U.S. energy firms cut oil rigs for a third week in a row to the lowest level since November 2009, oil services company Baker Hughes Inc said Friday, as energy firms keep slashing spending despite crude futures prices jumping roughly 50 percent since hitting a near 13-year low in February.
Drillers cut 8 oil rigs in the week to April 8, bringing the total rig count down to 354, Baker Hughes said in its closely followed report.
The number of U.S. oil rigs currently operating compares with 760 rigs operating in the same week a year ago. In 2015, drillers cut on average 18 oil rigs per week for a total of 963 for the year, the biggest annual decline since at least 1988 amid the biggest rout in crude prices in a generation.
Before this week, drillers cut on average 13 oil rigs per week for a total of 174 so far this year. Energy firms have sharply reduced oil and natural gas drilling since the selloff in crude markets began in mid-2014. U.S. crude futures collapsed from over $107 a barrel in June 2014 to a near 13-year low around $26 in February.
U.S. drilling services company Patterson-UTI Energy Inc said it had 64 drilling rigs in operation in March, compared with 142 during the same month in 2015.
But with U.S. crude futures trading around $40 a barrel, up about 50 percent since hitting the February low, some analysts think the rig count will rise later this year and next year as prices increase.
Looking forward, U.S. crude futures were fetching around $42 a barrel for the balance of 2016 and about $44 for calendar 2017.
With the decline in oil rigs this week and an increase of one natural gas rig , total U.S. oil and gas rigs fell for a 16th week in a row, down seven to 443, the lowest since at least 1940, according to Baker Hughes data going back that far.
Analysts at Cowen & Co, a U.S. financial services firm, this week estimated the number of active U.S. natural gas and oil rigs would slide from an average 559 in the first quarter to 411 in the second quarter and 401 in the third quarter before rising to 415 in the fourth quarter.
In Texas, meanwhile, land rigs fell below 200 to 195 for the first time since at least 2000.