US Oil Rigs Cut for 13th Week in 14
U.S. energy firms this week cut oil rigs for the 13th week in the last 14, data showed on Friday, a sign drillers were still waiting for higher prices before returning to the well pad.
On Friday, OPEC decided to keep production near record highs despite depressed prices, as a way to boost market share by forcing rivals to reduce output.
Drillers removed 10 oil rigs in the week ended Dec. 4, bringing the total rig count down to 545, the least since June 2010, oil services company Baker Hughes Inc said in its closely followed report.
That decrease brings the total rig count down to about a third of the 1,575 oil rigs operating in same week a year ago. Since the end of the summer, drillers have cut 120 oil rigs.
U.S. oil futures averaged $41 a barrel so far this week, down from $42 last week.
U.S. futures fell below $40 after OPEC decided to maintain its production level.
Energy traders noted the rate of weekly oil rig reductions since the start of September, about nine on average, was much lower than the 18 rigs cut on average since the rig count 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 around $44 a barrel, down from $47 last week, 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 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.
Drillers cut rigs in three of the four major U.S. shale oil basins this week. They removed five rigs in the Permian in West Texas and eastern New Mexico; two in the Bakken in North Dakota and Montana; and one in the Niobrara in Colorado and Wyoming. The number of rigs in the Eagle Ford in South Texas remained unchanged.
Despite an increase of three natural gas rigs this week, the removal of 10 oil rigs knocked the nation's total rig count down to a 16-year low.
The rig count is one of several indicators traders look at to predict whether production will rise or fall in future months.
(Reporting by Scott DiSavino; Editing by Marguerita Choy and Richard Chang)