U.S. oil rig count declines a bit this week - Baker Hughes

Fri Apr 24, 2015 1:18pm EDT
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April 24 (Reuters) - The fall in U.S. rigs drilling for oil quickened a bit this week, data showed on Friday, suggesting a recent slowdown in the drilling decline was temporary, after slumping oil prices caused energy companies to idle half the country's rigs since October.

Drillers idled 31 oil rigs this week, leaving 703 rigs active, after taking 26 and 42 rigs out of service 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 20 weeks in a row to the lowest level since 2010, according to Baker Hughes data going back to 1987.

Since the number of oil rigs peaked at 1,609 in October, energy producers have responded quickly to the steep 60 percent drop in oil prices since last summer by cutting spending, eliminating jobs and idling rigs.

After its precipitous drop since October, the U.S. oil rig count is nearing a pivotal level that experts say could dent production, bolster prices and even coax oil companies back to the well pad in the coming months.

Pioneer Natural Resources Co, a top oil producer in the Permian Basin of West Texas, this week said it will start adding drilling rigs in June so long as market conditions are favorable.

U.S. crude futures this week climbed to over $58 a barrel, the highest level this year, as a Saudi-led coalition continues bombings in Yemen.

That was up 38 percent from a six-year low near $42 set in mid March on oversupply concerns and lackluster demand, in part on expectations the lower rig count will start reducing U.S. oil output.

After rising mostly steadily since 2009, U.S. oil production has stalled near 9.4 million barrels a day since early March, the most the early 1970s, according to government data. (Reporting by Scott DiSavino; Editing by Chizu Nomiyama)