Baker Hughes: US Oil Drillers Cut Rigs For 9th Week On Low Crude Prices
Oct 30 (Reuters) - U.S. energy firms cut oil rigs for a ninth week in a row this week, the longest losing streak since June, data showed on Friday, a sign low prices continued to keep drillers away from the well pad.
Drillers removed 16 oil rigs in the week ended Oct. 30, bringing the total rig count down to 578, the least since June 2010, oil services company Baker Hughes Inc said in its closely followed report.
That is about a third of the 1,582 oil rigs operating in same week a year ago. Over the last nine weeks, drillers cut 97 oil rigs.
Although U.S. oil futures have averaged $45 a barrel so far this week, the same as the prior week, the December contract was on track for its first weekly gain in three weeks despite a supply glut that has tested storage capacity and hammered oil company results.
Energy traders noted the rate of oil rig reductions over the past few weeks - about seven on average - was much lower than the 19 rigs cut on average over the past year since the number of rigs peaked at 1,609 in October 2014 due in part to expectations of slightly higher prices in the future.
U.S. crude futures for next year were trading on average over $49 a barrel, according to the full year 2016 calendar strip on the New York Mercantile Exchange.
Higher prices encourage drillers to add rigs. The most recent time crude prices were much higher than they are now was in May and June when U.S. futures averaged $60 a barrel.
In response to those higher prices, drillers added 47 rigs over the summer even though crude prices had declined to $47 a barrel on average by the time July and August rolled around.
The rig count is one of several indicators traders look at in trying to figure out whether production will rise or fall over the next several months. Other factors include how fast energy firms complete previously drilled but unfinished wells and recent rises in well efficiency and productivity.
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.
On a weekly basis, the amount of U.S. oil pulled out of the ground has remained around 9.1 million bpd since the start of September, according to EIA's weekly field production report, well below the 9.6 million-bpd peak seen in April.
(Reporting by Scott DiSavino; Editing by Marguerita Choy)
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