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U.S. oil rigs at two-year low this week

From Staff and Wire Reports
Jan. 23, 2015 at 5:46 p.m.


The number of rigs drilling for oil in the U.S. fell to a two-year low this week, Baker Hughes Inc. said Friday.

The 49-rig drop, to 1,317, left the number of oil-directed rigs at their lowest level since late January 2013.

Rigs pursuing natural gas rose by six to 316. The total number of onshore and offshore rigs pursuing oil and natural gas fell by 43 to 1,633.

The count of rigs operating has dropped by an unprecedented 258 in seven weeks, threatening to end the surge in domestic oil production that turned the U.S. into the world's largest fuel exporter. Last week, the rig count fell by the largest weekly amount in six years.

More cuts are expected as companies continue to slash drilling budgets for 2015 in response to plummeting crude prices. A recent estimate by energy consulting firm Wood Mackenzie forecast a 30 percent drop in the rig count after a 40 percent cut in drilling budget of U.S. operators this year.

West Texas Intermediate dropped 72 cents Friday to settle at $45.61 a barrel on the New York Mercantile Exchange.

The slump in oil rigs has yet to put a dent in U.S. production, which reached 9.19 million barrels a day in the week ended Jan. 9, the most in weekly data since at least 1983, Energy Information Administration data show. Output was virtually unchanged last week.

Of the major oil- and gas-producing states, Texas' count declined another 13, North Dakota dropped nine, Oklahoma fell eight, Ohio four, California and New Mexico each lost three and Utah declined by two. Kansas, West Virginia and Wyoming dropped one apiece.

Louisiana increased by three rigs, Pennsylvania added two and Arkansas gained one.

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