U.S. oil drillers cut rigs for 5th week -Baker Hughes

Fri Oct 2, 2015 1:08pm EDT
 
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By Scott DiSavino

Oct 2 (Reuters) - U.S. energy firms cut 26 oil rigs in the latest week for a fifth straight weekly decline, data showed on Friday, a sign low prices were keeping drillers from returning to the well pad.

The reduction in the week ended Oct. 2 brought the total rig count down to 614, the least since August, 2010. In the previous four weeks, drillers cut a total of 35 rigs, oil services company Baker Hughes Inc said in its closely followed report.

That compared with 1,591 oil rigs in the same week a year ago and an all-time high of 1,609 in October 2014.

Those reductions were cutting into the 47 oil rigs energy firms added in July and August after some 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 prices this week, however, averaged $45 a barrel, the same as during the month of September, on continued lackluster global demand and lingering oversupply concerns.

Analysts at Simmons & Co International, an investment banking services firm, said in a note they expect oil and gas rig counts to decline in the fourth quarter of 2015 with the rate of decline stabilizing in the first half of 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.

That was still down from the April peak of 9.6 million bpd, which was the highest U.S. oil output since the early 1970s.

Most of the July production gains came as big projects in the Gulf of Mexico entered service. Those projects were undertaken long before the oil's price rout of the past year.

In weekly data, meanwhile, EIA said production last week averaged 9.1 million bpd for a fourth week in a row, the least since October. (Reporting by Scott DiSavino; Editing by David Gregorio)