Gas and oil rigs in the U.S. dropped for the eighth straight week to the lowest level since March 2011 as energy producers’ demand for new equipment weakened.
Oil rigs declined by seven to 1,316 this week, the lowest level in almost 10 months, data posted on Baker Hughes Inc. (BHI:US)’s website show. The gas count dropped by five to 429, the field- services company based in Houston said. Total energy rigs fell by 12 to 1,749.
The U.S. oil rig count has fallen every month since August as crude supplies climbed and more efficient drilling technology lessened energy producers’ demand for new rigs. The gas count has shrunk to almost a fourth of its peak in August 2008 as energy companies moved equipment away from dry-gas plays to target more lucrative liquids.
“A number of operators such as Whiting are replacing rigs with more efficient pad-capable drilling rigs,” John Kelso, a spokesman for Denver, Colorado-based Whiting Petroleum Corp. (WLL:US), the third-largest leaseholder in the Bakken play, said by e-mail Jan. 14. “An operator can drill just as many wells with fewer rigs.”
Crude for February delivery on the New York Mercantile Exchange was unchanged today at $95.49 a barrel, down 5.1 percent from a year ago.
U.S. oil output rose 39,000 barrels a day to 7.04 million last week, the highest level since January 1993, according to data compiled by the Energy Information Administration, a division of the Energy Department. Stockpiles slipped 0.3 percent to 360.3 million barrels in that same period. Supplies reached a 22-year high of 387.3 million barrels in June.
Natural gas for February delivery gained 7.1 cents, or 2 percent, to $3.565 per million British thermal units on the Nymex yesterday. Futures are up 44 percent from a year ago.
Gas stockpiles fell 148 billion cubic feet last week to 3.168 trillion, the EIA said yesterday. Supplies were 4.4 percent below year-earlier levels, the widest deficit in 17 months.
To contact the reporters on this story: Lynn Doan in San Francisco at email@example.com; Richard Stubbe in Houston at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Stets at email@example.com