U.S. weekly oil rig count decline slows -Baker Hughes

Fri May 15, 2015 1:10pm EDT
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May 15 (Reuters) - 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 number of rigs drilling for oil fell by eight this week to 660 active rigs, the smallest drop since December, after declining 11 and 24 rigs in the prior two weeks, respectively, 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 23 weeks in a row to the fewest since August 2010, according to Baker Hughes data going back to 1987.

Since the number of oil rigs peaked at 1,609 in October, producers have slashed spending, eliminated thousands of jobs and idled more than half of the country's rigs in response to the steep drop in oil prices since last summer.

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

North Dakota, a key shale producing state, posted a surprising jump in oil and gas output in March, as producers leaned on newer technologies and processes to offset a slump in commodity prices.

U.S. crude futures this week eased to $59 a barrel from over $62 a barrel last week, the highest level this year, helped by a stronger dollar and bets some drillers have started boosting production, reviving worries of a new supply glut.

Despite the slight decline this week, crude futures were still 40 percent over the $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. (Reporting by Scott DiSavino; Editing by Richard Chang)