US Oil Drillers Cut Rigs to November 2009 Lows

US Oil Drillers Cut Rigs to November 2009 Lows
Baker Hughes says US energy firms cut oil rigs for a fourth week in a row to the lowest level since November 2009.

Reuters

April 15 (Reuters) - U.S. energy firms cut oil rigs for a fourth week in a row to the lowest level since November 2009, oil services company Baker Hughes said on Friday, as energy firms keep slashing spending despite a more than 50 percent jump in crude futures since hitting a near 13-year low in February.

Drillers cut 3 oil rigs in the week to April 15, bringing the total rig count down to 351, Baker Hughes said in its closely followed report. The number of U.S. oil rigs operating compares with the 734 rigs operating in the same week a year ago. In 2015, drillers cut on average 18 oil rigs per week for a total of 963 for the year, the biggest annual decline since at least 1988 amid the deepest rout in crude prices in a generation.

Before this week, drillers cut on average 13 oil rigs per week for a total of 182 so far this year. Energy firms have sharply reduced oil and natural gas drilling since the selloff in crude markets began in mid-2014. U.S. crude futures collapsed from over $107 a barrel in June 2014 to around $26 in February. But with U.S. crude futures this week trading around $40 a barrel, up over 50 percent from the February low on talk of a possible OPEC production freeze, some analysts think the rig count will bottom soon and rise later this year and next as prices increase.

U.S. crude futures were fetching around $43 a barrel for the balance of 2016 and about $45 for calendar 2017. U.S. oil and gas exploration and production firm Pioneer Natural Resources Co., the most active oil producer in the Permian basin in Texas with 12 rigs in the play, this week said it will add five to 10 rigs if oil prices return to $50 a barrel, which it expects by the end of 2016 or early 2017.

Analysts at Cowen & Co, a U.S. financial services firm, this week estimated the number of active U.S. gas and oil rigs would slide from an average 559 in the first quarter to 411 in the second quarter and 401 in the third quarter before rising to 415 in the fourth quarter. With the decline in oil rigs this week and no change in natural gas rigs, total U.S. oil and gas rigs fell for a 17th week in a row, down three to 440, the lowest since at least 1940, according to Baker Hughes data going back that far.

(Reporting by Scott DiSavino; Editing by Meredith Mazzilli)

Copyright 2016 Thomson Reuters. Click for Restrictions.

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Financial Analyst II
Expertise: Accounting|Financial Analyst
Location: Houston, TX
 
Program Manager - Manufacturing
Expertise: Marine Engineering|Mechanical Engineering|Project Management
Location: Chesapeake, VA
 
Business Development Manager
Expertise: Business Development|Sales|Structural Engineering
Location: Seattle, WA
 
search for more jobs

Brent Crude Oil : $49.24/BBL 1.12%
Light Crude Oil : $47.83/BBL 1.65%
Natural Gas : $2.959/MMBtu 0.23%
Updated in last 24 hours