UPDATE 2-U.S. oil rig count declines to lowest since 2010 -Baker Hughes

Fri Apr 17, 2015 4:13pm EDT
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April 17 (Reuters) - A decline in U.S. oil rigs slowed this week, but left their number at the lowest since 2010, suggesting that the collapse in drilling may be leveling off after slumping crude prices caused energy companies to idle half the country's rigs since October.

Despite the signs of stabilization, the count fell by 26 to 734 after the loss of 42 and 11 rigs in the prior two weeks, oil services firm Baker Hughes Inc said Friday in its closely-watched report.

The number of active rigs has fallen for a record 19 consecutive weeks, 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.

On Friday, Schlumberger NV, the world's biggest drilling services provider, said it would eliminate 11,000 jobs in addition to the 9,000 cuts it announced in January.

After its precipitous drop, the 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 coming months.

U.S. crude futures this week climbed over $57 a barrel, the highest this year, rebounding 35 percent from a six-year low near $42 set in mid March, in part on expectations the declining rig count will cut oil output.

After rising mostly steadily since 2008, U.S. oil production has stalled near 9.4 million barrels a day since early March, the most since the early 1970s, according to government data.   Continued...