Total U.S. rig count falls by three to 421 as oil prices struggle to stay above $50 per barrel

After three weeks of slowly increasing, the U.S. rig count posted a loss for the week ended June 24, 2016. The total number of active rigs operating in the country fell by three to 421 this week, according to information released by Baker Hughes Industries (ticker: BHI).

Rigs drilling for oil largely drove the rise in the U.S. rig count over the course of June, but drilling activity pursuing oil slumped this week, with the U.S. fleet shedding seven rigs looking for oil. The total count is now at 330, down 298 from this time last year. The number of rigs targeting gas was up by four this week to 90 total rigs, but still down 138 from this time last year.

Increasing oil prices prompted some operators to begin drilling again, creating concerns that more oil might come back to market, capping crude oil prices. Oil has struggled to stay above $50 per barrel, however, with global events like the Brexit keeping the commodity from strengthening too much despite slowing supply growth.

While oil is down today along with global markets, many are hopeful that sustained lower prices have reduced the global glut to manageable levels. On Thursday, Saudi Arabian Oil Minister Khalid al-Falih said “the oversupply has disappeared. We just have to carry the overhang of inventory for a while until the system works it out.”

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