U.S. oil drillers cut rigs for 6th week on weak crude prices - Baker Hughes

Fri Oct 9, 2015 1:07pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

By Scott DiSavino

Oct 9 (Reuters) - U.S. energy firms cut oil rigs for a sixth week in a row this week, the longest streak of weekly declines since June, data showed on Friday, a sign low prices continued to keep drillers away from the well pad.

Drillers removed nine oil rigs in the week ended Oct. 9, bringing the total rig count down to 605, oil services company Baker Hughes Inc said in its closely followed report. That total was the least since July, 2010. Drillers had cut a total of 61 rigs over the prior five weeks.

Since hitting an all-time high of 1,609 during this week a year ago, weekly rig count reductions have averaged 20.

The reductions over the past month erased the 47 oil rigs added over the summer when 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 futures this week averaged $48 a barrel, up from a $45 average last week, on concerns over Russia's entry into the Syrian conflict and a rising Chinese stock market.

On Friday, U.S. futures were trading around $50 a barrel, up just 1 percent on the day, in choppy trade as speculators took profits on a big weekly surge for Brent.

"The current rig count is still pointing to U.S. production declining sequentially between the second quarter and fourth quarters of 2015," analysts at Goldman Sachs said, noting production growth was expected to resume in 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 increase, however, occurred because a project in the Gulf of Mexico that was started year's ago when the price of oil was much higher began producing oil.

On a weekly basis, the amount of U.S. oil pulled out of the ground has remained about 9.1 million bpd since the start of September, according to EIA's weekly field production report, well below the 9.6 million bpd peak seen in April. (Reporting by Scott DiSavino; Editing by David Gregorio)