U.S. oil drillers cut rigs for 13th week in 14 -Baker Hughes

Fri Dec 4, 2015 1:12pm EST
 
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Dec 4 (Reuters) - U.S. energy firms this week cut oil rigs for an 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.

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.

On Friday, U.S. futures fell below $40 after OPEC decided to maintain its production near record highs despite depressed prices, as the producer group continued to seek an increased share of an oversupplied market.

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.   Continued...