US Gas Rig Count Falls for 3rd Week; Oil Count at Record High

NEW YORK (Dow Jones)

The number of rigs drilling for natural gas in the U.S. in the past week was at its lowest since January 2010, while the oil rig count hit its highest level in more than 20 years for a second week, Baker Hughes Inc. (BHI) said Friday.

There were 875 rigs drilling for natural gas in the U.S. during the week ended Friday, the oil-field services provider said, down seven from the previous week and the third consecutive week of declines. Analysts have kept a close watch on the rig count for signs that gas producers are pulling back to limit supply growth.

Rising production, particularly from North American shale rock formations, has pushed U.S. prices to unusually low levels and pressured drillers' bottom lines. Some analysts say a drop to the 800 to 850 range would be necessary to begin to balance the market.

The number of horizontal rigs, the type typically used to access the gas and oil held in shales, rose by five to 986 on the week, surpassing the record reached in February. About two-thirds of horizontal rigs are seen drilling for gas.

Meanwhile, oil drilling activity rose for a third week, reaching its highest levels in Baker Hughes data since 1987. The count rose by 12 to 839, since drillers continue to explore unconventional fields as benchmark U.S. oil prices topped $100 a barrel this month.

Copyright (c) 2011 Dow Jones & Company, Inc.


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