May 13, 2016 / 5:52 PM / 2 years ago

UPDATE 1-U.S. oil drillers cut rigs for 8th week to Oct 2009 lows -Baker Hughes

(Adds U.S. land rig count from 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.
    U.S. financial services firm Cowen & Co expects oil and
natural gas land rigs to bottom near current levels between 375
and 400 before increasing in the fourth quarter. 
    Land rigs have not gained in the Baker Hughes survey since
August and fell further this week, by seven to 384, according to
the latest report. 
    Cowen had forecast on Thursday that land rigs rose seven in
the week ended May 11, the first weekly rise in land rigs since
December. It added, however, it expected to see a muted impact,
if any, to the Baker Hughes land rig count due to "a week lag."
    Some companies plan to focus more on  (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 
drilled but uncompleted wells (DUCs) than on new drilling over
the next few quarters.
    Oasis joined several other shale producers, like Pioneer
Natural Resources Co and Hess Corp in saying
that it was likely start thinking about increasing its drilling
activity when prices reach the $50 to $60 range.

 (Reporting by Scott DiSavino; Editing by Marguerita Choy)
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