs report released by the Bureau of Labor Statistics shows unemployment at five percent with employment increases in retail, construction and health care, but job losses in manufacturing and mining. Labor force participation, the metric which measures those who are able to work and actively searching for a job, increased. This indicates that although the unemployment rate rose 0.1 percent it is, at least in part, due to increased confidence that those out of work may find a job and are willing to search. Those not actively searching for a job are not factored into the unemployment rate.
Goodrich Petroleum and Emerald Oil file for Chapter 11
Emerald Oil, Inc. (NYSE:EOX) filed last Tuesday, March 29 for voluntary Chapter 11 petitions in the US Bankruptcy Court. Chapter 11 is a form of bankruptcy protection which allows for reorganization of debt that allows the company to possess and operate assets as it attempts to reorganize debt. The debtor is supervised by the court during the operation period. A possible sale of Emerald assets to Latium Enterprises Inc. is also in the works.
Goodrich Petroleum Corp. is expected to follow Emerald’s lead and file for Chapter 11 by April 15th according to a Bloomberg article. This agreement takes place after a failed attempt to trade their debt-for-equity exchange.