US Oil Rig Count Drops By 42 This Week

The fall in U.S. rigs drilling for oil quickened this week, data showed on Friday, suggesting that a recent slowdown was temporary, after slumping oil prices caused half of the country's rigs to be closed since November.

 

The oil rig count fell by 42 this week to 760, the biggest drop in a month after the loss of 11 and 12 rigs in the prior two weeks respectively, according to data from oil services firm Baker Hughes. U.S. natural gas rigs, meanwhile, rose by three to 225.

 

The slowing decline in March had caused some analysts to wonder whether oil drillers had finished making deep cuts for now, with U.S. crude prices stabilizing at around $50 a barrel or so.

 

But after Friday's data, prices rose 2 percent on the day and 5 percent on the week, to above $51 a barrel, partly on signs that more cuts may come.

 

"It's a sign of the tumult the oil industry is still going through," said John Kilduff, partner at New York energy hedge fund Again Capital.

 

"The price recovery in crude isn't really to the degree that's helping, and there are lots of job losses being reported in the oil industry, so I won't be surprised to see more rig losses hereon."

 

With this week's decline, the oil rig count has fallen for a record 18th week in a row, reaching December 2010 lows, according to Baker Hughes data going back to 1987.

 

U.S. energy firms have slashed spending, cut jobs and idled wells over the past several months as crude prices plunged over 50 percent since the summer on oversupply concerns and lackluster world demand.

 

Despite the 53 percent reduction in oil directed rigs from a record high of 1,609 in October, oil output has remained at a 40-year peak, declining only one week in the last couple of months.

 

The number of rigs drilling for oil in Canada were unchanged at 20, the lowest since 2009.