U.S. oil drillers cut rigs for an eighth week in a row to the lowest level since October 2009, oil services company Baker Hughes Inc said Friday, even with futures at six-month highs as some energy firms focus on completing wells rather than drilling new ones.
Drillers cut 10 oil rigs in the week to May 13, bringing the total rig count down to 318, Baker Hughes said in its closely followed report.
The number of U.S. oil rigs currently operating compares with the 660 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 biggest rout in crude prices in a generation.
Energy firms have sharply reduced oil and gas drilling since the collapse in crude markets began in mid-2014 as U.S. crude futures fell from over $107 a barrel to hit a near 13-year low at around $26 in February.
But with U.S. crude futures reaching a six-month high around $47 a barrel earlier this week, some analysts forecast rig counts will stop declining soon and rise later this year as prices increase in coming months.
U.S. crude futures were fetching nearly $48 for the balance of 2016 and over $49 for calendar 2017.
U.S. financial services firm Cowen & Co expects oil and natural gas land rigs to bottom near current levels between 375 and 400 before increasing in the fourth quarter.
Land rigs have not gained in the Baker Hughes survey since August and fell further this week, by seven to 384, according to the latest report.
Cowen had forecast on Thursday that land rigs rose seven in the week ended May 11, the first weekly rise in land rigs since December. It added, however, it expected to see a muted impact, if any, to the Baker Hughes land rig count due to "a week lag."
Some companies plan to focus more on (DUC) wells than drilling new ones.
Oasis Petroleum Inc, an independent U.S. oil and gas producer, said this week it planned to spend more to complete drilled but uncompleted wells (DUCs) than on new drilling over the next few quarters.
Oasis joined several other shale producers, like Pioneer Natural Resources Co and Hess Corp in saying that it was likely start thinking about increasing its drilling activity when prices reach the $50 to $60 range.
(Reporting by Scott DiSavino; Editing by Marguerita Choy)