Baker Hughes: US Oil Drillers Cut Rigs For 7th Week

Reuters

Oct 16 (Reuters) - U.S. energy companies cut oil rigs this week for a seventh week in a row, the longest streak of reductions since June, data showed on Friday, a sign low prices continued to keep drillers away from the well pad.

Drillers removed 10 oil rigs in the week ended Oct. 16, bringing the total rig count down to 595, the least since July 2010. Over the prior six weeks, drillers had cut 70 rigs, oil services company Baker Hughes Inc said in its closely followed report.

That total was less than half the 1,590 oil rigs in the prior year. Since hitting an all-time high of 1,609 in October last year, weekly rig count reductions have averaged about 20.

While the total U.S. oil and gas rigs fell to another 13-year low, natural gas rigs were up three to 192. With that increase, gas rigs were just over the lowest level in at least 28 years, according to Baker Hughes data going back to 1987.

Traders look to the rig count as an indicator of whether production may rise or fall over the next several months.

The reductions over the past several weeks have erased the 47 oil rigs energy firms added over the summer when several drillers followed through on plans to add rigs announced in May and June when U.S. crude futures averaged $60 a barrel.

U.S. oil futures this week averaged $47 a barrel, down from an average of $48 last week, in choppy trade driven up and down by mostly technical buying and selling.

Drillers reduced the number of oil wells in three of the four major U.S. shale oil basins this week. Three were cut in the Permian in West Texas and eastern New Mexico; two in the Eagle Ford in South Texas; and one in the Bakken in North Dakota and Montana. There were no changes in the Niobrara in Colorado and Wyoming.

"The current rig count is still pointing to U.S. production declining sequentially between the second and fourth quarters of 2015 by 255,000 barrels a day," analysts at Goldman Sachs said, noting production was expected to grow modestly in 2016.

Despite drilling cutbacks, U.S. oil production edged up to 9.4 million barrels per day (bpd) in July from 9.3 million bpd in June, according to the latest U.S. Energy Information Administration's (EIA) 914 production report.

(Reporting by Scott DiSavino; Editing by David Gregorio)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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