Rig counts in the United States have been falling at record rates since the beginning of December as the price of oil remains too low for many producers to make a profit. Rig counts are likely to stay down until global over-supply is reduced, but it could take some time before fewer rigs begins to translate into lower production.
At the time of this article’s writing, WTI is at $52.09 and Brent is at $60.83, posting gains this week. Significantly lower oil prices caused by OPEC’s decision to maintain production in the face of stagnating global demand have taken a toll on the oil and gas industry, as U.S. operators lay down rigs. The Baker Hughes’ (ticker: BHI) weekly rig count showed U.S. drillers have cut active rigs for the tenth straight week.
The rig count fell by almost one hundred this week to 1,358 from 1,456 last week, according to the most recent data from BHI. That represents a 7% decline from last week, and a 25% decline from the beginning of the year when the rig count was 1,811. The last high for rig counts was on December 5, 2014, when the count was 1,920.
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