May 13, 2016 / 5:07 PM / 2 years ago

U.S. oil drillers cut rigs for 8th week to Oct 2009 lows -Baker Hughes

By Scott DiSavino
    May 13 (Reuters) - U.S. oil drillers cut rigs for an eighth
week in a row to the lowest level since October 2009, oil
services company Baker Hughes Inc said Friday, even with
futures at six-month highs as some energy firms focus on
completing wells rather than drilling new ones.
    Drillers cut 10 oil rigs in the week to May 13, bringing the
total rig count down to 318, Baker Hughes said in its closely
followed report. RIG-OL-USA-BHI
    The number of U.S. oil rigs currently operating compares
with the 660 rigs operating in the same week a year ago. In
2015, drillers cut on average 18 oil rigs per week for a total
of 963 for the year, the biggest annual decline since at least
1988 amid the biggest rout in crude prices in a generation.
    Energy firms have sharply reduced oil and gas drilling since
the collapse in crude markets began in mid-2014 as U.S. crude
futures fell from over $107 a barrel to hit a near
13-year low at around $26 in February.
    But with U.S. crude futures reaching a six-month high
around $47 a barrel earlier this week, some analysts forecast
rig counts will stop declining soon and rise later this year as
prices increase in coming months. 
    U.S. crude futures were fetching nearly $48 for the balance
of 2016 and over $49 for calendar 2017.
    Analysts at Cowen & Co, a U.S. financial services firm,
expects U.S. oil and natural gas land rigs to bottom near
current levels between 375 and 400 before increasing in the
fourth quarter. There were 391 land rigs in the week ended May
6, according to Baker Hughes.
    In fact, Cowen said in its rig count forecast this week that
land rigs increased by seven in the week ended May 11, the first
weekly rise in land rigs in its forecast since December. Land
rigs have not gained in the Baker Hughes survey since August.
    Still some companies plan to focus more on completing
drilled but uncompleted (DUC) wells than drilling new ones.
    Oasis Petroleum Inc, an independent U.S. oil and gas
producer, said this week it planned to spend more to complete
DUCs than on new drilling over the next few quarters.
    Oasis said it was likely start thinking about increasing its
drilling activity when prices reach the $50 to $60 range,
joining several other producers in the shale basins, like
Pioneer Natural Resources Co and Hess Corp which
have said the same. 

 (Reporting by Scott DiSavino; Editing by Marguerita Choy)
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