US Oil Drillers Cut Rigs for 7th Week

U.S. energy firms 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.

 

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.

 

"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.

 

On a weekly basis, the amount of U.S. oil pulled out of the ground has remained about 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.