🔺 What to do when markets are at an all-time high? Find smart bargains, like these.See Undervalued Stocks

U.S. oil drillers cut rigs despite $50 crude -Baker Hughes

Published 2016-05-27, 01:10 p/m
© Reuters.  U.S. oil drillers cut rigs despite $50 crude -Baker Hughes
CL
-
NG
-

By Scott DiSavino
May 27 (Reuters) - U.S. oil drillers cut rigs for a ninth
week in the last 10, energy services company Baker Hughes Inc
BHI.N said on Friday, despite crude prices this week testing a
seven-month high at $50 a barrel.
That is a key level that analysts and producers said would
trigger a return to the well pad.
Drillers cut 2 oil rigs in the week to May 27, bringing the
total rig count down to 316, the lowest level since October 2009
and about half the 646 rigs a year ago, Baker Hughes said in its
closely followed report. RIG-OL-USA-BHI
Before this week, drillers cut on average 11 oil rigs per
week for a total of 218 so far this year.
They cut on average 18 oil rigs per week for a total of 963
in 2015, the biggest annual decline since at least 1988 amid the
biggest rout in crude prices in a generation.
The rig count has dropped since hitting a peak of 1,609 in
October 2014 as U.S. crude futures CLc1 fell from over $107 a
barrel mid-2014 to a near 13-year low around $26 in February.
U.S. oil futures CLc1 have recouped about half of their
losses and broke above the $50-mark on Thursday and were trading
around $49 on Friday with analysts predicting range-bound
markets for the next few months as supply outages slowly help
clear a glut of crude. O/R
U.S. oil executives and analysts have said any price rise
above $50 could fuel a resurgence in new drilling projects.

"For approximately two weeks, crude has held steady in the
$45-50 range. During the first quarter earnings season, a number
of exploration and production companies indicated that prices
near that range could lead them to add rigs," analysts at
Simmons & Co, energy specialists at U.S. investment bank Piper
Jaffray, said this week in a note.
"These anecdotes lead us to believe that a modest
improvement in the rig count could develop beginning in the
coming weeks," Simmons said.
The U.S. rig count generally reacts to prices with a three
or four-month lag.
Further ahead, crude futures were fetching around $50 for
the balance of 2016 CLBALst and over $51 for calendar 2017
CLYstc1 .

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on U.S. rig counts http://graphics.thomsonreuters.com/15/rigcount/index.html
U.S. natural gas rig count versus futures price http://link.reuters.com/nuz86t
Thomson Reuters Analytics natural gas data reuters://screen/verb=Open/URL=cpurl://pointcarbon.cp./trading/gmtna/
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.