The US oil rig count has dropped sharply in the New Year and it may affect the oil price inthe coming days, as the former has been a consistent key factor in the past.
The latest data from Baker Hughes suggests a signifcant drop during the past few days, from 348 to 267. The drop of this magnitude, 23%, can cause alarm in the markets, despte the recent resurgence of the oil price.
The exponential increase in infections in the US, across almost all the states, can be attributed to the fall in rig count, as the producers fear a decline in demand; the recent sabre-rattling between the US and Iran does not help calm the geo-political tensions in the region.
The sentiments will improve as the vaccination drive goes into full swing in the coming weeks and the new US administration take over the reins of the world's biggest economy in the turbulent times.
