U.S. oil drillers cut rigs despite $50 crude -Baker Hughes
By Scott DiSavino May 27 (Reuters) - U.S. oil drillers cut rigs for a ninth week in the last 10, energy services company Baker Hughes Inc said on Friday, despite crude prices this week testing a seven-month high at $50 a barrel. That is a key level that analysts and producers said would trigger a return to the well pad. Drillers cut 2 oil rigs in the week to May 27, bringing the total rig count down to 316, the lowest level since October 2009 and about half the 646 rigs a year ago, Baker Hughes said in its closely followed report. RIG-OL-USA-BHI Before this week, drillers cut on average 11 oil rigs per week for a total of 218 so far this year. They cut on average 18 oil rigs per week for a total of 963 in 2015, the biggest annual decline since at least 1988 amid the biggest rout in crude prices in a generation. The rig count has dropped since hitting a peak of 1,609 in October 2014 as U.S. crude futures fell from over $107 a barrel mid-2014 to a near 13-year low around $26 in February. U.S. oil futures have recouped about half of their losses and broke above the $50-mark on Thursday and were trading around $49 on Friday with analysts predicting range-bound markets for the next few months as supply outages slowly help clear a glut of crude. U.S. oil executives and analysts have said any price rise above $50 could fuel a resurgence in new drilling projects. "For approximately two weeks, crude has held steady in the $45-50 range. During the first quarter earnings season, a number of exploration and production companies indicated that prices near that range could lead them to add rigs," analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, said this week in a note. "These anecdotes lead us to believe that a modest improvement in the rig count could develop beginning in the coming weeks," Simmons said. The U.S. rig count generally reacts to prices with a three or four-month lag. Further ahead, crude futures were fetching around $50 for the balance of 2016 and over $51 for calendar 2017 . (Reporting by Scott DiSavino; Editing by Marguerita Choy and Chizu Nomiyama)
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