Baker Hughes: US Oil Drillers Cut Rigs For 4th Straight Week

Baker Hughes: US Oil Drillers Cut Rigs For 4th Straight Week
The number of rigs drilling for oil in the US fell by 17 this week, as energy companies facing lower crude prices reduced the rig count for the fourth straight week, data from Baker Hughes shows.

Jan 5 (Reuters) - The number of rigs drilling for oil in the United States fell by 17 this week, as energy companies facing lower crude prices reduced the rig count for the fourth straight week, data from oil services firm Baker Hughes showed on Monday.

The oil rig count dropped to 1,482 in the week to Jan. 2, its lowest level since March, the data showed. The number of oil rigs has declined in nine of the last 12 weeks since hitting a record high of 1,609 in mid-October.

The number of rigs remains up more than 100 from the same time last year, when there were 1,378 rigs seeking oil. But analysts said the trend is down, with crude prices sliding nearly 55 percent since the summer.

In the prior week ended Dec. 26, oil rigs declined by 37, the biggest weekly drop in more than two years.

The biggest losses continue to be in the Permian Basin. For a second week in a row, drillers cut five rigs there, bringing the total down to 522, the lowest since April.

Despite the reduction in rigs, the Permian, located in West Texas and New Mexico, is still the fastest growing and largest U.S. shale play for oil.

Analysts however have said drilling there is costlier due to the geological complexity of the play, particularly compared with the Eagle Ford formation in South Texas.

Less efficient vertical rigs declined by nine to a total of 300, the lowest since at least 1991, after falling 15 last week, according to the Baker Hughes data.

The horizontal rig count, most often used to extract oil from shale rock, fell for a sixth week in a row, down 14 this week, the biggest drop in 21 months, to total 1,336, the lowest since September.

Horizontal rigs peaked at 1,372 in late November.

U.S. crude oil futures fell last week. On Monday, the slide continued, with futures falling as low as $49.95 per barrel, the lowest in five years.

U.S. oil and gas producers are scaling back capital spending plans for 2015.

The number of U.S. rigs drilling for natural gas, meanwhile, fell by 12 this week to 328, the lowest since October.

(Reporting by Scott DiSavino; Editing by David Gregorio)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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Brent Crude Oil : $48.06/BBL 2.51%
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