US Weekly Oil Rig Count Decline Slows

The fall in the U.S. oil rig count slowed this week, data showed on Friday, suggesting the collapse in drilling may be coming to an end as prices recover after falling 60 percent from June to March.

 

The oil rig count fell by 24 this week to 679 active rigs, the smallest drop since early April, after the loss of 31 and 26 rigs in the prior two weeks, oil services firm Baker Hughes Inc said in its closely-watched report.

 

With the oil rig decline this week, the number of active rigs has fallen for a record 21 weeks in a row to the fewest since September 2010, according to Baker Hughes data going back to 1987.

 

Since the number of oil rigs peaked at 1,609 in October, producers have cut spending, eliminated jobs and idled more than half of the country's rigs.

 

The U.S. oil rig count, however, is nearing a pivotal level that experts say is bolstering prices and trimming production, and will eventually coax oil companies back to the well pad in coming months.

 

U.S. crude futures this week climbed to near $60 a barrel, the highest level this year, helped by a weaker dollar and bets that the supply glut would ease as the falling rig count starts to reduce oil output.

 

That was a 43 percent price rebound from the near $42 six-year low set in March on oversupply concerns and lackluster demand.

 

After rising mostly steadily since 2009, U.S. oil production has stalled near 9.4 million barrels a day since early March, the highest level since the early 1970s, according to government data.

 

The Permian in West Texas and eastern New Mexico and the Eagle Ford in South Texas both lost seven oil rigs, leaving the number of active rigs in both basins at the lowest since at least 2011, according to data going back to 2011.

 

The Williston basin in North Dakota, meanwhile, gained one rig, its first increase since early January.

 

Texas was again the state with the biggest decline in rigs, down 13 to 379, the least since 2009.

 

In Canada, drillers added one oil rig, bringing the total up to 17, just above its lowest levels since 2009, set last week.

 

U.S. natural gas rigs, meanwhile, fell by three to 222, the least since mid April.