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Rig count dwindles again as oil holds close to 5-month highs

From Staff Reports
Sept. 15, 2017 at 11:44 p.m.


The number of U.S. rigs exploring for oil and natural gas fell again this week as oil prices continued to rally to near five-month highs.

In its weekly report Friday, Baker Hughes Inc. said the combined total of rigs at work was down eight to 936. Though still up significantly from a year ago, the pace of increase slowed in the second quarter and have reversed in the third as concerns about oversupply weighed on prices.

Baker Hughes data showed the oil rig count decreased by seven this week to 749, while the natural gas rig count fell by one to 186.

U.S. crude oil finished unchanged Friday at $49.89 a barrel in New York but up about 5 percent for the week — its strongest performance in nearly two months.

Brent crude, the standard for international oil prices, gained 15 cents to $55.62 a barrel in London. The 3.3 percent gain also was the largest since the end of July.

The Houston oilfield service company's rig count, a positive sign for a long-oversupplied oil and gas industry, comes after bullish inventory data earlier in the week from the U.S. Department of Energy.

The Energy Information Administration on Wednesday reported a large refined products draw with gasoline reduced by 8.4 million barrels and distillate fuels cut by 3.2 million barrels.

Also this week, the Organization of the Petroleum Exporting Countries forecast higher demand for its oil in 2018 and pointed to signs of a tighter global market, indicating its deal with non-OPEC states to cut output is drawing down supply.

That was followed by a report from the International Energy Agency saying the glut was shrinking thanks to strong European and U.S. demand, as well as production declines in OPEC and non-OPEC members.

Baker Hughes' data showed Louisiana and Texas each lost three rigs, while Colorado, New Mexico and North Dakota shed one apiece.

West Virginia added one.

By major basin, the West Texas-New Mexico Permian lost two to 380 while South Texas' Eagle Ford lost two to 71. North Texas' Barnett and the East Texas-Louisiana Haynesville were flat on seven and 46, respectively. The week's big loser was Oklahoma's Cana Woodford Shale, which dropped three rigs to 64.

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