Oil and gas rigs in the U.S. fell to the lowest level since April 2011 as price declines prompted energy producers to curb drilling.
Energy rigs slipped by one to 1,799 this week, according to data posted on Baker Hughes Inc. (BHI:US)’s website. The gas and oil counts each declined by one to 416 and 1,381, respectively, the Houston-based, oil-services company said.
The U.S. natural gas rig count has shrunk to almost a fourth of its peak of 1,606 in August 2008 as energy producers started focusing on more lucrative liquids drilling. Oil rigs decreased last quarter for the first time since 2009 as more efficient drilling operations and a drop in crude prices curbed companies’ demand for equipment.
“There’s just no strength right now,” James Williams, president of WTRG Economics in London, Arkansas. “Oil prices have been wobbling around and gas prices have gotten weaker. We’re looking at more downward pressure on the rig counts unless prices recover.”
Schlumberger Ltd. (SLB:US), the world’s largest oilfield-services provider, said in a statement today that it expects earnings per share to fall in the fourth quarter because of contractual delays and because “North America activity is weaker than anticipated on land.”
Natural gas for January delivery fell 3.3 cents, or 1 percent, to settle at $3.314 per million British thermal units on the New York Mercantile Exchange. Prices are up 11 percent this year.
Natural gas inventories rose 2 billion cubic feet in the week ended Dec. 7 to 3.806 trillion cubic feet, the Energy Department said yesterday.
Crude for January delivery on the Nymex gained 84 cents, or 1 percent, to $86.73 a barrel. Oil prices are down 12 percent for the year.
Oil stockpiles increased for the first time in four weeks in the seven days ended Dec. 7, rising by 843,000 barrels to 372.6 million, the Energy Department said Dec. 12.
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