USA oil rigs drop to lowest in five years
USA energy firms cut 26 oil rigs in the latest week, the biggest reduction since April and the fifth straight weekly decline, data showed on Friday, a sign low prices were pushing drillers away from the well pad. Baker Hughes reported that the gas rig count fell by one to 197 in the week ending September 25.
The crude pumped out of shale formations in the US helped created a glut globally that pushed prices lower by nearly 60% since June of 2014. Natural gas rigs were trimmed 2 to 195 and miscellaneous rigs slipped by 1 to zero, bringing the total down 29 by 809, the fewest since May 2002.
Ahead of the report, crude oil prices were little changed, sitting at around $44.50 a barrel in New York. Recently, though, the relationship between USA production and the number of active rigs has grown more complex, as drillers have managed to keep production high despite a massive falloff in the rig count.
USA crude production slowed by 40,000 barrels a day to 9.1 million last week, the smallest output since November 2014, according to Energy Information Administration data.
America’s oil drillers idled over half the rigs of the country since October of past year as the largest crude suppliers in the world battle for more market share. Five wells were reduced in the Eagle Ford (EF) in South Texas; two in the Niobrara in Colorado and Wyoming, and seven wells were reduced in Permian Basin in Eastern New Mexico and West Texas.
Here’s the latest chart of the oil rig count, which has accelerated its decline in recent months. US crude futures rose 1.8% to $45.54 a barrel, and Brent futures edged up 0.9% to $48.13.