U.S. oil drillers cut rigs for 10th week in a row -Baker Hughes

Fri Feb 26, 2016 1:23pm EST
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Feb 26 (Reuters) - U.S. energy firms this week cut oil rigs
for an 10th week in a row to the lowest levels since December
2009, data showed on Friday, as some producers focus more on
completing their drilled but uncompleted wells instead of
drilling new ones.
    Looking forward, analysts forecast the rig count will bottom
in a few months before recovering later this year when they
expect crude prices to rise.
    Drillers removed 13 oil rigs in the week ended Feb. 26,
bringing the total rig count down to 400, oil services company
Baker Hughes Inc said in its closely followed report.
    That compares with 986 oil rigs operating in same week a
year ago. In 2015, drillers cut on average 18 rigs per week for
a total of 963 oil rigs for the year, the biggest annual decline
since at least 1988.
    Before this week, drillers had also cut on average 18 rigs
per week so far this year.
    U.S. crude futures were trading over $33 a barrel,
putting them on track for their largest weekly gain in seven
years, after supply disruptions in Iraq and Nigeria and higher
equity prices fueled by U.S. growth data. 
    After falling to the lowest level since 2003 earlier this
month at $26.05 a barrel, U.S. futures were expected to continue
climbing for the rest of the year, fetching around $38 for the
balance of 2016 and $42 for 2017.
    Whiting Petroleum Corp, a U.S. exploration and
production company, said on its fourth quarter earnings call
this week that it would consider completing some of its drilled
but uncompleted wells, known in the industry as DUCs, if crude
prices recover back to the $40-$45 level.
    Other U.S. exploration and production companies, like Cabot
Oil & Gas Corp, have also said they too will focus more
on completing existing DUCs this year as they cut back on
spending to drill new wells.
    Analysts at Simmons & Co International, an investment
banking services firm, said they expect the total U.S. oil and
natural gas rig count to bottom around 400 during the second
quarter before recovering later this year.
    For all of 2016, Simmons expects the total U.S. land rig
count to average 468, which is about half of last year's 978
    Analysts at Cowen and Co, a financial services firm,
forecast the total onshore rig count could fall even further,
bottoming between 375 and 400 later this year.

 (Reporting by Scott DiSavino; Editing by Marguerita Choy)