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Biggest three-week decline in oil rigs number since May

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Staff writer ▼ | September 19, 2015
Drillers removed eight rigs in the week ended September 18, bringing the total rig count down to 644, after cutting 23 rigs over the prior two weeks,according to Baker Hughes. That was the biggest three-week decline since May.
Oil rig
Oil industry   Total rig count is now 644
Those reductions cut into the 47 oil rigs energy firms added in July and August after some drillers followed through on plans to add rigs announced in May and June when U.S. crude futures averaged $60 a barrel.

U.S. oil prices, however, have averaged $46 a barrel so far this week, up a bit from the $45 average last week.

In the country's major shale basins, drillers this week cut three oil rigs in the Bakken in North Dakota and Montana but added two in the Permian in West Texas and eastern New Mexico. The number of rigs in both the Eagle Ford in South Texas and Niobrara in Colorado and Wyoming remained unchanged.

In response to falling prices, U.S. oil production has declined over the past several weeks, with output down to about 9.1 million barrels per day last week from an average 9.6 million bpd from late May to mid-July, the highest since the early 1970s, according to government data.

Those output reductions occurred months after U.S. energy firms slashed spending, cut thousands of jobs and idled around 60 percent of the record 1,609 oil rigs that were active in October 2014 as prices collapsed from around $107 a barrel in June 2014 to under $44 in January on lackluster global demand and lingering oversupply concerns.